Where to invest next?

[element926]

Hi all,

I'd love to get feedback on where I should invest next. What type of investment strategies do you follow, are you trying anything new etc.

I'm 26 and make approximately 200k a year give or take (primary job, contract work, rental property etc.)

Here is my current snapshot:

- I currently rent an apartment and pay $2,000 +/- a month including utilities (major city/modest 1 bedroom is pretty expensive).
- No debt (besides mortgage for rental)
- 10k savings / 30k emergency fund
- 100k Vanguard (90% S&P 500 Admiral funds / 10% short/long-term bonds)
- 90k 401k (max out every year to limit of 18k with company match, index funds with low fees)
- 30k in Robinhood (easy investing app for individual stocks - I pick companies I like and that I believe will do well in the future Apple, Telsa, Cigna etc. -- no fees associated)
- 6k Health Savings Account (I max this every year for pre-tax savings, index funds with relatively low fees)
- Every 6 months I leverage a ESPP (10% of post tax funds go to it and basically it gives me a 15% return on that saved money each time - I sell off immediately paying higher taxes / but still taking the gains).

Rental property (valued at 460k)
- Mortgage is $2600 a month
- Rents in the summer for about 3k a week (40k over the summer) and 2,500 for 6 months in the winter (15k)
- 16% property management fee and other associated fees like linens, repairs etc.
- This is the first year, but all seems to be going well. I should make a small profit, I intend to put it back in the house to pay the loan down faster.

Based on the above information - is there anything I can differently, better, or new?

Thanks!

[97guns]

Your doing great, I don't like the idea of paying rent but that's just my viewpoint

[element926]

Agreed! However, we are thinking about moving again in less than a year so I figured this would be okay for a year. We just moved to a new area.

[97guns]

Ok then, nothing you can do about that. I'm also not a proponent of having money locked up in a 401k or IRA. Your numbers on the rental are very good, if you wanted to do another you need accessible funds.

[TexasHusker]

Ok then, nothing you can do about that. I'm also not a proponent of having money locked up in a 401k or IRA. Your numbers on the rental are very good, if you wanted to do another you need accessible funds.

+1.

401Ks and IRAs are great for a retirement nest egg, but horrible for trying to get rich. I'd rather be rich.

But it all depends on yiur goals. I really like your RE play and suspect it could do a lot better for you.

Be forewarned that me and Guns are mavericks around here and are regularly lampooned for our foolishness. We both did retire in our 40s, however.

[Petunia 100]

Hi all,

I'd love to get feedback on where I should invest next. What type of investment strategies do you follow, are you trying anything new etc.

I'm 26 and make approximately 200k a year give or take (primary job, contract work, rental property etc.)

Here is my current snapshot:

- I currently rent an apartment and pay $2,000 +/- a month including utilities (major city/modest 1 bedroom is pretty expensive).
- No debt (besides mortgage for rental)
- 10k savings / 30k emergency fund
- 100k Vanguard (90% S&P 500 Admiral funds / 10% short/long-term bonds)
- 90k 401k (max out every year to limit of 18k with company match, index funds with low fees)
- 30k in Robinhood (easy investing app for individual stocks - I pick companies I like and that I believe will do well in the future Apple, Telsa, Cigna etc. -- no fees associated)
- 6k Health Savings Account (I max this every year for pre-tax savings, index funds with relatively low fees)
- Every 6 months I leverage a ESPP (10% of post tax funds go to it and basically it gives me a 15% return on that saved money each time - I sell off immediately paying higher taxes / but still taking the gains).

Rental property (valued at 460k)
- Mortgage is $2600 a month
- Rents in the summer for about 3k a week (40k over the summer) and 2,500 for 6 months in the winter (15k)
- 16% property management fee and other associated fees like linens, repairs etc.
- This is the first year, but all seems to be going well. I should make a small profit, I intend to put it back in the house to pay the loan down faster.

Based on the above information - is there anything I can differently, better, or new?

Thanks!

You're off to a fine start. You have the means to get yourself in a position where you can afford whatever you want. So, what do you want? What are your non-monetary goals for your life?

Think about that. When you have a rough idea, it will help you decide how best to make it happen.

[element926]

Good responses and questions. Are you suggesting I decrease the amount I contribute to my 401k and put it towards something like another rental property? If not - where else would I invest it?

Just a note that everything else is liquid - I could pull everything buy my 401k out if I needed to do so without penalty (just taxes).

To answer the last question - I'm not exactly what I want but it would be great to not "have" to work a normal job by 40. I'd rather live on rental income and do jobs that just seem fun - like being a scuba dive instructor (one of my hobbies).

[TexasHusker]

To semi-retire by 40 is certainly achievable, but you will need to forget about traditional retirement vehicles and step into the world of risk and some speculation.

The safest route is more real estate - my niche is vacation homes - that has the potential to significantly appreciate over the next decade. Highly desirable properties - water front, mountain views, exclusive areas - are the best bests. Otherwise a house is a house.

Put 20-25% down on each property and make certain they will easily cash flow. Buy as many as you can as soon as you can. Leverage your equity to buy more! Get your banker on board. If he won't get on board, find another banker. Dedicate your free money to building your RE portfolio. You've got 14 years to reach your goal.

[rennigade]

Gold and rentals...thats all you need. You're pulling in $200k/year. High grade bullion because you never lose on gold. And real estate because that too only ever goes up. Retire in 4 or 5 years and live off those rental gains!

[corn18]

+1.

401Ks and IRAs are great for a retirement nest egg, but horrible for trying to get rich. I'd rather be rich.

But it all depends on yiur goals. I really like your RE play and suspect it could do a lot better for you.

Be forewarned that me and Guns are mavericks around here and are regularly lampooned for our foolishness. We both did retire in our 40s, however.

You are not retired.

[TexasHusker]

You are not retired.

I guess it all depends on how you define retired.

Perhaps a more appropriate term is "walked away from the corporate world" and all that entails. And watching all three hours of Dan Patrick every morning, and attending all of my son's golf tournaments, and taking an afternoon nap when I want to, and sleeping in when I want to, and going fly fishing when I want to...

As I type this post, I'm in jeans and a t shirt in front of a fire watching Live at the Masters. It actually is very hard work and takes practice.

[Spiffster]

I suggest checking out p2p lending with Prosper or Lending Club (via LendingRobot). If you want to get really adventurous, check out Bitcoin.

[97guns]

Gold and rentals...thats all you need. You're pulling in $200k/year. High grade bullion because you never lose on gold. And real estate because that too only ever goes up. Retire in 4 or 5 years and live off those rental gains!

feel the hatred.... it's what retirement at 40 feels like

[corn18]

feel the hatred.... it's what retirement at 40 feels like

You are not retired, either.

[97guns]

You are not retired, either.

Ok, ty