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Im young, so are there any 'set it and forget it' type of investments?
Old 08-10-2010, 03:43 AM   #1
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Im young, so are there any 'set it and forget it' type of investments?

I just turned 24 at the end of July, and since I am young I assume that I have quite a large amount of time available for any money I put some place now to compound and grow on its own without me touching it to a point where in 20 years its amassed its self in many multiples of what was originally invested?

I am lost on what to do and I am shying away from doing a lot of the leg work myself as I have the vision that it will take several hours of research every week to stay on top of the markets and status of all my investments (that's after learning about all my options, like ETFs?), this is not really what I would like to do.

I have about $450K saved up in total but not liquid.
I have $240K in 3 houses in Florida which are all rented out paying $900/month rent (before taxes/insurance, no mortgage).
I have $80K in the stock market kinda just sitting there, and I have $100K in a short-term 1 year hard money loan paying 11% that I just started on.
Every month I save another $30K-$33K in the bank. The next $160K is already spoken for as I'm buying 2 more houses in Florida (at which point I think I will stop since I will have 6 or 7).

All I know is that I want more recurring income or a good chances bet in place somewhere so that I can stop worrying about my future as soon as I can.

My money in the stock market isn't really doing much. I'm up like $4K between BRK-B and NEE+F. My GOOG and C are a few hundred down, but I expect them to pop back up.
Could I be doing something a lot better with that $80K?
What about in 12 months when my $100K comes back?

I know what I have now is a good step, but what next?
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Old 08-10-2010, 03:59 AM   #2
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Originally Posted by Fantasm View Post
I have $240K in 3 houses in Florida which are all rented out paying $900/month rent (before taxes/insurance, no mortgage).
I have $80K in the stock market kinda just sitting there, and I have $100K in a short-term 1 year hard money loan paying 11% that I just started on.
Every month I save another $30K-$33K in the bank.
I have no idea what a "short-term hard money loan" is, but I gather it's a way of getting 11% out of your money, so good for you.

You've shown $2700/mo in pre-expenses rent, and $1100/mo in interest on that loan. Where does the other $26200-29200 per month (saved on top of your living expenses) come from? If I had that amount of money coming in, I wouldn't be getting my financial advice from strangers on the Internet; I'd be too busy discussing asset allocation with my private bankers in their plush offices.
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Old 08-10-2010, 04:15 AM   #3
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My monthly savings are all from my company... I am not FIRE yet.
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Old 08-10-2010, 04:20 AM   #4
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My monthly savings are all from my company... I am not FIRE yet.
What do you do? Are you hiring?
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Old 08-10-2010, 04:27 AM   #5
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You have accumulated a fair amount of money for a 24 year old... Just keep in mind, it is possible to lose it with any sort of investment. Continue to educate yourself.


IMO - It is a bad idea to "set and forget" any investments. Keep and eye on them always. Be careful and do not take too much risk. I would not recommend investing in securities, loans, assets that one does not understand. Develop a long-term plan... from now to a planned retirement and on to your ultimate demise. Your plan will evolve over time... it usually does for everyone (as the future unfolds).

I use low cost Mutual Funds that are reputable and have a good track record. I generally have invested for long-term goals such as retirement. A number of people in this forum use VG... there are several other good options available. I have been asked similar questions by relatives who had a goal of investing for the long-term for retirement... I usually tell them to consider a few of balanced funds where the Mutual Fund Manager rebalances (i.e., stocks and bonds... well diversified, etc). But have cautioned them that they need to understand the risk! Education is one's best friend when it comes to finances... learning through negative experience is expensive!

Generally speaking about retirement investing... when one is nearing the end of the accumulation phase and nearing the decumulation phase, the tactics and strategies change a little. This is another area that I would advise one to understand...

Finally... do not rely solely on advice from others and blindly follow it. Educate yourself!
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Old 08-10-2010, 06:00 AM   #6
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Writing a book are you? An interesting story line -- right at the edge of believability as good fiction should be.
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Old 08-10-2010, 10:20 AM   #7
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I agree with BigNick: since you enjoy annual disposable income of almost $400,000 (after taxes, living expenses and fancy cars), perhaps you should spend a tiny fraction of that money and obtain professional advice.

But anyway, here you go.
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Old 08-10-2010, 10:44 AM   #8
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I have no idea what a "short-term hard money loan" is, but I gather it's a way of getting 11% out of your money, so good for you.
....
We've been doing hard money loans as well - never bothered to look up a definition before.
Wiki has the answer, or there is this: The Truth about Hard Money Lenders? - The Truth about Hard Money Lenders

That's sorta mostly real, though there are differences in valuation and such - and we loan on real property only - and no way I'm loaning more than a fraction of what a property is worth. My blue sky loan cost way too much and peeves me. We are the old fashioned type that look at the property before lending.
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Old 08-10-2010, 10:48 AM   #9
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I find Fantasm's story a little far-fetched, unless he is a trust fund baby............
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Old 08-10-2010, 02:05 PM   #10
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Dunno, could be possible if he started what would eventually be a successful company while he was 18 or 19, and decided not to go to college. I remember reading a blog of a girl that did that with a data hosting company that she sold to a competitor for $1.6M at age 26 (somewhere around that age and amount). She was only pulling in $80-100k/year though before the sale, probably would be even harder to build something that paid even more a year right away.
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Old 08-10-2010, 05:37 PM   #11
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I find Fantasm's story a little far-fetched, unless he is a trust fund baby............
+1, though who knows.

It does seem odd that a young person who by his own account works very long hours at a demanding, high performance computer job would be cruising this forum. It is also passing strange that someone living and working in Los Angeles would have the bulk of his savings invested in individual rental houses located in Florida. But again, anything is possible.
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Old 08-10-2010, 05:41 PM   #12
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+1, though who knows.
Oh! I must be on a lot of "ignore" lists.
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Old 08-10-2010, 08:11 PM   #13
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I would hire an investiment advisor by the hour, and not even bother with an internet forum. At $400,000/year net income (especially at 24), you really should be getting some professional advice.

My biggest concern would be losing, what appears to be, a very substantial income stream

Congrats on being so accomplished at such a young age. I must admit that I am somewhat envious.
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Old 08-11-2010, 08:28 PM   #14
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My money in the stock market isn't really doing much. I'm up like $4K between BRK-B and NEE+F. My GOOG and C are a few hundred down, but I expect them to pop back up.
Could I be doing something a lot better with that $80K?
What about in 12 months when my $100K comes back?

I know what I have now is a good step, but what next?
Did not read the replies to your post.

Why not use one of the target date funds so you can get to your 'set and forget' process. Just a thought. You look like you've got it together at a fairly young age. Best of luck to you.
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Old 08-17-2010, 02:30 PM   #15
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Writing a book are you? An interesting story line -- right at the edge of believability as good fiction should be.
Yeah, that's what I thought or otherwise I'd've proposed to him .
But now he's gone to an advisor probably, y'all shooed him away.
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Old 08-17-2010, 03:32 PM   #16
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I'm not sure about fantasm but:
Would any of you guys recommend, at this point in the market, buying a home or two near the beach, say Foley, Alabama for rental property?
I would like to produce rental income and maybe a place to vacation near the beach area for the future.
Steve
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Old 08-19-2010, 07:18 AM   #17
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I would like to produce rental income and maybe a place to vacation near the beach area for the future.
Ew! Ew! An even better story-line.
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Old 08-19-2010, 08:11 AM   #18
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My God! What do you do that allows you to accumulate $1,000,000 by the time you are 24 years old? You aren't a contract killer are you?

This looks like old-money inheritance or you won the lottery.

Just jealous. But seriously, in my opinion, you need enough cash to put it in lowly but full protected CD's at 3% interest and have enough money to live on the interest.

The key, in my opinion, is not to lose any principal. Years ago, before the stock market booms, and before everybody became a stock broker and money manager, all the investment volumes said that within 12-15 years of retirement, you needed to take everything out of everywhere but 10% and put it into either Treasuries or CD's. In a downturn you need to have enough time to make it back.

This is a key piece of advice that many of my baby boomer friends failed to heed. Now many of their 401K's have all but disappeared and they are now planning on working until they are 75, to make up the money. Most of them will really be working until they die.
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Old 08-19-2010, 08:19 AM   #19
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I'm not sure about fantasm but:
Would any of you guys recommend, at this point in the market, buying a home or two near the beach, say Foley, Alabama for rental property?
I would like to produce rental income and maybe a place to vacation near the beach area for the future.
Steve
My parents did that. They built two houses on the beach in Topsail Island, NC, right next to the New River inlet. What they didn't count on was a) hurricanes, and b) the fact that as soon as the Army Corps stopped dredging the New River Inlet channel, the 300 yard beach in front of their houses would disappear and the breakers would be running under their houses at high tide, causing them to be condemned while they were still holding mortgages.

Build to handle a category 4 hurricane, and not on the waterfront. I suggest a concrete Dome house on telephone poles 10 feet off the ground back far enough from the water to be safe from loss of beach. Such a house is pretty much indestructable even to tornados, and high enough off the ground to be impervious to storm surges and floods(works against nuclear fallout too). Be sure to make a platform for your car too.
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