I'm a trustafarian

[M2d]

[ QUOTE ]
100k after 40 years at 10% = 4.5M
100k after 40 years at 3% = 325,000


[/ QUOTE ]
previous poster is obviously talking about the short term. he's saying that, if op doesn't have immediate targets for spending but anticipates spending a good portion of that money soon, then a low interest/low fluctuation vehicle would be better than a higher interest/higher risk one. I doubt that he, or anyone, disputes the long term value of ekeing out additional points.

[scotty34]

I believe 100K is an adequate bankroll for the $100-$200 games. [img]/images/graemlins/cool.gif[/img]

[tolbiny]

At 25 years old.
Assuming i had 70,000 after taxes i would take 50,000 and put it into a long term investment that i would expect 8-12% return on. This would be my retirement fund and i wouldn't touch it (unless of an emergency of course) untill i was 65. By then it should be >2,000,000 and it should be enough to retire on.
i would take 5,000 and put it in my poker roll, i would pay off the last 1,500 i owe on my car, take around 5,000 and plan a really nice trip- either to Australia or Europe- maybe SE asia. Take a month and see a bunch of stuff. the last 8-9,000 i would buy a hell of a setup for multitabling, a new bed/wardrobe/desk/TV/couch and hopefully have 1-2,000 in my bank account. Thats basically it- i would use the bulk of it to secure my future, and a decent chunk to enjoy now.

[Matt Flynn]

We get little to no usable financial education in high school or college, then get finance advice from an industry that makes all of its money selling you services. Yeah, and those penis enlargement pills work and if you just take echinacea you won't get colds. Money markets and bonds are complete horseshit for a 19-year-old except as liquid cash equivalents. Anyone selling them to you either doesn't have the slightest clue about money or is making money off of you.

You need a 5% down payment and closing costs to buy a home. You do NOT need credit. You will, however, have to pay higher interest if your credit is bad. Ask about "stated income loans" and "rolling closing costs into purchase price." If your real estate agent cannot handle those or recommends against them, fire the agent immediately.

Buy the cheapest condo/townhome/home you can stand to live in, with the caveat that you want to be able to sell it. Your primary dwelling is a fair but not good investment. Anyone who tells you to buy the biggest house you can afford has no clue and should be dismissed or fired out of hand as an advisor. You can put your money to better use.

You may not, with bad credit, be able to do the really good real estate transactions. You may also have problems finding a decent (and cheap) management company. However, you can most certainly buy good rental property - JUST NOT IN SEATTLE. Seattle's too expensive for you. Plus you should get your feet wet buying your primary dwelling first. How much can you comfortably afford? Divide your current rent by $640. Multiply by $100,000. That is what you can afford easily, including Principle, Interest, Taxes and Insurance ("PITI"). Problem: you may not be able to afford more than a condo or townhome. Those are bad investments. They have "HOA dues" that can get very expensive and are not under your control. Also, they do not appreciate well. Better to live in a small detached home in the exurbs in a good school district. Even better, buy a duplex. If you can afford half the cost (as your "rent"), you rent the other half. If you move, you just rent your half too. Many a young man has become a rich uncle using that strategy, and it's the best for the underfunded and underexperienced.

When you buy the home, shop the mortgage. Do not stop at the one the real estate agent recommends. Never pay points for an owner-occupied home. "Points" are payments you make up front to reduce the interest rate on your mortgage. They are almost invariably a ripoff. Strongly consider getting a 5-year ARM loan. You are very likely to move within five years Might as well take the lower interest rate. Once you get a loan offer, walk to the next guy with a copy of your credit report and the "good faith estimate" the first mortgage guy gives you and ask him if he can do better.

When you buy, assume the house seller is going broke next week if you don't buy it. Ask how many days the house has been on the market (part of the real estate agent method of holding power over home transactions is witholding that datum from realtor.com and other basic sites). If the house has been on the market for >30 days, you are in the driver's seat. Your agent gets paid more if you pay more!!! So don't listen to them. E.g., on a seemingly good-buy $150K home that is empty and has been on the market for 60 days, offer $136,000 with $2,000 back in closing costs and a $2,000 cap on repairs, they pay all structural repairs, and you get the fridge, washer and dryer. (Be absolutely firm about the $2,000 back. It makes no difference whatsoever to the seller whether you pay $125K with nothing back or pay $127K with 2K back to closing, but it makes a huge difference to you.) They MIGHT tell you to hose off, but who cares. Move on to house B. If you end up with structural problems that are easily fixed (as most are), do not accept less than full money to fix them. I have threatened to walk three times and (with the exception of my first residential investment property, when I was underexperienced) have NEVER paid a cent towards basic structural repairs. Remember, if there's $5,000 to be had that you didn't ask for, you don't get it. Always be willing to walk.

Have fun. www.realtor.com is a decent site to find out what sells for what and what rents for what. Keep in mind location and school district are what sell a home, and that dirty homes that need painting sell for WAY less than clean freshly painted ones even though cleaning and painting are cheap.

One more thought: all those guys with 401K's have no clue when then can retire or how well they'll live. They get all excited about the concept of 64K at age 65 not realising that it's really 16K or less indexed for inflation and that most mutual funds do not have that high a yield. Whereas if you buy a rental property that is relatively new and you always roll the excess rent back into the mortgage (not the best strategy but very good for illustration), you KNOW that in 20-24 years the house will be paid off and you will have the future equivalent of 2/3 of today's rent as income each month. Will that be double todays rent? Triple? Who cares! The key is it will be the equivalent. Buy a $110K house that rents for $850 and you know, in 24 years, you will have the future equivalent of $550/month (after all costs) in today's dollars. How much gross income do you live off a month? Divide that by $550 and you know how many of those $110K houses you need for basic retirement in 24 years. (Throw an extra in for insurance.)

btw with decent managing of the mortgages you need at most 5% down to buy anything.

Matt

[Ulysses]

two girls
or three girls
at the same time
that's what you should do

[DavidC]

[ QUOTE ]
two girls
or three girls
at the same time
that's what you should do

[/ QUOTE ]

I can't believe that all the other posters were shallow enough to focus on the money.

[The Armchair]

[ QUOTE ]
two girls
or three girls
at the same time
that's what you should do

[/ QUOTE ]

That takes $1m. Everyone knows that.

[StevieG]

[ QUOTE ]
[ QUOTE ]
two girls
or three girls
at the same time
that's what you should do

[/ QUOTE ]

That takes $1m. Everyone knows that.

[/ QUOTE ]

Well, the kind of chicks that'd double up on a dude like you do.