Comments on: Seeing the Big Picture in Creating Wealth http://moneyning.com/investing/seeing-the-big-picture-in-creating-wealth/ A personal finance blog where we share insights on carefully saving money, investing, early retirement, mortgages, stocks because the little things matter in achieving financial freedom! Sat, 21 Nov 2009 10:57:14 -0800 http://wordpress.org/?v=2.8.6 hourly 1 By: Chiko http://moneyning.com/investing/seeing-the-big-picture-in-creating-wealth/comment-page-1/#comment-12758 Chiko Sat, 03 Jan 2009 03:41:16 +0000 http://moneyning.com/?p=1817#comment-12758 Yes, I have a plan to be financially independent by the age of 25. One the thing s that I will be implementing in my plan a year from now is the steady investment of an index fund that follows the S&P 500. Yes, I have a plan to be financially independent by the age of 25. One the thing s that I will be implementing in my plan a year from now is the steady investment of an index fund that follows the S&P 500.

]]> By: Dorothy http://moneyning.com/investing/seeing-the-big-picture-in-creating-wealth/comment-page-1/#comment-12756 Dorothy Fri, 02 Jan 2009 22:14:37 +0000 http://moneyning.com/?p=1817#comment-12756 Yes, my investments are in stocks. My plan all along was to have them be "for the long term." Yes, they took a beating, and yes, I expect the value will return one day. And for the money I put in investments, I can afford to wait 5 years for that to happen. Yes, my investments are in stocks. My plan all along was to have them be “for the long term.” Yes, they took a beating, and yes, I expect the value will return one day. And for the money I put in investments, I can afford to wait 5 years for that to happen.

]]> By: steveo250k http://moneyning.com/investing/seeing-the-big-picture-in-creating-wealth/comment-page-1/#comment-12395 steveo250k Thu, 11 Dec 2008 15:53:41 +0000 http://moneyning.com/?p=1817#comment-12395 If you are just talking where to put some cash now, stocks. But if you have some significant cash to buy property, the knowledge to make the contracts, and the skills to maintain property, then is sounds like following Marci's path is a good option. Especially given the deals you can find in most markets on property today. I am still amazed, though, at people questioning if they should buy stocks because of the downturn. I had one friend tell me she stopped investing in her 401k because it had lost so much. She didn't seem to understand that by investing now she was buying shares on sale. If you are just talking where to put some cash now, stocks. But if you have some significant cash to buy property, the knowledge to make the contracts, and the skills to maintain property, then is sounds like following Marci’s path is a good option. Especially given the deals you can find in most markets on property today.

I am still amazed, though, at people questioning if they should buy stocks because of the downturn. I had one friend tell me she stopped investing in her 401k because it had lost so much. She didn’t seem to understand that by investing now she was buying shares on sale.

]]> By: marci http://moneyning.com/investing/seeing-the-big-picture-in-creating-wealth/comment-page-1/#comment-12391 marci Thu, 11 Dec 2008 15:29:40 +0000 http://moneyning.com/?p=1817#comment-12391 My savings and investments are automatic. I don't have to think about them - they just happen. The 401K, I increased when all this started to take advantage of the great buying opportunities. My stock dividends are automatically reinvested in my stock accounts - I don't see them, so I am not tempted to spend them. It's really just a matter of attitude... decide you are going to do it, then set it up automatically, and away you go! Quit fretting about the ups and downs and just let it ride! About real estate - I made a LOT of money in real estate, and am still collecting on some of it now. I bought rentals, rented them out for 5-10 yrs or so and got the tax goodies out of them, then sold them on land sales contracts (ie, I carry the paper and get the interest) some for as much as 11.5% interest, and that's a nice amount of interest to still be collecting on monies. One example - bought a house in 1980 for $19,000. Fixed it up, and rented it out for about 5 years. Had some ups and downs with renters, as can be expected. Got in a really good renter and after 2 years they wanted to buy the house but didn't have the financing to go thru the bank, nor would the old house finance well. I sold it for $35,000 in 1986, carried the paper on it at 11% interest for 30 years, and am still collecting on it and into the future. Due to the serious economy problems in our area back in the early 90's, he missed one payment (called me and asked permission - ok'd by me), I added the interest to the contract, and he's been good as gold ever since. Didn't hurt me to miss that payment, and think what the interest on that missed payment has meant to my income stream over these years! So - I got tax goodies out of the property, had renters pay for the property thru their rents, sold it for almost double, and have been collecting 11% interest on the balance for over 20 years.... I think I made good money on this one :) And at this point, if I had to take the property back, it is worth over 4 times what they paid for it, so I can't lose! In all these years, I have only NOT made money on one real estate investment - and I at least came out even on that one - which is more than I can say for the stock market lately. My savings and investments are automatic. I don’t have to think about them – they just happen. The 401K, I increased when all this started to take advantage of the great buying opportunities. My stock dividends are automatically reinvested in my stock accounts – I don’t see them, so I am not tempted to spend them. It’s really just a matter of attitude… decide you are going to do it, then set it up automatically, and away you go! Quit fretting about the ups and downs and just let it ride!

About real estate – I made a LOT of money in real estate, and am still collecting on some of it now. I bought rentals, rented them out for 5-10 yrs or so and got the tax goodies out of them, then sold them on land sales contracts (ie, I carry the paper and get the interest) some for as much as 11.5% interest, and that’s a nice amount of interest to still be collecting on monies.

One example – bought a house in 1980 for $19,000. Fixed it up, and rented it out for about 5 years. Had some ups and downs with renters, as can be expected. Got in a really good renter and after 2 years they wanted to buy the house but didn’t have the financing to go thru the bank, nor would the old house finance well. I sold it for $35,000 in 1986, carried the paper on it at 11% interest for 30 years, and am still collecting on it and into the future. Due to the serious economy problems in our area back in the early 90’s, he missed one payment (called me and asked permission – ok’d by me), I added the interest to the contract, and he’s been good as gold ever since. Didn’t hurt me to miss that payment, and think what the interest on that missed payment has meant to my income stream over these years! So – I got tax goodies out of the property, had renters pay for the property thru their rents, sold it for almost double, and have been collecting 11% interest on the balance for over 20 years…. I think I made good money on this one :) And at this point, if I had to take the property back, it is worth over 4 times what they paid for it, so I can’t lose! In all these years, I have only NOT made money on one real estate investment – and I at least came out even on that one – which is more than I can say for the stock market lately.

]]> By: Steve C @ MyWifeQuitHerJob.com http://moneyning.com/investing/seeing-the-big-picture-in-creating-wealth/comment-page-1/#comment-12386 Steve C @ MyWifeQuitHerJob.com Thu, 11 Dec 2008 04:58:42 +0000 http://moneyning.com/?p=1817#comment-12386 A proper plan is essential to any sound investment plan. But the hard part is staying on plan when your emotions are going nuts. You can tell yourself that you are going to sell or buy but sometimes pulling the trigger is extremely difficult. I usually set stop limit orders as soon as I make a purchase for exactly this reason. A proper plan is essential to any sound investment plan. But the hard part is staying on plan when your emotions are going nuts. You can tell yourself that you are going to sell or buy but sometimes pulling the trigger is extremely difficult. I usually set stop limit orders as soon as I make a purchase for exactly this reason.

]]> By: Mizé http://moneyning.com/investing/seeing-the-big-picture-in-creating-wealth/comment-page-1/#comment-12385 Mizé Thu, 11 Dec 2008 02:13:41 +0000 http://moneyning.com/?p=1817#comment-12385 Hi. I would never have voted in stocks because it´s not a stable investment. I´ve been in a familiar/small property business for over ten years and I think it´s a very good choice when you consider long term profits. In my country, house prices and rents have gone up alot in the past years making this area a very good investment. A good Thursday. Mizé. Hi.
I would never have voted in stocks because it´s not a stable investment.
I´ve been in a familiar/small property business for over ten years and I think it´s a very good choice when you consider long term profits.
In my country, house prices and rents have gone up alot in the past years making this area a very good investment.
A good Thursday.
Mizé.

]]> By: MoneyNing http://moneyning.com/investing/seeing-the-big-picture-in-creating-wealth/comment-page-1/#comment-12384 MoneyNing Thu, 11 Dec 2008 02:07:24 +0000 http://moneyning.com/?p=1817#comment-12384 Sandy: Writing it down is the first step! Try to make one tonight! It really could be quite simple to start off! Eric: I'm a huge advocate of DRIPs as well. They are great and really help investment returns! Erica: Mathematically, stocks are definitely better than real estate but it's tough sometimes since most people probably need to make "both" investments. Ryan: Precisely :) ToughMoneyLove: Insurance strategies - do you mean buying options and the like? What insurance does a person buying real estate have other than time? Sandy: Writing it down is the first step! Try to make one tonight! It really could be quite simple to start off!

Eric: I’m a huge advocate of DRIPs as well. They are great and really help investment returns!

Erica: Mathematically, stocks are definitely better than real estate but it’s tough sometimes since most people probably need to make “both” investments.

Ryan: Precisely :)

ToughMoneyLove: Insurance strategies – do you mean buying options and the like? What insurance does a person buying real estate have other than time?

]]> By: Mr. ToughMoneyLove http://moneyning.com/investing/seeing-the-big-picture-in-creating-wealth/comment-page-1/#comment-12382 Mr. ToughMoneyLove Wed, 10 Dec 2008 22:17:21 +0000 http://moneyning.com/?p=1817#comment-12382 If you are creating wealth to provide financial independence, then you must look at the long term consequences of your investing decisions. Thinking about only what has happened in 2008 will skew your analysis and cause you to make poor decisions on incomplete data. On the other hand, risk tolerance can change. The best way to respond to those changes is to reduce risk in other areas of your financial life, using insurance strategies for example. If you are creating wealth to provide financial independence, then you must look at the long term consequences of your investing decisions. Thinking about only what has happened in 2008 will skew your analysis and cause you to make poor decisions on incomplete data. On the other hand, risk tolerance can change. The best way to respond to those changes is to reduce risk in other areas of your financial life, using insurance strategies for example.

]]> By: Ryan http://moneyning.com/investing/seeing-the-big-picture-in-creating-wealth/comment-page-1/#comment-12381 Ryan Wed, 10 Dec 2008 22:13:23 +0000 http://moneyning.com/?p=1817#comment-12381 Stocks are always better than real estate even though there will be periods (sometimes long ones) where one asset class dominate over others. However, you can always live in a house if you wanted to so performance should not be the only consideration! Stocks are always better than real estate even though there will be periods (sometimes long ones) where one asset class dominate over others.

However, you can always live in a house if you wanted to so performance should not be the only consideration!

]]> By: Erica Douglass http://moneyning.com/investing/seeing-the-big-picture-in-creating-wealth/comment-page-1/#comment-12380 Erica Douglass Wed, 10 Dec 2008 19:24:13 +0000 http://moneyning.com/?p=1817#comment-12380 Stocks over a long time period FAR outperform real estate. Stocks since the Great Depression have averaged 9.3% a year return. Real estate in the same time period has averaged 2-3%. Of course, you can use leverage in real estate, but you can use it in stocks too. -Erica Stocks over a long time period FAR outperform real estate. Stocks since the Great Depression have averaged 9.3% a year return. Real estate in the same time period has averaged 2-3%.

Of course, you can use leverage in real estate, but you can use it in stocks too.

-Erica

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