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re: Investment advice
Posted on 6/1/16 at 2:26 pm to dabigfella
Posted on 6/1/16 at 2:26 pm to dabigfella
and which one is easier to attain? a dividend portfolio of 100k in cash a year? or RE positive cash flow of 100k?
Think about it. My dividend returns are nothing compared to RE based on cash on cash returns. Look, i like dividends also but I'll take RE anyday.
equity capture, principal paydown, way better return based on cash flow, greater tax advantages. no brainer.
show me where dividends gives you all those advantages. Show me the leverage you have buying stocks for dividends. It is not a better cash on cash return. My value of my RE may drop but guess what? rent keeps coming in as do tax advantages among others! What happens when your dividends are cut? Or a company goes under?
Think about it. My dividend returns are nothing compared to RE based on cash on cash returns. Look, i like dividends also but I'll take RE anyday.
equity capture, principal paydown, way better return based on cash flow, greater tax advantages. no brainer.
show me where dividends gives you all those advantages. Show me the leverage you have buying stocks for dividends. It is not a better cash on cash return. My value of my RE may drop but guess what? rent keeps coming in as do tax advantages among others! What happens when your dividends are cut? Or a company goes under?
2
Posted on 6/1/16 at 3:52 pm to Fat Bastard
well I have a pretty enormous dividend portfolio that spits off 6 figures and I dont even blink. PM,V,NKE,SBUX,AAPL,etc and its on complete autopilot. Its completely liquid and I could dump it tomorrow if I wanted to. I have 5 stores that would get me a decent return if I leased them but I'd have deal with a headache of finding a capable operator and god forbid I try to sell them I might be facing $500k+ in realtor fees to sell those assets vs I could dump my whole portfolio tomorrow for under $100
If you can invest in a solid portfolio of 10-15 dividend growth companies its 100x easier than real estate on any level. As I said not only does my income grow in the form of dividend growth but it grows in terms of I acquire new shares all the time via dividend reinvestment and acquisition of new shares.
My stores would command nice leases but those leases would be fixed with nominal 7.5% or so raises every 5 years vs dividend income rising that amount annually. Im not talking cash on cash return bc we're talking about the man retiring and living off his portfolio we're not talking about investing. Sure real estate cash on cash kills it. I made 140% on a condo in south florida using cash on cash metrics but we're talking about retirement income and a dividend growth portfolio of equal value beats a piece of commercial real estate in all ways with simplicity and liquidity being number one.
Dividends can be cut without a doubt if you're in things like oil which are cyclical. I try to invest in companies with good dividend coverage. Apple is not cutting its dividend anytime soon, neither is nike, nor is starbucks. These arent debt ridden kinder morgans that depend on a commodity to maintain its value.
If you can invest in a solid portfolio of 10-15 dividend growth companies its 100x easier than real estate on any level. As I said not only does my income grow in the form of dividend growth but it grows in terms of I acquire new shares all the time via dividend reinvestment and acquisition of new shares.
My stores would command nice leases but those leases would be fixed with nominal 7.5% or so raises every 5 years vs dividend income rising that amount annually. Im not talking cash on cash return bc we're talking about the man retiring and living off his portfolio we're not talking about investing. Sure real estate cash on cash kills it. I made 140% on a condo in south florida using cash on cash metrics but we're talking about retirement income and a dividend growth portfolio of equal value beats a piece of commercial real estate in all ways with simplicity and liquidity being number one.
Dividends can be cut without a doubt if you're in things like oil which are cyclical. I try to invest in companies with good dividend coverage. Apple is not cutting its dividend anytime soon, neither is nike, nor is starbucks. These arent debt ridden kinder morgans that depend on a commodity to maintain its value.
This post was edited on 6/1/16 at 3:57 pm
Posted on 6/1/16 at 4:33 pm to Fat Bastard
Quoting two or more people in a thread here on an iPad is too time consuming.
By my mid 20's, I had a real estate portfolio in seven figures. How? Debt. All one has to do is MANAGE the situation. Is it for everyone? No. But I think you and I both know what is possible if the intestinal fortitude is there. To attain that amount of stock (with the same capital outlay) would not have been possible. And I would never suggest that someone use margin to build a stock portfolio anyway. I'm heavily invested in the equity markets now. But that money, in large part, came from the fact that real estate gave me a solid base to grow from. As for the doc, he may need to wait awhile before he starts building a portfolio of (managed) properties.
As for the young doctor right now, I would hit the Roth hard now, just as he suggested. The backdoor Roth option has been on the chopping block for awhile, if I'm not mistaken. As for a house, I would only buy something major and meaningful if I knew for certain that I'd be setting down roots in that general location for at least 5-7 years. I didn't build THE house until I knew that I was done bouncing around.
Just my 2 pennies. Everyone's mileage varies...
By my mid 20's, I had a real estate portfolio in seven figures. How? Debt. All one has to do is MANAGE the situation. Is it for everyone? No. But I think you and I both know what is possible if the intestinal fortitude is there. To attain that amount of stock (with the same capital outlay) would not have been possible. And I would never suggest that someone use margin to build a stock portfolio anyway. I'm heavily invested in the equity markets now. But that money, in large part, came from the fact that real estate gave me a solid base to grow from. As for the doc, he may need to wait awhile before he starts building a portfolio of (managed) properties.
As for the young doctor right now, I would hit the Roth hard now, just as he suggested. The backdoor Roth option has been on the chopping block for awhile, if I'm not mistaken. As for a house, I would only buy something major and meaningful if I knew for certain that I'd be setting down roots in that general location for at least 5-7 years. I didn't build THE house until I knew that I was done bouncing around.
Just my 2 pennies. Everyone's mileage varies...
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