If you had $10,000 laying around...

[CoBeerToad]

$10k put into a retirement type account will turn into a sick amount of money down the road. But where is the fun in that. Me, I'd put it into the house. A remodel job or two will also pay out dividends down the road and you will get to enjoy it as well.

[rondocap]

On these investments, what are the average or conservative gains? If a Savings account is only like .08%, will these other investment options yield higher rates? 1-5%? Or what?

[Topless]

Originally Posted by rondocap

On these investments, what are the average or conservative gains? If a Savings account is only like .08%, will these other investment options yield higher rates? 1-5%? Or what?

The mice type:
"Past performance is no guarantee of future gains."

It really depends on your goals and how much you are wiling to risk. If you are really financially well established you may be willing to chase higher returns knowing that you could lose it all. I tend to look at investments long term and I am not much of a gambler. 5 years is a very short investment window for me.

With the OP I agree that the first question should be "What are your goals?" Fatmike gives very sound planning advice that I agree with but it always depends on your goals. $10K might just be 6 months of living expenses that you don't want to risk so leave it in the bank. The question "What would I do with $10k?" is probably not very useful because each of our goals and situations are different.

[Porsche Chick]

Originally Posted by rondocap

On these investments, what are the average or conservative gains? If a Savings account is only like .08%, will these other investment options yield higher rates? 1-5%? Or what?

No one should ever give investment advice, but I will offer this; I like a high dividend yield on a solid stock. Yahoo financial has some wonderful screeners that you can use to find a return from 2% on up into double digits. I have a few that were yielding 8-10% when purchased and the increase in price is just gravy. Then you have to figure out what kind of market cap you are comfortable with, which industries you know something about, and dig into the companies to see which ones are solid. Set a reasonable stop loss.

[BruceH]

Spend a few bucks on a book. The rest in an IRA. Take a look at this site and then buy the book. Easy read and the best investment advice you will ever get IMO. Porsche Chick is right about index funds.

http://www.gonefishinportfolio.com/

[AndyA6]

Ok guys! Lucky me I have one credit card I pay off every month. Box is paid for, too. So I would get me a Ducati for the stable and invest in me still being healthy and enjoy as long as I can.

Otherwise I would truly get me some IRA, sound advice!

[Skrapmot]

Take it and use it for a nice trip with the family, kids grow up fast . If you got 5k or more, pick up a nice lifetime lasting watch like a Rolex (preowned), to wear and give to your kid when you're older.
Enjoy life as much as possible, try to save for retirement, but don't neglect living a little.

[SF-Rockster]

Originally Posted by Skrapmot

Take it and use it for a nice trip with the family, kids grow up fast . If you got 5k or more, pick up a nice lifetime lasting watch like a Rolex (preowned), to wear and give to your kid when you're older.
Enjoy life as much as possible, try to save for retirement, but don't neglect living a little.

On the money!

10k is not a lot of money.
Can't really invest in too much.
Invest in family!
Returns on that are priceless!

Take your family on a trip.
You don't have to blow all your money on traveling but maybe camping at the lake and rent a house boat and some jet skis for a week.
About $5 k
Don't ask me how I know. Haha
The rest save it for a rainy day.

[DFW02S]

I'd spend it on booze, broads and fast cars .... the rest I'd just squander.

Hat tip to George Best.

[TeamOxford]

Originally Posted by DFW02S

I'd spend it on booze, broads and fast cars .... the rest I'd just squander.

Well, there's that then too.

A man has GOT to get his priorities in order......

Just sayin'....................

TO

[pjq]

Well, we're on a Porsche forum so if your going to keep your car put the money into your engine, rebuild/upgrade. It'll pay back 10 fold with years of trouble free enjoyable driving. Drive it don't store it.
There are some reputable engine shops that support this forum you could choose from.

[Perfectlap]

^It's not just mutual fund managers, it's every kind of investment manager. I've seen studies that hedge funds (as a class) keep 98% of the profits they make with their investors money.
And that's because so few can beat the S&P over any significant period of time and simply shut down the fund. But they become fabulously wealthy collecting that cut of your initial investment win or lose. And private equity fund managers have the best deal of all: they get to keep that management fee even if they decide not to allocate a dime of your money towards any PE investment, getting rich for doing nothing! And if they lose any money they can simply walk away from any new debt they created (and used to pay themselves big salaries) thanks to the bankruptcy laws and the rule of OPP (other people's money).

To the OP, when people say "10K is not a lot of money" think abou this.
in 1965 $1,355 would be the equivalent of $10K today. Had you invested that $1,355 in the S&P, today you'd have ~$51K. Do you know how many seniors today can not write a check for $600? USA Today did a story on just that and the number is somewhere in the high 90% range (staggering numbers of seniors still living pay check to pay check after 65 -- I blame the costly pipe dream of home ownership).


Had you invested that $1,355 in Berkshire?

$14,000,000.

^ Timing is everything... but I'll settle for $51K if that's all I can get.

Rarely did a huge pile of money not start as a very very small one. If you wait until you have "a lot of money" to start investing in your future you're going to miss one boat after another. You'll never have good timing if you're on the sidelines.

[rondocap]

Originally Posted by Perfectlap

^It's not just mutual fund managers, it's every kind of investment manager. I've seen studies that hedge funds (as a class) keep 98% of the profits they make with their investors money.
And that's because so few can beat the S&P over any significant period of time and simply shut down the fund. But they become fabulously wealthy collecting that cut of your initial investment win or lose. And private equity fund managers have the best deal of all: they get to keep that management fee even if they decide not to allocate a dime of your money towards any PE investment, getting rich for doing nothing! And if they lose any money they can simply walk away from any new debt they created (and used to pay themselves big salaries) thanks to the bankruptcy laws and the rule of OPP (other people's money).

To the OP, when people say "10K is not a lot of money" think abou this.
in 1965 $1,355 would be the equivalent of $10K today. Had you invested that $1,355 in the S&P, today you'd have ~$51K. Do you know how many seniors today can not write a check for $600? USA Today did a story on just that and the number is somewhere in the high 90% range (staggering numbers of seniors still living pay check to pay check after 65 -- I blame the costly pipe dream of home ownership).


Had you invested that $1,355 in Berkshire?

$14,000,000.

^ Timing is everything... but I'll settle for $51K if that's all I can get.

Rarely did a huge pile of money not start as a very very small one. If you wait until you have "a lot of money" to start investing in your future you're going to miss one boat after another. You'll never have good timing if you're on the sidelines.

I agree with you on The home ownership pipedream. What made you to reach that conclusion? I'm just curious, because I kind of felt the same way. I'd like to hear more about it.

[Topless]

I completely disagree with PL re: home ownership. It is only a pipedream if you are looking for short term gain or if your eyes are bigger than your wallet. Long term, real estate is a win and should be in the mix along with stocks for a true diversified investment strategy IMHO.

Warren Buffett agrees:
Warren Buffett - Investing in U.S. Real Estate - YouTube

http://www.bloomberg.com/news/2011-02-28/buffett-says-buying-his-home-for-31-500-was-third-best-investment-he-made.html

[Perfectlap]

Originally Posted by Topless

I completely disagree with PL re: home ownership. It is only a pipedream if you are looking for short term gain or if your eyes are bigger than your wallet. Long term, real estate is a win and should be in the mix along with stocks for a true diversified investment strategy IMHO.

Warren Buffett agrees:Warren Buffett - Investing in U.S. Real Estate - YouTube

Buffett Says Buying His Home for $31,500 Was Third-Best Investment He Made - Bloomberg

If Warren Buffett put the $31K he used to buy his first home into shares of his own company instead, he'd have $42 million today... That house is not worth $42 million...

But that's why buying the home was such a wonderful investment. $42 million is 0.069% of his $60 billion net-worth. He could afford not to chase a better return elsewhere.

[Topless]

Originally Posted by Perfectlap

If Warren Buffett put the $31K he used to buy his first home into shares of his own company instead, he'd have $42 million today... That house is not worth $42 million...

Another fallacious strawman argument PL. He has to live somewhere and the total costs associated with owning his home were lower over time than the total costs associated with renting an equivalent property over the same period. This freed up more cash to invest wisely in Berkshire.

So unless your mom is willing to take care of your housing by giving your old room back, buying beats renting long term. Renting beats buying short term. It really is that simple. Only the time window changes based on market fluctuations.

[Perfectlap]

Originally Posted by rondocap

I agree with you on The home ownership pipedream. What made you to reach that conclusion? I'm just curious, because I kind of felt the same way. I'd like to hear more about it.

Because every investment has two sides. Performance and cost. Some think the former is the only thing to consider. Big mistake.

The real estate industry love to run commericals with Tom Selleck voice overs telling you that a home purchase is not an investment, it's a way of life. That's total BS. I can barely watch those things. Many do make a comfortable living and can do the double: A) paying a mortgage with interest, property taxes, maintenance and all the other mandatory costs that go above an beyond the cost to rent, AND B) put away enough into a retirment account to live off for 20 years after the age of 65-67.

I can tell you right now the average American can not buy the home they feel has enough square footage, amenities and quality of schools without taking on more mortgage than their retirement planning can ever allow. Since 1980 the securitization of mortgages has made it far too easy for people to borrow money they have no business borrowing if they aren't planning on working until they drop dead at 75. The bank approves a young couple for X amount of loan and then they go out and see how much home they can buy for X without ever sitting down with a financial planner or investment adviser to see what they should be spending in the first place. Is it a wonder why the average American has almost nothing saved? This spend now plan later over-leveraging raises real estate prices to unreachable levels. The municipalities reward these poor planners with higher property taxes because the only people who can qualify for higher and higher mortgages are those with rising incomes -- precisely the targets of municipal and state tax authorities. So your home went up 10% this year? Great, that's peformance now what about the rise in cost to hold that investment ??

If you live in a state with low taxes different story, but generally, that's not where real estate prices are rising because wages tend to be flat or falling in those states. It's a catch 22. And of course this doesn't even address the fact that you'll be paying 15 years of interest before any of the money even goes into the loan itself. So your home has to go up that much more to compensate for the performance you missed out on in other asset classes, namely the S&P 500 which the average investor can't time, they have to be in it without interruption all while they are working. So that mortgage interest cost you more than you think.

Real estate is simply an asset class that carries probably the highest cost to hold -- which means the return is compromised. If you are properly diversified in all asset classes then you can't possibly be putting half your income into your home like so many do. Much like going too deep on stocks, going too deep into a mortgage as % of income, leaves your net worth extremely vulnerable to the whims of the real estate industry/TBTF banks who may decide to dump so much inventory into a state like FL for instance, such that houses will never be worth what many paid or they'll have to wait 15-20 years until their back at BEP. While in states less prone to bubble to bust cycles.... from MD up to Maine where property taxes are reaching absurd levels, the politicians will slowly be draining your net-worth of the equity you were building to the point where you will not be able to afford the taxes (and other costs) on the house you finally paid off!

If you don't have kids, don't enter the real estate market if it interferes with your retirment savings plan.
If everyone followed this advice real estate prices would fall dramatically in all but the high income/high net worth zip codes. That in itself should tell you the disaster that we are setting up for the future.

[cameronzero]

fresh tires, semi solid motor and transmission mounts, fresh paint job, motor refresh, full custom exhaust and intake, SS brake lines with new rotors w/pads, and suspension work for the 986.

turbo build with 3" turbo back exhuast, 15x8et25 konig wideopens, comp tires, xida coilovers, autokonexion fast back top, dual hoop roll bar, SS brake lines and comp rotors w/ pads, SS clutch lines, 6 spuck sprung clutch with HD pressure plate and LWFW on a balanced crank with ATI damper for the Miata.

i may be over by a c-note or so for shipping, but most of that stuff is local.

could die tomorrow, why wait until i'm old and infirm to enjoy life?

ninja edit: old and infirm for my people is 45-50.

[BruceH]

I have to agree with Topless. You need a place to live, but you don't need 4000+ square feet to heat/cool pay taxes on, maintain. Most people spend way too much on their homes, that is the problem, not home ownership. Having a reasonably sized house allows you to pay it off before retirement, then, you will be able to write a check for a lot more than $600. You will be living in your house for much less than an apartment. Also, the reasonable house costs less to maintain, ie, taxes, utilities. And $10,000 is not a small amount of money when the time value of money is factored in.

[Perfectlap]

Originally Posted by BruceH

I have to agree with Topless. You need a place to live, but you don't need 4000+ square feet to heat/cool pay taxes on, maintain. Most people spend way too much on their homes, that is the problem, not home ownership. Having a reasonably sized house allows you to pay it off before retirement, then, you will be able to write a check for a lot more than $600. You will be living in your house for much less than an apartment. Also, the reasonable house costs less to maintain, ie, taxes, utilities. And $10,000 is not a small amount of money when the time value of money is factored in.

Needing a place to live in not a rationale to enter into a RE investment. That's a rationale for convenience. Owning will always be more convenient, no debate.
The question is how much are you giving up for that convenience? To a limited U.S. average income, it's a luxury that leaves them retiring on a prayer.

And you really don't have to buy a lavish home to over-leverage yourself.
It's a basic fact that incomes are not rising and job creation has been falling for for decades (yes while corporate earnings and the stock market hit new all time highs). They will have LESS money to invest in their retirements once that mortgage check is written each month. In other words it's eating up a larger and larger % of their income as time goes by because home ownership carries other costs that are not fixed like their 30 year mortgage. Neither are their living expenses fixed either. Rather than cutting back on what they spend on housing they cut back on what they spend in their IRA/401K/savings. The return on the average real estate investment after costs are weighed do not make up for this lost income in their retirement accounts.