re: Being "recession proof"

Isn't the Atlanta market "booming" again? Do you see the same thing happening there?

Diversification.

Or put in a more practical ways, always ensure you have a fluidity of choice. Don't put yourself in a position that a situation will dictate your choice.

For instance, don't put yourself in a position where you have to sell undervalued assets in other to pay an emergent liability

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Real estate income
Stocks
Ownership in multiple types of business.
Etc

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and i will add:

tax liens

futures

private lending

Well he did say "technically", it doesn't mean he views his portfolio that way.

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I hear stories of people who lost millions in the 2008 crash. Where does this money go? And can it be recovered?

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The value of your investment shrinks you don't think of it as money leaving. It is like owning an acre of land then finding out later that it is hazardous land. Your land value disappears because no one wants it

When you have lost a lot of money in the stock market, you have to look at the companies who lost money and ask yourself "is this company still a viable profit making company?" If yes you keep your stock and weather the storm, if not you discard it.

My friend's dad is a big investment broker and he made tens of millions betting on banks to recover when their stock hit near 0 because he believed they wouldn't go bankrupt.


Historically, holding blue chip stocks that have good management and a good balance sheet/business practices will survive recessions as they are not going to go bankrupt

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Did anyone here get hit hard in real estate?

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Personal experience for me - I lost $5,000 in American Mortgage Company. It is trading at $0.0032 per share under 02756814. I learned about "catching a falling knife".

I learned more from that loss than any gain I have ever made. I know some CRE guys in Florida, Georgia and North Carolina that lost EVERYTHING in transitional real estate. Ruined some forever.

What happened? How were you hit, if you care to elaborate?

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Isn't the Atlanta market "booming" again? Do you see the same thing happening there?

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Pockets have recovered nicely, then again these areas didn't decline as much and are in better/more desirable areas, people buying 20-30 miles out may never recover as know one wants to live that far out and deal with gas prices and commutes, some of those developments were very poorly planned. Until mortgage rates popped up recently sellers in desirable areas were receiving multiple bids at or above asking price on the first day of listing. Many areas outside of the I-285 perimeter, which became known as the circle of death, are still well below 2006/2007 price levels. We are roughly 8-miles from downtown, bought in 1998 and have put about the same $ amount in renovations in the house as the original purchase price, and, based on recent sales, are fairly accurately down 5% which isn't bad given the level of reno my wife wanted. I would be just as happy in a tiny house with moderate upgrades but go figure.

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Do you see the same thing happening there?

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Depends on if people have learned their lesson and what happens with lending. I am buying into another commercial property, it is priced a little over 22% less than it sold for 5-yrs ago. It can be a slog but worth the work. I make a point to not become over-levered, it makes life a lot less complicated and more enjoyable.

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 I make a point to not become over-levered, it makes life a lot less complicated and more enjoyable. 

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This is my philosophy too. Leverage can be helpful, if it's well managed and a small percentage of overall portfolio. It can also be an albatross even if it is well managed. I've been on the verge of being homeless because of having too much debt and not managing it well. It took years to clean up the mess I made with my own stupidity.

That experience basically made me afraid of debt, because I never want to go through that hell again. When possible, I prefer to only buy real estate without leverage. If I must borrow, (which I haven't done in 2 years) I never borrow more than 20% of the value of my portfolio. Overly cautious perhaps, but I still make plenty of money, and I rest a lot easier.

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If I must borrow, (which I haven't done in 2 years) I never borrow more than 20% of the value of my portfolio. Overly cautious perhaps, but I still make plenty of money, and I rest a lot easier.

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Once I got to a certain passive income and NW number the desire for excess risk exposure was driven from my system. Reading white papers like "Determinants of Growth in Distribution Portfolios: A non-Gaussian Approach" like this didn't hurt, link is in sidebar:

LINK

I am not scared of debt, just that I like to know I have a way of working out of something on my own terms instead of being dictated to by external people/institutions. Everyone has to start somewhere, but hopefully people learn quick when taking lumps.