Lets talk money. If your not comfortable talking money, this thread isnt for you. Investing. Who does it? How did you start? How much has it paid off?
I've only invested in my land. What will it pay off? Have to wait and see when I sell the parcels up for sale. I don't think I'd ever invest in a market, but land is pretty darn good IMO.
Property is a good investment, it's hard to loose on it but it can be a long term investment. I have rental properties that make me money while other people pay off the note. When I started out I would live in a house while I remodeled it then flip it. I made enough on 2 houses to put 40% down on the house I live in now. I don't like to play the stock market anymore too many variables that are out of my control.
I work in the financial industry, but do little investing outside of managing the funds making up my 401(k), I hold most of my assets in cash for the time being. Trying to save to buy a house in the next few years.
My family (grandfather, dad and i) own a commercial real estate development company, we are invested in large commercial steel buildings for the most part, manufacturing, office, and warehouse type properties. It's more than an investment for us as its what we do on a daily basis, we are also electrical and construction general contractors, which allows us to do all of the necessary work for fitting up space for new tenants. My grand father started the company in the late 80's after being an electrical contractor for 20 years. It's his passion, work and hunting is all he knows, and if he was responding to this thread, all he would say is "they're not making any more land" invest in land, invest in property that can make you money while you're paying for it. If you want to buy hunting land split it up and lease half, sell Crop rights, or buy rental property if you think you have the where with all to maintain it, i will add that if you buy rental property and would need subcontractors to do most of the general work around the place its not the right investment for you, sub contractors will drive you to the poor farm in this industry! A couple residential units can be a full time job in and of themselves though so be mindful of that.
Property and flipping houses seem pretty popular, but you guys gotta remember that im still in school with student loans and whatnot. It takes money to make money..
In your case it will take other peoples money for you to make money, find an investor to put up cash and you put up the labor,win win for both of you. My self, I'm a land guy.
Rental properties are extremely simple to get started in. Save up enough for 20% down on a house and most banks will grant you the loan...then allow others to pay off the house for you. The only tricky part is NOT investing in junky houses or neighborhoods. They sell cheaper and usually give more cash flow up front, but property values rarely increase and often decrease...not to mention the different demographic of renters uou will have to deal with. In your case, I'd recommend working overtime and extra jobs to get enough start up money to do some business on my own..whether it be lawncare, home renovation, rentals, painting, whatever. A tip my grandfather left me long ago is no one gets rich working for someone else. Work a side business of your own on evenings and weekends to get money saved up to start your own investment whatever that may be. I'm at your same standoff point of school and loans. Once I sell my business this winter I'll have around $35k in the bank. I originally intended to invest in 2-3 rentals and get started early. I'm now waiting to insure I know where I will want to settle once out of school. Going home to kentucky is looking like less and less of a reality. Living in Alaska is my goal so for the mean time I'm holding my money to afford a house right away wherever I land.
buy a small piece of property that is undeveloped and hold on to it a few years. after you're done with school, put a house on it and live there or flip it. Either way you cannot lose.
That is true in investing in the markets also and, maybe, moreso. If you were invested in a fund that tracked the S&P 500 from Jan 1 this year you would be 16% to the good. With $10k that comes out to $1600 for riding the roller coaster all year so far. Nice return but if you use $100k then you start making money. Of course, you can lose that much too. When the market took a nosedive back 2007 I was lucky and jumped out quickly and still lost $25K in a week. I know folks that lost much more. Your best investment is land, even if you just buy 1-5 acres to start. They aren't making any more land but there are more and more people every day.
Personally, I'd watch my *** investing in rental right out the gate. ALWAYS crunch numbers for worst case senerios. Having debt can be a good thing - but having payments you can't make is not. Liquidity is a term for your available money...land isn't very liquid, because it can't be accessed quickly (for the most part). At your age, I would put a premium on liquidity. Look into IRAs and Roths.....research and study what your jobs benefits are. Perhaps the best thing you can do, is put the coin in a simple savings account or perhaps a CD, although CD's aren't worth squat now, you won't touch it which is the primary goal. Starting early is the secret Siman...99% of your friends won't do it, and it is the #1 thing you can do at your age to make life easier down the road. Don't get caught up in the etrade commercials and whatnot. Also, I suggest you read books on it - not get rich quick books but books that teach you what things are, and how they work. Smart people read, it is that simple. The earlier you are gain financial wherewithal, the smarter decisions you'll make. Also, investing can be as simple as paying off car loans (which are evil) and college first. Research what net worth is, and how to increase it. Final point - buy right. I bought property 6 months ago that I could resell today for a 30% profit. It sounds weird, but the day I cut a 35K check, was the day I increased my net worth. I have friends who have money in the stock market, while still having college and car loans. IMO, that is just stupid. Decrease debt first, and then increase saving.
Buying rentals right now is tough as this price range house as taken a big boost with the recent dip in economy. Owning rentals right now is a gold mine. Rentals in south central ky right now are rented within 2-3 days of being advertised right now. No one is buying and no one can get loans. Landlords are becoming increasingly choosy in tenants. Buying a rental house for a smart price is nearly a foolproof plan for someone with some money sense and a decent income coming in. If you can afford to float 2-3 payments, you should have no problem gettin out from under neath a property if everything goes to **** in your life given how fast they are selling now. I've went to several several auctions w my father this summer trying to find more properties, we can't find them for numbers that are safe given what rent they can bring in. Personally I'd watch my *** investing in anything at such a young age that doesn't provide cash flow. Buying land is great, but most land provides no income in return for such a large investment and can only be profited from down the road later upon sale. Later in life? Smart. Initial investment? I dont think so as it can tie up all your capital keeping you from expanding your investments.
I've worked in and around the business for a while... Best year 167% gain. Worst year, lost all of that gain and some more-this goes under the categories of experience and what I heard called 'stupid tax'. There was a time when banks paid this thing called interest...your yields will be sub 2%, more likely < 1/4% unless you have money or are willing to tie it up for some time. Banking in general and savings products in particular have changed a lot in the past 40 or so years...and banks are more regarded as utility now and seem to be less about investment. 401k and similar have been popular for many years with employers offering to kick in some matching $ was gravy. Good vehicle if you make good $, want to reduce your present tax rate, believe taxes will be less in the future or just need an easy way to start disciplined savings. Contributions limited by fed law, investment options are limited by the fiduciary of the fund. Roth IRA similar to 401k, except the taxes are paid first and (theoretically) exempt from taxes at withdrawal. 401k, Roths, and other plans really aren't investments, but rather a way you can start investing with an eye toward retirement. Insurance I don't consider an investment. Stock markets-do your homework on companies, how they make their $, forces that impact their revenue or constrain their profits. Decent rule of thumb-don't invest more than 4% of your investments in a single stock-which helps with diversification and mitigates against those forces that constrain companies/industries profits. Mutual funds / ETFs - pay attention to fees, experience of manager, limits and objectives of the fund that constrain the investment options. House flipping/real estate-there is a place for it, but a) at present few folks are buying homes, b) lots of people lost lots with the bubble burst in '08, it takes time, experience, good choices and understanding of where value can be created or $ thrown away and will never be recouped. Good construction, code familiarity, location familiarity, understanding of the local markets/neighborhoods/community all help. Best advice ever given to me is ask yourself how the others in the deals (broker, real estate agent, financial advisor, house flipper guru, whomever) profits from the deal. Or "Cui Bono" ("as a benefit to whom"). Why do real estate agents try to sell you more than you told them? What's their commission? Why does a broker suggest class a/b/c mutual funds or suggest to manage your assets? Same with every business... "Cui Bono" and "Buyer beware". Oh yeah, also spend less than you make, then you actually have something to invest. I'll save the diversification diatribe and opinions on Fixed income v Equity for another time... Final thought-before risking all your own $. Think about, nay, STUDY what really moves prices up or down (stocks, houses, pork bellies, corn, whatever), look into your crystal ball at the day, week, month or 2 (the election will be key), etc and mentally play a game of "If I think this (what ever 'this' is-candidate a wins, candidate b wins, product Z is released, the price of oil rises or falls, there is another year of bad drought, etc) happens, then the effect will be..." Once you get good at the game, you've moved from gambling to profitable investing, but for now, just squirrel $ away in something safe.
First time home buyers can get into a home with little money down. If you are willing to live in it and work on at at the same time, you can get in on a loan at 3% down might be a little different in OH but still around 5% of course the bank will want to charge you P&I insurance. Buying a flipper is not out of range for a lot of people with steady work and good credit.
I started at 24yrs old (4 years ago) with timid investments into my TSA. My wife started her 401K with her company when she started out of college in 2009. They match $ for $ up to 5%, so we're contributing an effective 12% into that, and we just setup life insurance (as stated, not really an investment), and a UL policy for me to gain some more on the long run. I'm not sold on UL, and I'm contemplating just doing a Roth. I want to keep about 50% of my financial investments at pre-tax and 50% post-tax. Other than that, I've built a decent amount of equity into my home which will pay off when I sell it, but I'm hoping I can pin down a land investment to make offloading the current home, and building on the land some day more financially secure.
Caleb, do you have any debt? That is the first and most important question.... then we can talk investments ...
Technically, not all debt is bad debt...ESPECIALLY when talking investments. Living debt free is the safe way to go, but not always the most prosperous with rates how they are currently.
I agree with PT on this point. I didn't address it before, but paying off debt, is super-important. Did I see something about college loans above? If so, they would be very high on my list of priorities.
Especially at the rate the government is giving us currently. I can buy a car at 1/4 and a house at 1/2 the interest rate the government charges me to get an education. Luckily, I'll be refinancing the loans to private loans upon graduation to get rid of these ridiculous 7.9% rates.
