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

[DeletedUser2]

Which market are you in (geography)?

I lend in Texas, Utah, Idaho, Nevada and rarely New Mexico

If these guys are experienced investors why don't they put a mortgage on the property instead of borrowing at 15%?

ok let me give you some scenarios

1. experienced does not mean they have perfect credit, or money.
2. banks don't move fast, I have closed a loan in 24 hrs
3. if you have more than 4 loans with a bank, its hard to get any more
4. if you going to rehab and sell the property, banks dont loan on property until its fixed up
5. if banks will let you buy rehabbed property, (some will) they often wont give you any money to fix it.

so here is a deal recently

THE DEAL
woman wanted to sell house, she had cancer, got divorced, and was getting foreclosed on. she was stressed to the max

investor came in, offered her 350K for the house knowing he would have to put in 150K to fix it up.
house was 5K sq-ft in a area of town that typically fetches 200-250 a sq-ft all day long. even in this market

a different buyer offered her 350k on the house, but my investor offered her 15K in cash to her personally. (the 350 would only cover the loans on the property, one to the bank, one to her aunt, one to her dad, no money for her)

she needed to close in 7 days or the foreclosure would take effect, and she would lose the house.
she didn't want to file bankruptcy because she was sick with cancer, and didn't want the additional stress.

so to close the deal my investor had me walk the house. i agreed that it would sell for 1M + and the rehab money still only brought it to just over 50% LTV.

we agreed it would take one year to fix and to sell. (slow market, Fixed in 2 months, 10 months to sell.)

as an example of a deal I would do
loan the 365K as a first lien.
150K into escrow for rehab
total loan 515k before points and fees.

now this is in New Mexico, so max I can loan is 15% Int APR. that kills my points, and a higher int rate.

to fix that I charge 14% (so i have room for late fees,) and 15% of the equity deal.
investor does not like that very much, so we settle on 12% equity.

so the numbers will look something like this.

purchase price 365K
Rehab 150K

Payments to me MO /Yr $4258.33/$46,841

150K escrow. expected it to be drawn down in 2 months.

extra payment of mo/yr $1750/$15750

Total payments for 1 yr $62,591

Sell for 1M dollars
take out costs (6% RE fee, taxes title ect, total about 12% +/-) or about 120K max, (could be less)

pay my loan at 515K
pay Int for 1 yr of $62,591
Total payout $697,591

Net profit $302,409

I take my 12% 36,289.08

his take home profit is 266,119.92

my take home profit is 98,880.08


my investment is $515,000
My risk is secured by a 1M dollar home.
my return is 98K
or about 19.2% if everything works out.

if it does not work out, I take the house and I sell it. at a discount say 900K
I end up with about 260K for my 500K investment. so that's ok,


now why would someone pay those rates?

this investor got divorced. bad credit, doesn't have a "regular job" is an entrepreneur, and banks don't like any of that.
so just because he is out of the box, but very experienced doesn't mean he should be disqualified from making an extra 250K on this deal. it should take him 2 months, to finish the house out, (he is hiring a contractor, one of my conditions) and then sit around until it sells. so he can stay busy, and do other deals.

He cant afford to pay the interest only on the loan every month, and since im into the house around 50% I can roll some of the money into it. but I require he pays something every month. I like the monthly contact with borrower. so say 1K a month.
the extra money gets rolled and charged at the regular rates.

now what If I don't have all that money avail? well I call a couple of my friends and offer them a slice. so I get 200K from a friend of mine who has been doing this for years on and off, with me, and he is a doctor. doesn't have time, or knowledge about lending so leaves it to me. as a result he gets a straight 14% as a partial of the loan. all the points are mine, for dealing with it.

so this deal has gone from way beyond this guys ability, and no banks ability, to being able to be done, into the title company, and closed in 4 days.

the winners are...

1. The woman. she gets to pay off her aunt, and her father, oh, and the bank. she also gets 15,000 in cash where she had zero before. also no stress

2. the investor. borrows at expensive rates, BUT, didn't have to muck around with a bank, and the bank would have said no for a dozen reasons. including, bad credit, (less than 720) not enough income, no additional equity, not an owner occupied home, already has multiple loans on the books, not an income producing property, not enough money to put down (20% these days), yet still can plan on making 250K extra this year, as a result of probably less than 100 hrs of work.

3. the lender, me (gets a sold 19% ROI, with the upside of more is the investor defaults. ) gets a piece of the upside to compensate for the lower Int Rate in New Mexico. offsets risk with good LTV in property

4. the lenders investor, gets a 14% ROI at just 200K into the deal, gets to put in a smaller amount of money, gets to have a hands off transaction, with the lender taking part of the risk, and all of the work.


this is why I like hard money lending

Now, how does it compare to the other aspects of real estate?

development. there is just the dirt to start. if things go wrong, its dirt, or a partially finished building. to much risk for me. I have had developer friends, and they told me it was the fastest way to go broke. but others have done well. just not my thing

SFR Rehabs lots of work if you ask me, and lending brings in almost as much as a rehab would in most cases (not this case, this deal is pretty sweet for the rehabber) to much work to fix and sell.

multifam. I can usually get a 10-15% Cap rate, and a Higher IRR on multifamily. those are great, buy you have to find a great deal, get the loan in place, get the equity money in place, get the management in place, and it takes a lot of brain damage to get one done at a good price.

house rentals....
well its a usually a better return than rentals, with less management. I outsource most of my loan servicing to a private company that charges me $12 a month per loan to manage, collect and send out those 1099 INT forms at the end of the year. that means no toilets and no Tenets yah!

Commercial property, ... See multifam.

Lending if done right is great, but you will need some good solid information, and expertise for doing it right. all that is obtainable via a couple different classes out there.

licenses, if you do under 12 loans a year in Idaho, you don't need one. each state is different and you will have to check with your state, or any state you lend in.

there is Usury laws out there too, and that's why only the 14% in New Mexico. max is 15% APR, that includes a calculation for points fees ect, for the 1st year. Utah, unlimited if to a business, I think 10% on a property. so I only lend to businesses that own the property. Texas 18%, you get the point.

hope that helps.

 

[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.

 

[arpeggiomeister]

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!

Before I recommend anything let me state up front that every investment has risk. Bonds have typically been considered safe because the US has never defaulted. If you have been following the news as of late you understand that bonds are not safe at all.

My first question would be are you looking for capital gains or cash flow? If you are investing for capital gains you will have a different approach. What I am offering is merely suggestions and you should of course do your own research and make up your own mind.

One final note before I get into the suggestions, congratulations on your success!!!

If you are looking for capital gains silver is a very unique opportunity that will probably turn out to be the greatest investment of this decade. The silver market is being manipulated by the banksters. Spot price is completely out of whack with the actual demand. This has been achieved by large banks like JP Morgan and HSBC naked shorting silver in the COMEX. There are plenty of shills trying to say that silver was in a bubble. This is simply not true. Here is the truth. Silver is the second most used commodity behind oil. It has over 10,000 industrial uses. The fiat currencies around the world are failing, including the US Dollar. Countries are recognizing this and making preperations to return to a gold and silver standard. China and India are hoarding massive amounts of gold and silver. I expect silver to outperform gold because people do not realize it has become more rare than gold. This is because we can not recover the silver that we use for industrial purposes. It is used in such minute amounts that recovering would be too expensive, thus when we break a mirror we throw it away, when we are done with our cell phones, ipods, keyboards, and a whole host of electronic devices we throw them away. As a result 90% of all mined silver has been discarded and no longer recoverable. There will be a rush for silver in the very near future. The whole world will soon realize how rare silver has become. Those who hold it before the rush stand to make a fortune. According to my research silver should be valued at $400 to $500 an ounce. Current spot price is less than $40.

I don't recommend using leverage such as stock options or commodities futures to take advantage of this unless you are an expert. I got burned badly because I did just that. This is how I learned about the manipulation aspect of the silver market. It was a hard lesson. There is tons of info available on youtube that explains all of this much better than I ever could.

As good as this opportunity is, it is a sit and wait deal. If you are looking to develop some passive income than this is not a good investment.

If you are looking into creating some cash flow at 6% or better there is a multitude of options available. Have you looked into stock options at all? By selling covered calls you can make on average about 3% a month. The downside is if the stock takes a hit, it can swallow that gain and then some quickly. The upside is that your exposure can be limited to just one month. If you are only looking for 6% this means you can reduce your risk of exposure to the market to only two months out of the year. There are other more advanced strategies such as straddles, collars, etc. The point is that most people know nothing about options. This tool allows you to make consistent gains at far less risk than typical stocks and mutual funds. The risk is less because you are making your profit up front, not waiting for the stock to go up in value. I would be happy to go in deeper detail with you, or you can pick up the book "The Wall Street Money Machine" by Wade B Cook. It was written in the mid 90s in the great tech bubble so the claims of potential are outdated. They were true for the times, but we live in a different economic environment. The principals still work but the dynamics of the markets have shifted dramatically since that book was written.

Real Estate offers a great opportunity right now. It is in the toilet and everybody is afraid of depreciating home values. Nobody is buying despite the firesale prices. This is an incredible opportunity for an investor. I can find buildings that cash flow all day long. There has never been an opportunity quite like this in our lifetimes. In fact i think this opportunity surpasses the Great Depression. I found a 3 unit building for $20,000. It needed about $30,000 of work to get it rentable. That is not just good, that's a steal. $1,800 a month in rental income and the expenses didn't even come to $500. That is sick. As you look at the bigger units it becomes even easier to find opportunities like this.

We are living in one of the greatest times for investors in the history of mankind. While everybody is terrified of the future remove your blinders to see the opportunities that are right in front of you.

Let me reiterate that these are all merely suggestions. You asked for some possibilities and I have shown you some. There is risk with any of these suggestions, so educate yourself and find what suits you best.

Hope this helps.

 

[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%.

 

[arpeggiomeister]

I like the naked put suggestion, and in the case of this poster it would be well with in reach. I believe you must be an accredited investor to play that game and I am not. I have learned a lot about money, from real estate to the stock market, etc. but I am am still working my way up.

I know that Scottrade will not even allow you to sell puts at all. That is the broker I currently use.

What I like about your suggestion is that it has less than 33 % of losing money. Those are good odds to start with right out of the gates. If you like the company enough, and do your research, you can reduce the odds even more. Sounds like an excellent source of cash flow.

I am expecting a major crisis in the US dollar in the near future which scares me away from the market in general. If I was smart enough to narraow the timing down to within 6 months than I would load up on put options. Unfortunately, I have learned that I know just enough to be dangerous. When silver started it's ride up to $50 a share I bought call options. I thought the big move was here. When it hit $48 I repositioned my holdings so that I was controlling over $500,000 of SLV. Than it tanked. It was then that I learned about the manipulation of the silver and gold markets by the banksters. They have naked shorted more silver in a single month than the entire amount of physical silver projected to be mined this year!!! This is totally artificial, and when it finally comes unhinged the move is going to be huge. The fundamentals support my theory, and the buying pressure is off the charts. It is the naked shorts that is holding it down, and they can not keep that game up forever... ...I digress

My main point to this response is that if you are set up so your broker will allow naked puts that would be an superb source of cash flow. This option is not available to those of us with lesser means though.

 

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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.)

 

[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

 

[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.

 

[AJGlobal]

I've invested in a lot of MJ's fav's that he's mentioned in this thread in the past year and everything your going to read below is based on my personal situation so its not right or wrong. Its just what works for me and what my experience has been during the past year. The main component FOR ME to this is that.....

#1 You don't buy them and hold them because they have good yields. You still need to watch what they are doing and know when to sell and buy back in...........which leads me to #2

#2 Buying and selling in and out of these takes time. You not only need to be disciplined, but you need to really know how each individual stock reacts over time. Your not going to see big moves on these day to day, although in the past month or so they have been volatile. I was holding some of these stocks based off me picking MJ's brain but currently I'm not...........which leads me to #3

#3. Lets say your investing $200k across 4 or 5 of these funds and the yields are 5 percent a year paid monthly. Of course this could be more of less but to make this easy let just average it all out and say that you've moved in and out of these funds all year with your $200k and when its all said and done you average a 5 percent yield for the year. Not bad, right ? That is $10k profit on your 200k for the year...........which leads me to #4

#4. To me (and this is just my personal opinion) I can do that or better playing around with $200k on other stocks regardless of what the market is doing or what the yields are. Some don't have any at all. Of course I've read and studied and learned a lot about how to do this and it doesn't always work out the way I'd like it to as I'm always learning more every day, but in the end I'm still doing pretty good and give myself the chance to make more than 5 percent. This is more aggressive and more risky, so I could end up making nothing or actually lose money........which takes me to #5

#5 is HUGE.......this is where MJ's fastlane approach makes a difference, a BIG difference. IMO unless you have millions ( by that I mean at least 1 to 2 mil ) to invest in the higher yield funds mentioned above, its not worth it when your working with 200k. At 5 percent with 200k your making $10k a year or $833 a month. Again this is just examples to keep things simple but.................... With 2 mil invested at 5 percent your making 100k a year or $8,333 a month !!!! Big difference if you trying to live off the interest.

Some of us have the luxury of being able to have 1, 2, 5 or 10 mil to work with in this fashion. For those that don't, it just doesn't make sense to me. I'm not in that position yet, as I keep investing in other things and have not sold my business as MJ did. Had I not invested in other projects and in fact had I sold my business, then I would be in a position to do this as I would have had enough liquid assets to live off of the interest.

So far this year I'm up over 5 percent on what I've been using as my "trading money" and this is after the markets took a crap the past month. Prior to that I was up close to 10 percent overall for the year.

For me the $400 or $500 or $800 a month I would make buying and moving in and out of the funds MJ works with isn't going to cut it should I need to live off the interest.

I still watch those funds everyday. They are on my watch list and I'm always seeing what they are doing, but in the past month I've done better shorting certain stocks and buying more of others I already own and buying new stocks that I've been watching for some time that have signaled a buy.

Bottom line for me is that until I have the right amount of money to invest with, sitting on stocks that pay dividends isn't going to tickle my fancy. I plan on getting to that point and could have very well already been there, but I just have other things going on that keep from being in that position of being able to "Live" off of the interest.

In the meanwhile I'm learning...............that is the biggest investment overall for me, because when the day comes that I do what MJ is doing, I'll have the experience and knowledge to put me where I want to be......

 

[davidil]

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 know why? Because the amount of money that companies need and their "value" to investors is BULLSHIT. I have a friend that runs a startup using investors and angels money, the company has ZERO profits, a "product" (App) that about 50 others company are selling or giving away for free, and he asked me to invest $100k based on a $2-3m value. Haha. They are burning money like crazy, the company "value" is some random number which has nothing to do with reality. It's all bullshit.

Meanwhile my company has 3 employees and I make tens and sometimes hundreds of K a month and I started my business spending nothing but $12 on a domain name.

But yea, it's on my list of things to do. I'll probably be good at recognizing a winner team / mentality / product.

 

[davidil]

Thanks, will do. And I'm Israeli so.... start-up capital of the world. I'll let you guys know if I find something interesting

 

[DeletedUser2]

Very good reply.



Questions for you:

1. Where are you finding these deals (city, county)

2. Are you managing the properties yourself, or have a professional company taking care of them?

Andviv
I buy in multiple markets

the midwest has had some of the snot beat out of it even pre crash, so there are some great deals there
East coast has some of the rust belts coming back, and you can get some great deals there.

west coast is still crazy California prices so its alot harder to find good deals there. but they do exsist.

Arizona took a beating, but rents still wont match up to the example above.
the thing is pretty much all markets have pockets like that. great for deals, getting into the deal flow is part of the issue. but once in, its good.
picked up 8 units for 125K with a 600 mo rent for each. how? it was never listed, it was a divorce thing, and the guy wanted out fast and the wife wanted a few bucks and be gone.

how did i find it? deal flow. I tell everyone what I do, and that I pay referral fees for good deals. I see about 10 deals a month, with only word of mouth advertisement. and its really low key, but I get good deals.

if you want drop me a PM and I will send some deals your way.

 

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[arpeggiomeister]

Great stuff. I'm going to dedicate the next two weeks to read books about investments. Can you please recommend some ??? That would be a great help. Just the top 1-2 books that you think is a MUST when it comes to learning how to invest your hard earned money...

THANK YOU!

The Wall Street Money Machine by Wade B Cook. It is a little hyped, but teaches stock options better than any other book I have ever read.

Rich Dad, Poor Dad by Robert Kiosaki. This might be too general for you. You are at a place financially that I am aspiring to reach. The book had a big impact on me for it helped me to understand cash flow, the difference between assets and liabilities, and other general concepts that helped me to understand the investment game much better. For me the book was a revelation, but for someone who is already familiar with these concepts and has used them to become successful it might be boring.

I took the Rich Dad Real Estate Coaching program. It was way too expensive in my opinion, but I did learn a lot. I am willing to bet you can get the same info in the bookstore for less then 1/10th of what I paid.

If you decide that real estate is an avenue that you want to pursue the most important thing you need to be able to do is calculate cash flow. You will want a financial calculator so you can figure monthly mortgage costs. You then want to add the costs of management, insurance, and any other expenses. Once you have the monthly cost of the building subtract this number from the monthly rent roll and you have the cash flow of the building.

Real estate has many advantages over other investments. Despite the major dip in real estate prices, rents (in this area anyways) have been relatively unaffected. This means the further the price of a property goes down the better the opportunity is for cash flow, this increasing your ROI (return on investment). There are tax advantages, depreciation, 1031 exchanges, etc. Plus, real estate is one of the few investments that you have the power to increase the value. Add a garage, paint the building, build a new porch, these are all things that can increase the value of your investment. With silver, or stocks, all you can do is sit and wait, hoping you made the right decision.

I also see this site as a great resource. It is clear from reading the responses that there are people here that know a lot more than I do. I think that is awesome. It is an incredible opportunity to learn from those that have accomplished what I am looking to do.

I am fascinated by the game of money. I have researched a lot of different avenues. If I have any information that can help you I am more than happy to share it. The more I learn, the more I realize how little I know. If I find myself getting taken to school, I am more than happy to be the student too. I am just looking to surround myself by people who are as into this game as I am.

 

[garyfritz]

I like the naked put suggestion, and in the case of this poster it would be well with in reach. I believe you must be an accredited investor to play that game and I am not.

You don't have to be a full AI. I'm not sure how much $$ you have to have to qualify -- probably depends on your broker. But even stodgy old Fidelity lets me sell naked puts -- in an IRA no less!As long as you have the $$ in the account to buy the stock if it drops to your strike price, it's not really "naked." Don't know about Scottrade but most brokers should allow that. You just have to get approved for options trading and option selling. For most brokers I think that just involves signing forms that say "I'm a big boy and understand what I'm geting into."

 

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[DeletedUser2]

Nope,
I do First lien loans only,
and they are only to experienced investors who know what to do with the property.
I also only allow 6 months, with a 6 month extension on the loan.

so I don't loan to those in an unfortunate situation. only experienced real estate investors.
If the house drops in value, I have a long way to go before it bites me. but I have been bitten a couple times.
there is no 100% risk free anything.

and the thing is, I have more people who want to borrow more money than I have so it keeps my money busy. and I get to be choosey.

I have a cousin that does the same thing. But usually these houses have a mortgage (or two!) from the bank on 80% or 90%... so you're not actually getting the house at a 60% discount, do you? And if you get the house at 90%, by the time you put your hands on the house it's value (if prices drop) can be worth less than that.

But yea, other than the moral problem of profiting on someone elses misfortune, it's a good way to get a nice return on your money.

I think putting an ad in a local newspaper "need cash? loans against your house" would get you dozens of people calling you. But you probably really need to know what you are doing in order to get into it directly. My cousin pays me the interest but sometimes I get into deals with him in which on top of that, if we get the house, he also pays me part of the profit.

 

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[OliverR]

After reading The Millionaire Fastlane I have understood the importance of financial markets and started to learn what I can about it. To all of you who are asking about books to read or where to find information. By far the most useful guide into the world of finance I have found to be on iTunes U. There is just something cool about learning from the top professors in the world about the subject. I am currently watching the courses of Financial Markets and Financial Theory from Yale University. Definitely a must for all beginners. Both courses have about 26 1h lectures with video from the classroom and a link on the side for all the study material, problem sets etc.

Hope this will help some of you guys to the right path and information.

Oliver

 

[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.

 

[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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[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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[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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