Steady 4-5% annual return on $5 million
- Thread starter One Time
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I'd rather be poor than keeping money sucked up in my bank when I don't have steady business running.
Once you hit 7 figures - especially over 3 million or so where you can live a good life without working - managing the money becomes a business in and of itself.
And normally a safer one than any traditional business if you play your cards right.
Fixed income ladder FTW. watch those commissions, 99.99% of stock brokers are idiots, who you pay whether you win or lose. It's a great rebill scam.
With extreme due diligence (not for the fucking lazy) you can also do some more creative things that are recession proof with much higher returns for very little work. capital is king.
1. Coin-op laundromat. everyone needs to wash clothing. even in suburbia. these can be super easy and unattended with web-video monitoring. i did tons of research before i got into this, as far as checking census data, utility usage and way deeper.. great book on it is:
coin-op laundries - Road to financial independence by emerson higdon.
like $100 but extremely worth it. it's like a college textbook.
2. Buy an existing storage center with solid books.
3. This one may sound a little off the deep end, but after a LOT of research i'm now scouting locations:
Standing timber lots.
There is a lot of nitty gritty here, but the basics are simple. Trees grow, as they grow they become exponentially more valuable. They can be harvested at will, which means, and here's the kicker, you are able to take gains at will. everybody needs wood, especially quality craft woods.
good luck. be creative. that shit is real easy to lose, be careful, don't be lazy. if you DO lose some cash, MAKE SURE YOU LEARN SOMETHING.
-ss
With extreme due diligence (not for the fucking lazy) you can also do some more creative things that are recession proof with much higher returns for very little work. capital is king.
1. Coin-op laundromat. everyone needs to wash clothing. even in suburbia. these can be super easy and unattended with web-video monitoring. i did tons of research before i got into this, as far as checking census data, utility usage and way deeper.. great book on it is:
coin-op laundries - Road to financial independence by emerson higdon.
like $100 but extremely worth it. it's like a college textbook.
2. Buy an existing storage center with solid books.
3. This one may sound a little off the deep end, but after a LOT of research i'm now scouting locations:
Standing timber lots.
There is a lot of nitty gritty here, but the basics are simple. Trees grow, as they grow they become exponentially more valuable. They can be harvested at will, which means, and here's the kicker, you are able to take gains at will. everybody needs wood, especially quality craft woods.
good luck. be creative. that shit is real easy to lose, be careful, don't be lazy. if you DO lose some cash, MAKE SURE YOU LEARN SOMETHING.
-ss
I swear, I dont know if you really serious about the tree lot or not, but I got a good laugh from it
real estate. Why would you take 4% in the bank when you can get at least 15-20% return in a few years
That's a mortgage reit, backed by pools of bad mortgages, you would want to look at once backed by a portfolio of investment properties.
The price fluctuations in the RE market are pretty stable, since most of the damage has been done. The people that don't pay their mortgage need to live somewhere. They usually become renters again.
I laughed too the first time I heard of it (a good friend is actually an arborist who works for a private firm with around $200m in acreage.) Then I did a lot of research. now I'm in the market. If you're a mid-7 figs guy like the OP, I'd definitely check it out when you're done laughing.:thumbsup:
I'd agree that most stupid sounding ideas are generally stupid, but some aren't. Investigation takes only a little free time, and it's important to keep your head outside the box.
^^^This. there's lots of REITs flush with cash right now. solely relying on or heavily weighted with residential rentals is key.
Very good advice. With the trees, just be prepared to pepper spray treehuggers who chain themselves to them. A really interesting facet of this investment is the dynamics of a mill. It is more expensive to shut one down and restart than it is to take a loss contuining to purchase raw timber even in a low-priced cut wood environment. This helps insulate you from events like decline in homebuilding, etc.
For the laundromats, make sure you don't give into temptation when it comes to taxes. Several years back a smart IRS agent extrapolated from coin-op laundry water bills how many loads it entails.. and used your pricing to work backwards ascertaining how many loads you really sold.
Yes, you are right they are (were) a mtg REIT. However, even the most conservative of commercial prop REITs like DRE were slammed. Plus, REIT dividends are not qualified for 15% divvy tax rate (assuming obama doesn't abolish that lower rate anyway), so looking at it after-tax a REIT divvy needs to be double a comparable qualified divvy like from MO in order to yield same after-tax return.
Farming.
Grab a big plot of land in Omaha. Plant a shitload of sweet corn and other vegetables. Fertilize the hell out of it. Harvest. Sell out of the back of your truck. Cash only. Make sure you always "take a loss." Write off a whole lot of shit.
Friend of mine got started with that in college, had his dad finance a tractor and so on. Paid off the tractor completely in 2 years. Grosses low six figures, hardly sets foot on the land anymore.
Grab a big plot of land in Omaha. Plant a shitload of sweet corn and other vegetables. Fertilize the hell out of it. Harvest. Sell out of the back of your truck. Cash only. Make sure you always "take a loss." Write off a whole lot of shit.
Friend of mine got started with that in college, had his dad finance a tractor and so on. Paid off the tractor completely in 2 years. Grosses low six figures, hardly sets foot on the land anymore.
It depends on how much risk you wish to undertake... Also, you have to factor in taxes. The best solution would be tax-free bonds that are indexed to inflation.
Yes, this is a good suggestion. Investments which give you the opportunity to muck through cowshit singing "the corn is as high as an elephant's eye" often are attractive to those just inheriting mid-seven figure wealth.
No cows. Vegetables.
Alternatively, buy plot of land and rent it out to a farmer who knows what he's doing.
Alternatively, go through Iowa/Nebraska/Missouri and look for prime hunting land. Trees, water sources, road access, maybe a small cabin or two. Then contract with hunters in the area to give them access to that land during hunting seasons. Hunting land is in huge demand. Lots of hunters out there who would love to have some land they could rely on to have some shooting action.
Who knows where the guy lives? That would also affect his plans. If he's living in New York, he could piss through that money fast. If he's living in the Midwest, he's going to be set for a long time as long as he doesn't fuck things up.
Alternatively, purchase 5 million worth of cocaine in Mexico, drive it to New York and quadruple your money.