Need some opinions

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
PernInc
Posts: 17
Joined: Tue Aug 09, 2011 3:56 pm

Need some opinions

Post by PernInc » Tue Aug 09, 2011 4:53 pm

I've read both of the stickies at the top, I've been doing research the past couple of weeks, learning the basics..what certain terms mean..etc..etc.

But just want to hear some opinions on what I should do. Since my situation is different than most.

I am on disability, therefore no sufficient income ...only income is SSI. I would love the day to come where I could work again( certainly not one of those taking advantage of not doing so, its driving me nuts not being able to work the last 4 years, that is why I am looking at investing so I can start making some money until that day comes).

I got a settlement because of the injury, a decent amount but certainly not enough to live on forever..not even close..so I want to use this to make more. Goal is to take advantage of getting this settlement and become wealthy. Certainly not out spending , buying cars and other toys , just wasting the money.

However, I do have to pay bills - apt( and everything that goes with that) , car , phone, etc. And my settlement money has been sitting in a savings account since Ive gotten in 6 months ago. Obviously that is a waste, which is why I'm looking to invest.

Bottom line is the money I get from SSI isn't nearly enough to cover the expenses every month, so I am losing money and something has to be done about it. Like I said I'm not out spending all my money , but its still slowly decreasing.

I've been to a financial advisor( morgan stanley-smith barney) and talked about options. She went over some things , I learned a little but was a bit confusing at the time. I took it all in..did some more research online the past few weeks and now know much more. Never really payed attention to the stock market but have been doing so the past few weeks.

Would like to know what some of you would do. Like I said, I know its a different situation than most , I don't have an income to fall back on if I did lose so I'm guessing some of you will say to be very conservative, but I also want to find ways to make significant money( who doesn't?) .

Also planning on getting into real estate( been learning about that for the past year, do know a lot about it and what my goals are with that).


By the way, 29 years old. its been miserable not being able to work since I was 25 ( at the time was a personal trainer and had big things going on, and in the near future). Its time to get things going.

Thanks in advance.

retiredjg
Posts: 34397
Joined: Thu Jan 10, 2008 12:56 pm

Post by retiredjg » Tue Aug 09, 2011 5:45 pm

PernInc, welcome to the forum!

You want to make a lot of money. To do that, you have to take a lot of risk. That means you could just as easily lose your money as make more money. Unfortunately, it doesn't sound like losing your money is an option.

This is not what you want to hear, but what you need to be thinking about is "preservation" of your assets rather than huge growth of your assets. Some amount of slow growth will be necessary to keep up with inflation. Trying to go beyond that could be too risky.

You have not told us enough to actually help you. I don't know if I would know how to help anyway. Some options I can think of to research:
  • -an income annuity (aka SPIA, single premium immediate annuity) but I doubt it would pay much since you are so young;
    -an income paying mutual fund like Wellington which is 60% stocks, 40% bonds and pays you something each month or quarter (might not be much though)
    -a simple portfolio that you withdraw from each month

    -do NOT consider anything called a "variable annuity" and if someone wants to sell you one, you know that person is trying to make money rather than trying to help you out
    -do NOT consider anything called an "indexed annuity", same warning as above

User avatar
ruralavalon
Posts: 14267
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Post by ruralavalon » Tue Aug 09, 2011 5:56 pm

Welcome to the forum :) .

Sorry to hear of your disability. Its great that you are thinking of investing, rather than wasting, the settlement.

The first thing to do is nothing. Beware of anybody (advisor, friend, family member, broker etc) trying to sell you anything (options, commodities, stocks, bonds, mutual funds, insurance, annuity, etc). Just keep the settlement in a federally insured bank account or accounts, or short term CDs, for now.

The second thing to do is educate yourself: try this on-line book -- http://investingroadmap.wordpress.com/ ; the wiki -- Wiki article link: Getting Started ; and perhaps one of the books from the General Investing section of this reading list -- http://www.bogleheads.org/readbooks.htm . Self-education is your best and only real defense against bad advice.

Then post your financial details here in this format -- http://www.bogleheads.org/forum/viewtopic.php?t=6212 -- for some concrete suggestions.

Don't let any advisor or financial salesperson rush you into doing anything. Mistakes are easy to make. Retiredjg is right-- unless the settlement is large you will need to very carefully balance risk (and the chance of growth) against the need for preservation of your money.

I hope that this helps.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

livesoft
Posts: 63000
Joined: Thu Mar 01, 2007 8:00 pm

Post by livesoft » Tue Aug 09, 2011 6:18 pm

A relative of mine is on social security disability. Their technique is to cut expenses so that they can live solely off of that income.
Wiki This signature message sponsored by sscritic: Learn to fish.

wilked
Posts: 1354
Joined: Thu Mar 24, 2011 1:50 pm

Re: Need some opinions

Post by wilked » Tue Aug 09, 2011 6:36 pm

PernInc wrote: I am on disability, therefore no sufficient income

Bottom line is the money I get from SSI isn't nearly enough to cover the expenses every month, so I am losing money and something has to be done about it.
PernInc wrote: Also planning on getting into real estate( been learning about that for the past year, do know a lot about it and what my goals are with that).
Something doesn't quite compute here

wilked
Posts: 1354
Joined: Thu Mar 24, 2011 1:50 pm

Post by wilked » Tue Aug 09, 2011 6:37 pm

You are speaking in roundabout terms. If you want advice on improving cashflow, you will need to describe your budget in detail

djw
Posts: 1456
Joined: Tue Apr 08, 2008 9:34 pm

Post by djw » Tue Aug 09, 2011 7:08 pm

The implicit assumption of your post is that the only way to solve your problem is through financial investing. I suggest that you broaden your search and think outside the box.

Posters to this forum will point out from time to time that the best way to make money and improve your standard of living (and happiness) is to invest in yourself. Most people make most of their money through employment, not investing.

I have no idea what sort of disability you are living with, and it really doesn't matter to me. Whatever it is, I'll bet that it does not make it 100% impossible to earn money by using your brain and/or body in some way. If you can write an intelligent posting to this forum (as you have) you can find a way to make some money using your brain.

I know nothing about your education, skills, and experience so I won't waste your time by listing a bunch of examples which may not be possible given your disability, but I'll throw out a few:

Writing of some type
Answering phone calls
Making phone calls (eg. sales calls)
Creating a website which you continually update, supported by ads (eg. Drudge Report)
Designing and/or maintaining websites for others
Sell other people's stuff for them using eBay

If there's a non-disabled person who can help with a few tasks that you can't readily do yourself, so much the better.

You can afford to underbid other job applicants since you might say this will be your secondary, not primary, source of income. Your state probably has an office or a non-profit group that helps find work for disabled persons.

My cousin was extremely autistic, yet he was always employed in a full-time job outside the house and learned to travel back and forth on the bus all by himself. His last job was baking bread at a fine dining restaurant. The repetitive nature of the task and being able to work alone without needing to communicate with his coworkers was right up his alley. He never missed a day of work.

It appears that you don't need to earn a high salary, just enough to supplement your settlement. Perhaps you're not up to performing brain surgery, but there must be lots of stuff you could do to make some extra dough within your physical limitations.

I leave it to other bogleheads to give you investment advice. I've said enough.
Love many, trust few, and always paddle your own canoe

User avatar
norookie
Posts: 3016
Joined: Tue Jul 07, 2009 1:55 pm

Post by norookie » Tue Aug 09, 2011 7:21 pm

:D PernInc welcome. I'm falling asleep at the wheel.
" Wealth usually leads to excess " Cicero 55 b.c

btenny
Posts: 4623
Joined: Sun Oct 07, 2007 6:47 pm

Post by btenny » Tue Aug 09, 2011 7:24 pm

One of the guys I knew in college 40+ years ago was in a wheel chair and paralized from mid chest. Today he is a multi-millionare. He went to work part time as a bookkeeper and store helper for a McDonalds franchisee while we were in college. After a year or so the guy made him the manager of a store. He did great at it. No need to walk to do the books and manage people, just be smart and a good guy. Well after a few years he bought his own store and then after a few years he bought another and so on.

So just because you are disabled does not mean you cannot work or have full life.

Bill

User avatar
norookie
Posts: 3016
Joined: Tue Jul 07, 2009 1:55 pm

Post by norookie » Tue Aug 09, 2011 7:42 pm

norookie wrote::D PernInc welcome. I'm falling asleep at the wheel.
P.S. Plus not enough info. Bi-polar, Alcoholic, or missing extremities? You seem to know how to assess your situation :? "I'm on disability",... I've seen to many on disability who leave it at that, period :?
Last edited by norookie on Tue Aug 09, 2011 7:54 pm, edited 1 time in total.
" Wealth usually leads to excess " Cicero 55 b.c

PernInc
Posts: 17
Joined: Tue Aug 09, 2011 3:56 pm

Post by PernInc » Tue Aug 09, 2011 7:49 pm

Thanks for the responses, retired/rural..I'll take that advice.

Still going to see the financial adviser again tomorrow , to learn some more ..pick her brain, etc. Won't sign up with anything yet.


As for the others about the disability..I'm definitely not on here looking for sympathy. I wouldn't have even shared it if it didn't factor into what my goals were, wanted to be as specific as possible without telling everything, so I could get some good answers. However, kinda figured most would just talk about that..was right of course.

There are plenty of disabilities that people can work thru, fully aware of that. 9-5 type job for me is out of the question, which is what I was referring to. Bosses aren't too fond of you leaving whenever you have to, which is very often. That is why I am looking into something like real estate( not becoming a realtor and working for others , but flipping houses for example) , so I can work on my own time. But in the meantime I wanted to put my money to work, instead of just sitting in a savings. Thats why I came on here, for that type of advice. Not about what I can do with a disability.
Last edited by PernInc on Tue Aug 09, 2011 7:53 pm, edited 1 time in total.

PernInc
Posts: 17
Joined: Tue Aug 09, 2011 3:56 pm

Post by PernInc » Tue Aug 09, 2011 8:06 pm

norookie wrote:
norookie wrote::D PernInc welcome. I'm falling asleep at the wheel.
P.S. Plus not enough info. Bi-polar, Alcoholic, or missing extremities? You seem to know how to assess your situation :? "I'm on disability",... I've seen to many on disability who leave it at that, period :?
I said I was on disability so people knew I don't have a sufficient income. And that the spending each month is more than what I am getting. Just wanted to be clear about that, so I could get the right advice. The reason for being on disability wasn't important. I wasn't asking advice on what I can do with a disability( I say that with sincerity, not trying to be an a**).

+$674 for SSI
- $1450 for apt ( including everything)
- $ 600 for other bills
Then I'd say about another 1000 a month for food/gas/etc.

Around $3050 going out, $674 coming in. Obviously not good. Which is why I want to put the money to work, and start something else ( such as the flipping houses) so I could start earning( my goals are high).


Edit: guess I should add I haven't been on SSI for the past 4 years since I've been injured. I just got on it last December..was in and out of hosipitals/brain rehabs before that. I wasn't sitting at home collecting checks.

So the money just started coming in, and want to know the best ways to make the most out of it, instead of just spending it. A lot of people would just use it on nice things, get a house..car..trips..etc. But I decided to come on here and ask the people that are into investing. Those are things I want eventually of course, but want to make more from this money I have before " starting" that lifestyle so to say.

retiredjg
Posts: 34397
Joined: Thu Jan 10, 2008 12:56 pm

Post by retiredjg » Tue Aug 09, 2011 8:21 pm

PernInc wrote:Still going to see the financial adviser again tomorrow , to learn some more ..pick her brain, etc. Won't sign up with anything yet.
The most important thing to know about your "financial advisor" is that she is a sales person who may not have any duty to act in your best interest. It would be best for you to learn enough about investing, which can be quite simple, to not even need an advisor. Then if you choose to use one, you will actually know what you are doing and how to choose someone suitable to help you and not sell you stuff you don't need.

Do some research on "fiduciary duty" vs "suitability standard" so you'll know what I'm talking about.

Stick to your plan not to sign up for anything yet. There is nothing to lose by spending more time on your financial education.

livesoft
Posts: 63000
Joined: Thu Mar 01, 2007 8:00 pm

Post by livesoft » Tue Aug 09, 2011 8:25 pm

I do not know how big a pot of money you got to work with, but you should consider yourself retired. The sustained withdrawal rate from a portfolio when you are this young is probably in the 3% range annually. If you are withdrawing more than that including any advisor fees, then this money is not going to last very long at all.

Retirees in that situation usually reduce expenses or go back to work.
Wiki This signature message sponsored by sscritic: Learn to fish.

retiredjg
Posts: 34397
Joined: Thu Jan 10, 2008 12:56 pm

Post by retiredjg » Tue Aug 09, 2011 8:33 pm

l'm even wondering if 3% is too much. Can you explain?

PernInc
Posts: 17
Joined: Tue Aug 09, 2011 3:56 pm

Post by PernInc » Tue Aug 09, 2011 8:38 pm

retiredjg wrote:
PernInc wrote:Still going to see the financial adviser again tomorrow , to learn some more ..pick her brain, etc. Won't sign up with anything yet.
The most important thing to know about your "financial advisor" is that she is a sales person who may not have any duty to act in your best interest. It would be best for you to learn enough about investing, which can be quite simple, to not even need an advisor. Then if you choose to use one, you will actually know what you are doing and how to choose someone suitable to help you and not sell you stuff you don't need.

Do some research on "fiduciary duty" vs "suitability standard" so you'll know what I'm talking about.

Stick to your plan not to sign up for anything yet. There is nothing to lose by spending more time on your financial education.
Will do. Thanks .

PernInc
Posts: 17
Joined: Tue Aug 09, 2011 3:56 pm

Post by PernInc » Tue Aug 09, 2011 8:39 pm

livesoft wrote:I do not know how big a pot of money you got to work with, but you should consider yourself retired. The sustained withdrawal rate from a portfolio when you are this young is probably in the 3% range annually. If you are withdrawing more than that including any advisor fees, then this money is not going to last very long at all.

Retirees in that situation usually reduce expenses or go back to work.
What does the 3% mean?

User avatar
norookie
Posts: 3016
Joined: Tue Jul 07, 2009 1:55 pm

Post by norookie » Tue Aug 09, 2011 8:41 pm

PernInc wrote:
norookie wrote:
norookie wrote::D PernInc welcome. I'm falling asleep at the wheel.
P.S. Plus not enough info. Bi-polar, Alcoholic, or missing extremities? You seem to know how to assess your situation :? "I'm on disability",... I've seen to many on disability who leave it at that, period :?
I said I was on disability so people knew I don't have a sufficient income. And that the spending each month is more than what I am getting. Just wanted to be clear about that, so I could get the right advice. The reason for being on disability wasn't important. I wasn't asking advice on what I can do with a disability( I say that with sincerity, not trying to be an a**).

+$674 for SSI
- $1450 for apt ( including everything)
- $ 600 for other bills
Then I'd say about another 1000 a month for food/gas/etc.

Around $3050 going out, $674 coming in. Obviously not good. Which is why I want to put the money to work, and start something else ( such as the flipping houses) so I could start earning( my goals are high).


Edit: guess I should add I haven't been on SSI for the past 4 years since I've been injured. I just got on it last December..was in and out of hosipitals/brain rehabs before that. I wasn't sitting at home collecting checks.

So the money just started coming in, and want to know the best ways to make the most out of it, instead of just spending it. A lot of people would just use it on nice things, get a house..car..trips..etc. But I decided to come on here and ask the people that are into investing. Those are things I want eventually of course, but want to make more from this money I have before " starting" that lifestyle so to say.
:D Sorry, I might have been a bit "off color". You seem good with numbers, and reality. Buying houses, rehabbing + flipping them suggest your fine physically. Thats a lot of work. Candidly it depends on your settlement's amount, and as livesofts suggests, what you do with that. <shrug> 3% is a figure the .gov estimates for inflation annually, or the dollars depreciation over long periods of time. Like 20 yrs. Some yrs its 0%, some its 5-6-7-8%. 3% is a average withdrawal rate for your settlement , so as not to deplete it outside the rate of expected inflation, that no one knows. Additionally 3% as Dale posts below is also a SWR estimate, when you've retired at normal retirement ages. Its tricky. I'm spent and need to rest. :wink: Good Luck!
Last edited by norookie on Wed Aug 10, 2011 12:39 pm, edited 3 times in total.
" Wealth usually leads to excess " Cicero 55 b.c

PernInc
Posts: 17
Joined: Tue Aug 09, 2011 3:56 pm

Post by PernInc » Tue Aug 09, 2011 8:45 pm

norookie wrote:
PernInc wrote:
norookie wrote:
norookie wrote::D PernInc welcome. I'm falling asleep at the wheel.
P.S. Plus not enough info. Bi-polar, Alcoholic, or missing extremities? You seem to know how to assess your situation :? "I'm on disability",... I've seen to many on disability who leave it at that, period :?
I said I was on disability so people knew I don't have a sufficient income. And that the spending each month is more than what I am getting. Just wanted to be clear about that, so I could get the right advice. The reason for being on disability wasn't important. I wasn't asking advice on what I can do with a disability( I say that with sincerity, not trying to be an a**).

+$674 for SSI
- $1450 for apt ( including everything)
- $ 600 for other bills
Then I'd say about another 1000 a month for food/gas/etc.

Around $3050 going out, $674 coming in. Obviously not good. Which is why I want to put the money to work, and start something else ( such as the flipping houses) so I could start earning( my goals are high).


Edit: guess I should add I haven't been on SSI for the past 4 years since I've been injured. I just got on it last December..was in and out of hosipitals/brain rehabs before that. I wasn't sitting at home collecting checks.

So the money just started coming in, and want to know the best ways to make the most out of it, instead of just spending it. A lot of people would just use it on nice things, get a house..car..trips..etc. But I decided to come on here and ask the people that are into investing. Those are things I want eventually of course, but want to make more from this money I have before " starting" that lifestyle so to say.
:D Sorry, I might have been a bit "off color". My weekly supply of food was burning, my back was killing, and I was tired from not being able to sleep more than 2-3 hrs a day straight. You seem good with numbers, and reality. Buying houses, rehabbing + flipping them suggest your fine physically. Thats a lot of work. Candidly it depends on your settlement's amount, and as livesofts suggests, how or what you do with that. <shrug>
Not all injuries result in you trying to put a circle toy into a square hole. Nor do they all lead to wheelchairs. Yet there are plenty of other miserable things that can happen. I can handle the sarcastic remarks tho..no big deal. Just looking for advice. :wink:

PernInc
Posts: 17
Joined: Tue Aug 09, 2011 3:56 pm

Post by PernInc » Tue Aug 09, 2011 9:12 pm

norookie wrote: 3% is a figure the .gov estimates for inflation, or the dollars depreciation over long periods of time. Like 20 yrs. Some yrs its 0% some its 5-6-7-8%. 3% is a average withdrawal rate for your settlement , so as not to deplete it outside the rate of expected inflation, that no one knows. Its tricky. I'm spent and need to rest. :wink: Good Luck!
That makes sense. Thank you.

wilked
Posts: 1354
Joined: Thu Mar 24, 2011 1:50 pm

Post by wilked » Tue Aug 09, 2011 10:02 pm

PernInc wrote: - $1450 for apt ( including everything)
- $ 600 for other bills
Then I'd say about another 1000 a month for food/gas/etc.
I think I found your problem.

$1450 for apt - time to move, you cannot afford the place.

$600 for other bills (I guess these bills are not part of the 'everything' above) - unless a big part is medical you need to reduce this

$1000 for food and gas - might be time to drive less and learn to cook for yourself. I would expect $250 a month for food and gas.

PernInc
Posts: 17
Joined: Tue Aug 09, 2011 3:56 pm

Post by PernInc » Tue Aug 09, 2011 10:48 pm

wilked wrote:
PernInc wrote: - $1450 for apt ( including everything)
- $ 600 for other bills
Then I'd say about another 1000 a month for food/gas/etc.
I think I found your problem.

$1450 for apt - time to move, you cannot afford the place.

$600 for other bills (I guess these bills are not part of the 'everything' above) - unless a big part is medical you need to reduce this

$1000 for food and gas - might be time to drive less and learn to cook for yourself. I would expect $250 a month for food and gas.
My fault for not including that is for me and another person.

And yes moving when lease is up . Wanted to learn about real estate before buying a house. Ready for that now.

As for food, do cook for myself but its not cheap eating healthy. I don't go to whole foods and buy organic or anything like that, but my diet is expensive. Chicken breasts, salmon, fruits/veggies, almonds, etc...etc. Along with the protein shakes to equal 7 meals a day. So thats a lot of food . Its a must for me, so I accept the amount that needs to be spent.

There's nothing I'm really doing that needs to be fixed besides getting out of the apt when lease is up. I'm being as tight as possible without being uncomfortable(for me) if that makes sense.

PernInc
Posts: 17
Joined: Tue Aug 09, 2011 3:56 pm

Post by PernInc » Tue Aug 09, 2011 10:55 pm

By the way, 150k is in the bank. Started off at 200k( minus the helping out family = 35k) . Got the settlement end of December, so I've spent 15k in 8 months. Hope that helps.

Certainly not enough to live off of, I obviously need a plan . Once again, want to use this settlement as an opportunity to become wealthy, rather than just trying to live off of.

User avatar
Dale_G
Posts: 3124
Joined: Tue Feb 20, 2007 5:43 pm
Location: Central Florida - on the grown up side of 81

Post by Dale_G » Tue Aug 09, 2011 11:33 pm

PernInc, the 3% mentioned earlier refers an estimated safe withdrawal rate for a young retiree. We know you are not retired and hope to return to work, but the timing is at least uncertain.

If the $150,000 is the extent of your savings and if it is invested in the market, you could expect to withdraw 3% per year and expect the withdrawals to continue for 30-40 years. No guarantees.

So, 3% of $150,000 is $4,500 per year. Spending any more than that risks running out of money.

Google "safe withdrawal rate". You will find that folks often use 4% as the safe withdrawal number, with increases in following years for inflation. But the 4% rate is for folks who start withdrawing much later in life.

Dale
Volatility is my friend

PernInc
Posts: 17
Joined: Tue Aug 09, 2011 3:56 pm

Post by PernInc » Wed Aug 10, 2011 12:48 am

Dale/Jenny, that helps a lot , exactly what I was looking for.

Didn't expect to make a fortune thru investing ( not cut out to be a day trader) but just wanted to make a return on it , and 4.5k is certainly better than a savings. But figured I could make more than that thru investing. By diversifying , stocks/bonds/funds/etc.

As for real estate, I know its a risk but its one I'm willing to take, considering my goals in life. What I'm looking at doing is for example finding a house for about 25% or so under market value ( I know, not easy to find but they are out there) and then selling it for lets say 5% under market value. I see most people buying houses for a decent price , fixing them up, but then putting them a little over market value and they are going nowhere. Listed for months. So I figure in order for me to make a good profit and to be able to sell the house quick( to not cut into profits) I have to find a steal and then sell it for a little less than its worth.

I do have connections that can help with fixing up the houses( eletrical, siding, windows, plumbing etc), which would save a ton.

I've done a ton of research on this, studying the market for the past year, million listings. However, there are things I still need to learn ( law aspect of it) so will work with a real estate agent to start off with. Already have that in place, and waiting to find the right house.

Any opinions on that, or is that for a different forum all together?

PernInc
Posts: 17
Joined: Tue Aug 09, 2011 3:56 pm

Post by PernInc » Wed Aug 10, 2011 2:15 am

jenny345 wrote:
Any opinions on that, or is that for a different forum all together?
I think you've already made up your mind, but my opinion is don't do it. Find some kind of work where you don't have to risk all of your savings to make a small profit. Do something where all you lose is your time or mental or physical capital if it doesn't work out. Check out the fatwallet forums for ideas on how other people find ways to make extra money when they don't have full time jobs.

There is still a huge back log of foreclosures right now and many people think home prices may drop even further. You can buy your fixer upper and then see interest rates rise, meaning less potential buyers, or home prices go down further and there goes your profit. I don't see how you could get a home loan under your current circumstances, so that means paying cash and tying up the limited money you have now and not have your nest egg generate the extra $4.5K SWR you need to live on in the mean time.
Understandable, but I've been looking at houses that I can get in the 25-40k range( that can be sold for much more when fixed up, foreclosures are the ones im looking at). Buy a house for 30k , put 10-15k into it and sell it for 60-65k. The comparables in that area would be going for more than that, 70k + . So I'm not looking to make a huge profit on each house by pricing it at what its worth or what others are going for and having it listed for months hoping someone bites. Looking to get in and out, make a good profit. In this market its about quantity than quality.

I don't have my mind made up completely. Always willing to listen to other ideas . This is just something I've been studying for awhile and feel like I could make some profits . I feel like it is taking less risk doing it the way I plan, its just obvious much harder to find those types of houses. Theres plenty on the market right now for market value that aren't going anywhere, but I do consistently see houses listed under market value being sold ( houses that are fixed up of course). I'm in Michigan btw. Was also looking at buying a property at a college( MSU) and rent that out to multiple students. Have to do more research on that .

I'll check out fatwallet.

wilked
Posts: 1354
Joined: Thu Mar 24, 2011 1:50 pm

Post by wilked » Wed Aug 10, 2011 7:17 am

PernInc wrote:
wilked wrote:
PernInc wrote: - $1450 for apt ( including everything)
- $ 600 for other bills
Then I'd say about another 1000 a month for food/gas/etc.
I think I found your problem.

$1450 for apt - time to move, you cannot afford the place.

$600 for other bills (I guess these bills are not part of the 'everything' above) - unless a big part is medical you need to reduce this

$1000 for food and gas - might be time to drive less and learn to cook for yourself. I would expect $250 a month for food and gas.
My fault for not including that is for me and another person.
As the poster below noted, assuming a safe withdrawal rate your income is $12.5k / year. Your expenses, as noted above, are $36.6k / year, leaving an annual differential of -$24.1k.

And you are looking to buy a house?

And you support another person living with you?

As others have noted, you ask for opinions but seem to already have your mind made up. Your expenses vastly outnumber your income, either the former has to go down or the latter has to go up, there is no magic involved.

retiredjg
Posts: 34397
Joined: Thu Jan 10, 2008 12:56 pm

Post by retiredjg » Wed Aug 10, 2011 8:35 am

PernInc wrote:Didn't expect to make a fortune thru investing ( not cut out to be a day trader) but just wanted to make a return on it , and 4.5k is certainly better than a savings. But figured I could make more than that thru investing. By diversifying , stocks/bonds/funds/etc.
I'm not sure you understood about that 4.5k.

The 4.5k is not a return. If the settlement is invested in at least 40% stocks/60% bonds, that's how much money you can take out each year if you hope for your money to last any time at all. It appears you are taking out much more than that.

User avatar
JupiterJones
Posts: 2703
Joined: Tue Aug 24, 2010 3:25 pm
Location: Nashville, TN

Post by JupiterJones » Wed Aug 10, 2011 9:24 am

retiredjg wrote:
PernInc wrote:Still going to see the financial adviser again tomorrow , to learn some more ..pick her brain, etc. Won't sign up with anything yet.
The most important thing to know about your "financial advisor" is that she is a sales person who may not have any duty to act in your best interest.
I just wanted to quote this because it bears reiterating.

Since you used to be a personal trainer, you can look at it this way. Let's say I wanted to get in shape and maybe bulk up a bit. And let's say I have the choice of two personal trainers.

Trainer #1 charges an hourly rate. She is unaffiliated with any gym or other business.

Trainer #2 is free. She works out of a gym across town. She earns her money via new member referral fees from the gym and from commissions on certain nutritional supplements and from a particular brand of home exercise equipment.

Now which one do you think is going to give me the best, most unbiased advice about A) what gym (if any) to join, B) what equipment (if any) to purchase, and C) what supplements (if any) to use?

The "advisor" you're seeing is almost certainly of the #2 variety (so to speak). Tread carefully.

JJ
Stay on target...

PernInc
Posts: 17
Joined: Tue Aug 09, 2011 3:56 pm

Post by PernInc » Wed Aug 10, 2011 1:03 pm

jenny345 wrote:
Buy a house for 30k , put 10-15k into it and sell it for 60-65k. The comparables in that area would be going for more than that, 70k + .

I'm not an expert in the real estate market, but it seems like most people make money flipping houses when housing prices are on the way up, not down. There are many people in the construction industry out of work right now, so you have to think about if there are such good opportunities then why aren't others taking advantage of these same bargains?
Yes, definitely the money is made when house prices are up, and its much harder now but I do think it can be done. Why most aren't doing it is because it still does take a ton of work trying to find the bargains. A lot of research online looking at houses , and you have to make a lot of offers to get the house for the price you want. You basically have to lowball everyone ( talking about foreclosures) and hope one bites. So the deals aren't just sitting out there, you have to create them.


As you know from the previous posts your money will not last very long if you continue to pay $1450 monthly for rent long term so you have to find some way to cut that way down.

You also have to find out how much money you can make, and what kind (wages, rent, capital gains) without getting your SSI payments reduced.

Have you applied for food stamps? Be sure to max out on any government programs like that you can qualify for. You might also try getting your food budget down to a few bucks a day per per person if you can't get any food aid. That is possible to do if you cook from scratch and shop at warehouse, 99 cent stores and stock up on loss leaders at the regular grocery stores.
Good advice.

PernInc
Posts: 17
Joined: Tue Aug 09, 2011 3:56 pm

Post by PernInc » Wed Aug 10, 2011 1:05 pm

retiredjg wrote:
PernInc wrote:Didn't expect to make a fortune thru investing ( not cut out to be a day trader) but just wanted to make a return on it , and 4.5k is certainly better than a savings. But figured I could make more than that thru investing. By diversifying , stocks/bonds/funds/etc.
I'm not sure you understood about that 4.5k.

The 4.5k is not a return. If the settlement is invested in at least 40% stocks/60% bonds, that's how much money you can take out each year if you hope for your money to last any time at all. It appears you are taking out much more than that.
Got it. Makes more sense.

PernInc
Posts: 17
Joined: Tue Aug 09, 2011 3:56 pm

Post by PernInc » Wed Aug 10, 2011 1:22 pm

Is this basically a time where I don't get involved in the market? Do I wait for this to balance out?

Curlyq
Posts: 787
Joined: Tue Jul 08, 2008 5:26 pm

Post by Curlyq » Thu Aug 11, 2011 1:07 am

.....
Last edited by Curlyq on Thu Oct 18, 2018 12:08 pm, edited 1 time in total.

User avatar
MekongTrader
Posts: 357
Joined: Wed Jul 16, 2008 2:33 am
Location: On the banks of the Mekong

Post by MekongTrader » Thu Aug 11, 2011 1:32 am

djw wrote:The implicit assumption of your post is that the only way to solve your problem is through financial investing. I suggest that you broaden your search and think outside the box.

Posters to this forum will point out from time to time that the best way to make money and improve your standard of living (and happiness) is to invest in yourself. Most people make most of their money through employment, not investing.

I have no idea what sort of disability you are living with, and it really doesn't matter to me. Whatever it is, I'll bet that it does not make it 100% impossible to earn money by using your brain and/or body in some way. If you can write an intelligent posting to this forum (as you have) you can find a way to make some money using your brain.

I know nothing about your education, skills, and experience so I won't waste your time by listing a bunch of examples which may not be possible given your disability, but I'll throw out a few:

Writing of some type
Answering phone calls
Making phone calls (eg. sales calls)
Creating a website which you continually update, supported by ads (eg. Drudge Report)
Designing and/or maintaining websites for others
Sell other people's stuff for them using eBay

If there's a non-disabled person who can help with a few tasks that you can't readily do yourself, so much the better.

You can afford to underbid other job applicants since you might say this will be your secondary, not primary, source of income. Your state probably has an office or a non-profit group that helps find work for disabled persons.

My cousin was extremely autistic, yet he was always employed in a full-time job outside the house and learned to travel back and forth on the bus all by himself. His last job was baking bread at a fine dining restaurant. The repetitive nature of the task and being able to work alone without needing to communicate with his coworkers was right up his alley. He never missed a day of work.

It appears that you don't need to earn a high salary, just enough to supplement your settlement. Perhaps you're not up to performing brain surgery, but there must be lots of stuff you could do to make some extra dough within your physical limitations.

I leave it to other bogleheads to give you investment advice. I've said enough.
This was a very thoughtful and encouraging post. Great advise!
MT

User avatar
Dale_G
Posts: 3124
Joined: Tue Feb 20, 2007 5:43 pm
Location: Central Florida - on the grown up side of 81

Post by Dale_G » Thu Aug 11, 2011 1:41 pm

I believe the $150K in the bank makes PernInc not-eligible for food stamps.

Dale
Volatility is my friend

User avatar
Dale_G
Posts: 3124
Joined: Tue Feb 20, 2007 5:43 pm
Location: Central Florida - on the grown up side of 81

Post by Dale_G » Thu Aug 11, 2011 1:54 pm

Obviously, we don't have all of the facts, but for SSI, eligibility for individuals is limited to those with less than $2,000 in resources.

Resources include: cash, bank accounts, land, insurance, etc.

Dale
Volatility is my friend

User avatar
Dale_G
Posts: 3124
Joined: Tue Feb 20, 2007 5:43 pm
Location: Central Florida - on the grown up side of 81

Post by Dale_G » Thu Aug 11, 2011 2:30 pm

Oops, I carelessly used Florida. Obviously Michigan is more enlightened, clearly in better financial shape, and can well afford provide for needy lottery winners.

Dale
Volatility is my friend

PernInc
Posts: 17
Joined: Tue Aug 09, 2011 3:56 pm

Post by PernInc » Thu Aug 11, 2011 4:34 pm

Yeah that's all still being sorted out with the lawyer. They actually hung on to some of the money I got(another 130k) until they sort it out with Medicare..and said it could take up to 18 months to get it cleared. Something about a new law that lawyers can be held accountable if that isn't taken care of first. I didn't mention that money because I wanted to know what I could do with the money I had, and basically looking at that as emergency money. Not to mention it will be awhile since I have it.

As of now I still have the SSI, even though I didn't get a structured settlement( thats what most do to avoid ending SSI , you can keep it when its structured). I chose to get a lump sum. So I don't know if I'd even be able to keep that down the road, or if I'll have to pay back the checks I have been getting since I got the settlement. Lawyer said I wouldn't , but we'll see.



I'm more hesitant now about the real estate, if the prices for houses are expected to drop up until march 2012, its pretty risky. Gonna have to find a really great deal if I'm going to take a chance on that.

Been watching all of this going on in the market, and keep getting tempted to start investing. Gold is much lower today, tempted to jump in long term..also a few large stocks( apple, etc) and something like cisco. I only know what I've been learning the past few weeks. Certainly don't know enough to take advantage of the short trading..I would have to go long term. Just not sure what to get into.

PernInc
Posts: 17
Joined: Tue Aug 09, 2011 3:56 pm

Post by PernInc » Thu Aug 11, 2011 4:36 pm

jenny345 wrote:
Dale_G wrote:Obviously, we don't have all of the facts, but for SSI, eligibility for individuals is limited to those with less than $2,000 in resources.
Perninc, if that is true for you then that changes much of the advice here. If you can't have stocks and bonds and collect SSI, you'd have to either give up the SSI or shift your $150K to SSI exempt assets, which would require entirely different advice.
Yeah, I'm not looking to keeping SSI anyways. I want to earn much more, so I'm looking forward to getting rid of it( meaning I'll be making more).

hicabob
Posts: 2721
Joined: Fri May 27, 2011 5:35 pm
Location: cruz

Post by hicabob » Thu Aug 11, 2011 5:04 pm

Since you like real estate, perhaps buy a duplex, live in one side and rent the other? Hope things work out for you - brain injuries are horrible and tend not to get much sympathy.

retiredjg
Posts: 34397
Joined: Thu Jan 10, 2008 12:56 pm

Post by retiredjg » Thu Aug 11, 2011 5:36 pm

PernInc, the one thing you do NOT want to do is buy individual stock like Apple and Cisco. That is definitely heading in the wrong direction.

Individual stocks are much riskier than a mutual fund which contains thousands of stocks. You can't afford that much risk. If you must have individual stock, it should be less than 5% of your investments.

If you are going to use your money in the next 10 years to invest in houses or to spend for living expenses, it should not be in stocks at all.

Post Reply