$9,000 - best way to invest? - Tilted Forum Project Discussion Community

Spherion · 04-06-2004, 01:43 PM

So for reasons I won't go into, I've recently been able to pay off all my debt. Car loans, and charge cards. I now have about $9,000 left and was wondering what the best use of this money would be. I'd like to try to use it to generate some more and break into the whole "you gotta have money to make money" revolving door.

eribrav · 04-06-2004, 02:44 PM

You said you have paid off all your debt. That's a huge step.

Have you also squirreled away a little safety fund for yourself yet? Like maybe enough money to get you through 2 or 3 months if an unexpected hardship came up? That might be something to do first, if you haven't already.

Spherion · 04-07-2004, 12:26 PM

I'm looking moreso into how to use this money to make more. Investments and the such. I've though about starting with vehicles, buy one for a good price, cash, then turn it over for a $500-$1000 profit. Then do it again.

Cynthetiq · 04-07-2004, 03:04 PM

Quote:

Originally posted by Spherion
I'm looking moreso into how to use this money to make more. Investments and the such. I've though about starting with vehicles, buy one for a good price, cash, then turn it over for a $500-$1000 profit. Then do it again.

vehicles depreciate ....

real estate.
I bought my first condo for 6k down, it's rented and I make a tidy sum every month I go to the mailbox. It's also appreciated over 25k in the 5 years I've had it.

beaten every other investment I've got.

micah67 · 04-07-2004, 03:57 PM

If you haven't already, open a Roth IRA. You can still deposit your max ($3k) for 2003 (have to deposit before April 15). Plus deposit $3k for 2004. Interest-free retirement!

With the remaining $3k, get yourself something nice. It sounds like you deserve it.

But if you're set on the making money now thing, I'd avoid cars like Cynthetiq says; they seldom make money. Real Estate is the way to go.

Aletheia · 04-07-2004, 04:37 PM

Land will almost never lose value so like Cyn and micah67 said, invest in some real estate.

NoSoup · 04-07-2004, 08:29 PM

Quote:

Originally posted by Aletheia
Land will almost never lose value so like Cyn and micah67 said, invest in some real estate.

Well, true - However, if he were to purchase just land with no building on it, generally it has a negative cash flow, as few people are going to rent a chunk of land from you with rent high enough to pay the taxes on it each year.

I also agree with real estate, unless by chance you are skilled in fixing vehicles, doing body work, or have dealer hookups and can purchase them for ultra cheap at an auction.

clavus · 04-07-2004, 09:09 PM

Plastic

Spherion · 04-08-2004, 03:37 AM

Well, the reason I suggested cars, is because I know them. Not really versed in real estate,....yet. I've made at least $1,000 on every vehicle I've ever sold, and of the three vehicles I currently own, I purchased ALL for 75% or less of the loan/market value.

Bill O'Rights · 04-08-2004, 04:20 AM

One word...

Casino!

J/K

Cynthetiq · 04-08-2004, 06:06 AM

Quote:

Originally posted by Spherion
Well, the reason I suggested cars, is because I know them. Not really versed in real estate,....yet. I've made at least $1,000 on every vehicle I've ever sold, and of the three vehicles I currently own, I purchased ALL for 75% or less of the loan/market value.

there comes a certain time when you cannot do that anymore because you will have to register as a dealer.

being a property owner has that same limit, except a single sale of property can net you the same amount of $$$ as selling 20 cars.

look around your area for condos, small 1-2 bedroom homes.

http://www.homes.com/index.cfm

or

http://www.realtor.com

stevie667 · 04-08-2004, 12:24 PM

put 3k aside for a rainy day/month (thats my advise to everyone, always have something to fall back on, because you'll be fucking glad it's there to get you out of a hole) in an account with nice interest, then like said before, see if theres some real estate you can look into, or just stick the rest in accounts and just live happy that you have a lot more dispossable income each month

HamiC · 04-09-2004, 05:45 AM

I vote for the Roth IRA.

beerman · 04-09-2004, 07:59 AM

The problem with real estate right now is that it is a sellers' market. With interest rates so low right now and looking to climb, it may not be the right time to invest. (Keep this in mind, buy investment Real Estate when the rates are high and soon to drop, not the other way around) Rental rates are high right now, and those rates have also been factored into the price of investment property.

I would say the stock market is the way to go, mutual funds if you don't have that much experience. As far as the Roth is concerned, I would say that doesn't quite match your needs. If you are looking to start making money with money, can we assume that you want this extra cash to increase you standard of living? A Roth will only increase your standard of retirement. On the other hand, if you are planning to buy your first house in the next few years, the Roth would be a good idea, since the investments will grow tax free, and you can use them for that purchase without penalty.

Finally, look for new Mutual Funds that have high dividends, with the new dividend tax rates, it might be perfect for an added income plan.

gar1976 · 04-09-2004, 10:15 AM

Quote:

Originally posted by HamiC
I vote for the Roth IRA.

If you can, do a regular IRA waaay before you consider a roth.

Regular IRA - tax break now. You can figure out your tax savings.

Roth - tax break....when? Who knows what the tax laws will be in 30 years. Look how much they've changed in the last 30.

Plus, a dollar in tax savings now is worth well more than a dollar in tax savings in 30 years.

Third option - porn. And lots of it. Think of the money you'd save by not going out on dates. In fact, this option would easily pay for itself in 2-3 weeks. What a rate of return!

Dilbert1234567 · 04-10-2004, 01:56 PM

i'd go with the mayo jar in the ground.

HamiC · 04-11-2004, 06:53 PM

Quote:

Originally posted by gar1976
If you can, do a regular IRA waaay before you consider a roth.

Regular IRA - tax break now. You can figure out your tax savings.

Roth - tax break....when? Who knows what the tax laws will be in 30 years. Look how much they've changed in the last 30.

Plus, a dollar in tax savings now is worth well more than a dollar in tax savings in 30 years.

Good point about considering a Regular IRA...

But, the decision should also be based on whether you have a 401(k).....income level.....desire to potentially withdraw a portion in the not-to-distant future....and several other factors that you can explore on most financial websites (Motley Fool comes to mind).

Best of luck regardless of what you do. We're all pulling for you.

Cynthetiq · 04-12-2004, 06:58 AM

Quote:

Originally posted by Dilbert1234567
i'd go with the mayo jar in the ground.

problem with the mayo jar is that when you pull out the money from the ground 20 years later you only have the amount that you have, which with inflation has less buying power than when you started.

I think though... the first poster needs to say when he's going to need this money. IRA's are a nice way to invest but if he wants to use the money in the next few years, he won't be able to without substantial penalty'

Bill O'Rights · 04-12-2004, 08:02 AM

Quote:

Originally posted by Cynthetiq
problem with the mayo jar is that when you pull out the money from the ground 20 years later you only have the amount that you have, which with inflation has less buying power than when you started.

Hmmm...you should've seen my 401K statement from 2002. I'd have been better off putting my money in a mayonaise jar, that year. Except wouldn't it make the dollar bills smell bad, after awhile?

hari · 04-12-2004, 05:37 PM

Make sure you have an emergency fund first.

Between a regular and Roth IRA, I'd go for the Roth.

The tax break for a regular IRA isn't huge, and what's worse, you'll have to file a form every year to keep track of the proportion of IRA money that has been taxed vs. not taxed.

I'm slowly converting all of my regular IRAs to Roths ... I still have 30 years to retirement, and I can quit filing those 8606 forms.

Just get in the habit of saving. It will pile up, slowly but surely.

DDDDave · 04-14-2004, 08:34 AM

Try this....

Retirement Plan
If you had purchased $1000.00 of Nortel stock one year ago, it would now be worth $49.00.

With Enron, you would have $16.50 left of the original $1,000.00.

With WorldCom, you would have less than $5.00 left.

But, if you had purchased $1,000.00 worth of Beer one year ago, drank all the beer, then turned in the cans for the aluminum recycling price, you would have $214.00.

Based on the above, current investment advice is to drink heavily and recycle.

It's called the 401-Keg Plan

Cynthetiq · 04-14-2004, 09:03 AM

I just got back from the mortgage broker... she told me some great news... that buying a rental property would be excellent since they will take consideration of a rental property income into your income to offset the mortgage liability.

YMMV but that's where I'm moving my free 20k...I'll have a nice monthly positive cashflow.

iccky · 04-14-2004, 04:13 PM

I don't really know anything about this beyond reading the business section, but I have been reading a lot lately about the overvalued real estate market (see articel below, yes it was on fark yesterday). I'm sure its usually a wonderful investment but you might worry now about buying at the top of the market.

Quote:

Why Housing Is About to Go "Pop!"
Too many red alerts are flashing for investors and the Fed to remain in denial when so much is at stake. If this bubble bursts, watch out By Mark Weisbrot

Updated: 8:00 p.m. ET April 12, 2004If you still need proof that a bubble is building in the housing market take a look at the findings of my economist colleague Dean Baker at the Center for Economic Policy & Research in Washington, D.C. He has tracked national housing prices going back to 1951. Prices pretty much track the rate of inflation up until 1995. But since then, average prices on new and existing homes have soared more than 35 percentage points beyond the overall rate of inflation. Is that unusual? You bet it is.

advertisement

This sudden increase has no plausible explanation other than a bubble, in my view. Part of the bubble's expansion is explained by the enormous wealth the stock market generated in the late '90s, which spilled over into real estate, as happened in Japan during the '80s. Even after the stock market crashed in 2000-02, financial "experts" -- the same ones who mistakenly counseled unfortunate 401[k] investors that there was "no way" anyone investing in the stock market for the long run could lose -- recommended housing as the next big thing.

Of course, that's exactly what a bubble is -- people buy an asset because its price is rising, and that pulls more buyers into the market. Prices rise further, and the cycle continues, without regard to the real value of the asset -- whether it's stocks, housing, or tulip bulbs in the 17th century.

JAPAN'S LESSON. All bubbles must eventually burst, although it's very difficult to predict the timing. The stock market bubble could conceivably have continued for years longer than it did. To see an example of what that would have looked like, consider Japan: In 1989, their Nikkei stock index hit a bubble peak at 39,000. Today, more than 14 years later, it's less than 12,000. Imagine the Dow dropping to less than a third of its peak value and still sitting there 14 years later.

We do know that the longer a bubble persists and the bigger it grows, the more likely it is to burst sooner rather than later. In the case of the housing bubble, I think the signs are that it's getting close to breaking. One is the large divergence between the rise in rental prices vs. home prices. This can't persist for long, because people can choose whether to buy or rent.

Over the last year, housing prices increased by 8%, while rental prices rose by only about 2%. In some of the bubble areas, such as Seattle and San Francisco, rents are actually falling. And rental vacancy rates are at a record high nationally. These are indications that the bubble's end is near.

INDIFFERENT FED. A rise in long-term interest rates, which would push up mortgage rates, could collapse the housing bubble faster than anything else. Even after the recent jump in interest rates -- from 3.65% to 4.20% on the 10-year Treasury note -- long-term rates are still very low by historical standards. But inflation has been rising: The consumer price index is now running at a 3.7% compound annual rate over the past three months, as compared to 1.7% over the last year.

And the dollar's decline portends more inflation in the near future, especially as the greenback remains historically quite overvalued [another bubble] -- as witness the U.S. current-account deficit, which stands at more than 5% of gross domestic product.

The Federal Reserve Board has been uncharacteristically indifferent to the prospects of increasing inflation. It has not only kept short-term rates at a 46-year low of 1% but in its last statement, the Fed's rate-setting committee said the risk of "an unwelcome fall in inflation" now "appears almost equal to that of a rise in inflation." Chairman Alan Greenspan has also denied the existence of the housing bubble. It's hard to imagine that he really believes either of those two things.

OUNCE OF PREVENTION. Surely, Greenspan would like to minimize the impact of a housing bubble bursting. But look at what he did when he discerned signs of a stock market bubble: After a brief comment about "irrational exuberance" at the end of 1996, he retreated and allowed that bubble to expand enormously, with the Dow growing by 80% and the Nasdaq nearly quadrupling before the crash.

I think Greenspan could have prevented the stock market bubble from reaching its distended proportions, simply by explaining the basic arithmetic to the public. A number of political leaders from either party presumably could have done the same.

The collapse of the equity bubble caused a recession in 2001, followed by a recovery of unprecedented weakness in the labor market. The U.S. is still experiencing the fallout, which included a corporate crime wave that contiues to work its way through the courts. Millions lost much of their retirement savings. The government's latest household survey of employment report last week showed that people over 55 accounted for an incredible 103% of jobs gained over the last year. Many have no choice: They can no longer afford to retire as planned.

IN DENIAL Economists at the International Monetary Fund -- which to its credit has been warning about America's housing bubble for some time -- have estimated that a collapse could have as much as twice the negative impact on the U.S. economy as did the stock market crash in 2000-02.

It makes no sense to remain in denial when so much is at stake. Even from the most libertarian, "free-market" approach to policy, there's a public interest in disseminating accurate information so that markets can function efficiently. Bubbles are not examples of markets operating efficiently. In fact, they're the opposite. And the bigger they grow, the harder they burst.

Dilbert1234567 · 05-24-2004, 08:09 PM

Quote:

Originally posted by Cynthetiq
problem with the mayo jar is that when you pull out the money from the ground 20 years later you only have the amount that you have, which with inflation has less buying power than when you started.

I think though... the first poster needs to say when he's going to need this money. IRA's are a nice way to invest but if he wants to use the money in the next few years, he won't be able to without substantial penalty'

heh i was kidding about the mayo jar, but it has been doing better then some of my stocks lately. it does not beat inflation and would be safer in a bank (fdic and no moles)

yippiekiyeh · 06-22-2004, 01:05 AM

Rental property at this point in time does seem like a good investment, but I always wonder about, repairs and damages etc etc... bad tenants etc etc... If anyone would like to enlighten me I'd be happy to listen!

Flyguy · 07-03-2004, 10:55 AM

Quote:

Originally posted by DDDDave
Try this....

Retirement Plan
If you had purchased $1000.00 of Nortel stock one year ago, it would now be worth $49.00.

With Enron, you would have $16.50 left of the original $1,000.00.

With WorldCom, you would have less than $5.00 left.

But, if you had purchased $1,000.00 worth of Beer one year ago, drank all the beer, then turned in the cans for the aluminum recycling price, you would have $214.00.

Based on the above, current investment advice is to drink heavily and recycle.

It's called the 401-Keg Plan

nice!

Flyguy · 07-03-2004, 10:56 AM

yippiekiyeh, my wife and I are pondering buying some investment property. Like a duplex with us living in one half and the tenant living in the other and we charge them enough so that they end up paying something like 75% of the mortgage or something like that. Just don't know if I really want to be a landlord dealing with bad tenants, damage, etc.

Merlocke · 07-03-2004, 03:53 PM

Hey man,

Honestly, I'd go with a combination of two choices had I been put in your shoes.

1) Do the real estate thing - small downpayment - rent it. There's a reason why they made that Game - "Monopoly". More millionaires have been created out of real estate than anything else. Just do yourself a favour and read up a hell of a lot on it first. Or find someone you trust that can do a good job and doesn't ask for too much in return.

2) Foreign Exchange. They've deregulated foreign exchange markets and have opened them up to the public. It's super easy trading because you can never really "lose" as long as you don't automate stuff. I've got a buddy making around 5k extra a month doing that stuff. You could easily turn what's left of your 9k (after buying a place) into another 9k all over again. Drop me a line (PM)if you want info on it.

teethman · 07-20-2004, 10:15 PM

if i wanted to start with real estate, wheres the first place to look it up?

ZZubius · 07-22-2004, 02:30 PM

teethman...if your interested in investment properties or just kicking the idea around, let me know. I'm a real estate appraiser, 3.5 years exp. in high rise condos, multi units, single family and commercial, in the chicagoland area. I may have some usefull information, especially where the highest returns are.

04-06-2004, 01:43 PM	#1 (permalink)
Spherion Upright Location: Everywhere yet nowhere	$9,000 - best way to invest? So for reasons I won't go into, I've recently been able to pay off all my debt. Car loans, and charge cards. I now have about $9,000 left and was wondering what the best use of this money would be. I'd like to try to use it to generate some more and break into the whole "you gotta have money to make money" revolving door.

04-07-2004, 03:57 PM	#5 (permalink)
micah67 Thor Location: 33:08:12N 117:10:23W	If you haven't already, open a Roth IRA. You can still deposit your max ($3k) for 2003 (have to deposit before April 15). Plus deposit $3k for 2004. Interest-free retirement! With the remaining $3k, get yourself something nice. It sounds like you deserve it. But if you're set on the making money now thing, I'd avoid cars like Cynthetiq says; they seldom make money. Real Estate is the way to go. __________________ ~micah

04-07-2004, 09:09 PM	#8 (permalink)
clavus pow! Location: NorCal	Plastic __________________ Ass, gas or grass. Nobody rides for free.

04-08-2004, 04:20 AM	#10 (permalink)
Bill O'Rights will always be an Alyson Hanniganite Location: In the dust of the archives	One word... Casino! J/K __________________ "I distrust those people who know so well what God wants them to do because I notice it always coincides with their own desires." - Susan B. Anthony "Hedonism with rules isn't hedonism at all, it's the Republican party." - JumpinJesus It is indisputable that true beauty lies within...but a nice rack sure doesn't hurt.

04-10-2004, 01:56 PM	#16 (permalink)
Dilbert1234567 Devils Cabana Boy Location: Central Coast CA	i'd go with the mayo jar in the ground. __________________ Donate Blood! "Love is not finding the perfect person, but learning to see an imperfect person perfectly." -Sam Keen

04-06-2004, 02:44 PM	#2 (permalink)
eribrav Junkie Location: upstate NY	You said you have paid off all your debt. That's a huge step. Have you also squirreled away a little safety fund for yourself yet? Like maybe enough money to get you through 2 or 3 months if an unexpected hardship came up? That might be something to do first, if you haven't already.

04-07-2004, 12:26 PM	#3 (permalink)
Spherion Upright Location: Everywhere yet nowhere	I'm looking moreso into how to use this money to make more. Investments and the such. I've though about starting with vehicles, buy one for a good price, cash, then turn it over for a $500-$1000 profit. Then do it again.

04-07-2004, 04:37 PM	#6 (permalink)
Aletheia Psycho	Land will almost never lose value so like Cyn and micah67 said, invest in some real estate.

04-08-2004, 03:37 AM	#9 (permalink)
Spherion Upright Location: Everywhere yet nowhere	Well, the reason I suggested cars, is because I know them. Not really versed in real estate,....yet. I've made at least $1,000 on every vehicle I've ever sold, and of the three vehicles I currently own, I purchased ALL for 75% or less of the loan/market value.

04-08-2004, 12:24 PM	#12 (permalink)
stevie667 Too Awesome for Aardvarks Location: Angloland	put 3k aside for a rainy day/month (thats my advise to everyone, always have something to fall back on, because you'll be fucking glad it's there to get you out of a hole) in an account with nice interest, then like said before, see if theres some real estate you can look into, or just stick the rest in accounts and just live happy that you have a lot more dispossable income each month

04-09-2004, 05:45 AM	#13 (permalink)
HamiC Insane Location: USA	I vote for the Roth IRA.

04-09-2004, 07:59 AM	#14 (permalink)
beerman Upright Location: Bristol, CT	The problem with real estate right now is that it is a sellers' market. With interest rates so low right now and looking to climb, it may not be the right time to invest. (Keep this in mind, buy investment Real Estate when the rates are high and soon to drop, not the other way around) Rental rates are high right now, and those rates have also been factored into the price of investment property. I would say the stock market is the way to go, mutual funds if you don't have that much experience. As far as the Roth is concerned, I would say that doesn't quite match your needs. If you are looking to start making money with money, can we assume that you want this extra cash to increase you standard of living? A Roth will only increase your standard of retirement. On the other hand, if you are planning to buy your first house in the next few years, the Roth would be a good idea, since the investments will grow tax free, and you can use them for that purchase without penalty. Finally, look for new Mutual Funds that have high dividends, with the new dividend tax rates, it might be perfect for an added income plan.

04-12-2004, 05:37 PM	#20 (permalink)
hari Upright Location: Los Angeles, CA	Make sure you have an emergency fund first. Between a regular and Roth IRA, I'd go for the Roth. The tax break for a regular IRA isn't huge, and what's worse, you'll have to file a form every year to keep track of the proportion of IRA money that has been taxed vs. not taxed. I'm slowly converting all of my regular IRAs to Roths ... I still have 30 years to retirement, and I can quit filing those 8606 forms. Just get in the habit of saving. It will pile up, slowly but surely.

04-14-2004, 08:34 AM	#21 (permalink)
DDDDave Addict Location: Sarasota	Try this.... Retirement Plan If you had purchased $1000.00 of Nortel stock one year ago, it would now be worth $49.00. With Enron, you would have $16.50 left of the original $1,000.00. With WorldCom, you would have less than $5.00 left. But, if you had purchased $1,000.00 worth of Beer one year ago, drank all the beer, then turned in the cans for the aluminum recycling price, you would have $214.00. Based on the above, current investment advice is to drink heavily and recycle. It's called the 401-Keg Plan __________________ I am just a simple man trying to make my way in the universe... "Go confidently in the direction of your dreams. Live the life you have imagined." - Thoreau "Nothing great was ever accomplished without enthusiasm" - Emerson

04-14-2004, 09:03 AM	#22 (permalink)
Cynthetiq Tilted Cat Head Administrator Location: Manhattan, NY	I just got back from the mortgage broker... she told me some great news... that buying a rental property would be excellent since they will take consideration of a rental property income into your income to offset the mortgage liability. YMMV but that's where I'm moving my free 20k...I'll have a nice monthly positive cashflow. __________________ I don't care if you are black, white, purple, green, Chinese, Japanese, Korean, hippie, cop, bum, admin, user, English, Irish, French, Catholic, Protestant, Jewish, Buddhist, Muslim, indian, cowboy, tall, short, fat, skinny, emo, punk, mod, rocker, straight, gay, lesbian, jock, nerd, geek, Democrat, Republican, Libertarian, Independent, driver, pedestrian, or bicyclist, either you're an asshole or you're not. What's the best nation in the world? DO-NATION!

06-22-2004, 01:05 AM	#25 (permalink)
yippiekiyeh Upright	Rental property at this point in time does seem like a good investment, but I always wonder about, repairs and damages etc etc... bad tenants etc etc... If anyone would like to enlighten me I'd be happy to listen!

07-03-2004, 10:56 AM	#27 (permalink)
Flyguy Banned Location: Swooping down on you from above....	yippiekiyeh, my wife and I are pondering buying some investment property. Like a duplex with us living in one half and the tenant living in the other and we charge them enough so that they end up paying something like 75% of the mortgage or something like that. Just don't know if I really want to be a landlord dealing with bad tenants, damage, etc.

07-03-2004, 03:53 PM	#28 (permalink)
Merlocke Location: Canada	Hey man, Honestly, I'd go with a combination of two choices had I been put in your shoes. 1) Do the real estate thing - small downpayment - rent it. There's a reason why they made that Game - "Monopoly". More millionaires have been created out of real estate than anything else. Just do yourself a favour and read up a hell of a lot on it first. Or find someone you trust that can do a good job and doesn't ask for too much in return. 2) Foreign Exchange. They've deregulated foreign exchange markets and have opened them up to the public. It's super easy trading because you can never really "lose" as long as you don't automate stuff. I've got a buddy making around 5k extra a month doing that stuff. You could easily turn what's left of your 9k (after buying a place) into another 9k all over again. Drop me a line (PM)if you want info on it. __________________ -=[ Merlocke ]=-

07-20-2004, 10:15 PM	#29 (permalink)
teethman Tilted	if i wanted to start with real estate, wheres the first place to look it up?

07-22-2004, 02:30 PM	#30 (permalink)
ZZubius Upright	teethman...if your interested in investment properties or just kicking the idea around, let me know. I'm a real estate appraiser, 3.5 years exp. in high rise condos, multi units, single family and commercial, in the chicagoland area. I may have some usefull information, especially where the highest returns are.