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I'm in the same boat. In the last few months I've spent dozens, if not hundreds of hours reading about various investment ideas. Here are some of the things I've considered:
Please keep us updated and let us know what you decided to do.
- P2P lending - I invested some money in P2P lending sites with 10-12% ROI. Most of the investments are collateralized, but I don't feel entirely comfortable about putting a lot of money into it and probably won't invest more. It's as passive as you can get, but risk-adjusted return is lower here than with other options.
- short-term rental properties for Airbnb, etc. (@GlobalWealth's process) - after reading a lot about it, I think it's too big of a headache for me (still not entirely sure, but that's what I'm leaning towards). Even with a property manager, I feel it's too stressful and more like a business than an investment. This post (and other posts in this series) was eye-opening. It all comes down to the final paragraph: "The money I’ve earned as an Airbnb and VRBO host is better than what I’d collect as a traditional landlord. But that comparison is apples-to-oranges. One is active; the other is passive. One is hospitality; the other is real estate. They’re not the same industry."
- traditional rental properties (apartments) - explained later.
- stock market investing focused on dividends - decided against it because I have zero control over it. Dividends can change, companies can go bankrupt, interest rates can influence returns, etc. Rents generally don't fluctuate that wildly (and since I'd be buying and holding the properties for a long time, I wouldn't care much about the fluctuations in the property's price anyway). Moreover, since I found stock market investing too complicated and time-consuming to be able to pick individual stocks, I'd have to focus on index investing. The dividend yield from the best low-cost funds is about 3-4%, and that's too low considering that even if I hire a property manager, I can get 6-7% in my area.
- REITs - as above, can't control them and if you don't know how to properly research them, it'd be better to invest in a REIT ETF (that generates about 4%, so it's too low).
- bonds and stuff like that - get low returns borrowing to broke governments. No thanks.
- buying digital assets/passively-managed websites - returns can be great here, but my primary business is also digital, so I'd rather diversify and own something more tangible.
- forestry - I investigated the possibility of investing in land for forestry (managed by a professional forestry company). Returns were too low (4%) and the investment is too illiquid.
- collectibles - returns can be incredible, but there's no cashflow so no, thanks.
- if you buy at the right price and find a good long-term tenant, your returns are stable.
- real estate protects you from inflation, and often appreciates beyond the inflation rate (though my focus is on cashflow, not capital appreciation).
- it's very scalable, particularly if you hire a good property manager.
- it's just a good retirement plan. Buy 10 or so good properties with cash and if your living costs are reasonable, you're set for life.
- lower tax.
Please keep us updated and let us know what you decided to do.
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