Comments on Boston Gal's Open Wallet: Net Worth Update April 2011

Congrats, as always.

2011-11-16T12:42:48.939-05:00

Congrats, as always.

+1 for index funds. Check out The Bogleheads Guid...

2011-05-10T00:43:19.307-04:00

+1 for index funds. Check out The Bogleheads Guide to Investing

I would prepay your mortgage. A guaranteed 4.25% ...

2011-05-07T03:04:10.157-04:00

I would prepay your mortgage. A guaranteed 4.25% return is pretty darn good these days.

You can always take out a HELOC or mortgage if you need the money again, but paying off the mortgage makes the rental cash flow more positive.

How about contributing to a roth ira and picking a...

2011-05-03T16:59:04.675-04:00

How about contributing to a roth ira and picking an index fund, Individual stocks or bonds?

I also agree another investment property would be worth looking into at these rates. Perhaps finding a small real estate investment group to buy into would also be of interest.

Two facts, as food for thought: - Only 202 of the ...

2011-04-24T16:11:05.863-04:00

Two facts, as food for thought:
- Only 202 of the 500 biggest companies in the United States in 1980 were still in existence 20 years later.
- On December 29, 1989, Tokyo's Nikkei stock average reached its all-time peak of 38,915.87. Twenty years later, the Nikkei has never again reached that level — and, in 2009, reached a new low of 7,054.98.

Congrats, as always. I filed for an extension thi...

2011-04-15T15:06:02.224-04:00

Congrats, as always.

I filed for an extension this year for the first time. Free through TaxAct (you do NOT have to file your taxes with them), and since I don't owe this year (back-of-the-napkin calculations show I'll be getting a few hundred back), there's no late penalty to worry about. If you're feeling squeezed, I think it's better to take more time and not make mistakes!

I don't see why the next rental has to be some...

2011-04-14T10:17:56.661-04:00

I don't see why the next rental has to be something you want to move into. Find something in a desirable location from the perspective of renters that will cash flow, maybe a two or three family, or another single family with a basement apartment. You want to build wealth and shelter your income from taxes. Real estate is still the best way to do this, as long as leverage is positive.

To answer some questions: * I am uncertain about ...

2011-04-14T08:27:11.086-04:00

To answer some questions:

* I am uncertain about buying another property at this time. I have looked, but not seriously. So far, the properties I have purchased have been places I wanted to live. So it is not just finding an investment property. It is finding one that I would either want to move into now or can see myself moving into in the future. Finding such a property is a tall order considering what is on the market right now.

* Yes, the real estate line item includes two properties. What is now an investment condo (but was my first home) and my primary residence which includes a basement apartment.

* I stopped prepaying my mortgage after refinancing and knocking a point off my interest rate. That debt is now financed at the low rate of 4.25%. I suspended my extra cash payments while I look around to see if my current excess cash can be put to work somewhere else.

* I am thinking about other investing ideas. Ideally, it would be nice to find another way to generate passive income. Spending some money on improvements is also a possibility.

* I have not been a fan of peer to peer lending. Some have done well with it while others have not done as well. The closest I have come is lending some money to family. So far, that worked out well, but I doubt that is something I want to repeat often.

* Commodity investment is something I need to look at. I am not someone who has purchased gold or art or other alternative investments.

Whatever I come up with, I will be sure to post. But knowing me, this will not be a quick decision.

Seriously, some of these suggestions are nuts. Go...

2011-04-14T07:50:48.003-04:00

Seriously, some of these suggestions are nuts. Go buy (or borrow) The Elements of Investing by Malkiel and Ellis. It is a very short book (fashioned after the classic Elements of Style by Strunk and White).

Read it cover to cover - it is right up your alley. You'll enjoy the read, I promise.

Then, follow their advice.

As you, me and millions of others have observed, i...

2011-04-13T14:39:36.780-04:00

As you, me and millions of others have observed, interest rates are at historic lows. As a result, many other income producing investments have skyrocketed in price as others have flocked to them. Therefore, I am pointing out some possible investments for you but caution that if and when interest rates rise significantly, the prices of these could decrease. On the other hand, now that many more have learned about these investments, it is possible the will not decrease as much as they otherwise would. With my caution stated here are some other investments that you might begin to learn about so that you may consider them. I've done pretty well with them having jumped in before much of the crowd did. I'm not sure I would buy in heavily at this time.

You should consider preferred stocks and master limited partnerships. Both have nice income streams. MLPs, paying around 6%) have the added advantage of some tax deferment and have routinely increased their payouts by around 5% per year. As natural gas production grows in the US. MLP pipelines should grow too. Some individual MLPs to look at are EPD, KMP or MKR, PAA, NSH, EEP, ETE or an ETF ANJ. MLPs have some tax complications. I had an accountant do my return for the first time I can remember this year and it cost $185 including 4 MLPs. Not such a big deal.

Preferred stocks can yield 6 - 7%. One ETF is PFF. Individual prefereds can be researched at www.quantumonline.com
For diversification, safety and simplification, I think you may be better off with the ETF.

PS: For diversification purposes, I would recommend you avoid any more real estate. You have a large position already. Good going.
Marty

Very nicely done! I agree with the others would it...

2011-04-13T09:27:02.253-04:00

Very nicely done! I agree with the others would it be possible to have a further run down of your real estate holdings?

-Ravi Gupta

How about at Lending club? Peer to peer lending. ...

2011-04-12T22:00:04.953-04:00

How about at Lending club? Peer to peer lending. You can invest based on your risk tolerance level.

Please post about what you end up doing with any e...

2011-04-12T18:25:31.853-04:00

Please post about what you end up doing with any extra cash for investments! I am trying to get ideas.

Are you looking for suggestions? I have a non-ret...

2011-04-12T17:04:15.050-04:00

Are you looking for suggestions? I have a non-retirement investment account at Euro Pacific Capital, and have been very happy with them.

I just read about dividend reinvestment plans, DRIPS, where you buy stock directly from a company (no brokers fees!) for a discounted rate and the dividends are reinvested automatically (haven't tried it myself though). See http://www.fool.com/dripport/whataredrips.htm

You might also consider spending some of that cash: home improvement projects, redecorating, vacation, a wardrobe update, or electronics. It looks like prices are only going one way now: UP!

Since you're already maxing out your retiremen...

2011-04-12T16:24:13.387-04:00

Since you're already maxing out your retirement accounts, what about using part of that cash for another rental apt?

Just curious, why did you stop prepaying your mortgage?

Does the real estate line item include your primar...

2011-04-12T11:01:59.860-04:00

Does the real estate line item include your primary residence?

Time to buy another rental property. Rates are lo...

2011-04-12T09:48:55.312-04:00

Time to buy another rental property. Rates are low and prices are down. You have enough cash to make a sizeable downpayment and have enough reserves. The tax shelter will help.