Author Topic: Thinking through investment options  (Read 1618 times)

Fenfen

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Thinking through investment options
« on: February 08, 2016, 01:45:27 PM »
My wife and I recently sold a house and we divided the funds into our personal accounts.

I've been thinking through what I plan to do with my cash. There are a few things I am considering.

Here is some background:


32 y/o married no kids

Aside from retirement accounts I am 100% VTSAX (~75k). I plan to diversify (part of the reason for this post) soon.

Recently put in $15k into VTSAX buying into the downturn.

I have about 120k cash left and I am considering a few options:

--Continue buying into VTSAX, but also diversify into either a) a bond fund b) a REIT.

--Purchase a multiple unit property as a long-term investment property. I'm looking at areas where I can purchase cash, with the goal of the property to generate cash flow immediately. I've never been a landlord (renting a room in a house doesn't really count compared to this venture), and would likely look to a management company. Would conduct relevant research on properties before purchasing.

--Open a Wealthfront/Betterment/etc account and let the computers do their thing.

Thoughts

I've gone back and forth about whether real estate makes sense. I'm attracted to the cashflow, though I know it's not the only way to go.

Since I am only in VTSAX I know at some point I should diversify. However, with the downturn, is now the time to get some extra bang for the buck, especially since I am relatively young? I don't think I would put all of my remaining cash into VTSAX, but maybe I buy more now than I would have otherwise.

I'm not sure if there is a bad decision in here, per se. I guess I'm really weighing the merits of diving into real estate vs continuing to invest in the markets and diversify my asset classes. I know this forum being the investors forum may focus more on that, but any feedback is appreciated.

FIRE47

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Re: Thinking through investment options
« Reply #1 on: February 08, 2016, 02:08:10 PM »
Without getting into the bonds or the REITS - I would just like to mention that VTSAX is only US based equities - almost all other areas of the world have also been hit even harder over the last 1-2 years - so it may pay off to diversify even more given the pullback rather than less and just going VTSAX.

I'm not in the US so I'm not sure what the experts recommend as far as home country bias there but International developed and emerging markets have been absolutely pummeled and are well into bear market territory, whether that represents an opportunity - who knows but going by your post you were aiming to look at more risk for the potential for more reward - this would seemingly fit the bill.

Keith123

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Re: Thinking through investment options
« Reply #2 on: February 08, 2016, 02:18:22 PM »
My wife and I recently sold a house and we divided the funds into our personal accounts.

I've been thinking through what I plan to do with my cash. There are a few things I am considering.

Here is some background:


32 y/o married no kids

Aside from retirement accounts I am 100% VTSAX (~75k). I plan to diversify (part of the reason for this post) soon.

Recently put in $15k into VTSAX buying into the downturn.

I have about 120k cash left and I am considering a few options:

--Continue buying into VTSAX, but also diversify into either a) a bond fund b) a REIT.

--Purchase a multiple unit property as a long-term investment property. I'm looking at areas where I can purchase cash, with the goal of the property to generate cash flow immediately. I've never been a landlord (renting a room in a house doesn't really count compared to this venture), and would likely look to a management company. Would conduct relevant research on properties before purchasing.

--Open a Wealthfront/Betterment/etc account and let the computers do their thing.

Thoughts

I've gone back and forth about whether real estate makes sense. I'm attracted to the cashflow, though I know it's not the only way to go.

Since I am only in VTSAX I know at some point I should diversify. However, with the downturn, is now the time to get some extra bang for the buck, especially since I am relatively young? I don't think I would put all of my remaining cash into VTSAX, but maybe I buy more now than I would have otherwise.

I'm not sure if there is a bad decision in here, per se. I guess I'm really weighing the merits of diving into real estate vs continuing to invest in the markets and diversify my asset classes. I know this forum being the investors forum may focus more on that, but any feedback is appreciated.
For some background:  I own a 3 family house and 2 condos that I rent.  My family has had a small real estate brokerage for almost 40 years so I have access to very good advice when it comes to finding deals.  You will need this also. 

My only advice is not to buy a multi-unit property unless you are pretty handy and have a high tolerance for emergencies.  Management companies are very expensive and don't care about the property like you will.  You will need to be hands on, in my experience, if you expect to make a good return.  In the past 6 months, I have had a few big problems.  The water main broke on the 3 family causing me to have to shut the water off for all 3 units and have an emergency call to a plumber.  The gas to one of the condos wasn't working one cold night also.  That was another emergency call to the gas company.  It ended up being a problem with the gas meter itself and the flow.  Also, the main drain at the other condo got blocked which made me have to drain the system from above the blockage.  The result was getting pretty covered in all manner of sewage as I caught the water in 5 gallon buckets.  Not a lot of fun and definitely not worth it if you're not getting a very good return. 

Fenfen

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Re: Thinking through investment options
« Reply #3 on: February 08, 2016, 04:59:58 PM »
Keith123,

That is what I needed to hear. I had talked myself out of it and then opened my computer and started to browse...

Thank you--