Investment plan, thoughts

[redfish955]

This is my current plan and I would like some thoughts. I live in a cheap city. I plan on investing 25% of my earnings into 401k, roth ira, and ect. I plan on purchasing a home I can pay off in 10-15 years. Once the house is paid off I will purchase a vacation condo or home that has good rental income. I will vacation at the condo/ vacation home and invest the extra income into stocks. Is there anything I am missing on here in my quest to become a $5,000,000 man and get there without too many sacrifices? Once the home and vacation property are paid off I will just invest the money I was putting towards the home.

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[vashp2029]

Why do you have to wait until you pay off your house to invest in a rental property? And why do you need to wait until you have rental income to invest in stocks? If you can afford to buy a given home with a 4% mortgage over 15 years, why not buy the same home with a mortgage of 30 years? Instead of paying down debt for the sake of paying down debt, use the money you save from lower monthly payments to either invest in stocks or real estate (or both) now and start building up the assets. With rental income coming in now, you can put that money to work now. It doesn't make any sense to put it off until you pay off your own mortgage even though psychologically it might feel better to know that you're throwing everything you have at paying down debt.

The only exception would be if the best mortgage rate you can get is high relative to the average returns you could make investing in whatever it is you choose to invest in. If the rates you're getting are 6%+ then pay down as much as you can for a few years, refinance, and then put the extra money towards building up other assets. Your home isn't an investment, it's a black hole for money--after you account for inflation, mortgage, utilities, home improvement, and maintenance, you're likely going to break-even at best even if the price of the home seems to be appreciating. Let the bank keep the non-cash-flow-producing asset on their books as long as you can and funnel your extra money to something that benefits you in the long run.

Edit: Also, you said you're putting 25% into some retirement accounts but you didn't mention what you're holding in those accounts. Are you just holding cash? Stocks? Real estate? Are you maxing out your contributions? If not, that's where the extra money should go first.

 

[redfish955]

If I did a 30 year instead of a 15 year loan it would increase the interest rate by about a full % point. Plus it takes a large down payment to get a second loan. I'm putting 25% of earnings into stocks and mutual funds. Once the house is paid off I will use a new loan as long as interest rates are low to leverage my money a little into a vacation and rental property.

 

[ThoracicGuy]

If I did a 30 year instead of a 15 year loan it would increase the interest rate by about a full % point. Plus it takes a large down payment to get a second loan. I'm putting 25% of earnings into stocks and mutual funds. Once the house is paid off I will use a new loan as long as interest rates are low to leverage my money a little into a vacation and rental property.

I would not invest in individual stocks. Mutual funds are much safer and likely to give you better returns in the long run.

 

[doc05]

Buying a vacation home will not be financially beneficial.

 

[nameeta26]

Investment plans would require a complete knowledge of the stock market and the experience in it. the fundamental analysis helps along with full market research. But the main key is to understand and implement the trading psychology for successful implementation of plan.

 

[stillpremed]

This is my current plan and I would like some thoughts. I live in a cheap city. I plan on investing 25% of my earnings into 401k, roth ira, and ect. I plan on purchasing a home I can pay off in 10-15 years. Once the house is paid off I will purchase a vacation condo or home that has good rental income. I will vacation at the condo/ vacation home and invest the extra income into stocks. Is there anything I am missing on here in my quest to become a $5,000,000 man and get there without too many sacrifices? Once the home and vacation property are paid off I will just invest the money I was putting towards the home.

Save some money for a house, sure. That is not an investment by any means.

As long as you have cash in the bank for emergencies, put most of your money into the vanguard funds (VTSAX is a good one with minimal fees) and buy one bitcoin. It is 6600 now - in three years you will probably be very happy with the price.

 

[Renal_Prometheus]

which vanguard funds should I buy?

 

[TMP-SMX]

which vanguard funds should I buy?

Review of Bogleheads Guide to the Three Fund Portfolio | The White Coat Investor - Investing And Personal Finance for Doctors

3-5 index fund portfolio

 

[Zadafabra]

thank you for this thread! it's really useful for my situation

 

[scharnhorst]

This is my current plan and I would like some thoughts. I live in a cheap city. I plan on investing 25% of my earnings into 401k, roth ira, and ect. I plan on purchasing a home I can pay off in 10-15 years. Once the house is paid off I will purchase a vacation condo or home that has good rental income. I will vacation at the condo/ vacation home and invest the extra income into stocks. Is there anything I am missing on here in my quest to become a $5,000,000 man and get there without too many sacrifices? Once the home and vacation property are paid off I will just invest the money I was putting towards the home.

just be careful of who you marry !

 

[tartesos]

just be careful of who you marry !

If you ain't No punk, holler we want pre nup!



Sent from my iPhone using SDN

 

[stillpremed]

Not bad, not bad. 1 bitcoin now at 11,100. I will revisit this July 2021. Bull run just warming up.

Save some money for a house, sure. That is not an investment by any means.

As long as you have cash in the bank for emergencies, put most of your money into the vanguard funds (VTSAX is a good one with minimal fees) and buy one bitcoin. It is 6600 now - in three years you will probably be very happy with the price.

 

[stillpremed]

Not bad, not bad. 1 bitcoin now at 11,100. I will revisit this July 2021. Bull run just warming up.

Four months later, we are at $17,600. It will probably take a couple tries to bust through 20K (previous ATH). Let's see what happens March 2021. Second inning of a nine run bull.

 

[CocoMelon0531]

Haters are going to hate about the Lambo crypto ride, until they become believers at new all time highs. BTC and ETH will dominate digital finance in the future. Jamie Dimon and all the boomers in finance are starting to eat their words.

 

[stillpremed]

Haters are going to hate about the Lambo crypto ride, until they become believers at new all time highs. BTC and ETH will dominate digital finance in the future. Jamie Dimon and all the boomers in finance are starting to eat their words.

Hahah yep. Can't wait for noobs to starting buying my bags at 50K lmfao. I try not to dabble in alt coins but couldn't pass on LTC at 85 and DASH at 95.

 

[stillpremed]

Four months later, we are at $17,600. It will probably take a couple tries to bust through 20K (previous ATH). Let's see what happens March 2021. Second inning of a nine run bull.

The bull is stronger than I envisioned. $28,300 today. We are going to six digits Christmas 2021.

 

[stillpremed]

The bull is stronger than I envisioned. $28,300 today. We are going to six digits Christmas 2021.

$41,580 today. Perhaps six digits by June . Institutions appear to be piling on King BTC. Early innings still.

 

[stillpremed]

$41,580 today. Perhaps six digits by June . Institutions appear to be piling on King BTC. Early innings still.

$46,900 today. Institutions getting in... as in Tesla buying 1.5B worth, which is 7.5% of their free cash flows? Interesting. Onwards and upwards to six digits before this Christmas. Ponzi, they say!

 

[thesauce]

Unreal. Boy was I stupid for not getting in.

 

[CocoMelon0531]

$46,900 today. Institutions getting in... as in Tesla buying 1.5B worth, which is 7.5% of their free cash flows? Interesting. Onwards and upwards to six digits before this Christmas. Ponzi, they say!

Elon Musk is dumb...

 

[stillpremed]

Elon Musk is dumb...

Broke airhead billionaire 🤪

 

[stillpremed]

Unreal. Boy was I stupid for not getting in.

I will chronicle bitcoin’s journey to the multimillions sometime this decade 😀
Highs and lows, bull and bear, it will be a rollercoaster ride

 

[Mman]

I will chronicle bitcoin’s journey to the multimillions sometime this decade 😀
Highs and lows, bull and bear, it will be a rollercoaster ride

not sure how high it will go but I'd bet within 5 or 10 years it will be back down at very low levels. Just nothing special about bitcoin and it can be improved upon. Only has value if other people think it has value but not very useful for transactions so will get replaced.

definitely a gamble and not a investment

 

[CocoMelon0531]

not sure how high it will go but I'd bet within 5 or 10 years it will be back down at very low levels. Just nothing special about bitcoin and it can be improved upon. Only has value if other people think it has value but not very useful for transactions so will get replaced.

definitely a gamble and not a investment

The ultimate COVID thread

Buffett may start out buying cigarette butts for 10 cents on the dollar in the 60s, but his investment strategy has evolved over the years due to the influence of Ken Fisher and Munger. He is more of a growth investor nowadays than anything. he will tell you to not expect 15-25% returns long...

forums.studentdoctor.net

Brah, you have been wrong plenty of times before. Should have gone all in when Michael Burry came by and gave you his blessings under an anonymous nick.

 

[Mman]

The ultimate COVID thread

Buffett may start out buying cigarette butts for 10 cents on the dollar in the 60s, but his investment strategy has evolved over the years due to the influence of Ken Fisher and Munger. He is more of a growth investor nowadays than anything. he will tell you to not expect 15-25% returns long...

forums.studentdoctor.net

Brah, you have been wrong plenty of times before. Should have gone all in when Michael Burry came by and gave you his blessings under an anonymous nick.

you joined the forum several months ago and are telling me how many times I have been wrong the last 15+ years? WTF??? And then you link a post that isn't even wrong????

You may be confused about how the world works.

 

[CocoMelon0531]

you joined the forum several months ago and are telling me how many times I have been wrong the last 15+ years? WTF??? And then you link a post that isn't even wrong????

You may be confused about how the world works.

Where To Put Tuition Money

I matriculate in August. I have $7,000 cash. I was planning on using it for tuition/living expenses. The rest I will cover with Direct Unsub Federal Loans, at 6.08%. However, if I were to invest that money, it could be potentially worth more. The extra 7K I would take out in loans if I...

forums.studentdoctor.net

Michael Burry schooled you again and proved you wrong again. Hey, man. Why not start bumping your wrongs?

You made a point here that was once proven wrong over time already.

 

[Mman]

Where To Put Tuition Money

I matriculate in August. I have $7,000 cash. I was planning on using it for tuition/living expenses. The rest I will cover with Direct Unsub Federal Loans, at 6.08%. However, if I were to invest that money, it could be potentially worth more. The extra 7K I would take out in loans if I...

forums.studentdoctor.net

Michael Burry schooled you again and proved you wrong again. Hey, man. Why not start bumping your wrongs?

You made a point here that was once proven wrong over time already.

yet again, linking things I was correct about to prove me wrong?

Now I got it. Poster @CocoMelon0531 is @Epilepsy365 that has been banned. T minus how many days til this username is banned as well?

 

[CocoMelon0531]

yet again, linking things I was correct about to prove me wrong?

Now I got it. Poster @CocoMelon0531 is @Epilepsy365 that has been banned. T minus how many days til this username is banned as well?

You came here to make a point about cryptos going to zero. I linked you to posts that you have made in the past about cryptos, and you have been proven wrong already, with market price and time proving that YOU ARE WRONG.

I didn’t bother to bump those posts up.

Don’t cry when you have been called out for your previous posts. Take it like a champ.

 

[stillpremed]

not sure how high it will go but I'd bet within 5 or 10 years it will be back down at very low levels. Just nothing special about bitcoin and it can be improved upon. Only has value if other people think it has value but not very useful for transactions so will get replaced.

definitely a gamble and not a investment

This will be fun to keep up with. As we are awaiting bitcoin's death, the results will naturally speak for themselves. I will either be wiping away tears as I am frantically working my a** off or I will be smiling at the opportunity that I seized upon while sipping my pina colada from Fiji in 2025

 

[Mman]

You came here to make a point about cryptos going to zero. I linked you to posts that you have made in the past about cryptos, and you have been proven wrong already, with market price and time proving that YOU ARE WRONG.

I didn’t bother to bump those posts up.

Don’t cry when you have been called out for your previous posts. Take it like a champ.

I have no idea whether cryptos will go to zero. I just do not view them as an investment. They are a gamble and should be viewed as such. I have nothing against gambling, I do it a decent amount myself. I just don't confuse it with my investments.

 

[chocomorsel]

Buying a vacation home will not be financially beneficial.

It can be if rented out when OP isn’t using it. That’s OPs plan.

 

[dpmd]

It can be of rented out when OP isn’t using it. That’s OPs plan.

If you want a rental property get a rental property, but if you are going to be using the property for yourself and trying to rent it out when you aren't using it the tax rules are different based on how much you use it and how much it is rented out and the end result is likely less financially beneficial than just having a rental property and vacationing elsewhere or not buying and instead investing that money in the market.

 

[mentos]

Man I wish I knew about this thread 3 years ago.

 

[Splenda88]

Four months later, we are at $17,600. It will probably take a couple tries to bust through 20K (previous ATH). Let's see what happens March 2021. Second inning of a nine run bull.

56k now

 

[mentos]

I lost 30k in stock gains from Feb-Apr. Cashed out 2-3 weeks ago and went all in crypto, already made it all back and then some. I'm grateful for @CocoMelon0531 for educating me about ethereum and a few other coins. Many of us are making a lot of money thanks to him. My only regret is that I didn't jump in earlier. Too bad some Karen reported him and got him banned cause he tells it like it is. I see nothing inappropriate in his posts, what a joke.

 

[Mman]

I lost 30k in stock gains from Feb-Apr. Cashed out 2-3 weeks ago and went all in crypto, already made it all back and then some. I'm grateful for @CocoMelon0531 for educating me about ethereum and a few other coins. Many of us are making a lot of money thanks to him. My only regret is that I didn't jump in earlier. Too bad some Karen reported him and got him banned cause he tells it like it is. I see nothing inappropriate in his posts, what a joke.

glad you didn't put it all in bitcoin which is down about 25% over the last month

 

[mentos]

glad you didn't put it all in bitcoin which is down about 25% over the last month

Bitcoin is good if you got in before 20-30k. I feel like I missed the boat with that one. But ETH has many catalysts coming up, I think 9-10k by end of year is realistic.

 

[Mman]

Bitcoin is good if you got in before 20-30k. I feel like I missed the boat with that one. But ETH has many catalysts coming up, I think 9-10k by end of year is realistic.

i am not sure how anyone can have an informed opinion as to what any coin price should be. Could be $0, could be $1,000,000 or anything in between.

I mean at least when stock analysts give projections for a future stock price they are basing it on things like earnings and P/E multiples in comparison to a stock's history and to peers in the industry and what not. When people throw out guesses for prices on a crypto coin they are literally just blindly guessing random numbers based on nothing. I am open to explanations for why crypto is useful as a currency or even that it will be the only currency in some number of years in the future, but none of those have anything to do with what the value of a currency should be. And if it is a currency, it is 100% definitely not something you would want to invest in. I mean maybe you keep a small amount of your total net worth in cash and change that to be in crypto instead which would be reasonable. But crypto coins having value is not the same as a company having value. Companies have value because they create goods and services that people pay for and generate profits that get returned to owners of them. Unless you are a miner extracting value from the crypto existing, holding it would seem unlikely to have a high margin of safety as an investment. I keep coming back to the thought that if somebody creates the "perfect" crypto in the future than the value of all the others will be essentially zero.

 

[mentos]

i am not sure how anyone can have an informed opinion as to what any coin price should be. Could be $0, could be $1,000,000 or anything in between.

I mean at least when stock analysts give projections for a future stock price they are basing it on things like earnings and P/E multiples in comparison to a stock's history and to peers in the industry and what not. When people throw out guesses for prices on a crypto coin they are literally just blindly guessing random numbers based on nothing. I am open to explanations for why crypto is useful as a currency or even that it will be the only currency in some number of years in the future, but none of those have anything to do with what the value of a currency should be. And if it is a currency, it is 100% definitely not something you would want to invest in. I mean maybe you keep a small amount of your total net worth in cash and change that to be in crypto instead which would be reasonable. But crypto coins having value is not the same as a company having value. Companies have value because they create goods and services that people pay for and generate profits that get returned to owners of them. Unless you are a miner extracting value from the crypto existing, holding it would seem unlikely to have a high margin of safety as an investment. I keep coming back to the thought that if somebody creates the "perfect" crypto in the future than the value of all the others will be essentially zero.

BTC is mostly a commodity or currency but ETH is much more. ETH is a software platform with actual utility for smart contracts and decentralized apps. If BTC is a calculator then ETH is a smartphone.

Bitcoin vs. Ethereum: What’s the Difference?

Comparing Bitcoin vs. Ethereum shows that ether's surging popularity has made it a potent competitor token to bitcoin, even with less market cap and volume.

www.investopedia.com

The 9-10k prediction comes from matching BTC's current market cap around 1 tril. ETH will eventually overtake BTC.

 

[Mman]

BTC is mostly a commodity or currency but ETH is much more. ETH is a software platform with actual utility for smart contracts and decentralized apps. If BTC is a calculator then ETH is a smartphone.

Bitcoin vs. Ethereum: What’s the Difference?

Comparing Bitcoin vs. Ethereum shows that ether's surging popularity has made it a potent competitor token to bitcoin, even with less market cap and volume.

www.investopedia.com

The 9-10k prediction comes from matching BTC's current market cap around 1 tril. ETH will eventually overtake BTC.

I am well aware of what Ethereum is and how things are built on to it. None of that means it can't be improved upon and become without value nor does it even imply any given value for what currently exists.

 

[hestro]

BTC is mostly a commodity or currency but ETH is much more. ETH is a software platform with actual utility for smart contracts and decentralized apps. If BTC is a calculator then ETH is a smartphone.

Bitcoin vs. Ethereum: What’s the Difference?

Comparing Bitcoin vs. Ethereum shows that ether's surging popularity has made it a potent competitor token to bitcoin, even with less market cap and volume.

www.investopedia.com

The 9-10k prediction comes from matching BTC's current market cap around 1 tril. ETH will eventually overtake BTC.

BTC is the puppet master. All other coins bend to bitcoins will. Bitcoin being the first crypto as a store of value, limited supply, etc. is critical in every portfolio. In a world of unlimited money printing bitcoin will continue to go up. Its my main bag as I see bitcoin going up insanely in pesos, quetzales, or bolivares, its only a matter of time before the dollar crashes more against bitcoin.
Ethereum is the software of the world. Most of all other coins are built on top of Ethereum. As defi/derivates goes mainstream, ethereum will inevitably go up as well - as its the native currency on that network. And many more use cases are being developed on ethereum.
Bitcoin might be valued at 36k or whatever but look at market cap. Its about 1 third of Amazon market cap (dollars invested in the asset). So relatively cheap compared to Amazon or Apple. Not to say ethereum is insanely cheap compared to them and its not even at all time highs yet.
If bitcoin is being compared to gold as a 10 trillion dollar asset in market cap, bitcoin is far superior as you can do more w it like wrap and use on ethereum.

As for me, I have more BTC than ETH in dollar value (that I invested), also invest some in dogecoin casino sites at bitcoinbuster.com/dogecoin-casino/, but I believe ETH will have higher returns than BTC.

 

[mdartclub]

BTC is the puppet master. All other coins bend to bitcoins will. Bitcoin being the first crypto as a store of value, limited supply, etc. is critical in every portfolio. In a world of unlimited money printing bitcoin will continue to go up. Its my main bag as I see bitcoin going up insanely in pesos, quetzales, or bolivares, its only a matter of time before the dollar crashes more against bitcoin.
Ethereum is the software of the world. Most of all other coins are built on top of Ethereum. As defi/derivates goes mainstream, ethereum will inevitably go up as well - as its the native currency on that network. And many more use cases are being developed on ethereum.
Bitcoin might be valued at 36k or whatever but look at market cap. Its about 1 third of Amazon market cap (dollars invested in the asset). So relatively cheap compared to Amazon or Apple. Not to say ethereum is insanely cheap compared to them and its not even at all time highs yet.
If bitcoin is being compared to gold as a 10 trillion dollar asset in market cap, bitcoin is far superior as you can do more w it like wrap and use on ethereum.

As for me, I have more BTC than ETH in dollar value (that I invested), also invest some in dogecoin casino sites at bitcoinbuster.com/dogecoin-casino/, but I believe ETH will have higher returns than BTC.

And now you also have to consider potential ethereum-killers such as Cardano and Solana...

 

[Splenda88]

Investment plan:

I plan to purchase another investment property this year (likely by May-June). I plan to put 20% down (property price 150-200k). Is it better to have a 15-yr mortgage so whatever I make in rental (no cash flow) will pay down the property in 15 years? or get 30-yr mortgage and use the cash flow ($300-400) and invest it in stocks or an index?

 

[Chemist0157]

Investment plan:

I plan to purchase another investment property this year (likely by May-June). I plan to put 20% down (property price 150-200k). Is it better to have a 15-yr mortgage so whatever I make in rental (no cash flow) will pay down the property in 15 years? or get 30-yr mortgage and use the cash flow ($300-400) and invest it in stocks or an index?

Cash flow. People don’t get real estate just so they can rent it out and pay it off faster. Give yourself a longer time horizon and let your leverage, regular cash flow, future appreciation, and ongoing inflation work for you.

 

[Splenda88]

Cash flow. People don’t get real estate just so they can rent it out and pay it off faster. Give yourself a longer time horizon and let your leverage, regular cash flow, future appreciation, and ongoing inflation work for you.

I got what you are saying but I was looking at it differently.

Let's say I buy a property for 200k and I put 20% (40k) and another 6k in closing cost for a 15-yr mortgage. So my initial investment is 46k.

Average home appreciation is 3% yearly, so at the end of 15 years, I will have a paid off home that worth 310k. It's ~265k profit in 15 yrs.

 

[Chemist0157]

I got what you are saying but I was looking at it differently.

Let's say I buy a property for 200k and I put 20% (40k) and another 6k in closing cost for a 15-yr mortgage. So my initial investment is 46k.

Average home appreciation is 3% yearly, so at the end of 15 years, I will have a paid off home that worth 310k. It's ~265k profit in 15 yrs.

Okay. If we take those numbers at face value, that’s an IRR of 12.5%. Isn’t that low for real estate? I would also consider the money you will put into it as a property owner over the years (repairs, replacements, etc). It may not appreciate at that average rate over your time period. You get nothing from the property until 15 years from now, and you have to sell to realize that return. You probably have to account for some vacancy as well.

Just some things to think about. I think the chances of losing money are quite low, and I don’t think you would lose to inflation either, but I have been under the impression that people look for better rates of return than a max 12.5% nominally.

If you are so inclined, you could also do the math over 30 years and with investing some of the cash flow into stocks or whatever to see how that matches up.

 

[Barrel Proof]

I got what you are saying but I was looking at it differently.

Let's say I buy a property for 200k and I put 20% (40k) and another 6k in closing cost for a 15-yr mortgage. So my initial investment is 46k.

Average home appreciation is 3% yearly, so at the end of 15 years, I will have a paid off home that worth 310k. It's ~265k profit in 15 yrs.

You are also assuming you have zero months of vacancy. And as mentioned above, you aren’t accounting for maintenance. What about a property manager? Additional expense, which you can avoid by doing yourself but that takes time and attention. When you sell said investment, you don’t walk with 265k. You’ll give back at least 7% in closing costs + realtor fees. Probably closer to 10%. And lastly, Uncle Sam will want his cut on your gains in the form of capital gains taxes if this is an investment property.

To your question though, in today’s market I would be not so motivated to pay down a 3% interest rate. I’d probably leverage it given the current inflation we are seeing.

 

[Splenda88]

@Chemist0157

12.5% in not bad IMO and it won't be quite nominal since I was planning to buy a new built (very low repair cost) and use the little extra rent $$$ for repair.

Maybe I think I can replicate my early success. I invested 45k in 2011 (purchase price 150k and using 15-yr mortgage) and use the extra $$$ in rent to pay off the mortgage. Paid it off in 10 yrs and 3 months and now sitting on 480k equity according to zillow.

I probably had a total of 4 months vacancy during these 10 yrs.

 

[Barrel Proof]

@Chemist0157

12.5% in not bad IMO and it won't be quite nominal since I was planning to buy a new built (very low repair cost) and use the little extra rent $$$ for repair.

Maybe I think I can replicate my early success. I invested 45k in 2011 (home worth 150k using 15-yr mortgage) and use the extra $$$ in rent to pay off the mortgage. Paid it off in 10 yrs and 3 months and now sitting on 480k equity according to zillow

That’s incredible, nicely done!