Money question for the Susan Orman Type?
This is a question for those Financial Gurus out there, AKA Susan Orman Type.
About three years ago I was taken to court over a frivolous law suit. Although I did not loose per say, the court battle ate through my finances like acid. I went from a 80K net worth to 0.
Determined to put it all behind me, I started all all over. In two years my net worth went from 0 to 30K. Here is my financial portfolio.
21k in very strong Bank Stocks. Strong meaning those banks that survived and thrived.
9K in physical Gold Bullion.
I think I also have 3k in a company savings plan.
In addition I have about 40K in credit available to me.
although my career has been pretty lucrative for me, I would like to plan an exit strategy. I love my job but hate my schedule. I hate the area and apartment I live in. I would like to start investing a bit more aggressively so that i can maybe move to another city. Here is what I think my options are:
1. Work with family members or other trusted investors to buy distressed real estate for rental income.
2. use about 10k of my credit to start day trading.
3. Work with family members or other trusted investors to start a social coffee shop and or juice bar.
4. Works with friends to start a part time business repairing computers and cell phones.
5. change nothing and tough it out a bit longer, and try to save up to 70K
What do you think? what would you do?
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about 1 year ago
Your thoughts and my thoughts:
1. Work with family members or other trusted investors to buy distressed real estate for rental income.
If you’re good at real estate and are reasonably hnd with the ability to fix up properties this could be a good idea for you.
2. use about 10k of my credit to start day trading.
Day trading is glorified gambling. You have as much of a chance of losing money as making any. Not a good strategy for long term reliable income.
3. Work with family members or other trusted investors to start a social coffee shop and or juice bar.
You’ll put more time into a job like this than a regular job. You also better have a good business plan and good start up capital. If you do your home work and are willing to work hard this could work.
4. Works with friends to start a part time business repairing computers and cell phones.
Same as above. If you’re qualified to fix computers and phones, have a good business plan and enough start up capital you might do very well.
5. change nothing and tough it out a bit longer, and try to save up to 70K
The most conservative idea.
Whatever you do, good luck.
about 1 year ago
I was in your situation about 5 years ago and I’ve been doing some things you are suggesting. Only a couple of years left in my current job. Here’s my take on your questions:
1. I just started doing this. Not a bad idea. Make sure any profit projections you make are based on the rental income you can generate. If you can make a profit on the rental income then it’s potentially good opportunity. Do not buy the properties where the only way you can make money is if the property appreciates in price. You can’t count on price appreciation as a sure thing. I would also recommend buying your properties in cash (or as close to it as you can). If you can only afford to to this by borrowing a lot of money on the properties, then don’t do it.
2. Don’t borrow or use credit to trade stocks – don’t even trade on margin. I make as much money trading stocks (and options) as I do in my “regular” job. Don’t day trade. Develop a strategy that you fully understand and then practice that strategy through “paper” trading until you can prove that it’s successfull.
3. It depends on your specific marketplace and the demand in that area for the business. It this type of business is a passion for you then take a good hard look at doing it.
4. I like this one. Low start up cost and not much upfront capital required to get started. If this fails your risk is pretty limited.
5. It depends on how much you hate your current schedule. If time permits, it would be good if you can gradually start some of your other ideas while still having the income from your current job.
Also, be careful about having family members as business partners. It works sometimes, but an absolute mess when it fails. I recently had a family member who is aware of what I make trading stocks ask me to trade their portfolio for them. I said no way – I trust what I do, but I don’t want the added responsibility/pressure of managing someone else’s money.
I like the goals you are setting. Good Luck.