Re: [php-49] Contractors and Business owners, investing for the future.

From: Jd D.
Sent on: Tuesday, May 7, 2013 5:41 PM

Not sure how my email address makes me naive, but I wpuld appreciate the links. Thanks.

On May 7,[masked]:28 PM, "George Marian" <[address removed]> wrote:
*Shameless plug*

Countless tomes have been written on this subject.  Eggheads have gotten trounced and the Oracle of Omaha is a relatively simple person.  Serendipity is a fact of life, accept it.  Life is a risk.

You're probably already cut-out for this sort of thing, though personal interest also comes into play.  You need to sort through a bunch of data and figure out what's right for your implementation.  The best solution will have some elegance and be achievable in a reasonable timeframe.  Prepare for the inevitable variability, by accepting that you can't foresee it all, but that you can focus on what you can identify and address.  I believe that my interest in this topic shares common roots with my interest in programming.  Hence, my belief that you likely have the skills necessary to invest your income prudently.

Your email is typical of someone that is naive of the investing world, yet it seems that you understand that you only know enough to be dangerous.  Hence your email with a long list of ideas you've considered to some extent.  So, do what you do well: learn a new topic and put that knowledge to use.  You may do all of your own investing or you may decide to hire someone for some or all of it.  You already understand that investing isn't just about the (stock) markets.  Now, you need to dig deeper, but there is no reason to think you can't do it.

I don't think any idea you mentioned jumped out as unrealistic.  They all have their pros and cons.  For example, physical gold has to be stored **and secured.**  However, gold certificates share the same risk as any other paper investment: if things well and truly go south, they won't even be useful as toilet paper.  Of course, that pile of shiny metal may be of little use if the markets truly collapse.

My basic thesis is that understanding the principles of investing is accessible to most people.  Many C-students have done quite well.  Many A-students have perpetrated some spectacular failures.  These principles don't fit neatly into our academic organization of knowledge.  Much of it is human psychology.  Business makes more sense if you accept that human psychology is fundamental to the endeavor.  If man were truly an island, there would be no such thing as business.  It's all about identifying and understanding the fundamental principles.

I could go on and on.  In fact, you can read more on Money.SE.  :D  (If you're interested, I can send you some links to discussions on Money.SE to get you started.)

As a disclaimer, in all seriousness, these are just the opinions of an avid amateur and should in no way be constituted as financial advice.  Same disclaimer for Money.SE.


On Tue, May 7, 2013 at 2:04 PM, Walter Parker <[address removed]> wrote:
I think you are mistaken about this part:

>   I also though briefly about IRA's, but I know that if a bank collapses, there is a written in clause that my money goes with the bank against their defaulted loan, since it is then the banks property.

  You own your IRA. The bank or broker that holds your IRA does it in trust (they don't own it, they are just safe keeping it). The money should be segregated from other funds (can't taken by the banks creditors). However, there was a recent case where a brokerage firm stole those funds. When the auditors showed up, a Billion dollars was missing from the trust accounts. But this usually only short-term issue, as the money is often invested somewhere else (see next paragraph).

  From within the IRA, you can invest the funds into several different types of investments, such as CDs, monkey market funds, stocks, and other items. CD are protected up to $250,000 (just like normal CDs). The other items are like the versions outside of an IRA, not insured by the FDIC. In the recent banking problem, the government covered much of these loses as well.

If I'm wrong, could you please point me to sources that document why an IRA is "the bank's property" and not mine?


Walter




On Tue, May 7, 2013 at 9:34 AM, Rolfe Lindberg <[address removed]> wrote:

I invest at Vanguard. If you are looking to invest for retirement, they have products (portfolios) that are built for specific retirement years. Their fees are the lowest in the industry by far. Stocks have ups and downs but over the long-term offer the highest return. Depending on your income you might want to consider a Roth IRA. You don’t get a current tax deduction, but all of the money the investment makes is tax free.

 

As far as other options, it’s really an individual decision based on how you want to spend your time. Real estate, Laundromats, etc are all good ideas. But, you have to deal with broken toilets, painting, employees, filings, etc. But, you can make more money this way if you make the right investments, hire the right people, get the right tenants, etc.

 

 

From: [address removed] [mailto:[address removed]] On Behalf Of Jd Daniel
Sent: Tuesday, May 07,[masked]:14 AM
To: [address removed]
Subject: [php-49] Contractors and Business owners, investing for the future.

 

 

Hey kids and not kids. Many of you know me (if not by my scary reputation, than in person). If not here's the 411, I've been a independent contractor for the greater portion of my life, making the "big bucks" lol. Unfortunately AS a contractor I pay my own taxes, do not get a 401k (or pension, if those things still exist on some alternate universe), get granted medical through an employer and a slew of other things that W-4 guys definetly take for granted.

Lets talk about money.

I make pretty good money (finally), and I've gotten to the point where I can take a large portion of my income out back and b burn it, and still not be hurting. That's well and fine, except for the fact that my on the top is wasted on worthless things, like car parts, couches, and whatever catches my eyes at the time. Not really doing me a lot in the short or long term.

Lets say I could take 1500$ - 3500$ a pay check and actually do something that would benefit me, short term or long term. What would be a smart investment? I hear about the stock market, but I feel that its a bubble that WILL collapse without notice, and take my money with it, I read about it all the time, some guy losing his life savings on oranges because Florida wasn't hot enough this year. I also thought about Gold, gold is finite, it has a face value (we aren't talking about gold certificates here, but the real deal). I also though briefly about IRA's, but I know that if a bank collapses, there is a written in clause that my money goes with the bank against their defaulted loan, since it is then the banks property.

So lets talk about money.

What about self generating incomes? How about passive incomes? I've honestly though about buying houses and renting them, passive income IS recurring income, and it can carry well into retirement, or provide the seed money required to open new businesses or just retire flat out. How about laundry mats? Almost completely passive, they would only really need on employee per store, and one supervisor per region. I believe that the costs and the closed market space for competition weed those out pretty quick. Of course theirs OUR speciality, eCommerce and electronic business, maybe create a few forwarding stores and see how they generate income, after your initial investments of time and moola, they could be semi-lucrative and almost completely hands off as well. 


What do you guys invest in? Do the contractors have plans for the future? Have you started a nest egg? Where and how and why?

 

Cheers guys, love you all and wish you the best!

 

Jd Daniel || ERADO MCS L3C.
Senior Applications Architect
1329 Monroe Ave N.E. Renton
C.    [masked]
Professional Profile

 

 





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The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding.   -- Justice Louis D. Brandeis




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