I think I might be the ultimate contrarian

**97guns** · 03-28-2016, 08:09 PM

i agree with every one of your bullet points but we are probably the less than 1% of forum members who think this way, most everyone here is pro IRA/401K as a means to build wealth and retirement

**TexasHusker** · 03-28-2016, 08:24 PM

Originally posted by 97guns View Post

i agree with every one of your bullet points but we are probably the less than 1% of forum members who think this way, most everyone here is pro IRA/401K as a means to build wealth and retirement

Glad to know I'm not alone ! So tell me your philosophy of money management and wealth building. Maybe this can be a "contrarian" thread for those out there who don't wish to follow the herd.

**97guns** · 03-28-2016, 09:41 PM

im also a big fan of building wealth through real estate, my mother built her wealth through it and her parents did the same, all my family members with real estate are very well off but i do have a cousin that made his millions in the stock market.

i dont trust stocks or bonds, any paper asset or the american dollar. i dont have an IRA or 401K, i dont pay into social security, have 5k in the bank, i pay 2% tax on my income and i like it just like that

**corn18** · 03-29-2016, 02:58 AM

Yeah, I'm hating the 104% return on invested capital I'm getting from my 401k. Mmmmooooooo...

**Fishindude77** · 03-29-2016, 06:15 AM

Interesting stuff, below are my thoughts.

I'm not a fan of IRAs and 401Ks
Never had an IRA so can't speak on them but I'm a huge fan of 401K plans. You are investing tax free (immediate 30% gain), plus many get a significant employee match. In these cases, if would be a good deal, if it didn't make any gain. This is the single easiest way for "the average person" to build a nest egg.

I'm not a fan of paying off your house
Hear this all the time too. Meanwhile I'm enjoying my ZERO house payment and having fun with or investing that money each month.

I'm not a believer in "the markets" as a reliable means to build true wealth and financial independence.
I feel like you need to spread some money around, diversify. Unless you think there is going to be a total failure of the US economic system, every wise investor should have a portion of their portfolio in the market. I'm personally to the point where I've got plenty in the market, and am opting to do other investments now.

I am a proponent of investing in yourself - no investment holds more promising returns than the one that you directly control: Your business.
Without a doubt. Most of the worlds truly wealthy people are self employed.
Even if you have a solid job working for the other guy, you should still have a side gig business of your own.

I believe that real estate is the without question the easiest way to build wealth and net worth the fastest.
I'm a big fan of real estate, it represents about 1/3 of my net worth and has done well for me.

I believe that "the markets" are nothing more than a glorified version of online poker, and the house almost always wins.
Most of us in "the market" are in 401K's, mutual funds, blended funds, etc. rather than selecting individual stocks and investing in companies. This is "passive investing" where you are trusting the other guy to care for your money, charge a little fee and make you a buck. People that pay attention to their market investments and work with reputable firms and brokers generally make a few bucks.

I believe annuities are perhaps the biggest scam of the last hundred years, except for timeshares.
I don't want anything to do with these either.

**Singuy** · 03-29-2016, 07:19 AM

Sooooo we have to wait until another housing crisis in order to follow your advice to get rich?

You and 97guns bought at the lowest of the housing crisis which is fantastic!

Now if you want to invest in real estate today, the returns are just not there. Appreciation has weaned and it's impossible nowadays to get a 120k house and collect 2k on rent. The returns I have been looking at is around 6-7% on my money and that's IF I pay the house in cash! You can say using leverage to make a higher return is possible...buy 10 houses each at 20% down, making 2-3%/year per house. But this is a lot of work..collecting rent..chasing dead beats..mowing lawns, etc etc. Not to mention the possibility of another housing crisis due to the ability to obtain a house at 0% or 3% down and banks throwing pre-approval letters at you with 43% debt to income ratio.

I can have my money sit in corporation bonds and get 7%, preferred stocks at 7%, or muni bonds at 5% tax free and these type of investments are MUCH more liquid than houses with min risks.

I agree with you that trading stocks or putting your hopes and dreams in certain stocks hoping for a 400% return is like glorified gambling. If I can travel back in time and have the capital, I would also invest in real estates. I've gained 200k in net worth via real estate and my parents gained about 1 million..but I'm afraid that the best time to get into real estates is nothing but the past.

**Nika** · 03-29-2016, 07:23 AM

Live in NYC - can't touch investment real estate with a ten foot pole.

1br apartment is well over a million (not in a trendy area), with 2K+ a month maintenance to boot.
If you bought a long time ago, you can do well collecting rent. Right now, finding anything that will even come close to cash flowing itself after a 25% down payment is not possible.

401K - with 6% match, plus 30% saving in tax, money is made at the buy here. There is some level of paranoia involved when people "do not believe in it".

**bjl584** · 03-29-2016, 07:46 AM

There are many paths to wealth and prosperity. None are inherently right or wrong. Some work for some people and others for other people.

If you are a savvy real estate investor and are willing to do it, then you will probably be successful.

If you are good at playing the stock market and can stomach risk, then you will probably be successful.

If you are a go-getter and willing to do whatever it takes for your career, then you may become a CEO of a company, and you will probably be successful.

**97guns** · 03-29-2016, 07:55 AM

dont get me wrong, ive made money with the stock market and i would not be where i am today without it but my current financial snapshot dictates safety and preservation not capital appreciation, at this point and time i prefer a hard asset, something physical. i also agree the market is a casino, you can hit it big or loose big, ive had several stock issues go to Zero

my mom and other relatives did not "time" the housing market like i have, they all bought when they had the money to invest and have held for 30-50 years virtually worry and trouble free all the time building massive wealth

**autoxer** · 03-29-2016, 08:27 AM

I believe that real estate is just another "market".

I have some friends and neighbors that are leveraging and buying up rental houses, and I don't necessarily think they are making bad investments, just that it isn't the right market for me.

**Fishindude77** · 03-29-2016, 09:04 AM

Everyone thinks of rental houses and apartments first, but there is plenty of other real estate investments out there besides rental housing.

To me, commercial real estate is much better. Only have to deal with one tenant to get the same amount of rent / income as ten apartments would get you. You can also get 5-10 year leases where they do all of the upkeep, pay the taxes, etc.

Farm ground, timberland, ground with minerals or aggregates are also real estate investment considerations. My neighbor has a lake home he rents for $3000 per week. Said he takes in enough rental income to pay the taxes, the utilities and half the mortgage, so he's got a lake home to enjoy for very little out of pocket.

**bjl584** · 03-29-2016, 09:07 AM

Originally posted by Fishindude77 View Post

Everyone thinks of rental houses and apartments first, but there is plenty of other real estate investments out there besides rental housing.

To me, commercial real estate is much better. Only have to deal with one tenant to get the same amount of rent / income as ten apartments would get you. You can also get 5-10 year leases where they do all of the upkeep, pay the taxes, etc.

Farm ground, timberland, ground with minerals or aggregates are also real estate investment considerations. My neighbor has a lake home he rents for $3000 per week. Said he takes in enough rental income to pay the taxes, the utilities and half the mortgage, so he's got a lake home to enjoy for very little out of pocket.

Self storage units are a great investment opportunity. You might have one part time employee working a desk, showing the units, and answering the phone. Other than that, it's just a fenced in lot with some pole buildings.

**ua_guy** · 03-29-2016, 09:47 AM

Becoming wealthy is a journey like everything else. Not everyone takes the same path or mode of transportation.

Like the OP, I'm worried about taking a bus on a slow-moving, congested freeway to get there. Too many people on that route, and the bus is full. Sometimes walking might feel faster.

**TexasHusker** · 03-29-2016, 10:15 AM

One of the big selling points of an IRA or 401K is that it is tax deferred. But all that means is that you are kicking the tax can down the road until you're retired. Then you are going to pay ORDINARY INCOME TAX on every dime you withdraw. And congress can and will change the tax rates at their pleasure.

And while you may have "104% gain" on your 401K, that's just a number on your monthly statement - it is not your money to do anything with unless you are 59.5 years old. In fact, you can't touch the funds under ANY circumstance in a 401K plan unless you leave your employer. So if you want to use that money to start your own business or buy a piece of real estate - you're screwed. Your only investment options are the ones that YOUR EMPLOYER chooses to offer. Period.

Of course they are going to "match" -- they want to make sure you have no incentive to leave the company - unless they decide to kick you to the curb as it suits them.

In a way, when you buy into the whole 401K deal, you're conceding that there's no way you can manage better on your own - selling your financial soul in a sense - and grabbing the employer match carrot and hoping the investment options that the employer offers are worth a damn. As you might guess, I found out a lot of this the hard way. If I hadn't chased the 401K pipe dream for 20 years, I might have left the corporate world at 36 instead of 46. But I'm hard headed.

I think I might be the ultimate contrarian