Friend's business sold and netted $3m

[kmacdonald]

Real estate investing is no good unless you buy it with someone else money. Put it in the stock market. An index fund, a few mid cap funds and a few overseas funds. Chose wisely and you can fairly easily get 20+% returns. The last few years have been much better than that.

[Group9]

Originally Posted by a64pilot

You guys make me feel poor

When you add in the whole world, we're probably all one per centers! :

[Paul L]

Originally Posted by kmacdonald

Real estate investing is no good unless you buy it with someone else money. Put it in the stock market. An index fund, a few mid cap funds and a few overseas funds. Chose wisely and you can fairly easily get 20+% returns. The last few years have been much better than that.

Your dreaming. Look at the long term averages.

[a64pilot]

Not that I know at all what I’m doing, but I figured a 3% return, and hoped for four.
So far my investment is still growing even though we are living off of it, cause it has been beating the 3%, but will it continue? I don’t think so, I think long term 3% is a safe bet.
But the numbers you guys are talking sound awful risky to me

[sy_gilana]

That is plenty...You can live very nicely on a well found boat for very little. Some are doing it for about $500.00 a month, others a LOT more, but to keep sane, maintain standards and the boat 1500 a month is a more realistic number in todays money, and this includes everything! We have been doing this for 20 years now, I would be very relaxed with 3 mil in the bank. Its important to flatten all liabilities first, then look for a boat, and I know of an ideal one for him in Mallorca, a Catana 521 cat, that a friend of mine is selling.

[Paul L]

Originally Posted by a64pilot

Not that I know at all what I’m doing, but I figured a 3% return, and hoped for four.
So far my investment is still growing even though we are living off of it, cause it has been beating the 3%, but will it continue? I don’t think so, I think long term 3% is a safe bet.
But the numbers you guys are talking sound awful risky to me

I hope that is 3% inflation adjusted. If not, then your investments ought to be close to zero risk as that's about what you get with Treasury bonds.

[a64pilot]

Originally Posted by Fence Man

Naah. You are one of the wealthy. I regret not cracking a cork with you and the boss when we were "close", but I made the mistake of slipping into a comfortable looking bed for the first time in years. Spent the rest of the trip at the bone crusher getting fixed up. Scuba, guns, boats, planes.......When I grow up, I want to be just like you.

You do well too. Let me tell you, you will miss the barn, the shop, the welder and other tools you have now. I miss the backhoe, cause I guess I’ll never have another, you’ll miss the land to wander around like you want to and as crude as this sounds if you need to pee, you do
I miss setting up my 22-250 on the coffee table in the den, opening the sliding glass door and plinking a few rounds.
Can’t do that in civilization.
Things you think nothing of now, will become major projects as you try to figure out how to accomplish with just hand tools and a vise.

However I am looking forward to the sunrises where there is no evidence of human activity within sight other than our boat.

[Island Time O25]

Today we are at the edge of the new type of economic situation. Kind of like what was happening in the early 1900s with automobiles, electricity, telephones, etc. So any mistake in the long term investments can be a "good deal on a horse farm" or a "steal of a hay processing plant". Or it could be pennies for just issued GM or Edison or Bell stock.

That said, one needs to see and analyze the big picture and invest accordingly. On one hand brick and mortar malls are a dying breed. On the other hand there will be shortage of warehouse and storage space as online orders expand and produce a need for close by warehousing and so forth.

Commercial real estate in small towns has also an iffy future but there always be a need for some of it, the question is - what type and how much of it. The traditional gas stations and repair shops will continue to decline in the long term as electric vehicles proliferate and car ownership will become more fractional and uber/airbnb like in its core so the vehicles will tend to be serviced centrally and not at your local mom and pop shop.

Overall residential RE is a safe bet for the short and mid term if one can stand occasional headaches and tenant forced setbacks. One bad tenant can cost the owners a year's worth of rent should the matter go into litigation and god forbid there is a judgment against the owner. On the other hand demographics point to continued scarcity of it, especially in well established RE markets. And given the latest mega trend of populace returning to the core cities from the suburbs one will do well to invest in housing in not yet hot but trending cities. Not NY or SF (as 3m there will get you a 6-10 unit hovel in a seedy neighborhood) but somewhere close enough to be marketable as "close to everything" yet far away so that you can get 15-20 units to operate with. That way even if you get 1-2 of the tenants as bad apples the other 14-18 will be enough to keep you afloat.

[a64pilot]

I had one bad tenant, I was an absentee owner being stationed in Germany.
That one bad tenant cost me tens of thousands of dollars of damage.
Sue them? He had nothing, business had gone under, just divorced, be beating a dead horse.
I’ll never own a home and rent it out again, but for some it works.
In truth the ones that seem to do the best, are pretty much slum lords, real cheap properties seem to have the highest returns, but you can’t be an absentee owner, you have to watch that like a hawk.

I will say that in my opinion we are breaking new ground in the World financially, I have no idea where it’s going.
I think China will be a very big key.

If I were your friend, I’d cut my expectations down a lot and go smaller and less expensive, and live comfortably for the rest of my life, cause things cost more than you think they will, there are surprises around every corner, and surprises are not inexpensive.

[daletournier]

Originally Posted by kmacdonald

Real estate investing is no good unless you buy it with someone else money. Put it in the stock market. An index fund, a few mid cap funds and a few overseas funds. Chose wisely and you can fairly easily get 20+% returns. The last few years have been much better than that.

20% returns? Yer sure that's been true the last couple of years but it's also the second most overvalued market in history! I'd be more worried about getting the return of my money not the return on it.

Least real estate it dosent go away.

[kmacdonald]

IMHO it's a big mistake being too conservative with your investing. Small increases in return translate into huge gains in disposable income. If you are withdrawing only 3% yearly and increase your returns by an additional 1% you could withdraw 4% or a 33% increase in disposable income. Don't save yourself to the poor house. Invest for greater income and wealth.

[kmacdonald]

Originally Posted by daletournier

20% returns? Yer sure that's been true the last couple of years but it's also the second most overvalued market in history! I'd be more worried about getting the return of my money not the return on it.

Least real estate it dosent go away.

DOW 30000 is just around the corner.

[Island Time O25]

Originally Posted by kmacdonald

IMHO it's a big mistake being too conservative with your investing. Small increases in return translate into huge gains in disposable income. If you are withdrawing only 3% yearly and increase your returns by an additional 1% you could withdraw 4% or a 33% increase in disposable income. Don't save yourself to the poor house. Invest for greater income and wealth.

For most of us that is not the problem. But spending our way to the poor house is.

[Island Time O25]

Originally Posted by kmacdonald

DOW 30000 is just around the corner.

Unless the bubble bursts first.

[daletournier]

Originally Posted by kmacdonald

DOW 30000 is just around the corner.

You could be right, dosent mean it's good value and ultimately everything returns to fair market value after it dips well below it, soon or later.

If I tried to sell you my business (previous) for 20+ times net profit would you buy it? Once markets reach these nose bleed valuations they are driven by speculation not value. The herd can change direction at anytime. Personally I'd rather buy when something is undervalued.

But good luck to you... Genuinely.