manage half a million dollars for me.

[rudeboyja]

Job well done sir.

but I would add female hookers into the mix as well.

Hell yeah. I'm sure the ROI on running a brothel is like 1000000001%

 

[Razorguns]

uhhhhhhhhhhh, who the F told you that a municipal bond will double your money in 5 years, FYI, that is a 15% AFTER TAX rate of return (in "real life" they pay about 3.5% after tax right now guys).

Also, who in the shit has made you all believe real estate prices never go down? You actually believe that it is really hard to lose money on real estate? I'm 25, and I'd like to have a heart attack reading a lot of the responses in this thread. Real estate is as CYCICAL and industry as they come. It moves in 7 to 10 years CYCLES. Do you all know what a CYCLE looks like? it goes UUUUP, and then it comes DOOOWN. Maybe I can help you guys relate to by thinking of steroids. You cycle them up, increasing increasing increasing dosage mmmmm feels good, then you cycle them down down down and you lose your muscle awww that hurts.

You must become familiar with history.

Past results are not an indicator of future performance. And who was it that said that the S&P fund will return you a "10% year after year, one year it might be -3% but not usually" or something which is TOTALLY WRONG AGAIN.

Let me show you again what the "real world" looks like:

12/31/95 37.45%
12/31/96 22.84%
12/31/97 33.31%
12/31/98 28.54%
12/31/99 21.02%
12/31/00 -9.08%
12/31/01 -11.87%
12/31/02 -22.11%

That, friends, is the end of a BOOM (or what you're more familiar with "BULL" market) and the beginning of a BUST (or yes, a "BEAR")

The market almost NEVER, EVER ACTUALLY returns 6-12% in any one year, that is an AVERAGE, that is why people say the stock market is "RISKY" short term.

There is only one way to truly be an investor, and that is to learn what the INTRINSIC VALUE, (look it up) of the asset you are buying is, and buy it for LESS. That is the only way.

Buying a condo in South Florida for $500,000 because they've been going up, in the hopes that there is some other scmuck out there who will buy it from you in 2 years for $600,000, is SPECULATION, it is GAMBLING. Do you know how you should truly value that piece of real estate? You should take that purchase price, figure out your monthly mortgage payment, check rental rates in the area, and see if the monthly rent payment will cover the mortgage payment and give you a positive monthly cash flow after all expenses are paid. If you can do that, and you find the mortgage is POSITIVELY GEARED (meaning income > expenses) you have a piece of real estate that you should CONSIDER buying.

Land? Works the same way. What is the INTRINSIC VALUE? What is it's highest and best use? How can you find it? Well appraisals are a start. They will run you through sales comparables, show you what others have paid for land in the area, what a developed building on the land is worth, etc. etc..

Again, all I stress is, buying because something has been going up, in hopes that it will keep going up, is not investing. It is not investing. It is not investing. It is subscribing to The Greater Fool Theory.

For those of you unfamiliar:

A theory that it is possible to make money by buying securities, whether overvalued or not, and later selling them at a profit because there will always be someone (a bigger fool) who is willing to pay the higher price.

If you want to speculate, and be a gambler, then so be it, but call yourself that. IF you don't do your research and make sure you are buying $1 of assets for less than $1, then you will take it up the ass when the inevitability of the next Real Estate Bust (which the last one was just in the early 90's folks) begins. You will be holding the bag. And you could lose all your money. I'd like to say I never knew anyone who went bankrupt buying stocks without using margin, but if you think using 90% leverage and buying real estate is SAFER unless you know what you're doing, you need a lesson in debt.

Do you know what putting 10% down and borrowing 90% really means? It means that if the value of the asset you purchases declines by as little as 10%, you have lost all your equity.

Let's go through an example:

10% down on a $200,000 property, $20,000 cash, $180,000 loan.

Real estate bust. Properties decline in value 30%.

$140,000 property, 0 cash, $180,000 loan. Foreclosure. Bankruptcy.

$20,000 cash, buy $20,000 in stocks.

Stocks crash, lose 50%

$20,000 is then worth $10,000, you aren't bankrupt.

Risk is all relative.

That being said, I love investing it's great.

Holy phuck!

I have no need to reply now! lol. Although i would ask first if this person is more geared towards passive investing, or active investing. Seems like he wants to do the former and get the rewards of the latter (don't we all).

I always suggest, put the money away in something safe UNTIL YOU FIGURE IT OUT.

Don't rush this shit. There's more than enough hungry wolves out there masquearding as financial advisors to the heavens, who'll be glad to take your money.

And look into RE Developments and the track record of those who want ur money.

 

[bdog527]

Vanguard Selected Value Fund
Vanguard 500
Vanguard Wellesley Income Fund


Spread it out across these three funds and tell him to get a job. Unless this kid can't work for some reason it's unrealistic for him to expect to live off it for very long, however invested properly he can retire early and very wealthy.

 

[gotmilk]

Real estate but only something he can flip quick. I'd look for something that can be bought quickly and sold off just as quick.

I bet their are lots of private sales in Southern Florida where owners are forced to sell due to health reasons or financial reasons. You just need to know where to look.

I'd bank some in a high yielding money market account. You can find banks with 6 month deals where you can withdraw money without penalty.

I was just looking at a bank in Florida because I want to buy it and take it public. There are some decent interest rates coming from some of the smaller banks down there.

 

[bullett]

I don't know where the money should be put, but If I had 500k, I would put 40k down on a 160k house, use the money I make at my current job to live on (utilities and mortgage) and make the house bigger and change the layout to my taste and slowly add new furnishings, pay off 18k in debts, put 25k in a savings account, put the remaining amount (roughly 420k into an account that would give me at least 10%. Live like this for seven years, quit my job and live off the 80k a year that I get in interest.

LMAO.....10%....good luck

 

[MattTheSkywalker]

now i see why MTS likes bran

I like Bran a lot. Bran you have an email coming this evening, and btw the stuff you wrote on this thread was spectacular.

Hopefully jackangel you also see why MTS doesn't touch these threads anymore.

The only acceptable answer here is to sit down with a private wealth management consultant aka "private banker" and discuss strategy.

Most major banks will put you in touch with a private banker with $500K; only the really boutique ones ask for more than that. Bank of America, Wachovia, etc will all turn you on to advisors who can direct you; they have other clients you can talk to.

Posers. Everyone here does so well financially but virtually no one knows anything about what to do with all the cash they are supposedly earning.

 

[bullett]

Well, I'll tell ya real estate is ok, but you better know your shit. I bought a lot 10 years ago...2.2 acres on a private lake in a hot suburb....nice, right? I had a bonus check for 100k, and bought this lot for 65k, thinking that I'd either put a custom house on it (4000 sq ft minimum), and resell it, or just wait a few years until the other lots were sold, and make lots of return. Well, I just sold it (10 years later) for 75k....not a very good return.

Someone said it earlier in this thread, real estate cycles also. Not likely you will lose mooney, but you may tie your money up and not make much either... AND btw, you can't borrow against an un-improved lot...

 

[pitbullstl]

Posers. Everyone here does so well financially but virtually no one knows anything about what to do with all the cash they are supposedly earning.

heh....

I am also positive everyone here has $100,000,000 portfolio.

I say you buy 500,000 Livestrong Bracelets.......great cause.

 

[gonelifting]

I stand by my post. A nice Apartment building with a huge rent roll. The income would hopefully add up fast enough to cover any downdraft in the RE market and possible rents falling. I love the fact that you can have all those rents under literally ONE ROOF. If you have 10 single families, then you have 10 roofs to worry about fixing. It's something worth looking into.

 

[Becoming]

heh....

I am also positive everyone here has $100,000,000 portfolio.

I say you buy 500,000 Livestrong Bracelets.......great cause.

I know I don't know shit. That's why I'd move to mexico.

At least it would be fun.