people are always going to eat, drink, smoke, reside, and drive. invest in those things.
people are always going to eat, drink, smoke, reside, and drive. invest in those things.
I always wondered if investing in sugar would be a good bet. I mean, the stuff is addictive as all get out. Mmm...sugar...
I dunno, the stock market has been pretty good to me. I've put most of my savings into it, increasing contributions over time as my income has increased. Amazing how it accelerates in value when you do that. Took 30 years to save my first million, only 3 to get 30% of the second. This is the tortoise version of investing/saving, versus the hare version that entails a lot more risk.
Sure, there have been some drops along the way, but the market has always recovered. Of course, I'm using a portfolio approach that is well diversified and includes other investments like bonds. I consider it investing in America.
My biggest fear is that I'm actually doing the ant version of saving/investing and that government will decide that I need to support the grasshoppers in my old age, as well as myself.
In reply to SVreX:
[This is gonna be geeky, fair warning to the disinterested. Margie, please please please don't banhammer me. I will stick to economics - no politics, I promise. This is about the consequences, not the wisdom, of policies.]
There are no easy answers to the OP's question, especially in the near term. The Fed and Treasury have been quietly devaluing the dollar using Quantitative Easing, effectively inflating the government's way out of debt.
[Sidebar: QE, not scarcity is why commodity prices such as gasoline have increased over the past few years into a recession, during which time reduced demand would usually cause prices to fall. Nearly 100% of the government's borrowing is being financed by the Federal Reserve and has been pushed "short", that is, into short-duration notes of 24 months or less, mostly 6-12 months. What is the Fed buying? Treasury notes, bills and bonds. There are effectively no buyers other than the Fed because nominal yields are effectively zero. This is how QE is hurting retirees and conservative institutional investors like banks and foundations: by pressing yields down to almost nothing the income streams from these investments isn't there.]
The government's strategy of controlling its cost of borrowing and debt service using QE to ensure low interest rates is not sustainable over time without inflation getting out into the open and creating a real problem. To now, inflation has been disguised pretty well by changes to how it is measured and by, for instance, repackaging retail goods to keep the price steady by selling a smaler quantity. Inflation is nominally low right now, but you buy gasoline and see that it hasn't been below $3 in years despite less consumption, and have probably noticed that a pound of sugar is 12 or 14 ounces these days, your package of cookies used to be 16 ozs but is 12 now, and beef sure is spendy.
When the time comes that inflation results in rising interest rates, the country's borrowing costs will spike and the government will face difficult choices such as default, very large tax increases to cover the cost of borrowing, and/or steep cuts in spending that will of necessity change the package of benefits offered by Medicare, Medicaid and Social Security. We would see cuts to defense and dicretionary programs as well, but spending on social services is the primary driver of debt right now and for the forseeable future.
As far as investing goes, we are in new territory and don't have references for what has worked in the past to rely on. Certainly, the old standby of government notes isn't yielding anything, and neither are related/dependent offerings like bank CDs and money market accounts. QE has made it hard to find anyplace to put money, which is part of the reason so many larger companies are sitting on cash.
We are, I think, unlikely to see significant and sustained national economic recovery as things sit right now. Traditionally, this has argued against stocks but as I've explained, government paper isn't an option right now. Many municipalities have the same debt problems as does DC, so "munis" are especially dangerous; it is entirely possible we will see defaults in this arena. Further, you darn sure don't want to be in long notes in an environment of rising rates, when the day comes, so stay with short paper.
After QE is either exhausted or made ineffective, government notes will begin to provide yield again. If significant tax increases become likely, figure out how to increase your income, perhaps with a cottage business. Avoid all but the best bonds starting, like, now. If entitlement reform is undertaken, save as much money for retirement as you can because the safety net will get lower. In the meantime, you can only invest as you think best (to the OP's point) or make sure your portfolio is diversified enough to make money where it can be made for the next couple of years, until the country's direction is more clear.
Say it with me... Monorail....
My head hurts
Honestly, as a child, I never thought I would be in a position where I had enough money to "worry about money" if you know what I mean.
First world problems, for sure. (not bragging, I am actually humbled by the fact I have a surplus of money, I know MOST people around the world would gladly trade me problems)
I am looking at Franchise opportunities, I am very near the "net wealth" needed to secure a license. One person said in this thread, "people will always eat". I am looking into that.
Chick-Fil-A !
I invested by buying a house. The plan being to hold on to it for 5-6 years making small improvements and then sell it. With the returning market (at least in my neck of the woods) I could easily see a 10% return on a little sweat equity after 5 years, which feels good.
DaveEstey wrote: I invested by buying a house. The plan being to hold on to it for 5-6 years making small improvements and then sell it. With the returning market (at least in my neck of the woods) I could easily see a 10% return on a little sweat equity after 5 years, which feels good.
Keep close tabs of your TIME investment, and then see how much you are paying yourself after you are done.
10% on a 200k house is decent. Bad if the work takes 2000hrs. Great if it takes 200 hrs. This is where the whole idea of flipping cars has problems.
And watching the TV shows about doing re-models for rentals- most of them are getting $100/mo more than if they had done nothing. Seems like decent money, until you look at the big picture- $1200/yr for how much time and money invested?
What I'm trying to point out- there can be better ways to spend your time making money than working on your home or car. Find a good part time job...
alfadriver wrote: And watching the TV shows about doing re-models for rentals- most of them are getting $100/mo more than if they had done nothing. Seems like decent money, until you look at the big picture- $1200/yr for how much time and money invested?
My wife watches these and I just have to laugh. They are obviously little more than commercials for Home Depot and Lowe's.
EricM wrote: My head hurts Honestly, as a child, I never thought I would be in a position where I had enough money to "worry about money" if you know what I mean. First world problems, for sure. (not bragging, I am actually humbled by the fact I have a surplus of money, I know MOST people around the world would gladly trade me problems) I am looking at Franchise opportunities, I am very near the "net wealth" needed to secure a license. One person said in this thread, "people will always eat". I am looking into that.
There are also groups of private investors that pool money together and help those starting small businesses. I'd like to do this as a "hobby" source of income when I'm old and rich 
But seriously. I like the idea of putting the eggs of a lot of different baskets rather than "I'm going to buy a franchise restaurant..." depending of course on how much money we're talking about.
And yeah, real estate, with a ton of different ways to do it. Personally, I really want to take some of the cash we've got sitting idle and turn it into rental income. Mama doesn't want to deal with it. Thinks it will be too much hassle. When I look at how much I've paid my landlord (at the shop) over the last 10 years vs. what he paid for the building and the little bit of cash he's had to put into it, it makes me sick. And we are good tenants. I fix half the little chicken E36 M3 stuff myself, and there really hasn't been any "big" stuff over the last 10 years. He's made a couple hudred grand off me in the time we've been here...and he rents out a dozen or so other buildings around town, AND has a (presumably) 6-figure "day job." I want to be THAT guy. I digress.
I like the "buy it today, start making money off it tomorrow" program. Others like the "I buy an acre here and there when I have the cash" strategy.
Look at it this way, it's REALLY unlikely that land/housing is going to get any cheaper any time soon, and they ain't makin' any more of it.
Another random thought for me has been cashing in on the retiring baby-boomers. It is an astounding number that are retiring every day (thousands if IRRC.) Whether that's in the form of retirement communities/assisted living, etc., or selling bars of fake gold (joking) I dunno.
As for our "next big thing," I'll letcha know when it happens. Still trying to convince mama it's a good idea.
Sorry, I'm in a "stream of consciousness" state today.
PS: I don't know if Angry is selling stock for his "patent pending" idea yet, but when he does, you'd better believe I'll be buying some.
In reply to poopshovel:
things are progressing in my plan to be the pimp rather than the ho. as such, my accountant advised me to look into assisted living as an investment, so you're not alone in the realization that baby boomers gotta go somewhere before they die.
alfadriver wrote:DaveEstey wrote: I invested by buying a house. The plan being to hold on to it for 5-6 years making small improvements and then sell it. With the returning market (at least in my neck of the woods) I could easily see a 10% return on a little sweat equity after 5 years, which feels good.Keep close tabs of your TIME investment, and then see how much you are paying yourself after you are done. 10% on a 200k house is decent. Bad if the work takes 2000hrs. Great if it takes 200 hrs. This is where the whole idea of flipping cars has problems. And watching the TV shows about doing re-models for rentals- most of them are getting $100/mo more than if they had done nothing. Seems like decent money, until you look at the big picture- $1200/yr for how much time and money invested? What I'm trying to point out- there can be better ways to spend your time making money than working on your home or car. Find a good part time job...
Depends on whether you consider it work. I like cutting down trees and doing landscaping. It's releaxing after a day spent at a desk. We bought a place that didn't need much work to the house, but the yard was virtually non-existent due to 20 years of forest creep and what was available was a wreck.
I'm also talking 10%+ on a 450k house.
poopshovel wrote: PS: I don't know if Angry is selling stock for his "patent pending" idea yet, but when he does, you'd better believe I'll be buying some.
it's not pending. we are currently protected by US Patent 8231664, and another of our applications will be approved within the next few weeks
we are not selling stock, but we are offering a "convertible note" which is kinda like a corporate bond, with a pretty attractive interest rate and a couple of interesting options for payoff if our LLC is bought by one of the big boys before the note's maturity date. minimum buy-in is $10k and i must stress to you that it is a gamble, not a sure thing. we're on a good path, but if my doctor buddy gets hit by a bus it could end poorly.
due to adding partners, angel investors, the convertible note, etc, my ownership stake is down to about 6%. so i won't be able to retire right away, but i might be able to get out earlier than most.
bottom line: invent something. figure out some way to get paid for something people do every day (like eat, sleep, whack off, inhale, etc)
AngryCorvair wrote: minimum buy-in is $10k
Dammitt.
DaveEstey wrote:alfadriver wrote:Depends on whether you consider it work. I like cutting down trees and doing landscaping. It's releaxing after a day spent at a desk. We bought a place that didn't need much work to the house, but the yard was virtually non-existent due to 20 years of forest creep and what was available was a wreck. I'm also talking 10%+ on a 450k house.DaveEstey wrote: I invested by buying a house. The plan being to hold on to it for 5-6 years making small improvements and then sell it. With the returning market (at least in my neck of the woods) I could easily see a 10% return on a little sweat equity after 5 years, which feels good.Keep close tabs of your TIME investment, and then see how much you are paying yourself after you are done. 10% on a 200k house is decent. Bad if the work takes 2000hrs. Great if it takes 200 hrs. This is where the whole idea of flipping cars has problems. And watching the TV shows about doing re-models for rentals- most of them are getting $100/mo more than if they had done nothing. Seems like decent money, until you look at the big picture- $1200/yr for how much time and money invested? What I'm trying to point out- there can be better ways to spend your time making money than working on your home or car. Find a good part time job...
The OP is asking about investing. So your time invested does matter.
If people are happy earning below minimum wage doing projects on their house thinking they are making money- that's great. But if you are trying to make real money- gotta pay attention to the time.
$45k is nice. Depending on how long of a time frame you are talking. $45k over 10 years isn't a lot ($5000/year is a part time minimum wage job). Over 1 year, it is (enough to live on pretty nice).
The point is- gotta do the math. Time is money.
mtn wrote:AngryCorvair wrote: minimum buy-in is $10kDammitt.
Find 8 friends, and I'll throw a grand in. Hell, just get a loan from the bank for $10k, and if it turns out to be a "bad investment," just walk away. That's what people do, right?
alfadriver wrote: ($5000/year is a part time minimum wage job). Over 1 year, it is (enough to live on pretty nice).
And the thing is, your money doesn't have the opportunity to magically evaporate under your nose.
In reply to poopshovel:
since i know Barenaked Ladies are your favorite band, let me just say that if i had a million dollars, i'd buy you a CRX. 
AngryCorvair wrote: In reply to poopshovel: since i know Barenaked Ladies are your favorite band, let me just say that if i had a million dollars, i'd buy you a CRX.
Actually, I'm a big Pearl Jam fan. Eddie Vedder's social, political, and environmental views get my ladyparts all soupy. And the way he twirls his hair and speaks like he's retarded so people will think he's a genius? Swoon.
Wherever you end up investing, never forget the hidden wealth tax our treasury department refers to as inflation. With inflation at 3-4% annually, you will loose 3-4% a year if you let the money sit under your mattress. You could put it in the banks and get .00000001% interest on it or alternatively, you could take a gamble. I believe that many Americans did just that, they took a gamble in the stock market. I'm concerned that the stock market is artificially inflated because of our low interest rates. I mean where else are you going to put it? You could put it in a 5 year CD and get E36 M3 interest on it (about 0.8%); you could get 3% in a long-term treasury bond, so that you almost break even. I think that nearly everyone has their savings in the stock market now which creates an artificially high stock market. Ultimately, you have two choices IMO. You can either invest in precious metals or in a foreign market. With inflation at 3-4%, bonds and CDs really aren't viable options. Housing could be a good investment depending on where you live but ultimately, I wouldn't have the confidence to purchase a house with the amount our government is spending.
How about those who are interested invest a set amount per share and start buying up some investments.
I suggest real estate per JohnRW's thread
Do we have someone who is in a position to manage this type of deal onboard
Javelin wrote:Fueled by Caffeine wrote:Yeah, you know, the *real* reason to own stock.EvanR wrote: As for me, I buy dividend-paying, blue chip stocks, such as Coca-Cola. The dividends are way more than any bank account or CD will pay, and it is my personal belief that Coca-Cola is more likely to be around (and of some value) than money in a bank account, or cash under the mattress.Was going to suggest this. Buy strong and invest long.(Sssshhhh! Don't tell Osterkraut!
)
Don't take stock advice from a man who once said stocks aren't real things, or some nonsense like that. The archive is gone so I can't find that little nugget of wisdom, unfortunately.
AngryCorvair wrote: people are always going to eat, drink, smoke, reside, and drive. invest in those things.
Diageo plc has returned damn near 30% for me, and gives a pretty solid dividend!
aussiesmg wrote: How about those who are interested invest a set amount per share and start buying up some investments. I suggest real estate per JohnRW's thread Do we have someone who is in a position to manage this type of deal onboard
Would you link to John's real estate thread? That's the main thing I'm interested in at this point.
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