Discussion Topic |
|
This thread has been locked |
Grampa
Trad climber
So Cal
|
|
|
Nov 28, 2011 - 02:19pm PT
|
Deposit $400K in an Ameritrade Leveraged account.
This gives you approximately $800K buying power.
Purchase $800K worth of SDS ( S&P500 2x Short leveraged ETF )
Sell when the market crash bottoms in late 2012.
Disclaimer: While this strategy will work perfectly, timing is everything, so remember, buy low, sell high.
"This offer void where fraud is prohibited by law."
|
|
couchmaster
climber
pdx
|
|
|
Nov 28, 2011 - 02:23pm PT
|
This is something you need to sort out based on your age (and age to retirement), tolerance for risk, job skills, income and life goals. To start, immediately make sure your high interest bills are payed off and stay paid off. Any 18-22 percent credit cards or high interest loans. Make sure your retirement is funded to the max so you can defer taxes. You don't say where the $ came from, but you might consult a tax attorney if you are in doubt or unsure of your tax liability. A consult will be cheap and fast, and a possible huge return on investment.
Let the internet be your friend, and take your time. Certainly there are financial advisers and accountants out there who can help. Don't give them your money, invest it yourself.
http://findanadvisor.napfa.org/Home.aspx
BTW, I have some gold, but would not recommend it as an investment. Getting some gold should be likened to gambling, not investing. For instance, the aggregate cost to pull the gold out of that open pit mine in Nevada which Newmont owns is @260 an ounce. Thus, they are working as fast as possible to pull it out and sell it to us suckers for just under $1700 an ounce. If demand slackens, ask yourself where will gold prices be.
Certainly the old standby is sticking it into a bunch of no load mutual funds to get the diversification. Look at Fidelity and Vanguard funds.
|
|
TrundleBum
Trad climber
Las Vegas
|
|
|
Nov 28, 2011 - 02:26pm PT
|
At my income level:
That would be enough to just go climb for the rest of my life
(or at least till I was as old as Donini, maybe even Becky)
I'd just spend it all on time ;)
|
|
Karl Baba
Trad climber
Yosemite, Ca
|
|
|
Nov 28, 2011 - 03:13pm PT
|
The housing market is down but probably has a ways to crash further as more people are forced into foreclosure. Keep the $400K liquid until you are in a position to jump in and get an amazing deal on income producing property like rentals.
If one of the units would be an acceptable living space if times get tough, so much the better.
Peace
Karl
|
|
nature
climber
back in Tuscon Aridzona....
|
|
|
Nov 28, 2011 - 03:13pm PT
|
14000 cans of sardines from Trader Joes
|
|
Roger Breedlove
climber
Cleveland Heights, Ohio
|
|
|
Nov 28, 2011 - 03:14pm PT
|
I would say the first thing is to make sure that you have a sensible financial plan. Do you have high interest permanent debt (already asked)? Do you have medical insurance? Do you need and have life and disability insurance? Do you have a will? Do you have a sensible idea of how much you will need for retirement and when? Do you have a short-term cash cushion (mad money)? Investing is the final part of a financial plan.
If you have answered all of these questions and you have $400K to invest, then the two hardest questions to answer are your risk tolerance (most folks don't act the way they talk) and do you want to manage, on a regular basis, your investment.
I think that one of the best ways to get started is to visit Schwab and tell them about your financial plan and listen carefully to what they tell you. Ask them to help you figure out your risk tolerance and desire to manage your investment. Reading Morningstar.com’s fund, EFT and stock blurbs and watching the world markets move will give you a good idea of the uncertainty in thinking a specific investment is a slam-dunk: for everyone buying a hidden gem, someone is selling a turkey.
Again the key questions are the risk tolerance and how actively you want to manage the money. Four-hundred thousand is not enough money to get anything more than cursory advice (one of the downsides of being in the 99%) but it is enough money to take seriously—lots of folks have blown that amount of money. If you have a sound financial plan, and you invest reasonably well, that amount of money can give you increasing levels of financial security, which can be converted into lots of different things that make you happy.
Currently, I am amongst investors who are very nervous about contagion of the Euro debt crisis. I don't think anyone knows exactly how an Italian default or Euro breakup will affect both international banking and worldwide GDP. For me the downside risk is too high for any short term gains. Now, my problem is deciding when to reinvest and where. I work on it every day.
|
|
FRUMY
Trad climber
SHERMAN OAKS,CA
|
|
|
Nov 28, 2011 - 03:25pm PT
|
Of course Nature is right.
I always give Fatrad sh-+ but he is dead nuts on with what he said on page one.
Fortmental I have done very well though the last 3 hard years.
I don't day, week, or month trade I invest in high quality companies that run their business properly & have a proven record of paying dividends.
|
|
Bruce Morris
Social climber
Belmont, California
|
|
|
Nov 28, 2011 - 03:26pm PT
|
Rent a condo in Vail or Aspen. Invite all your friends up for a Big Party & spend it all in 6-months on drugs, women and skiing. I knew a guy in college who did just that after inheriting a half mil from his aunt and wound up at 27 back working in a hardware store. He never regretted it because all his relatives were filthy rich. He just had to wait in line for the next big legacy to come down the pipe. Dead relatives were his best friends.
Now if your family isn't filthy rich and you're not in line to inherit a bunch more, then . . . then . . . you might adopt a more cautious approach.
PS- Whenever you have nothing more left to sell, sell you ass.
|
|
bergbryce
Mountain climber
South Lake Tahoe, CA
|
|
|
Nov 28, 2011 - 03:29pm PT
|
My grandpa has been buying duplexes in Kentucky for like $32k the past two years. In retirement he's making $$ hand over fist.
Helps to live near the units though so you can screen the tenants.
|
|
Reilly
Mountain climber
The Other Monrovia- CA
|
|
|
Nov 28, 2011 - 03:32pm PT
|
I'd tell you but then I'd have to kill you.
Those advocating paying off all debt other than your home are right. Paying
off your home right now is probably a bad idea but one can't generalize.
There is plenty of money to be made in the markets but it takes a fair bit
of savvy. Good financial advisors generally won't talk to you if you've less
than $500K unless they are fee only but many of them are not worth it. If
they were they'd be percentage men for the big accounts.
Putting it all into real estate is not that bad an idea as it is a buyer's
market. But then your money is locked in for a goodly while. Putting it in
a CD is just giving it away to inflation. Muni bonds are giving 5% right now.
You can get 9% from junk bonds with more risk.
It is a complicated subject so you have much reading to do.
This is a good place to start: http://www.bobbrinker.com/
While it is called Bob Brinker's Marketimer, and you should avoid being a
'market timer', he is pretty conservative and there is a ton of good free
advice there.
|
|
tolman_paul
Trad climber
Anchorage, AK
|
|
|
Nov 28, 2011 - 03:48pm PT
|
Money is a tool, and it only benefits you if you use it. Sure, you could stuff it away in a savings acount and forget about it until you retire, or until some immergency requires you use it.
Then again, you could use it to make a dramatic change in the quality of your life, but you need to figure out what your life plan is. So it's impossible for any of us to guess the best use of your money. I think most people are projecting how it could best benefit them. For some it is just the piece of mind of having it. For others it is a means to gain additional income or returns, for others mad money.
So figure out what motivates you most, a fully funded frugal lifestyle, early retirement, change in lifestyle for a short term, financial independence......
|
|
Elcapinyoazz
Social climber
Joshua Tree
|
|
|
Nov 28, 2011 - 03:53pm PT
|
You could buy quite a few politicians, and use about $500 to setup a corporate structure, then have your bought politicians steer some fatty govt contracts your way, which you of course sub-out and skim a "management fee" off the top. Say 15% of the $500million contract in fees for providing baby wipes to the military or something.
But you need to diversify...buy some Republicans AND some Democrats.
|
|
the Fet
climber
Tu-Tok-A-Nu-La
|
|
|
Nov 28, 2011 - 04:14pm PT
|
Escort Service.
|
|
JLP
Social climber
The internet
|
|
|
Nov 28, 2011 - 04:16pm PT
|
I'd put about $300K into a nice rural property that had some rental units (for income) in addition to a place for me to live (shelter), a workshop or two, and an orchard, gardens (food), enough oak trees for harvesting firewood, etc. I'd keep some cash reserve invested wisely and look for small, ventures, like Guido's or my own tour company to invest in. Sounds like a great plan - for about 4 million.
400k will set you clear in a single family on a 1/4 acre in the shitburbs - or a fukin condo in a place people actually want to live, bro!
|
|
Prod
Trad climber
|
|
|
Nov 28, 2011 - 04:24pm PT
|
Rental management? With 400K? Good luck. 2 rentals will give you a headache and a job as a handyman or having you pay 10% to a rental management company who hopefully has 50 plus properties, or 49 plus of your competitors when times are tough and vacancies are high.
Prod.
|
|
Prod
Trad climber
|
|
|
Nov 28, 2011 - 04:28pm PT
|
My scottrade portfolio went up 5.627% today. If I was investing your 400k you would have made $22,508. Lets talk.
Prod.
|
|
Moof
Big Wall climber
Orygun
|
|
|
Nov 28, 2011 - 04:41pm PT
|
Pay off all debts. Debts suck away freedom. A house over your head you own gives you options.
Consider investing in yourself. 100k on a new education can get you a job that doesn't suck, and is something that can't be taken away easily. I contrast my life, albeit somewhat more sedentary than I would like, to that of my father and his father, and I'm darn happy I have a degree. Indoors, no heavy lifting. I could not however go back to school thanks to the mortgage I have, so I am glad I already have my degree.
|
|
Mighty Hiker
climber
Vancouver, B.C.
|
|
|
Nov 28, 2011 - 04:42pm PT
|
Isn't EKat trying to sell her cottage high atop a drumlin in the north woods, just a few kilometres from paradise - Canada, that is? Complete, presumably, with deer, moose, and flocks of turkeys.
|
|
Seamstress
Trad climber
Yacolt, WA
|
|
|
Nov 28, 2011 - 04:57pm PT
|
As others said, it is all dependent on:
1) what phase of life you are at
2) what your assets and debts are
3) what is your risk tolerance
I absolutely would not put it in gold. The older people - like me - have seen gold bubbles before, and this walks and talks like a gold bubble. You should have bought gold 2 years ago. Now is the time to hold or sell it.
How is the rest of your life savings invested? If you already have significant investments in the stock market, you might want to consider setting up your retirement. With my last good bonus (a fading ememory), I put a big downpayment on a vacation/retirement property. Yes, in Central Oregon you can get quite a nice property for $300K - $400K. Mine came complete with a renter and furniture. I have a property management company that currently gets 8%. The renter left, but was easily replaced in a month last year with another nice family. In a few years, I will retire to this beautiful house. In the meantime, the mortgage, insurance and taxes are covered by my renter. So it is costing me nothing, and I am quite confident this property will not get cheaper. I'm glad I did it as lending requirements tightened up since then.
Eventually the housing glut will clear up. That probably would be about the time I plan to retire. Since I was born during the peak of the baby boom, lots of us geriatrics will be migrating and driving up the price of lovely homes.
Years ago financial advisors thought that was too small a sum to bother with. Nowadays they are hurting for business and will be happy to take on your business. Yes, there are fees. However, I do not want to be tied to managing my portfolio everyday while maintaining a full time job and trying to get in some good climbing trips. Looking at the totality of your assets, liabilities, and dreams is important. Got to have a plan.
|
|
phylp
Trad climber
Millbrae, CA
|
|
|
Nov 28, 2011 - 05:20pm PT
|
It really depends on:
your age
your income/debt profile
if you are living where you want to live
if you have a job that you love and that will keep you employable for the next 10-20 years
if you are partnered w or s children or want to have those things in the near future
Good luck thinking thru your options.
One other thing. This statement was made above:
"Professional money managers interest is in enriching themselves, if you make a proffit that is secondary to their primary interest."
There are big differences among the functions that SEC-registered Financial advisors, financial planners, and stock brokers perform. It is useful to know what the differences are.
If you are paying someone a % of your portfolio to manage your money (a common way to do it), their primary interest is to maximize your return within your risk profile. That way they make more money as your portfolio goes up, rather than less money as it goes down. Esp. because if it goes down too much and you fire them, they make no more money at all and their reputation suffers.
I'm not in the financial industry, that's just the way I see it.
|
|
|
SuperTopo on the Web
|
Let us know!