Warren Buffet, Investing, Side Hustles, and the Market (1 Viewer)

[MTDB1983]

Let’s talk about money y’all. With the introduction and subsequent boom and reachability of the internet, never before have more people been able to become financially independent than during this era.

So let’s talk about why. Let’s talk about the opportunity that the internet affords us. Let’s talk the market. Who do you trust? What is your plan? Where are you in that plan?

My wife and I were bequeathed $90k in 2012. I stuck $25000 into the market. I had $15000 in Facebook using margin when FB was $19 a share. I took it out when it doubled. Got totally out of the market because the prediction was Democratic leadership would tank the market. Let’s not get into politics.

Point is, It got as high as $220. My $25k portfolio would be worth near $300k now.

We were young, dumb and lacked focus and leadership. We had no mentors. 4 years later in 2016 a Scottrade employee sent me access to my old portfolio. That’s when I realized the gargantuan financial mistake I had made.

Last year I buckled back down. We had been saving 15% of our paycheck but the money was just sitting there, stagnant, earning nothing. So as I am re-acclimating myself to the market I started learning anything I could about Warren Buffet and the market as a whole.

My wife and I established our Roth IRAs and we have an individual brokerage account. We plan to start rental real estate soon.

So, inquiring minds want to know, what financial plans do you all have going? Mind sharing? Tips? Ideas? Got a side hustle going? Care to verbally assist others to get ahead?

I grew up brutally poor. I don’t want my 7 mo old daughter to.

 

[bclemms]

My plan is to make big movements over medium periods of time by being quite contrarian.

Ride the big run up and when you see people that normally don't talk about investing, the economy and stock market jumping in the market then it's time to get out. Wait for the bust and when everyone is crying and freaking out start buying. Rinse and repeat.

Signs I look for to get out.
1) People getting into flipping homes and buying rental properties at a fast pace.
2) Record runs, low unemployment, rising interest rates, a very healthy economy.
3) A hot new sector that has far outpaced profits.
4) People talking about fundamentals not mattering anymore and this irrational wave after a big run.
5) Interest rates quickly rising over a years time.

Signs I look for to get in.
1) Massive sell off over a month or more.
2) Quickly falling interest rates.
3) Panic by the average Joe, selling what he has left.
4) Big spike in layoffs.

When I look to get out of stocks then I like to get into gold and cash.

I spend too much time with money on the sidelines and haven't got the nerve to short but over the past 15 years it's paid off well. Built up a nice little nest egg. I'm not quite 40 years old but seems to be working to beat the market average without taking big risks. Every now and then I'll buy a big sell off and then turn around and sell the bounce. It made me over 5% one day last month but I don't get greedy and those days are rare. I just figure if I can remove myself from the big valleys by selling short of the peaks then it's worthwhile.

 

[Saints#34]

Its time for you to spend a few weeks at bogleheads.org

 

[mjcouvi]

My plan is to make big movements over medium periods of time by being quite contrarian.

Ride the big run up and when you see people that normally don't talk about investing, the economy and stock market jumping in the market then it's time to get out. Wait for the bust and when everyone is crying and freaking out start buying. Rinse and repeat.

Signs I look for to get out.
1) People getting into flipping homes and buying rental properties at a fast pace.
2) Record runs, low unemployment, rising interest rates, a very healthy economy.
3) A hot new sector that has far outpaced profits.
4) People talking about fundamentals not mattering anymore and this irrational wave after a big run.
5) Interest rates quickly rising over a years time.

Signs I look for to get in.
1) Massive sell off over a month or more.
2) Quickly falling interest rates.
3) Panic by the average Joe, selling what he has left.
4) Big spike in layoffs.

When I look to get out of stocks then I like to get into gold and cash.

I spend too much time with money on the sidelines and haven't got the nerve to short but over the past 15 years it's paid off well. Built up a nice little nest egg. I'm not quite 40 years old but seems to be working to beat the market average without taking big risks. Every now and then I'll buy a big sell off and then turn around and sell the bounce. It made me over 5% one day last month but I don't get greedy and those days are rare. I just figure if I can remove myself from the big valleys by selling short of the peaks then it's worthwhile.

You think you're playing something beyond chance? I don't know man. If you're figuring the ups and downs based on trends, then who wouldn't be able to? You may be lucky.

 

[You]

Warren buffet buys when the herd gets scared and if he sells, it’s when exuberance is overwhelming or fundamentals break down. He is remarkably optimistic and very financially adept. He has very good analysis on value.

I’ve been a buyer at the current market levels. Trading is well below the 50 day moving avg and that is a historically good opportunity.

As for rental real estate; are you looking to borrow money?

 

[mt15]

Our plan isn’t as exciting as bclemms, but much safer and will do pretty well. We buy only stocks which pay dividends and hold them. When we retire our dividends will be a separate income stream, and not an insignificant one.

There are some stocks which pay great dividends, and will also appreciate in value during good years. In bad years, they still pay dividends.

Warren Buffet would advise against trying to time the market. Get in and stay put. Oh, and diversify. You were too heavy on one stock, that’s risky. We had some GE, which we got out of when it was starting to fall, about $30 something. We took a hit, but not enough to really hurt us because it was only one of about 60 different stocks.

Oh and this advice is worth exactly what you paid for it.

 

[UncleTrvlingJim]

Dollar cost averaging. Start now, a set month every month, don't look at your account for 15 years.

 

[MTDB1983]

Warren buffet buys when the herd gets scared and if he sells, it’s when exuberance is overwhelming or fundamentals break down. He is remarkably optimistic and very financially adept. He has very good analysis on value.

I’ve been a buyer at the current market levels. Trading is well below the 50 day moving avg and that is a historically good opportunity.

As for rental real estate; are you looking to borrow money?

Yes. I’m open ears.

 

[You]

Yes. I’m open ears.

The question on rental property is whether you can sustain a mortgage. can you afford to pay the note when the place is unrented? The tradeoff is that you have less invested and returns can be much higher when it IS rented.

There’s a method that can pay off nicely if you know your market.
Buy low in good neighborhood. Look for repo’s. Buy with cash so you can close quickly. Do some smart refurb and get it appraised. If you did it right, the appraisal will come in higher than what you have in it.
Then borrow on the high appraised value and rent or flip it.
Gotta be smart in how you refurb though. Don’t go putting granite and marble and hardwood floors in a rental. Keep it modest but attractive. In a flip, it can be different and you can afford to go more upscale sometimes. Just know your market.

Anyway, do your homework: plenty of info out there. Podcasts, books, google etc

 

[MTDB1983]

The question on rental property is whether you can sustain a mortgage. can you afford to pay the note when the place is unrented? The tradeoff is that you have less invested and returns can be much higher when it IS rented.

There’s a method that can pay off nicely if you know your market.
Buy low in good neighborhood. Look for repo’s. Buy with cash so you can close quickly. Do some smart refurb and get it appraised. If you did it right, the appraisal will come in higher than what you have in it.
Then borrow on the high appraised value and rent or flip it.
Gotta be smart in how you refurb though. Don’t go putting granite and marble and hardwood floors in a rental. Keep it modest but attractive. In a flip, it can be different and you can afford to go more upscale sometimes. Just know your market.

Anyway, do your homework: plenty of info out there. Podcasts, books, google etc

Yes, this is more or less what my advisors are telling me. Thank you for this advice. It’s invaluable.

May I ask what your background is?

 

[You]

Yes, this is more or less what my advisors are telling me. Thank you for this advice. It’s invaluable.

May I ask what your background is?

Background is marketing and finance. Some real estate and many years as an invester

 

[nolaswede]

Its time for you to spend a few weeks at bogleheads.org

Agree with Saints#34. By far the best financial website out there. And we lost a great one today. Mr Bogle, IMO the most influential person in the financial industry. RIP Sir!

 

[MTDB1983]

John Bogle died!? That stinks. May he RIP.