Frugal Investing

[Beaver...@live.com]

I am making way too much money right now. I don't even want to spend it if I can help it but I should be earning interest on it. I am so unprepared but I never thought this day would come. What do I do?

[John Weiss]

On 7/6/2017 10:39, Beaver...@live.com wrote:
> I am making way too much money right now. I don't even want to spend it if I can help it but I should be earning interest on it. I am so unprepared but I never thought this day would come. What do I do?

First pay off all your credit card debt.

Then pay off any other loans that have an APR of 3% or more.

Then stash away in a SAFE account (e.g., Money market savings account,
CDs, or combination) AT LEAST 3 months gross wages. After continuing
per below, increase that to 6 months over time. If you can get CDs for
higher interest than Money market, split them up so they mature every 2
months or so, and automatically renew.

Are you contributing to an IRA (Roth preferred, if eligible) AND 401k
(if employer sponsors one)?

FIRST set up contributions for the max 401 contribution that your
employer matches (even a partial match) - a 50% match = an IMMEDIATE 50%
gain!

Go to Vanguard.com and set up an IRA. Vanguard is noted for having
just about the lowest management fees in the industry, as well as a wide
range of GREAT investment options. They will help you set up a
reasonable financial plan. Their reps are very helpful, and will give
you good advice for a startup IRA. They are salaried, so they won't
steer you into bad investments to reap commissions.

If you still have money to invest after those, set up a regular
brokerage account at Vanguard. Start by buying an S&P500 or NASDAQ
Index fund, and diversify as you become more familiar.

[Beaver...@live.com]

On Thursday, July 6, 2017 at 11:50:12 AM UTC-7, John Weiss wrote:
> On 7/6/2017 10:39, Beaver...@live.com wrote:
> > I am making way too much money right now. I don't even want to spend it if I can help it but I should be earning interest on it. I am so unprepared but I never thought this day would come. What do I do?
>
> First pay off all your credit card debt.
>

No credit card debt.

> Then pay off any other loans that have an APR of 3% or more.
>

No loans.

> Then stash away in a SAFE account (e.g., Money market savings account,
> CDs, or combination) AT LEAST 3 months gross wages. After continuing
> per below, increase that to 6 months over time. If you can get CDs for
> higher interest than Money market, split them up so they mature every 2
> months or so, and automatically renew.
>

Right now it's about 40 months wages just sitting in a brokerage account. We're talking about the minimum wage job I no longer have.

But then it was to keep living expenses safe in case my other venture derailed until I could figure out what to do with it. But now it's time to do something with it.

> Are you contributing to an IRA (Roth preferred, if eligible) AND 401k
> (if employer sponsors one)?
>

No

> FIRST set up contributions for the max 401 contribution that your
> employer matches (even a partial match) - a 50% match = an IMMEDIATE 50%
> gain!
>

I don't have a job. Kinda not into an IRA because I don't think I am going to make it that long.

> Go to Vanguard.com and set up an IRA. Vanguard is noted for having
> just about the lowest management fees in the industry, as well as a wide
> range of GREAT investment options. They will help you set up a
> reasonable financial plan. Their reps are very helpful, and will give
> you good advice for a startup IRA. They are salaried, so they won't
> steer you into bad investments to reap commissions.
>

Awesome!

> If you still have money to invest after those, set up a regular
> brokerage account at Vanguard. Start by buying an S&P500 or NASDAQ
> Index fund, and diversify as you become more familiar.

Yeah I am so busy and sleep deprived and suffering from information overload so I just kept it on the back burner while I earned only like $20 interest on way too much money.


As of now I am ready to just peel off living expenses and some working capital and just keep investing the rest. My overall goal is really just to see how much money I can die with.

[John Weiss]

On 7/6/2017 12:22, Beaver...@live.com wrote:

> Right now it's about 40 months wages just sitting in a brokerage account. We're talking about the minimum wage job I no longer have.
>
> But then it was to keep living expenses safe in case my other venture derailed until I could figure out what to do with it. But now it's time to do something with it.

OK. Keep about 12 months living expenses. Start investing the rest.

[catalpa]

<Beaver...@live.com> wrote in message
news:5bb480a6-51ba-40fb...@googlegroups.com...

>I am making way too much money right now. I don't even want to spend it if
>I can help it but I should be earning interest on it. I am so unprepared
>but I never thought this day would come. What do I do?

Open an account with Vanguard and invest in index funds.

Or buy low expense index ETFs in your brokerage account.

Keep in mind you should have a balance of equity and fixed income
investments. The ratio is decided by your risk tolerance.

[hchi...@hotmail.com]

On Thu, 6 Jul 2017 10:39:01 -0700 (PDT), Beaver...@live.com wrote:

>I am making way too much money right now. I don't even want to spend it if I can help it but I should be earning interest on it. I am so unprepared but I never thought this day would come. What do I do?

Crap! I hate it when that happens. Where is full-metal-grotus when we need
him?

[21bla...@gmail.com]

in case you don't know,
you can get 1.x% with an online savings [with checking] account

Ally bank is just one of several

marc

[Beaver...@live.com]

Dude, you have no idea how crazy the past few years have been. All this money and it doesn't mean a thing. All I want to do is what I have been doing all along. But you wanna know how crazy it is in Southern California? I quadrupled my income in 3 years and it's STILL NOT ENOUGH TO LIVE ON. I could have all the money in the world and it wouldn't matter to me if I couldn't live in this neighborhood and do the things I like to do every day. And the cash flow is temporary and I still really have no idea what I am doing.

I love America!

[Beaver...@live.com]

Thanks for the info.

I do have some high risk tolerance. Basically in 3 years I turned about $1000 into $150,000 all high risk but I hit the peak of my capabilities and it's time to start protecting and managing what I have made.

[Michael Black]

A couple of months ago I saw a teaser, "I inherited $50,000, what should I
do with it". But it was for a Q&A at a personal finance page, and the
answer was "ask an expert". They didn't give any hints.

Michael

[21bla...@gmail.com]

yes, 150k can or cannot be much, depending on what part of Calif you live in

best to have some kind of income -
you can go through 150k easily, or miserly, it depends on expenses

as far as making 150k grow, it's the old risk vs reward

crypto curriencies[?] have potential, but lots of risk
and vs as mentioned 1%+ from online savings

marc

[wilm...@gmail.com]

The Beaver shared,

"I do have some high risk tolerance. Basically in 3 years I turned about $1000 into $150,000 all high risk but I hit the peak of my capabilities and it's time to start protecting and managing what I have made."

Really? You should call Guinness. And yet you're on a dying newsgroup asking for advice on what to do with your money.

If true you should open an office on Wall Street and start a hedge fund, money, because continuing your ROR, in nine years you'll be the richest person in the world, and in a few more years you'll own ALL the money.

[Beaver...@live.com]

I wish it would work like that. This is where peak hits. I am on a plateau now and it will actually decline a bit once summer's over and there will be a few months where I make almost nothing.

Basically I am exploiting market price disparities as well as what the casual consumer knows about how certain things work versus what I know. Think retail arbitage though that isn't exactly it. I've reached the absolute peak of the kind of volume I can handle, as well as having multiple income streams shut down and also prices normalized to what consumers will pay, cutting me out. Also selling off all my collectables amassed from years of buying, hoarding and inheriting and I am running out of stuff.

I was extremely lucky and I have no problem admitting I really have no idea what I am doing, I would just watch the numbers keep going up in total awe and then when the work situtation was shaken up, I just bailed. And the previously mentioned figure isn't all cash but the value of my inventory.

[Dennis]

On Mon, 10 Jul 2017 11:45:31 -0700 (PDT), Beaver...@live.com wrote:

>Basically I am exploiting market price disparities as well as what the casual consumer knows about how certain things work versus what I know. Think retail arbitage though that isn't exactly it. I've reached the absolute peak of the kind of volume I can handle, as well as having multiple income streams shut down and also prices normalized to what consumers will pay, cutting me out. Also selling off all my collectables amassed from years of buying, hoarding and inheriting and I am running out of stuff.
>
>I was extremely lucky and I have no problem admitting I really have no idea what I am doing, I would just watch the numbers keep going up in total awe and then when the work situtation was shaken up, I just bailed. And the previously mentioned figure isn't all cash but the value of my inventory.

How many Metallica Tour shirts does it take to get a Big Mac?

Dennis (evil)
--
"There is a fine line between participation and mockery" - Wally

[Dennis]

On Thu, 6 Jul 2017 12:22:51 -0700 (PDT), Beaver...@live.com wrote:

>
>As of now I am ready to just peel off living expenses and some working capital and just keep investing the rest. My overall goal is really just to see how much money I can die with.

I could hook you up with this Nigerian dude who'll split a ton of cash
with you if you'll just front him a few $K to cover his expenses
getting it out of Africa!

Dennis (evil)
--
I'm behind the eight ball, ahead of the curve, riding the wave,
dodging the bullet and pushing the envelope. -George Carlin

[Beaver...@live.com]

My back hurts just thinking about it. I did sell a single shirt to a museum for $250 a few months ago. It's time for me to start dressing like an adult anyway.

[Beaver...@live.com]

I will pass but I appreciate the offer and everything everyone in this group has done to encourage and influence me. I would not be where I am today without you.

[Beaver...@live.com]

On Thursday, July 6, 2017 at 10:39:06 AM UTC-7, beaver...@live.com wrote:
> I am making way too much money right now. I don't even want to spend it if I can help it but I should be earning interest on it. I am so unprepared but I never thought this day would come. What do I do?

Is $80-100,000 too low to reap enough dividends to pay my basic monthly living expenses of under $1000?

[21bla...@gmail.com]

you can easily get 1%+ with insured bank accounts

dividends are only stocks, i think, and with stocks come risk

let's say 1% x 100,000 is 10k, divided by 12 equals $833.33
[if you can get more than 1%, then closer to $1000 a month]

you can also look into laddered CDs, for more interest;
do some research on this; you only tie up a portion at a time of your 100k

marc

[John Weiss]

On 10/24/2017 14:58, 21bla...@gmail.com wrote:

>> Is $80-100,000 too low to reap enough dividends to pay my basic monthly living expenses of under $1000?
>
> you can easily get 1%+ with insured bank accounts
>
> dividends are only stocks, i think, and with stocks come risk
>
> let's say 1% x 100,000 is 10k, divided by 12 equals $833.33
>

> you can also look into laddered CDs, for more interest;
> do some research on this; you only tie up a portion at a time of your 100k

The key is to find a bank/credit union that won't charge more in fees
than you get in interest. The good news is that $100K may be enough for
them to waive monthly fees; the bad news is that you may have to keep a
chunk of that money in low- or no-interest accounts.

Interest on Money Market accounts is in the 0.5% range. Shorter-term
CDs (12-24 months) max out around 2%. Laddering them takes a bit of
time and effort to set up the sequence; and at the beginning, much of
your $$ will be in very-short-term CDs or holding accounts with lower
interest. Of course, YMMV depending on type of bank (brick, online,
credit union...) and current special offers.

[ItsJoan NotJoann]

On Tuesday, October 24, 2017 at 6:49:14 PM UTC-5, John Weiss wrote:
>
> The key is to find a bank/credit union that won't charge more in fees
> than you get in interest. The good news is that $100K may be enough for
> them to waive monthly fees; the bad news is that you may have to keep a
> chunk of that money in low- or no-interest accounts.
>

I pay no fees or a monthly charge on checking and savings account;
never have. I only keep a few thousand dollars in the savings
account and that's to cover any appliance or vehicle emergencies.
Years ago I signed up to have my paycheck deposited in my checking
account and that qualified me for free checking. I only write 4-5
checks per year and when I need new ones (the plain blue or green)
I order them online from one of the check printing places for a LOT
less than the bank charges.

>
> Interest on Money Market accounts is in the 0.5% range. Shorter-term
> CDs (12-24 months) max out around 2%. Laddering them takes a bit of
> time and effort to set up the sequence; and at the beginning, much of
> your $$ will be in very-short-term CDs or holding accounts with lower
> interest. Of course, YMMV depending on type of bank (brick, online,
> credit union...) and current special offers.
>

I don't even fool with CD's any more as the bank keeps the lion
share of interest. That money is with an investment company.

[Beaver...@live.com]

On Monday, July 10, 2017 at 3:07:49 PM UTC-7, Dennis wrote:

I just got $1000 for like 15 shirts. And this is having a pro sell them for me because I don't have time for that.

[Beaver...@live.com]

So I bought 25,000 worth of some Fidelity short term treasury bond index fund a year ago. It's now worth 26,500.

Now what?

[John Weiss]

Now you do your own math, because 21blackswan didn't do it correctly.
1% of $100K is $1K/year, not $10K.

It is virtually impossible to get a consistent 12% yield today
($1K/month from your $100K). You MIGHT luck into a security that will
pay that for a while, but there is no way to predict which one it will be.

You cannot generate the income you want from a $100K investment; you
need more like $1,000,000. While CD yields have been in the 2-3% range,
and you got around 6% from your bond fund, both are likely to trend
downward as the Fed reduces interest rates. With the results you cite,
you would have gotten $6,000, or $500/month, if you had put all of the
$100K into that fund. Those results are not likely repeatable in
today's market.