Favorite investments?

[Plznate]

So guys, for those of you who are actually of age, familiar with investing, or perhaps have already began your journey into the world of investments, curious as to what some of your favorites are.

Long story short, I have a 7 year obligation with the military. In that time, I intend on living modestly while placing as much income as I can into aggressive funds up until that 7 year mark; after which I intend on moving to central america and opening up a business there.

I will be opening an online brokerage with TD ameritrade, and beginning with an initial $10k investment for this year. I think, factoring in all known and potential expenses, I should have between $20k-$30k in investable income over the next 7 years.

Personally, I think that index matching mutual funds are a great option. Another thing I was considering trying to see if I could find a fund whose portfolio contains stocks from only BRIC countries. There are a few blue chip type stocks that I have been looking through as well, that seem to be undervalued right now (Microsoft being one of them). Other option would be to invest into a real estate fund, given the downed market currently, the potential for a swing seems possible.

I think realistically, to be as aggressive as possible without just throwing money away would be to stick it in a foreign growth fund, focusing on small cap companies outside of USA/EU.

What are your thoughts? Suggestions? Favorite investment vehicles? Stock picks? Fire away

 

[KerokeroCola]

Are you looking for only short-term or investments that can be liquefied easily?

 

I know someone who saved in a real estate fund. It turns out he lost more money he invested with. That potential for a rise in real estate seems really unrealistic given the situation of the economy still. Other than that, I have no other advice, lol.

 

[Plznate]

Are you looking for only short-term or investments that can be liquefied easily?

Liquidity when dealing with stocks, mutual funds, REI's, or any other ownership investment is all the same: very liquid (i.e. log into brokerage account, click sell).

I plan on swing trading on rises and falls, so yes I will be focusing on these types. So no buying bullion bricks to store in the garage or anything like that ; )

Open to the suggestion of purchasing homes though; again looks rewarding since the potential for a comeback in the housing market seems probable over the next year.

I know someone who saved in a real estate fund. It turns out he lost more money he invested with. That potential for a rise in real estate seems really unrealistic given the situation of the economy still. Other than that, I have no other advice, lol.

I would be willing to assume your friend bought in at the peak? And the beauty of investors is that they think just like how you said: the market is down, housing is in the shits, why throw your money into a loser like that? However, in my opinion, I see it as this; "all homes now on sale for a limited time!". Sure, it may drop slightly, but populations always increase, and land always becomes more scarce. I think I will find a good REI fund and note its price, that way in a year when it has increased a ton in value, I can look back at this thread and kick myself for not following my own advice lol.

 

[KerokeroCola]

Well I asked because I misuderstood. . I just thought you meant to turn 10k into 30k over seven years, which is a huge feat indeed.

Maybe I can compile some advice later at home, but one bit of insight I have presently is that real estate still does not seem to be a sound investment--at least for the short-term. Yes, rates and prices are low, but that's for a reason. Unless you're an aggressive flipper with a lot of capital to offer, you'll likely have a hard time getting any sales for the next few years. I'd recommend as a good investment to buy and rent the home until prices rise, but that depends on so many variables that I wouldn't outright say it's a good idea. For instance, my particular town has giant property taxes for off-site landlords (about 8% of the home), but on-site landlords pay less than 4% per $100k value of the home. That 8% is basically anti-interest, so you'd need incredibly impressive returns to compensate.

 

[Plznate]

I'd recommend as a good investment to buy and rent the home until prices rise

This would be my game plan if I were to purchase a home within the next year or so. If I were to purchase a home then I would adjust the focus to paying off the mortgage within 3-4 years to get it completely paid off, then either rent it out for as long as I want (and the rent paid would be 100% reinvestable income) or sell it if the market flips to a point where it would net me enough profit to walk away from that extra $10-15k a year in rent money ; )

 

[KerokeroCola]

On second thought, my 8% citation is much larger than it probably is. I'd have to look up the ordinance again. I'm far from qualifying for a mortgage without a nice 25%+ down, so I haven't had to say afresh. Regardless, renting does seem strong, but maybe not for you. I live in a big military town, and I know how often you guys get re-posted. You'd have a hard time showing a house halfway across the country or even on another continent.

 

[Plznate]

This is true, and the only real deterrent in why I would not purchase a home at my next duty station.

However, the Army actually offers some nifty services that assist military members trying to buy/sell/rent out there houses. Plus the fact that people are always coming and going from different bases, means the necessity for rented homes will almost always be there, especially around a military base. I would probably do a bit of looking around to see what kind of fees/taxes Kansas law has for home ownership.

 

[KerokeroCola]

Okay, this number is the right one and is much less alarming. "$825.32 per $100k value of the home annually."

Still, thats nothing to take lightly. Homes are ~$160k minimum here, so (in my town) you'll have to spend $1000+ a year in addition to the 4.5% interest on the mortgage. You're in a strong spot to do so, since you live exclusively near bases and posts, where the rental market is good. My parents rent a house and they actually make about $80 a month from rent after mortgages and taxes. . (The total equity gain is like $500/month, which is amazing tbh.) The only major problem is that they have had two tenants get suddenly re-deployed (I forget the terminology), and she was left with a vacant lot for nearly a month.

 

[Lord LaLa]

although ive not invested in anything yet, once ive finished my degree at university, i plan on creating a property portfolio.

What i plan to do is save up enough each year to put a 10% deposit down on a minimum of two houses. Work out before i buy how much i can get through renting them out, and factor in upkeep costs, estate agents fee's, insurance and mortgage. I plan on for the first 5 years or so just to purely break even meaning i will have no profit or loss from the income and just slowly build up from there, as after the five years i should have a portfolio of around 10 property's which then means i should get a decrease in estate agent fee's which then would start making a small profit where as i would be able to buy up to 4 or 5 property's per year. I know it is a long term investment and a long time but i plan that buy the time i am 40 (18 years away), to own outright at least 12 property's with mortgages on another 20+.

 

[Plznate]

Okay, this number is the right one and is much less alarming. "$825.32 per $100k value of the home annually."

Still, thats nothing to take lightly. Homes are ~$160k minimum here, so (in my town) you'll have to spend $1000+ a year in addition to the 4.5% interest on the mortgage. You're in a strong spot to do so, since you live exclusively near bases and posts, where the rental market is good. My parents rent a house and they actually make about $80 a month from rent after mortgages and taxes. . (The total equity gain is like $500/month, which is amazing tbh.) The only major problem is that they have had two tenants get suddenly re-deployed (I forget the terminology), and she was left with a vacant lot for nearly a month.

Ya being military does have some advantages. And typically, if you put a decent enough down payment on a house and didnt buy at the peak of a bubble, renting it out should cover all your monthly costs of owning. Like you said, it pays for itself and builds great equity.

although ive not invested in anything yet, once ive finished my degree at university, i plan on creating a property portfolio.

What i plan to do is save up enough each year to put a 10% deposit down on a minimum of two houses. Work out before i buy how much i can get through renting them out, and factor in upkeep costs, estate agents fee's, insurance and mortgage. I plan on for the first 5 years or so just to purely break even meaning i will have no profit or loss from the income and just slowly build up from there, as after the five years i should have a portfolio of around 10 property's which then means i should get a decrease in estate agent fee's which then would start making a small profit where as i would be able to buy up to 4 or 5 property's per year. I know it is a long term investment and a long time but i plan that buy the time i am 40 (18 years away), to own outright at least 12 property's with mortgages on another 20+.

Eh.... closing costs for houses are usually between $3k-$6k. Buy two houses a year and your at $12k in closing costs alone. 10% down payment means your monthly mortgage bills for each one will be huge. Plus since it is under 20% you need to buy PMI, adding to the costs. The interest rate on your mortgages will also be huge cause of the low down payment, and since you will have so much liabilities in your name, I doubt anyone would be willing to extend you another mortgage after the first or second. Even if you were able to flawlessly keep all houses rented, I doubt any of the rented houses would be able to cover the ownership and mortgage fees per month. I would be willing to bet that you would end up defaulting everything in all honesty.

It sounds good on paper, but once you actually look at the closer details of everything, borderline impossible. Suggest reading a good book about the intricacies of real estate.

 

[Lord LaLa]

i live in the uk, so things are slightly different. I've already done some research, and the property im looking at i will be able to buy, rent out for 550 GBP per month. + i might be able to make larger deposits, depending on how my fathers property business is doing by the end of next year as i might be going into partnership with him which would mean less overheads to consider as well as already having an existing portfolio and tradesmen + estate agents to deal with.

 

[KerokeroCola]

One big problem with using property in an investment is that you cannot diversify. Putting down a $150-300k liability is no small commitment, and I doubt you could commit to any other types of investments with the intensity you would want. It's definitely looking like a promising market these days, but if your dreams of moving to Latin America depend on it, I'd suggest a diversified route.

 

[Plznate]

One big problem with using property in an investment is that you cannot diversify. Putting down a $150-300k liability is no small commitment, and I doubt you could commit to any other types of investments with the intensity you would want. It's definitely looking like a promising market these days, but if your dreams of moving to Latin America depend on it, I'd suggest a diversified route.

The beauty of my position is, as a military member, I can do 20 years if I wish and comfortably retire at 42 with a decent salary for the rest of my life.

Hence why I plan on being as aggressive I can over the next 7 years with it, because if it turns out well then I will be able to have enough capitol to consider funding a business down south. If not, then I will still be in a good position.

 

[malakadang]

From my knowledge in the Australian market, there's an inverse relationship between the real-estate market, and the share market. When the Share market is down, real-estate is up, and vice versa.

Also, If your looking for aggressive shares with enormous volitility, then I would recommend biotechnology penny shares. You could very easily lose all your money, but have the potential to more than quadruple it.

Just a thought.

 

[Grrr]

Liquidity when dealing with stocks, mutual funds, REI's, or any other ownership investment is all the same: very liquid (i.e. log into brokerage account, click sell).

I plan on swing trading on rises and falls, so yes I will be focusing on these types. So no buying bullion bricks to store in the garage or anything like that ; )

Open to the suggestion of purchasing homes though; again looks rewarding since the potential for a comeback in the housing market seems probable over the next year.




I would be willing to assume your friend bought in at the peak? And the beauty of investors is that they think just like how you said: the market is down, housing is in the shits, why throw your money into a loser like that? However, in my opinion, I see it as this; "all homes now on sale for a limited time!". Sure, it may drop slightly, but populations always increase, and land always becomes more scarce. I think I will find a good REI fund and note its price, that way in a year when it has increased a ton in value, I can look back at this thread and kick myself for not following my own advice lol.

It's now getting to the point where the construction business as a whole really has to begin to pick up I'm not really sure if things can even afford to get much worse. Eventually it will, it just depends how long your willing to wait, I'd say right now in my opinion if it's worth anything, that investment in land/property would be a good idea. Recently in the UK I've seen a sharp increase in the number of companies which have been set up, specifically, in order to buy property at cheap prices which indicates a trend to me. Maybe some more belief in the construction business picking up? Who knows.

 

[Viou]

Buy a few blue chip stocks and hold them. Easiest way to invest long term. Good examples are Apple, Microsoft, AT&T, just pretty much anything that's a part of the DOW.

 

[Sillymonkey]

Open to the suggestion of purchasing homes though; again looks rewarding since the potential for a comeback in the housing market seems probable over the next year.

If you are open to the idea of purchasing homes, you should look at the Sydney housing market.

Unlike the housing market in the US, the one in Australia didn't take a hit with the GFC.

A modestly priced apartment in my area of Sydney can give a rental return of approximately 7% p.a., and they aren't incredibly expensive (around my area, that is). The downside to buying an apartment, of course, would be that the value doesn't increase to the extent that houses do, but there is actually a housing shortage in Sydney so there is at least some sort of increase.

Just something for you to think about :idea:

 

[JohnK]

It's something I'll be looking at post-graduation.

 

[neo coolboy]

Upcoming energy and transportation companies also seem like a stable foreign investment. Look into petrobras the Brazilian oil company. Having discovered many large oil deposits of the coast of brazil their future seems to be bright.

And like you said above renting properties is the way to go. People lack credit now in days and even if they have the money they can´t purchase the property they want. I assume you have a relativly good credit and are in position to invest in a house or condo.

Short term = rent
Long term = renewed housing markets