Investment BS Thread - Stocks/Futures/Mutual Funds/Bonds/Commodities/Options/ETFs/401ks/Etc

Not yet.

 

That’s a tough one! As an income NOW investor, I would say keep it, hire a property management company, and roll in the income. Or, take the total you could sell it for and figure out what you could do with that in the markets. I’d lean towards renting it out since you already have it, the hardest part (acquiring a property) is done.

 

Assuming you've lived in it for at least 2 years, you can rent it out for 3 years at which time you need to make another decision because you'll have to pay capital gains tax when you sell it after that, unless you move back in for a year. If it's been your primary residence for 2 out of the last 5 years when you sell it, then no capital gains.

 

When you say equally invested, I am guessing you mine dollar wise and not number of shares?

 

Dollar amount contributed by me. I let the winners run, so current market value is not equally weighted. I just pay attention to my total purchase (brokerage has a column with this number so it's easy to see).

Not a scientific method, and not really anything I have read about. Just what I like to do to reduce my personal risk (I can only lose so much this way, and in a worst case scenario if a business completely fails, I lose about 3% of what I have contributed).

Share count means nothing. One share of AMZN is the same position size as 265 shares of F. I hope nobody balances their portfolio on share count, that may cause some problems!

 

Ok. That is what I figured you were going to say.

 

I just try to break everything down and explain things on this thread because I don't know everyone's knowledge level. I am sure some are way above me, and others may be just getting started. Didn't mean to insult your intelligence if that post came off that way.

 

It's a great plan.

One thing you may want to look into though. If you have any offers, you can do a cc balance to cash transfer. Typically you can get a fee of 4% and some kind of 0% interest for a year.

Say you are 10k in the hole in CC debt? You can pull 10k from a CC through a balance transfer with 0 interest for a 400 dollar fee. So basically you get 10k in cash and you get a charge on your CC for 10,400 dollars. That money is at 0 interest. If you can pay it back within a year, do it. Pay off all of your CC debt with that initial 10k, and pay off that 10k over the year.

I know you are paying CC debt with a CC and that is typically a no no, but if you are smart about it, it can save you a ton of cash from interest payments.

If this doesn't make sense, I can build some kind of example. Sorry, I teach this to people in person mostly haha.

 

I swear, they should also make it where property can’t be foreclosed on for absent pay as well.

 

no, it makes sense but I’m a bit more in debt than that. I bought the house completely debt free, I put the down payment down and instead of working on the house slowly but surely I started using cc’s to renovate it. Once I got the cc fever again, I somehow thought it was ok to use cc’s foolishly again. If ever I’m on the Dave Ramsay podcast, you’ll know it’s me because he’ll be calling me stupid, foolish and a bafoon.

 

Thats everyone on his show

Did you hear the 18 year old kid who called him up and said “I disagree with your stance on credit cards Dave” and proceeded to tell him how his net worth is $25k

Dave basically hung up on him and is like “why do I care what some 18 year old says about money?”

I like that he’s hard on people, but I think hes hard on people in the right way.
We all do dumb shit, no one is immune.

 

I have never listened to Dave Ramsey, but hear so much about him, I may have to check it out.

I found that the book "Rich Dad, Poor Dad" explained it perfectly. You buy income producing assets while you're young and working. They eventually will produce a respectable income. You spend that income (from the assets), not the income you make working. This works great if you're willing to do it.

 

I’m currently making my way through Millionaire Next Door. Rich Dad Poor Dad is next on my list for finance books.

People argue a lot with Daves philosophies because they argue with his math. Well his plan isn’t about math, its about behavior. His rules control behavior in a way that produces wealth.
So while there are other philosophies on wealth building, his is really basic and is set up in a fashion anyone can follow regardless of income.
His plan is basically a plan that shows you why the statistics in Millionaire Next Door are accurate.

His Total Money Makeover is worth the read.

 

He's fine for people who have no sense of money management and are deep in debt and need concrete steps to get out of debt. But beyond that he has highly questionable advice. His views on CC's and recommendations on investments among other things are far from what I would consider sound advice.

 

I'll also clarify that my response is in regard to any additional contributions beyond what your employer will match. Because turning down a free, guaranteed 100% return on your investment is completely foolish and financially unwise. Because in that case you're throwing away a 100% ROI in order to pay of a 20% debt. Dave can talk about all the mental aspects of debt that he wants, but if you actually use your head it's clear that giving up 100% returns to pay off 20% debt is wholeheartedly a fiscally terrible idea.

 

10k was just an example. Still look into it. You can often get credit card consolidation loans that have lower interest rates. Sometimes balance transfers even are lower interest. Worth talking to your cc company about or looking into on your own. Sometimes easier to manage when everything is in one spot as well. And cut your CCs if you don't trust yourself. I've had to in the past, no shame. Truck parts called me.

 

sub'd. just getting started on robinhood

 

I use 401ks for that reason. I do the max match. If I stop working for that place, I will withdraw it with the penalties. But getting 100% ROI, and then paying 10% to withdraw early, is a no-brainer. I would of course invest it in my brokerage account after withdrawing it.

 

If you're just going to reinvest it, why not roll it into a qualified IRA and avoid the penalties?

 

If I want to fully retire next week, that won't do me any good. I have healthcare through the VA so I don't have to work (other than for money if I want more). I consider myself semi-retired, working so that I stay productive. My brokerage account is my retirement account, it's just there for now and not in 30 years. I work from home now and I'm not sure if I'll ever end up with a "real" job again.

I don't recommend my method to others, as I have left various disclaimers about on other posts.