Stock Market Stinks (Down -800 points Today) - Real Estate Great
Specialist · Paradise Valley, AZ · Member since 2018 · 3k+ posts · 2k+ votes
Here we go - it's just the beginning . . . Is your Broker returning your calls?
"This Is The Tipping Point": One Bank Is Calling For A 30% Market CorrectionI thought I was seeing objects falling from skyscrapers in Manhattan until I realized these were investment bankers jumping out of the windows ....
Just kidding. We had 900 point decline in Feb and we are still standing.
HOWEVER, clouds are on the horizon
a) International markets have been routed - from 50% down in Asia and Russia to 15% down in Europe
b) Interest rates are climbing, 30 year mortgage hit -- shock, horror -- 5% again
c) Real estate markets in some regions are showing seasonal cooling down
d) Tariff wars
e) Oil prices rising
f) Employers cannot find employees
The next 12 months should be interesting ....
When the credit markets sneeze, the real estate market will catch a cold ....
@Account Closed You got an update for 10/11? Dow down 545 more points. Lots of fear in the market. I bought some $SDS to protect me and am up 6.5% over the last 2 days buying the inverse of the market. Its all about CYA.
All real estate is local. What is happening in Paradise Valley AZ is different than what I am seeing in Jacksonville, FL, so I am not worried about my properties. Good investors make money in all kinds of markets. Its the weak hands that end up losing. So stay strong!
@Dan H. not sure why somebody would only invest in the S&P 500 and only earn 10% because my index funds through Vanguard have average 15% for the past 18 years.
which one are you invested in?
@Dan H. not sure why somebody would only invest in the S&P 500 and only earn 10% because my index funds through Vanguard have average 15% for the past 18 years.
The S&P 10% is lifetime return (since 1928) and includes the Great Depression and was used just as a reference. Certain indexes have done better. Some money managers have done better. However there are indexes and money managers who have done worse.
If you have done 15% for the last 18 years you have done great as the first decade of this century was not a good decade for the S&P and most other indexes.
I was not advocating for the S&P. I was using it as a reference. I could have used the Dow or Wilshire or any other index as a reference. I chose the S&P because it has way more stocks than the Dow and greater name recognition than the Wilshire and serves the point as being passive and for RE investing to make sense to me the RE must return significantly greater return than a passive option.
It is somewhat upsetting to see how topic starter pushes this idea of investing. People come to BP primarily because they have responsibility for their own wealth. The responsibility is different if you have 0 net worth as oppose to if you have 10mil net worth. The investing vehicles differ from person to person. It depends on many factors: net worth, risk tolerance, future goals. There is no a single word solution for investing. It is certainly not real estate, it is not sp 500, it is not treasury notes, bonds etc. There is no path that would suit us all. All you need to do is diversity according to your intuition and risk tolerance.
The topic starter blames the market in its "free fall". Sure, this only tells that he is not risk tolerant to the extend of loosing 40% in a single year. This is his choice which I respect. I personally keep most of the money in high yield savings account starting this September, I prepare for a dip in stock and RE market. My 401k is a well diversified portfolio, it has bonds and stocks, it has stocks from emerging markets, European and Asian markets, US markets. Be certain that the path I have chosen for myself is the best way to be responsible for MY personal wealth. Mike is right, my portfolio dropped today by 6k, but wait a second I paid only about 60k from my paycheck, my employer added 120k on the top of that, and the value now is about 325k. My question to Mike is purely mathematical: how much market must loose in order for me to start losing money from my paycheck? Another question: do you really believe that this can happen in our lifetime? So yes, I being responsible for my wealth creation, I do and will contribute to my 401k my 5% of the salary which will be matched by 10% from the employer. The same purely mathematical computation applies to other investments. I do buy properties for 0.5-0.7 cents on a dollar, as I don't expect the price to fall by 30% in a single year. It is very hard to find deals like that right now, so I am playing safe and keep most of my net in cash.
Please don't push so hard with your ideas on cash flow and real estate. If you get to other people's shoes, you would think of investment differently.
The Dow down another 2.13% today...but my cannabis stocks netted a gain today. Hehe, don't ask me how they did yesterday though!
I decided a long time ago that relying on stocks for early financial independence will not work for me. Unless you spend a life-time of making virtually max contributions to the various tax deferred vehicles, you're not going to end up with much by the time you reach retirement age....let alone early retirement.
Also, my goal is not to be financially free when I'm 59 1/2 years old. My goal is to be financially free ASAP. The best way to go about this FOR ME is to make RE the foundation of my financial portfolio and live off the passive income it provides. I'm at a point where I could probably consider myself financially free now, but it would probably take me at least a year or two to properly convert everything to core cash-flowing assets.
This does not mean stocks are not a great tool for wealth building. I invest in stocks because they serve a good purpose for me. If not for stocks, I would not have had the money to buy my first property. I also invest in stocks when I see a middle to long-term opportunity (5-10 years), kind of like what I see right now in cannabis. I'm sure that some of my positions will go bust, but I'm also sure that some of them will grow a lot and provide quadruple digit total returns in the long term as the Cannabis industry moves more into the mainstream.
Are you sure about that? For an 18 year period, a 1,300% increase is equal to an annual return of 16.29%. I agree that you might be hard pressed to find a mutual fund that performed this well for 18 years, but it certainly isn't out of the realm of possibility. If you include employee matching as part of the calculation, then I can easily see how this is possible.
which number are you referring to? I've checked my fidelity account, and it says that total employee contribution is about 60k (well something like 62 and cents). My account grew from about 180 to about 320 over 8-9 years. Are you saying that this number is wrong? sorry, I am confused.
It all depends on how you define "infinite". I understand you are taking your gain and dividing by zero...hence an infinite return on capital. That is one way to define the return of investment. But like any equation, you cant just blindly plug in numbers.
But in reality, you receive a defined return. in this case your return is the asset value - mortgage + rents - expenses. You can add some fancy math for the time value of money on the rents, but you get the idea. That is not infinite, that is a discrete number. Just because you didnt have to put money in does not make it infinite. a truly infinite return means you get unlimited money in return, which no one gets on any investment (although Warren Buffet tries every day).
Neither my definition or your is perfect, and I by no means minimize your success. My point is that real estate is hard to scale, it is limited in quantity and the number of deals is finite as is the return.
Youre saying you can retire with 330k in your retirement account?
If you are referring to the 15% return for last 18 years, you should be referencing @marcos Johnson.
My comment was that if he achieved 15% return for last 18 years then he did awesome.
While I think it would have been an awesome return, I do not think it as unlikely as you seem to think it is.
It all depends on how you define "infinite". I understand you are taking your gain and dividing by zero...hence an infinite return on capital. That is one way to define the return of investment. But like any equation, you cant just blindly plug in numbers.
But in reality, you receive a defined return. in this case your return is the asset value - mortgage + rents - expenses. You can add some fancy math for the time value of money on the rents, but you get the idea. That is not infinite, that is a discrete number. Just because you didnt have to put money in does not make it infinite. a truly infinite return means you get unlimited money in return, which no one gets on any investment (although Warren Buffet tries every day).
Neither my definition or your is perfect, and I by no means minimize your success. My point is that real estate is hard to scale, it is limited in quantity and the number of deals is finite as is the return.
Your number is not ROI as it does not even have the amount of investment as a parameter. Your formula looks more like return on value. The big problem of return on value is it does not include any return from value add and appreciation. My short term return estimate relies heavy on return by the value add. So return on value would provide a very inaccurate return value in our case.
It is somewhat upsetting to see how topic starter pushes this idea of investing. People come to BP primarily because they have responsibility for their own wealth. The responsibility is different if you have 0 net worth as oppose to if you have 10mil net worth. The investing vehicles differ from person to person. It depends on many factors: net worth, risk tolerance, future goals. There is no a single word solution for investing. It is certainly not real estate, it is not sp 500, it is not treasury notes, bonds etc. There is no path that would suit us all. All you need to do is diversity according to your intuition and risk tolerance.
The topic starter blames the market in its "free fall". Sure, this only tells that he is not risk tolerant to the extend of loosing 40% in a single year. This is his choice which I respect. I personally keep most of the money in high yield savings account starting this September, I prepare for a dip in stock and RE market. My 401k is a well diversified portfolio, it has bonds and stocks, it has stocks from emerging markets, European and Asian markets, US markets. Be certain that the path I have chosen for myself is the best way to be responsible for MY personal wealth. Mike is right, my portfolio dropped today by 6k, but wait a second I paid only about 60k from my paycheck, my employer added 120k on the top of that, and the value now is about 325k. My question to Mike is purely mathematical: how much market must loose in order for me to start losing money from my paycheck? Another question: do you really believe that this can happen in our lifetime? So yes, I being responsible for my wealth creation, I do and will contribute to my 401k my 5% of the salary which will be matched by 10% from the employer. The same purely mathematical computation applies to other investments. I do buy properties for 0.5-0.7 cents on a dollar, as I don't expect the price to fall by 30% in a single year. It is very hard to find deals like that right now, so I am playing safe and keep most of my net in cash.
Please don't push so hard with your ideas on cash flow and real estate. If you get to other people's shoes, you would think of investment differently.
HUH? No one is forcing you to follow this thread.
The stock market is fickle, but we are probably heading for some sort of recession. It's been 10 years, the yield curve is flattening and the real estate market has been really hot for a long time. We're living on borrowed time.
It is somewhat upsetting to see how topic starter pushes this idea of investing. People come to BP primarily because they have responsibility for their own wealth. The responsibility is different if you have 0 net worth as oppose to if you have 10mil net worth. The investing vehicles differ from person to person. It depends on many factors: net worth, risk tolerance, future goals. There is no a single word solution for investing. It is certainly not real estate, it is not sp 500, it is not treasury notes, bonds etc. There is no path that would suit us all. All you need to do is diversity according to your intuition and risk tolerance.
The topic starter blames the market in its "free fall". Sure, this only tells that he is not risk tolerant to the extend of loosing 40% in a single year. This is his choice which I respect. I personally keep most of the money in high yield savings account starting this September, I prepare for a dip in stock and RE market. My 401k is a well diversified portfolio, it has bonds and stocks, it has stocks from emerging markets, European and Asian markets, US markets. Be certain that the path I have chosen for myself is the best way to be responsible for MY personal wealth. Mike is right, my portfolio dropped today by 6k, but wait a second I paid only about 60k from my paycheck, my employer added 120k on the top of that, and the value now is about 325k. My question to Mike is purely mathematical: how much market must loose in order for me to start losing money from my paycheck? Another question: do you really believe that this can happen in our lifetime? So yes, I being responsible for my wealth creation, I do and will contribute to my 401k my 5% of the salary which will be matched by 10% from the employer. The same purely mathematical computation applies to other investments. I do buy properties for 0.5-0.7 cents on a dollar, as I don't expect the price to fall by 30% in a single year. It is very hard to find deals like that right now, so I am playing safe and keep most of my net in cash.
Please don't push so hard with your ideas on cash flow and real estate. If you get to other people's shoes, you would think of investment differently.
HUH? No one is forcing you to follow this thread.
I am not following your thread, I am following what other people say. What you wrote is misleading for many, and I've explained in my messages why. I don't really see that you cared to read most of the replies from the others. It indicates your ignorance on many levels. Indeed, I am quitting this thread.
@Dan H. not sure why somebody would only invest in the S&P 500 and only earn 10% because my index funds through Vanguard have average 15% for the past 18 years.
which one are you invested in?
I'm not going to give away all of my secrets, but VTASX is my favorite.
Youre saying you can retire with 330k in your retirement account?
My retirement account is a small percentage of my net worth. No, definitely 330 is not enough.
I'm not going to give away all of my secrets, but VTASX is my favorite.
isn't it a total stock market? It should return approximately the same as sp 500, or I am missing something?
@Dan H. not sure why somebody would only invest in the S&P 500 and only earn 10% because my index funds through Vanguard have average 15% for the past 18 years.
The S&P 10% is lifetime return (since 1928) and includes the Great Depression and was used just as a reference. Certain indexes have done better. Some money managers have done better. However there are indexes and money managers who have done worse.
If you have done 15% for the last 18 years you have done great as the first decade of this century was not a good decade for the S&P and most other indexes.
I was not advocating for the S&P. I was using it as a reference. I could have used the Dow or Wilshire or any other index as a reference. I chose the S&P because it has way more stocks than the Dow and greater name recognition than the Wilshire and serves the point as being passive and for RE investing to make sense to me the RE must return significantly greater return than a passive option.
Just remember this, it's very difficult for me to wake up, check my Vanguard account to know that my dollar cost averaging just put more money into my index funds and then close the lid on my computer and go to work. I could have spent my income on fancy items from Amazon, but I chose to spend it on investments. A lot of effort and time went into my Roth IRA's, Yawn!!!! And without my interaction my dividends are reinvested without a breath. Roth IRA's are so tiring. LOL
RE, is the complete opposite. You can background check all you want, but once you add the human element, there are so many variables. The background check I have doesn't include hidden personality traits that are hard to detect that can cause time and money to deal with. Most RE investors don't include their time and pay themselves for this expense. It drastically cuts into the profits margins. No one calls me when the markets drops. I check my vm last night and nothing, weird.
I'm not going to give away all of my secrets, but VTASX is my favorite.
isn't it a total stock market? It should return approximately the same as sp 500, or I am missing something?
Nope, the S&P 500 contains the top 500 companies, the VTASX is and admiral fund that has over 3000 companies.