Need Investment Advice

[Zx2guy19]

Normally I don't make information like this public, but I really do feel like there are some people on this site that could lead me in the right direction to make the best of this situation.

 

I am not making this post to boast or brag, I simply respect the opinions of members in central Ohio. I have other, more long term forums I could post this on, but they do not know Columbus and the opportunities that are available in this area. If anything on here is inappropriate, please let me know and lock the thread.

 

Recently (started in 2011) I have been flipping houses quite successfully. However, as the market turns and improves, solid investment houses are harder and harder to come by and it's usually the "big dogs" that get to them because they have more pull, more inside information and more money. I am happy to see the market turning around, but naturally that comes at a cost to me.

 

My most recent sale was for a house in Canal where I walked with a pretty substantial check on a house that I had no mortgage on, leaving me with quite a bit of cash. Naturally, at 23, more than I have ever had.

 

I am looking for ways that I can grow this money relatively short term. I do not want this money tied for any more than 6-9 months at a time, unless it is in a business. So, that rules out money markets, IRA's, etc. Some may feel that is dumb, but with the way I live my life (a 1/4 mile at a time), I cannot have this money tied up for 40 years, especially since I am 23. Hell, I may die in a year or 2 and then it's all for nothing.

 

I am an HR manager at a company located here in Columbus, so I have a salary job that I enjoy. I also have 2 rentals properties that I have been realitively successful with.

 

I have been thinking about opening up a business. As I've mentioned twice before, I am 23, but I have a pretty good head on my shoulders. I have a degree, work a full time job, own a house, blah blah blah. I have courses towards my MBA and I have run my own profitable business (LLC) for the last 8 years (2 of which it was an LLC). However, that business will never grow to anything more than 5-7k a year.

 

Let's say I had...75k to invest into a short term investment OR OR OR a business that I could run full time and grow into something substantial, such as a franchise (I have looked into Tom and Chee).

 

Thoughts? Again, if this is douchey, please tell me to fuck off. I am just looking for advice for someone who has been through a similar situation and could give me some guidance.

 

Thanks,

Brad

 

PS, the money is in the bank, so please don't come and kill me. :gabe:

[LJ]

Personally I would leverage it into more rentals

[Eric1647545520]

I am 27 and I completely hate you;

that is all

[SRTurbo04]

two chicks at the same time....

 

 

 

 

 

but in all seriousness I agree with below. Constant income coming in if you guys a good tenant.

 

With that short of a time period your gonna be looking at something really high risk for a good return.

 

Personally I would leverage it into more rentals

[Green Bastard]

You could always look into renting section 8 housing, at least that way you are guaranteed money every month when there is a renter in there.

[Zx2guy19]

This is going to sound lame, but for 2 years I've taken HUGE risks with real estate. For the first 2 properties I bought I purchased them site unseen because of the quick deadline. I don't have a problem with risk. No risk, no reward

 

I think rentals are the way to go long term, but if I were to buy 3 rentals, I wouldn't have any money left to reinvest. That's scary to me haha...I've gotten relatively addicted to flipping.

 

Any input on buying 50k worth of silver or gold and hold onto it for 6 months?

[Zx2guy19]

I am 27 and I completely hate you;

that is all

 

Still time brother.

 

You could always look into renting section 8 housing, at least that way you are guaranteed money every month when there is a renter in there.

 

My one house is in the process of going through section 8. Big pain in the ass, but guaranteed. I have a contractor manage it so I don't have much to do with it aside from bank rolling that crap.

[zeitgeist57]

You could always look into renting section 8 housing, at least that way you are guaranteed money every month when there is a renter in there AT A LOWER RENTAL RATE THAN MARKET, and with a higher-than-average level of repairs.

 

In this economic environment, you're not likely to find anything that pays a decent annual rate of return without taking on risks. As the bond market is coming back, look into 7-day floaters, which as the name implies only locks your $$$ in a backed-and-traded investment for 7 days and pays 2-4%. Put $20k in that.

 

I'd worry about starting another business only because it sounds like you've got a lot of irons in the fire already. Is it worth investing $50k in something that you can't put 100% of the time it needs to get it off the ground successfully? It's a gamble anyway, but a lot of business investments are tax-deductable...a nice perk.

 

I wouldn't buy gold or silver for the short term at all. Do you have any stocks in a brokerage account? Do some options trading...

[Green Bastard]

I did not know that Clay. I kind of figured the repairs would be higher than normal (as a lot of people on section 8 prolly just don't care), but I didn't know the rental rate was lower.

[Littleguy]

Any input on buying 50k worth of silver or gold and hold onto it for 6 months?

 

That would be a little risky for me right now. I don't have specific advice but investing in a blue chip stock that pays a dividend and is near a 52 week low would be reasonably safe. Nov, aapl, and orcl come to mind.

[Zx2guy19]

In this economic environment, you're not likely to find anything that pays a decent annual rate of return without taking on risks. As the bond market is coming back, look into 7-day floaters, which as the name implies only locks your $$$ in a backed-and-traded investment for 7 days and pays 2-4%. Put $20k in that.

 

I'd worry about starting another business only because it sounds like you've got a lot of irons in the fire already. Is it worth investing $50k in something that you can't put 100% of the time it needs to get it off the ground successfully? It's a gamble anyway, but a lot of business investments are tax-deductable...a nice perk.

 

I wouldn't buy gold or silver for the short term at all. Do you have any stocks in a brokerage account? Do some options trading...

 

Excellent advice! I do not own any stocks at all. I am scared shitless of them (contradicting my risk statement earlier) because my grandpa lost ~100k in the stock market years ago. That makes me Leary because he was extremely business savvy.

 

I am on the same committee for a local HR chapter for a dude who owns a successful brokerage (libertas) and I have emailed him about 20 minutes ago to see if he wants to help (I know there is a fee). I am interest in the 7 day bond.

 

That would be a little risky for me right now. I don't have specific advice but investing in a blue chip stock that pays a dividend and is near a 52 week low would be reasonably safe. Nov, aapl, and orcl come to mind.

 

What are your concerns with metals? Not questioning, just curious. I don't even know how to buy them haha

[Littleguy]

What are your concerns with metals? Not questioning, just curious. I don't even know how to buy them haha

 

I just think they have further to go on the downside, especially with inflation so low. Plus they won't pay any income to you while you hold them. As far as commodities I'm only in sttyd but it doesn't have any short term catalysts.

[Sledhead36]

If you put $75k into Tesla 9 months ago you would have $272k today.

 

Oh, and probably $305k by October.

Edited June 6, 2013 by Sledhead36

[Zx2guy19]

We make a shit loan of parts for Tesla. I have a rear trunk stop on my desk as a pen topper, ha.

 

I'd love to put it all in one spot. That would be sweet.

[Zx2guy19]

That makes me sick about Tesla. That is incredible growth.

[Doc1647545523]

I am no investment expert ..... far from it. I think you're doing the right thing to survey for opinions, but when you get guidance from an investment expert, weigh it heavily compared to the advice you get here.

 

That said, I'll throw in my 2 cents' worth on these points:

 

This is going to sound lame, but for 2 years I've taken HUGE risks with real estate.........

Any input on buying 50k worth of silver or gold and hold onto it for 6 months?

 

Your huge risks in the past have paid off. Don't fall into the trap of thinking that your luck (or great business intuition, or whatever you believe it to be) will last forever. It doesn't.

 

I've done well in gold and silver, but I wouldn't advise getting into it now with the idea that you'll be able to get your money out quickly with a profit. Although it could happen, the metals markets are generally overvalued right now, and it might take you a decade to get your money back.

 

I'd love to put it all in one spot. That would be sweet.

 

Putting all your eggs in one basket? It has some appeal at a gut level, but it makes a poor investment strategy. Hell, it isn't even a good gambling strategy.

[LJ]

This is going to sound lame, but for 2 years I've taken HUGE risks with real estate. For the first 2 properties I bought I purchased them site unseen because of the quick deadline. I don't have a problem with risk. No risk, no reward

 

I think rentals are the way to go long term, but if I were to buy 3 rentals, I wouldn't have any money left to reinvest. That's scary to me haha...I've gotten relatively addicted to flipping.

 

Any input on buying 50k worth of silver or gold and hold onto it for 6 months?

 

Leverage that 75k into 2 rentals @100k. Then re-leverage your rentals through a HELOC and use that cash to get your flips. If you are careful with your flips, you should always be able to get that equity back into your rentals. This is how all the big guys got started back in the day

[2highpsi]

I'd love to put it all in one spot. That would be sweet.

 

Walk into Hollywood Casino and throw it all on Black.

 

*end sarcasm

 

 

 

You should most definitely diversify it if you want to play in the market.

If you want to make big money on short term semi liquid investment you need A LOT of money. 75k just isn't much nowadays. Don't get me wrong, you are in GREAT shape for someone your age. Just don't get ahead of yourself, and don't look for stuff that sounds too good to be true.

 

Stick with what you know. Sometimes the answer is to leave the money on the sideline (ie. a money market account, or online savings that has a decent yield on it) and wait for an opportunity. Some of my best investments were because I had fast access to cash that no one else did at that given time.

 

Clay and Doc have given you solid advice

[Littleguy]

That makes me sick about Tesla. That is incredible growth.

 

Tesla has been on a tear lately but I have one major major problem with Tesla......they don't make any money (and they are priced right now as if they were producing 1 billion plus in earnings, which I don't think they will see for a long while if ever).

[Sledhead36]

Tesla has been on a tear lately but I have one major major problem with Tesla......they don't make any money (and they are priced right now as if they were producing 1 billion plus in earnings, which I don't think they will see for a long while if ever).

 

As was every dot.com in the 1990's and everyone made out like bandits.....

[2highpsi]

As was every dot.com in the 1990's and everyone made out like bandits.....

 

Not sure if SRS

 

 

You playing in this stuff is a whole different story than a young man sticking his entire net worth into it.

 

 

http://my.voyager.net/~jrrandall/StkChrt0.GIF

 

You don't seriously believe that astronomical PE ratios can be sustained for anything long term do you?

 

Your entry position into Tesla stock would probably represents early 90s NASDAQ. While I believe Tesla is in for a dip, you will still be ok.

Anyone hopping into Tesla now, would be like the poor saps that got into the .com game in late 99-2000.

 

If I were you, I would take some profits. If you don't want the immediate tax burden but still want downside protection, maybe you could Buy a Put or something.

 

Pigs get fat, hogs get slaughtered.

[TTQ B4U]

Personally I would leverage it into more rentals

 

^^ this. Wife and I started in property at a very young age and now have several in different areas all doing very well for us. Go slow and steady and you can reap some very nice rewards.

[Sledhead36]

Not sure if SRS

 

You playing in this stuff is a whole different story than a young man sticking his entire net worth into it.

 

http://my.voyager.net/~jrrandall/StkChrt0.GIF

 

You don't seriously believe that astronomical PE ratios can be sustained for anything long term do you?

 

Very true, you have to diversify. But I have been blown away more times on how profitability and PE had nothing to do with the rise of a stock price.

[Geeesammy]

I'm 21, with a few thousand..

Someone show me the way?

 

Long term, Roth IRA. It's what I'm doing and make a hefty deposit of my income monthly (for my age at least) into it...

 

Short term, I have no clue. I was getting into flipping cars before I moved, made some decent money off of quick head gaskets, but other than that I know nothing else!

 

Good luck!

[2highpsi]

Very true, you have to diversify. But I have been blown away more times on how profitability and PE had nothing to do with the rise of a stock price.

 

Short Term, I 100% agree. "Bottle rocket" stocks. They seem to defy gravity.

 

Until the powder runs out.....