patrick.net

8% return is what 'everyone expects' from stocks.

It seems crazy to expect that going forward but those are the assumptions you get from the 'financial planning' industry/scheme.

taking money from your 401K is simply having it taxed as current income, plus a 10% penalty.

So you'll be taking at 40% hit right off the bat.

Not too terribly attractive, but if you are secure in your work you could consider a 401k loan. These aren't so bad, you have to pay interest, but it is to yourself. You'll technically be taxed twice on the interest you've had to pay into your 401k, once when you first made the money and again when you draw it out of the 401k.

I really don't think we're heading into deflationary collapse from here (despite what the bond rates are saying), so you have my blessing to invest in rental real estate.

Leech.

I'm going to sound like a worn-out record to the normal folks on here... But an awful lot of the "advice" I hear in regards to getting out of the market is based almost entirely on recent market activity. This is usually the case- people get freaked out, assume that "this time is for real" and assume that we're all in a new paradigm where we should all stuff money under the mattress and abandon the stock market.

The truth is that for the last 100+ years stocks have on average gained a median of 7-8% per year- over the Long term. Long term being a 30-40 year stretch. Doesn't sound like much but once the compounding starts its not hard to eventually have a million bucks by the time you're 60.

I also find it interesting that for the most part, a lot of real estate investors are using recent values ( bubble values) as a gauge to what they think is a good value in real estate. Truth be known prices in many major metros like those in CA, NY, MA, and so on are still overpriced. I think this is because people either willingly or subconsciously believe that today's RE slump is a temporary bump on the way back to another spectacular bubble. Why do I find this interesting? Because stocks are in fact at pretty low prices now. If we look at RE and stocks as simply investments stocks are a bit more compelling. If you wanted to buy a car and that car was $10,000 less tomorrow, would you buy it? Of course you would. Yet when it comes to stocks people do the total opposite and dump em'.

All I can say is that growing up, my parents owned 2 rentals. They were a pain in the ass. Houses deteriorate and need constant and often expensive repairs, especially when you get renters coming in every few years and have to re-paint the whole interior. At the end of the day they did ok on them. But nothing compared to if they had taken that same money and stuck it in the market.

But anyway, I probably wouldn't seek important, life-changing investment advice on a forum. Talk to a financial adviser or someone who can take a look at your situation and give you some opinions.

It's 7-8% Average, if you live 100 years.

Between 1968-1980, the stock market hardly moved at all over that time.

1980-2000 it boomed.

So it all depends on when you reach peak savings, for most people, in their middle ages.

If you turned 50 around 1980 or 1955, great! You'd have been investing into a boom.

If you turned 50 in 1968, not so great. Or in 2000 for that matter. You'd be 61 this year and if you had invested in broad domestic market indexes, it's pretty much a wash.