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

Oh god damn it. I was talking about that to my girlfriend, that I wanted to pull out equity from my rental. She convinced me not to. I’m gonna do it if it hits again.

 

I'm sitting here thinking" we sure made a lot of money during Covid"

I can count on one hand the peeps in my circle that did not pull money out when the market was in free fall.

 

If someone needed the money to live that’s one thing, selling over fear is always a bad idea though.

 

Yep, my dad pulled from his 401K last month, I hated to see him do it and he hated to do it but they needed the assets to downsize (it’s Mom and Dad in a 3600 sq ft house and dad is out of state 4-6 months/yr).

 

Here's the way I see it - if I was retiring in May this year, in February (and well before that) my entire retirement would likely be in all bonds, right? Maybe a 90/10 split, live dangerously. When the market tanks, I'm safe, and when it recovers, I am missing out on them gainZ. BUT I can sleep soundly at night, since my retirement is still safe.

That's your rental. You could have pulled equity, which is fine, and earned a lot of money. Or lost a lot of money. But if you left it, you sleep soundly at night with a steady income stream before, during, and after this mess (well, maybe a bit of a blip during for obvious reasons). Without risking your investment in it already.

At least with retirement it would have been that "You planned for this day for 40+ years, now you're here, don't throw 40 years of planning and decisions down the drain because FUN looks like a good investment for half of your retirement...." Lost out, sure, but also could have lost big. Look at HTZ, if you bought on 18-Mar when it was at it's low, thinking "Aww heck yeah, they'll be back to 15 easy, 5x investment!", now we're at $2.65

 

I rode the train from 1.30 to 7, then from 9 to 11... I put a little bit back in it incase it runs on the 15th.

 

Yea, but your suspension find is still your biggest steal

 

True, I will say, I loose a shit ton of money to dumb things, but I make up for it with smart plays... I break even most of the time.

Today has been a hell of a ride, cant wait to get the red theme going again.

 

Yea that’s true...I’ve been marching towards that income stream for 9 years now. I’m like 4 years from paying it off and I’m only 33; it would suck if I lost it or extended my payoff date by a couple decades on a bad play.

 

free gambling is still fun

 

I used my stimulus check, then GNUS check for this ride.

 

freeer gambling is still funner

 

I, too, stimulated Robinhood with my daddy trump allowance.

 

To add to my last post, there are ways to do it. If you have a diverse portfolio (at least 20 stocks), you can raise money by selling winners at gains, selling losers at losses, or close to break even. I was up on plenty of individual stocks at the market lows that I could have sold at gains.

 

Gah, it's times like that I am second guessing my decision to say NO to rentals. I could totally buy a 3 family and live in the top floor (F living underneath anyone ever again). I need to live somewhere anyway, might as well have first floor paying the mortgage and 2nd floor paying for maintenance and everything else. Maybe, we'll see what the next few years bring.

 

And now I have the red theme again

 

My experience with rentals is that the gain is in the equity - not in cash flow. They can even be slightly cash flow negative. BUT you're leveraging your capital investment (downpayment) against the real estate value gain, coupled with the tenants paying the principle (adding to your equity), taxes, and interest on the loan.

Another factor is you're depreciating the property - so every dollar of depreciation offsets your rental income and comes off your income taxes at your marginal rate. Then when you sell the property, you pay the tax at the lower LT capital gains rate. Kind of a convoluted / delayed payback, but it is a factor depending on your marginal rate.

The single biggest thing with having tenants though is being extremely consistent in how you interact with the tenant - the rules are the rules, they break the rules there are consequences, gotta pay to stay. Also I'd suggest ensuring minor stuff like lightbulbs is theirs to fix, minimize what appliances you provide (because they're your problem if you provide them), be compassionate if they come to you with a problem but be careful not to get rolled over (rent's gotta be a priority not a if-I-have-money-left thing).

 

If they dip back down here is where I have my stop loss sell orders placed at, NRGU being my biggest earner thus far
UCO - $27.50
NRGU -$6.20
CPG - $1.90

 

Oh, yeah. The issue is when we had to evict the "friends" that were "tenants" at my dads house when he passed. Holy crap, what a nightmare. It was of course a worst case nightmare scenario (estate, no leases, horrible people). But, I can sleep soundly missing out on the investment opportunity knowing I never have to deal with that headache again. And I wasn't even the executor, my sister had to deal with all that. Same with an HOA. I've never had an HOA, and I never will. I've never had a bad experience but I want to not put myself in the situation for that to even be an option.

 

I'm at 4.55 on NRGU so I might start putting in stop losses soon. I think I'll ride it through June Q2 and then see what Q3 says and start putting in some stop losses then. Once it hits 10 I'll be happy, 20 happier, 40 vacation