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    Asset Allocation ideas

    Hi there! After looking at this site for numerous years I am finally looking to the group for some advice on asset allocation.

    Current Situation:
    35 y/o single
    $700 car payment no other debts
    Rent $1800 a month, no property ownership
    Income of approximately $200K annually
    Company 401K maxed out every year with 6% matching and discretionary bonus each April current value $140K
    IRA with no contributions since rolling into it from another company run 401K $130K
    $25K in individual ETrade account, holdings-Apple, Exxon, Altria, Bank of America, Amazon, Sirius, JP Morgan, GLD, GE, KO and Yelp
    $20K in Cash with ING

    What should I do with my disposable income of around $3000-$5000 a month?
    First thought is to pay off the car, roughly $27K
    Then what??? Eventually would like to own a rental property and buy another vehicle with cash. Thoughts on where to put the cash?

    Thanks for all the feedback

    #2
    It looks like you have no real estate holdings. Since RE prices appear near bottom, if you don't want to own any directly, you might consider doing so via a mutual fund.

    Comment


      #3
      Thanks MakeaStash

      Thanks, Unless it provides me a monthly income I see real estate as a huge liability. Therefore I would ultimately like to purchase a rental property at some point.

      Are there any REIT's you suggest? Anything from Vanguard?

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        #4
        If you live in your own home, in a sense it is generating an income of $1800/month you would have spent in rent. With mortgage rates near those of inflation, mortgages are like free money currently.

        Mortgage REITs had been interesting, but no longer are to me because the Fed is pushing down rates by buying mortgage securities. Other forms of REITs have potential. One that has popped onto my radar is WRE, which is near a multi-year low, but I want to study it more. I think Vanguard has a RE fund that's worth checking out.

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          #5
          Do you desire to be a homeowner? If so, I'd start saving for a house.
          Brian

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            #6
            I think I would rather own an income property, possible something I could live in and rent out.

            Comment


              #7
              at 1800/mo, unless you live in SF, I dont see how home ownership is not priority #1, from a financial standpoint.

              you currently have 2500/mo in expenses that you essentially could eliminate at some point in the future.

              where do you live?

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                #8
                With that much at your disposal, you could consider upping your charitable giving too if you haven't already.

                Comment


                  #9
                  Owning an income property bricks & mortar brings a whole lot of work and potential for frustration but if you have the skill sets needed it has rewards. REITS need research and investigation as some are well managed and others are problematic.

                  We keep hearing interest rates will be kept low 2013 as long as inflation stays low and the housing market is beginning to return bringing direct and ancillary jobs. If you wish to be a home owner this is likely a good time to explore/research your market.

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                    #10
                    I always suggest people make big decisions based upon an overall plan. You should consider retirement, college planning if you have kids, etc. Decisions are best made within that context. On real estate, it tends to be a long term decision because the costs of moving are a very high percentage of the value of the property. You want to be sure you are going to stay for a long time. With that in mind, I suspect people are not considering the impact of global warming on real estate. You might want to be careful with waterfront property because if you lose your home in a flood, you may not be able to recover anything with insurance depending upon the state.

                    Comment


                      #11
                      Appreciate all the feedback!

                      I really appreciate all the feedback! I live in Chicago. As far as real estate is concerned, I was fortunate enough to own two homes in the past. I was also very fortunate to have been able to sell them at no loss during the downturn. It taught me that purchasing a home the right way, 20% or more down was almost like a guarantee that you could walk away from it with at least some cash in hand.

                      I am not in a place personally where I think settling into a place for 10 or more years is reasonable, unless it is an income property. The mortgage interest deduction it great for some people, but I would much rather donate $ to achieve the same come tax time and have the freedom to move if I need to.

                      I am looking for long term investment ideas for my $3,000 a month that utilize the markets. Any ideas? I would seed the investment with $10,000.

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                        #12
                        I'm still worried about the state of the American economy as it combines with political brinkmanship. I'd begun to DCA but cancelled the December & January payments until I feel more confident. Meanwhile I'm following a couple of REITS and EWS-NYSE [Singapore Index] as they seem to be determined to maintain their status in the technology sector

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                          #13
                          I would still say you have to start with a plan. If you are investing, the idea is you eventually want to use it to defray your living expenses and possibly make donations after that. You want to know how your investments will match up against your expenses before you do anything.

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