The Investment Thread (stocks, bonds, real estate, retirement, just not gold)

[BMBiology]

Automation is already here. We need to deal with this fact.

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[BMBiology]

CNN townhall today at 7 pm EST:

 

[JustFillIt]

Did anyone make a dollar from the Disney bump last week?

 

[Thoughtfulsinner]

Did anyone make a dollar from the Disney bump last week?

Bought 300 shares a few weeks ago when it was at 108. Thought the investor day would be a nice catalyst.

 

[JustFillIt]

Bought 300 shares a few weeks ago when it was at 108. Thought the investor day would be a nice catalyst.

Nice! That’s a great bump right there!

This week... I’m wondering if Netflix bounces back. Also - I am feeling like Nike might bump up with the tiger win this weekend.

I am also betting on alibaba this week - I bought 25 shares. Do you have any recommendations?

Ok - I’m going to add Tyson foods as a possible bump too

 

[BMBiology]

Even FS is doing what I am doing:

Cashing Out Of Stocks To Buy Real Estate: Analyzing The Temptation

After a banner year in 2020 and an even stronger 2021, more people are thinking of cashing out of stocks to buy real estate. After all, real estate is a real asset that provides utility and tends to hold its value. Stocks are just digital values that could plummet in value over night. Seeing your

www.financialsamurai.com

 

[wagrxm2000]

"The downside to cashing out of stocks and buying real estate is that one might be jumping out of the frying pan and into the fire. With rising inventory and a slowdown in the economy, real estate prices could continue to soften in the coming years. Leverage up too much and financial pain could ensue."

-Financial samurai

It's amazing how you only use this guy when you think he agrees with you. Remember he also recommends real estate crowdfunding.

His main reason is due to stocks being up 15% and San Fran being down 10%. Unlike him you were wrong and lost out during this time.

 

[BMBiology]

"The downside to cashing out of stocks and buying real estate is that one might be jumping out of the frying pan and into the fire. With rising inventory and a slowdown in the economy, real estate prices could continue to soften in the coming years. Leverage up too much and financial pain could ensue."

-Financial samurai

It's amazing how you only use this guy when you think he agrees with you. Remember he also recommends real estate crowdfunding.

His main reason is due to stocks being up 15% and San Fran being down 10%. Unlike him you were wrong and lost out during this time.

Obviously there is a potential downside to every investment including RE. But, I like how he is leaning toward selling his stocks and buying RE. That is what I did.

Isn’t it interesting that FS made his fortune from real estate? He bought rental properties and managed them. Just food for thoughts.

The property I bought last year is not only generating $5 k a year in positive cash flow (after all expenses including maintenance and vacancy) but it has gone up 10% in appreciation which means I have made more than 50% of my initial investment. Of course this is not the norm because it takes experience and good business sense to buy a property at below market price. I love RE and more importantly, I love being in control of my investment and the bags of money it has made for me and my family.

 

[wagrxm2000]

Obviously there is a potential downside to every investment including RE. But, I like how he is leaning toward selling his stocks and buying RE. That is what I did.

Isn’t it investing that FS made his fortune from real estate? He bought rental properties and managed them. Just food for thoughts.

The property I bought last year is not only generating $5 k a year in positive cash flow (after all expenses including maintenance and vacancy) but it has gone up 10% in appreciation which means I have made more than 50% of my initial investment. Of course this is not the norm because it takes experience and good business sense to buy a property at below market price. I love RE and more importantly, I love being in control of my investment and the bags of money it has made for me and my family.

Missed rent for just 2 months in a calendar year and that goes to $3k. Unexpected events then make that unprofitable. That roof will need replaced at some point for $8k, the tenant might freeze your pipes in the winter for $1k, main sewer line repair at a couple thousand to ten thousand, new fridge for $1k and the list could go on.

Or you could be lucky.

 

[BMBiology]

Missed rent for just 2 months in a calendar year and that goes to $3k. Unexpected events then make that unprofitable. That roof will need replaced at some point for $8k, the tenant might freeze your pipes in the winter for $1k, main sewer line repair at a couple thousand to ten thousand, new fridge for $1k and the list could go on.

Or you could be lucky.

That is why I always put away a significant amount of rent for unexpected and long term repairs, as well as for vacancy. Over a period of 10 years, something unexpected is bound to happen. When it does, then I am covered.

That is what I mean by having good business sense. I only buy properties that would cover all expected and unexpected expenses and would still positive cash flow. I make money from the extra rental income and from the appreciation.

 

[wagrxm2000]

That is why I always put away a significant amount of rent for unexpected and long term repairs, as well as for vacancy. Over a period of 10 years, something unexpected is bound to happen. When it does, then I am covered.

My point is why mess with all that when you can just toss money into stocks bonds CDs crowd funding etc? You keep acting like there is no downside.

 

[BMBiology]

My point is why mess with all that when you can just toss money into stocks bonds CDs crowd funding etc? You keep acting like there is no downside.

Simply put...I make a lot more money in real estate investing. I am not going to settle for 8-9% return in the stock market when I am making at least 15-20% in real estate.

Obviously, I am not against putting money in the S&P 500. But the truth is...going forward, the S&P is not going to have the same great return as the last 10 years. You are still going to make good money and you get to retire at 65 like everybody else.

I can’t borrow $300 k from Bank of America to buy stocks. But BOA would gladly lend me $300 k to buy RE. That is how I became wealthy at a young age. I can tell you this...it is a lot more fun having money when you are 35 vs. 65. I choose to take risk and put in the time. It has paid off handsomely. But, you be you. You got to know yourself and what you can and cannot do.

 

[wagrxm2000]

Simply put...I make a lot more money in real estate investing. I am not going to settle for 8-9% return in the stock market when I am making at least 15-20% in real estate.

Obviously, I am not against putting money in the S&P 500. But the truth is...going forward, the S&P is not going to have the same great return as the last 10 years. You are still going to make good money and you get to retire at 65 like everybody else.

I can’t borrow $300 k from Bank of America to buy stocks. But BOA would gladly lend me $300 k to buy RE. That is how I became wealthy at a young age. I can tell you this...it is a lot more fun having money when you are 35 vs. 65. I choose to take risk and put in the time. It has paid off handsomely. But, you be you. You got to know yourself and what you can and cannot do.

Still not admitting it I see

 

[Momus]

Someone is trying too hard talking up RE.

 

[BMBiology]

Still not admitting it I see

Isn’t it funny how the financial guy you religiously followed made his money by buying rental properties?

It is also interesting how FS doesn’t show his readers how to find good properties. Maybe it is a skill he doesn’t want others to know? Or maybe he just wants people to buy RE crowdfunding thru him so he would get a cut.

 

[wagrxm2000]

Isn’t it funny how the financial guy you religiously followed made his money by buying rental properties?

It is also interesting how FS doesn’t show his readers how to find good properties. Maybe it is a skill he doesn’t want others to know? Or maybe he just wants people to buy RE crowdfunding thru him so he would get a cut.

Someone may correct me but about 50% his passive income comes from stocks and bonds while about 20% and 10% comes from rentals and real estate crowdfunding

 

[BMBiology]

Someone may correct me but about 50% his passive income comes from stocks and bonds while about 20% and 10% comes from rentals and real estate crowdfunding

Why are you not listening to your financial God?

 

[wagrxm2000]

Why are you not listening to your financial God?

View attachment 258318

It's like you don't listen, his exact reasons for not being in real estate are the same I've been saying...

Because family comes first.

I take it I was correct since you didn't say anything differently, only 20% in rentals

 

[BMBiology]

It's like you don't listen, his exact reasons for not being in real estate are the same I've been saying...

Because family comes first.

I take it I was correct since you didn't say anything differently, only 20% in rentals

What are you talking about?

Do you think slaving away at Walgreens is using your time wisely? Is that best for your family?

 

[BMBiology]

I can understand why some people don’t want to do RE but it is ridiculous to say they don’t have the time when they are trying to make a few hundred dollars extra by working OT.

Being a slave to cvs, wag is more acceptable to them.

 

[wagrxm2000]

What are you talking about?

Do you think slaving away at Walgreens is using your time wisely? Is that best for your family?

You make 5k a year from your rental, living the high life i see.

Are you using free WiFi at Starbucks?

 

[BMBiology]

You make 5k a year from your rental, living the high life i see.

Are you using free WiFi at Starbucks?

The 5 k is just extra. I make my money from appreciation. That is where I collect my bags of money.

 

[BMBiology]

You make 5k a year from your rental, living the high life i see.

Are you using free WiFi at Starbucks?

You missed out:

 

[wagrxm2000]

The 5 k is just extra. I make my money from appreciation. That is where I collect my bags of money.

So you really do sit at Starbucks and use their WiFi every day, gotcha.

How hard is it living off $5k?

 

[BMBiology]

So you really do sit at Starbucks and use their WiFi every day, gotcha.

How hard is it living off $5k?

Much better than slaving at Wag. Have they cut your hours yet?

 

[wagrxm2000]

Much better than slaving at Wag. Have they cut your hours yet?

I'm being serious, how hard is it living off $5k?

I've heard of early retirement but this is extreme. How do you afford insurance, food, etc?

Does Starbucks allow a bed in their store?

 

[BMBiology]

I'm being serious, how hard is it living off $5k?

I've heard of early retirement but this is extreme. How do you afford insurance, food, etc?

Does Starbucks allow a bed in their store?

This “multimillionaire” can’t stop being a Corp slave even tho he lives in the middle of nowhere

 

[wagrxm2000]

This “multimillionaire” can’t stop being a Corp slave even tho he lives in the middle of nowhere

At least tell us how you afford rent in expensive California on $5k a year.

 

[Thoughtfulsinner]

Would this be the wrong time to say I closed a deal 2 weeks ago and just received a 550K bonus for it? All while getting my MD and picking up shifts at the 3 letter slave factory.

 

[wagrxm2000]

Would this be the wrong time to say I closed a deal 2 weeks ago and just received a 550K bonus for it? All while getting my MD and picking up shifts at the 3 letter slave factory.

Nope the slave factory has made all us long term pharmacists very wealthy

 

[Thoughtfulsinner]

Nope the slave factory has made all us long term pharmacists very wealthy

Nope the slave factory has made all us long term pharmacists very wealthy

No doubt. I just wanted to add my piece to the dick measuring contest between a few individuals ITT.

Carry on...

 

[BMBiology]

Nope the slave factory has made all us long term pharmacists very wealthy

You are a “wealthy” pharmacist but you let some store manager with a high school degree tell you what to do. That is not wealth!

 

[wagrxm2000]

You are a “wealthy” pharmacist but you let some store manager with a high school degree tell you what to do. That is not wealth!

We're actually partners, he knows he's clueless in the pharmacy. Not once has he told me what to do.

So about that rent, how do you afford it?

 

[mentos]

Would this be the wrong time to say I closed a deal 2 weeks ago and just received a 550K bonus for it? All while getting my MD and picking up shifts at the 3 letter slave factory.

Wow what kind of deal gives 550K bonus? That's crazy!

 

[321931]

Anyone looking into the healthcare stocks? Medicare for all is giving all healthcare stocks a good scare. I'm eyeing UNH.

 

[BMBiology]

We're actually partners, he knows he's clueless in the pharmacy. Not once has he told me what to do.

So about that rent, how do you afford it?

Did wag cut your hours or something? You are always online

 

[wagrxm2000]

Did wag cut your hours or something? You are always online

We're so efficient at work that I have time.

I'm still fully staffed at 84 hours.

Are you not going to answer how you afford rent off $5k a year?

 

[BMBiology]

We're so efficient at work that I have time.

I'm still fully staffed at 84 hours.

Are you not going to answer how you afford rent off $5k a year?

$70 k down payment with $5 k in extra cash plus $14 k in appreciation = $19 k/$70 k = 27% return for the property I purchased last year. I also got it for a good price (not including in the return).

I made more in RE last year than working as a pharmacist. I love rubbing it in your face while you are sweating your balls at Wag.

We get to retire young in the beautiful state of California.

 

[BMBiology]

Oh, did I mention I don’t have to pay taxes on my RE income? Doesn’t get better than that.

You need to get your head out of the sand. There is a reason why RE has made more millionaires than any other assets.

 

[wagrxm2000]

$70 k down payment with $5 k in extra cash plus $14 k in appreciation = $19 k/$70 k = 27% return for the property I purchased last year. I also got it for a good price (not including in the return).

I made more in RE last year than working as a pharmacist. I love rubbing it in your face while you are sweating your balls at Wag.

We get to retire young in the beautiful state of California.

The only money you made last year was $5k. Your appreciation is in the house not cash in hand.

So again I ask, how do you live off $5k a year?

Why do you refuse to answer that question?

 

[BMBiology]

The only money you made last year was $5k. Your appreciation is in the house not cash in hand.

So again I ask, how do you live off $5k a year?

Why do you refuse to answer that question?

That is from one property I purchased last year, you fool. I own multiple properties.

$70 k down payment with $5 k in extra cash plus $14 k in appreciation = $19 k/$70 k = 27% return for the property I purchased last year. I also got it for a good price (not including in the return).

 

[BMBiology]

Here is the beautiful thing about RE. If you lived in a house for 2 out of the last 5 years and you sell it, you don’t have to pay taxes up to $500 k in profit.

So you can move into your rental (only have to live there 50% of the time and go on vacation for the other 50%), then sell it and make bags of money without paying taxes. How hard do you have to work as a pharmacist to bring home $500 k? Just let that sink in for a minute.

 

[wagrxm2000]

That is from one property I purchased last year, you fool. I own multiple properties.

Oh yeah?

So you have what a million in debt and make $10k a year. Still doesn't answer the question.

I know you are making all this up, just admit it already.

 

[BMBiology]

Oh yeah?

So you have what a million in debt and make $10k a year. Still doesn't answer the question.

I know you are making all this up, just admit it already.

Yeah I am trying to impress people I don’t even know. I don’t know anything about RE. I am as ignorant as you right? Give me a break. Go on your jealous way.

 

[pezdispenser]

Here is the beautiful thing about RE. If you lived in a house for 2 out of the last 5 years and you sell it, you don’t have to pay taxes up to $500 k in profit.

So you can move into your rental (only have to live there 50% of the time and go on vacation for the other 50%), then sell it and make bags of money without paying taxes. How hard do you have to work as a pharmacist to bring home $500 k? Just let that sink in for a minute.

View attachment 258472

That is incorrect. Any depreciation you took is recaptured and taxed at 25%, and the 250k/500k exclusion only applies to the gains pro-rated to the period that the house qualifies as your primary residence.

Tax Rules Converting Rental Property To Primary Residence

 

[BMBiology]

That is incorrect. Any depreciation you took is recaptured and taxed at 25%, and the 250k/500k exclusion only applies to the gains pro-rated to the period that the house qualifies as your primary residence.

Tax Rules Converting Rental Property To Primary Residence

That is why it said “up to $500 k”. If you want to maximize $500 k in tax free profit, you must:

1) minimize depreciation
2) only make it as your primary residence after it has significantly gone up in value

404 | CWS Capital

www.cwscapital.com

This is exactly why I look at appreciation more than extra rental income (after expenses).

 

[pezdispenser]

That is why it said “up to $500 k”. If you want to maximize $500 k in tax free profit, you must:

1) minimize depreciation
2) only make it as your primary residence after it has significantly gone up in value

404 | CWS Capital

www.cwscapital.com

This is exactly why I look at appreciation more than extra rental income (after expenses).

1) You'll get taxed on depreciation recapture whether or not you claimed it, so you can't simply 'minimize' depreciation.

2) e.g. bought in 2011 at $300k and rented it out for 6 years (non-qualified use), convert to primary residence in 2017, sell in 2019 for $500k after 2 years of qualified residence.

Only 2/8 of the gain or $50k is eligible to be excluded under the 250k/500k primary residence exclusion. The remaining $150k is taxable.

The more years you leave it as a rental, the greater the proportion that you cannot exclude so will be taxed.

You will also pay taxes on depreciation recapture: 6 yrs x 200k estimated building value / 27.5 = $43,636 x 25% = $10,909 tax.

 

[BMBiology]

1) You'll get taxed on depreciation recapture whether or not you claimed it, so you can't simply 'minimize' depreciation.

2) e.g. bought in 2011 at $300k and rented it out for 6 years (non-qualified use), convert to primary residence in 2017, sell in 2019 for $500k after 2 years of qualified residence.

Only 2/8 of the gain or $50k is eligible to be excluded under the 250k/500k primary residence exclusion. The remaining $150k is taxable.

The more years you leave it as a rental, the greater the proportion that you cannot exclude so will be taxed.

You will also pay taxes on depreciation recapture: 6 yrs x 200k estimated building value / 27.5 = $43,636 x 25% = $10,909 tax.

You can minimize depreciation by doing 1031 exchange.

You are right about it being prorated. Let’s say you do 1031 exchange, then make it your primary residence for 2 or 3 years and then you sell it for $500 k profit.

Prorated 2 or 3 years of $500 k is $200 k or $300 k in tax free profit. Where are you going to get that kind of deal?

This explains it well:

I am planning to hold on to my rental properties for 20 years but the idea of making that kind of money tax free is very interesting.

 

[lane one]

Tax free gains in RE? Not so fast. Bernie is gonna need a lot to pay for healthcare...

 

[JustFillIt]

No doubt. I just wanted to add my piece to the dick measuring contest between a few individuals ITT.

Carry on...

I just want to say - I’m pretty sure I have the largest dick here.