Investing 102

[CRCRFT78]

I've been thinking about cashing out my IRA and buying a house. Of course I woud incur the tax hit and te early withdrawal penalty but I think getting back into a house as opposed to renting could be a good idea. My rent payment can become a mortgage payment and be cut in half. The half I would save I can then contirbute back into a retirement account. Any opinions on this?

[Bucketlist2012]

I've been thinking about cashing out my IRA and buying a house. Of course I woud incur the tax hit and te early withdrawal penalty but I think getting back into a house as opposed to renting could be a good idea. My rent payment can become a mortgage payment and be cut in half. The half I would save I can then contirbute back into a retirement account. Any opinions on this?

It depends on how old you are...If you are low 30's then maybe it is a good idea..You have plenty of time to regain Investments..

I just don't see rates being lower ever again...At 3.75% with deductions and Inflation, you are borrowing for almost free...

Renting ? You never gain anything...

[CRCRFT78]

I'm 35 so I feel like I have some time. Also the fact that I could possibly cut my payment by almost 50% and own instead of renting is a big factor. That 50% can be divided towards other things including more than what goes into my investment accounts already. I'm aware that starting over will hurt my total balance in the long-run but the thought of renting long-term just doesn't sit well with me.

[Bucketlist2012]

I'm 35 so I feel like I have some time. Also the fact that I could possibly cut my payment by almost 50% and own instead of renting is a big factor. That 50% can be divided towards other things including more than what goes into my investment accounts already. I'm aware that starting over will hurt my total balance in the long-run but the thought of renting long-term just doesn't sit well with me.

35...Then IMO, I would do it..

Rates will never be lower and renting will give you nothing in return..

Sure being in California we get punished for being Home Owners, but in the long run, for me, it is one leg of my table of Financial Security..

Also you are selling at a High because I think we may get a correction in 2013..Nothing drastic, but we could lose 10% in a correction in the Stock Market..Temporarily..

NOT being an advisor, this is strictly opinion..

Also prices are on the rise with Homes , so better now than later.

[96z28ss]

really good article I just read, and that is what investing 102 has been all about.

http://beta.fool.com/thebargainbin/2013/01/28/should-you-reinvest-dividends/22749/?ticker=MCD&source=eogyholnk0000001

[WSSix]

Jose, maybe only cash out enough to cover 20% of the home costs? That way you can avoid PMI and not take out too much from the 401k hopefully. I'd consult a financial adviser with that idea unless they can offer good reasons why not at all or why you should go more than the 20% down payment. Good luck. I hate renting and look forward to the day I can buy my own home, too.

[WSSix]

really good article I just read, and that is what investing 102 has been all about.

http://beta.fool.com/thebargainbin/2013/01/28/should-you-reinvest-dividends/22749/?ticker=MCD&source=eogyholnk0000001

Excellent find! Very encouraging to me.

[glassman]

I know this is Investing 102 , so some of what I mention is actually Investing 101.

But everyone should be in their Companies Employer Matched funds if they are available..

When I worked , my company matched 10% and they also had a profit sharing program...

FREE Money. Plus I had them taking out 15%...Over a long period of time ??:G-Dub:

Add to that having no consumer debt like Revolving Credit Card balances, or Car loans.

Then add to that a mid 3% Mortgage on a home you can afford ?

Then live within your means and have Investments on your own ? :G-Dub:

Of course a high paying Job would be nice but not needed.

I may not be rich, but I am comfortable..

Ahhh but you are rich Michael ...we are in the top 10% in the world if all we have is one apartment/house, one car, and one computer.....not to mention our pot bellies lol...

Mike

[Bucketlist2012]

Ahhh but you are rich Michael ...we are in the top 10% in the world if all we have is one apartment/house, one car, and one computer.....not to mention our pot bellies lol...

Mike

Ah Yes, when you put it that way....:thumbsup:

I know I am blessed and Lucky to Live in America , even though I don't like the government that much...

[glassman]

Me neither!!! But we is still free (for the moment)....

[GregWeld]

You boys holding Faceybook are looking better all the time....

[XLexusTech]

You boys holding Faceybook are looking better all the time....


dropped just after earnings... hoping for a bounce tomorrow.. :relax:

[Bucketlist2012]

You boys holding Faceybook are looking better all the time....

Yes, I could have been wrong about it, and don't own it, but I have enough winners to be happy...

We don't get them all right, but all you need is enough right...

[Tony_SS]

Just my humble opinion but hold onto your shorts.. the stock market is only up due to the unlimited quantitative easing policy of the Fed.. its due for a hard fall as it's being propped up right now by phony stimulus.

[GregWeld]

Just my humble opinion but hold onto your shorts.. the stock market is only up due to the unlimited quantitative easing policy of the Fed.. its due for a hard fall as it's being propped up right now by phony stimulus.



Go back to page one and re-read the entire thread.... you've missed something.

Go back and look at stocks on a longer term chart and you'll see that for the most part the TRENDS are lower on the left hand side - and higher on the right hand side of the chart. That trend (say the last 10 years) is what INVESTORS are looking for. Looked at this way - "opinions" - don't hold much water.

Now -- in the TREASURY market -- the FED has played a major role. They have been massive buyers - and that holds RATES DOWN. When they stop buying and let rates rise - then I'd say "hold on to your shorts" because the bottom "might/could" cause a lot of loss of face value. But that is an entirely different market - and most market participants should certainly be aware of this situation. Would the "spill over" affect other markets? That's just pure hypothesis and speculation.

[Tony_SS]

Go back to page one and re-read the entire thread.... you've missed something.

Go back and look at stocks on a longer term chart and you'll see that for the most part the TRENDS are lower on the left hand side - and higher on the right hand side of the chart. That trend (say the last 10 years) is what INVESTORS are looking for. Looked at this way - "opinions" - don't hold much water.

Now -- in the TREASURY market -- the FED has played a major role. They have been massive buyers - and that holds RATES DOWN. When they stop buying and let rates rise - then I'd say "hold on to your shorts" because the bottom "might/could" cause a lot of loss of face value. But that is an entirely different market - and most market participants should certainly be aware of this situation. Would the "spill over" affect other markets? That's just pure hypothesis and speculation.

I'd say that'd be a big yes.

I know how the trajectory goes in grand scheme. There are a lot of players that have barely regained what they've lost from 08. Factor in real world inflation though, that is the kick. Not saying you'll get hurt Greg, but others not as knowledge or insulated might.

At sometime I think the market will burst with this dollar ponzi scheme and the economy they are trying to prop up. But I hope it doesn't. It's just my depreciated .02 cents. You know I gotta pop in every few months and say that. lol Good luck out there.

:peepwall:

[Bucketlist2012]

:poke:

I have to agree...As long as Bernanke keeps pumping the system, we will continue upward.

But as soon as he stops priming the pump, we will see the large correction..How large ? That is speculation..And when ? More speculation.

I got out and back in from 2007 to 2009 and missed taking a large hit..I plan to do the same..

I still own my Precious metals and I am scaling back on Bonds.

But I am also ready to move larger sums when what I think the BIG correction begins.

Then buy back at a lower price...Last time in 2009 it was a Fire sale at 55% off.

It is not a time for a guy like me who lives off the money to set it and forget it...

[takid455]

Heard thus tid bit an wanted others perspective. Now this sort of ruffles the purpose of this thread but with good intents.

Foreign currency investing

Iraqi Dinar in question. Currently at 1/100 of a cent roughly where it was 3.25 to 1 USD in the 90's.

Did some online research and found that the Iraq budget is supposedly to be set 2/5/13 which could lead to a revaluation of the Dinar thus yielding great returns.

one source I found
http://dinarwatchdog.com/


What I didnt see is prior revaluations and or inputs to industry of this country that is restructuring/ rebuilding to make the currency increase. Although it does have one the the biggest oil reserves in the world.


If this is true , a 1G USD investment could make overnight Millionaires if the Dinar was set equal to the dollar. Does seem this idea has been going on for sometime.

Anyone here have better input?

[GregWeld]

Heard thus tid bit an wanted others perspective. Now this sort of ruffles the purpose of this thread but with good intents.

Foreign currency investing

Iraqi Dinar in question. Currently at 1/100 of a cent roughly where it was 3.25 to 1 USD in the 90's.

Did some online research and found that the Iraq budget is supposedly to be set 2/5/13 which could lead to a revaluation of the Dinar thus yielding great returns.

one source I found
http://dinarwatchdog.com/


What I didnt see is prior revaluations and or inputs to industry of this country that is restructuring/ rebuilding to make the currency increase. Although it does have one the the biggest oil reserves in the world.


If this is true , a 1G USD investment could make overnight Millionaires if the Dinar was set equal to the dollar. Does seem this idea has been going on for sometime.

Anyone here have better input?


This SCAM has been circulating for about 5 years now....

Here's my advice. Take your 1G and toss it in the street - you'll have better odds of becoming a millionaire.

Or actually do some real research - starting with checking your "story" out... just Google "Iraq Dinar investing" and just read any of the first 2 or 3 stories.

[takid455]

Looked deeper at some more trusted sites and saw the story. Funny how this revaluation is stated for 'next tuesday' (meaning it never happens). I thought something was up when it seemed to good to be true. Could it happen, sure, but doubt it will be an overnight drastic change.

[GregWeld]

Looked deeper at some more trusted sites and saw the story. Funny how this revaluation is stated for 'next tuesday' (meaning it never happens). I thought something was up when it seemed to good to be true. Could it happen, sure, but doubt it will be an overnight drastic change.

Always, always triple check these kinds of get rich quick schemes out!!

And remember, if it seems too easy or too good... It's most likely just plain crappola.

[Bucketlist2012]

I was too excited to sleep.

I am in the middle of a refinance at 3.75% for 30 years...:thumbsup:

[Flash68]

I was too excited to sleep.

I am in the middle of a refinance at 3.75% for 30 years...:thumbsup:

Nice! That refi window seems to be closing more and more each day....

[Bucketlist2012]

Nice! That refi window seems to be closing more and more each day....

Dave. Thanks..

Yes, The bottom at the bank I am at was 3.625% and it went to 3.825%, so I am going for it.. Right now it is 3.75%

No cost , and 300. fee.

Once Bernanke took the 2015 rate increase off the table and tied it to the Unemployment rate that can be manipulated, I knew it was time...He can change things now overnight.

I have a good loan now, but soon I will have a great loan...Just unbelievable ...Below 4% APR.....:thumbsup: :thumbsup:

[toy71camaro]

Awesome!

We just closed on our new (to us) home with a 30 yr fixed at 3.75 too. :)

[96z28ss]

I refinanced 2nd week in December. 3.50% 30 year.

[Bucketlist2012]

Awesome!

We just closed on our new (to us) home with a 30 yr fixed at 3.75 too. :)

WOOT....Congrats Albert...:thumbsup: :thumbsup:

[Bucketlist2012]

I refinanced 2nd week in December. 3.50% 30 year.

Now that is SWEET....:thumbsup:

[glassman]

Three weeks ago I got an offer for a 15yr @ 2.875 fixed. We are at a 3.625 fight know...for 30. My payments are really really low. Would have a nice positive cash flow if we were to rent it out, but hey, ya gotta take a crap somewhere lol

[Bucketlist2012]

Three weeks ago I got an offer for a 15yr @ 2.875 fixed. We are at a 3.625 fight know...for 30. My payments are really really low. Would have a nice positive cash flow if we were to rent it out, but hey, ya gotta take a crap somewhere lol

Yes, the 15 year is 2.9% but I am still going with a 30 Year.. The payments are lower and I prefer a longer loan that I can always pay down as I see fit.

But at that rate, I don't see me adding principal payments ...I will go the full term if I stay here...

At that point it is a personal choice..Either way, the deals are great...

[glassman]

I agree mike, with the key word being "if"....me too, if I stay, still up in the air. I like the idea of NO mortgage.

[Bucketlist2012]

I agree mike, with the key word being "if"....me too, if I stay, still up in the air. I like the idea of NO mortgage.

Yes, I may be moving near Family in the next several years, depending on a lot of things...Health or too high of rates in a few years.

But plan A is to secure another low fixed 30 year just in case I stay here...

I do like the idea of NO mortgage, but only if when I buy the rates are too high..Then maybe I would pay cash..Or at least 60 to 70% .
But the rates would have to be in the 8 or 9% range for me to consider paying more down...

But I cannot wait any longer about IF I am moving in a few years...Just in case I don't...

[GregWeld]

I paid all cash for a house once -- it was a huge mistake. You're losing the use of the capital to invest to make money and grow....

With interest rates this low anyone is foolish to pay off early or put too much down.

Think of it this way... I get a bit more than 4% in TAX FREE muni bonds... and a mortgage is less than that and you get to deduct the interest payments... so in actual fact you can make more money on your money than you're paying.

The 'key' to making a return - called ROI (return on investment) is to put down 20% -- say on a 500K house... so we'll call that 100K down.... if the house sells later for 600K -- you've doubled your "INVESTMENT" which was the cash you put down. Not bad... not bad at all.

If you pay all cash for the house -- 500K -- and sell for 600K -- you've only earned 20% on your money.

[Bucketlist2012]

Greg,

You know I agree with you... It took me a while to convince the Wife a few years back. When the rates were 4.6%, I told her no paying the house off, no paying early, and no extra payments..:idea:

Now she is Investment smart and totally gets it...So I don't have to convince her anymore..

Only if the rates were like in the 1990's would I consider a Paid for home...Rates in the double digits..But now ? It is a no brainer...

A new 30 year fixed at 3.75%....My Wife is totally on board with going full term..:thumbsup:

My Sister ? The opposite...She paid it off and then could not cash out money to invest when the rates went down...She is stuck ...No Liquidity.:sieg:

High Credit card debt, and Student Loans...I gave up giving advise that she won't listen to and tells me she knows what she is doing..:bang:

Did I mention her Investment advisor is Chase at 1.4% with all Chase Investments ?:bang:

[GregWeld]

I think the problem with money management "in general" is that we grow up with ideas and thoughts from our past/parents/etc. EVERYONE wants a paid off house... Well YEAH! But it doesn't make FINANCIAL sense if you have adequate cash flow and adequate assets to retire on. It's simple math rather than simple thinking.

The key to "retirement" --- is not about how much money is coming in -- it's about how much money is going OUT... if you don't have much going out you can make it with not that big of a nest egg. The problem with most people is that they don't have ANY plan. So til the day they retire - they're spending like the pay check will never change... If you're 35 and have a 30 year mortgage and you pay it off the month you retire... then you don't need "X" coming in to pay the mortgage. This is all a manor of actually sitting down with pad and pencil and doing a simple spread sheet. How old you are - when you plan to retire - what you owe MONTHLY when will things be paid off - and make sure you don't owe a ton of dough come retirement time. The thing with a fixed rate mortgage was that you should be making double in 20 years and still have that cheap mortgage payment. Now days people are buying bigger more expensive houses and they're like 55 years old - and they have a 10 year variable rate mortgage that's set to go UP at the same time they're set to retire. That's just DUMB. Sorry. DUMB DUMB DUMB. Do ya really want to be 70 years old and a greeter at Wal Mart to make ends meet? :popcorn2:


Make a plan -- realistic -- and stick to it and don't fudge the numbers. Do so at your own peril. Retirement is what you were SUPPOSED to be working for. You can have a nice relaxed retirement - or you can struggle to keep the lights on and watch as everything around you is falling apart.

So here's what you really HOPE FOR! You have a fixed rate 30 year mortgage at 4% --- and INTEREST RATES go to 10%... I LOVE inflation. I can make a killing in income in an inflationary environment. If you already own your house on or near retirement and your savings are earning TWICE what you're paying out --- PERECT! I'd love to be able to park money is a CD at 9 or 10%! I'd double my income! :G-Dub:

[Bucketlist2012]

Ya Greg, Planning is critical..

Take me for instance..I was forced into retirement 3 years ago due to two Strokes, A Brain lesion that turned into Seizures, and a major Heart infection and a Bad Heart valve.. I know, When I do things, I go BIG.

But I will be OK due to long term planning.. I had planned to work until I was at least 57 , But I had to retire at 50.

But like you said, it is how much is going out..I keep my monthly nutt going out reasonable , so I will make it. My Investments will generate enough for me. And like you said, this is the slow time...When Inflation hits ? I know my income will double with lower risk, a.k.a. CD ladders, ect... So if I can make it now, I will make it then.

I have no problem taking a 30 year loan at 53. Also I have plenty of equity. And locking in at 3.75% is just incredible.

Lucky I was living consumer debt free and had my Taxable account 90% of my Investments. So when tragedy struck, i was as ready as I could be...

We have to plan for the unknown sometimes...

[GregWeld]

Ya Greg, Planning is critical..

Take me for instance..I was forced into retirement 3 years ago due to two Strokes, A Brain lesion that turned into Seizures, and a major Heart infection and a Bad Heart valve.. I know, When I do things, I go BIG.

But I will be OK due to long term planning.. I had planned to work until I was at least 57 to 60, But I had to retire at 50.

But like you said, it is how much is going out..I keep my monthly nutt going out reasonable , so I will make it. My Investments will generate enough for me. And like you said, this is the slow time...When Inflation hits ? I know my income will double with lower risk, a.k.a. CD ladders, ect... So if I can make it now, I will make it then.

I have no problem taking a 30 year loan at 53. Also I have plenty of equity. And locking in at 3.75% is just incredible.

Lucky I was living consumer debt free and had my Taxable account 90% of my Investments. So when tragedy struck, i was as ready as I could be...

We have to plan for the unknown sometimes...


Mike that's the key!

A mortgage of any kind is a no biggie IF you have adequate income.... Then it's smart to use cheap mortgage money! But you and I know that you have to have the assets etc to back it up.

What I'm saying is that people who DON'T have adequate assets and retirement income - looking at a mortgage for a bigger house etc -- and retirement is right around the corner. That's a plan alright -- a plan for disaster!

I have a mortgage on my main house and this new Sun Valley house -- but it's peanuts on a monthly basis compared to my income and assets - so I don't even think about it. But I certainly know that most aren't quiet as lucky as I have been. Retirement income is precious and ya just gotta plan for it is all. :thumbsup:

[Bucketlist2012]

AMEN Greg..

I had to train the Wife...She wanted to move up, ect... and I said no..We stay within our means and if things go well, we increase our spending later.
I would rather die with assets left than have to be a Walmart greeter..

And I could never have written the script for what happened to me...I almost didn't make it... I Had the Notary and the Attorney writing my Trust on my deathbed.

For you readers...WRITE A WILL AND A TRUST NOW.. Do not wait...

So that is why you haven't seen me at any events yet..Still recovering..

But like you said, Inflation will come, and that will be good for guys like you and me...Low Debt and Liquidity to Invest both no risk, and still Invest in the Market..:G-Dub:

[GregWeld]

If you check your accounts -- AT&T (T) paid you a nice dividend after the market closed on Friday.... AND it went up in price too!

Gotta love that!!


EEEEEEEEHHHHHHAAAAAAA

[glassman]

Greg and mike, the key the readers need to know here is PLANNING.

I committed the investment sin from 98 to 08 of invest and forget, 1100 a month from age 31 to 41. I now have 3k a month to "play with". I am still getting started and learning. I don't have much knowledge to contribute here and am taking in much more than I'm putting out....

Have a plan
Manage your debt, keep it at an absolute minimum.

I like the idea of being "homestead" in case sh$t really hit the fan, both in our market and the global market. Why do I feel this? Don't know, been in other countries where 90% of the populas has absolutely nothing. It's hard to watch as I look at my own belly. My wife and I are also fairly charitable ...

I would like to be out in 10 or so years, puts me at 55 ish.

No/ low overhead, just like you said greg....

[sik68]

Hey guys,

I'm no macro economist, but shouldn't the opportunity cost of borrowing in a low rate environment be the same as a high rate environment? That is, if inflation does correspond to market cycles, which I'm guessing aren't tied at the hip.

Granted, a mortgage is 30 years, and market cycles are much shorter than that, so I definitely see the appeal of locking in a cheap mortgage now....when the inflation pendulum swings hard the other way, I will be quite off-put to buy a house at over double the rates my peers are locking in now. I suspect so will a lot of people, and it will hurt house prices, maybe enough to compensate for the crappy loan rate I'll be offered.

Am I sounding like a :lostmarbles: ? These supposedly low housing prices AND low rates just doesn't make supply and demand sense... When one goes up the other should come down, no?

[GregWeld]

Steven --

Here's the problem with that thinking.

Interest compounds at the payback total will be HUGE compared to the lower interest rate - not to mention the monthly payment will also be far higher.

The housing prices might not rise as much - as demand dampens - but they still tend to rise... so by waiting - you not only pay a higher first cost - your monthly outlay is higher and your total outlay is also.


EXAMPLE:

You buy a house at 300K with 50K down - and finance 250K at 8%

Monthly payment is - 2,146.91
Total payback is - 772,888.12


Same house same down payment but at 4%


Monthly payment is - 1,506.04
Total payback is - 542,173.77

[sik68]

Steven --

Here's the problem with that thinking.

Interest compounds at the payback total will be HUGE compared to the lower interest rate - not to mention the monthly payment will also be far higher.

The housing prices might not rise as much - as demand dampens - but they still tend to rise... so by waiting - you not only pay a higher first cost - your monthly outlay is higher and your total outlay is also.


EXAMPLE:

You buy a house at 300K with 50K down - and finance 250K at 8%

Monthly payment is - 2,146.91
Total payback is - 772,888.12


Same house same down payment but at 4%


Monthly payment is - 1,506.04
Total payback is - 542,173.77

I totally get the compound interest part, but why would that house sell for the same price at 8% as 4%. Since payment affordability is based off a ratio of monthly income, the house should be cheaper.

I'm simply trying to justify to myself that I won't be screwed over when I go to buy a house in 5 or so years when these dream rates are gone. :rolleyes:

[Flash68]

I know it was an example, but if rates go to 8% (not even terrible on a long term scale) anytime in the next few years housing would be in for a world of hurt re pricing.

Yes, that same house should be able to be bought for less because affordability for qualification purposes (DTI) would be reduced dramatically in that environment.

Depends also what income growth was over that period that arrived at an 8% interest rate environment. Inflation out of control most likely?

[Bucketlist2012]

You guys are some smart dudes. Me ? More lucky than smart , but I was always told to hang out with smarter people to accelerate my Learning.

I have the obvious money management skills which go a long way in life, Investing 101, but my Investing 102 skills need work, and this thread helps alot.

There is a truth with the correlation of Prices being higher as rates are lower. On paper , as the rates dropped 1%, my Home went up 100K in "Value". So the Guy buying 2 years ago was getting a home for 280,000 @ 5%. Now he will pay 380,000 @ 3.75%. So when rates rise again, prices should drop...

Mike, you got it right planning and studying and keeping debt low. No matter what, it will all pay off.

And I am just trying to keep up with Dave, and Greg and some of you other guys, and trying to absorb all the knowledge I can...

[Flash68]

Mike, stop it. You know very well what you are doing over there. :unibrow:

[Bucketlist2012]

Mike, stop it. You know very well what you are doing over there. :unibrow:

Dave...

Haha..Yes, I do my best...But you guys do teach this old Dog new tricks...

I just need to get healthy so I can chase you guys around the track...

But thanks to this thread, I am smarter now than I was before..:D

[GregWeld]

I totally disagree with the "hypothetical" discussion of houses going DOWN when rates rise. The historic "norm" proves that to be incorrect assumption. They won't go rising to the stratosphere like they did with the artificially low rates we have now... and most like what you'll see (which I've seen in my own personal history) is that as the rates go higher --- you'll just adjust your dream house DOWN the scale -- so your monthly will be higher for a less desirable home.

What the low rates have allowed folks to do is to buy way more house than they would have "ordinarily" been able to afford on a monthly basis.

Rates creep up slowly -- and people just make the adjustment.

Now -- if rates SUDDENLY went sky high in a 6 month or 1 year period that would be a different story - but that isn't the norm and if it did rock this way - the WORLD will be in a depression so nobody will be buying anything! :lol:

[Bucketlist2012]

I totally disagree with the "hypothetical" discussion of houses going DOWN when rates rise. The historic "norm" proves that to be incorrect assumption. They won't go rising to the stratosphere like they did with the artificially low rates we have now... and most like what you'll see (which I've seen in my own personal history) is that as the rates go higher --- you'll just adjust your dream house DOWN the scale -- so your monthly will be higher for a less desirable home.

What the low rates have allowed folks to do is to buy way more house than they would have "ordinarily" been able to afford on a monthly basis.

Rates creep up slowly -- and people just make the adjustment.

Now -- if rates SUDDENLY went sky high in a 6 month or 1 year period that would be a different story - but that isn't the norm and if it did rock this way - the WORLD will be in a depression so nobody will be buying anything! :lol:

My Wife just said what you said....:poke: Damn....

[Flash68]

I totally disagree with the "hypothetical" discussion of houses going DOWN when rates rise. The historic "norm" proves that to be incorrect assumption. They won't go rising to the stratosphere like they did with the artificially low rates we have now... and most like what you'll see (which I've seen in my own personal history) is that as the rates go higher --- you'll just adjust your dream house DOWN the scale -- so your monthly will be higher for a less desirable home.


That is a nice anecdotal piece and I don't disagree, however, interest rates and home prices are for the most part inversely connected over time. It's not perfect, but it does largely follow that "hypothetical."

http://i236.photobucket.com/albums/ff245/flash68/USA-Home-Price_1950-2009-real-600x4_zpsf85fd8c6.png

[GregWeld]

That is a nice anecdotal piece and I don't disagree, however, interest rates and home prices are for the most part inversely connected over time. It's not perfect, but it does largely follow that "hypothetical."

http://i236.photobucket.com/albums/ff245/flash68/USA-Home-Price_1950-2009-real-600x4_zpsf85fd8c6.png



There's no question that they are linked..... but what the reality is is that prices don't go UP --- and buyers are forced to buy down to what they can afford on a monthly basis as rates rise... so while the two are related - the rise in rates doesn't mean that suddenly houses are going to go down 25%. It just doesn't happen. What you really see is that houses go UP quickly (too fast) as the rates are low.

What I was trying to show with my rate example is that while you might get a house a smidgen lower -- you'll more than make up for your "deal" in interest.

The perfect storm to buy has been the last two or three years --- falling house prices with the lowest rates in 50 years. Not likely to repeat that scenario --- as houses are already getting multi bids - prices inching up -- and it's almost a given that rates will climb from these historic lows.

[GregWeld]

Let's also examine that chart a bit closer -- as we all know that the super low rates caused the spike in purchasing power and home values ---- which is also the PLUNGE in that nice spike up. Painful for many and a historic aberration.

[GregWeld]

A report just came out and said that home prices ROSE 8.3% in all but four states. That's the largest gain since 2006.


THAT is why interest rates will start to creep up --- IF --- IF --- that continues. Money is a market. More demand to borrow - causes the rates to go up. Money is no different than anything else -- if there is demand then things go UP.

So back to the house/interest rate question. Those that haven't already jumped in with both feet are already seeing that once in a lifetime opportunity (Low house prices - lower interest rates) slip away.

The FED is still artificially holding rates down. Once they see the employment picture brighten and the housing sales start jumping up... they'll ease off the brake and let the rates rise.


FOR INVESTING 102

One of the oldest sayings is ---- "when interest rates fly - stocks will die"

We have a long way to go for the interest rate (treasuries and CD's and Money Market funds) to start to be attractive enough to pull money out of stocks and into interest bearing investments. But for 102 -- you need to learn to be aware of these interactions and trends.

[GregWeld]

This is interesting! Shows a complete lack of planning and understanding of money.... Or even "life" as in. Your future?!?!?


http://m.cnbc.com//id/100434965

[Bucketlist2012]

This is interesting! Shows a complete lack of planning and understanding of money.... Or even "life" as in. Your future?!?!?


http://m.cnbc.com//id/100434965

Ameriprise tried to sell me annuities..:confused59: Before the crash in 2006/2007...I stayed in Cash after selling a home....That way I was in control of the money in 2009...

Also people need to do the research..One study says you need 11 times your yearly spending to survive retirement...

I say you need 14 to 17 times your yearly spending in funds to survive...And it must be invested for dividends , ect.... And not in cash.



Filling out the paperwork now for the 3.75% 30 year fixed right now...

[glassman]

Ameriprise tried to sell me annuities..:confused59: Before the crash in 2006/2007...I stayed in Cash after selling a home....That way I was in control of the money in 2009...

Also people need to do the research..One study says you need 11 times your yearly spending to survive retirement...

I say you need 14 to 17 times your yearly spending in funds to survive...And it must be invested for dividends , ect.... And not in cash.



Filling out the paperwork now for the 3.75% 30 year fixed right now...


I think that holds true if your expenses/lifestyle stays the same, at least from what I've heard... I am planning on 1.2 to 1.5 with the hopes of 5% ish for my return, bout yrs 10 to go, hopefully no more....we'll see...and that's a little under what I make now. Mike

[WSSix]

I'm just not going to stop working :lol:

Seriously, my second life will be doing something that still generates income but is on my own terms so I can "enjoy" retirement. In all honesty, the idea of just lounging around while traveling around bores me. I'd have to do something to keep me going. Might as well make some money at it if I can.

[Tony_SS]

Once the govt gives its blessing, and finds a way to tax pot, its going to be a VERY lucrative industry...

5 Marijuana Stocks Going Crazy (And This Could Be Just The Beginning)
http://seekingalpha.com/article/1156521-5-marijuana-stocks-going-crazy-and-this-could-be-just-the-beginning?source=yahoo

[GregWeld]

The thing is - we all know that "expenses" are allowed to grow to match or overtake income. Usually without corresponding savings/investment.

I can tell you that you WILL spend MORE in retirement than when you're working. You just don't have time to spend when you're working all day. Wait til ya got nothing to do all day - every day - and someone says "hey! Let's all go to X...." You're in! :lol:

You don't spend on the same stuff.... but you'll spend it on hobbies - trips - dinning/entertaining - and MEDICAL. Ya get older - insurance goes up - trips to the doc increase - meds you didn't use to need are now required etc.

The problem with retirement "lately" has been the utter lack of returns. If the returns get better -- your investments grow quicker (compounding) and when you retire -- getting 8% on a million is WAY better than getting a lousy 4%!!

The keys to this ---- by retirement have your expenses down to basics ---- and investing EARLY so it has time to compound.... One has to go UP and the other must go down. Or -- you live for 25 or 30 years wish'n' you'd have done a better job on something you had plenty of time to prepare for.

It used to be you inherited a little from your folks.... but I'm telling ya that about the only thing most will inherit any more is the debt from taking care of them in their final years. You/they will have blown thru the house - savings - and anything else not nailed down if they stroke - or get cancer - or require assisted living. I can tell you this via my own personal experience with my parents. 4 years of assisted care --- ya got nothing left. And these days people live longer but then they seem to need more care in the end.

[Bucketlist2012]

Greg..

I call it the "Burn Rate"...How much you are burning through your money..

My big things for 2013 was to make sure we stay Insured ,YES, and second was to refinance the Home loan...YES, just locked in a 30 year 3.75% fixed this morning ..:thumbsup: :thumbsup:

We have also stopped the rate of going through money, so we have enough to last..

[GregWeld]

OH YEAH MIKE!!

We can all burn through the dough!

Some of us are pretty lucky. I MAKE more than I can spend... well -- I can spend it with the best of 'em... but most people would be damn lucky if they retired with 500K --- and even luckier if they had 1MM... and trying to live off the interest - and Social Security if you only have 500K is going to be a long tough haul. Even 1MM is only going to earn 50 or 60K -- and that's GROSS so you've got 20% taxes out of that... So then most folks are going to be dipping into that capital for little things like the roof on the house - or the 50th Wedding anniversary -- or the loan to the kids for a house downstroke...

With INFLATION - property taxes go up almost every year - auto insurance - medical insurance - just STUFF.... and suddenly what seemed like a massive amount of dough - isn't.

My buddy lived off his union pension - and SS.... and it was TIGHT! He had to watch every nickel if he wanted to be able to do anything other than just pay his bills. BUT == BIG BUTT == he'd invested in land many years ago -- and just sold it. That was his piggy bank. Now -- he's a comfortable guy and invested for dividends he can now sport an extra 7 or 8K per month gross... pretty dang nice for a guy that was just getting by. The point is -- I don't car how you do it - land - rentals - stocks - savings - whatever.... ya got to have some for down the road. Ya don't have to be Charlie or Greg. We're the exception. But ya gotta get busy and do SOMETHING. There's no magic bullet.

[glassman]

Greg, I do agree with you. I have a saying I've sead since my twenties that I'm kinda tweaking today, basically " It's either be here making it, or out there spending it...". But I m finally beginning to see the light of some investing advice I received a while back, is to have your money making money while your sleeping, which is totally contrary to my bisness.

So at 8% and I have 1.2, does that translate to 96,000 before taxes? Less 15% for taxes (probably 20% of that 1.2 will be from my Roth)...bout 6800 a month. Or bout 1700 a week. You can see where it starts to get thin...

Mike

[GregWeld]

Greg, I do agree with you. I have a saying I've sead since my twenties that I'm kinda tweaking today, basically " It's either be here making it, or out there spending it...". But I m finally beginning to see the light of some investing advice I received a while back, is to have your money making money while your sleeping, which is totally contrary to my bisness.

So at 8% and I have 1.2, does that translate to 96,000 before taxes? Less 15% for taxes (probably 20% of that 1.2 will be from my Roth)...bout 6800 a month. Or bout 1700 a week. You can see where it starts to get thin...

Mike



Yes -- if you can SAFELY make an 8% cash flow off your investments. I've yet to be able to make that kind of return. You can get that in TOTAL return - capital growth and dividends -- but to consistently, safely earn 8% you'd have to be seeing mortgage rates in the 9's and 10's -- and treasuries would be yielding 6% or more.

Of course that's the issue isn't it.... we don't really know what the future holds for rates etc.

A more conservative estimate would be to earn a steady 5%.... if you get more --- then we're in a highly inflationary period... which of course ALL retirees hope for!! :lol:

[glassman]

So basically tread lightly and pay attention (or you won't be paying anything...hahaha)

[GregWeld]

So basically tread lightly and pay attention (or you won't be paying anything...hahaha)



Well...... once you start living off the cash-flow -- and you're "older".... it's not the time to be risking what took you years to achieve. So MOST people take a step back and invest a bit more conservatively. At retirement you're goal is to have a steady rock solid cash flow you can count on for many years. You don't want to be gambling - suddenly loose a quarter mill - and then have the market be down too.... and all of a sudden you're in hot water.

Now -- if you have 5 or 10 or 20 million.... then you can take a bit more risk because if you have 10 million -- and it's spinning off 500 to 600K in cash... (5 or 6%) -- you're probably okay regardless. :lol:

[Bucketlist2012]

A more conservative estimate would be to earn a steady 5%.... if you get more --- then we're in a highly inflationary period... which of course ALL retirees hope for!! :lol:

I do believe we will see that Inflation at some point in the future..

That is why locking in on the present rates is critical..

Having a long term fixed loan at sub 4% and Investments that will yield double or more ? :thumbsup:

[glassman]

Well put.

[GregWeld]

People get mad at me when I say I'm hoping for raging inflation... and that I'd love to see 10% CD rates. Actually if truth be known - anyone that is living off their money would love to see a return to these kinds of rates. In retirement you're most likely (key statement - MOST LIKELY) not buying as much "stuff"... Your mortgage is most likely locked in or non-existent. Even if you have one - like Mike pointed out - paying 4% and making double that - is a good thing.

While nobody really actually wants inflation, it's good for retirees. It's just a no brainer for folks to be able to put money into super safe bonds or CD's or Treasuries and make acceptable returns. High return rates actually RAISE the buying power for these folks... but, of course, at the expense of those that are still working and trying to raise families and buy homes and cars etc. That's why inflation and high rates are "bad". But the historic low rates on these same investments have been really bad for the retiree for several years now. This is particularly true for those with the lowest amounts to retire on. The difference between making 7% on 300K and making 3 or 4% on that same amount is just huge to that family.

[Bucketlist2012]

People get mad at me when I say I'm hoping for raging inflation... and that I'd love to see 10% CD rates. Actually if truth be known - anyone that is living off their money would love to see a return to these kinds of rates. In retirement you're most likely (key statement - MOST LIKELY) not buying as much "stuff"... Your mortgage is most likely locked in or non-existent. Even if you have one - like Mike pointed out - paying 4% and making double that - is a good thing.

While nobody really actually wants inflation, it's good for retirees. It's just a no brainer for folks to be able to put money into super safe bonds or CD's or Treasuries and make acceptable returns. High return rates actually RAISE the buying power for these folks... but, of course, at the expense of those that are still working and trying to raise families and buy homes and cars etc. That's why inflation and high rates are "bad". But the historic low rates on these same investments have been really bad for the retiree for several years now. This is particularly true for those with the lowest amounts to retire on. The difference between making 7% on 300K and making 3 or 4% on that same amount is just huge to that family.



Greg, I almost blew coffee all over my Monitor laughing so hard.. I know, it doesn't sound good saying we welcome High Inflation... But in all honesty, I think it is inevitable and not our fault..

The fact that it will benefit me the most is just part of life...I won't be the one causing it and neither will you..

I just see it coming and I am getting ready..I will benefit greatly from it...

Holy poo, If I can get double digits on CD's again, I will lock in those too and take some out of Stocks to diversify even more...

[Tony_SS]

People get mad at me when I say I'm hoping for raging inflation... and that I'd love to see 10% CD rates. Actually if truth be known - anyone that is living off their money would love to see a return to these kinds of rates. In retirement you're most likely (key statement - MOST LIKELY) not buying as much "stuff"... Your mortgage is most likely locked in or non-existent. Even if you have one - like Mike pointed out - paying 4% and making double that - is a good thing.

While nobody really actually wants inflation, it's good for retirees. It's just a no brainer for folks to be able to put money into super safe bonds or CD's or Treasuries and make acceptable returns. High return rates actually RAISE the buying power for these folks... but, of course, at the expense of those that are still working and trying to raise families and buy homes and cars etc. That's why inflation and high rates are "bad". But the historic low rates on these same investments have been really bad for the retiree for several years now. This is particularly true for those with the lowest amounts to retire on. The difference between making 7% on 300K and making 3 or 4% on that same amount is just huge to that family.

Right now we are seeing a lot inflation, but rates are being held way too low. So the while the cost of living is going way up, the SS checks are not reflecting that and rates are way too low for investments to keep up for the average retiree.

I was listening to this guy on the radio and to me, he knew exactly what game was being played and how to win it..

http://www.amazon.com/The-Boomers-Guide-Worry-Free-Retirement/dp/1599322935

[sik68]

Greg!

I am now on my 4th audiobook on $Money$, and the Rich Dad/Poor Dad guy reminds me so much of you and this thread. It's like having GW in this thread and GW in my ear for an hour each day...is that a good thing? Haha

Here are the points from this thread and the book that I'm really eating up right now:

1) Learn to Make Decisions With Rationality As Well As Emotions - All of us make decisions emotionally, but the smartest people recognize and harness their emotions and learn to use rationality to make decisions. (I have started to do this and it changes your whole perspective on life, money, relationships, etc).

2) Don't Work For Money - Working for money keeps you desperate, and unable to think and be creative. Work for knowledge that experience brings.

3) Let Your Money Work For You - THINK and act on ways you can generate cash flow outside of the 'rat race'

4) Don't Play It Safe, Play It Smart - Most of us 'play it safe' and fear taking a loss. Making money requires not avoiding risk, but staying focused, and managing risk.

I KNOW that's not all, but my dimmer switch is sliding up. :idea:



GW I'm still doing more research on your post about housing prices vs. rates and I see what you're saying...in reality it's more complex than just an inverse relationship. I'll post about this soon too.


Thanks,
Steven

[GregWeld]

Greg!

I am now on my 4th audiobook on $Money$, and the Rich Dad/Poor Dad guy reminds me so much of you and this thread. It's like having GW in this thread and GW in my ear for an hour each day...is that a good thing? Haha

Here are the points from this thread and the book that I'm really eating up right now:

1) Learn to Make Decisions With Rationality As Well As Emotions - All of us make decisions emotionally, but the smartest people recognize and harness their emotions and learn to use rationality to make decisions. (I have started to do this and it changes your whole perspective on life, money, relationships, etc).

2) Don't Work For Money - Working for money keeps you desperate, and unable to think and be creative. Work for knowledge that experience brings.

3) Let Your Money Work For You - THINK and act on ways you can generate cash flow outside of the 'rat race'

4) Don't Play It Safe, Play It Smart - Most of us 'play it safe' and fear taking a loss. Making money requires not avoiding risk, but staying focused, and managing risk.

I KNOW that's not all, but my dimmer switch is sliding up. :idea:



GW I'm still doing more research on your post about housing prices vs. rates and I see what you're saying...in reality it's more complex than just an inverse relationship. I'll post about this soon too.


Thanks,
Steven



I could say "I feel sorry for you" -- but then I'd be lying... :poke: :lol:



I like the Rational/Emotional discussion with regards to investing. I've said it many times here -- that you MUST invest in things you feel good about... so that's "emotional". I've also said - invest in things you understand -- and that's "rational".

So when I hear a news story - let's say it's about "rising rates".... and that triggers -- "what do I have that is interest rate sensitive"? So the emotional side says "Holy crap! I've got a lot invested in that space!" and I jump to check.... THEN I try to suppress the emotional side -- search around -- read other opinions - gather some data - I go back to myself and discuss "WHY I BOUGHT THIS"... and "Where does this fit in my portfolio" etc. IF -- IF -- I decide to pull the trigger on either a buy or sale ---- I do so lightly. I may sell a 1/3rd -- or a half. I would do the same on a buy. This gives you time to settle down - think - and take the emotion out of it.

[Vegas69]

Investment Property #Deuce

Purchase Price: $155,000
Loan Amount: $124,000
30 Year Fixed/3.75%
Initial Investment: $39,520(Down Payment, Closing, Repairs)

Exterior Paint
Interior Paint
New Flooring
New Appliances
Misc....

Rent: $1295 (1 year Lease)
Monthly Payment:$734

Gross Mo. Cash Flow: $561
Principal Reduction(Mo. 1st year):$175
Monthly Appreciation(3% Yearly): $387.50

Gross Monthly Financial Gain: $1123.50

Now you know why I no longer own a 1969 Camaro. :lol: With all the costs, it ROI's 100% back in just under 4 years. I've decided to add $218 a month to reduce principal which pays off the mortgage in 18 years. Still cash flowing every month along the way. Yes, I'm building in 3% yearly appreciation along the way. I bought it for late 90's prices at 3.75% interest. Hell yes!

I fix them up NICE. I have the fringe benefits of being in the business. I received a 6% commission and manage my own properties. I had tenants beating down the door. I ended up with 5 that wanted it and picked a couple in there late 50's that had to short sale their home bought in the boom.

It's a prime location, backs to the community trail system with a private gate to the trail, two blocks to the community center, library, 3 blocks to one of the best elementary schols in town, walking distance to the hottest hang out spot in Henderson.

Four more to go.......:G-Dub:
http://i200.photobucket.com/albums/aa251/Payback1969/1_zps83bf0830.jpg
http://i200.photobucket.com/albums/aa251/Payback1969/5-1_zpse113e897.jpg
http://i200.photobucket.com/albums/aa251/Payback1969/7-2_zps02fb8cce.jpg

[GregWeld]

AWESOME BUDDY!!!


That's INVESTING!! Right there.

[Vegas69]

Thank you sir...:cheers: As I said in my healthy 101 thread.... The pain of discipline weighs ounces, while the pain of regret weighs tons. I can play with cars later, it's time to set myself up for the future.

[GregWeld]

Thank you sir...:cheers: As I said in my healthy 101 thread.... The pain of discipline weighs ounces, while the pain of regret weighs tons. I can play with cars later, it's time to set myself up for the future.




THAT is exactly what this thread is all about....

[XLexusTech]

THAT is exactly what this thread is all about....
Vegas... I wouldn't ask this is the answer was not really important to me... did you get an investment or Traditional mortgage? I have a rental that is underwater and just about even..(income to expense annually). I cant refi because I haven't lived in in 3 of the last 5 years... Well I can but only as in investment loan which is not favorable... so if you know a way out i would love to learn...
I thought about putting the property into an LLC and letting it go.. I doubt it will ever be very heavy cash positive without a favorable refi...

[sik68]

That is a sweet deal. It's impressive to be so cash flow pos. without a lot of money down.

Is it common to find houses where the mortgage is significantly less than the rental market price? Do the renters of these places tend to be those that were put out by the housing crash?

[Vegas69]

Vegas... I wouldn't ask this is the answer was not really important to me... did you get an investment or Traditional mortgage? I have a rental that is underwater and just about even..(income to expense annually). I cant refi because I haven't lived in in 3 of the last 5 years... Well I can but only as in investment loan which is not favorable... so if you know a way out i would love to learn...
I thought about putting the property into an LLC and letting it go.. I doubt it will ever be very heavy cash positive without a favorable refi...

I purchased the property with an investment loan. I did pay 2 points to get that rate. Your Loan to Value is your biggest problem. The higher LTV, the more risk the lender assumes. What type of loan do you have currently? FHA, VA, Conv (Fannie/Freddie or Private?) Does it adjust or have a balloon?

Depending on your financial position and negative equity, a short sale may be beneficial. I'd certainly do that before suffering a foreclosure. A talk with an asset protection attorney and cpa would be your first steps. The laws are different than Nevada. The LLC won't protect you as the loan is in your personal name. You can only change how you hold title. Then research an agent that has a proven track record of closing short sales.

That is a sweet deal. It's impressive to be so cash flow pos. without a lot of money down.

Is it common to find houses where the mortgage is significantly less than the rental market price? Do the renters of these places tend to be those that were put out by the housing crash?

It's really a unique recipe. Our market over corrected due to the bubble burst. Team that with all time low interest rates and displaced homeowners that have suffered a foreclosure/short sale and this is the result.

The margin between ownership and leasing can't be this wide forever. Our prices are increasing rapidly(21.5% in one year) and rates have been inching up. That will do two things: Reduce investor ROI and primary residence affordability. The margins will shrink and vacancy will rise as investors decide to move their money out of our market. I expect a rent decrease down the road but I have lot's of insulation and my properties are always at the top of the heap. I'll have then rented as long as the lights are on downtown. :D

I really feel like it's a once in a lifetime opportunity to capitalize on low prices AND interest rates at the same time. Investors agree as we(our market) have many hedge funds picking up 50 properties at a time all cash. While I feel our market is getting investor heavy, a majority of the sales over the last 2-3 years have been all cash, heavy down, or highly qualified. The foundation of ownership will be solid this time around. I do see a hiccup coming in 6-12 months when sale inventory increases and interest rates rise. I do see the individuals that have suffered short sales/foreclosures getting back in the market as buyers about the same time the investors start to wane.

I've been wrong before but these investments are no brainers over a lifetime.

[XLexusTech]

Vegas.. I have 2 loans the ole 80/20 from the BS loan days... 80% conventional which is likley 90 LTV on itself.. 20% HELOC which I would consider paying off... if i did the Net cash flow would be about 300/month and the initial outlay would be about 35K.

I thought a short sale is as bad for you credit as a foreclosure? and since the HELOC would have to be paid in full it would be tough to impossible.

Thanks for any help... the advice is appreciated.

[GregWeld]

The key for INVESTING like Todd is doing -- is keeping the properties CLASS A... and investing in great neighborhoods where good people want to live. All the properties I've ever invested in were always class A apartments. You get a better tenant... higher rental rates... and less vacancy etc.

Todd -- I think your rentals should be unaffected by "down the road" events. You've positioned your self well. Great underlying price paid. Low fixed rate mortgage. You'll get good rents because the properties and management are nice. If anything - my guess is you'll be able to RAISE rates as housing prices firm because the prices paid for new purchases will have to be reflected in the rental rates. A rising tide floats all boats. The tighter the market gets with inventory absorption - regardless of who is buying the better it will be for everyone.

We just raised our rental rates 50% in one building I own (an LLC with other investors) and 35% in the one I just invested in (we're doing a major redo of units as they become vacant - raising the quality a long way). Over the next 10 to 15 years these units are going to make nothing but money.

Selling a depreciating asset to buy/invest in an appreciating asset with cash flow is the smartest move you'll have ever made in your entire life (other than marry Kelli). I'm proud of you for having the guts to make the move. :thumbsup:

[Bucketlist2012]

[B]Selling a depreciating asset to buy/invest in an appreciating asset with cash flow is the smartest move you'll have ever made in your entire life

I am at that crossroads too.. I am in the middle of refinancing my Home and helping my MIL refinance hers..This should be done in 30 days or less.

After that it is time to look at at purchasing at least one rental Property to start.

Vehicles are my only depreciating assets...I may sell one.

But I need to diversify even more from Stocks ,ect... and into some properties...

My Wife wanted to back in 2007 and I stopped her, and I was right...

Now she wants to again, and now she is right...

Todd and Greg...Thanks for the info and the push.....:thumbsup:

[Flash68]

Nice work Todd. Your discipline here is inspiring and painful at the same time. :lol:

I have really tried to minimize my depreciating assets overall as well and I am down to just one. Yep, this stupid Camaro. :bang:

You are in a great position there with your craft and recognizing the opportunity. Congrats on capitalizing on it. That will be your Social Security (and then some) when the real one has nothing left in the coffers. :sieg:

The fire extinguisher in the kitchen is a nice touch. Not many LL's I know would provide that. Smart.

:thumbsup:

[Vegas69]

Vegas.. I have 2 loans the ole 80/20 from the BS loan days... 80% conventional which is likley 90 LTV on itself.. 20% HELOC which I would consider paying off... if i did the Net cash flow would be about 300/month and the initial outlay would be about 35K.

I thought a short sale is as bad for you credit as a foreclosure? and since the HELOC would have to be paid in full it would be tough to impossible.

Thanks for any help... the advice is appreciated.

Rates will go up and that heloc will bite you down the road. I've had conversations with many of my past clients that we've closed short sales for and it can be easy on your credit depending on the rest of your profile. I have one that went from 830 to 810 and 800 to 750. (Approx.) A short sale is a settlement of debt, a foreclosure is a black eye on your credit and you forever. It's on a mortgage application, job application, home owners insurance applicatioin. You can get obtain a conventional loan in 2 years after a short sale, and 3 years for FHA. I've had good success with Helocs taking 6-10 cents on the dollar through a short sale and many times the 1st lien has paid it, not the homeowner.

Clearly, there are unlimited variables. From who your lien holder is, you financial position, State laws, on down the road. Find a competent local expert.....

The key for INVESTING like Todd is doing -- is keeping the properties CLASS A... and investing in great neighborhoods where good people want to live. All the properties I've ever invested in were always class A apartments. You get a better tenant... higher rental rates... and less vacancy etc.

Todd -- I think your rentals should be unaffected by "down the road" events. You've positioned your self well. Great underlying price paid. Low fixed rate mortgage. You'll get good rents because the properties and management are nice. If anything - my guess is you'll be able to RAISE rates as housing prices firm because the prices paid for new purchases will have to be reflected in the rental rates. A rising tide floats all boats. The tighter the market gets with inventory absorption - regardless of who is buying the better it will be for everyone.

We just raised our rental rates 50% in one building I own (an LLC with other investors) and 35% in the one I just invested in (we're doing a major redo of units as they become vacant - raising the quality a long way). Over the next 10 to 15 years these units are going to make nothing but money.

Selling a depreciating asset to buy/invest in an appreciating asset with cash flow is the smartest move you'll have ever made in your entire life (other than marry Kelli). I'm proud of you for having the guts to make the move. :thumbsup:

I'll take wisdom over speculation anyday. It makes sense to me as housing prices and rates increase, rents will follow. I've always been floating around in the glass with it half full and empty at the same time. It's kept my nose pretty clean over the years. :)

It wasn't an easy deal but you have to grow up and be a big boy someday. :confused59:

Nice work Todd. Your discipline here is inspiring and painful at the same time. :lol:

I have really tried to minimize my depreciating assets overall as well and I am down to just one. Yep, this stupid Camaro. :bang:

You are in a great position there with your craft and recognizing the opportunity. Congrats on capitalizing on it. That will be your Social Security (and then some) when the real one has nothing left in the coffers. :sieg:

The fire extinguisher in the kitchen is a nice touch. Not many LL's I know would provide that. Smart.

:thumbsup:

You must have hobbies as an outlet. I pissed so much money away in this one and others. This hobby just happens to be the most expensive and time consuming I've every experienced. I'm enjoying the simplicity of hunting, fishing, golfing, fitness, etc.... for hobbies. In comparison, they are inexpensive and easy. Once I get where I want to be and the desire is back, I'll put a brawler together. Maybe I'll just buy yours when the Wife puts her foot down. :lol: :lol: :lol:

[GregWeld]

You must have hobbies as an outlet. I pissed so much money away in this one and others. This hobby just happens to be the most expensive and time consuming I've every experienced. I'm enjoying the simplicity of hunting, fishing, golfing, fitness, etc.... for hobbies. In comparison, they are inexpensive and easy. Once I get where I want to be and the desire is back, I'll put a brawler together. Maybe I'll just buy yours when the Wife puts her foot down. :lol: :lol: :lol:


It always amazes me when discussing our hobby with people... how many people are trying to build a 100K car on a 75K salary. I shake my head to try to clear out the cobwebs hoping I didn't hear incorrectly. I just paid 15K to the upholstery shop for Rudys Camaro... and I wonder how long it would take for someone to "save" this amount... and how much it would EARN if put into something important vs upholstery!

I just read that people are once again using their homes as piggy banks... there were numbers to back up the claim.

I find this absolutely STUNNING.... apparently "we" never learn from our past mistakes.

[Tony_SS]

Nice going Todd... well done!

[slow4dr]

Congrats Todd! How long had you been shopping/making offers before you found this one?

I would be all over doing another rental but the competition is fierce is my area. I can't compete with the cash buyers.

On a side note: I check Redfin daily for new listings. I have noticed a number of instances where I get an e-mail for a new listing but it already shows as "Pending" even though the actual listing date is old.

[WSSix]

It always amazes me when discussing our hobby with people... how many people are trying to build a 100K car on a 75K salary. I shake my head to try to clear out the cobwebs hoping I didn't hear incorrectly. I just paid 15K to the upholstery shop for Rudys Camaro... and I wonder how long it would take for someone to "save" this amount... and how much it would EARN if put into something important vs upholstery!

I just read that people are once again using their homes as piggy banks... there were numbers to back up the claim.

I find this absolutely STUNNING.... apparently "we" never learn from our past mistakes.

We are a materialistic society. I can understand it to an extent as I think we all suffer from it but I personally believe too many people have taken it way too far.

Today I just saw a new GMC Escalade advertised for $71k. I had no idea they cost so much. That's a stupid amount of money to pay for that vehicle yet they are everywhere. There's no way all the people owning them can truly afford them. But, we live in a gotta have it society. It's going to harm us all again.

[Bucketlist2012]

Trey...

It is going to harm a lot of people...We have to be the smart one's and stay as debt free as possible...

Another bubble will form and burst and we need to be the one's that don't get harmed...

It is like chess, and we need to look a few moves ahead so we are ready..

Americans have a short attention span...They don't remember history and they live in an Internet, ATM, Drive through world....Now, Now, Now...

So just get ready and be smart..That is all we can do.

[Vegas69]

It always amazes me when discussing our hobby with people... how many people are trying to build a 100K car on a 75K salary. I shake my head to try to clear out the cobwebs hoping I didn't hear incorrectly. I just paid 15K to the upholstery shop for Rudys Camaro... and I wonder how long it would take for someone to "save" this amount... and how much it would EARN if put into something important vs upholstery!

I just read that people are once again using their homes as piggy banks... there were numbers to back up the claim.

I find this absolutely STUNNING.... apparently "we" never learn from our past mistakes.

There are alot of folks in this country that are in for a real rude awakening. The grey poupon mindset of the average American that doesn't want to work for it spells some real touble in THEIR lives.

If you change, everything will change for you. Things have changed one hell of alot in the last 10 years. You have two choices, regress with the same mentality you had when things were to easy OR progress through adaptation, education, become more economical, better time management, and ultimately, separate yourself from your competition.

To many wish things were the same as they used to be. Not going to happen...
That's just my humble opinion. :D

Nice going Todd... well done!

Thank you Tony!

Congrats Todd! How long had you been shopping/making offers before you found this one?

I would be all over doing another rental but the competition is fierce is my area. I can't compete with the cash buyers.

On a side note: I check Redfin daily for new listings. I have noticed a number of instances where I get an e-mail for a new listing but it already shows as "Pending" even though the actual listing date is old.

Both I bought this year were in house deals. Number on was a listing of my brokers that never hit the market. This one was a referral from a past client of mine and I bought it. We put all the paperwork in my team agents name and processed his short sale. He's extremely happy and so am I. :thumbsup:

I'd find a local agent that slings some business in a productive office and tell them to go shake some hands.

[slow4dr]

Both I bought this year were in house deals. Number on was a listing of my brokers that never hit the market. This one was a referral from a past client of mine and I bought it. We put all the paperwork in my team agents name and processed his short sale. He's extremely happy and so am I. :thumbsup:

I'd find a local agent that slings some business in a productive office and tell them to go shake some hands.

Damn, that pretty much sums up why I can't compete in today's market. When I bought in 2010 I had been shopping and making offers for 6-9 months. I was so fed up with the whole process that I almost got my license. In the process of making so many offers I probably used 15 different agents. I found a few that were very proactive that I really enjoyed working with and will use in the future.

Inventory levels are 25% of what they were in 2010 in my area so I don't even bother seriously looking right now.

[GregWeld]

Today is a perfect example of why I "scale" in or out of positions...


I had built quite a large position in the Junk Bond ETF (JNK)... some 60,000 shares. Remember that this, and a couple other names, are used to "park" cash until I want it for investing. This ETF pays a monthly cash flow of almost 13 grand on this amount of shares (.21 per share per month!)... so you understand why I don't just let this kind of cash sit in a Money Market account etc.

A couple weeks ago I decided I should cut this down and get busy buying some shares - so sold HALF the position. I never get "antsy" to just rush money around... so no need to sell ALL and then try to find suitable homes for it. These "employees" were very content and working hard in their current jobs there at JNK!! :)

So the reason for todays post.... JNK paid me a full dividend - because I always check to see what the EX dividend date is before I sell anything! No point in missing the EX date dividend (that would be just stupid)... and the full position had a paper gain of about 24K at the time of the sale. I sold half. With todays paper gain - the half that's left shows a 20K paper gain. BINGO! Gotta love that!

Remember -- we want TOTAL RETURN... that's the dividend stream AND the capital growth combined!

Obviously I'm well aware that most of you don't have these kinds of numbers to play with... However, the LESSON here is what needs to be focused on - it does translate regardless of the amounts involved. So REMEMBER to check the EX dividend date before a sale! And don't be afraid to take a profit! And don't sell everything all at once or buy everything all at once if you have "enough" position to be able to scale in and out (Unless the position has blown up and is heading down in a hurry - but that's a different discussion).

[GregWeld]

This article on Wal-Mart sums up why I don't investment in any business where the principal customer is "low end". They're (sadly) the most vulnerable to very small economic changes. A person making minimum wage -- is just barely scraping by --- hit this person with 40 or 50 bucks a month in decreased income (for whatever reason) and they're hosed!

NOW -- there's been no official announcement from Wal-Mart - but usually these types of "leaks" have some basis in truth.




http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9874419/Wal-mart-sales-a-total-disaster-say-leaked-emails.html

[realcoray]

Damn, that pretty much sums up why I can't compete in today's market. When I bought in 2010 I had been shopping and making offers for 6-9 months. I was so fed up with the whole process that I almost got my license. In the process of making so many offers I probably used 15 different agents. I found a few that were very proactive that I really enjoyed working with and will use in the future.

Inventory levels are 25% of what they were in 2010 in my area so I don't even bother seriously looking right now.

It's definitely possible to find solid investments right now, it isn't like the pros just throw their hands up, they are out there grinding and finding deals.

If you're looking for investments, I would suggest NOT using an agent to find you properties because in my experience most agents are not aware of what constitutes a good investment. Even if they have their own, they are often holding onto money losers.

You don't have to have your license, you just need an agent who is fine with you being in charge, picking out things to look at and operating at your pace.

[Vegas69]

It's definitely possible to find solid investments right now, it isn't like the pros just throw their hands up, they are out there grinding and finding deals.

If you're looking for investments, I would suggest NOT using an agent to find you properties because in my experience most agents are not aware of what constitutes a good investment. Even if they have their own, they are often holding onto money losers.

You don't have to have your license, you just need an agent who is fine with you being in charge, picking out things to look at and operating at your pace.

This is why I work with very few investors. :D I'll take my clients that buy and sell and think they owe me dinner.

[Tony_SS]

Guys, what would you do with IRA CD that isn't making squat? It will mature in Nov this year. Idea's?

My knowledge is very limited on all of these investment products.

[GregWeld]

Guys, what would you do with IRA CD that isn't making squat? It will mature in Nov this year. Idea's?

My knowledge is very limited on all of these investment products.




This thread is full of "ideas" -- you just have to go back and read them to answer your own question. :thumbsup:

[slow4dr]

It's definitely possible to find solid investments right now, it isn't like the pros just throw their hands up, they are out there grinding and finding deals.

If you're looking for investments, I would suggest NOT using an agent to find you properties because in my experience most agents are not aware of what constitutes a good investment. Even if they have their own, they are often holding onto money losers.

You don't have to have your license, you just need an agent who is fine with you being in charge, picking out things to look at and operating at your pace.

I am not arguing that there are plenty of solid investments out there. The problem is getting an offer accepted. I was very proactive in 2010 trying to find something, even offering 5%-10% over in some cases and ended up closing two days after Christmas. I fought tooth and nail for months and never gave up. It was an extremely stressful process and my wife was pregnant at the time so it is not a happy memory. The thought of going through that now with an 18 month old and a 5 year old just doesn't sit well with me. Especially given the fact that inventory levels are even lower now.

Every single house I looked at (which was hovering around 100 in a 9 month period) was researched and found by yours truly through Redfin. Never once did any of the agents call me about a house that fit my criteria, I was always one step ahead of them, which is truly sad.

[Jack Maurer]

Guys, what would you do with IRA CD that isn't making squat? It will mature in Nov this year. Idea's?

My knowledge is very limited on all of these investment products.

CD, you mean certificate of depreciation. I would look at some of the annuity products on the market. You might want to visit my web site at www.capitaladvisor.info

[Tony_SS]

CD, you mean certificate of depreciation. I would look at some of the annuity products on the market. You might want to visit my web site at www.capitaladvisor.info

LOL yes, that's it. Thanks, I'll take a look.

[WSSix]

Tony, if it's in a IRA already, why not jump into the dividend stocks market which is mainly what the thread is about? It's a long term deal which if I remember correctly you're in your 30s still so you've got time.

[Tony_SS]

Tony, if it's in a IRA already, why not jump into the dividend stocks market which is mainly what the thread is about? It's a long term deal which if I remember correctly you're in your 30s still so you've got time.

38 this year.. the clock is a tickin'. I can look more into dividend stocks, but I just don't have a lot of confidence and think the market is very inflated right now. I know that's not the popular view here though. I just want to know all my options. I've got some research to do I guess.

[JKnight]

Tony, don't worry about trying to time your entry into the market. That would only be necessary if you were looking to take distributions in <2-3 years. Since you're not touching the dollars for 20+ years, just get in and get going. Over the 20 year term, any dip you think might happen this year won't really matter. Conversely, if you're wrong about a dip, you might lose out on some nice appreciation.

[GregWeld]

38 this year.. the clock is a tickin'. I can look more into dividend stocks, but I just don't have a lot of confidence and think the market is very inflated right now. I know that's not the popular view here though. I just want to know all my options. I've got some research to do I guess.



Tony -- Seriously -- go back to page one... start reading. It will take you several days at this stage to get thru it... but it should start to be helpful for you.

[Tony_SS]

Tony -- Seriously -- go back to page one... start reading. It will take you several days at this stage to get thru it... but it should start to be helpful for you.

Will do Greg. I'm willingly dragging myself into this, at the same time resisting. But I know what needs to be done for the future. Something rather than nothing!

[GregWeld]

Will do Greg. I'm willingly dragging myself into this, at the same time resisting. But I know what needs to be done for the future. Something rather than nothing!



Yeah -- you're going to have to adjust your thinking out WAY longer term... And yes -- something is better than nothing. Nothing is the absolute worst thing anyone can do.

By the way -- you will learn via this thread that there's NEVER a good time to invest (the little man on Wall Street... you'll read about him). There's also never a time you shouldn't be investing.

[Bucketlist2012]

Tony...

I feel we are in for some corrections this year..I will be adding assets on the dips...But regardless, you have to get Investing..

You have to scale in like this thread tell you to and you must be in the Investments to achieve your goals.

Inflation will eat your Cash...Dividends on Stocks get paid regardless if they go up or down in value...

Don't let fear keep you from acting...I have some reservations and this is all a calculated risk..But the risk of not Investing is worse..IMO

[GregWeld]

Today was a great day to be fully invested!! The DOW numbers don't reflect what my Schwab account did today. It was a wow! Gotta love it!

[JKnight]

We're giving it all back, plus a little more today though!

If you were looking for a time to say things are going "on sale", this might be it.

[toy71camaro]

blame it on me.. i set my 401k account to be completely re-balanced last night... LOL. :peepwall: :omg: :brix:

[GregWeld]

We're giving it all back, plus a little more today though!

If you were looking for a time to say things are going "on sale", this might be it.



I don't know -- I was UP 48 grand on Tuesday and only down 11 grand today (Wednesday) so that's a net two gain gain.

:D


blame it on me.. i set my 401k account to be completely re-balanced last night... LOL. :peepwall: :omg: :brix:



Okay - let me repeat this.... The little man on Wall Street knows your every move and he WILL take 'em down the day after you buy - and he'll take 'em up the day after you sell... :bang: :bang: :bang:


Happens every time.

[GregWeld]

I'll tell you what's been saving my bacon on this TINY selloff.. ALTRIA (MO)...

I own 40,000 shares of it -- and it's been UP while most everything else seems to be selling off a bit. That combined with JNK --- which HAS BEEN a steady eddy...

Sometimes owing stocks that don't go down very much (the steady eddies) -- is every bit as good as owning stocks that go up. In a poopie market that is.

They're like having an employee that isn't the best worker or even the smartest - but they show up EVERY DAY without fail... and put in a a days work. They're RELIABLE.

[toy71camaro]

MO is one of my stable ones as well.. Its up 16% since i first jumped into it last year. But at one point it was down a percent or two. But since im in this for the long haul, i got 30+ years to go. So I aint worried about the dips (in fact, we welcome them!). I would consider "selling some profits", but the cost of the trade would take to large of chunk out of the profit to make it worthwhile (IMO). $1k invested last year, its up ~16%, so im +$160. And a sale would cost me ~$9. So thats a 5% cut. :(



On another note, here's some good news to us Coke owners.. We got a 10% Div increase today! http://seekingalpha.com/article/1210991-coca-cola-s-dividend-increase-revisiting-the-story?source=kizur

[bobcat68rs]

I have to say this is a great thread. I understand the long term investment concept, but what if the long term isn't really an option? by that I mean 12 to 15 years before retirement. To little to late? just wondering how to improve things down the road.

[toy71camaro]

I have to say this is a great thread. I understand the long term investment concept, but what if the long term isn't really an option? by that I mean 12 to 15 years before retirement. To little to late? just wondering how to improve things down the road.

Bob,

I am of course, no expert in this. I'm learning from this thread and on my own as I go.

But I have similar questions. Not for myself, but for my parents (61 and 59). Right now, their 401k sits in who knows what funds, making who knows what (squat? hopefully not).

I've been trying to get myself informed enough, to be able to jump in with them and work their situation out to better themselves, their window is a little shorter than yours due to health reasons (dad, 61, already medically retired and about to go under for heart and kidney transplant within the next few months/year).

My thoughts on the whole thing is getting in with good, long term, dividend growth stocks. Mainly "steady eddies", as to not "gamble" so much, but play it safe. Continue to review their account on a quarterly/yearly basis and "trim the fat". If we're actively watching it, i wouldnt be to crazily concerned about a huge downside in the market. Not that we can see it coming, but investing in solid dividend players should still prove to be profitable (ie. Coke, who's increased their dividend for 50+ years. Even in a down market, the dividend should still go up (or at least stay the same)).

Thats my thoughts on it anyway, but I am curious as to others opinions as well, as this is something I am interested in knowing. Good question to bring up!

[GregWeld]

MO is one of my stable ones as well.. Its up 16% since i first jumped into it last year. But at one point it was down a percent or two. But since im in this for the long haul, i got 30+ years to go. So I aint worried about the dips (in fact, we welcome them!). I would consider "selling some profits", but the cost of the trade would take to large of chunk out of the profit to make it worthwhile (IMO). $1k invested last year, its up ~16%, so im +$160. And a sale would cost me ~$9. So thats a 5% cut. :(



On another note, here's some good news to us Coke owners.. We got a 10% Div increase today! http://seekingalpha.com/article/1210991-coca-cola-s-dividend-increase-revisiting-the-story?source=kizur



Of course "taking a profit" is not to be misconstrued as just taking any old profit. It has to be an individual case by case basis. When I look at MY account and I see a stock I've bought has gone up 30%... I might - MIGHT - decided to take HALF that gain... That doesn't mean I sell have that stock -- I sell enough to equal HALF the gain. For instance -- I own 100K of stock - it's now 130K -- I might sell 15 to 20K of shares and then use that money to either buy another stock - average some loser down - or maybe I just pay my bills with it. Either way -- it's a gain... BUT I'm not talking about taking half of a $100 gain. Come on guys -- that's not going to make or break you... SO many of these rules are to be learned now - and exercised LATER when you really start to build your accounts up. AND if I think a stock has a lot more to go... then I wouldn't sell any of it if I've bought it for long term and think it's still a buy. This is something you learn and begin to feel. I look at it as "would I buy more shares here?" Or - "man that was a lucky buy... and I need to be conservative?"

[GregWeld]

I have to say this is a great thread. I understand the long term investment concept, but what if the long term isn't really an option? by that I mean 12 to 15 years before retirement. To little to late? just wondering how to improve things down the road.



Anything over about 3 years would be "long term" -- Then there is LONGER term -- which you'd be in. 10+ years is LONG TERM.


Now I would respond to your next statement --- When do you EVER feel it's "too late" to save some money or invest??

And -- Are you planning to die in 12 to 15 years -- or do you plan to live many years beyond that? If so - how many? 10 more years? 20? Remember that your money needs to last you to your last dying breath... And we all hope that's many many years from now.

[Sieg]

I'll tell you what's been saving my bacon on this TINY selloff.. ALTRIA (MO)...

I own 40,000 shares of it -- and it's been UP while most everything else seems to be selling off a bit. That combined with JNK --- which HAS BEEN a steady eddy...

Sometimes owing stocks that don't go down very much (the steady eddies) -- is every bit as good as owning stocks that go up. In a poopie market that is.

They're like having an employee that isn't the best worker or even the smartest - but they show up EVERY DAY without fail... and put in a a days work. They're RELIABLE.
And Charles Schwab ratings rank Altria as a D.

Have an opinion on that? Political?

[toy71camaro]

Of course "taking a profit" is not to be misconstrued as just taking any old profit. It has to be an individual case by case basis. When I look at MY account and I see a stock I've bought has gone up 30%... I might - MIGHT - decided to take HALF that gain... That doesn't mean I sell have that stock -- I sell enough to equal HALF the gain. For instance -- I own 100K of stock - it's now 130K -- I might sell 15 to 20K of shares and then use that money to either buy another stock - average some loser down - or maybe I just pay my bills with it. Either way -- it's a gain... BUT I'm not talking about taking half of a $100 gain. Come on guys -- that's not going to make or break you... SO many of these rules are to be learned now - and exercised LATER when you really start to build your accounts up. AND if I think a stock has a lot more to go... then I wouldn't sell any of it if I've bought it for long term and think it's still a buy. This is something you learn and begin to feel. I look at it as "would I buy more shares here?" Or - "man that was a lucky buy... and I need to be conservative?"

Right.. which is why i threw in my measly $ amounts to show what kind of "profit" i had. And show the cost side that would be incurred IF I acted upon trying to "take" that profit. (ie. Bad idea).

Good explanation. :thumbsup: :thumbsup:

[bobcat68rs]

Thanks guys,
By all means I plan on living way past 10-15 years. I went with those numbers with the idea those years will be what I plan on working every day. So that will be my time fram to gain more $ to invest. I'm glad that the time I have to do this is considered long term gives me some hope. I have no doubt I am late to the party.

[GregWeld]

And Charles Schwab ratings rank Altria as a D.

Have an opinion on that? Political?




I NEVER use anyone else's rankings - or ideas. I'll use their ideas only to use to take a look at the idea. THEN I make my own decisions. I make my decisions based on that total return - my guts - the dividend... whether or not I KNOW the company and what they do... and whether or not I like the company and the businesses they're in. I don't smoke - I don't drink - that does not affect my decision... I went to Europe == I've been to Asia... they smoke and drink like mad! I thanked them for paying for my trip. :G-Dub:





Right.. which is why i threw in my measly $ amounts to show what kind of "profit" i had. And show the cost side that would be incurred IF I acted upon trying to "take" that profit. (ie. Bad idea).

Good explanation. :thumbsup: :thumbsup:





They're not "measly" --- they're a beginning. You pooped your diapers before you learned to pull your pants down. You skinned your knees learning to ride a bike... you babbled before you spoke... YOU STARTED... and that makes you a winner in my book! :thumbsup:

[sik68]

Speaking of profit-taking...

Chicago Bridge and Iron (CBI) was a stock I've owned for a while now, but didn't really know WHY other than I read some articles a while back. I don't follow the industry, don't know the company, doesn't pay a dividend, and and it's not one of those companies that makes enough headlines to keep track of it easily.

The price skyrocketed in the last 3 months, so I sold out Tuesday after a 62% gain. More importantly I learned 3 things:
1) Don't be greedy
2) This was luck, and for every stock that I rely on luck to make me money, I will be AT least as unlucky for another stock.
3) I freed up money to invest in a 'steady eddy.'

It felt really good to learn a lesson and make money at the same time. I am seeing more and more that knowledge of a company is more valuable to my sanity than the share price. I rest easier knowing that I reduced my exposure to what I don't know, if that makes sense.




Greg, do you you think a young guy like me (29) should take an interest learning to "scale in and out" of the market? My sentiment is that this recent run may be a good time to see what scaling out (say 30% out) of my mutual funds can do, but remain all-in on my steady-eddy dividend stocks. My reason is, with all my money tied up now, I don't have any for periods when the market "goes on sale." Timing the market is bad I know, but I think I need some on the sidelines if I ever want to take advantage of a market on sale. Am I being logical? I am reading Ben Graham's "The Intelligent Investor" right now and it's drilling into my head that "money is made on the buy," so I am feeling more compelled to actually be ready to buy.

Thanks!!

[GregWeld]

Speaking of profit-taking...

Chicago Bridge and Iron (CBI) was a stock I've owned for a while now, but didn't really know WHY other than I read some articles a while back. I don't follow the industry, don't know the company, doesn't pay a dividend, and and it's not one of those companies that makes enough headlines to keep track of it easily.

The price skyrocketed in the last 3 months, so I sold out Tuesday after a 62% gain. More importantly I learned 3 things:
1) Don't be greedy
2) This was luck, and for every stock that I rely on luck to make me money, I will be AT least as unlucky for another stock.
3) I freed up money to invest in a 'steady eddy.'

It felt really good to learn a lesson and make money at the same time. I am seeing more and more that knowledge of a company is more valuable to my sanity than the share price. I rest easier knowing that I reduced my exposure to what I don't know, if that makes sense.




Greg, do you you think a young guy like me (29) should take an interest learning to "scale in and out" of the market? My sentiment is that this recent run may be a good time to see what scaling out (say 30% out) of my mutual funds can do, but remain all-in on my steady-eddy dividend stocks. My reason is, with all my money tied up now, I don't have any for periods when the market "goes on sale." Timing the market is bad I know, but I think I need some on the sidelines if I ever want to take advantage of a market on sale. Am I being logical? Thanks!!



Number ONE!!

Good for you for learning. Knowing what and why you own something is CRITICAL to being a decent INVESTOR.... and that's why I preach to know and understand what you own. It really really helps when the market SUCKS.... Nobody cares what they own when the market is hot -- but it's invaluable when you're dying the death of a 1000 cuts!


Number TWO...


Scaling in and out is not a good thing in the way you're "thinking". You'll be out when it goes up and you'll be in when it sucks and so on...

Scaling in and out is more about MENTALLY doing a checks and balances --- i.e., If you plan to invest 5,000 dollars --- or you intend to buy 1000 shares of something. It FEELS better to buy HALF.... and wait... watch - learn - is the stock doing what you thought or did you jump before you really did your homework etc. So give it a FULL quarter.... then buy another quarter.... OR maybe you made a mistake on the intial buy -- and lucky you! You only put in half!

It's a thing so you don't end up with buyers remorse. Same way selling. You can get sellers remorse... 'cause just after you sold half -- the SOB shoots up $3 a share on a better profit report (or something - whatever).


NOW ---- If you have no NEW MONEY -- then you just need to SAVE that new money.... so that your new money is actually new money - not the same money you already had invested. Selling to buy something else is EMPLOYEE RETRAINING - but you still have the same amount of employees! You need NEW employees.

This - of course... is in ADDITION to repositioning because you have a big loser --- or because a stock you owned doubled or something -- and you're just retraining. But you don't want to sell one stock just because it's going up to buy something else you think MIGHT go up. Do that with new money.

AND --- if you're a real investor -- stay 100% invested with all your long term funds. When the stocks go DOWN -- your dividends will be buying you more shares at lower prices -- but if you don't own the stocks - you won't get the dividends! Your dividends being reinvested for you each quarter is also an automatic scale in.

[sik68]

Number ONE!!

Good for you for learning. Knowing what and why you own something is CRITICAL to being a decent INVESTOR.... and that's why I preach to know and understand what you own. It really really helps when the market SUCKS.... Nobody cares what they own when the market is hot -- but it's invaluable when you're dying the death of a 1000 cuts!


Number TWO...


Scaling in and out is not a good thing in the way you're "thinking". You'll be out when it goes up and you'll be in when it sucks and so on...

Scaling in and out is more about MENTALLY doing a checks and balances --- i.e., If you plan to invest 5,000 dollars --- or you intend to buy 1000 shares of something. It FEELS better to buy HALF.... and wait... watch - learn - is the stock doing what you thought or did you jump before you really did your homework etc. So give it a FULL quarter.... then buy another quarter.... OR maybe you made a mistake on the intial buy -- and lucky you! You only put in half!

It's a thing so you don't end up with buyers remorse. Same way selling. You can get sellers remorse... 'cause just after you sold half -- the SOB shoots up $3 a share on a better profit report (or something - whatever).


NOW ---- If you have no NEW MONEY -- then you just need to SAVE that new money.... so that your new money is actually new money - not the same money you already had invested. Selling to buy something else is EMPLOYEE RETRAINING - but you still have the same amount of employees! You need NEW employees.

This - of course... is in ADDITION to repositioning because you have a big loser --- or because a stock you owned doubled or something -- and you're just retraining. But you don't want to sell one stock just because it's going up to buy something else you think MIGHT go up. Do that with new money.

AND --- if you're a real investor -- stay 100% invested with all your long term funds. When the stocks go DOWN -- your dividends will be buying you more shares at lower prices -- but if you don't own the stocks - you won't get the dividends! Your dividends being reinvested for you each quarter is also an automatic scale in.

Thanks GW, it always takes me 3-5 times of reading what you say until I 'get it' :idea: but that makes total sense.

Trading is fun until :computer: Gotta keep learning how to be an investor. :relax:

[Sieg]

I NEVER use anyone else's rankings - or ideas. I'll use their ideas only to use to take a look at the idea. THEN I make my own decisions. I make my decisions based on that total return - my guts - the dividend... whether or not I KNOW the company and what they do... and whether or not I like the company and the businesses they're in. I don't smoke - I don't drink - that does not affect my decision... I went to Europe == I've been to Asia... they smoke and drink like mad! I thanked them for paying for my trip. :G-Dub:
Agreed, I just don't understand the basis of Schwab's ratings at times compared to other sources and personal experience with given stocks.

Altria is one of the stocks in my portfolio I'm considering adding to the position, then I see that D rating from Schwab and it creates doubt in my strategy.

[Sieg]

Here was a decent read from today regarding Coke, and dividend investing.

http://seekingalpha.com/article/1210991-coca-cola-s-dividend-increase-revisiting-the-story?source=email_rt_article_readmore

[GregWeld]

Agreed, I just don't understand the basis of Schwab's ratings at times compared to other sources and personal experience with given stocks.

Altria is one of the stocks in my portfolio I'm considering adding to the position, then I see that D rating from Schwab and it creates doubt in my strategy.



I own 40,000 shares of Altria (MO) --- valued at 1.4MM --- it pays me $5,866 per MONTH... AND I have an unrealized gain of $183,996


IS THAT A "D" stock to you?? :D :relax:

[Sieg]

I own 40,000 shares of Altria (MO) --- valued at 1.4MM --- it pays me $5,866 per MONTH... AND I have an unrealized gain of $183,996

IS THAT A "D" stock to you?? :D :relax:
I KNOW! Why does Schwab have it rated D!!!!! Their rating system baffles me at times......so it's typically discounted which isn't a bad thing.

[sik68]

Hey Greg I'm today's pest :)

What do you think about Public Storage (PSA). The 5 and 10 year is very steady eddy-esque, and they have a 2.89% div yield. And storage is one of those very easy-to-understand industries....everybody is accumulating too much stuff and that will never change. It's one of those human behavior 'habit' stocks like Altria :lol:

[GregWeld]

Hey Greg I'm today's pest :)

What do you think about Public Storage (PSA). The 5 and 10 year is very steady eddy-esque, and they have a 2.89% div yield. And storage is one of those very easy-to-understand industries....everybody is accumulating too much stuff and that will never change. It's one of those human behavior 'habit' stocks like Altria :lol:



You know -- it looks okay... there's a long history of growth... and they just reported a 23% increase in profits for the quarter AND increased their margin. They've doubled the dividend payout since 2007.... and that tells me that the company is "pro" shareholder.

My only quibble is the low 2.89% dividend based on todays price. It's a low dividend -- so you're relying on share price growth for your gain. It's also a relatively expensive stock solely based on per share price. So depending on how much $$ you've got to buy it - you may not be getting very many shares. Remember that the dividend is paid as a Dollar amount PER SHARE... so if you only have 10 shares - you're really not getting much of a payout.

So that's just some things to think about. It's why I own a lot of MO vs Philip Morse (PM) which is twice the share price.


So -- this is NOT a recommendation - that's not what this thread is about - and I'm not the resident stock picker.... I'm just trying to arm you with enough food for thought that you become dangerous all on your own.

PSA is a REIT (Real Estate Investment Trust)... if you compare REITS - there's a bazillion of them and they are all basically real estate plays. I own National Retail Properties (NNN). PSA is into renting storage space - NNN is into renting shopping centers but in the end they're real estate investments.

NNN pays a higher dividend @ 4.68% -- BUT has less share price growth... BUT the share price is far lower... So what I'm saying is -- I like your basic idea (real estate) but just be sure you go out and do a bit of homework to make sure that is the one that's the best bet for YOU.

[GregWeld]

BTW --- PSA just announced a 14% increase in their dividend to $1.25 per share.... Ya gotta love a company that increases the payout to the shareholders and this company has a stellar track record of doing that!

What that does is -- over time -- covers inflation... and as the payout increases but your cost stays fixed -- that increase becomes really nice!

[XLexusTech]

Greg any thoughts on the new strategy AAPL is potentially going to do.
"IPrefs"

[toy71camaro]

What that does is -- over time -- covers inflation... and as the payout increases but your cost stays fixed -- that increase becomes really nice!

Speaking of that... I just spent the last few hours documenting all my dividend stocks out of my paper "folder" and into Excel.

One of the things im starting to track is my "Yield on Cost". With the 2 of my core holdings increasing their Div % today, started to now track what the YOC is too.

So being the geek I am, I setup a spreadsheet to calculate my YOC and my Dividend payments each time i get one (i have to manually input the payment info, but it carries it over to various forms and adds it up for me so i can see my yearly dividend payouts).

At this point, my overall average YOC is 3.95% at this time. Not great, but not horrible. Its up from 3.88 last year, thanks to the two that announced increases today. It gives me a spot to keep track of my YOC for my 9 core (investing 102) stocks, and my total payout for each year.

I need to find something to offset that ~4% and get it up a bit this year. ;)

[GregWeld]

Speaking of that... I just spent the last few hours documenting all my dividend stocks out of my paper "folder" and into Excel.

One of the things im starting to track is my "Yield on Cost". With the 2 of my core holdings increasing their Div % today, started to now track what the YOC is too.

So being the geek I am, I setup a spreadsheet to calculate my YOC and my Dividend payments each time i get one (i have to manually input the payment info, but it carries it over to various forms and adds it up for me so i can see my yearly dividend payouts).

At this point, my overall average YOC is 3.95% at this time. Not great, but not horrible. Its up from 3.88 last year, thanks to the two that announced increases today. It gives me a spot to keep track of my YOC for my 9 core (investing 102) stocks, and my total payout for each year.

I need to find something to offset that ~4% and get it up a bit this year. ;)



The OFFSET is the growth in share price -- which is what gives you TOTAL RETURN. Do not discount this fact. Chasing YIELD only will have you being real upset with yourself and your account when we DO - and yes we will - get a correction. 4% dividend is good --- and coupled with growth -- it should be 9 or 10% a year. HUGE in this low interest rate environment.


Some of my core holdings are already UP 8 and 9% this year. Dude -- that's a whole years "growth" expectation in 6 weeks!! Will it last?? I'd love to think so -- but I also know why there are AVERAGES.... and if I hold on to the 8 or 9% to finish up the year - I'll be a happy man. So that means that at some point we're going to look like yo-yo's.... it can't just keep going up up up. Now that's not saying it can't go up 20% - but then my guess is we don't hold on to all of that. Love to.... but don't spend it. :lol:

[GregWeld]

Greg any thoughts on the new strategy AAPL is potentially going to do.
"IPrefs"



I don't have any thoughts about Apple except that I love their products. I have no position in the stock -- too scary for me. Great company. Scary stock.

When EVERYONE is talking about "THE STOCK" it's time to run like hell IMHO.


Like when everyone was dot.bomb.... and everyone was flipping houses.... and everyone I know SAID Apple was going to 1000 and GOLD was going to 2000.... RUN!

[toy71camaro]

The OFFSET is the growth in share price -- which is what gives you TOTAL RETURN. Do not discount this fact. Chasing YIELD only will have you being real upset with yourself and your account when we DO - and yes we will - get a correction. 4% dividend is good --- and coupled with growth -- it should be 9 or 10% a year. HUGE in this low interest rate environment.


Some of my core holdings are already UP 8 and 9% this year. Dude -- that's a whole years "growth" expectation in 6 weeks!! Will it last?? I'd love to think so -- but I also know why there are AVERAGES.... and if I hold on to the 8 or 9% to finish up the year - I'll be a happy man. So that means that at some point we're going to look like yo-yo's.... it can't just keep going up up up. Now that's not saying it can't go up 20% - but then my guess is we don't hold on to all of that. Love to.... but don't spend it. :lol:

Good point. that was in the back of my mind. I was explaining that to my GF last night over dinner, but when i wrote this, i didn't think about that.

The little man on wall street doesn't like me now that I rebalanced my 401k into and handful of diff mutual funds. Those are taking a hit. But he did seem to forget about my Investing 102 stocks, they're doing decent. lol.

And speaking of stock growth and total growth (stock + div), is there a way to calculate that? I'd like to keep track. Or is there a tool/page you use that gives you that basic info?

Edit: after a little further thinking about it.. to calc growth wouldnt you simply take your average purchase price and compare it against the current price? or would it be better to take your purchase cost, compared against the current value? If you do the 2nd option, then it seems you may be able to take your purchase cost and compare it against the current value + dividend payouts to get the total growth? Im not sure if thats right.. its been too long since math class. LOL

Edit 2: i think this explains it: http://stocks.about.com/od/evaluatingstocks/a/0506formualaeva.htm :)

[GregWeld]

Good point. that was in the back of my mind. I was explaining that to my GF last night over dinner, but when i wrote this, i didn't think about that.

The little man on wall street doesn't like me now that I rebalanced my 401k into and handful of diff mutual funds. Those are taking a hit. But he did seem to forget about my Investing 102 stocks, they're doing decent. lol.

And speaking of stock growth and total growth (stock + div), is there a way to calculate that? I'd like to keep track. Or is there a tool/page you use that gives you that basic info?

Edit: after a little further thinking about it.. to calc growth wouldnt you simply take your average purchase price and compare it against the current price? or would it be better to take your purchase cost, compared against the current value? If you do the 2nd option, then it seems you may be able to take your purchase cost and compare it against the current value + dividend payouts to get the total growth? Im not sure if thats right.. its been too long since math class. LOL

Edit 2: i think this explains it: http://stocks.about.com/od/evaluatingstocks/a/0506formualaeva.htm :)





YES -- that explains it.

[GregWeld]

For those of you with Charles Schwab accounts ---- that like to see how they're doing but can't do all the math.... There's a real easy way for you to see.


Log in to your Schwab account


Under the "Accounts" tab go to PORTFOLIO PERFORMANCE


Once there - it will take a bit to do it's calculations so give it a minute.


Now -- I take my cash in and out of here -- and I DO NOT re-invest my dividends so I CHANGE a setting that you'll find on the far right (Just below "Pinter Friendly" and "Spreadsheet"). Click on CHANGE -- and change the calculator to PERSONAL RATE OF RETURN... I also have this set as my default calculation - because now it calculates cash flow as part of the return (dividends).

From this point you can select what you want to see -- i.e., Year to Date - One Year - QTD (Quarter to date) etc.



So --- My Year to Date is 5.89% (over 11% using the Personal rate of Return calculation page) (obviously since we're in the first quarter this is the same as Quarter to Date). My three year is 62.24%

I'm posting this because I want you guys to see that it's not just all about the dividend --- in other words --- it's about the TOTAL RETURN -- growth plus that magic cash cow called the dividend.

Okay -- HAVE FUN! You might just be surprised about how well you're doing! I hope so!

[GregWeld]

So now that you're "there" in your PORTFOLIO PERFORMANCE



Note that there are other items you can select:


Returns is where we are currently but there is also "Health" and "Quarterly Portfolio Profile"


But more importantly under the RETURN tab

is

Portfolio Performance -- and Risk & Return -- and Asset Class Performance etc


Play around in here and just to use ASSET CLASS PERFORMANCE --- this tab will show you where you're invested --- and give you benchmarks -- and compares YOUR performance against that benchmark.



My account (this one Schwab account I use for this thread) shows me invested in:

56.9% Large Cap Equity

17.3% Small Cap Equity

19.9% Fixed Income

5.9% Cash (gotta have some cash dude!!)



So just play around with these pages and see that Schwab does a great job doing all this WORK for you.

[pw2006]

Thanks Greg! I have played around with most of the tabs, but never the change button. My 401k is with Schwab, and I like reviewing my Personal Rate of Return, but never found it for my other Schwab accounts. Very cool and thanks again!

BTW- I have way too much sitting in cash (20%) and fixed income (45%) right now due to a big sale in November. I have been adding to my holdings every Monday since Nov. Kinda hoping for a pullback so I can back up the truck and put these guys to work. :thankyou:

[GregWeld]

Thanks Greg! I have played around with most of the tabs, but never the change button. My 401k is with Schwab, and I like reviewing my Personal Rate of Return, but never found it for my other Schwab accounts. Very cool and thanks again!

BTW- I have way too much sitting in cash (20%) and fixed income (45%) right now due to a big sale in November. I have been adding to my holdings every Monday since Nov. Kinda hoping for a pullback so I can back up the truck and put these guys to work. :thankyou:



You never have to rush to put money to work. The stock market as well as other markets are open rather frequently. :D

Waiting for some "event" though - is generally not a very good long term strategy. For whatever reason - the market will run to the moon while you're waiting -- and then too - let's remember our time frames. If the market runs up 8% while you're waiting -- and then goes backward 10% -- do the math and we're not talking about a very large amount of money.

I had to laugh to myself - because some of you "think" like you're playing with millions of dollars and that 50 cents per share is going to make or break whether or not you have a profit/gain.... I had this same conversation with my trainer the other day. He asked "what should I be buying" because he had 10K ready to add to his account.... After a couple suggestions his next statement was that he'd watch the market and jump in on a pullback... So I grabbed pencil and paper and did some math for him. My basic premise - which was to rub his nose in his statement (since he kicks my sorry ass all the time) - was to make him realize the nonsensical point of his waiting. We're talking about someone who is going to scale in - and be buying 100 shares of something... a 1 or 2 dollar pullback was hardly worth the "wait". If he thought that a buck or two was important in the scheme of things.

Now --- a big pullback --- 10% or more... IF === HUGE IF === you're LUCKY and can catch that. Fantastic! But my guess is - when the market pulls back 10% -- you'll wait for 15%.... and so on.

Just saying.... that even myself - for an example - where I'm buying 10,000 shares or more at a time... I'm not waiting. Having said that - this next week with the sequester thing coming up - MIGHT BE - MIGHT BE - worth a wait. But we all know what can happen. The idiots do some kind of a "fix" and the market runs instead of falls back. Thus the age old problem of timing. It rarely works the way you thought. I hate that little man on Wall Street!:D

[GregWeld]

I read all articles like this with a bit of "jaundice".... because most writers have an axe to grind or an agenda of some kind. But if you read stuff like this and figure that some of it is actually CORRECT... it's just generally beneficial and particularly if you're NEW TO INVESTING. Because you haven't had the TIME to actually live through the ups and downs of a market -- and you may begin your investing life with many pre-concieved notions.

We have talked about rising interest rates and there direct correlation to the stock market. The generally accepted rule is that when rates rise - money comes out of the market - and goes in to interest bearing investments.

The problem with that is that it doesn't GROW your money... yeah you get the interest - but you lose the growth... and high rates are also when we generally have high INFLATION... so while 10% looks good on paper... it actually isn't.

Anyway -- Here's a "myth busting" article that has facts. Remember please -- the market rarely ever does what you think it will/should.... and all we can really do is ATTEMPT to have a better understanding of "things".


http://seekingalpha.com/article/1223511-3-charts-3-busted-dividend-myths?source=email_investing_income&ifp=0

[96z28ss]

A few weeks ago I bought a few shares of Sturm, Ruger (RGR) they have a 2.8% yield, so I scalled in a bit. then it took a nice dip when all the teachers unions started to divest out of weapons and ammo. I bought some more on the dip. Today they reported there 4th quarter earnings.
They basically blew past analysts expectations. The stock has had a nice bump up today and its up even more in after hours trading. Oh and they also raised its dividend.

http://buzz.money.cnn.com/2013/02/27/sturm-ruger-profits-soar-on-strong-gun-sales/?source=yahoo_quote

http://www.reuters.com/article/2013/02/27/sturmruger-results-idUSL4N0BR95X20130227?feedType=RSS&feedName=marketsNews&rpc=43

[GregWeld]

Too bad you missed the SPECIAL DIVIDEND ($4.50 per share) paid back in December. You don't see that very often!!


Nice purchase by the way!

[GregWeld]

Be careful of this though, with Sturm Ruger (RGR).... this is a VARIABLE dividend. I'm only bringing it up here because of the investing 102 aspect for knowledge....

The Company also announced today that its Board of Directors declared a dividend of 40.4¢ per share for the fourth quarter, for shareholders of record as of March 8, 2013, payable on March 22, 2013. This dividend varies every quarter because the Company pays a percent of earnings rather than a fixed amount per share. This dividend is approximately 40% of net income.



You could be a big winner -- ala the special dividend paid back in December -- or the idiots in Washington DC decide to do something stupid regarding guns and it puts a big crimp in sales for a couple quarters. However... this appears to be a well run company - has a great quality product... and appears to be very shareholder friendly. Those are all good qualities to have in any company!

[96z28ss]

Too bad you missed the SPECIAL DIVIDEND ($4.50 per share) paid back in December. You don't see that very often!!


Nice purchase by the way!

Yeah I saw that, can't win them all.

There is also only two ammo manufacturers that pay a dividend, I was thinking about jumping in some of that also.
Here is why

http://granitegrok.com/wp-content/uploads/2013/02/ammo-shelf.jpg

[GregWeld]

Just be certain you are well diversified!


The gun and ammo industry is under attack - to put it mildly... the wild sales of the last quarter prove that... What we don't know is what the whack jobs will cook up for the future. My guess / gut feeling is - little change in the long run... and in the meantime it's record sales for the industry.

[96z28ss]

Just be certain you are well diversified!


The gun and ammo industry is under attack - to put it mildly... the wild sales of the last quarter prove that... What we don't know is what the whack jobs will cook up for the future. My guess / gut feeling is - little change in the long run... and in the meantime it's record sales for the industry.


Here is an article, it mentions one of the dividend paying companies ATK.
Basically its going to supply the department of homeland securities for the next 4 years. 450 million rounds. The article brings up another point why is the DHS buying BILLIONS of rounds of ammo.

http://www.infowars.com/dhs-purchases-21-6-million-more-rounds-of-ammunition

I think i'm starting to get diversified.
F auto
FB social
CHD sex and cleaners
RGR guns
thinking about adding some OLN or ATK

[GregWeld]

Oh yeah -- the perfect portfolio Bob! Sex - guns - ammo - drugs.... and alcohol and cigarettes! All of the basic needs!


HAHAHAHAHAHAHAHAHAHA



Just kidding of course.

[GregWeld]

A good article that makes some very valid points. The only one I'd take issue with is the statement about the writers personal investing where he says he only buys stocks he thinks are undervalued (that generally means out of favor - or that nobody else likes them enough to lift the price). I don't personally like to think in those terms. Why go out of your way to find stocks that nobody else likes? Buy stocks in companies that you THINK have a chance to make you some money. That means more buyers than sellers.

Regardless of that point - it's worth a read if only for re-inforcement of basic principals.

Remember that - no different from my own "blogging" here -- these are just one persons opinion. They should all be taken with a grain of salt -- and are just "things to think about".


http://seekingalpha.com/article/1235591-7-investing-truths?source=email_investing_income&ifp=0

[sik68]

A good article that makes some very valid points. The only one I'd take issue with is the statement about the writers personal investing where he says he only buys stocks he thinks are undervalued (that generally means out of favor - or that nobody else likes them enough to lift the price). I don't personally like to think in those terms. Why go out of your way to find stocks that nobody else likes? Buy stocks in companies that you THINK have a chance to make you some money. That means more buyers than sellers.

Regardless of that point - it's worth a read if only for re-inforcement of basic principals.

Remember that - no different from my own "blogging" here -- these are just one persons opinion. They should all be taken with a grain of salt -- and are just "things to think about".


http://seekingalpha.com/article/1235591-7-investing-truths?source=email_investing_income&ifp=0

Good article!

It makes sense what you're saying about "why go out of your way to find stocks no one likes." As a small-fry investor, how can I expect of myself to out-think the think tanks on Wall Street and find something they don't like yet. You may get a lucky 'hit' every now and then by getting out in front on an 'unloved' industry...but over the diversified long haul, it is very hard to beat this industry. The best thing we can do is include ourselves in its best parts I suppose?

[GregWeld]

Another good article -- some of which states what most probably already know... but there's some decent info to think about here... Particularly that last line or two! :warning:



http://www.nbcnews.com/business/cant-buy-happiness-truth-behind-7-personal-finance-myths-1C8601858

[GregWeld]

While this is not a TRADING thread -- nor am I a trader... I am "market aware" which to me is completely different than just the itchy trigger finger -- or just buy and hold and forget. As such I read A LOT -- and I listen A LOT....
And I look around at lots of various factors. So when I hear that auto sales have hit records - and housing is making a major recovery... and that the talking heads (TV people) are all talking about the RECOVERY rather than the depression, this signals a shift that I need to pay attention to. My friends are all talking about trips - and or - what they're buying or planning to buy. Thus the selling and discussion about selling this or that is over. Yippee is all I can say about that!

But what does this tell me about "the market" and or what I'm invested in. I've had a fairly large position "parked" for months now in JNK bonds... and this pays a great monthly dividend so it's been good to say the least. BUT a holding like this will get clobbered in share price (which would actually raise the dividend percentage if you buy at the lower prices) which would not be a good thing given the amount I hold. I want to be AHEAD of any such drama... and as I've preached here again and again -- I want to SCALE OUT of a position. So this morning I sold 1/3rd of my position. It (JNK) went ex dividend on 03/01 - so I get this months dividend (paid on the 11th)... I've got nice capital gain % in the name as well as collecting that magic dividend.

What I'll buy is yet to be determined. No rush. I'm shopping for a new position not adding to existing stuff. What I want is something that WON'T be interest rate (a rise in) sensitive - while still giving me a good dividend but that might also do well in a "good" economy.

Annaly Capital Management (NLY) is another candidate for scaling out of - although with it's much higher dividend % -- I'll scale out a bit slower... maybe 20% of the holding at a time. My position is not as large but it's certainly interest rate sensitive so I've got to keep on my toes. If the FED even hints that rates are going to rise -- or that they're going to start to reduce their Treasury purchases ---- Rates are going to start to rise. I just am trying to be "somewhat" ahead of that. Most likely - nothing will happen and I will be way early to that party. I'm okay with that.

[GregWeld]

I can't remember who posted here a couple weeks back (and don't want to spend the time going back to find it) -- and said they were on the sidelines WAITING for the market to come down so they could buy...

I remember responding with something along the lines of --- while you're waiting the market can run up rather than doing what you think it's going to MAYBE do. I also said though -- that with the whole Sequester thing coming up -- that who knows.... maybe that creates a buying opportunity.


Well.... Anyone see what the market has done SINCE the big mega event (NOT!) called the Sequester - which was going to cause the world to collapse? :lol: :lol:

[Tony_SS]

Greg, you might be referring to me... I still lack the knowledge but most of all, I think, the capital to risk really. But even if I did, I still think I would hold back...

I ran across this, I thought it was interesting:

The last time the dow was here, October 11th 2007
Dow Jones Industrial Average: Then 14164.5; Now 14164.5
Regular Gas Price: Then $2.75; Now $3.73
GDP Growth: Then +2.5%; Now +1.6%
Americans Unemployed (in Labor Force): Then 6.7 million; Now 13.2 million
Americans On Food Stamps: Then 26.9 million; Now 47.69 million
Size of Fed's Balance Sheet: Then $0.89 trillion; Now $3.01 trillion
US Debt as a Percentage of GDP: Then ~38%; Now 74.2%
US Deficit (LTM): Then $97 billion; Now $975.6 billion
Total US Debt Oustanding: Then $9.008 trillion; Now $16.43 trillion
US Household Debt: Then $13.5 trillion; Now 12.87 trillion
Labor Force Particpation Rate: Then 65.8%; Now 63.6%
Consumer Confidence: Then 99.5; Now 69.6
S&P Rating of the US: Then AAA; Now AA+
VIX: Then 17.5%; Now 14%
10 Year Treasury Yield: Then 4.64%; Now 1.89%
USDJPY: Then 117; Now 93
EURUSD: Then 1.4145; Now 1.3050
Gold: Then $748; Now $1583
NYSE Average LTM Volume (per day): Then 1.3 billion shares; Now 545 million shares

:peepwall:

[GregWeld]

Ever hear the term -- The market climbs a wall of worry??


You've missed the most important "lessons" of this entire thread.... Not being an arse here. Just being honest.

Pick some of the best names that you know -- Home Depot - Phillip Morse - stuff like that - then pull up a 10 year chart.... and tell me at what point YOU would have thought it was okay - or not - to get in.

That's the point of this entire thread. LONG TERM INVESTING.... not in this week out next month... buying dips if you can - and if not - don't friggin' worry about it 5 years from now you'll be ahead -- by a long ways.

[silvermonte]

Im new to the forum, I spend all my time over at pro-touring and just recently found this place.I have a question for you guys and sorry if its been asked im only on page 25 of this thread at the moment and the great thing about this is because of this thread im ready to get back into investing. 10 years ago when I was 20 and single and in the military living in europe having the time of my life with no bills and no worries I thought I could become rich being a day trader and I blew 1000's and 1000's trying to do that. I lost it all in the long run and havent even looked at stocks since then. Now Im 30 married with a house and a stable job and its time to start investing and this thread is great.

Here is my question, I make alot less then most on this site and pro-touring, but its all relative really. I have all my bills paid off and I have 6 months of pay saved up for emergency. Only things I pay are house payment, health insurance and car insurance. I pay 10% of my paycheck to my works 401k and they add 5% on top of that.I feel that this should be enough for what i need for retirement but i would like some wiggle room. What should be my next step for investing, they rule seems to be to max out your 401k, but for me that wouldnt be possible giving the cap for that. Should I be aiming to pay the house off early my rough numbers say i could pay it off about 10 years sooner making me about 50 years old, or should i be putting money into a roth IRA, or should i be doing what greg suggest and do the dividend stocks.My thought would be the stocks as the compounding interest should pay off in spades 30 years from now giving me a very plush retirement.

[WSSix]

What is the interest rate on your home loan?

If you and your wife make less than $150k combined, you can put your money into a Roth IRA. I would do that. With Vanguard, you can pick your stocks or chose a mutual fund. That's who I have and I've done both with my account in case I choose my stocks poorly.

Regardless of what your interest rate is on the home, a simple way to help pay it off quicker is to take one month's payment and divide it into 12. Add that amount to each month's payment which will mean you'll make 13 payments in a year. I can't remember the number of years you'll pay off the loan quicker doing this but it's significant. I personally will do this even if I get a great interest rate. I simply hate having debt.

Oh, and welcome to the forum.

[GregWeld]

#1 -- Welcome to Lat G --- the BEST PT site...

#2 -- Glad you found this thread!


Sounds to me like you have your act together pretty good! So kudos to you.


I'm not a finanacial planner -- nor (I don't think) is anyone on here a professional investment advisor... this is just a good "Starter" thread that give people some stuff to discuss and think about.

Here's what I'd think about if I was in your shoes.

Max a ROTH IRA if you can....

If you have a FIXED RATE mortgage... and you'll be a reasonable age when it's paid off (some time before or at retirement) I wouldn't rush to pay it off. You're fixed rate mortgage will be mighty cheap 10 years from now... and if we're all lucky -- returns should far outstrip the interest rate on your loan. That's the "theory" anyway.

Now for that 401K at work.... It's not nearly as important how much you're putting in (and the match) as it is WHAT IT'S IN! Pay attention to that! You'll read here about Mutual Funds --- and you really need to have your money going into good ones -- because there's a 100 that SUCK and a very few that will get the job done for ya. So look into that.

Six months of savings is plenty in cash for rainy day fund.... so now it's time to start INVESTING... and keep reading this thread and you'll catch on real quick!!


:thumbsup: :thumbsup:

[GregWeld]

Regardless of what your interest rate is on the home, a simple way to help pay it off quicker is to take one month's payment and divide it into 12. Add that amount to each month's payment which will mean you'll make 13 payments in a year. I can't remember the number of years you'll pay off the loan quicker doing this but it's significant. I personally will do this even if I get a great interest rate. I simply hate having debt.

Oh, and welcome to the forum.



I have two very low rate mortgages... and I round them both up every month... for the very same reasons you state. I just don't like mortgages. But I also know that at the rates I'm paying (I borrow cash on cash)... it's just flat ass stupid to do what I'm doing.

As you all know I'm in a different "place" investment wise... and don't have any reason whatsoever to "save" any money... but I still just can't stand "owing".

[silvermonte]

Thank you for the reply greg, i do have a fixed rate on my house, its fairly low at 4% and i do round up on the payments. I couldnt stand to owe money anymore and i decided it was time to do something about it. The 401k i have is a government TSP account, its not great but i watch it alot,in the 5 years ive had it is has averaged 11% in returns but its a fund account and that makes me a bit worried as i have no control over what they put in it, there isnt much to pick from with the different plans and it being something tied to the government I always fear it will just go poof one day and be gone.

I figured having a house payment is unavoidable and I will prolly have it paid off in my mid to late 40s. I have give or take about $200 a month to put into a roth IRA so I wont get it capped either at this moment but at least this money was cash I was throwing away in interest for all the stuff I owed money on.

Its a shame I didnt read something like this 10 years ago, everything you have sad not to do was stuff I have done and I didnt know any better at the time. Alot of stuff I have read for investment advice I think is wrote by people making well over 100+k a year and I live in the midwest. I think average wage in Iowa is 35-40k a year so I dont know anyone that makes 100+k a year so its kinda a guessing game as to how a person should divy up their money to be well protected when investment caps cant be meet.

[GregWeld]

Thank you for the reply greg, i do have a fixed rate on my house, its fairly low at 4% and i do round up on the payments. I couldnt stand to owe money anymore and i decided it was time to do something about it. The 401k i have is a government TSP account, its not great but i watch it alot,in the 5 years ive had it is has averaged 11% in returns but its a fund account and that makes me a bit worried as i have no control over what they put in it, there isnt much to pick from with the different plans and it being something tied to the government I always fear it will just go poof one day and be gone.

I figured having a house payment is unavoidable and I will prolly have it paid off in my mid to late 40s. I have give or take about $200 a month to put into a roth IRA so I wont get it capped either at this moment but at least this money was cash I was throwing away in interest for all the stuff I owed money on.

Its a shame I didnt read something like this 10 years ago, everything you have sad not to do was stuff I have done and I didnt know any better at the time. Alot of stuff I have read for investment advice I think is wrote by people making well over 100+k a year and I live in the midwest. I think average wage in Iowa is 35-40k a year so I dont know anyone that makes 100+k a year so its kinda a guessing game as to how a person should divy up their money to be well protected when investment caps cant be meet.



Wanna make yourself sick??

$2,000 a YEAR saved from 21 til you're 31 -- never add another dime to it - will net you a MILLION dollars at retirement (given about a 7% compounded average return)


Don't start saving until you're 31 -- put $2,000 a year away til you're 65 and you end up with about $600,000


HUGE difference in retirement income right there!!


Want to really be shocked?? You should have started saving at 19.....
Check out this investing page for KIDS!!


http://kids.daveramsey.com/index.cfm?event=displayContent&intContentId=4509

[silvermonte]

Yeah im already 30, i woke up one day and said enough of this crap its time to get serious, went and got a part time job and paid everything off, ill prolly work the part time for another year or two till the wife starts popping out kids just to get caught up from all the fun i had in my early 20s, and it was from reading things about how much money you can save by starting in your 20s instead of your 30s that got the ball rolling for me. Like I said its a shame I didnt read something like this when I was younger, I wouldnt of blown all that cash trying to be a high roller.

[WSSix]

Make your house payment and no more. Put the $200 and any extra into a Roth IRA. That's what you can do and have a good impact on your retirement. The other thing is to keep your spending levels low even when your income increases. Basically, live below your means.

[GregWeld]

With the stellar run the market (stock market) has had for over a year now... I've had several people ask when they should take some profits. It's a great question - especially since one of the best market quotes is -- Nobody ever went broke taking a profit!

However... We must also use our heads and adjust these kinds of blanket statements to "our" personal situations.

For someone such as myself... who's already "set"... and who has very large (compared to most) positions. Taking a gain is how we buy stuff - how we re-invest in other stuff... and how we make a living. But let's put this into perspective. If I have a million dollars in one position - and it's up 25% - that's a $250,000 gain! So If I sell 100K of that position (pure gain) - that's "real money". A 100 grand is a 100 grand. I don't care who you are.

But let's look at a more normal situation and strategy/thought process. The basic premise of LONG TERM investing is to buy dividend paying stocks - having the dividend automatically reinvested to buy shares and parlaying this over a very long time to build up the number of shares owned so that upon retirement - you'll have enough that you can start using that dividend to live on. So..... how are you going to get there if you sell some off every time you have a 20 or 30 or 40% gain?

Let's remember the long term goal is TOTAL RETURN. When you look at a purchase -- we're supposed to research this as part of our strategy right? So if you look at this... we want to use the long term total return of any given stock --- usually 5 years. If the 5 year TR is 100+%.... and you're asking about selling to take a gain when something is up 40%.... how are you going to double your money in 5 years. That 40% rise is PART OF that overall gain we need to get set long term. Think of the market as a set of stairs.... they go up - they flatten out - they go up again and so on. So if you go back and pull up a long term chart of a stock -- you know - the one you relied upon to make a buying decision... go back and look at that same chart and see when you would have "taken a gain"... My guess is -- unless you're the smartest man in the universe - any time you'd have sold -- the stock would have continued to rise AFTER your sale. Now -- had you been brilliant - and been in the market prior to 2007 -- and you sold at the top -- and then been brilliant enough to have gotten back in at the bottom of 2009... then okay -- we could argue that you "should have" done all that. But my guess is... none of us is that f'n lucky. One or two might have even done that with housing - but "most" didn't - and in fact - many more did just the opposite - they bought high and sold low.

So let's get back on track here.... It's dang hard to see a nice gain in either dollar terms or percentage terms -- and not start thinking about "making some money". But if you "only" have 100 or 200 shares of something... let it ride... There's nothing wrong with 20 years from now looking at your account and that "gain" you were going to take -- is now 800% and paying you a nice check every quarter. That's what we're after here.... You'll never get there is you're thinking is the here and now.

Does this make sense??

[sik68]

With the stellar run the market (stock market) has had for over a year now... I've had several people ask when they should take some profits. It's a great question - especially since one of the best market quotes is -- Nobody ever went broke taking a profit!

However... We must also use our heads and adjust these kinds of blanket statements to "our" personal situations.

For someone such as myself... who's already "set"... and who has very large (compared to most) positions. Taking a gain is how we buy stuff - how we re-invest in other stuff... and how we make a living. But let's put this into perspective. If I have a million dollars in one position - and it's up 25% - that's a $250,000 gain! So If I sell 100K of that position (pure gain) - that's "real money". A 100 grand is a 100 grand. I don't care who you are.

But let's look at a more normal situation and strategy/thought process. The basic premise of LONG TERM investing is to buy dividend paying stocks - having the dividend automatically reinvested to buy shares and parlaying this over a very long time to build up the number of shares owned so that upon retirement - you'll have enough that you can start using that dividend to live on. So..... how are you going to get there if you sell some off every time you have a 20 or 30 or 40% gain?

Let's remember the long term goal is TOTAL RETURN. When you look at a purchase -- we're supposed to research this as part of our strategy right? So if you look at this... we want to use the long term total return of any given stock --- usually 5 years. If the 5 year TR is 100+%.... and you're asking about selling to take a gain when something is up 40%.... how are you going to double your money in 5 years. That 40% rise is PART OF that overall gain we need to get set long term. Think of the market as a set of stairs.... they go up - they flatten out - they go up again and so on. So if you go back and pull up a long term chart of a stock -- you know - the one you relied upon to make a buying decision... go back and look at that same chart and see when you would have "taken a gain"... My guess is -- unless you're the smartest man in the universe - any time you'd have sold -- the stock would have continued to rise AFTER your sale. Now -- had you been brilliant - and been in the market prior to 2007 -- and you sold at the top -- and then been brilliant enough to have gotten back in at the bottom of 2009... then okay -- we could argue that you "should have" done all that. But my guess is... none of us is that f'n lucky. One or two might have even done that with housing - but "most" didn't - and in fact - many more did just the opposite - they bought high and sold low.

So let's get back on track here.... It's dang hard to see a nice gain in either dollar terms or percentage terms -- and not start thinking about "making some money". But if you "only" have 100 or 200 shares of something... let it ride... There's nothing wrong with 20 years from now looking at your account and that "gain" you were going to take -- is now 800% and paying you a nice check every quarter. That's what we're after here.... You'll never get there is you're thinking is the here and now.

Does this make sense??

Greg it definitely makes sense, especially since like you say, when the price is slumping on your stock, your investment is buying more shares, so it's better to look at it like a stock going on 'sale' rather than losing value for us long-termers.

Where I get hung up on regarding not "taking a profit" is that my portfolio is about 60% dividend stocks, but 40% in 3 mutual funds...they all move in direct correlation to the market. Given this "triple top" where the S&P hasn't done anything for 13 years except grow skepticism, that's I think where this sentiment is coming from.

I believe strongly in the dividend stock strategy you are teaching us, but it's my Funds that I worry about on total return...am I talking myself out of Funds completely?

[GregWeld]

Steven --- I wouldn't put 50 cents into a Fund...


Funds are just fees for management... there's not a single reason in the whole wide world that a semi intelligent individual can't do every bit as well as any fund and should do considerably better. A fund is just a dumbed down blended basket of stocks... sadly -- in their effort to be broad based... the laggards drag down the performance of the top. While the "Top 10 Holdings" are usually stellar --- they're only the top 10 and the fund probably has 100 or more holdings. It's those that dumb down their returns.

When you factor in their mediocre returns -- and then compound what they're fees do to YOUR returns over time - it's astounds me that anyone in invested in them. It's just that they are "available" via retirement IRA's for most folks -- they pick them by throwing a dart at a list -- and then work for 30 years and wonder what the hell happened to all the money they put in. :disgusted:

If a person can buy or build their own little basket of stocks --- 10 minimum and 20 tops... you can kick some azz all on your own just by buying the best of breed stuff we discuss here so often. It isn't rocket science that's for sure.

[WSSix]

You're making sense, Greg.

[GregWeld]

You're making sense, Greg.



Good!


People hear about all these terms and sayings and things they should be doing... i.e., "taking a profit".... but if you're got 10K invested and have a 2K profit -- that's GREAT but you don't need to take it...

Even if you have 50K and have a 10K "gain" ---- great! But let it ride. If you don't - you won't get to 100K which is where you want to be heading!

If you have 300K and have a 75K gain... you might take 25 or 30K and buy another name with it.

[GregWeld]

One of my favorite sayings is "better lucky than smart". I firmly believe that little nugget. I know LOTS of people that are way smarter than I - but they've never been lucky.

So with that said --- I'd just posted about whether or not to take your gains and try to rebalance your accounts etc. and here comes an article in SeekingAlpha that has actually charted this. What the author has done is to calculate the net of doing a DRIP (dividend re-investment plan) vs taking the dividends and trying to buy the shares at lower prices etc...

I'll tell you without reading the article yourselves -- the DRIP beat the other methods. What I really want you to see is the beginning investment --- then seeing the net at 5 year - 10 year - 20 year... SO what I really want you all to see is how much money GROWS given some time. That's the main crux of all my posts!!


In the END -- i.e., the last 5 years of the 25 year calculation -- the withdrawal and reinvest method was a whopping $801 ahead of the DRIP (automatic) method. That is more LUCKY than anything else... because we all know that most of us wouldn't be as "calculated" as this little test was. We'd forget - or we'd switch gears - or whatever...

http://seekingalpha.com/article/1261531-drip-or-rebalance-25-year-portfolio-analysis-to-answer-the-question?source=email_investing_income&ifp=0

[WSSix]

Good info! I have no intention of taking any "profit" out of my accounts until I retire. Even then, I'm only going to take what I need and keep the rest invested. I look at it as a continuation of living below my means.

[GregWeld]

Good info! I have no intention of taking any "profit" out of my accounts until I retire. Even then, I'm only going to take what I need and keep the rest invested. I look at it as a continuation of living below my means.



I must have told a 1000 people -- that retirement isn't how much money you have it's about what you need -- so keeping overhead low is a great thing. Not many folks get to just retire and do whatever they want to.

The part most folks don't calculate is how much they can MAKE off their retirement nest egg... and in normal times -- it takes a million bucks to produce 50K in income.... Then you factor in the "4% rule" which says you can take 4% of your principal out per year... so now we're up to 90 grand and that's if you have a million bucks put away.

90 grand sounds like a lot --- but my guess is the amount people are making per year now -- sounded like a lot when they were in high school. So if we add 25 years to retirement --- and then plan to live 25 years AFTER retirement -- that's 50 years of inflation to account for.

Take your income now -- and compound 3% per year on it -- and see how that works out.


50K now -- needs to be 104,688K 25 years from now with that 3% interest rate! So that million bucks is just about what you're going to need. Making 150K a year now?? Ya need 3MM!!

Wanna live like you're rich?? 20MM :lol:

[GregWeld]

BTW --- Somebody was talking about paying their mortgage off early etc...



This calculation website has just about anything you can calc!! Including what it takes to pay off your mortgage early etc... you just fill in the amounts and press the "easy" button.


http://www.calculator.net/mortgage-payoff-calculator.html?cloanamount=300000&cloanterm=30&cinterestrate=4&cremainingyear=25&cremainingmonth=0&cmonthoryear=monthly&cadditional=500&x=55&y=8

[GregWeld]

Good article about Charlie Munger (Berkshire Hathaway === AKA Warren Buffet)...


http://seekingalpha.com/article/1263801-charlie-munger-built-his-fortune-by-seeking-income-first-capital-gains-later?source=email_investing_income&ifp=0

[GregWeld]

I know that many of you probably bought McDonalds a few months ago - perhaps near it's high of around 100... and then watched as it died the death of a 1000 cuts and drifted down to 85ish... and you were probably kicking yourselves!


What I want to point out here is that while you were busy whining... you should have been adding to the position (I know most can't be following this kind of stuff as the funds just aren't there YET)... because here it is back near it's high... a nice "stealth rally" in the name.

The other thing I want to point out is --- TIME... all it took was a little time and boom.... back to where it was. No need to get all nervous and sell --- (the old buy high and sell low trick). In the meantime you were collecting that dividend and hopefully that was being re-invested at these lower prices.

A PERFECT example of how this all should work!


:G-Dub:

[toy71camaro]

I know that many of you probably bought McDonalds a few months ago - perhaps near it's high of around 100... and then watched as it died the death of a 1000 cuts and drifted down to 85ish... and you were probably kicking yourselves!


What I want to point out here is that while you were busy whining... you should have been adding to the position (I know most can't be following this kind of stuff as the funds just aren't there YET)... because here it is back near it's high... a nice "stealth rally" in the name.

The other thing I want to point out is --- TIME... all it took was a little time and boom.... back to where it was. No need to get all nervous and sell --- (the old buy high and sell low trick). In the meantime you were collecting that dividend and hopefully that was being re-invested at these lower prices.

A PERFECT example of how this all should work!


:G-Dub:

I happened to be one of those people.. lol. i wasnt worried though. but i was able to add a little bit to my position with some extra funds. I think we had discussed that here before i made the additional purchase. :) :thankyou:

Also, after completely restructuring my 401k into funds *I* researched and picked (rather than just throwing darts at, lol). I'm all back in the green again by a couple %. So the little man on wall street went and found someone else to bug. heheh

[GregWeld]

Albert!!! You are DA MAN! buddy!

So easy a caveman could do it!!


:trophy-1302:

[96z28ss]

I bought some MCD at $98 and I sold some of my NLY and bought some mcd at $88

[GregWeld]

I bought some MCD at $98 and I sold some of my NLY and bought some mcd at $88




:trophy-1302: :trophy-1302: :trophy-1302: :trophy-1302:

[96z28ss]

I sold the rest of my NLY last week and added to my NNN.

[GregWeld]

That's a good solid plan Bob.... NLY is a terrific payer... but IF -- Big IF -- the interest rates start climbing -- the dividend will get eaten alive with a drop in share price. Of course that's hard to predict when and where and how much etc -- but JNK -- NLY -- HYG -- these are very mortgage interest rate sensitive.... and the banks are going to start to jack up the mortgage rates if houses keep selling like they have been. What remains to be seen is if the sales are really localized regionally or are they broad based.

[GregWeld]

I sold the rest of my NLY last week and added to my NNN.



What I like about NNN (National Retail Properties) is that they're a big box retail lease outfit. They're not leasing to mom and pop operations.... so the rents come in on time and the leases (the buildings) get taken care of. They have quite a good list of big box stores. In a good economy or bad -- most big box stores don't just fold up the tent. Even if a big box retailer scales back - they might close a store but they're still obligated to pay the lease. This has been a good name for a long time and as a REIT is obligated to pass through the bulk of the profit.

[GregWeld]

What I picked up from this article is that "most" or "many" have their net worth (outside of the primary residence value) INVESTED in the equities (stock) market.




http://www.nbcnews.com/business/rising-stocks-yield-300-000-new-us-millionaires-1C8865668

[toy71camaro]

Good little read... stay the course people... invest that "extra" money wisely, and dont blow it on stupid crap. lol

[bdahlg68]

Another sneaky one is CVX! Wow! I bought some shares on 1/31/2012 at $103.39 and collected 5 dividends since then! Total return is about 20% in a year!

[toy71camaro]

Another sneaky one is CVX! Wow! I bought some shares on 1/31/2012 at $103.39 and collected 5 dividends since then! Total return is about 20% in a year!

another one of my core items. I purchased a little later, and then purchased some more on their big "dip"... im at around 12.5% paper gain + a few dividends.

[GregWeld]

Another sneaky one is CVX! Wow! I bought some shares on 1/31/2012 at $103.39 and collected 5 dividends since then! Total return is about 20% in a year!

another one of my core items. I purchased a little later, and then purchased some more on their big "dip"... im at around 12.5% paper gain + a few dividends.



We have some serious investors here! Soon they'll be known as the "millionaires next door"!


Way to keep at it guys! Seriously.... this is the way it gets done!


Just please remember that the way to get 'er done is to not give up when the chips are DOWN.... That is when the smart guys buy more. They suffer - but then they're made whole -- and make money.

[Tony_SS]

How does SIAL look to you guys?

[GregWeld]

How does SIAL look to you guys?



Personally --- I've never heard of it.... It might be a great name.... But I don't invest in stuff I know nothing about.

[sik68]

Investors, here's an excerpt from The Intelligent Investor that really slaps you upside the head when we think to deviate from the rules in Investing 101...

Nearly all the richest people in America trace their wealth to a concentrated investment in a single industry or even a single company (think Bill Gates and Microsoft, Sam Walton and Wal-Mart, or the Rockefellers and Standard Oil). The Forbes 400 list of the richest Americans, for example, has been dominated by undiversified fortunes ever since it was first compiled in 1982.

However, almost no small fortunes have been made this way - and not many big fortunes have been kept this way. What Carnegie neglected to mention is that concentration also makes most of the great failures of life. Look again at the Forbes "Rich List." Back in 1982, the average net worth of a Forbes 400 member was $230 million. To make it onto the 2002 Forbes 400, the average 1982 member needed to earn only a 4.5% average annual return on his wealth - during a period when even bank accounts yielded far more than that and the stock market gained an annual average of 13.2%

So how many of the Forbes 400 fortunes from 1982 remained on the list 20 years later? Only 64 of the original members - a measly 16% - were still on the list in 2002. By keeping all their eggs in the one basket that had gotten them onto the list in the first place - once-booming industries like oil and gas, or computer hardware, or basic manufacturing - all the other original members fell away. When hard times hit, none of these people - despite all the huge advantages that great wealth can bring - were properly prepared.

Although it speaks about the un-sustainability of over-concentrating, it also shows that wealth is not about striking it rich, but is really about having the intelligence to grow money over time. I suppose that's the point GW keeps making regarding luck. Luck is certainly a part of the equation to get rich "quickly" and "easily"... but it's only the kindling. Turning riches into wealth takes intelligence and time.

Stay the course!


GW, I'm rooting for you on the 400 list!

[GregWeld]

Investors, here's an excerpt from The Intelligent Investor that really slaps you upside the head when we think to deviate from the rules in Investing 101...



Although it speaks about the un-sustainability of over-concentrating, it also shows that wealth is not about striking it rich, but is really about having the intelligence to grow money over time. I suppose that's the point GW keeps making regarding luck. Luck is certainly a part of the equation to get rich "quickly" and "easily"... but it's only the kindling. Turning riches into wealth takes intelligence and time.

Stay the course!


GW, I'm rooting for you on the 400 list!





Good points made here! Very good points.


You know - really - there are so many OLD sayings that actually MEAN SOMETHING if you care to listen.

Diversify
Pigs get fat - HOGS get slaughtered
Don't put all your eggs in one basket
Nobody ever went broke taking a profit
COMPOUNDING


I've said it a 100 times -- none of this is complicated. WE try to make it complicated.... because WE think we're smarter or WE think we can't loose... or WE think this is the sure thing...

<<<<< BUZZER >>>>>


Just buy good stuff -- best of breed names -- keep adding to the pile.... re-invest the dividends -- don't hawk your house -- strive to get debt free by retirement....


Then you dudes could come skiing with me in Sun Valley... go racin' with Charlie... and just generally mess around!

EEEEEEEEHHHHHHHHHHAAAAAAAAAA


BTW --- I'm a long long long ways from making ANY lists except my wife's S**T list.

[Vegas69]

I know I have my own thread on philosophy but what the hell. :D

The fundamentals of life and business never change. What happens is people forget what got them there in the first place. All good things come from labor and persistence. Get fat and lazy, you become broke and start blaming the democrats. :D

Greg is rich because he found an opportunity, took advantage of the opportunity, worked at growing his wealth, continues to work at growing his wealth, and will always work at growing his wealth.

My mentor Jim Rohn says, "Success is the refined study of the obvious." I can't think of a more opportune time to use it.

Back to my own thread.....:peepwall:

[XLexusTech]

I know I have my own thread on philosophy but what the hell. :D

The fundamentals of life and business never change. What happens is people forget what got them there in the first place. All good things come from labor and persistence. Get fat and lazy, you become broke and start blaming the democrats. :D

Greg is rich because he found an opportunity, took advantage of the opportunity, worked at growing his wealth, continues to work at growing his wealth, and will always work at growing his wealth.

My mentor Jim Rohn says, "Success is the refined study of the obvious." I can't think of a more opportune time to use it.

Back to my own thread.....:peepwall:

Thanks for that.. it was a really good motivator for me..

[GregWeld]

Thanks Todd!


So here's the way I look at this -- I'm just not very eloquent about it....



Let's go back to my "employees"..... Where each dollar represents one employee. I like to think of them this way because you always must manage your employees. That takes some work. And if you ask most business owners - they'll tell you that THEY take less vacation and less time off than their employees do. It's their work ethic that is why they're the boss and not the employee.


The thread is not about ME.... The thread is about how YOU can be a successful investor using some of the simplest concepts that anyone can do. BUT -- always that dang big butt -- YOU DO HAVE TO WORK AT IT.

What we've already seen here is that many were lazy in their investing - and even though they had some dough stuck away - that dough was asleep or on vacation. The "company" 401K etc lulls people into thinking that they've done all they can by simply "participating". <<<<< BUZZER>>>>> Some have literally wasted 10 or more years of precious time languishing in these "plans".

My goal has been to be like Dorothy and show you the yellow brick road. That with just a little bit of work --- it can and does make a HUGE difference. But -- like what Todd just posted -- you can't think you're work is done. The outcome is far too important to allow yourself to go back into that mode of "I participated" therefore I'm done. You've got to make this a hobby - get into it just like we do our cars. We're always reading or participating with our cars... we never grow tired of it.

Health - Wealth - Cars/Hobbies... You need the first one otherwise the second one is useless to you... and the third one takes the first two if you really want to enjoy it. All of it takes constant work.

[Vegas69]

Thanks for that.. it was a really good motivator for me..

You're welcome..... Remember, motivation only gets the motor running. Discipline keeps it going. If I was managing my own money, I'd start by reading a good book, watching the market everyday at the same time, and listening to somebody way more successful than me(This Thread). Those are three great disciplines to start with.

You can only be great at so many things at once. I'm man enough to admit that I don't know enough about stocks or the market to manage my own money. It seems to me with something as important as your portfolio, you better be all in or all out. Learning all you can and gaining experience. Otherwise, you may do yourself more harm than good.

[GregWeld]

I think this article is worthy of a quick read.... and it's not for his personal portfolio --- but rather --- I think his way of THINKING is great! This is a kid that actually uses his brain to get a large picture about "sectors" and their possible issues.... I like that! He has a very good way to think about diversification --- that you don't need to be in EVERY sector - and in fact, there are sectors to avoid.

Remember that OTHER PEOPLES way of doing things may not have 100% merit... but there's usually a nugget here and there that should be considered and I think this writer has a couple of them. It's not so much the details -- but the "thought process".



http://seekingalpha.com/article/1280451-the-perfect-portfolio-evolved?source=email_investing_income&ifp=0

[WSSix]

That was a good article. I agree with him about the tech and banking stocks. I don't care to follow or know enough about the sectors to get involved. Way too risky in my mind. Plenty of other sectors out there to choose from and still be diversified.

I've decided to take a gamble on a stock. It's only a small gamble and won't hurt me really if it fails but all indications are that it will be ok even if it's not a huge return. Considering I'm not trying to get rich quick with any of this, I figure why not try. It could work out well and I think I'm being conservative enough with my other selections so as not to be in risky territory. The company is Mid Continent Energy Partners(MCEP). They are a new company but are being run by experienced people. I'm interested in them for a few reasons. They are run by experienced people gives me piece of mind, they have a $0.50 per share dividend, the share price is low so I get more buying power with the dividend payment, they've increased their dividend twice already, and they are bringing in the petroleum like they predicted. They are a partnership like KMP so I did this under my Roth IRA to shield my tax liability. So we'll see what happens. Maybe it'll be a barn burner and I can retire after a few more years because of it :lmao: Yeah, right. Regardless, I think it'll turn out alright.

[GregWeld]

Good for you Trey!


It's perfectly okay to take some risk.... you just need to be prudent about it... and you need to be in the head space that says - Oops it went to zero... okay... no biggie - maybe next time. Rewards don't come without risks. They key is to not "gamble" with money that is crucial - or money that you have other plans for "shortly"... where you put yourself into a "must sell at a loss" situation.


Several years ago -- I invested in a start up company. The shares cost me .53 cents each... I bought a bunch of them... the company then went public about 2 years later and it opened at $18 and went to $28.... RIGHT BEFORE IT WENT TO $1.70... I never sold any of it.... I used to tell myself "hey! at a buck seventy I still have a triple in it"! MY POINT IS --- I didn't have to sell, I wasn't worried about the investment because it was money that I could do without. It was a very small percentage of what I have (had) to invest.

Eventually we sold it all, in an all cash offer from EMC @ $34


Was it risky? Hell yeah! Was it rewarding? Uh... just a little. :lol:

[out2kayak]

Several years ago -- I invested in a start up company. The shares cost me .53 cents each... I bought a bunch of them... the company then went public about 2 years later and it opened at $18 and went to $28.... RIGHT BEFORE IT WENT TO $1.70... I never sold any of it.... I used to tell myself "hey! at a buck seventy I still have a triple in it"! MY POINT IS --- I didn't have to sell, I wasn't worried about the investment because it was money that I could do without. It was a very small percentage of what I have (had) to invest.


Out of curiosity, how did you learn of the startup?

:cheers:

[GregWeld]

Out of curiosity, how did you learn of the startup?

:cheers:




My wife spent 20 years in hi tech and we know everybody who's anybody in that industry in our town. Remember the old "better lucky than smart"... and it's not always what you know but who you know.

Want me to make a list of how many of those I LOST BIG MONEY in??

[68ZClone]

The question of whether or not to time the market has come up several times during the course of this thread. The following article takes a look at investing now versus holding and investing in one year. The outcomes might surprise you.

http://seekingalpha.com/article/1278691-time-in-not-timing-dividend-growth-stocks?source=yahoo

No doubt, in a longer view than 5 years, buying lower would eventually recoup and surpass the "buy it now" scenario. But, as the author points out, does anyone really know what the stock price is going to do? Is the 40% upside risk worth the 60% downside risk the article describes?

[GregWeld]

I got a good laugh this morning --- with the market opening up nicely --- the talking heads on CNBC were talking about General Mills (GIS) -- yeah.... the cereal company. I'm like -- okay -- really? Cereal... WTF!?! Cramer calling it
a "dividend monster". So...... Of course I go out to see for myself why he'd be calling a boring old lady stock like General Mills a dividend monster. Well.. it pays a whopping 2.82% dividend. That's a dividend monster?

BUT here's the deal -- I look deeper -- and we come up with that TOTAL RETURN... which is really what we're after... and now this little old lady stock starts looking better... and it split 2 for 1 in June of 2010... and the TR for 5 years is 88%.

The reason I chuckled to myself when I'm looking all this stuff up is ------ most "investors" are always talking about the get rich quick stocks... Everybody is trying to find the next Dell -- or Microsoft -- or Google.... While in the meantime -- the little old lady has doubled her net worth in CEREAL over the last 5 stinky short years. Go figure.

I guess my point would be... INVEST -- best of breed? Dividend payer? And total return (growth in capital) doesn't have to be the next hot deal..... Facebook IPO anyone??? :popcorn2:

[Sieg]

..........and I'm just waiting to dump my $35 dollar shares of Dell acquired in '99.
And have no intention of selling my old-school '69 :D

[GregWeld]

..........and I'm just waiting to dump my $35 dollar shares of Dell acquired in '99.
And have no intention of selling my old-school '69 :D



Well.... We have fresh powder here... so I'm headed for more vertical. But there's an old saying about "your first loss is your best loss". That stock has been "dead money" for 10 years -- ditto Microsoft... and I have MANY friends still into those stocks big time -- waiting for the "rebound". In the meantime they could have sold 9 years ago --- invested in General Mills cereal and they have 3 times more money.


Yeah --- I had a HUGE amount of MSFT shares.... but I scaled out of them on a regular basis and re-invested in other stuff. Sometimes I look back and say -- if I hadn't sold at "X"... I'd have had double the amount of dough.... and then I look at my friends that are still holding and rode it down to a third of "what they had"... I'm retired - they're not. :thumbsup:

[Sieg]

Well.... We have fresh powder here... so I'm headed for more vertical. But there's an old saying about "your first loss is your best loss". That stock has been "dead money" for 10 years -- ditto Microsoft... and I have MANY friends still into those stocks big time -- waiting for the "rebound". In the meantime they could have sold 9 years ago --- invested in General Mills cereal and they have 3 times more money.


Yeah --- I had a HUGE amount of MSFT shares.... but I scaled out of them on a regular basis and re-invested in other stuff. Sometimes I look back and say -- if I hadn't sold at "X"... I'd have had double the amount of dough.... and then I look at my friends that are still holding and rode it down to a third of "what they had"... I'm retired - they're not. :thumbsup:

Dell & HP may end up cereal......

Yup, I'm a World Champion Bull Rider...........thought I was winning, until I realized the bull was dying. :sieg:

[96z28ss]

I got a good laugh this morning --- with the market opening up nicely --- the talking heads on CNBC were talking about General Mills (GIS) -- yeah.... the cereal company. I'm like -- okay -- really? Cereal... WTF!?! Cramer calling it
a "dividend monster". So...... Of course I go out to see for myself why he'd be calling a boring old lady stock like General Mills a dividend monster. Well.. it pays a whopping 2.82% dividend. That's a dividend monster?

BUT here's the deal -- I look deeper -- and we come up with that TOTAL RETURN... which is really what we're after... and now this little old lady stock starts looking better... and it split 2 for 1 in June of 2010... and the TR for 5 years is 88%.

The reason I chuckled to myself when I'm looking all this stuff up is ------ most "investors" are always talking about the get rich quick stocks... Everybody is trying to find the next Dell -- or Microsoft -- or Google.... While in the meantime -- the little old lady has doubled her net worth in CEREAL over the last 5 stinky short years. Go figure.

I guess my point would be... INVEST -- best of breed? Dividend payer? And total return (growth in capital) doesn't have to be the next hot deal..... Facebook IPO anyone??? :popcorn2:

I watch MadMoney whenever I get a chance and he is always preaching best of breed dividend stocks for long term investing.

[96z28ss]

..........and I'm just waiting to dump my $35 dollar shares of Dell acquired in '99.
And have no intention of selling my old-school '69 :D

Isn't the owner of dell trying to take the company private?

[GregWeld]

Isn't the owner of dell trying to take the company private?



Yes --- at around $14 a share I think... That company is dead and dying IMHO --- Mobile computing is the growth area -- so they're left with the replacement desktop and laptop business --- Low margin requiring high volume... The world has changed... it's tablets - Apple - and smartphones.... Dell is none of those.

[silvermonte]

So im going to newb up this great thread by asking a silly question.Im on page 61 currently so I have have a understanding of what I should be looking for in a stock. I started out looking at local company's that i use. Casey's (CASY) is a gas station currently only in the midwest, in the last year they have purchased land in tennesse and kentucky, so i would think they plan to expand.When i got out of the military in 2006 and moved back here to iowa they bought out most of the other local gas stations, and they now have about 75% of the market here. What my question is, all the info that is in this thread says to not buy this stock. It has a annual dividend yield of 1.15%, thats horribly low, buts its growth has been great in the last 10 years. I would personally not have a problem owning this stock as i can see what they are doing every day but they are not best of breeds, so does the growth out gain the lack of a decent dividend, or should i be looking at something else.

They have an interesting market over a normal gas station, they make some amazing pizza that for the most part is a home made on a large scale that is priced cheaper and taste better then your normal papa johns,pizza hut,dominos and other pizza places.Why i think they are planning to be around for awhile is they just started adding a deliver service of their pizza to help get in on the food market and make a move on the "main" pizza joints.Im not sure of any other business that does something like that. I just got into this investing game again some im just in the research phase for the next few weeks till i get game plan going. Not that im trying to find the next get rich stock but i think over the long term of 30+ years this may be one to get and wanted to know if my thinking is in the correct spot.

I should probably add that I would not have a large amount to invest, so this is where im thinking i should probably go with a better steady eddie as greg puts it to start out, till i get more into the account and can then take this mild "risk" as i look at it.

[GregWeld]

So im going to newb up this great thread by asking a silly question.Im on page 61 currently so I have have a understanding of what I should be looking for in a stock. I started out looking at local company's that i use. Casey's (CASY) is a gas station currently only in the midwest, in the last year they have purchased land in tennesse and kentucky, so i would think they plan to expand.When i got out of the military in 2006 and moved back here to iowa they bought out most of the other local gas stations, and they now have about 75% of the market here. What my question is, all the info that is in this thread says to not buy this stock. It has a annual dividend yield of 1.15%, thats horribly low, buts its growth has been great in the last 10 years. I would personally not have a problem owning this stock as i can see what they are doing every day but they are not best of breeds, so does the growth out gain the lack of a decent dividend, or should i be looking at something else.

They have an interesting market over a normal gas station, they make some amazing pizza that for the most part is a home made on a large scale that is priced cheaper and taste better then your normal papa johns,pizza hut,dominos and other pizza places.Why i think they are planning to be around for awhile is they just started adding a deliver service of their pizza to help get in on the food market and make a move on the "main" pizza joints.Im not sure of any other business that does something like that. I just got into this investing game again some im just in the research phase for the next few weeks till i get game plan going. Not that im trying to find the next get rich stock but i think over the long term of 30+ years this may be one to get and wanted to know if my thinking is in the correct spot.

I should probably add that I would not have a large amount to invest, so this is where im thinking i should probably go with a better steady eddie as greg puts it to start out, till i get more into the account and can then take this mild "risk" as i look at it.





Personally - without doing huge research.... I think it would be a great stock for YOU. Here's why.


YOU (any individual) are a good judge for what a business is doing. If you shop there - and YOU like it - and you see what they're doing - and your friends like the place... Then those are good points. You'll also be the first to read when there's a change in the business that you DON'T like... so the minute you sense something wrong -- then it's a tip off that maybe others are just like you, and you then have a heads up on when to bail out. We would hope that doesn't happen of course. But use your gut feeling for a stock/company the same going UP as going DOWN... pay attention to those feelings.


Now -- remember we want TOTAL RETURN.....so we can offset the low dividend with a higher growth rate. That's what this stock is doing -- it's growing nicely - and that can make you more money than just a higher paying dividend stock. Nothing wrong with this "combo" of low dividend as long as it's accompanied with high growth.

Then use all the other things we've discussed here ---- don't put all your eggs in one basket --- work towards diversification --- pay attention --- but get started. :thumbsup:

[silvermonte]

Thank you for your input. I have another question. You suggested I start looking into a roth since im a lower income so I started looking into it. Ive managed to figure out most of what I need to know. Where Im confused is how to use the account.

How I understand the best way to use the account is I set up an automatic payment to the Roth account from my paycheck that ends up in the "cash fund", where the money will sit till I pick a place (stock) to put it in.It will only let me add to the account till I hit the cash cap limit. To limit the amount of fees I pay I should wait till I have a decent amount saved up to buy the stocks, say $1000 or wait till i have $1500 to scale in. Then continue to do this every $1000-$1500 till I retire.

Where my confusion is that once the money goes into the account any growth inside is tax free. Well what happens if you end up with a crappy stock that has losses for 5 years in a row or zero gains and you have to sell. That money will now go back to the "cash fund" but will still be in the roth account, does this sell if there was any gains or anything of that sort have to have taxes paid on it since I will be below retirement age, and will it be part of my yearly money cap for what im allowed to put into the account.

I read that im allowed to pull out my contributions at anytime without tax or penalties, but Im wondering what is considered pulling out? I would think that would only be money pulled out of the actual account and into a bank and not the cash that could possibly be bouncing around in Roth account. Im not wanting to do that since im aiming for long term but i want a solid grasp of what im doing and what could possibly happen while im planning my attack.

[GregWeld]

Thank you for your input. I have another question. You suggested I start looking into a roth since im a lower income so I started looking into it. Ive managed to figure out most of what I need to know. Where Im confused is how to use the account.

How I understand the best way to use the account is I set up an automatic payment to the Roth account from my paycheck that ends up in the "cash fund", where the money will sit till I pick a place (stock) to put it in.It will only let me add to the account till I hit the cash cap limit. To limit the amount of fees I pay I should wait till I have a decent amount saved up to buy the stocks, say $1000 or wait till i have $1500 to scale in. Then continue to do this every $1000-$1500 till I retire.

Where my confusion is that once the money goes into the account any growth inside is tax free. Well what happens if you end up with a crappy stock that has losses for 5 years in a row or zero gains and you have to sell. That money will now go back to the "cash fund" but will still be in the roth account, does this sell if there was any gains or anything of that sort have to have taxes paid on it since I will be below retirement age, and will it be part of my yearly money cap for what im allowed to put into the account.

I read that im allowed to pull out my contributions at anytime without tax or penalties, but Im wondering what is considered pulling out? I would think that would only be money pulled out of the actual account and into a bank and not the cash that could possibly be bouncing around in Roth account. Im not wanting to do that since im aiming for long term but i want a solid grasp of what im doing and what could possibly happen while im planning my attack.




These are questions that should only be discussed with your accountant -- or someone that is clearly qualified to help you with those questions. Don't take advice on tax questions from just anyone that "thinks" they know.


I've never had a ROTH account (I don't qualify) so I have only a very basic knowledge of how they work.

You have very good questions by the way.

I am pretty sure you have until "tax day" to fund a ROTH.... at least that's the way it used to be... In other words you had until April 15th to fund "last years (the taxable year) account". But here again -- seek some professional help with these questions. Taxes are complicated and can really trip you up down the road - just when you "thought" you were doing things right.

I can still remember finding out (many years ago) about the "wash sale" rules.... Oh yeah! That cost me big time!

[silvermonte]

thanks for you help again, i guess i prolly should set up a meeting with someone to get some of the these questions answered. Im able to figure out most of what i need, and I will be setting up the payments to the roth directly from my paycheck a little at a time that way the money gets there. Ive found out that if I dont do direct payments to my stuff I tend to forget to do them or tell myself ill do it later and just add extra money to the next payment and we know how that goes for most people.

[GregWeld]

You're welcome Silvermonte. Taxes are too "personal" as in there's too many rules etc that apply to the individuals personal tax situation. That really needs to be gone over with a "tax professional".

I also agree that most people benefit from automatic deductions. You get accustom to the new net and never miss the deduction.

If you read this thread -- you'll run into discussions that are critical to you.. you "sound" relatively young -- and time is on your side. Starting this strategy EARLY is the sure way to success even if you're only a mediocre investor. Much of the focus of this thread is about just being the steady "tortoise" that wins the race.

[GregWeld]

I don't know about the rest of you guys -- but if you invested in ANYTHING even as little as 6 months ago -- you should have nice gains by now!!!!


Okay -- but really -- this is the most amazingly easy market to have invested in that I can remember since 1997/98/99.... I used to get up in the morning - buy half a million bucks worth of Dell and of Microsoft and of Cisco -- an hour later I'd sell them UP 50 cents a share - and go off and play golf or work on something in the shop. It was so easy that baby in the E*Trade commercials could do it! Well.... I feel the same way about this market.

Here's going to be my point though.... it's almost too easy. And if you're just starting out... your sense of "the market" is going to be that you just put money in and it grows every day. Trust me when I tell you that this is not NORMAL! But it's markets like this that can make you some real gains --- and then there's markets that go down every day -- and they just cut you a little bit every day again and again and again. "The death of a 1000 cuts". YOU'LL need to remember these fantastically good times -- when the poo market does (and it will) comes around.

Here's the way I look at this ---- and the charts will confirm it.... If you have a run and are up 50%.... and then we get into a period where we go DOWN 20%.... Your down 20% is off of the UP 50% so you're still ahead... Think of it like a person that bought a house 25 years ago... and it tripled in price -- then went down 40%... they're still WAY ahead! And when it comes back (like it has in many areas) they'll be back to near their triple. Are ya gonna cry for them? NO!

The savior in a down period -- is that dividend is buying more shares at cheaper prices... and when the market comes back - you'll have a better return on those shares.

I just don't want people to think they're somehow brilliant investors and that they should hawk everything they have to invest in the market. Just keep doing what you're doing because there will come a time when you're going to be thinking -- WHY THE HELL DID I LISTEN TO THAT IDIOT WELD!?!?! And then the sun will come out and all will be good again. Hard to believe that when it's all going badly --- just as it is when things are going so friggin' well like they are right now. :G-Dub: :thumbsup:

[WSSix]

Oh, I know I'm not a brilliant investor. That little man who likes to kick people kicked me on my gamble choice, lol. It went down just a touch the day after I bought. Nothing serious at all but funny none the less. Oh well, the buying power of the dividend payment might just buy me even more than I had planned on originally. I do like the streak KO is on though. Wonder if these soda bans are having the same affect on KO that the gun/ammunition scares are having on gun stocks and profits. Maybe everyone's stock piling two liter bottles and mega-cups just in case the worst happens. I wonder is Solo cup is publicly traded :lol:

[GregWeld]

The beauty of Coke (KO) is to pull up a "all" chart..... look along the bottom and see that it has SPLIT FIVE TIMES since 1986.... Yes that's a long time ago - but if you were just 33 years old in 1986 (like I was) and you'd bought 100 shares.... You'd now have 4800 shares and that's if you never re-invested the dividend!

[Tony_SS]

Bitcoin

discuss.

[toy71camaro]

Bitcoin

discuss.

Did a quick read on it from their wiki... a little to high tech for my likes. Being in the tech industry and see what can/will/does go wrong is a little scary. lol

[Tony_SS]

Did a quick read on it from their wiki... a little to high tech for my likes. Being in the tech industry and see what can/will/does go wrong is a little scary. lol

It's takes some research to wrap your mind around it, but it's all open source, uncontrollable by anyone other than the market who is buying into it and trading it. It's certainly nothing that has ever been done before.

I knew about 2 years ago when a bitcoin was .02 each. I didn't listen.. kicking myself now! They are worth $77 dollars today and are climbing due to the EU/euro/Cyprus stuff.

[GregWeld]

I cut and pasted this from a longer article I was reading. I think it shows younger investors ---- that you don't need to chase Bitcoin --- or Faceybook --- in order to retire "wealthy". You just need to INVEST.... and stick to it.







For younger investors with long-term investing horizons, the reason for this comes down to the reasonable certainty of return from a dividend stock with higher yield, versus the more uncertain return from capital growth that lower yielding dividend stocks are dependent on. This is a return that is highly reliant on "Mr Market's mood."

Companies like McDonald's (MCD), the Coca-Cola Company (KO), Pepsi Co (PEP) and Kimberly-Clark Corporation (KMB) all offer dividend yields of near 3% or more. For investors in these stocks, dividend return contributes a significant amount to the total return that an investor derives. Further, an investor is able to accelerate their investment growth and dividend income by reinvesting that dividend income over time.

In contrast, stocks like Visa, MasterCard, American Express (AXP) and Moody's (MCO), which have provided reasonable dividend growth over time are far more reliant on strong capital returns to generate total return for investors. These stocks all offer dividend returns of 1.5% or less.

The significance of such a strong contribution from dividend income to a investment return should not be understated. Dividend income makes a significant contribution to a stock's total return and can form the basis for close to 50% of a stock's total return on average, and even more so during periods of poor stock market performance.

Additionally, the impact that reinvestment of dividend income makes on a portfolio return should not be overlooked. Consider the example of an investor who had invested in McDonald's 10 years ago. An investment of $10,000 in McDonald's without dividend reinvestment would be worth close to $66,000, and provide you with an annual dividend income of almost $1800. An investor who had reinvested McDonald's dividends back into McDonald's stock would have an investment value of almost $73,400 and an annual dividend of almost $2500.

The power of dividend reinvestment on investor wealth creation can really be seen over a very long term time period. An investor in The Coca-Cola Company who invested $10,000 about 50 years ago would have had a stock value of almost $500,000. If you think that's impressive, consider the scenario where those dividends were reinvested. That same investor would have almost $1.75M in stock investment in The Coca-Cola company.

So younger investors who are able to stick with a long-term plan and reinvest their dividends over the long term will be significantly advantaged in terms of both capital growth and dividend income. Of course this assumes that they retain the conviction and discipline to stick with such a strategy over many years. It doesn't take much to knock this confidence away, such as devastating bear market or recession of the likes that we saw in 2008 - 2009.

The key with any investment strategy is that you can you stick with it long enough to make it work and see the returns. This is where higher yielding, but possibly slower dividend growth stocks should be preferred in a younger investor's portfolio. While companies such as a Verizon (VZ) or AT&T (T) may not have the high growth, high return profile of a Visa or MasterCard, a young investor in these types of businesses is getting the advantage of a stable, reliable dividend from a company, which can be reinvested and put to work.

Verizon and AT&T pay out hefty dividends in the range of 5% and also experience less volatility than the broader S&P 500. In other words, higher-yielding stocks give you an incentive to stick around and give the dividend growth strategy time to work. You get paid to wait, even if there isn't any immediate capital appreciation for some time. Additionally, investors in higher-yielding stocks such as Verizon have experienced handsome longer-term returns; for investors in Verizon close to 9% per annum over the last 10 years.

Not only do you get paid to wait, but more importantly, higher-yielding stocks help provide a buffer against considerable market fluctuations. They help make it less likely that downturns in the market will result in younger investors getting scared by volatility and selling out. This is because these higher-yielding stocks can still generate considerable total return purely from the contribution of a high dividend, in spite of the general turmoil that may be happening in the stock market.

[toy71camaro]

Good article.. I believe i read that one on SA yesterday too. heheh.

It popped up on my feed due to me owning a bunch of the ones they mentioned in there. ;)

[Tony_SS]

Bitcoin is not a stock like Facebook.. its an open source virtual currency. One that is safe from devaluation.

[realcoray]

Bitcoin is not a stock like Facebook.. its an open source virtual currency. One that is safe from devaluation.

http://www.damninteresting.com/the-dutch-tulip-bubble-of-1637/

[GregWeld]

Bitcoin is not a stock like Facebook.. its an open source virtual currency. One that is safe from devaluation.





Really?? That's not the story I read! It's already been hacked
And the "currency" has swung wildly up and down.

While it's an interesting concept.... Usually the last guys in are
Left holding an empty bag. The concept has been tried many times
So there's history of this kind of stuff if you dig a little. This may be
Different this time.... But I'd say it's a gamble not investing. IMHO.

[GregWeld]

Bitcoin is not a stock like Facebook.. its an open source virtual currency. One that is safe from devaluation.






This was a couple years ago. But if you search.. You find the system is still
Being hacked.... I found articles about that dating January 2013


This particular article just has better basic information.


http://www.dailytech.com/Inside+the+MegaHack+of+Bitcoin+the+Full+Story/article21942.htm

[GregWeld]

Here's a comprehensive list of the hacks and thefts if bitcoin.





https://bitcointalk.org/index.php?topic=83794.0

[toy71camaro]

Like i mentioned.. too "high tech" for my tastes...

Open source is great, for a software for the greater good of the community. Such as a Security software. NO ONE wants to get hacked. especially the developers. Thus they donate their time to be as secure as possible. Multiply the contributers by 10 fold and you have a LOT of great minds to put something together and at VERY low overhead. Thats a GREAT reason for open source.

Now, dangle the fact they can have MONEY to do this. These same programmers when faced with the fact of "i can donate my time to make bitcoin more secure. OR, i can use my time to find loopholes in bitcoin and potentially make myself rich.".

Are you willing to gamble YOUR money on the fact that most/all programmers/hackers will be MORALLY SOUND? Not me.

Thus, a little too "high tech" for me.

[Tony_SS]

http://www.damninteresting.com/the-dutch-tulip-bubble-of-1637/

The link comes up empty.. but I'll correct myself, the value of it depends on the user market.. so no, its not exempt from devaluation, but the good news is the users control the value instead of a central bank.

Really?? That's not the story I read! It's already been hacked
And the "currency" has swung wildly up and down.

While it's an interesting concept.... Usually the last guys in are
Left holding an empty bag. The concept has been tried many times
So there's history of this kind of stuff if you dig a little. This may be
Different this time.... But I'd say it's a gamble not investing. IMHO.

Peoples wallets have been hacked before, but it is correcting. Any bitcoins you have are stored in a wallet, and that is kept on your computer or a flash drive, offline. Like any wealth anywhere, you need to protect that. There are so many layers built into the system that makes it pretty secure. But its at a record level $90 each, someone out there should try to hack and steal right? With its growth, we are already seeing more levels of security built in.

This concept has never been done before as far as I know. It's completely user driven, peer to peer. I've always thought that competing currencies was a good idea, no one should be forced to use just one. And as for investing, many invest in other currencies for security.

I think the whole bitcoin thing is fascinating, it will be interesting to see how it plays out.

[realcoray]

The link comes up empty.. but I'll correct myself, the value of it depends on the user market.. so no, its not exempt from devaluation, but the good news is the users control the value instead of a central bank.


The link is about the dutch tulip bubble, where by dutch people went insane paying thousands of dollars for tulip bulbs, that is thousands of dollars in todays money.

It sounds ridiculous, why would someone pay 2k for a tulip bulb? And that's how it is AFTER something melts down, it sounds ridiculous, even to (sometimes formerly) rich so called smart people.

Have you seen the internet? Do you want the internet people controlling the value of anything you have?

[GregWeld]

Have you seen the internet? Do you want the internet people controlling the value of anything you have?





Great question! I'm pretty sure that's why this thread was named "Investing 102" rather than "Hey! Let's gamble!"



:lol: :lol: :lol: :lol:

[GregWeld]

You'd think that with the fantastic run up in equities -- that this thread would be lit up like a neon sign.... yet it seems to have fallen off the radar.


What? <think of the scene in The Birdcage>

[glassman]

Hey Greg, yes this thread does quiet down from time to time, but i read it every day, i dont have much to contribute in terms of experience, so rather that just babble, i just read and learn. I bet three hundred to a thousand "read only",

But the readership on this topic fluxuates like the market haha.

But I can bet you dimes to donuts, when sh!t hits the fan again, the readership will see numbers to the moon. When everybodys fat, who needs a meal, know what i meen?

Mike

[GregWeld]

Hey Greg, yes this thread does quiet down from time to time, but i read it every day, i dont have much to contribute in terms of experience, so rather that just babble, i just read and learn. I bet three hundred to a thousand "read only",

But the readership on this topic fluxuates like the market haha.

But I can bet you dimes to donuts, when sh!t hits the fan again, the readership will see numbers to the moon. When everybodys fat, who needs a meal, know what i meen?

Mike




So true!



A market like this lulls people to sleep.... it's way too easy! Every day it just goes up. Good for the old psychology... makes everybody FEEL smart and right and wonderful <remember what you felt like when your house doubled in value every month!>. I will say though -- that if people have made GREAT choices --- they should still sleep easy when it's not so hot --- and that's the key to good investing. Being able to rest easy with what you own. It's like owning a good house in a good neighborhood --- it's fundamentally important that you love the house and the neighborhood FIRST.... the value is only important when you finally decide to sell.

[glassman]

And I like what you said about the "employee" part, you good employees working for you when your sleeping or away....my company's getting like that, finally, after seventeen freakin years!

[GregWeld]

And I like what you said about the "employee" part, you good employees working for you when your sleeping or away....my company's getting like that, finally, after seventeen freakin years!

Good for you!


I know many people that work their butts off long hours and for years --- and then after 20 years or so they look around and they're running a pretty nice little business.... it's just that at the time... they're caught up in the day to day and are too busy to stand back and see what they've built!


Like my old partner used to say... "we'd have a really nice business if it wasn't for all these damn PITA customers".

[Flash68]

I don't post in this thread a lot but I read it. :popcorn2:

Happy Easter, people.

[toy71camaro]

You'd think that with the fantastic run up in equities -- that this thread would be lit up like a neon sign.... yet it seems to have fallen off the radar.


What? <think of the scene in The Birdcage>

yeah, i hear ya... it has been a nice run. my newly re-situated 401k is doing fairly well thus far. But, sadly to say I've been quite busy. My dads health hasnt been good for quite a while, and he just underwent a major hurdle in his Congestive Heart Failure situation. i wrote a thread about it in the Off Topic forum. He's been in the hospital the past month, and mom's been living over there in an apartment. Which is about a 2-2.5 hour drive. So my friday afternoons/saturdays have been spent trying to stay over there. While during the week juggle work, the work at my house and keeping my parents place up and trying to re-organize the house (de-clutter it), in preparation for their return home. The past 3-4 weeks have been hectic.

On a good note, I finished my "Total Money Makeover" book today. Started our house budget for April and looking forward to saving some money up for my emergency fund again, and then back to saving for investing/future. :)

[GregWeld]

yeah, i hear ya... it has been a nice run. my newly re-situated 401k is doing fairly well thus far. But, sadly to say I've been quite busy. My dads health hasnt been good for quite a while, and he just underwent a major hurdle in his Congestive Heart Failure situation. i wrote a thread about it in the Off Topic forum. He's been in the hospital the past month, and mom's been living over there in an apartment. Which is about a 2-2.5 hour drive. So my friday afternoons/saturdays have been spent trying to stay over there. While during the week juggle work, the work at my house and keeping my parents place up and trying to re-organize the house (de-clutter it), in preparation for their return home. The past 3-4 weeks have been hectic.

On a good note, I finished my "Total Money Makeover" book today. Started our house budget for April and looking forward to saving some money up for my emergency fund again, and then back to saving for investing/future. :)




Sorry to hear about your Dad! I didn't see the thread. I'm sorry to hear this news. Brought back memories of when my Dad was in one hospital from a heart attack - and my Mom was across town in another hospital with Congestive Heart failure and COPD.... Both in intensive care! OMG ---- it's all I did was go back and forth like a ping pong ball.

Life is what happens to us while we're busy making other plans....

[toy71camaro]

Sorry to hear about your Dad! I didn't see the thread. I'm sorry to hear this news. Brought back memories of when my Dad was in one hospital from a heart attack - and my Mom was across town in another hospital with Congestive Heart failure and COPD.... Both in intensive care! OMG ---- it's all I did was go back and forth like a ping pong ball.

Life is what happens to us while we're busy making other plans....

yeah.. ping pong ball. thats about what it feels like! lol. or a rag, being pulled every which direction by a pack of dogs. lol. You mom had CHF too? wow.

[GregWeld]

yeah.. ping pong ball. thats about what it feels like! lol. or a rag, being pulled every which direction by a pack of dogs. lol. You mom had CHF too? wow.



Oh yeah --- CHF and COPD.... and still smoked up a storm even while having to be hooked 24/7 to oxygen. Sorry smokers... you're just D U M B.


She lived 4 more years in a private nursing home (5 people lived there) - sitting in a chair - too weak to care for herself.... costing me a small fortune. Cost me an extra $5 per cigarette because someone had to take her outside and be with her while she puffed away. That's some addiction right there!

[Tony_SS]

The link is about the dutch tulip bubble, where by dutch people went insane paying thousands of dollars for tulip bulbs, that is thousands of dollars in todays money.

It sounds ridiculous, why would someone pay 2k for a tulip bulb? And that's how it is AFTER something melts down, it sounds ridiculous, even to (sometimes formerly) rich so called smart people.

Have you seen the internet? Do you want the internet people controlling the value of anything you have?

:lol: It's clear that there's a lot to learn about bitcoin, but I'm enjoying the reactions. :lol: "internet people" :lol:

Valuation bubbles happen all the time with fads. Bitcoin is emerging right now, but still very much under the radar. It's the antithesis to establishment central banking right now. For that reason alone, it holds great risk as the eye of Sauron looks on. Unless some major 'event' happens, I don't see a mass exodus or devaluation out of using Bitcoin. Either way, it'll be interesting.

Great question! I'm pretty sure that's why this thread was named "Investing 102" rather than "Hey! Let's gamble!"

Corrections just don't happen in tulip markets :lol: Everything's a gamble. In 2008 many investors lost huge. Now look at the dollar, look at the debt, look at the EU/euro. When the Fed stops pumping, then what?... tick... tick... tick...

[Bucketlist2012]

Life is what happens to us while we're busy making other plans....

Boy Greg, you said a mouthful there..

Health Issues will eat through money like termites through wood..

I have been too busy lately dealing with my own health care issues, and even with great Insurance, I still have to pay thousands for my share..

I should of, would of, could have taken better care of myself....Spilled Milk.:snapout:

So you younger Guys follow the Health thread and take good care of yourself...Otherwise the money you Save and Invest will get eaten up later by Hospitals and Doctors...

MIke

[toy71camaro]

Oh yeah --- CHF and COPD.... and still smoked up a storm even while having to be hooked 24/7 to oxygen. Sorry smokers... you're just D U M B.


She lived 4 more years in a private nursing home (5 people lived there) - sitting in a chair - too weak to care for herself.... costing me a small fortune. Cost me an extra $5 per cigarette because someone had to take her outside and be with her while she puffed away. That's some addiction right there!

Oh wow. Thats too bad. :(

My Dad's CHF is a result of CHOP Chemo he had to undergo during his 2nd round of Non-Hodgkins Lymphoma Cancer that he had in the late 90's. the LVAD pump (think electronic water pump, but hookedup to the heart and pumps blood instead) will (hopefully) be a short term fix until he is healthy enough to undergo a full on Heart Transplant. Assuming he gets that far. he's having some trouble right now (not with the device, but seizures and some mental issues). Talk about a scary road. :brix:

Sorry to hear about your parents Greg.

[Tony_SS]

Boy Greg, you said a mouthful there..

Health Issues will eat through money like termites through wood..

I have been too busy lately dealing with my own health care issues, and even with great Insurance, I still have to pay thousands for my share..

I should of, would of, could have taken better care of myself....Spilled Milk.:snapout:

So you younger Guys follow the Health thread and take good care of yourself...Otherwise the money you Save and Invest will get eaten up later by Hospitals and Doctors...

MIke

Wise words Mike. Hope you're doing well.

[GregWeld]

Good to hear from you Mike!


Keep up the good fight buddy!



:grouphug: :headspin: :D

[Woody]

:lol: It's clear that there's a lot to learn about bitcoin, but I'm enjoying the reactions. :lol: "internet people" :lol:

Valuation bubbles happen all the time with fads. Bitcoin is emerging right now, but still very much under the radar. It's the antithesis to establishment central banking right now. For that reason alone, it holds great risk as the eye of Sauron looks on. Unless some major 'event' happens, I don't see a mass exodus or devaluation out of using Bitcoin. Either way, it'll be interesting.



Corrections just don't happen in tulip markets :lol: Everything's a gamble. In 2008 many investors lost huge. Now look at the dollar, look at the debt, look at the EU/euro. When the Fed stops pumping, then what?... tick... tick... tick...

I don't know anything about bicoin, but from what others are saying here it looks like it may be a very risky stock. Sure the stock market has risks, but if you invest in solid companies and diversify, you greatly reduce your risk. You mention 2008 as an example in the stock market. I was invested in 2008 and did not lose, because I did not sell when everyone else was panicking. My portfolio is now worth much more than in 2008.

The difference is you are comparing one highly speculative stock that could go down signficantly and never come back up.

As far as what happens when the Fed stops pumping money into the sytem, who knows. They will likely stop pumping money into the system when they feel the ecomomy is strong enough, so maybe nothing happens.

If you watch CNBC at all there are so many people who claim to know what is going to happen, but no one really knows. For those that have been around long enough, do you remember Harry Dent. Many years ago he wrote a book projecting the Dow would go to 15,000 within a few years. He had all kinds of great reasons why it would hit that level. I believe that was in the early 2000's some time. Now he is claiming the Dow is going to go back to 6000. I would be willing to bet he will be wrong on that prediction as well. Unfortunately people listen to these guys.

[GregWeld]

I don't know anything about bicoin, but from what others are saying here it looks like it may be a very risky stock. Sure the stock market has risks, but if you invest in solid companies and diversify, you greatly reduce your risk. You mention 2008 as an example in the stock market. I was invested in 2008 and did not lose, because I did not sell when everyone else was panicking. My portfolio is now worth much more than in 2008.

The difference is you are comparing one highly speculative stock that could go down signficantly and never come back up.

As far as what happens when the Fed stops pumping money into the sytem, who knows. They will likely stop pumping money into the system when they feel the ecomomy is strong enough, so maybe nothing happens.

If you watch CNBC at all there are so many people who claim to know what is going to happen, but no one really knows. For those that have been around long enough, do you remember Harry Dent. Many years ago he wrote a book projecting the Dow would go to 15,000 within a few years. He had all kinds of great reasons why it would hit that level. I believe that was in the early 2000's some time. Now he is claiming the Dow is going to go back to 6000. I would be willing to bet he will be wrong on that prediction as well. Unfortunately people listen to these guys.




Woody --- Bitcoin is NOT a stock -- it's a "currency" that is traded on it's own exchanges. So not only is it speculative - the entire concept is "electronic" - and is only worth what the next guy will pay. It can be used to buy stuff - but only from others that are willing to accept it as a payment.


I couldn't agree with you more when you say the talking heads on TV all have the answer for what's ahead. That's what makes a market - one guy selling - the other guy buying - both betting they're right and everyone else is wrong.

It's why I HARP on the INVESTING aspect of the market rather than all the hype and speculation. You've heard it before - buy good stuff - that pays a dividend - companies you know and understand etc.

Bitcoin is for "fun" and for speculators. Maybe it becomes something and maybe it doesn't. I won't care one way or the other because I'm busy making real money off my investments... I have an open enough mind to look - read - discuss... but that's as far as my interest goes. It's a bit ironic since I made my money off speculative deals --- but a man has to know his limitations and say when is enough, enough. Personally - that's where I'm at.

[Tony_SS]

I don't know anything about bicoin, but from what others are saying here it looks like it may be a very risky stock. Sure the stock market has risks, but if you invest in solid companies and diversify, you greatly reduce your risk. You mention 2008 as an example in the stock market. I was invested in 2008 and did not lose, because I did not sell when everyone else was panicking. My portfolio is now worth much more than in 2008.

The difference is you are comparing one highly speculative stock that could go down signficantly and never come back up.

As far as what happens when the Fed stops pumping money into the sytem, who knows. They will likely stop pumping money into the system when they feel the ecomomy is strong enough, so maybe nothing happens.

If you watch CNBC at all there are so many people who claim to know what is going to happen, but no one really knows. For those that have been around long enough, do you remember Harry Dent. Many years ago he wrote a book projecting the Dow would go to 15,000 within a few years. He had all kinds of great reasons why it would hit that level. I believe that was in the early 2000's some time. Now he is claiming the Dow is going to go back to 6000. I would be willing to bet he will be wrong on that prediction as well. Unfortunately people listen to these guys.

Hi Woody. I never meant this to be Bitcoin vs Stocks or anything. Like Greg said, Bitcoin is a digital currency. Just like the dollar, its backed by nothing more the the people who use its. The main difference is that Bitcoin can not be artificially distorted by central banking manipulation. It's a peer to peer, open source user driven system. I knew about them and was very skeptical when they were $1 each. When I brought them up here, they were $70. Today they are busting out at $104. This is a direct result of the outright theft that has occurred to the people of Cyprus having their money outright stolen from the Banks they kept their money in. All of EU is debt to the same bankers. Bitcoin at $103 today is still a GREAT deal, I believe, as this mess is only going to get worse in the EU, and people are looking for other options.

As far as Bitcoin being something for "fun" I would agree! But its very real. It valued at more that alot of sovereign currencies are! It's total value topped $1 billion and soon could rival the dollar and euro. And you can always exchange back into dollars at any time just like any other currency. Of course to dive in you need to be tech savy and that right there turns a lot away, or scares them. But we all know the role technology is playing in this future.

As for stocks, the people I listened to seen it coming. I sold my home right before the bust. Because I listened to all the people the "stock" shows were calling "Crazy"... I listen to the guys who proved themselves right by calling out where these bubbles are. They are saying the same thing about the stock market.. it's very much an illusion that's being propped up. We are simply on bought time at this point.

Greg you should just go for some Bitcoin... Get in and out, now is the time... then kick yourself later for now staying in!

[GregWeld]

Greg you should just go for some Bitcoin... Get in and out, now is the time... then kick yourself later for now staying in!



Tony --- I've been IN the stock market and other investments for some 30 odd years now. I've been up and I've been down... but mostly I've been retired since I was 41 (I'll be 60 this summer) and I live a pretty nice lifestyle. I think I'll just keep doing what I'm doing. :thumbsup: