25 hotels, 11 cities, 90 rental properties, divorce, and the wall

1: Got free cash?

Question:

Just bought a house and have $8-10K to invest. What’s the best thing I can do to turn that into much more cash? Is there a specific fund you would recommend? I’m turning 28 this year and hopefully have about 30 years until i retire

Answer:

Congratulations on buying a house . Before you invest that $8–10K, make sure that you have an emergency fund. That should be 3–6 months of your salary. If you have already set aside money for emergencies, I’d suggest putting that money into an S&P 500 index fund. It’s returned 9.70% (including dividends) for the past 50 years. In 40 years, that $10K would be worth over $400K. Imagine inf you had an extra $10K to invest every year. After 40 years, you would have almost $5 million!

This isn’t a get rich scheme. It allows you to track the stock market’s performance. No, it won’t beat the market… it is the market, but since more than 80% of professional investors fail to beat the market, what makes you think that you can outperform the market? The odds are against you. Invest simply. You won’t get rich overnight, but you will have more money than most people when you retire.

I would recommend an S&P 500 index fund. Most (if not all) of the major brokerage houses offer one. Usually they have extremely low expense ratios; that’s the fee the fund charges to manage the fund.

Examples of such funds:

Vanguard – VFINX

Vanguard 500 Index Fund Investor Shares

Fidelity – FUSEX

FUSEX – Fidelity ® 500 Index Fund – Investor Class

Schwab – SWPPX

Equity Index Funds: Schwab Brokerage: Index Funds

T Rowe Price – PREIX

T. Rowe Price Equity Index 500 Fund

just to name a few….

There are also ETF (Exchange Traded Fund) options. The most common is the SPY. Most brokerage houses won’t charge you to invest in their index funds. Many won’t charge for the SPY and other ETFs as well.

For the long term investor, I think the index mutual fund is a reasonable choice. The ETFs trade during the day, the mutual funds are only priced at the end of the day. If you are a long term investor, you don’t need the temptation to trade in or out of your positions during the day.

originally published on Quora

2: Top 11 retire early cities

If you have saved and invested enough to retire early, congratulations! Now, where should you like? Maybe you like where you live? Maybe you have enough friends, family, and a support group that it makes sense to stat where you are? But maybe there are better alternatives? Chances are, if you live in New York, San Francisco, or Los Angeles, your mortgage payments may be considerable. Without an income, those payments may be more than you can bear. Worse, if you live in those cities and are renting, your rent is likely much higher than the national average. Our friends at Smart Asset have created a report of the top 11 cities for an early retirement. (We like top 11 lists…  ours foes to 11 too!) Click on the chart below for details about those 11 early retirement suggestions.

source: SmartAsset

3: Top 25 hotels

If you are planning a vacation in the US, or even if you aren’t, TripAdvisor just announced the Top 25 Hotels in the US, based upon votes from millions of travelers. Chances are, you haven’t heard of any of these hotels. Furthermore, you might be surprised where many of them are located; three are in New York City, one is in Seattle, the rest are in lesser known places. Have you even heard of Cannon Beach, Oregon or Meadows of Dan, Virgina? How about Hawley, PA or Rutherford, CA? Think of all the places you can visit without ever having to leave the USA. BY the way, the image at the top of this page is from Henderson Park Inn in Destin, Florida; #21 on the list.

 

4: Walleyed

President Trump wants to build a wall. Someone’s going to have to pay for it. He’s proposed imposing a 20 percent tax on all imports into the United States from Mexico, raising billions of dollars that would cover the cost of the new barrier. So much for cheap goods from Mexico.

According to the Trump administration, the 20 percent tax on annual Mexican imports would raise $10 billion a year. They go on to suggest that this amount would easily pay for a border wall which is estimated to cost between $8 billion and $20 billion. The value of imported goods from Mexico in 2015 was $296 billion. Taxing imports is not unusual, the Trump administration indicates that this is something that 160 other countries already do.

5: Wall Street south

Are you looking to become a financial analyst for one of the Wall Street firms? Chances are better that you might land a job in Florida rather than actually on Wall St. A growing trend in the financial community is to move back office personnel to Florida. The cost of living is lower, but so are the salaries. A financial analyst, for example, might earn $67,000 in Jacksonville, compared with $99,700 in New York. Firms are paying about 67% of NY wages for similar jobs in Jacksonville, Florida. While that might seem unpalatable, the chances of affording a really nice house on $60K in Jax are far greater than in NYC. How many 3 bedroom, 3 bath newly constructed homes in New York are selling for about $300K?!

6: From $1,000 to 90 properties

Speaking of real estate, can you make money investing in real estate? I’m not interested in buying and renting real estate myself. For me, it’s too much of a hassle. That’s not to say that this isn’t a fine way to earn a living. Chad Carson, a former football player at Clemson University, has been in investing real estate for the past 13 years. He and his business partner currently owns 90 properties in and around Clemson. He started with next to nothing. He doesn’t just rent, he buys and sells real estate too. His approach is to own a house, live in it, fix it up, and then sell it. I’m not interested in that approach, but there are plenty of people making money in real estate. Investing in real estate isn’t a bad idea. My friend’s late mother used to say, “real estate is a great investment…  they aren’t making any more of it.” Me, I’d rather invest in REITs and let others deal with the acquisition, upkeep, improvements, and sales. I’d rather just have the dividend checks roll in.

If you are interested in investing in real estate, buying properties near new stadiums can make sense. Inglewood, CA — the future home of the Los Angeles Rams and Los Angeles Chargers — is seeing a revitalization.

7: Are you into plastic?

A recent survey by Bankrate showed that many millennials don’t carry credit cards on a day-to-day basis. In fact, just 33% of those surveyed in the 18 to 29 crowd even owned a credit card at the time of the survey. People in the 30 to 49 category carried significantly more plastic, with about 55% having at least one card. I run almost everything I purchase through my credit cards. I make certain that I can pay off the credit card debt every month. I never carry a balance. All of my credit cards are cash back cards.

8: Worst cities to own a car

More and more people are considering selling their cars and using a ride sharing service, like Uber or Lyft. Below is a list of the top 10 worst cities to own a car. Not surprisingly, they are all on the coasts, half are in the North East.

Think of all the stress you can eliminate simply by letting someone else do the driving for you. Think of all the money you’ll save on gas, insurance, upkeep, car payments, etc. It doesn’t make sense for everyone, but there’s a growing segment of the population who could benefit by dumping their cars. In the chapter on cars in Building Wealth, I go into great detail on this topic. Simply stated, for most people, 10,000 miles is usually the break-even point; if you drive more than 10,000 miles a year, you are probably better off keeping your car.

If you live in New York, Boston, Seattle, Portland, or San Francisco, you are probably better off using Uber and/or mass transit.

source: Smart Asset

9: Etsy does it

Fewer and fewer people stay with one company throughout their careers anymore. Many people work at several companies throughout their career. Some people are working at multiple companies simultaneously (the gig economy.) There are a lot of alternate careers these days. Some people are making their way selling goods that they design and create themselves. A 31-year-old Etsy seller who turned her side hustle into a full-time business shares the philosophy that fueled her success.

10: Divorcing later in life… A growing trend

It’s long been know that those who marry early in life and stay married tend to be better off financially than those who either never marry or get divorced. The later in life that you divorce, the worse off it tends to be. Unfortunately, there is a growing trend.

Only 44 percent of “middle boomers” – those born in the late 1950s – have remained married to their original spouses, down from 52 percent of their parents’ generation. Middle boomers are also far more likely to have lived with partners without marrying, remained single all their lives, or even to have divorced twice.

11: Chart of the day

This poll was created before Trump proposal on taxing Mexican imports.

Infographic: Global Expectations Of Trump's Presidency | Statista
You will find more statistics at Statista

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