Author Topic: How to invest my fortune??  (Read 1740 times)

torbisen

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How to invest my fortune??
« on: August 04, 2016, 02:58:19 PM »
Hi. I have presented me in other threads here, so some of you might have seen my numbers before. My situation today is this.
Assets:   House to live in         Market value: 470.000$
              Rental apartment     Market value: 305.000$   Sell value after tax   253.000$   (Bought for 117.000 in 2000)
              Rental net income after tax and monthly fees on it :    782$ a month
              Stock fund               Todays value 95.000$
              Debt                        411.000$  (Interest rate 1,8% average)
              Cash                        235.000$  (Interest rate 1,6%)
              Car                          Sell value 53.000$  (Two years old Tesla)
              Saving rate              3800$ a month plus the money from the apartment (4500$ a month all together) (budget).

I have several ways to go on from here. And i want you to help out.
First the reason i have 235.000$ on an account with less rate than my loan is that they have been taken out of some investments recently. Funds that took to much of an fee and were not good enough and so. Also i do some stocks which i recently sold with a good result.

I am about 81000$ from beeing debt free keeping both house, apartment and car. I KNOW i can sell the car and buy i cheap one.

I could sell the apartment (and be about 170.000$ i plus) because the prices have risen so much recently that i fear there is a boom coming there. The 782$ a month which comes out of it (9384 a year)  is only a 3.7% investment payback on the Sell value after tax. You would expect stocks to do better than that in the long run, but then you have the value increase in the apartment also as long as there is no boom and crack in the prices. if there is a crack, i will still get my rent, and it will be relatively better in comparison to the new price eventually.

I could pay down my debt with all my cash, or i could buy stocks or funds for them thinking they are gonna beat the 1.8% interestrate on them in the long run.

I could buy the stocks or funds in to ways. Put it all in now, or divide int twelve or something and do a little every month.

What would you guys recomend. I am already invested in the Housing marked with my house, so selling apartment would even out more between the stock marked and Housing marked when it comes to investment balances. Now i am way overweight in the Housingmarked, but i like the hard cash coming from the rental also. Its a little different to stocks kind of.......

Many choices..... Tell me about how you do it or would do it and why.   

By the way i live in Norway.       

frugledoc

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Re: How to invest my fortune??
« Reply #1 on: August 04, 2016, 03:10:58 PM »
Hi. I have presented me in other threads here, so some of you might have seen my numbers before. My situation today is this.
Assets:   House to live in         Market value: 470.000$
              Rental apartment     Market value: 305.000$   Sell value after tax   253.000$   (Bought for 117.000 in 2000)
              Rental net income after tax and monthly fees on it :    782$ a month
              Stock fund               Todays value 95.000$
              Debt                        411.000$  (Interest rate 1,8% average)
              Cash                        235.000$  (Interest rate 1,6%)
              Car                          Sell value 53.000$  (Two years old Tesla)
              Saving rate              3800$ a month plus the money from the apartment (4500$ a month all together) (budget).

I have several ways to go on from here. And i want you to help out.
First the reason i have 235.000$ on an account with less rate than my loan is that they have been taken out of some investments recently. Funds that took to much of an fee and were not good enough and so. Also i do some stocks which i recently sold with a good result.

I am about 81000$ from beeing debt free keeping both house, apartment and car. I KNOW i can sell the car and buy i cheap one.

I could sell the apartment (and be about 170.000$ i plus) because the prices have risen so much recently that i fear there is a boom coming there. The 782$ a month which comes out of it (9384 a year)  is only a 3.7% investment payback on the Sell value after tax. You would expect stocks to do better than that in the long run, but then you have the value increase in the apartment also as long as there is no boom and crack in the prices. if there is a crack, i will still get my rent, and it will be relatively better in comparison to the new price eventually.

I could pay down my debt with all my cash, or i could buy stocks or funds for them thinking they are gonna beat the 1.8% interestrate on them in the long run.

I could buy the stocks or funds in to ways. Put it all in now, or divide int twelve or something and do a little every month.

What would you guys recomend. I am already invested in the Housing marked with my house, so selling apartment would even out more between the stock marked and Housing marked when it comes to investment balances. Now i am way overweight in the Housingmarked, but i like the hard cash coming from the rental also. Its a little different to stocks kind of.......

Many choices..... Tell me about how you do it or would do it and why.   

By the way i live in Norway.       

why are you switching . and , s

Shor

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  • Location: Orange County, CA, USA
Re: How to invest my fortune??
« Reply #2 on: August 04, 2016, 03:15:10 PM »
why are you switching . and , s
European standard is that the period (.) is used for every thousands placement, and the comma (,) is used for the cents separator (unofficial terms). I don't know why it's reversed from the US, but that's the reason it might look odd to you.

daverobev

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Re: How to invest my fortune??
« Reply #3 on: August 04, 2016, 04:14:41 PM »
The return on the rental isn't great but I don't know if there are tax breaks either way in Norway.

In terms of what to invest in, the standard: local and global stocks plus local bonds via low fee etfs or mutual funds, in the most tax advantageous way. That should be the bulk of your assets.

I'm fairly risk and debt averse, so I'd probably use some cash to reduce debt and invest the rest. The rental has to be your call, but if it is low hassle I might keep it. Stocks are expensive too, but having too much in real estate is being over exposed to one thing.

I guess I'd sell the rental.

The other thing is, as far as I know, there is a good set of government benefits in Norway? Pension and so on.

torbisen

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Re: How to invest my fortune??
« Reply #4 on: August 04, 2016, 09:59:57 PM »
Actually I am 41 years and if I stay in my job i will pension at 57 years (I am a helicopter pilot in the Air Force). The pay will be good, around 60% of todays pay i think ,which is around 130.000$ today x 0,6. If I quit working totally i will get some pension at 67. Have not bothered to check how much, but i think around 30.000$ maybe a year.
I work search and rescue in Norway, so i am not going to war regurarly as your pilots are :-). I love my work and even more my collegues, but its time consuming to be away from family 120days a year, although, and certainly by American work standards, having the rest of the year off is very generous. My kids are 7 and 9 today, and depending on how the Stockmarked goes in the nearest years it will still take me some years to eventually break free for sure, and its nagging me that i cant do it now, Because this is the most important time of my kids life to be there for them. Another way to do it is to really save for 3-4 years more, than do another kind of work maybe 50% or less after that. It is really tax efficient to earn a little bit. 25.000$ a year is almost tax free, maybe tax is 3000$. Even though I always have saved mor than my mates and invested in a rental and some stocks i should have realized the opportunity to go all free a little earlier. I just thought of it as investments until i read this blog a few year ago. Norway is a little more expensive than United States to live in, so 23.000$ like MMM family will be a little rough for my family i think.

torbisen

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Re: How to invest my fortune??
« Reply #5 on: August 04, 2016, 10:18:51 PM »
Since i live in my house, and will do for at least the next 15years, maybe its wrong to say i am in the housing marked with it? I dont care about the price because i just live in it. Anyone agree? Then its easier to think that i should keep the rental. The rental has been the core of my wealth increase since its grown threefold since i bought it, and the rent by 2,5 almost.