Actually yes, I do have more of a stomach for that, even if im wacky for saying that! I’ve watched my father’s stock investments lose and gain over the years, but after he lost nearly half a million a few years back, my husband and I lost all that was left of any desire to invest down that avenue. What I am looking at is how we can generate income in our retirement after costs have been considered. For example, 3 or 4 properties generating rental income in a decent area of London that has historically been a good neighborhood bringing in good rents would provide us with a nice income. Yes, there would be unforseen costs, and of course anything could happen…but that’s true of any ther kind of investment or even the value of any currency. Even though it could go terribly wrong, I am really at a loss as to what would be a better alternative.
If the property value / rent of a particular area started to go down, we would sell up and buy another elsewhere. We would just have to really keep our eye on things.
I read some good articles about the London property market recently, which has always been supported by foreign money, there’s a good one in Vanity Fair. Just as a matter of timing a better place to buy now would be Dublin or some cities in the US in my opinion. Thailand and SE Asia should do well too over the next few years. All guess work of course.
But then gets a lot harder to sell, and you might find yourself horribly out-of-pocket when you get to a price low enough to attract a buyer for something that (in general opinion) isn’t worth owning. Real estate is pretty much the definition of “illiquid”.
London might be OK. Certainly, if you’re going to buy property anywhere, that would be a good choice. But the UK looks to me like it’s on a long slide to the bottom.
Yes, that’s very true. People have an emotional attachment to buildings that they don’t have (obviously) to paper. I have seen people do well from property, but not before/without a few major setbacks. The reason they succeeded is because they were tenacious enough to pick themselves up, learn from the mistakes, and try again with a different approach. Property management is really a business like any other - how well you do depends on how good a businessman you are (or can become) in that particular field.
Property ownership in the UK is a very risky investment. We struggled to rent out our property to reliable tenants and had a very stressful 6 months or so worrying about it being broken into or the water pipes bursting in freezing winter temperatures. Luckily our former neighbours were wonderful and kept an eye on the place for us, popping in and putting the central heating on very low when temperatures were below freezing. Without them, we wouldn’t have been able to get vacant property insurance, as you must have someone visiting regularly. Normal house insurance isn’t valid if the property is empty for more than a month, usually. Luckily our house is paid off and we weren’t relying on a rental income to make mortgage repayments. We feel very lucky to have found great tenants who look after the place. The costs of bringing a house back to living standards after it’s been trashed must be huge.
My sister bought a new house and rented out her old one. When she wanted to free up the equity in her old house she put it on the market, and her tenant moved out immediately. Now, seven months later she still hasn’t found a buyer and has been paying two mortgages all this time, as well as vacant property insurance and now, after six months’ period of grace, council tax. She’s going to have to drop the price and lose tens of thousands in equity to sell. I certainly wouldn’t put my money in property in the UK at the moment. Especially when you live abroad and have to rely on agents to deal with everything, and pay through the nose for the privilege.
My old manager had a house he rented in the next city, had a minor argument with tenant, next time he visited there was no sign of them, the house had been trashed and they even took the fireplace!
[quote=“headhonchoII”]We’ve had this debate before, dollar cost averaging works wonders in a generally rising market like the last few years. Not all stock makets are the same. You hear this ‘stock markets rise over time’ used as a maxim. It’s not really true.
Maybe the Dow has risen over time, helped by massive financial engineering and big inflows of foreign investment, the Taiex and Chinese market certainly hasn’t.[/quote]
I’m not familiar with those indexes I can’t speak to them. But the Dow and S&P 500 absolutely have risen over time. And these sorts of investments should be looked at in terms of decades, not a few years.
[quote]Here’s a story about not being able to see the future. A few years ago I worked for an over the counter traded medical company in Taipei. We got options on shares and I bought just 200,000 NTD shares as the finance manager said it was a good deal. Then sold them at a loss a few months later in disgust feeling like they took advantage of the employees to raise capital in a sagging market.
That company’s shares are now worth over ten times what I bought them for and the biggest riser in Taiwan last year! Nobody could have predicted this, even the management, nobody could know that Taiwanese investors would suddenly go mad about biotech stocks. They are going to get burned badly though.[/quote]
That’s a classic story of the inherent risk in picking and choosing individual companies to invest in. There is no way to predict the future and know which companies will succeed and which will not.
Continuous, automatic investing in a broad swatch of the market over 30 or 40 years won’t make anybody rich, that’s true. But in my view it’s a safer bet than investing in individual companies, or just leaving everything in a low-interest bank account.
This thread really has me thinking and I am now having second thoughts about the UK. I had never even considered the US before, but thought I would look at Florida today just for giggles and it sparked an interest.
I saw this property in Orlando online and talked to a realtor at length about it this morning…
He told me that all of the units already have tenants and that there is even a waiting list to get in. After all expenses, it looks like there would be a 6% return, plus the property value is sure to rise (it already is rising).
What do you guys think? I’m wet behind the ears with this stuff, so I wonder if I’m missing something. I’ve just emailed him asking if the property taxes include school taxes, if the ‘Community Fees’ also include basic maintenance fees, what the insurance would cover (hurricanes, floods, fire, etc.) and if we would need to buy additional insurance to cover accidents on the property, etc.
This also peaked my interest because of the healthy returns on it, but my husband is wary:
My cousin was an estate agent (and a car salesman). He used to tell the most outrageous lies to make the sale. Nobody ever called him on it, even though there are laws about that sort of thing.
Never give your money to someone else to “invest” for you, unless you know that person well. He has his interests at heart, not yours. If you really want to invest in property, invest in a locale you’re familiar with - putting money in when you’re “wet behind the ears” is pretty much guaranteed to make you a target for sharks and scumbag tenants.
My cousin was an estate agent (and a car salesman). He used to tell the most outrageous lies to make the sale. Nobody ever called him on it, even though there are laws about that sort of thing.
Never give your money to someone else to “invest” for you, unless you know that person well. He has his interests at heart, not yours. If you really want to invest in property, invest in a locale you’re familiar with - putting money in when you’re “wet behind the ears” is pretty much guaranteed to make you a target for sharks and scumbag tenants.[/quote]
These days investors are faced with some very strong headwinds which will make it very difficult to make any money at all over the next several years.
Stock markets are overbought. Now don’t believe all the hype recently about markets being at all time highs. Yes they are, nominally. However when you look at inflation adjusted prices, which you should always do no matter what asset you are valuing, we aren’t there yet so we could still go higher and it would be well within the norm. Never the less, they are overbought, profit margins have no where to go but down, and we are sure to see a reversion to the mean in the not to distant future. (2 weeks, 2 months, 2 years, who knows, but it’s coming)
Treasuries are looking awful. Mathematically speaking, there isn’t anywhere to go but down. The 30 year bond bull market is probably on it’s last leg. It may flat line for several years because the FED is basically forced to hold rates steady so as to not collapse the whole fiat money system, but to see gains in bonds seems very unlikely going forward. And since Bond performance over the last 3 decades is really where the bulk of returns have come from, without them, financial planners are going to be looking pretty stupid in the future not being able to break the 0% return barrier.
Real estate is dangerous. The old mantra of real estate never goes down has been proven false in a big way. What’s even more worrisome is, nothing got fixed during the last crisis. Toxic loans are already accelerating, and despite the fact that real estate only started recovering in the last year or so, it already is starting to look overvalued in many areas. If you look at the long term mean, we are already over valued. No laws were changed, no regulations were implemented. Banks are going right back to their old ways, playing with borrowed money and betting the house, on houses. Dangerous…
Precious metals. Why is an ounce of gold worth what it is? What’s that based on? Why is it a good investment? The problem with gold is, it’s value can never be quantified. It’s price is abstract, mostly based on fear and speculation. Gold is the ultimate “greater fool” investment. It’s not very useful, and it’s not all that scarce. The only reason to invest in it is because maybe in the future you’ll find a greater fool who will pay more for it than you did. As far as it’s value? Experts can find all kinds of reasons why it should be valued at 500$ per ounce, or 5000$ per ounce. Who’s right? I wouldn’t want to bet my money on that one.
What’s left? Well, my advice to you is to look into option trading. In my humble opinion going forward, trading options is the only way a person can make outsized returns in a safe way. Option trading is also the only place that small investors, the little guys, have a distinct advantage over the corrupt Wall Street banks and the high frequency trading super computers.
There’s no shortage of information to be found online, and if you want some help I can give you some tips and advice on how to get started. If your math skills are decent and you don’t mind going against the grain, you could take your small savings every month and build it into a pretty nice fund while everybody else is struggling to make 0-3% a year.
Not all stock markets are overbought, but if you are talking about the US market, it looks hard to make gains on most big stocks now. I have heard that a lot of US companies have been buying back stocks to boost their stocks so management makes more off their stock options. They have been loading up on cheap debt while doing this.
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