I have a little bit of money that I'd like to do something with. My cars are all paid off, no loans or credit card debt, and no expenses beyond monthly utility bills and rent. I have a traditional IRA I've had for years that's doing okay and some stocks that are doing great. I have enough in savings and cash to cover 6 months of expenses.
Where to invest now? I want to diversify but I'm also super low risk. I know the answer is to buy a fleet of cl cars and flip them, but I want this money to work on it's own.
Advice?
more stocks, a low cost index fund is the easy button.
Best bet is boring* and likely an 'entire market' index fund that follows the sp500 or something similar.
However, if I were gambling, I'd say healthcare, tech, and alternative energy will outpace the market over the next 20 years and oil will fall behind.
*for many - boring is exactly what you want in an investment, haha.
Either throw it in a stock fund or a bond fund depending on what your personal feelings about the future are. Vanguard is the old standby for cheap funds (especially as you get more money with them) but I think Fidelity has caught up on their cost basis for popular funds.
Land is also nice depending on where you are. Rate of return is lower and much less linear, but you can't walk around on an investment portfolio.
(not) WilD (Matt) said:
more stocks, a low cost index fund is the easy button.
I already have 2 of those and contribute monthly.
In reply to mazdeuce - Seth :
Land is what I was thinking as well. I'm by the coast and there's some great investment properties that can make income in the summer.
mtn
MegaDork
2/20/19 12:20 p.m.
If you want the money to work on its own, index fund, even if that’s what you’re already in.
If you want whats low risk, index fund, even if it’s what you’re already in.
If you want the safest bet in terms of a decent reward, index fund, even if that’s what you’re already in.
If you want something riskier but potentially much more lucrative, email me and I can send you the algorithm that I’m using for a portion of my IRA that has been pretty lucrative.
mtn said:
If you want something riskier but potentially much more lucrative, email me and I can send you the algorithm that I’m using for a portion of my IRA that has been pretty lucrative.
I'm interested in what you are doing here.
mtn
MegaDork
2/20/19 12:29 p.m.
Robbie said:
mtn said:
If you want something riskier but potentially much more lucrative, email me and I can send you the algorithm that I’m using for a portion of my IRA that has been pretty lucrative.
I'm interested in what you are doing here.
I'll send you an email later today with (a) what I'm doing, and (b) my analysis on it
On a truly pessimistic day I'd say shotgun shells and canned food.
STM317
SuperDork
2/20/19 12:35 p.m.
Take advantage of tax sheltered accounts.
HSA is the king of tax sheltered accounts as money spent on qualifying purchases is never taxed (and you're guaranteed to have qualifying purchases at some point in your life). IF that's already maxxed out, it's not an option, or you have more than $6000 I'd look to the next rung of the ladder.
401(k), IRA etc come next in the hierarchy as money is only taxed once. You can still max out the IRA for 2018 if you haven't filed your taxes yet, and then apply the rest ot 2019's contributions.
529 plan for the kiddos is a great option as well.
These are all just types of accounts that can contain investments. Any investments within should probably be invested in a mix of low-fee index funds/bonds that reflects your preferred asset allocation.
+1 to index fund. If thats what you already do, great. Just do more :)
+1000 to what STM said. Use those tax sheltered accounts as much as possible.
STM317
SuperDork
2/20/19 12:42 p.m.
Javelin said:
In reply to mazdeuce - Seth :
Land is what I was thinking as well. I'm by the coast and there's some great investment properties that can make income in the summer.
Real estate can be lucrative. You can also lose your ass pretty easily. You need to get very comfortable with running numbers on a property (1% rule minimum, then focus on cash on cash return) to really have a chance at getting a better return than the stock market.
Real estate is work. It's illiquid, expensive to buy/sell and increases your risk by having all of your investmentmoney tied up in a single asset. If this is an investment, then we must compare it to an index fund, which is the easy button alternative that is likely to return around 7% long term. That means that your real estate investment needs to do a lot better than the 7-ish% of an index fund to justify the increased risk and work required. I've been looking into real estate lately, and if I can't get 10% returns, then it really doesn't seem worth it to me. YMMV though.
In reply to Javelin :
I heard mentioned an idea lately that's been bouncing around in my head. A sort of air B&B for people with motorhomes/trailers. Not a campground, but secluded sites with a hard parking surface and maybe power/water for people traveling who are looking to have a more secluded spot than a normal campground. Not sure what the return on investment would be for the property and improvements, but it's interesting.
+1 to run the numbers. Paying for a mortgage + a little cash != making money. There are a lot of factors. If you don't leverage it you need a larger return. Upkeep costs a (literal) fortune.
The biggest issue IMO is: you can't just walk away. With an index fund, you can stop, rebalance, or cash out at pretty much any time.
Land has High carrying costs, low liquidity, low rate of return, and high liability risk. I have most of my personal investments in the total us stock market fund VTSAX. If I got a windfall tomorrow I’d just put more in there. It’s diversified and gives a solid return over a long enough time line.
Any real estate is a job not a passive investment.
I'm just not seeing anything stable right now. PM's is about it, but that's just an insurance policy against stoopid. Real estate is one thing, but it's kinda the investment that keeps on sucking. That is, if you don't have a positive cash flow on it right away, it is sucking from you: Taxes, insurance, utilities, etc.
"They" got me last time. Everything looked great in '07. Why aren't you playing too? Well, OK, I'll play. HAHA, GOT YA. I don't have 10 years to recover from another one of those. I'll just wait it out on the sidelines, thanks. If you have to park it somewhere, some T-bills, or bond funds that are heavy into those. Or, hey, Chicago has some great yielding bonds out or coming out. They even have some high yielding bonds with zero coupons and a 100 year maturity date. I forget the details, but they are "paying" something like 8 or 10%. Do teh maffs. We'll all be rich!
Invest in yourself!
Classes to make you worth more in the employment market, or just to gain knowledge in an area that interests you.
Spend less. It's like making more!
Beanie babies !
But really stay away from "collectibles " ,
20 years ago I would have said to buy good solid cars , but I do not see that as a good investment now to keep for 20 years....
Safe way is a bundle of the top 100 stocks , no drama if you are in it for the long term.
AngryCorvair said:
Weed
PUFXF is up 39% since I bought it. It doesn’t pay to invest in physical product because it always disappears
Dr. Hess said:
I'm just not seeing anything stable right now. PM's is about it, but that's just an insurance policy against stoopid. Real estate is one thing, but it's kinda the investment that keeps on sucking. That is, if you don't have a positive cash flow on it right away, it is sucking from you: Taxes, insurance, utilities, etc.
"They" got me last time. Everything looked great in '07. Why aren't you playing too? Well, OK, I'll play. HAHA, GOT YA. I don't have 10 years to recover from another one of those. I'll just wait it out on the sidelines, thanks. If you have to park it somewhere, some T-bills, or bond funds that are heavy into those. Or, hey, Chicago has some great yielding bonds out or coming out. They even have some high yielding bonds with zero coupons and a 100 year maturity date. I forget the details, but they are "paying" something like 8 or 10%. Do teh maffs. We'll all be rich!
Weird, I actually agree with most of this, except it took 5 years for the market to recover from the 2007-2008 crash. If you do need the money in the short term, then the stock market isn't a great place to park it. Try bonds or high yield savings accounts or CDs. But given that the worst stock market crash since 1929 was erased in 5 years, I feel pretty comfortable that the time line over which I plan to hold stocks (40-50 years) is safe.
STM317
SuperDork
2/20/19 1:37 p.m.
Patrick said:
AngryCorvair said:
Weed
PUFXF is up 39% since I bought it. It doesn’t pay to invest in physical product because it always disappears
That's been quite the roller coaster for the last 18 months or so...
Looks like some low times, but I suppose there were some high times too.
Dr. Hess said:
"They" got me last time. Everything looked great in '07. Why aren't you playing too? Well, OK, I'll play. HAHA, GOT YA. I don't have 10 years to recover from another one of those. I'll just wait it out on the sidelines, thanks.
Good point. Maybe keep it in cash for a couple more years at least?
https://money.cnn.com/2018/06/10/investing/stocks-week-ahead-ben-bernanke-recession-economy/
I would especially want to wait out the resolution of the unbelievable clusterberkeley Britain has brought onto itself.
