What Do I Do with all the Money I made?

[csalvato]

First post in the forum. Just finished Fastlane Millionaire 4 minutes ago. Here's my question:

I've built up my business to the point it generates anywhere from $45-75k/mo, and I currently have about $220k in the bank. I have done NOTHING with this money. Zero Investments. The book talks very briefly about this subject that I know so little about. Where can I find more information on effective investment strategies? Are there other threads here? Recommended books? Or specific advice you recommend me taking?

Thank you!

What's your goal?

To live on a beach in Miami drinking piña coladas?

Or to create business systems that change the world?

Or to home school your kids?

Or what...?

 

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[theag]

And buy one of these:

 

[Kak]

My investment philosophy is to put money only in things I fully understand.

 

[insideusisgod]

My friend:

1. Reward yourself for truly you deserve to pay yourself first. Conditioning your mind. Training your mind happens only through rewards. Buy that thing you've always wanted. Invest in yourself.

2. Leverage.

 

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[Leo Hendrix]

Hey I just Btc out there...up to you to learn and understand before making your own moves, your money your choice, if you don't understand anything yet its all up to you to take the time to understand.

 

[odihost]

First, what's your risk preference and age. If you're still young and willing to take the risk, then invest in stocks, don't trade. If you're not a risk taker then invest in bond.

 

[Pete799p]

Do you want to get out of the financial sector and own hard assets? Consider real estate and precious metals. Look at the Forbes 400. How many of them don't have real estate in their portfolios? Almost none.

As previously touched on there are a lot of things you can do with your cash. It always comes down to what you are looking for ie. wealth creation, preservation etc. I am far from an expert money manager and cannot really speak to all the options out there but I would like to contribute to the real estate discussion.

Real estate can be a great way to create wealth or preserve it and your own goals will dictate what and how you invest. If you are simply looking for a place to park some cash, diversify, or preserve capital there are a lot of attractive options within the real estate space that are often overlooked. When most people think of real estate investing they think of rental houses or apartments and owners plunging toilets but this does not have to be the case. Beyond simply hiring a property manager there are alternative investment classes within commercial real estate that can offer a varying degree of personal involvement and subsequent return. Think office, industrial, retail, single tenant net leased, ground leases, farm land, self storage, manufactured housing, seniors housing, etc to name a few. Many of these can offer attractive returns without plunging toilets. Things like ground leases or single tenant net-leased properties can offer an investor a check every month with minimal to no landlord responsibilities. To give you an idea properties like Walgreen's, Chase Bank, Dollar Stores, Dialysis Centers, Distribution Facilities, Taco Bell etc. As with anything there are pros and cons to investing in these types of assets with some trade offs often being in the form of lower rates of return, ie lower CAP rates, risks associated with loss of tenant, and less growth potential. Unlike apartments where leases tend to be 1 year and offer landlords ample opportunities to push rents these leases tend to be longer term with predetermined rent levels, it is not uncommon for lease terms to extend beyond 10yr or 20 yrs. In some ways it functions like a bond, with pricing having some level of correlation between the caliber of the entity guaranteeing the lease and the terms etc. Plus it is still real estate so location also plays a part.

This is a very brief synopsis and my intention is not to promote/push real estate investing or suggest this is the million dollar guru secret sauce. More to shine some light on a topic that often gets over looked. It seems that alot of the real estate discussions revolve around residential/multi-family with little mention of the alternatives.

 

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[daivey]

I find it hard to believe that someone making $45,000 to $75,000 per month, has got to no clue where to start.

its like, you have the brains and ingenuity to create a stellar business, but can't go to your local bank to at least get started?

something doesn't add up.

 

[GlobalWealth]

I find it hard to believe that someone making $45,000 to $75,000 per month, has got to no clue where to start.

its like, you have the brains and ingenuity to create a stellar business, but can't go to your local bank to at least get started?

something doesn't add up.

Actually it is not at all uncommon for successful entrepreneurs to be ignorant about investing. If you are really good at your business, you got that way by focusing on the thing that makes you money. But that doesn't mean you are an expert in reading financial statements or analyzing a stock, understanding real estate investments, currency fluctuations, etc.

I had a recent client who earns about $100k/month. He had about $10k in gold coins and $6k in an ira. The rest was sitting in cash in his checking account.

He was head down focused on his business. And he is damn good at it. But knew next to nothing about what to do with his surplus.

 

[Npl9]

A lot of people here seem to be against investing in the markets, but that seems like a logical decision to me. Compound interest is a powerful thing. If you don't understand things yourself, and you probably don't have time to learn, you should shop around and find an investment manager to build a portfolio for you. With someone like that (a professional) they'll pick sound investments and diversify so you'll be left with minimal risk. There will definitely be times when you'll lose money, but over the years you'll make many, many more times what you would have if you had just left it in your bank account.

 

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[HighestVantage]

It's true, everyone has their specialty.

It's always easiest to start with stocks. The possibilities are nearly endless. If someone wanted to minimize their own time investment in managing their money (it can be a job in itself) they could buy into an index, or hire a manager.... There are also newer financial tools becoming available that are intriguing. Pricing can be super low, and time investment on the part of the investor can be pretty much zero. This is an example of one of the newer options, personally I think it would be a great option for someone not really interested in developing expertise to invest themselves, or people interested in avoiding higher fees from hiring a expert. https://www.futureadvisor.com/pages/pricing/

 

[Durete]

Heh, for me...I'm just plain out scared to let someone else invest my money, and know nothing about it myself makes it just plain stupid to start investing in something, so taking all my cash and play poker with it sounds like a more safe plan even than investing myself....
So I got all my money that I made from my normal dayjob literally sitting on the other side of the world in an old sock.(+with investing your always giving away your money in someone else's control anyway.)

And it's really not that much money(Talking about <50k) so paying someone to invest it would probably cost more than I would get as return over the next 5-10 years xD
And there's simply no time to learn to invest besides working 10-16 hours a day, giving fitness classes, exercising myself(need to to be able to keep up with the job) Sleep/eat and working on my book. And yep, I do value getting my 5-6 hours sleep a night and eating over spending hundreds of hours learning about investing. and then knowing that most options I read on are not available for me as I'm not a US citizen.

 

[Npl9]

Maybe you should schedule a meeting with a couple local investment managers just to see what they have to say. In my opinion it would be a very worthwhile thing to do.

 

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[EvanOkanagan]

I can't see why more people don't get into investment Real Estate. People will always be renting and inflation goes with higher rents.

The lowest rental I have has given me over 25% annual cash-on-cash return. Hard to find that anywhere else.

 

[1up]

I can't see why more people don't get into investment Real Estate. People will always be renting and inflation goes with higher rents.

The lowest rental I have has given me over 25% annual cash-on-cash return. Hard to find that anywhere else.

I would guess that it would be commercial real estate? Or residential?

 

[EvanOkanagan]

I would guess that it would be commercial real estate? Or residential?

That's with residential. I'll be getting into commercial soon though.

 

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[Bila]

That's with residential. I'll be getting into commercial soon though.

I am thinking about turning one of my rentals into airbnb ....any experience with that ?? Advice ??
The reason ?? I have a negative cash flow on it ( condo fees went up pffffff ) not a bit negative number but still.

 

[EvanOkanagan]

I am thinking about turning one of my rentals into airbnb ....any experience with that ?? Advice ??
The reason ?? I have a negative cash flow on it ( condo fees went up pffffff ) not a bit negative number but still.

I don't have any experience with Airbnb.. my rentals are homes with suites usually (or per-room rentals with student housing). The way my houses are setup I wouldn't see it beneficial.. but a condo possibly.

I'd imagine if it's a stylish/contemporary condo in a good area you could pull decently from airbnb. How much are you paying monthly vs rent?

 

[Bila]

I have -$ 235 every month .... Since September....it's a nice, modern condo relatively close to downtown, i saw yesterday on airbnb one unit similar ( same area ) renting for $80 a night minimum stay 14 days

 

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[GlobalWealth]

I have -$ 235 every month .... Since September....it's a nice, modern condo relatively close to downtown, i saw yesterday on airbnb one unit similar ( same area ) renting for $80 a night minimum stay 14 days

I have one apartment I rent on airbnb. And about to add 2 more.

This apartment rents for a minimum of eur125/n and I get on average 15 nights per month. My gross aver. is over eur2000/m. I have a PM that gets 25% of gross, but that covers everything. It is hands off for me. After that my expenses (including mortgage and utilities) run around eur1200/m. My net is around eur300 hands off. Of course that covers my mortgage. Based on my down payment, its around 18% annualized return.

edit. It is also on booking . com, but 90%+ of rentals comes from airbnb.

 

[Bila]

Do you have a minimum stay requirement ? @GlobalWealth
I was surprised to see the 14 days minimum ( less overhead work for sure but still )

 

[GlobalWealth]

Do you have a minimum stay requirement ? @GlobalWealth
I was surprised to see the 14 days minimum ( less overhead work for sure but still )

Depends on time of year. My PM manages that but in slow times we have a 2 day min. There is a also a cleaning fee we collect. Busier times we have a 4 day min.

I just looked at calendar. February I have 12 booked days now (and will likely get a few more with last minute people). March is 5 days booked. April is 6 days booked. May is 17 days booked.

June/July/August/September will be almost fully booked at higher rates.

 

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[GlobalWealth]

the 14 days minimum ( less overhead work for sure but still )

Much less overhead because you will find virtually no one to book for 14 days. No rentals = no work. Unfortunately also no money.

Location is very, very important. Even more important for short term rentals because travelers want to be located near hotspots, restaurants, shopping, attractions, etc.

Pictures sell on airbnb. I had pro photos taken in August and in September my flat was booked 22 days. Only 12 in August, supposedly a better rental month.

Ratings make a huge difference as it is P2P. You get bad ratings, you don't get bookings. Very good if you are good.

 

[Bila]

Thanks so much @GlobalWealth @EvanOkanagan

 

[Pete799p]

I can't see why more people don't get into investment Real Estate. People will always be renting and inflation goes with higher rents.

The lowest rental I have has given me over 25% annual cash-on-cash return. Hard to find that anywhere else.

The other nice thing about real estate is the potential tax advantages etc. Things like depreciation and 1031 exchanges to name a few can be great things. Some commercial assets can even be depreciate at an accelerated rate.

 

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