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need advice from you awesome PatNetters

By AdamCarollaFan follow AdamCarollaFan   2014 Apr 10, 9:15am 20,256 views   56 comments   watch   nsfw   quote   share    


the details:

30s, single, no kids, happy renter, good job, no debt, roth ira and 401K maxed every year

i have a large chunk of change that i'd like to do something with. it's currently earning 0.75%. i don't plan on using any of the money any time soon. also, i have a low financial risk tolerance.

my question is - what should i do with the money to maximize earnings?

i'm thinking of putting it in a 60-month CD earning 2.25% - good idea?

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17   Rew   ignore (0)   2014 Apr 17, 5:06pm     ↓ dislike (0)   quote   flag      

JH, I think the operative word here was "if you buy stocks" ... as in plural. That is to say, not all dividend giving stocks are equal, and it depends on how big a position you can take, in how much those stocks pay back in their dividends.

18   TheOriginalSBH   ignore (0)   2014 Apr 17, 11:20pm     ↓ dislike (2)   quote   flag      

JCP..100% IN
u can't lose....

19   RentingForHalfTheCost   ignore (5)   2014 Apr 18, 1:12am     ↓ dislike (0)   quote   flag      

indigenous says

RentingForHalfTheCost says

Convert it over to Swiss Franc's immediately. About the only way it will still have value in 10-15 years.

Why?

Massive US debt for one. Add in increasing liabilities in Health Care and Social Security, and you have a perfect storm for currency devaluation. Each US dollar I make quickly gets converted to something else. Gold, other currencies, foreign stocks, etc. This place is living on hope and hope only.

20   JH   ignore (0)   2014 Apr 18, 1:45am     ↓ dislike (0)   quote   flag      

Rew says

JH, I think the operative word here was "if you buy stocks" ... as in plural.

It was, but then he blathered on about specific stocks, so I thought I would discuss a specific example of stock from a company that it seems every other person has some consumption of. Demand for Verizon is very high, and 2 year contracts are the norm, so many people are stuck with Verizon. Yet, over 13 years, their stock dividends have barely covered inflation, even in an inflated stock market.

But sure, buy 1,000,000,000 VZ, and you'll get nice dividends. Until the market corrects or crashes, and then I hope the dividends cover your losses.

21   indigenous   ignore (0)   2014 Apr 18, 2:01am     ↓ dislike (1)   quote   flag      

RentingForHalfTheCost says

Massive US debt for one. Add in increasing liabilities in Health Care and Social Security, and you have a perfect storm for currency devaluation. Each US dollar I make quickly gets converted to something else. Gold, other currencies, foreign stocks, etc. This place is living on hope and hope only.

But all the countries are in a currency war.

From what I read the unfunded liabilities are going to come to a head in 2030.

We are in a deflation period because the banks are not lending, technology has made almost everything cheaper, the demographics in the US are shrinking.

Gold is a hedge against inflation not deflation.

22   zzyzzx   ignore (2)   2014 Apr 18, 3:09am     ↓ dislike (0)   quote   flag      

AdamCarollaFan says

what should i do with the money to maximize earnings?

Buy low. Sell high. Works every time!!!

23   indigenous   ignore (0)   2014 Apr 18, 3:14am     ↓ dislike (1)   quote   flag      

zzyzzx says

Buy low. Sell high. Works every time!!!

Cept when you are shorting (8^(l)

24   clambo   ignore (5)   2014 Apr 18, 4:56am     ↓ dislike (0)   quote   flag      

Re: Rentingforhalfthe cost, he has a point, a reason to own Swiss Francs would be to preserve capital buying power v. US dollar. I consider having swiss francs like owning gold, but much more convenient and liquid, no tax on selling it, etc.

When I visited Switzerland in 1974 1 Swiss Franc cost me 33 cents. Today, 1 Swiss Franc costs $1.13
Switzerland is awesome by the way.

Oh, a little off the subject, the Swiss stock market index is up 8.8% since Jan 1 (EWL)

re: stocks being dangerous for the next "crash", well the way to avoid losing money in such events is obvious; have sufficient cash reserves from your *dividends* to pay your bills and do not sell stocks when the market dips down unless you must.

There is always the risk of losing capital with stocks, but some stocks are much safer than others.

My complaint is becoming a shareholder in Solyndra when no one asked me if I wanted to own it. GM and Chrysler too, Citi too, AIG too, Bank of America too, GE too, etc.

25   clambo   ignore (5)   2014 Apr 18, 4:58am     ↓ dislike (0)   quote   flag      

You don't need to go overseas to open a bank account in Swiss Francs if you desire to.

26   Waitingtobuy   ignore (0)   2014 Apr 18, 7:17am     ↓ dislike (0)   quote   flag      

I invest some money in Everbank foreign currency CDs. The maturity is short (3 months) and they are FDIC insured. They have individual currencies or baskets, some of which have interest rates (the value of the currency can fluctuate)
https://www.everbank.com/currencies/rates

27   FortWayne   ignore (4)   2014 Apr 18, 7:23am     ↓ dislike (0)   quote   flag      

It's a simple game of risk vs reward. How much risk can you stomach?

28   epitaph   ignore (0)   2014 Apr 18, 7:48am     ↓ dislike (0)   quote   flag      

Vanguard sounds like what you want. Congrats on being in good financial shape.

29   rufita11   ignore (0)   2014 Apr 18, 7:53am     ↓ dislike (0)   quote   flag      

SoftShell says

Car washes. Invest in publically owned carwashes.

The middle class is extinct.

Only the richens and guttersnipes remain.

Latter washes formers luxery sedans.

All the time. Every day.

I know someone who fantasizes about owning a car wash in retirement ;p Apparently, he just loves spending time at them.

30   Shaman   ignore (2)   2014 Apr 18, 10:05am     ↓ dislike (0)   quote   flag      

I've said it before, but check out Visa stock, 50% up year over year over year. And the Asian countries are going in for cards now big time. Huge expansion!
You can make a bundle on single stocks if you choose wisely. Or you can lose your ass. I've done both. But I've mostly won. A lot. My strategy: choose stocks in companies that are rising stars, upcoming technologies or trending uses. Above all, pick companies that are ethically serving the populace with good product/service. Pick companies that have stuff you buy and are happy with.

31   clambo   ignore (5)   2014 Apr 21, 5:21am     ↓ dislike (0)   quote   flag      

More grist for the mill, re: mutual funds.

If you admire Warren Buffet's success with investing, you can have some of it by owning Fidelity Contrafund.

The #2 stock owned by Contrafund is Berkshire Hathaway. Of course Contrafund also has hundreds of other stocks in the portfolio, but Berkshire is #2 in terms of dollar amount. #1 is Google.

Funds are better than stocks unless you enjoy the activity, and for reasonable risk control you need 20 or 30, of course, picking the dividend paying blue chip stocks is OK.

T.Rowe Price Capital Appreciation, Dodge&Cox Stock, Dodge&Cox balanced, Vanguard Wellington, Vanguard Dividend Growth, Fidelity Contrafund are good, as are others. A fun website is Maxfunds.com to research funds if you are interested.
I forgot to mention, T.Rowe Price and Vanguard offer very low cost financial planning, I think it's $500.
If you have a large enough balance at Vanguard, there is ZERO fee for a financial plan to assist you. Theoretically you could "park" your chunk of dough in a Vanguard money market and then qualify for the free financial plan.
Either way the guys there are very good to talk to, the problem is you are on the phone, Vanguard doesn't have offices all over like Fidelity does.

32   corntrollio   ignore (1)   2014 Apr 21, 6:58am     ↓ dislike (0)   quote   flag      

Go over to Bogleheads and have them set you up on Vanguard with a 3-fund portfolio or whatever. You'll get nice market returns and pay almost no fees and be ahead of almost everyone speculating.

33   zzyzzx   ignore (2)   2014 Apr 21, 10:00am     ↓ dislike (0)   quote   flag      

Get a vasectomy. It's way cheaper than having any kids.

34   justme   ignore (0)   2014 Apr 21, 4:29pm     ↓ dislike (0)   quote   flag      

I am entering from stage left, and the below is specifically not written in response to any other posting in particular:

The single most important question you can ask anyone about their stock tip or other investment idea is WHO they got the idea from, or HOW they got it.

Was it from watching CNBC on TV or some other crappy source that is dominated by the sell-side of Wall St? Did you read it on some financial rag, web or otherwise? Did you base it on some original observation or analysis that you made?

My thesis would be that most investment ideas are subtly planted into people's heads, and they have no idea where it came from, and/or they may not recall the correct answer to that question if queried. A lot of times they are just parroting something they saw on TV or "read somewhere".

That does not mean that the advice is bad or good. Sometime one can even identify a good momentum play from what is richocheting around the echo chambers of the web. But most of the times it means that the train has already left the station.

The point is, investment ideas are rarely original, often bad ideas, and rarely timely.

35   Vicente   ignore (0)   2014 Apr 21, 5:25pm     ↓ dislike (0)   quote   flag      

"Municipal bonds, Ted. Triple-A rating, best investment in the book!"

36   AdamCarollaFan   ignore (0)   2017 Jan 13, 2:18pm     ↓ dislike (0)   quote   flag      

epitaph says

Vanguard sounds like what you want.

thanks to all of you for your informative (and comedic) answers.

i ended up putting the majority of it in a vanguard index funds.

and, yes, i did put some of it in a 5-year CD @ 2.2%. egg on my face for that one

37   _   ignore (0)   2017 Jan 13, 4:21pm     ↓ dislike (0)   quote   flag      

AdamCarollaFan says

i'm thinking of putting it in a 60-month CD earning 2.25% - good idea?

Buy a rental property in the new buildings being built from Austin to San Antonio in good school districts and rent it out

38   HEY YOU   ignore (10)   2017 Jan 13, 4:40pm     ↓ dislike (0)   quote   flag      

Who are these AWESOMES you speak of?
This is patnet. You must have us retardos confused with another site.

39   Strategist   ignore (2)   2017 Jan 13, 5:33pm     ↓ dislike (0)   quote   flag      

RentingForHalfTheCost says

Yes, holding about 20% in Swiss Franc, another 10% share in Canadian and another 10% in Reals (Brazil). The Brazil angle is also a double play, because it might be where I buy land and retire. Both Canadian and Brazil are also plays on precious metals making a comeback, which would strengthen the currencies as well as the countries finances. The other 60% is in a mix of metals, quality stocks (high dividends) and cash.

Renting must be broke by now.
And i'm sure he's paying twice the rent.

40   Strategist   ignore (2)   2017 Jan 13, 5:44pm     ↓ dislike (0)   quote   flag      

AdamCarollaFan says

thanks to all of you for your informative (and comedic) answers.

i ended up putting the majority of it in a vanguard index funds.

and, yes, i did put some of it in a 5-year CD @ 2.2%. egg on my face for that one

Here's the best advise you will receive:
Buy that fucking home. It's going up in value.

41   RealEstateIsBetterThanStocks   ignore (0)   2017 Jan 13, 6:06pm     ↓ dislike (0)   quote   flag      

imagine if you bought 2 years ago.

20% down on a 400K home = $80K.

very modest 7% annual appreciation: $458K

tax free profit $58K

return 72%

how is that compared to Vanguard index fund?

42   someone else   ignore (0)   2017 Jan 13, 6:19pm     ↓ dislike (0)   quote   flag      

i myself have enjoyed the vanguard index funds. low fees, easy to know how you're doing: just listen to the radio or read the papers.

not as much fun as picking individual stocks, but not as dangerous either.

43   Strategist   ignore (2)   2017 Jan 13, 6:21pm     ↓ dislike (0)   quote   flag      

anonymous says

costs to move, costs for new appliances/furniture etc.

Renters have these costs too. But renters don't get a tax write off on interest and property taxes.

44   RealEstateIsBetterThanStocks   ignore (0)   2017 Jan 13, 7:29pm     ↓ dislike (0)   quote   flag      

anonymous says

On that $58K profit did you take into account closing costs, costs to move, costs for new appliances/furniture etc., repairs/maintenance and all the other bullshit involved with a home purchase that adds up and costs more than you planned ?

why do you have to live in it? renters will pay for all those expenses and MORE!

45   RealEstateIsBetterThanStocks   ignore (0)   2017 Jan 13, 7:39pm     ↓ dislike (0)   quote   flag      

rando says

i myself have enjoyed the vanguard index funds. low fees, easy to know how you're doing: just listen to the radio or read the papers.

not as much fun as picking individual stocks, but not as dangerous either.

i have them too for my 401K. other than that i sold all my stocks. rental properties >>> stocks.

46   Shaman   ignore (2)   2017 Jan 14, 6:06am     ↓ dislike (0)   quote   flag      

I invest in stocks of companies that provide a valuable service to me. Any company that is doing something good and indispensable for its customers will grow and grow. This formula hasn't gone wrong yet! Sometimes it's slow but usually it beats market averages! For example: netflix.

47   Strategist   ignore (2)   2017 Jan 14, 7:52am     ↓ dislike (0)   quote   flag      

Ironman says

That's just icing on the cake along with the property tax deduction. I don't consider the house an "investment". I bought "shelter", and as long as the shelter price was affordable and in line with rental prices, the MID and tax deduction is found money.

A house you live in is your shelter and not an investment. Wether the price of your shelter goes up or down makes no difference, because it's still the same shelter.

48   Strategist   ignore (2)   2017 Jan 14, 8:47am     ↓ dislike (0)   quote   flag      

Ironman says

Ha ha... I went through that when purchasing the current house. The realtor was so pissed when I told her what I was going to spend, and she kept coming back saying "But, you qualify for so much MORE"... Needless to say, she WASN'T the realtor that ended up making the commission when I bought.

Many people have this belief.....If i qualify, i must be able to afford it.

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