Horrible investments (most the time) still better than no investments

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cryingshame
Posts: 23
Joined: Mon Feb 04, 2019 8:23 pm

Horrible investments (most the time) still better than no investments

Post by cryingshame »

Like allot of you here on this forum, once I came to understand the Boglehead principles, the opportunity cost lost for decades is really beyond what I could even guess. :oops: But I can take some solace in the fact that I was the type of person that wanted to invest. Below is some examples that I'm sure at least a few can relate to.

In 2000 when the business I was a part owner in sold I Invested even more in a brokerage firm. At that point for years it was front end loaded funds , calls on Friday when the broker needed some money ( hot tip/ new trend you name it).Because I always had the desire educate myself in investing I slowly (to slowly) caught on and even within the brokerage house I was dealing with started getting more inquisitive and went against some of their recommendations and started cleaning up my account where I could. 2013 found this forum transferred everything to Vanguard. We cleaned up as much as we could. The rest which is now only 30 percent of our total stocks owned, we have chosen not to sell because of Capital gain tax issues with the ACA clift. But our ER is down to .23 and falling.

We have an horrible variable annuity bought maybe 1998 put in 30,000 worth 100,000. Same reason not to sell taking the bird in the hand approach with managing ACA subsidies.

We also bought two Condo's as investments at the peak of the real estate bubble. One is still worth less than we paid by 15%. Its now paid off and has a really bad ROI of only 2.5 percent and represents 13 percent of our net worth. This really bad investment with bonds doing so poorly (were liking our 2.5%) and the condo in a strong rental market staying put. Also the depreciation on the front end has helped us manage our finances.

In 2006 started a small business (just me) that took a couple years to know if it was going to survive. Its been my best investment and a business gives you some tax depreciation and other legal tax maneuvers which have been so beneficial.

So even bad investments sometimes give you cards to play. That's my rant trying to put perfume on my stupid mistakes. :D It helps only a little.
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David Jay
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Location: Michigan

Re: Horrible investments (most the time) still better than no investments

Post by David Jay »

You are correct, investing poorly beats the dickens out of not investing.

We recently had an acquaintance pass away, his wife is 57 year old SAHM, they had no savings. A bad annuity or a bunch of high ER funds would look really good to her right now.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
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Watty
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Joined: Wed Oct 10, 2007 3:55 pm

Re: Horrible investments (most the time) still better than no investments

Post by Watty »

cryingshame wrote: Tue Jan 12, 2021 3:48 pm We have an horrible variable annuity bought maybe 1998 put in 30,000 worth 100,000. Same reason not to sell taking the bird in the hand approach with managing ACA subsidies.
There is a saying, "Even a broken clock is right twice a day."

While variable annuities are generally terrible investments there is a chance that with todays ultra low interest rates that were not expected back then it would actually have worked out well for you.

I don't really understand variable annuities but be sure to dig through all the details of it before you decide to get rid of it.

cryingshame wrote: Tue Jan 12, 2021 3:48 pm We also bought two Condo's as investments at the peak of the real estate bubble. One is still worth less than we paid by 15%. Its now paid off and has a really bad ROI of only 2.5 percent and represents 13 percent of our net worth. This really bad investment with bonds doing so poorly (were liking our 2.5%) and the condo in a strong rental market staying put. Also the depreciation on the front end has helped us manage our finances.
You will recapture the depreciation if you sell it so be sure to understand how much you would clear if you sell it.

One option to look into is to 1031 real estate exchange to move that money into some sort of better property.
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