Sock_Monkey on 14/9/2015 at 05:20
Quote Posted by Pyrian
How in the bloomin' heck are you clearing $36,000/year in savings off of $45,000 salary? :eek:
Nope, I work 9 out of the 12 months so nowhere as much as that.
Quote Posted by icemann
Still living with parents I'd assume
Ignorant as well as blind, huh? I mentioned before I live in a rental apartment with my boyfriend.
Queue on 14/9/2015 at 05:36
Do yourself a favor and invest it.
More specifically, invest it in an eight-ball and a shit load of hookers.
nickie on 14/9/2015 at 10:35
Yet again Queue reminds me that I must change my will.
I'd never buy a new car now - every car I've ever had (10 I think) has either been broken into, beaten up by some other car or someone's tried to nick it. But that's the UK.
PigLick on 14/9/2015 at 14:12
flggg
heywood on 15/9/2015 at 17:13
Quote Posted by Sock_Monkey
Please correct me if I am wrong here: I would like to purchase real estate (land / houses) but I have heard it is a very hands-on experience and I would have to be very familiar with the place / local culture to know my risks and chances of success? Currently, I live in Orlando which is where I have been working my contract job and have been doing so for the last 4 years. I would say that I'm still relatively new to the place. Also, career-wise, there aren't many job opportunities here that are in my line of work. The only thing keeping me here is the current studio / company that I contract for which I would eventually like to break and move to another company (most likely it will be a different state altogether). Orlando is said to be an upcoming hub though (besides for the already-existing Disney, NASA, Universal and Busch Gardens) and it has a fairly low cost of living so I think it would be wise to invest in some way, shape , or form in this city.
Owning a house is very hands-on. Owning an apartment/condo is usually not so hands-on, but it depends on what you want to do with it. I don't know what the housing market is like in Orlando, but more generally this seems like a fairly good time for young home buyers in the US. It's easier to qualify for a loan than it was a few years back, rates are still low but on their way up, prices are also on the way up but still below their 2006/2007 peaks in most places, and sales are brisk enough, so if you suddenly had to move you're less likely to get stuck not being able to sell. But the calculus has to include how long you expect to keep the home (I would say 5 years minimum or don't bother) and what your expected housing costs would be if you continued to rent over the same period.
Tony_Tarantula on 19/9/2015 at 01:43
A lot of good points made in the thread.
I would in particular agree with the idea that buying an expensive car is a poor idea. To quote a friend I have who works mid level in a large investment banking firm (household name in Europe big), the way you become wealthy in the long run is by build equity in whatever form that takes. Car's are a terrible expense because they are a rapidly depreciating asset with no measurable return over less expensive alternatives in most cases (exceptions noted for cases like Teslas or hybrids for people who drive long distances). In any case I wouldn't recommend buying them new unless it's imperative for whatever reason that you have the highest reliability possible.
For what to invest in I'm not entirely keen on the option you've mentioned. The positives is that they have a good level of diversification which will do a good job of mitigating the various types of risk (e.g. interest rate risk, systemic risk on the national level, etc) that investing will encounter. Overall they seem to have a roughly 1.4 beta for >60% stock allocations. That's both a good thing and a bad thing.
However keep in mind that a good financial advisor is worth their weight in gold. A lot of "high finance" people use personal advisors precisely because individual investing requires a specialized focus that is significantly different from the skills needed to be an effective investment banker, researcher, or trader.
I'd like you to research what an "ETF"/Exchange Traded Fund is and how they work first. Investopedia is a good starting point. Short version: they're similar to shares in corporations except you're buying into part of a larger portfolio.
Tony_Tarantula on 19/9/2015 at 01:47
Quote Posted by heywood
Owning a house is very hands-on. Owning an apartment/condo is usually not so hands-on, but it depends on what you want to do with it.
If you want a more hands off way of doing look into somethingn called a REIT(Real Estate Investment Trust). Similar to how buying shares of a corporation let you invest a small amount in exchange for a small amount of equity as opposed to owning a large portion of the equity for a contract, REITs let you invest smaller amounts of cash into a managed Real Estate company that you can receive returns on. Liquidity is typically very high for publicly traded REITs, and very low if they're not. The good part is that REIT's are are requried by law to pass on a large portion of their profits to equity investors in order to maintain the benefits they enjoy from being structured as a REIT.
Sock_Monkey on 21/9/2015 at 05:43
Quote Posted by heywood
Owning a house is very hands-on. Owning an apartment/condo is usually not so hands-on, but it depends on what you want to do with it. I don't know what the housing market is like in Orlando, but more generally this seems like a fairly good time for young home buyers in the US. It's easier to qualify for a loan than it was a few years back, rates are still low but on their way up, prices are also on the way up but still below their 2006/2007 peaks in most places, and sales are brisk enough, so if you suddenly had to move you're less likely to get stuck not being able to sell. But the calculus has to include how long you expect to keep the home (I would say 5 years minimum or don't bother) and what your expected housing costs would be if you continued to rent over the same period.
Thanks Heywood. I think I'll do some research on what goes into buying / keeping a home for it to be a worthwhile investment. But I know it's a better option than say, investing to buy a car.
Quote Posted by Tony_Tarantula
If you want a more hands off way of doing look into somethingn called a REIT(Real Estate Investment Trust). Similar to how buying shares of a corporation let you invest a small amount in exchange for a small amount of equity as opposed to owning a large portion of the equity for a contract, REITs let you invest smaller amounts of cash into a managed Real Estate company that you can receive returns on. Liquidity is typically very high for publicly traded REITs, and very low if they're not. The good part is that REIT's are are requried by law to pass on a large portion of their profits to equity investors in order to maintain the benefits they enjoy from being structured as a REIT.
I found this very helpful. Thanks, Tony! I'll look into REITs. Were you also meaning to say that betterment.com isn't a good option?
Tony_Tarantula on 30/9/2015 at 22:26
Quote Posted by Sock_Monkey
I found this very helpful. Thanks, Tony! I'll look into REITs. Were you also meaning to say that betterment.com isn't a good option?
Not really. I don't know anything about them. I am saying that they're not as interesting as they would have you believe. You can purchase equivalent investment products from almost any broker called "Exchange Traded Funds". From what you've told me it sounds like you'll want a diversified fund with some US equities, some foreign equities, and some bonds....but that said I'd still hold off on investing because October looks to be turbulent. Without getting into technical specifics there is a non-trivial risk of short term correction in US equity indexes leading into a slingshot move upwards into 2016, but the weekly and monthly closes will provide either confirmation or disconfirmation.
