Starting off with a 500k trust & Hello! (help)

35 Replies

Originally posted by @Robert Chambers :

@Nick Rutkowski

Thank you for all your information brother!

I think I am going to invest 400k in with a professional manager and a diversified portfolio, and use the income and dividends to make my own real estate investments and keep a 100k cash reserve for fixing!

How does that sound?

 That sounds like a good plan, just do NOT get talked into annuities.  They give you a fixed amount of money as income, but at a great cost to you.  You can do better investing the money, but the folks who sell them get a real big commission for finding a sucker to buy one, so they push them a lot.  

Additionally, you could take $100k and use that to buy yourself a house and house hack it, put $100k in your reserves/emergency fund and $300k for the financial manager to invest.  That lets you have a place to live and gets you started in investing as the other money grows.  The $100k in reserve can be invested in step cds through the financial manager as he can get a much better interest rate than you can directly, or anyways mine does. Step cds will have some money coming available each month for emergencies.

With the amount of money you have that should give you quite a variety of options.  Definitely don't mention how much money you have at a convention or you will likely be bombarded with people.  If anyone asks just say you might have enough for a downpayment.

If you want to grow fast you could house hack a house or two.  Purchase them with down payments instead of all cash.   I don't see any reason you can't generate passive income for life with a solid plan.  Personally I wouldn't invest 100% of it in real estate.

@Brent Paul

Hey Brent, I don’t mind bombardment. I am very socially aware and not easily fooled. I actually find enjoyment in people trying. I’m not sure of why you say not 100% in real estate. I do if you mean leaving no capital. But I believe 80% into real estate is certainly safer than 80% into stocks. Maybe not 80% with a financial plane though, that could work wonders.

Originally posted by @Robert Chambers :

@Brent Paul

Hey Brent, I don’t mind bombardment. I am very socially aware and not easily fooled. I actually find enjoyment in people trying. I’m not sure of why you say not 100% in real estate. I do if you mean leaving no capital. But I believe 80% into real estate is certainly safer than 80% into stocks. Maybe not 80% with a financial plane though, that could work wonders.

 Real estate can crash much faster and generally has a longer recovery time than stocks.  And with real estate when it is crashing no one wants to buy, so you can not sell.  When stock crash you can still sell as its going down, if you want out.  (Personally I stay in and buy more then.)  

Real estate also has other variables such as hurricanes and earthquakes. FEMA does not really help with investment property. You can have a total loss and the specialized insurance is so costly most people do not have it.

Never put all your eggs in one basket.  Real estates, stocks, bonds, mutual funds, CDs, all have a place in a balanced portfolio.  

@Robert Chambers be careful in evaluating Money Managers. There is a mountain of evidence that shows that active managers underperform simple index funds over the long term. Also, there is no evidence that a manager that has done well in a given time period will do well in the next time period. I do believe there are certain things you can do to do somewhat better than the market and reduce volatility (Overweight smaller companies, value companies, and companies with higher profitability), but this is NOT the way most money managers work. In general they attempt to pick winners and losers and time the market, which there is no evidence anyone can do successfully over long periods of time.

Best of Luck!

@Scott Jensen

Hey Scott!

Thanks for tapping in.

Yeah, I’ve been studying finance my whole life. I believe with my 500k, used semi correctly will keep me above average of my peers for my lifetime to come. I would much rather put my money in places and learn and gain experience even if I take some losses, because knowledge is everything in the world along with ambition and desire. I wouldn’t ever want to pay someone to manage my money. Only to track how big it’s getting 😎

@Robert Chambers

That’s a good start. I’ve been to a convention on multi family investing and they did try to offer a class. It was like 40K glad I didn’t pull the trigger. That’s what people are referring to when they say don’t buy the class. Start small, 500K is a lot and it’s easy to spend quickly. House hack a small duplex and put the rest of the money away in an account. After a few months I’d utilize it more. People will drag you in all directions and sell you on anything. At 20 you are young as I am so be careful about being quick to react. Try going to local meetups and learning from veterans. The biggest thing is to start don’t learn and never do anything. Best of luck :)

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