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If you HAD to invest 40k, what would you do?
Old 05-08-2006, 03:05 PM   #1
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If you HAD to invest 40k, what would you do?

I got to thinking (I'm not even remotely close to trying this...dont worry). But what if I tried to max out a HELOC to invest. I have a 40k line I'm opening. It's at prime plus .5%. SO, I'd have to earn 8-9% or so to break even.

HOW would you invest that $ to assure a profit?

Just wondering....
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Re: If you HAD to invest 40k, what would you do?
Old 05-08-2006, 03:09 PM   #2
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Re: If you HAD to invest 40k, what would you do?

8 to 9% with little risk? Let me know where you find that. Best I can do is ISM, which might get you to 7%, and would only get you higher if it bounces upward in price in short order. Other than that, you would have to take a substantial amount of risk to get that kind of return.
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Re: If you HAD to invest 40k, what would you do?
Old 05-08-2006, 03:14 PM   #3
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Re: If you HAD to invest 40k, what would you do?

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HOW would you invest that $ to assure a profit?
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Re: If you HAD to invest 40k, what would you do?
Old 05-08-2006, 03:16 PM   #4
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Re: If you HAD to invest 40k, what would you do?

Of COURSE it would be risky. that's why I wonder what you would do to achieve it, while trying to NOT lose your investing capital


just one of many random thoughts that crossed my mind today




I do hear that alpaca farms do quite well.....
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Re: If you HAD to invest 40k, what would you do?
Old 05-08-2006, 03:18 PM   #5
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Re: If you HAD to invest 40k, what would you do?

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Originally Posted by thefed
I do hear that alpaca farms do quite well.....
I don't plan on losing my capital and I think that STON and EGLE would handily pay the interest cost and likely deliver a profit as well. Natrally, I own both, by way of fair disclosure.
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Re: If you HAD to invest 40k, what would you do?
Old 05-08-2006, 05:50 PM   #6
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Re: If you HAD to invest 40k, what would you do?

Quote:
just one of many random thoughts
dangerous thinking ... best you cut that out!
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Re: If you HAD to invest 40k, what would you do?
Old 05-08-2006, 07:16 PM   #7
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Re: If you HAD to invest 40k, what would you do?

brewer , what 's ISM how does it get you 7%? can u share the secret?

enuff
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Re: If you HAD to invest 40k, what would you do?
Old 05-08-2006, 07:32 PM   #8
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Re: If you HAD to invest 40k, what would you do?

thefed,
If I were you I would be looking for another property to do the same thing. You obviously figured out how to make money with properties so why not continue along that route?
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Re: If you HAD to invest 40k, what would you do?
Old 05-08-2006, 08:07 PM   #9
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Re: If you HAD to invest 40k, what would you do?

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thefed,
If I were you I would be looking for another property to do the same thing. You obviously figured out how to make money with properties so why not continue along that route?
I was THINKING!!!! I'm just curious what route people here (who I hold in very high regard) would go. Would you play penny stocks? blue chips? Index funds? Hog futures? Gold? Resal estate? REIT's? Start a a small business? Loan it to your gambling addicted uncle?


I'm CURIOUS. I would NEVER do anything other than another rehab. BUT, if I did do somethign crazy like that, I think I'd alot 5k to penny stocks...that'd keep me busy. then I'd spread the other 35k amongst a few funds. Simple as that.

Sorry for asking! I am BORED ALL DAY at work, so I always daydream lots of stuff. Yesterday was what I'd do with a million bucks...or 650k since I 'won' it on the lottery.
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Re: If you HAD to invest 40k, what would you do?
Old 05-09-2006, 05:50 AM   #10
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Re: If you HAD to invest 40k, what would you do?

When this thread first started I could not think of anything that I would put your $40K into.* *The stock market is at a 6 year high, the Fed is still raising interest rates, folks need money to pay for gas as opposed to paying for other things, etc.*

However, you might be able to scratch out 0.5% to 1% a month selling covered calls of major S&P500 companies.* *Last year, I mentioned selling calls on TGT.* The share price is still hovering between 53 and 55 and the May 55 call is selling for just above a 1% premium.

You could lose money, but you might make some as well.

FD: I have no open calls at this time.
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Re: If you HAD to invest 40k, what would you do?
Old 05-09-2006, 05:52 AM   #11
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Re: If you HAD to invest 40k, what would you do?

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Originally Posted by Enuff2Eat
brewer , what 's ISM how does it get you 7%? can u share the secret?

enuff
It is an exchange-traded invetment grade note issued by Sallie Mae that pays CPI plus a spread and is trading at a significant discount to par. I think it is a steal, but do your own DD. Search the forum and you will bring up some recent posts.
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Re: If you HAD to invest 40k, what would you do?
Old 05-09-2006, 10:21 AM   #12
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Re: If you HAD to invest 40k, what would you do?

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Originally Posted by brewer12345
It is an exchange-traded invetment grade note issued by Sallie Mae that pays CPI plus a spread and is trading at a significant discount to par.* I think it is a steal, but do your own DD.* Search the forum and you will bring up some recent posts.
Brewer is a market mover. Up almost 1% today. When Brewer speaks..........the Early Retirement Forum listens.
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Re: If you HAD to invest 40k, what would you do?
Old 05-09-2006, 10:28 AM   #13
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Re: If you HAD to invest 40k, what would you do?

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Brewer is a market mover. Up almost 1% today. When Brewer speaks..........the Early Retirement Forum listens.
Uhuh. Just don't look at the other two things I mentioned for their daily moves (EGLE and STON). Not that a single day means all that much...
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Re: If you HAD to invest 40k, what would you do?
Old 05-09-2006, 10:41 AM   #14
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Re: If you HAD to invest 40k, what would you do?

I took out an HELOC back in February 2005. My initial draw was $75K, and then around May/June I pulled out another $25K. I got Prime +.25%, so for awhile it looked pretty lucrative. My first payment was only 5.5%. However, my last one was 7.75% and the next one should go up to 8%.

However, I've been pretty lucky. That money, plus the money I got from selling my condo back in December of '04 has been spread out into mutual funds, stocks with a Scottrade account, an MMA with Emigrant Direct, and a few other things. I didn't track where that money specifically from the HELOC went, because it was pooled with the condo sale money.

But over the past year, just the ~$46K that went into my Scottrade account has made about $10K. And I haven't paid that yet in interest on the whole $100K HELOC! I paid $4827 in interest in 2005, and so far this year, maybe $3000. So I'm doing okay so far.

However, now that the interest rates are going up, I'm paying the HELOC down faster. I used to just take the interest payment and round up to the next $100. Lately though I've been paying $1000 each month, and might just move a big chunk of money from my Emigrant account to knock it down quicker. It doesn't make much sense to have a chunk of money laying around earning 4.5%, when I could use it to pay down an 8% loan.

I guess in alot of ways it sounds like I'm robbing Peter to pay Paul, while I'm having fun with Mary. But it seems to have worked, so far.
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Re: If you HAD to invest 40k, what would you do?
Old 05-09-2006, 08:49 PM   #15
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Re: If you HAD to invest 40k, what would you do?

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Originally Posted by brewer12345
Uhuh. Just don't look at the other two things I mentioned for their daily moves (EGLE and STON). Not that a single day means all that much...
No complaints here; EGLE paid out a dividend on the 3rd and maybe people finally noticed. I swear Fidelity didn't tell anyone that I raised my stop-loss today.

As for STON, the market seems to be losing interest. Are they done with their restatement actions yet? Maybe they'll come down below $20 again on their downward momentum...
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Re: If you HAD to invest 40k, what would you do?
Old 05-09-2006, 09:05 PM   #16
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Re: If you HAD to invest 40k, what would you do?

I've been having some fun with MFW. Up 16% yesterday.

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Re: If you HAD to invest 40k, what would you do?
Old 05-10-2006, 05:55 AM   #17
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Re: If you HAD to invest 40k, what would you do?

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As for STON, the market seems to be losing interest.* Are they done with their restatement actions yet?* Maybe they'll come down below $20 again on their downward momentum...
That is certainly possible, especially if it takes them a long time to do the restatements. Frankly, as long as they continue paying distributions that go up a least once a year, I am a happy camper. 11% yield on my purchase price. The stock can flatline for eternity and I will have more than made my return hurdle.
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Re: If you HAD to invest 40k, what would you do?
Old 05-10-2006, 06:23 AM   #18
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Re: If you HAD to invest 40k, what would you do?

Well now

I'm a short term trader in my hobby stocks - so if they don't do good after 7 years - I'll dump them.

heh heh heh heh heh
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