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redfish955

2+ Year Member
Apr 10, 2018
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Non-Student
This is my current plan and I would like some thoughts. I live in a cheap city. I plan on investing 25% of my earnings into 401k, roth ira, and ect. I plan on purchasing a home I can pay off in 10-15 years. Once the house is paid off I will purchase a vacation condo or home that has good rental income. I will vacation at the condo/ vacation home and invest the extra income into stocks. Is there anything I am missing on here in my quest to become a $5,000,000 man and get there without too many sacrifices? Once the home and vacation property are paid off I will just invest the money I was putting towards the home.
 

vashp2029

7+ Year Member
Oct 17, 2011
7
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Medical Student
Why do you have to wait until you pay off your house to invest in a rental property? And why do you need to wait until you have rental income to invest in stocks? If you can afford to buy a given home with a 4% mortgage over 15 years, why not buy the same home with a mortgage of 30 years? Instead of paying down debt for the sake of paying down debt, use the money you save from lower monthly payments to either invest in stocks or real estate (or both) now and start building up the assets. With rental income coming in now, you can put that money to work now. It doesn't make any sense to put it off until you pay off your own mortgage even though psychologically it might feel better to know that you're throwing everything you have at paying down debt.

The only exception would be if the best mortgage rate you can get is high relative to the average returns you could make investing in whatever it is you choose to invest in. If the rates you're getting are 6%+ then pay down as much as you can for a few years, refinance, and then put the extra money towards building up other assets. Your home isn't an investment, it's a black hole for money--after you account for inflation, mortgage, utilities, home improvement, and maintenance, you're likely going to break-even at best even if the price of the home seems to be appreciating. Let the bank keep the non-cash-flow-producing asset on their books as long as you can and funnel your extra money to something that benefits you in the long run.

Edit: Also, you said you're putting 25% into some retirement accounts but you didn't mention what you're holding in those accounts. Are you just holding cash? Stocks? Real estate? Are you maxing out your contributions? If not, that's where the extra money should go first.
 
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redfish955

2+ Year Member
Apr 10, 2018
518
168
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Non-Student
If I did a 30 year instead of a 15 year loan it would increase the interest rate by about a full % point. Plus it takes a large down payment to get a second loan. I'm putting 25% of earnings into stocks and mutual funds. Once the house is paid off I will use a new loan as long as interest rates are low to leverage my money a little into a vacation and rental property.
 
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ThoracicGuy

7+ Year Member
Jun 11, 2013
10,390
26,114
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Attending Physician
If I did a 30 year instead of a 15 year loan it would increase the interest rate by about a full % point. Plus it takes a large down payment to get a second loan. I'm putting 25% of earnings into stocks and mutual funds. Once the house is paid off I will use a new loan as long as interest rates are low to leverage my money a little into a vacation and rental property.
I would not invest in individual stocks. Mutual funds are much safer and likely to give you better returns in the long run.
 
Jul 12, 2018
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Investment plans would require a complete knowledge of the stock market and the experience in it. the fundamental analysis helps along with full market research. But the main key is to understand and implement the trading psychology for successful implementation of plan.
 

stillpremed

Senior Member
15+ Year Member
Feb 23, 2003
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This is my current plan and I would like some thoughts. I live in a cheap city. I plan on investing 25% of my earnings into 401k, roth ira, and ect. I plan on purchasing a home I can pay off in 10-15 years. Once the house is paid off I will purchase a vacation condo or home that has good rental income. I will vacation at the condo/ vacation home and invest the extra income into stocks. Is there anything I am missing on here in my quest to become a $5,000,000 man and get there without too many sacrifices? Once the home and vacation property are paid off I will just invest the money I was putting towards the home.
Save some money for a house, sure. That is not an investment by any means.

As long as you have cash in the bank for emergencies, put most of your money into the vanguard funds (VTSAX is a good one with minimal fees) and buy one bitcoin. It is 6600 now - in three years you will probably be very happy with the price.
 
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scharnhorst

10+ Year Member
Jan 26, 2008
183
55
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Fellow [Any Field]
This is my current plan and I would like some thoughts. I live in a cheap city. I plan on investing 25% of my earnings into 401k, roth ira, and ect. I plan on purchasing a home I can pay off in 10-15 years. Once the house is paid off I will purchase a vacation condo or home that has good rental income. I will vacation at the condo/ vacation home and invest the extra income into stocks. Is there anything I am missing on here in my quest to become a $5,000,000 man and get there without too many sacrifices? Once the home and vacation property are paid off I will just invest the money I was putting towards the home.
just be careful of who you marry !
 

stillpremed

Senior Member
15+ Year Member
Feb 23, 2003
149
1
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Not bad, not bad. 1 bitcoin now at 11,100. I will revisit this July 2021. Bull run just warming up.

Save some money for a house, sure. That is not an investment by any means.

As long as you have cash in the bank for emergencies, put most of your money into the vanguard funds (VTSAX is a good one with minimal fees) and buy one bitcoin. It is 6600 now - in three years you will probably be very happy with the price.
 
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