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Well I have been using all my surplus income (income post retirement savings) for basically the following : paying off investment debt (2 rentals I own), buying gold, buying close ended funds (heavy in bonds), and finally some cash and equities purchases.
1) R.E. Rentals - Bought 1 place for $90k, put $10k into it, and it rents for $1k a month. 2nd rental: INherited. I owe $10k on it, and it rents for $1250 per month. (*note - Sold a bunch of big wins in my taxable accounts this year. The gov't Corporate bailouts for COVID surged my prices soooo high, that I would have been a fool not to sell and secure my rentals).
2) Buying Gold - Most liquid hedge against the falling US Dollar index value.... This is being further fueled by the ~0% interest rate, and printing too much money against our petro dollar (I think were spreading it too thin...). Since the bailout, I've pivoted my rare metal % from ~5% --> 10-20% (not sure when I'll stop, but I won't exceed 20% I imagine).
3) CEF (close end funds) = Currently I use Calamos, convertible, close end funds. They are about 50/50 equities and high risk debt (Bonds), with a mix of domestic/international exposure. These pay a solid 10% dividend, on a monthly basis. Typically I use the monthly interest income to buy additional shares of broad based index funds. These funds hold risk, as bonds would take a hit if the interest rates rise. But interest rate rise will be years out, FED made it clear they're not going to do much. And the value of these bonds is nearly irrelevant, as your trading a low ceiling for a 10% floor. (These paid me steadily during the 2008/9 housing & stock market recession). Plenty of good companies w/ comparable bonds, Aberdeen (I think is another). But I have kept to Calamos.
4) Cash: I paid off all my debts except for that $10k on my mom's house. (paid down from 50K i used to owe on it). I'm letting some cash buidup.... but because I paid off all my homes, I have HELOC's with a significant credit line @ 2.5% interest (*tied to prime, but that isn't going up anytime soon). So i'm a coiled spring of accessible cash, for if/when an opportunity arises (hopefully in the form of real estate, or deeply discount durable assets - like heavy equipment, commercial property, or other)
5) Equities: I'm still investing a bit in some broad based index funds (VTI, SPY, VOO, those kind). But not as aggressively as I had in the past. They're way too expensive.... Only reason I'm buying them still, is because it's part of my DCA strategy.... And it's all part of the process to adhere to the strategy.
****6***** Looking for new opportunities, outside of the market. Really interested in land (>40 acres in michigan), storage rental property, tax lien investing, and researching other methods of investing outside of the market. (I love the idea of owning property.... as it can derive value soo easily, and land is basically free in Michigan compared to the coasts. So it's a good time to buy stuff and hold..... as the only thing you really can't manufacture easily, is more earth). Plus we have a lot of farming up here, so it's not difficult to lease land for storage, farming, hunting, or other. Basically stave of the taxes until opportunity comes knocking.
These have been my taxable strategy during covid. (retirement has not changed at all). But i'm hoping if I do right in my taxable investments, I won't have to ever use that retirement stuff. and i really hope it was just a long term emergency fund that barely needs to be plucked at all.
1) R.E. Rentals - Bought 1 place for $90k, put $10k into it, and it rents for $1k a month. 2nd rental: INherited. I owe $10k on it, and it rents for $1250 per month. (*note - Sold a bunch of big wins in my taxable accounts this year. The gov't Corporate bailouts for COVID surged my prices soooo high, that I would have been a fool not to sell and secure my rentals).
2) Buying Gold - Most liquid hedge against the falling US Dollar index value.... This is being further fueled by the ~0% interest rate, and printing too much money against our petro dollar (I think were spreading it too thin...). Since the bailout, I've pivoted my rare metal % from ~5% --> 10-20% (not sure when I'll stop, but I won't exceed 20% I imagine).
3) CEF (close end funds) = Currently I use Calamos, convertible, close end funds. They are about 50/50 equities and high risk debt (Bonds), with a mix of domestic/international exposure. These pay a solid 10% dividend, on a monthly basis. Typically I use the monthly interest income to buy additional shares of broad based index funds. These funds hold risk, as bonds would take a hit if the interest rates rise. But interest rate rise will be years out, FED made it clear they're not going to do much. And the value of these bonds is nearly irrelevant, as your trading a low ceiling for a 10% floor. (These paid me steadily during the 2008/9 housing & stock market recession). Plenty of good companies w/ comparable bonds, Aberdeen (I think is another). But I have kept to Calamos.
4) Cash: I paid off all my debts except for that $10k on my mom's house. (paid down from 50K i used to owe on it). I'm letting some cash buidup.... but because I paid off all my homes, I have HELOC's with a significant credit line @ 2.5% interest (*tied to prime, but that isn't going up anytime soon). So i'm a coiled spring of accessible cash, for if/when an opportunity arises (hopefully in the form of real estate, or deeply discount durable assets - like heavy equipment, commercial property, or other)
5) Equities: I'm still investing a bit in some broad based index funds (VTI, SPY, VOO, those kind). But not as aggressively as I had in the past. They're way too expensive.... Only reason I'm buying them still, is because it's part of my DCA strategy.... And it's all part of the process to adhere to the strategy.
****6***** Looking for new opportunities, outside of the market. Really interested in land (>40 acres in michigan), storage rental property, tax lien investing, and researching other methods of investing outside of the market. (I love the idea of owning property.... as it can derive value soo easily, and land is basically free in Michigan compared to the coasts. So it's a good time to buy stuff and hold..... as the only thing you really can't manufacture easily, is more earth). Plus we have a lot of farming up here, so it's not difficult to lease land for storage, farming, hunting, or other. Basically stave of the taxes until opportunity comes knocking.
These have been my taxable strategy during covid. (retirement has not changed at all). But i'm hoping if I do right in my taxable investments, I won't have to ever use that retirement stuff. and i really hope it was just a long term emergency fund that barely needs to be plucked at all.
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