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Old 05-06-2008, 02:45 PM
 
692 posts, read 2,798,008 times
Reputation: 346

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Quote:
Originally Posted by forest beekeeper View Post
If you can't find investments that perform better than the stock market, then you are not looking very hard.
Yes, you are correct, there are many investments that can do better, but most go in cycles, ie. real estate.
I am suggesting an easy approach that is "tax deferred" or "tax free" in IRA's and 401K plans as a
"good starting point" and something that he could get started immediatly. Just keep in mind the rule of compounding. I would also mention he should probably dollar cost average into these types of investments.
He could go into business for himself as well, but you need much more to get going than what I suggested.

It comes down to risk/reward and how each individual asseses each investment opportunity.

I happen to like commodities lately but wouldn't recommend for someone uninformed to invest that way.
At 20+ I think you should get your feet wet before jumping in depending on your experience and financial knowledge.
I have always managed my own finances and it is a continual learning process.
Go slow, ask lots of questions, don't always believe everything your hear or read, stay away from finacial planners, seminars, etc. unless you just refuse to learn and manage your own affairs.
There are many people out there willing to take your valuables from you so be alert.

The game is not only played buy the amount you can make.......
It's about preservation of assets as you proceed thru life.
Nobody will look after your money better than you.
I will be investing my government rebate check.....Thanks Mr. President.

Silverfox

Last edited by silverfox; 05-06-2008 at 03:00 PM..
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Old 05-06-2008, 02:53 PM
 
Location: southern california
55,749 posts, read 74,738,506 times
Reputation: 48278
read your profile. your post is not 100% in sync with your profile unless it was meant to be humorous. saying no debt except student loans is like saying ham and eggs minus the ham. "bum" and "millionaire" dont fit together well do they? what do you do to retire a millionaire? focus.
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Old 05-06-2008, 03:51 PM
 
Location: Forests of Maine
30,732 posts, read 49,546,472 times
Reputation: 19166
Quote:
Originally Posted by silverfox View Post
Yes, you are correct, there are many investments that can do better, but most go in cycles, ie. real estate.
I guess so. [about the cycles]

Having been collecting apartment buildings since 1985, I have not seen the 'down cycle' in the market yet.

So if it does have a cycle, it must be a looong one. 40 years? 60 years?



Quote:
... I am suggesting an easy approach that is "tax deferred" or "tax free" in IRA's and 401K plans as a "good starting point" and something that he could get started immediatly.
'tax deferred' is not tax free.

And while an IRA may be a better use of money than spending it on whiskey, it will not move you toward the mark of being a millionaire, nor of being independently affluent.

A 401K may be good in the context that your employer is paying into it also, thus giving you more money. but even then how many 401ks do better than 15% APR?

Neighter IRAs nor 401Ks offer any tax-sheltering.



Quote:
... Just keep in mind the rule of compounding. I would also mention he should probably dollar cost average into these types of investments.
He could go into business for himself as well, but you need much more to get going than what I suggested.
'compounding' and 'dollar-cost-averaging' are both reasonable ideas, for slowly moving upward in financial affluence. But neither method helps lessen your tax obligation.

A better 'rule' in investing is to use someone else' money.
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Old 05-06-2008, 07:25 PM
 
Location: Earth
4,543 posts, read 3,120,855 times
Reputation: 3375
Quote:
Originally Posted by silverfox View Post
Yes, you are correct, there are many investments that can do better, but most go in cycles, ie. real estate.
I am suggesting an easy approach that is "tax deferred" or "tax free" in IRA's and 401K plans as a
"good starting point" and something that he could get started immediatly. Just keep in mind the rule of compounding. I would also mention he should probably dollar cost average into these types of investments.
He could go into business for himself as well, but you need much more to get going than what I suggested.

It comes down to risk/reward and how each individual asseses each investment opportunity.

I happen to like commodities lately but wouldn't recommend for someone uninformed to invest that way.
At 20+ I think you should get your feet wet before jumping in depending on your experience and financial knowledge.
I have always managed my own finances and it is a continual learning process.
Go slow, ask lots of questions, don't always believe everything your hear or read, stay away from finacial planners, seminars, etc. unless you just refuse to learn and manage your own affairs.
There are many people out there willing to take your valuables from you so be alert.

The game is not only played buy the amount you can make.......
It's about preservation of assets as you proceed thru life.
Nobody will look after your money better than you.
I will be investing my government rebate check.....Thanks Mr. President.

Silverfox
I don't know anything about investing. that's why i'm here for starting out. I'm a civil servant. I don't make much but the benifits are very good. I'm trying to make my money work for me. I never had full time job until I graduated which why I'm trying to invest my money as early as possible.

It's cruel world out there and stuff happens. I want to be ready for health care costs and god know what else. I have very little experience with the financial game.

Quote:
Originally Posted by Huckleberry3911948 View Post
read your profile. your post is not 100% in sync with your profile unless it was meant to be humorous. saying no debt except student loans is like saying ham and eggs minus the ham. "bum" and "millionaire" dont fit together well do they? what do you do to retire a millionaire? focus.
My profile is meant to be a joke. I'm very concerned about privacy online and I do not put personal information unless absolutely necessary. I don't have a my myspace or facebook.
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Old 05-06-2008, 07:33 PM
 
Location: Forests of Maine
30,732 posts, read 49,546,472 times
Reputation: 19166
Quote:
It's great you have been in the right place at the right time for so long, but where I have been there has been a rental crisis that lasted for about 1 1/2years a while back. Overall though I think it is a stable investment but not everyone wants to be a landlord.
East coast, West coast, and overseas; my career transferred me around a lot. I was able to do well buying properties at each location.



Quote:
Not many, but it depends on how you invest the monies. I have been able to extract and average of approx. 50% gains for the last 7 years.
50% gain in 7 years is 6% APR.

50% APR on the other hand is very good indeed.



Quote:
What about Roth IRA's. All gains going forward are tax free.
Yes and how much of your earned income does that shelter?



Quote:
Very true and an excellent point, but not easy to accomplish from the
"get go" of ones financial career.
Yes I know, I bought my first building while in college, working minimum wage, and supporting a wife and child. From my experience you do need to start with at least a 20-hour per week minimum wage job.



Quote:
You have chosen and evidently been able to execute a plan to accumulate rental properties. I applaud you for your success
thank you.



Quote:
I on the other hand have made most of my money in the stock markets.
Congratulations, succeeding on the stock market is very rare. From my acquaintances I have seen that it seems to be far more common for landlords to succeed, than traders.



Quote:
The message in the story is "Do what you do best" but make sure it's profitable.
And that you don't pay income taxes, of course.

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Old 05-06-2008, 08:50 PM
 
692 posts, read 2,798,008 times
Reputation: 346
Quote:
Originally Posted by forest beekeeper View Post
I guess so. [about the cycles]

Having been collecting apartment buildings since 1985, I have not seen the 'down cycle' in the market yet.

So if it does have a cycle, it must be a looong one. 40 years? 60 years?





'tax deferred' is not tax free.

And while an IRA may be a better use of money than spending it on whiskey, it will not move you toward the mark of being a millionaire, nor of being independently affluent.

A 401K may be good in the context that your employer is paying into it also, thus giving you more money. but even then how many 401ks do better than 15% APR?

Neighter IRAs nor 401Ks offer any tax-sheltering.





'compounding' and 'dollar-cost-averaging' are both reasonable ideas, for slowly moving upward in financial affluence. But neither method helps lessen your tax obligation.

A better 'rule' in investing is to use someone else' money.




Forest beekeeper,

It appears we have both done very well at our life long crafts. I took early retirement in 1997 and then took on my financials full time.
Yes you read it right. 50% average for each of seven years.
Started out in Tech stocks until the tech bubble burst, waited a year and then got into Gold and Silver stocks in 2001. Added platinum and uranium in 2002. Also owned some other commodity stocks as well.
2006 was a 150% year.
Most all of this money was in our Roth and Traditional IRA's so the profits were tax deferred and tax free as well.
Like many things in life it's about luck and the timing, but I really don't consider my success to luck. It's been more about research, determination to succeed, persistance and just hard work.
I never take on a task voluntarily unless I go all out to do my very best. It is one of the things in my life that has guided me to success. My friends however always let me know how lucky I am, but do not seem to want to take my suggestions or advice. Oh well.
I hope we both have enlighten "Dangerous Boy".

I just wish I were younger and could do it all over again. It's been a blast.

Silverfox

Last edited by silverfox; 05-06-2008 at 09:00 PM..
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Old 05-07-2008, 03:07 PM
 
16,092 posts, read 36,619,118 times
Reputation: 6277
I sometimes think about selling all the rental properties and putting it into the stock market ...but then I think about it and cleaning a few toilets is better than going down it..
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Old 05-07-2008, 03:15 PM
 
Location: Forests of Maine
30,732 posts, read 49,546,472 times
Reputation: 19166
Quote:
Originally Posted by Lakewooder View Post
I sometimes think about selling all the rental properties and putting it into the stock market ...but then I think about it and cleaning a few toilets is better than going down it..
LOL

Good point.

I rarely clean toilets. Blowing texture onto walls followed by a coat of paint is what I have done more often than cleaning toilets. I like having a manager

Just sometimes I have to move back into a building, fix what the previous manager had let slide, and find a new manager. But I guess that it adds spice to life.

Another good comparison between 'stock market' and rentals [besides the obvious risk difference]; is that stock market gains have traditionally been harder to shelter from taxes. Whereas rentals tend to shelter themselves, and can easily provide sheltering over other earned incomes.

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Old 05-08-2008, 01:44 AM
GLS
 
1,985 posts, read 4,852,596 times
Reputation: 2408
Quote:
Originally Posted by texdav View Post
You seem to be doing fine but I wouldn't worry about being a millonaire in your old age at the expense of wasting your youth. You don't have to spend alot of money to have good times and money will not make you happy. Even in rural areas their are people and things to do;but you have to look. As you get older you might find that the things in the city you think of as socal life are really not important.
Reps to you for reminding the OP to maintain some focus. It would be a shame arriving at retirement age a millionaire, but having spent most of the last 40 years worrying about becoming one. Even after several hundred years, Wordsworth's admonition bears reflection: " Getting and spending we lay waste our powers...".
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Old 05-08-2008, 03:32 AM
 
29 posts, read 98,780 times
Reputation: 27
Buy real estate! Husband and I bought acreage in upscale area when I was in my mid 20's. We decided we would do better by subdividing property even though we would have made out great by selling the large parcel.......anyway 2 years ago we sold one lot for 985K. First one sold at 325K 10 years ago. We have one more lot left and will wait for next real estate wave since lots are getting scarcer. we've seen 3 real estate waves during our ownership so we know it'll come. They don't make any more land. I retired 2 years ago at age 53. Did I mention we paid 65K for 16 acres? we paid more than that to develop it. good luck
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