What are your alternate investments?

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someuser001
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What are your alternate investments?

Post by someuser001 »

I think that, other than my house, all of my investments are in security-based instruments (funds, bonds, stocks, ira, 401k, etc) as in things that are basically "digital"

I have considered buying real estate as rental income and appreciation - the goal would be to hold for 20+ years. Not a flip but a buy-and-hold

So the questions is "What are the places where you invest money outside of security based investments?"
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knpstr
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Re: What are your alternate investments?

Post by knpstr »

rental real estate. 2 properties so far. Should have one paid off in December.
Currently age 32, I hope to add a couple more good properties which would essentially cover all living expenses, once all were paid off.

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Midpack
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Re: What are your alternate investments?

Post by Midpack »

I don't have any alternative investments either, and often think I should. Real estate, collectibles, other?

My BIL is a builder, and he buys, fixes and rents out homes, he has about 10 now. As a professional builder, it's a natural for him, unlike most of us. He can use his regular crew for any maintenance. I suspect even when he hangs up his hammer, he'll hold on to his properties for many years for the income. He's smarter than I am...
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nedsaid
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Re: What are your alternate investments?

Post by nedsaid »

The closest thing to alternative investments that I have are actually asset sub-classes; such things as TIPS, REITS, Small-Cap Value. Pretty much, I have diversified across asset sub-classes beyond stocks, bonds, and cash and diversified across factors. My factor investments have been mid/small, value, and earnings/price momentum.
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WJW
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Re: What are your alternate investments?

Post by WJW »

As a contractor, I have my business and 2 rental properties. That is enough for me as I do not like dealing with tenants and will sell both properties when it is time to retire. Not sure if my business will be salable then.
livesoft
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Re: What are your alternate investments?

Post by livesoft »

I guess my TIAA holdings are alternates:

TIAA traditional annuity, guaranteed not to lose money
TIAA Real Estate account, it owns some commercial properties

These two things certainly don't track non-alternate investments on a day-to-day basis very much at all.
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arsenalfan
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Re: What are your alternate investments?

Post by arsenalfan »

5 rental properties.
Share in one surgery center that wife operates in
2 privately held medical device firms (edited: $100k investment in these, not that I own them!)
Looked at P2P and RealtyShares, decided to pass.
Last edited by arsenalfan on Mon Mar 06, 2017 12:17 pm, edited 2 times in total.
Da5id
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Re: What are your alternate investments?

Post by Da5id »

My "alternate" investments is 3 Commercial Real Estate limited partnerships. I didn't seek them out, mind you, they were inherited. Unsure I'd have chosen them, but they aren't very liquid and besides send me a nice check each month. On the other hand, I have to deal with K1s and filing state taxes in a different state because of them, so some hassle factor.
taguscove
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Re: What are your alternate investments?

Post by taguscove »

By far my largest alternative investment is in education. Just invested $50k + opportunity cost the past 2 years to get a masters.
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nisiprius
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Re: What are your alternate investments?

Post by nisiprius »

None. Unless series I savings bonds are "alternatives." Wait, we have an income annuity (SPIA) which Larry Swedroe and Jared Kizer call an "alternative" investment in their books (they discuss them in the section of the book entitled "good.")

In my arrogant opinion "alternatives" are faddish, and when you pursue them you are entering a world of asymmetrical information (even more so than with securities.)
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Da5id
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Re: What are your alternate investments?

Post by Da5id »

nisiprius wrote: In my arrogant opinion "alternatives" are faddish, and when you pursue them you are entering a world of asymmetrical information (even more so than with securities.)
I personally largely agree with this. The (somewhat distantly related) family partnership offered to buy back my "alternative" investments (small shares of commercial buildings), and darned if I know if the price was reasonable (I declined).

People who want to put in the work/hassle to be a landlord seem like they can do well. But for many other investments the fair price may not be obvious, and also the risks/failure mode may not be apparent in advance.
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gasdoc
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Re: What are your alternate investments?

Post by gasdoc »

Does a kid count? Otherwise, none.

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ruralavalon
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Re: What are your alternate investments?

Post by ruralavalon »

Currently none.

We used to hold some shares of the Vanguard REIT Index Fund.
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feh
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Re: What are your alternate investments?

Post by feh »

LLC membership.
Carefreeap
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Re: What are your alternate investments?

Post by Carefreeap »

WJW wrote:As a contractor, I have my business and 2 rental properties. That is enough for me as I do not like dealing with tenants and will sell both properties when it is time to retire. Not sure if my business will be salable then.
That and the diversification issue.

Over the years I've seen plenty of contractors get into serious trouble because when the economy tanks their business dips at the same time the valuations on their real estate dips.

If you've refinanced to pull out cash to buy more rentals you can find yourself in a world of hurt of being over-leveraged at the worst time.

If you're in a location with a diversified economy it might not be so bad but as we saw in the greater Phoenix area both valuations and rental values went down because that economy was heavily based on growth. No jobs, no renters to pay investors' mortgages. Home values declined about 50% from 2007 and rents dropped about 25%. 10 years later, they have since recovered but a lot of people got hurt in the process.
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Carefreeap
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Re: What are your alternate investments?

Post by Carefreeap »

We have about half of our NW in RE including our home. Part of that is due to the crazy price of real estate in the SF Bay Area. We've sold one rental in San Diego County last summer and plan to sell another this summer.

We also have some mineral rights which I've not figured into our NW. We inherited them. I'm not quite sure how I would value them other than coming up with some kind of multiplier based on the stream of income. But they are volatile because of the price of oil. We haven't counted on that income. In 2010 they were kicking off $40k of income. Now they are at about $10k. We also don't know when the operator will stop pumping.
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why3not
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Re: What are your alternate investments?

Post by why3not »

gasdoc wrote:Does a kid count? Otherwise, none.

gasdoc
Sure, I also count body fat, which I began storing up with the onset of middle age, it will come in handy for the black swan, famine inducing, world economic crash event that folks on here sometimes worry they aren't guarded against.
Riverstwo
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Re: What are your alternate investments?

Post by Riverstwo »

Three rental units; just paid off and now collecting income from all. Retiring at 58.
heyyou
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Re: What are your alternate investments?

Post by heyyou »

My wife is a better tight wad than I am. She recently bought her only Coach handbag, at the thrift store.
Our retirement home is paid off, and is in a lower cost of living area.
I have a collection of not inexpensive, light weight, backpacking gear that I take for multi-day walks.

I owned a share of a limited partnership speculating in vacant land, that failed in 1983. The memory of the loss has kept me from any other investments with similar risks or compensation schemes.
Retiring with a no-COLA pension and with my fear of 1980s inflation, I bought PCRIX (PIMCO's collateralized commodities fund) when it was down 10% in 2008. The knife fell further after my catch. I'm planning to sell near the tenth anniversary of the purchase. My memory is that Wall Street will always be marketing something that looks to solve whatever risks that I most fear. (Stock index funds have out grown inflation over long periods, but you have to be patient since they do not respond well to quick inflation.)

In retrospect, it was my greed that drew me to investments with their alternative risks. A Wm Shakespeare quote, "The fault, dear Brutus, is not in the stars, but in ourselves."

The risks will be randomly distributed. Most assuredly, some will do well in alternative investments, while others will not.
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Koogie
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Re: What are your alternate investments?

Post by Koogie »

Some physical gold that I still have lying around from years ago.

Also have about 100K left in my business partnership. I guess you could call that 'private equity' investing.
WJW
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Re: What are your alternate investments?

Post by WJW »

Carefreeap wrote:
WJW wrote:As a contractor, I have my business and 2 rental properties. That is enough for me as I do not like dealing with tenants and will sell both properties when it is time to retire. Not sure if my business will be salable then.
That and the diversification issue.

Over the years I've seen plenty of contractors get into serious trouble because when the economy tanks their business dips at the same time the valuations on their real estate dips.

If you've refinanced to pull out cash to buy more rentals you can find yourself in a world of hurt of being over-leveraged at the worst time.

If you're in a location with a diversified economy it might not be so bad but as we saw in the greater Phoenix area both valuations and rental values went down because that economy was heavily based on growth. No jobs, no renters to pay investors' mortgages. Home values declined about 50% from 2007 and rents dropped about 25%. 10 years later, they have since recovered but a lot of people got hurt in the process.
Luckily, the values do fluctuate but I have never been over-leveraged. And the rents in our area hold steady even during the dips because of our close proximity to NYC. The thing for me is that rentals are not passive investments and require infusions of both capital and time. I only keep them because of the free use of storage and parking for my business. As I get older, I just don't like dealing with the tenants...
Carefreeap
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Re: What are your alternate investments?

Post by Carefreeap »

WJW wrote:
Carefreeap wrote:
WJW wrote:As a contractor, I have my business and 2 rental properties. That is enough for me as I do not like dealing with tenants and will sell both properties when it is time to retire. Not sure if my business will be salable then.
That and the diversification issue.

Over the years I've seen plenty of contractors get into serious trouble because when the economy tanks their business dips at the same time the valuations on their real estate dips.

If you've refinanced to pull out cash to buy more rentals you can find yourself in a world of hurt of being over-leveraged at the worst time.

If you're in a location with a diversified economy it might not be so bad but as we saw in the greater Phoenix area both valuations and rental values went down because that economy was heavily based on growth. No jobs, no renters to pay investors' mortgages. Home values declined about 50% from 2007 and rents dropped about 25%. 10 years later, they have since recovered but a lot of people got hurt in the process.
Luckily, the values do fluctuate but I have never been over-leveraged. And the rents in our area hold steady even during the dips because of our close proximity to NYC. The thing for me is that rentals are not passive investments and require infusions of both capital and time. I only keep them because of the free use of storage and parking for my business. As I get older, I just don't like dealing with the tenants...
I hear you! Even the good ones wind up creating some level of drama that affects your life. For us it's magnified because ours are 500+ miles away.
Every day I can hike is a good day.
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