Young guy needs savings + monthly spending advice

[gobbledonk]

Perhaps car and house weren't the best investment to jump up the financial ladder

 

I've heard this logic before - tell it to the mums and dads who made 100-500% *tax-free* on their principal place of residence over 5-8 years (in many cases, considerably less) in the residential real estate market on Oz's East coast between (roughly) 1995 and 2003. In the same period, the share market was relatively stagnant, although the scales have tipped back in favour of equity markets.

 

The problem with real estate is that you usually have to buy back into the same market you sold in, but its a safer investment than shares for those of us who need a roof over our head *and* a retirement fund for the same monthly payment. The investment property market is a different kettle of fish, and many people who bought high-priced apartments at the end of the boom are now kicking themselves.

 

I cant deny that the rewards in other markets are potentially much larger than the phenomenal housing gains I've quoted, but how many of us have the nouse to know when to get on the wagon and, more importantly, when to bail. Risk equals reward, but I'm reasonably confident that my house will still be there when I get home tonight - I'm somewhat less confident about those 500 shares in Acme Corp that were going to pay for my next trip to Asia.

[Guest]

Artiew,

 

I wasn't meaning investing in stock particulary ,and in France as well many people made very good mark up in the real estate over the last few years.

But the thought was indeed that to begin accumulating some wealth without much or any starting funds, one may do better looking for ways out of a regular job, wich not may be the case if U're focused on paying back the house's credit. Trading on shorter terms products(stock or others) offers more risks but higher prospects.

Than, in my trade it seems that all guys (yep, almost no bird to be seen, only the odd ones on husband's or daddy's side :: ) who've started making significant profits invest in real estate, so I may well follow soon (if the banks agree ?!?)

 

Amoresperros, out for the yacht in Monaco

[JJsushi]

You want my advice? if you can save US 6k a month then do it for 10 yrs straight and retire. Don't assume that after a couple of years MIA in Asia you can return to the US and make the same amount of money that you made in your previous career(unless it is a family business of some sort).

 

I made that mistake once. I made a shitload of money or what I thought was a shitload at the time, left my job for almost 2years while pursuing other interests and traveling. I got really burned in personal trades during the LTC meltdown, Russian default and SouthAmerican debt crisis. As a result I came back to the business at was the worst time to come back. No one was hiring and when I did eventually get a gig, I had to take a position that paid me 2/3 less than what I made when I left.

 

If your not a financial type then invest 75% of your cash in equity index funds because they are no brainers and you make what the market makes. Put the other 25% in laddered bond investments ranging from 1-5 yrs in maturity . That way you can continuously re-invest cashflow and principal at current market rates without taking a big hit because of price volatility, as interest rates move up. You might also want to consider real estate of some sort that will provide you with a tax shelter and possibly bring you in additional income. Mortgage rates are ridiculously low so now may be a good time to lock in some long term rates.