All I'm asking is 6%. Not 15%, not 12%. Just give me 6%

[davidil]

Hi,

First post. Read the book, loved it. It could have been me who wrote it, it was like reading a biography, down to wanting to free myself from work so I could write screenplays (wrote two already) Made my first mil at 28, I'm now 32. Did not sell my business yet.

My situation is this. All my money is in CASH.

In the book MJ DeMarco talks about making 6%-8% out of "safe and liquid" papers, municipal bonds etc.

What is he talking about?

I look at the offerings on TDAmeritrade website, I see much lower numbers and on top of that, states like CA and others may bankrupt at any moment. Are these papers really safe?

I'm desperately looking for that "safe 6% a year" investment but I just can't find it! Where is all YOUR money? I'm not asking for 15%. Not even 8%. Just give me 6%.... (net of fees) really. But WHERE?

Is this something you would buy:

Order Period* 09/06-09/12
Coupon* 5.00%-8.50%
Issuer Goldman Sachs Callable Step-Up Notes (Negative Outlook)
Moody's/S&P Rating* A1/A
Maturity* 15 Years
Callable Yes
Minimum Investment* $5,000.00
Payment Frequency* Semi-Annual


Please help !

Thank you!

 

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[Jonleehacker]

No such thing as a safe investment, only a safe investor.

The types of opportunities you are looking for will present themselves as you educate yourself and become an investor.

 

[MJ DeMarco]

n the book MJ DeMarco talks about making 6%-8%

I never said this. I said "even in this low interest rate environment, I can make 4-6%."

For example, Southern company is a stock I hold (SO).
It yields 4.6%. (Although I've made 10% on its appreciation).

I own Australian government bonds via FAX. It yields 5.5%.
I own some closed-end munifunds, example, PMM yields 7.2%
I own some REITS -- PMT for example, yields 12%. (<-- more risky)
I own Australian dollars - it yields 4%.

 

[CarrieW]

a southern company is who provides our electric!

well its georgia power owned by a southern company.

thats pretty cool I think!

quick question about your post, aud yeilds 3.5% ? are you trading it? you actually physically have the currency? how do you gt 3.5% from just owning a currency?

sorry if I am misunderstanding, just curious cause you know how much I love me my currencies!

 

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[Anon3587x]

Guns and ammo are the safest investment.

 

[davidil]

So no secrets here, just plain old diversification a la "The Intelligent Investor" via tdameritrade and such and that's about it?

My main problem is that my money is in Switzerland and they kill me with fees. Any paper I will buy they will take their 1%.

You have no problem putting a mil into an online brokerage account? This is really how things are done?

Sorry if this is a stupid question - my parents are middle class, I have nobody to ask these questions.

 

[davidil]

Wow... PMM looks risky to me:


Putnam Managed Municipal Income Stock Chart | PMM Interactive Chart - Yahoo! Finance

So basically, this is "as good as it gets" when it comes to papers? 3.5% or high risk?

I don't get it. I think that if I was smart enough and hard working enough to make some $$$ and then I lend it to someone else, I should be able to get AT LEAST 6% for it. Wouldn't that just be FAIR? The bank takes my money, charges others 15% for it A FEW TIMES, and I can't get a freaking 6% without risking losing my pants.

No justice.....


...... give me 6% and I'll be happy.....

anyone?

 

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[911Carrera]

I suggest you invest in some investment books. I'm doing this now. It's suicidal for anyone worth a 1m+ to not know about how to invest their money the right way. The best person who can manage your money is you. It doesn't matter how good a financial adviser is, they won't care about your money as much as you do. You should still consult with the pros but educate yourself well enough so that they can't fool you.

 

[davidil]

I read the intelligent investor.... so that's really as good as it gets? I should split my money into half, half into real estate, the rest to divide between 32% in bonds (my age) the rest in the stock market, and cross my fingers?

Doesn't sound like FastLane advise to me... but maybe it is. I don't know. That's why I'm asking.

 

[911Carrera]

Read more books. You need to read at least 5 different investor books to have decent knowledge on the topic. Also you have to keep learning as things change and laws are passed.

There are some advanced investing models and anything that will yield you above 1.5% involves some risks but that doesn't mean you will lose your money, it's just that the chance is there. Read up on any any market you're invested in religiously to know when to exit.

 

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[GlobalWealth]

I'm desperately looking for that "safe 6% a year" investment but I just can't find it! Where is all YOUR money? I'm not asking for 15%. Not even 8%. Just give me 6%.... (net of fees) really. But WHERE?

The big question here for you is, "do you want to actively manage your money, or 'set it and forget it'"?

If you really want to learn the investment business, you need to educate yourself. This can be done by reading various investment and trading books.

If you are looking for an investment manager to handle your funds, then just start asking around to people you trust for a competent investment adviser.

 

[MJ DeMarco]

Wow... PMM looks risky to me:

Only if you don't know what you're doing.
You got to know when to buy or sell these.
My basis is in the 5's.
And the income is tax-free.

I should be able to get AT LEAST 6% for it.

Sorry, but a "risk-free" rate of return of 6% doesn't exist, and frankly, it never will. (And no, I don't consider treasuries "risk free")

how do you get 3.5% from just owning a currency?

Just buy the FXA; it currently yields > 4% annualized, paid in monthly payments. Of course, the real value is in the dollar depreciation. I also wouldn't recommend a currency ETF unless you're time horizon was > than a few weeks. (Currency markets are 24/7, the ETFs are not.)

Again with ANY of these things, I don't buy them and sit on them for years. A 10 year chart is useless to me. For example, during August's sell off ... FAX sank to 6.90. Most people would sell, scared shitless. Me? I bought 10,000 more. In a few days it was back to 7.50. I made an extra $6K in a few days, and still collected the > 5% yield. Risky? Yea, if you don't know when to buy or sell.

Doesn't sound like FastLane advise to me

I never said the markets were Fastlane. I don't use the markets to get rich or to accumulate wealth; I use the markets as a vehicle to lend and deploy money - this creates passive income. And sometimes the side-effect of that activity, is capital appreciation. (Like the examples I cited above.)

 

[CarrieW]

sorry but the blonde must be kicking in but wth is fax n etf?

I only really know something about forex and somewhat know about regular stocks, so I have no clue what these things are or where to find out about them, I am really interested tho if you can point me in the right direction to do some digging on them.

thanks!

 

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[garyfritz]

Just buy the FXA; it currently yields > 4% annualized, paid in monthly payments. Of course, the real value is in the dollar depreciation. I also wouldn't recommend a currency ETF unless you're time horizon was > than a few weeks. (Currency markets are 24/7, the ETFs are not.)

There's also the foreign-currency CDs at Everbank. Aussie dollar currently pays 3.63% for a 12-mo CD, plus currency appreciation. 3-month Brazilian Real pays 4.84%. I don't know if I'd trust that but it's trended up pretty nicely for the last few years.

https://www.everbank.com/personal/rates.aspx?tab=currencies

 

[davidil]

Sorry, but a "risk-free" rate of return of 6% doesn't exist, and frankly, it never will. (And no, I don't consider treasuries "risk free")

Well, in that case it really does sound like real estate is a good investment where you can expect 4.5% easily, if not more. Especially if you can get a low interest mortgage, leverage your cash to buy a few properties or a very large one, buy them when the market is down (as it is now).... wouldn't you agree?

sorry but the blonde must be kicking in but wth is fax n etf?

Dude, google ETF.

Exchange-traded fund - Wikipedia, the free encyclopedia

I don't know what FAX is and can't google it because it gives too many Fax related results....

Read more books. You need to read at least 5 different investor books to have decent knowledge on the topic. Also you have to keep learning as things change and laws are passed.

OK mate, I'll do that. Any recommendations on which ones to read?

Cheers

 

[AcquireCurrency]

What inudstry is your business in and how long did it take you to reach $1m in revenue?

Sorry for going off topic, but thanks

 

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[davidil]

Software and now Application design. Took a few years...

 

[CarrieW]

dude Im a chick not a dude.

since mj knows what it is he can probably answer me in 1 sentence. what exchange they trade on and what it basically is. then I can look up more information on the exchange.

If I google it I will likely have to sift n sort thru alot of stuff to figure it out.

thanks for your imput tho.

 

[diesel]

I need to put away a certain amount this year to help out with my taxes and I really hate to put money in the stock market.

Any recommended books?

 

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[davidil]

OK, I'll tell you what's my problem.

I honestly believe I'm cursed. It's not me, it's my whole family.

If you want to make tons of money all you need to do is short what my father does. You will make 5% a month, guaranteed.

About a year ago I found a paper at my bank (UBS) which made 1% a month for about two years straight. I told my banker - "now look - I'm going in, you will see how this paper will start losing money". I went in with $30k, went out 6 months later it was worth $24k. Up until the very day I bought into it, it only made money. As soon as I bought it, it started losing.


If I'll put my hard earned money into ANYTHING which is not capital protected, I WILL LOSE. I honestly believe that.

I remember driving on Sunset in Los Angeles, there is big Apple billboard there for years already. I saw the ad for iPod and told myself "I should have bought Apple shares when I had a chance... idiot.... now it's too late!"

That was 2005....

dot dot dot
dot dot
dot

 

[diesel]

Anyone can have that perception and make it look true to themselves. You are wasting your time thinking like that. You're mind is basically in a self fulfilling circle of thoughts.

You're better than that!

Shift your thoughts bro.

People find great investments all the time. There is no reason why we can't either.

 

[garyfritz]

I know the feeling. I've had many friends beg me to start a service publishing my stock picks, so they could short them. Sell when I buy, buy when I sell. My stock-picking skilz suck, epically.

That's why I do automated short-term trading systems. I'm good at that.

 

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[Kak]

Play around with investopedia.com and learn the ins and outs. If you are an active trader there is no reason in the world you shouldn't be able to make 6 percent.

Plus it is just plain fun. Hone your strategy on the simulator and take it to a real platform.

 

[lleone]

Unfortunately, I feel the same way and I don't think any of the recommendations suggested to your question yield enough for the risk. Any foreign bonds, stocks, etc. may yield 4%+ but that doesn't consider exchange rate fluctuations. You don't know what the exchange rate will be when the bond is due or the stock is sold and that's the risk. Treasuries were always the safe bet and they yield next to nothing now. Your options are really:

1) Invest more in your current business. Your ROI for your business is probably huge so the more you grow it, not only will you make more, but your business will be worth more when you sell it.

2) Invest in passive investments that you have more direct control over (e.g. storage facility or spin-off of your current business (i.e. online component).

In the meantime, keep your excess cash safe even if the yield is low. At some point your number 1 and 2 above will yield enough that you can live with much less than 6% return.

 

[valuegiver]

If you hold gold, you will get much better than 15% per annum.

 

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[andviv]

WOW, this is a very good thread.

MJ, Rep++ for your response. I love the fact that you openly described your strategy and yet people want to battle with the result. Beats me.

I think the best advice here is the one about sticking to what you know. MJ knows about those vehicles he mentioned so he is doing that and I am sure he is not guessing, he has dedicated time to learn it.

I am sincerely amazed by the mentality of the original poster.

Dude, you can make a few millions in a particular industry but are asking about where to invest the money? You have done something amazing, something that most people can only dream about, and yet have this defeated why of thinking. I just don't get it.

So, if you know software, why not investing your money in companies in that business? you must know people in that industry. Open your ears, start talking to people, and invest on those companies that you think are worth your time and money. No, I am not necessarily talking about the Apples of the world... I am talking about small companies that need to grow, have a good product/service and need cash to keep growing. Buy a controlling share and let the owner run the business while you can keep a close eye on what's going on with the business.

You mention RE... what do you know about this? These days, and in some locations, you could buy a 20-unit apartment building, with professional management, that could give you a better return than what you are talking about. Me? That is what I'd do if in your similar situation, but that is because I have some experience and knowledge about the rental markets and apartment buildings.

 

[hrishikesh]

Why not invest in India?
I deposit money in government banks as fixed deposit and earn around 10% per annum returns guaranteed (before tax)
Since it is government bank I assume they are safe and backed by government (not sure though)
EDIT: Here are the rates if you don't believe me STATE BANK OF INDIA :: INDIA's LARGEST BANK

 

[Bozigian]

We need more threads like these

 

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[CommonCents]

A good area to look is receivables. Credit is non existent for small/med business that are in decent shape but are getting stretched in receivables by their larger solid credit customers. The going rates are 1-4% a month, with 2-3% most common. I'd say this market condition will remain for years. You might even talk to a factoring company as an investor and see what rates they might pay. I'm getting closer to starting a fund to invest in this and close to a hedge fund seed of $5-10mil.

 

[garyfritz]

2-3%/mo? Is it generally secured by anything?

How does your average person connect up with this? Call around to all the local businesses and see if they want to borrow money at 30%+ per year??