I'm wondering if I can have any advice on this matter and perhaps an idea of what would you do with this money if the intent is generating income from investments? I'm thinking the safest option is to buy my father a business because in this economy (US), jobs are scarce and job security is shaky. It's always stressful working for someone else, let alone receiving a tiny portion of the boss's salary. My father's background is in sale's management and I'm thinking he would be fit to manage and own a business with an already built-in success model. That's the great thing about buying a business, assuming the original owner is quitting for relocation or retirement - there is an existing successful business model with an established reputation and consumer base.
I've also pondered buying a rental property as it is a goal of mine in addition to becoming a physician. I consider rental properties a protection against inflation since the rent can be adjusted. Furthermore, there are always people looking for homes unlike owning a business where suddenly demand is crippled by a recession. There's also that fulfilling feeling of owning your own property, which is why it's a goal of mine. I'm just worried on how much the usual commitment would be...I intend to go to college and eventually medical school, meaning I won't have the time to really manage the property like a full time owner can. I do hear, though, that there are people with multiple properties who do just fine. Perhaps owning property with minimal involvement can be done if one hires a management team to oversee all needs for repairs? Sure, the investment would be diluted, but I would be secure.
Are REITs a better option than owning actual real estate? I've heard from a few people that they generate a nice return with no involvement and people are flocking to them. I'm just worried about the whole REIT deal because I've been reading Austrian economics and the future looks grim for businesses like these. The returns are only profitable at this moment due to borrowing at very low interest rates and once interest rates raise (and they'll probably raise dramatically), all this hype will collapse ... another bubble ended.
Real estate trust deeds seem VERY profitable and safe since the borrower is basing this loan in collateral and the interest rates from private lenders are much higher than banks. I've heard that within a few years, the original lending amount can be doubled. This is a huge return, but the obvious downfall is that your money will be 'locked' for 5 years or so. I'm looking to generate sustainable monthly income so maybe this route isn't the best for my goals.
Since I have a thrill seeking side of myself, venture capital and business investing so attractive to me, attractive enough for me to fantasize about being an angel investor after I've an established professional. I've entertained the idea of taking on a greater risk to invest in start up companies for equity. Of course, the only drawback is the risk. How does one determine a potential profitable company from a flop? I heard direct equity investing in already established big businesses looking for even more growth is safer, but how big are the returns? Is it worth it?
That's all I'll write because I'm almost positive no one wants to continue reading such a lengthy post. I've been known to struggle with brevity and end up annoying a lot of people in the process, so I'll leave it at this. Thanks SO SO much for taking the time to read this and for your advice.
And the emerging markets and developing countries have a history of numerous defaults. Its certainly possible that the US could experience inflation like the 70's or worse, but right now the markets (which are comprised of lots and lots of smart people) are pricing in deflation, not inflation (based on bond yields). By all means, diversify internationally, but currency risk is a very real risk. Just because the situation for a company, or even a currency looks bad, does not mean an investment will do poorly. Often its the companies that nobody wants to touch that can be a great investment if things happen to turn around for them.