• The KillerFrogs

OT: How Do You Invest Your Money?

McFroggin

Active Member
#1 - Invest in yourself. Started my own company and bought an office for it. Hopefully it appreciates and only I can raise my rent.
#2 - Develop new ideas. I’ve developed a start-up that is pre-launch. A team is putting it together. If it fails, I lose everything I put in, but I believe in investing in myself. If it goes well, it’ll be a big win.
#3 - Buy low. Bought real estate in 2010. Now buying energy funds. Oil is cyclical. It’ll rebound.
#4 - Max retirement accounts inside large passive mutual funds. Low fees and time.
#5 - Diversify in real estate. I’m in a few syndicated real estate projects that spit off quarterly returns. I don’t manage them. I prefer real estate that focuses on blue collar areas.
#6 - Invest in start-ups that you believe in. It’s high risk high reward. I don’t put a high % here, but if a profitable company needs $ to fill orders and I believe in it, I consider it.
#7 - Don’t invest in something you don’t understand. I don’t understand bitcoin. It may be a great idea, but it isn’t for me.
 

tcumaniac

Full Member
As an aside, fees are going to be a thing of the past in less than 12mths. The whole Financial Advisory industry will fundamentally change. I used to charge 2/20 as a P/E Fund ten yrs ago, then 1.75/15, then 1/10 and now 0.75/7.5. My firm is not small but will still have to rethink fees going forward. It's a race to zero (with the exception of the Blackstones of the world).

What does that mean for you? You will have ppl begging, perhaps paying, you to manage your cash. Keep the dry powder. Check in again with the board in 12mths.
Less than 12 months? What do you base that on?
 

tcumaniac

Full Member
My family has been working with this man for decades as he has moved around several financial companies till he formed his own https://segmentwm.com/. We set a plan and he does it.

Wife and I max out my 401(k), our IRA's and invest in real estate from commercial properties to home rentals. I really dislike the rentals and the tenant headaches, but the wife does real estate now and she handles that end.
Thanks. Looks like an intriguing group. Signed up for his newsletter.
 

tcumaniac

Full Member
I max out my 401(k) and luckily the last couple years reached the maxed limit. But I’m not knowledgeable enough in investing that I know what to do once I reached that limit. Also IRAs have an income limit correct?
Roth IRAs have income limits. For 2020 it's $196,000 for your modified adjusted gross income if you're married and filing jointly. $124k MAGI if you're a single filer.

You can still contribute to a Traditional IRA with any income, but once you reach the same income limits I listed above, the contributions are no longer tax deducible. However there's something called a Backdoor Roth that's essentially a loop hole the IRS allows to convert your traditional IRA to a roth and get around the income limit. If you don't have any other prior tax deferred traditional IRA's, the process is really simple and stress free. However, if you do have prior IRAs with tax deferred contributions, it can become a pretty complicated Tax burden.

Congrats on maxing out your 401k. If you're looking for additional investment options outside of your 401k, check out https://www.wealthfront.com/investing . As I stated earlier I think it's a fascinating and compelling investment platform that has low fees and is essentially a set it and forget it investment option.
 

NavyFrog

Active Member
Just curious, does anyone out there work for a company that has a pension plan? This does not include government that is in lieu of Social Security, but a plan in addition to Social Security and a 401k?
I have a pension plan from my company in addition to my military retirement, social security and 401K. I get an amount = to 16% up of my salary from my company. It all goes into a retirement account that I can control. I can select how it is invested or do the investing myself within the government limits of a PCRA (Personal choice retirement account).
 

SuperTFrog

Active Member
I think a reasonable goal for someone who makes a decent living is to be completely debt free by age 40, including having the mortgage paid off. And never borrow again for anything. I probably hate debt more than the average person.
I was debt free until last year and I borrowed money against my house for 3.5%. We have a commercial real estate company where we purchase/syndicate CRE assets and I felt comfortable I could beat 3.5%. In general I am anti debt, but money is extremely cheap right now and you can diversify into enough different asset classes to hedge your risk.
 
I was debt free until last year and I borrowed money against my house for 3.5%. We have a commercial real estate company where we purchase/syndicate CRE assets and I felt comfortable I could beat 3.5%. In general I am anti debt, but money is extremely cheap right now and you can diversify into enough different asset classes to hedge your risk.
Bingo!
 

Kyle101011

Active Member
For my money I keep it in a high yield savings account. Currently in Citi bank’s which is at 1.85%. Investing wise I just max out my 401k (19.5k allowed this year which is 500 more than what was allowed last year). I max out a Roth IRA contributing into Fidelity 500 Index Fund (FXAIX). I’ve been very pleased with it and I like the 0.015% expense ratio. There could be better index funds out there but I just don’t care enough to do further research. I also contribute to my HSA but I’m not maxing it out. Other than those basic items there are no crazy investing tricks I do.
 

ftwfrog

Active Member
This isn’t what you’re looking for but just wanted to mention a little known option for teachers. When our sons left my wife wanted to do something so she got her alternate teaching certificate and taught 4th grade about ten years. Only reason I bring this up is if one of you is making a pretty good living and the other is teaching, look into a 403(b) for the teacher. It’s a tax deferred savings vehicle for teachers similar to a 401k but you can contribute up to $19.5k per year or $25.5k if you are over 50. So if the spouse is making enough to live on it’s a nice savings strategy. The watch out is school districts don’t bring this up much, you have to look for it. Also a down side is they contract with administrators who try to force you into annuities or MF’s with high fees. But after asking several times they had other options and she ended up in a Fidelity 403b with most of the usual Fidelity options. When she retired she just rolled it into an IRA.

Edit: most school districts don’t do matching contributions.
Just be careful and read the social security laws. There’s some [ deposit from a bull that looks like Art Briles ] rule about when you die, she won’t get your SS checks. But if she never worked a day in her life she would. I know that’s not it, so look up the law.
 

nwlafrog

Active Member
From reading some of your responses to the comments, I think you have a better grasp of money management than I do so my advice is probably unwanted but here goes.

I’ll echo the recommendations of others with maxing out your 401K. I started mine late because I was too busy being a moron with my extra cash (and what was left went to a custody battle) so there wasn’t much to spread around until I resolved that issue and grew up a bit.

second, Mrs. NWLA and I had a “starter home” which we did some upgrades to. We saved what we could over time and upgraded our living situation. Now we use that property as a rental and a 3rd source of income because we both have employment. We take that money and put several hundred dollars of the renters payment into a savings account for home repair or unexpected expenses and the remainder of the payment into an investment account. We don’t spend any of that money. It can be stressful, but it has worked out well for us over the past several years. Our first home is not fully paid off, but the mortgage is low enough that we pocket a decent amount.

Save what you can responsibly, but never stop living your life to the fullest. It’s just money. You can make more of it.
 
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tcumaniac

Full Member
I buy 10 TCU season tickets. Really, I only need 2. I sell the extra 8 to UT, TT, OU, OSU and Baylor for 4xs what I pay for the season tickets. Been doing it since they built the new stadium. About to retire at the age of 40.
I’ll give you the benefit of the doubt and assume you initially missed Peacefrog’s post at the top of page two. And because of that, I'll give you credit for being equally as witty. Thankfully, I started responding to your post before you edited it away.
 

Dogfrog

Active Member
Just be careful and read the social security laws. There’s some [ deposit from a bull that looks like Art Briles ] rule about when you die, she won’t get your SS checks. But if she never worked a day in her life she would. I know that’s not it, so look up the law.

My wife worked enough in non govt jobs before we were married and before kids that she qualifies for her own SS based on her own work record. As a govt job, teacher work isn’t associated with social security but there is a teacher pension. What you may be referring to is that her own SS benefit as well as her survivor SS benefit when I die will be reduced by 2/3 of her teacher pension amount due to an IRS law, which does seem like BS.
 

jake102

Active Member
I was debt free until last year and I borrowed money against my house for 3.5%. We have a commercial real estate company where we purchase/syndicate CRE assets and I felt comfortable I could beat 3.5%. In general I am anti debt, but money is extremely cheap right now and you can diversify into enough different asset classes to hedge your risk.

So how many people on here subscribe to the theory you should take on debt as long as you can earn more than the interest rate?

I’m going to need to buy a new vehicle next year, plan is to pay cash but theoretically I could take debt at a terribly low rate and surely beat it. Thoughts?
 
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