I've been saving for about 8-9 years. Have a steady compounding 401K, my old Roth, and a taxable brokerage. I have about 150K-175K in an inheritance account. I was saving for a home, but at this point, buying in our area seems stupid since we pay about 1/3 of what mortgages are on homes in our neighborhood, and our landlords are fantastic. I want to invest, but I'm wondering what others do when they get to a certain level. Also our city is going to steadily increase property taxes over the next 10 years on a scale. So wondering if it's bored winter time thoughts or if people have some decent thoughts.
- Keep investing in the market, been making about 15-22% a year in my accounts, though that's not really fun.
- Thought of buying a business, investing in a business, or investing in a Franchise, but this is where I lack institutional knowledge, wondering if others on here have done this and did they just work with a broker? What did they invest in? Franchise or did they buy a small business where the owner is retiring, someone passed, etc.
Have a co-worker who invests in MF properties, typically in blocks of 25K, with 50K being the minimum investment. They make pretty good returns. I'm in the field; they are in the field, but it's a lot up front for steady, well-established returns. But the returns aren't as high as above.
Personally, I'd just index and chill. I'm assuming this money is for retirement? You don't want to fuck with that, who cares if it's boring? Get your kicks elsewhere. If you really need some excitement, take $10k and throw it in Robinhood and buy deeply OTM calls on companies right before earnings come out.
As for franchising/owning a business? It's a full-time job. I work at a family office and we looked into buying some local fast food franchises because the CoC is crazy high, but any good franchise has serious requirements for their owners, you often have to get trained up by the company themselves. You can't just up and buy a McDonalds. And when you do, it's not a passive investment, you are now a small business owner, and that means responsibility for payroll, scheduling, accounting, etc. If you buy a Subway and someone calls out sick, you aren't just going to shut down the store for a day, you're gonna have to get your ass behind that counter and start making sandwiches. It's not a passive thing, but it's pretty lucrative if you can build it into a larger thing and have a layer of management between you and the individual store levels, the problem is you need to build up to that.
Finally, investing in RE can be great if you're given the opportunity, but it can be very hit or miss. You say you're in the field so you should understand how deals can vary wildly based on a variety of factors, how much DD do you want to do for each $50k investment? And going this route just compounds your market risk. I always try to diversify streams of income. If RE underperforms and you get laid off, now you're out of a job and your investments are down the drain.
The answer is to continue with #1 and find other ways to have your "fun" in such a way that it doesn't jeopardize your long-term wealth potential or get you locked into some highly illiquid trap from which you can't redeem for 10 years. Do this until you are well on track for whatever your target retirement # is. Then, when you have some extra capacity, you can explore #3 when throwing $50k at something becomes a relatively small amount of your net worth. If that works, you can lean into that a little more. #2 doesn't make sense until you have a lot more money and time, unless you wanted to actually make that your career. Don't overthink the main pillars of personal finance, keep it simple, keep optionality via liquidity, and don't pay too much in fees.
Thanks, yea my father was in Franchising Law but never actually pulled the trigger himself, he didn't want the hassle as you pointed out. Basically this inheritance is from a family trust a while back and free money, but can roll into my brokerage at some point. I guess I could do a back-door Roth this year and max it out the next couple. We have other assets coming in the next 10 years. I guess more so my wife wants to leave her job and run something she's passionate about. So was leaning away from Franchise, but always see people bring it up. Real estate it just be a side passive investment as a KP. We are already saving about a third of our net right now.
Similar situation, I've thought about buying a multi-family property - live in it and rent the rest out to help pay down the mortgage. But I just don't think it's a good time to buy in the area where I want to live in eventually.
I wouldn't franchise at this point, it's a huge commitment. Can be lucrative if done right.
Instead I've thought about just changing my living situation and splurge financially for a year or two (thinking of moving to Queens, Brooklyn - live in the suburbs rn and am bored out of my mind). I'll continue to max my 401K / Roth and putting my savings into a HSA / existing brokerage accounts.
I could reasonably buy a Queens / BK apartment or a suburban house in 5 years (with a significant down payment) but I don't have the urge / desire to do it just yet since I don't have a family (kids) yet.
Yea my wife would never go for that type of MF, I'm talking 25-300 unit properties we invest in. My friend has done about 8-10 properties now, I know they were funding recently and that's why I started thinking, but their last year it was like 8.5% return yearly on CF to investors and the last prop they sold they made around 14% after all said an done, i think was a 6 year hold so made some decent returns as it was sunbelt during the explosion of rent increase and sold before vacancy issues from over supply came. Paying down the mortgage living in a quadplex only really works up to 5-units. So renting 4 don't want to live that close to your tenants.
This is helpful to know, thanks for sharing.
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