It is difficult to not be misleading with these things. The way I think about it is, "will your life meaningfully different in retirement if you are 3%* richer."

Also, "are you going to do an equivalent job if you take a DIY approach." This is, by far, the more important question, and the answer is almost invariably "no."

*this is using the numbers provided above, and is quite generous since I am assuming that all wealth will be in this one account (a silly assumption).

2 questions for me here:

1) I have about 3k in silver coins. Should I just sell it and put the money in the stock market? I would guess yes as I really don't see silver outperforming the stock market (kinda duh statement) and I don't really think I need the diversification assets but just wondering thoughts?


2) Do you see a problem if I gamble a lot and lose prolly a lot of money betting throughout the year say betting horses/ live and online tournaments? I put the max in my 401k (19.5k) and 6k in my roth ira. I currently live rent free (w/ a parent) and put a pretty good chunk of money into the stock market this year as a future house fund/ speculation to find some gains. I've probably lost maybe 6-8k betting horses this year, current 10-15k downswing in online poker tournies, and I typically will play roughly 20-40k [abi prolly $400-500] in live tournament buyins a year (I couldn't this year due to covid). I also have a cash balance plan my employer contributes to so I should be gold on the retirement front. I plan to max out 401k/roth ira until retirement now and I expect to make a lot more money in the next 4-5 years as I still have a pay bump in a union job that will take me to a 6-figure salary with ability to work ot in a cheap area to live (I don't live in a big city so costs are really fair). Also when I bink tournaments, I tend to put most of the winnings in the stock market.

Just wondering if I'm goofing by degenning. I don't have a safety account per se but I could always pull money from roth which I'm treating more so as a 1st home fund. With my 401k and defined pension plan, I feel I could probably retire at 55 if I want and continue to max the 401k. I live at home also so I have no real expenses. Just would like to hear thoughts.

1) Yes

2) I guess this is broader than investing advice, but ultimately, the purpose of money (should) be to make your life happier. I suspect that you'll have greater life happiness and fulfillment if you stop spending 6-8k on betting horses, and start spending that money on renting your own place, away from your parent's home.

Aim is to maximise long term happiness as Josem said. Gambling large amounts now gives short term happieness sometimes, short term happiness more often and will almost never lead to long term happiness. I look back on maybe one or two bets in my life that make me happy now. I enjoyed all of them at the time but I wouldn't say they have made me happier in the long run.

Lower your time preference and look for opportunities that will build your future. By all means have a gamble every now and then because I agree it's fun but it shouldn't be a habit.

In a good position here, but facing a tough choice. Should I buy a home?

Age: 35

~$900k NW:

Retirement: $300k

The remaining is:
Crypto: $90k
Bonds: $100k
Cash: $70k
Equities: $340k

Own a small business that generates $250 - $300k/year (business is relatively stable and does well during economic downturns).

Currently have a rent reduction to $2500 from $4k, indefinitely.

I live in LA, where home prices have been skyrocketing: up 15.5% over the past year and ~33% over past three years. I've been approved for a 10:1 ARM @ 2.25% on a $1.25 mill purchase (mortgage will be $4 - $5k, depending on property taxes). If I make the purchase, I'll still have ~$350k liquid, but, with the rent I'm currently paying, and the fact that interest rates can't really go lower/some metrics showing LA as more overheated than the rest of the country, I'm hesitant to make the dive into a home. I know it's a long-term investment and that you can't time the market, etc., but I think there's much greater upside to waiting another 6 months to see where inventory stands than diving in headlong right now. Anyways, 2p2 can't make this decision for me, but I'm curious on your guys' thoughts.

AtticusFish,

I think the decision about whether to buy a house is likely dependent on the rest of your life plans around family, where you want to live, and so on. If you have children going into primary school locally, then you're much more likely to be living in that same community in a decade than if you're a single guy without family ties, etc.

I have been looking into global metrics for this stuff, and Los Angeles is one of the least affordable major cities to live in the world (as measured by the ratio of median house price to median earnings). This is the survey that I used in my own research: http://www.demographia.com/dhi.pdf

If you're looking at it from an investment point of view, then I would be nervous that the newly-discovered world of remote working might reduce demand for LA housing in the medium-term (but then again, I'm an inherently efficient market guy, so I dunno if you should take the advice of a stranger on the internet)

Kind of in a similar boat, although I'm not concerned with the highly appreciating and overpriced market I'm in dropping much, if at all.

I'm factoring in a "comfort level" in there as part of evaluating my situation. Not sure yours, but I personally would pay a bit more for standard of living things that would make me happier and thus more productive in life as an overall return, which I'm sure you're considering as well and house vs. rental is a big part of that although I'm not eager for the maintenance side of home ownership.

I don't know the market right now in L.A. but if you plan to be there for next 5-10 years I personally wouldn't wait or worry about what could happen in the next 6 months, since odds are you will likely just see increases in that short of a period of time and you'll find yourself in an endless loop of "another 6 months" waiting to time the market.

Is there a possible income producing situation you can jump into when purchasing (if you like the idea) such as duplex/garage apartment/ADU?

That's really what I am currently interested in to offset my mortgage and alleviate my concerns of commitment and overpaying since I'd likely just convert into an investment property if I wanted to bounce after 2-5 years.

If one of your goals in buying a house is a higher standard of living, why would you want to buy yourself a second job of renting out a duplex or basement unit?

renting out a duplex or basement unit is nowhere close to a full time job if the property is in reasonable shape, although if something goes wrong in an attached rental i suppose the expectation when the tenants know you're home is you'll get right on the problem. flip side is the benefit of knowing when something potentially damaging goes wrong and being able to take care of it as soon as possible.
it's not for everyone, but having someone else pay 25-50% of your mortgage can have its benefits.

Currently residing in Hawaii:

31/m

Income: 100k/YR (active) small business and 100k a year in rental income.
Risk Tolerance: high
Timeframe for investment: 10-20 years.
Mortgages adds up to 1 million at 4.6k monthly mortgages.

The real estate market is drying up in my area and I'd like to invest my cashflow else where. I can either pay down debt or invest in other income. What would you do in my situation?

Can anyone recommend a brokerage that allows you to use securities margin rather than cash collateral for short sales? Interactive Brokers keeps cash collateral to cover shorts (link), which ends up costing an extra 1.5%+ interest in margin.

For example:

• $100K account value, all in VTI
• Sell short 100 shares of stock X at $100; cash proceeds of $10K
• But IB keeps that $10K cash as collateral, so I can't use it to buy more stocks, even though the $100K of VTI is more than enough to cover the margin requirements of the $10K short.
• So if I want to buy another $10K of VTI, I have to borrow on margin (and pay 1.59% annually)

It sounds like Schwab uses margin instead of cash collateral like I'm looking for (link) so I assume there must be others too? I'm having a hard time finding much info online, to know what's the best option. Overall I've been happy with IB's shortable stock availability and trading platform, and I'm skeptical that a more retail-focused brokerage like Schwab will work as well, but if it saves me 1.5% a year...

Just to follow up on this, in case anyone is curious... all brokers have to keep cash collateral to cover shorts - it's a regulatory thing. Even with IB's low margin rates, 1.5%+ of negative carry is a pretty significant hurdle to overcome on a long/short trade, so I guess I'll mostly have to stick to bear call and put spreads for shorts. Sigh.

You can borrow 96.5% of the investment for ~3%. Hard to pass on that unless present standard of living is your only goal.

VBR has been crushing it glad I piggybacked your play here.

Any strategies/advice on where to park some money for a fairly large ($125K+) upcoming tax bill on the sale of company (closed/funded in Dec. 2020)?

Large portion sitting in checking/savings and starting to work on a diversified portfolio to hold long term, along with a small "fun account" for Robinhood.

I guess the only thing I can do is try to earn some gains on it over next 3 months (and pray the market doesn't tank), stick it in something super safe with little to no gain, just eat it and pay off asap.....bitcoin it up?

It's a tough check to write, but a fortunate problem.

Enjoying it too, lol. Value just hadn't really recovered the same as the rest of the market and it was bound to catch up at some point.

Probably a muni bond fund, assuming it's in a taxable account. I keep emergency fund money or short term reserves in either of these:

VWALX (higher risk / higher return)
VWIUX (lower risk / lower return)

That really depends on your risk tolerance. Can you cover the money if it tanks 20%? I always have money for business taxes/rainy day fund of 50-75k cad and have always decided on just holding cash until I can figure out a safe 3-12 month investment where I can access the money at any time

Thoughts on the recent house price explosion? Toronto was expensive last year however we are still heading towards 20%+ YOY increase, seems to me that Tier 1 cities tend to appreciate at a faster rate than all else globally, by a significantly margin

Where to put $$ so that it is easily accessible for buying bitcoin if the price dips back? Looking for small-moderate risk, just want to be able to quickly convert to cash to buy bitcoin is the biggest factor. Is a savings account my best play? That's where it is currently sitting.

Stable lending / farming / lp? Something on binance smart chain for cost efficiency? (Likely give up some security though)

buy btc-linked stocks, e.g. MSTR

very cool. been playing around with this, and if your TL is 10 years +, should we just be jamming the stock market and not bothering with bonds? 100/0 still crushes 80/20 (tho the sim doesn't visualize the 1-10th percentile outcomes particularly well)

Depends on discipline, imo. If having a bond allocation will prevent you from going "all cash, homie" because of the latest and greatest panic (subprime, global viral pandemic, 9/11) then a bond allocation isn't a bad idea. Rebalancing is slightly annoying especially if you're continually putting in new money.

The conventional wisdom is that tax disadvantaged assets (bonds, reit, preferreds, etc.) should be in your tax-free Roth IRA accounts.

Personally, I don't follow any of that. I'm 80/20 in taxable. 100/0 in Roth.

apologies if this is trivial, but why are bonds tax disadvantaged relative to stocks?