May 12, 2016

Money on my mind

I want to go cruising again. I need money to do that.

We've paid off all our debt. That is a BIG step in the right direction.

Now I just need to figure out how to cover our day to day living expenses.

I've been primarily considering two areas of investment. The stock market, and real estate.

The Stock Market:
I've done a ton of research on the stock market. I've been investing small amounts of money since I was 18, and I've been pretty successful. However, in the long run no one beats the market. And the average market return for the last 100 years is just over 6% (annualized and inflation adjusted). That's okay. But it doesn't make me jump for joy. The other problem is that it doesn't pay out much. A whopping 3% dividend is considering "high" doesn't even come close to a live-able income. At least not with the amount of money I have to invest.

My take away is that the stock market is a great place to park money, and let it grow for a long time. Not a good way to generate cashflow. 

Real Estate:
I'm way more intrigued by rental properties. I've been reading up on it for about 6 months. My take away is that A LOT of people get burnt by real estate. So I started trying to learn from people who have been successful.  Specifically with rental properties.

The returns on single family properties are around 2,000-3,000 dollars per year. I'd need to own a lot of them. At least 20 houses to get an after tax return around 40k per year.

Multi-family units have a better rate of return (mathematically), but I haven't found anyone who successfully owns them yet.

I've heard great things about storage units. I seriously looked at one that was 230k. But after the mortgage payments and other expenses, the pre-tax profit was around $11k for the best case scenario, and that seemed like a really shitty return to me, so I walked away from that deal.

Online Business:
No matter what I invest in, I don't have nearly enough money saved up to generate enough income to live on. Not even close. So I'm also looking at starting an online business.

Of course I have my job and that could possibly turn into a telecommuting position. But I'm not 100% sure about that, so I don't want to rely on it completely.


  1. Howdy. Canadian living in Philly would love to talk to you sometime about sailing and how I have been doing non-sailing activities with a bit of real estate income.

    drop me a line if you want to chat sometime or give me a ring:

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  2. Thanks for commenting! I'll give you a call!