Poll: Which is the best investment

I voted real estate, specifically the $200,000 house bringing $2,000 rent example. Dividend paying stocks would be my second, like utilities. I like coins and au/ag, but not under the parameters specified above.

 

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I'm in 100% agreement and a lot older than 58. My portfolio and interests are exactly as described. At my age you now secure your assets rather than put them at risk. I therefor voted as the question pertains to me.

 

Out of business school 30 years ago I chose stocks and did well early on until the 2008 crash, and saw flat returns for 8 years before that. After seeing the rampant corruption on Wall St., with little willingness by the government to implement and enforce regulations to keep them honest, I’m keeping more of my portfolio in physical assets like silver, etc.

 

I'm not an investment Councilor , but there is no hugh tax bite, or any bite at all if you roll it over into a retirement fund which will pull you at todays rate of over 5%.

I maybe wrong but I think Roth is for self employed people and there is no added free contributions from an employer.

Dave

 

Roth is simply the nomenclature of post tax contributions. You can have Roth 401k's as well. The plan at work, of which I am the main trustee, offers Roth 401k as well as traditional 401k.

 

Just saying, I have never heard of a $200k house renting for 2k a month in a couple of decades. Most friends of mine are lucky to get half of one percent a month rent on a single residence. Anyone getting 1% a month is doing outstanding.

 

real estate prices in my area are high, rents are high, taxes are high, maintenance is high.

But it is extremely difficult to break even on yearly expenses, even rented out at market rates the entire year if you're paying 20% down. It's generally a losing investment until years down the road, when you have a chunk of the mortgage paid, and can either refinance into a lower rate or pull equity and buy another property with it. Or unless you dump in a lot more cash to purchase the property. Still though, the returns are dismal until you are closer to owning the property with no note. But YMMV, as always.

Generally speaking it's not easy to make a decent % return with passive investments. Once your asset base is large enough, more options open to you such as renting out properties you own or being able to live on dividend stocks and bonds.

 

Most areas I've seen, not that there aren't exceptions, it's real tough to break even on a rental on an annual basis. The real payoff is capital gain when the property begins to appreciate again. The gamble is how high (or low) it will go and how long it takes to get there. I like RE at these prices (buy low), if you’re not over leveraged in it.

 

double post

 

That plus the fact the renter is paying your mortgage and building equity.

Before, capital gains was "guaranteed", then the bubble burst. Now the prices are starting to climb again, but that's due to the fed holding the mortgage rates to record lows. ****, we were hitting record lows when the rates were in the mid 4% range. Now we're in the mid 3% for a 30 year loan, which is INSANE. Just think about it, you borrow $200 or 300 thousand dollars at 3% a year, nuts. Real estate can be a good investment, but not if you're overleveraged. A lot of people got caught with their pants down when the 2008 housing tide receded.

 

Real estate with a structure on it that you don't live in are money pits. I like structure free land. Where I've bought land vacant property sells for quite a bit more than built upon property. No structures- no mainteneance.
Guy

 

Stocks........preferably MNST!

 

For most people, A Roth is a type of IRA.

For clarification there are 401 K plans and IRAs. They are similar but different laws and income requirements apply to them. And IRA stands for Individual Retirement Account and a Roth IRA is one of several types. The other most common is the Traditional IRA. The primary difference is whether the amount deposited is pre-tax or after tax. Anyone can own an IRA whether employed or not and for most people you can simply open one at any financial institution.

A 401K is a retirement plan offered by employers to employees. Money is generally deposited on a pre-tax basis though some plans allow for after-tax (roth 401K) deposits as well. These plans became popular for corporations as replacement for the traditional pension plans.

There are some big differences. There are no income limits to 401Ks. For IRAs the pre-tax deferral ends at a certain income level and the amount that can be deposited each year is a lot less. There is also a special provision for 401Ks that allow withdrawals to begin at age 55.5 instead of 59.5 without the 10% penalty. IRAs have a wide range of investments available, whereas a 401K is limited to whatever the employer provides.

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For the investor, it's important to understand the differences because both offer certain advantages for tax avoidance and long term savings. Even if you participate fully in your employer's 401K plan, you should also consider opening an IRA. The tax savings can be considerable depending upon your circumstances. IMO, the reasons that one would hold physical PMs precludes using them for IRAs but others might feel differently about this. Physical PMs allow one to move wealth out of "the system" so putting them in a IRA would eliminate this advantage.

 

These kinds of rents are common here in many areas. My associate owns a rental condo that was just tax appraised at $134K that is pulling down $1500/month. The difference is this area is on of the fastest growing in the USA. 25,000 moved into this county between 2010 and 2011 according to the census and since there is little new construction because people are scared to buy homes now. As a result rents have moved up considerably. Widespread economic depression elsewhere has caused people to move here looking for jobs. I'm not sure why as there really aren't any. Badly written article on it;

http://www.charlotteobserver.com/2012/07/02/3356271/as-economy-improves-charlotte.html

 

Cattle.

 

Say WHA???

 

I just read David Ganz's book Profitable Coin Collecting where he, pretty convincingly, shows that rare coins consistently out perform every other type of investment. He mainly uses the Salomon Brother's survey to prove his point. Has anyone else read this book and have an opinion on it?

 

Thanks for the post. I just bought the book for $8.10

 

The problem with rare coins is, your talking about six or seven figure investing to start out with. I think the poll was intended to ask about entry or moderate investment opportunities. Rare coins are like looking at the Empire State Building as your initial real estate investment. Otherwise they would be called better or scarce coins. Does Davis Ganz really mean "rare" or is this your interpretation? If he really means rare, his advise would be extremely limited to a chosen few.

 

Well the in the bulk of the book he tries to show that, like anything you must use informed decisions to make money. But to prove his points he uses rarities such as the 1913 nickel and 1804 dollar, but also the 1909 s V.D.B. and 1993 Jefferson Commemorative dollar, along with price graphs to prove his point. I personally got into collecting just buying boxes of Lincoln cents to hoard the copper because it seems a win-win to me. But I've since then fallen in love with and become addicted to coins in general. And it does seem like they can be a great investment if you know what your doing (a great quote I read somewhere "first buy the book, then the coin") Which is why I wanted to know what you guys, who've been doing this a lot longer than I have think/know from experience.