My grandparents are wealthy but not financially savy at all. I have taken their finances and gone over them with a fine tooth comb to see if I can get their money working for them more. As it turns out they set up my college education fund with the broker at Morgan Stanley who manages their investment account. So I set up an appointment for all of us to go see him.
My grandfather is pretty much out of it and hasnt been too with it for the past few years. My grandmother said that about 8 years ago whenever the stock broker would call my grandfather wouldnt want to change anything in their account and the broker stopped calling as a result and it has been sitting unchanged for 8 years. So I loaded em up in the car wheelchairs and all and went and discussed their account. I pretty much told the broker I want him to put their money in “safe” dividend stocks and he said he manages an account that produces an 8% dividend return. After he explained this to my grandmother she was thrilled. They only had 300k out of their 1.5m in a 4% dividend payout. So it looks like they are going to be making at least 80k a year more now. My grandmother was quite happy with me to say the least.
What this all comes down to is my grandmother is realizing that I am pretty smart when it comes to money. The kicker is that they own three properties outright that total 1.5m in value. Once I do a few deals and show her I know what I am doing I am fairly certain that she will let me get a HELOC on them and borrow against it. How great would that be?? Just think of the deals I could do…woa back to real life. What do you all think
You sound like your in stocker broker training now when on the first day of training they tell you to solicte leads from your family and friends. Despite being very eager to make tons of money, do not destory the family fortune at the same time. Truyst me, one wrong move and you can wipe out everything. Get with a CPA that deals with real estate investors to properly set up some companies to protect yourself. Remember if the property is in an LLC, they can not get your personal savings, but if its in your own name, then they can get everything you own. The more you have, the more likely you will be sued down the road so protect yourself and kept your real estate investments seperate from personal finances.
Also if your looking for some good dividends…I happen to like AIM funds…the return in my Global Agressive fund has been over 20% the last 3yrs after the market recovered with one yr about 35%. Its agressive but still solid, however I justed moved some of it into a newer fund by AIM that is heavy in energy and telecommunications.
Also, I think you have to be 21, but look into opening a self directed ROTH IRA for yourself. Great investment tool. With investments you can increase its protofilo much faster since your limited on your yearly contributions.
Be real careful with the use of family member’s money. Try to get a profitable deal or two under your belt and then wean yourself from having to use your relative’s cash or credit to do the deals.
You don’t want to lose $100,000 of Dad’s money and have him looking at you funny while you’re having your Thanksgiving dinnner.
The Roth IRA is a great investing too. If you have roth, buy a piece of property and have the roth for over 5 years and are over 59 1/2, and the place is paid off, all the money that comes in for rent will go into your roth, and you can take out the money the next day, tax free. If you have 5 properties in your Roth, then imagine the tax free income that is coming in. This is how the rich get rich and the poor stay poor.
When the market crashed after 9/11, the real smart investors started looking into emptying there 401K and Roth IRA into the RE market. They never lost a penny really, since the housing market was strong from 2002-2005 in most areas… They were more than doubling there money in there retirement accounts. I like to do 3 deals a yr with my IRA account. I dont see the money now, but when i am 59 1/2 (unless they change it to like 80 by the time i am able to collect) I will have enough tax free money in there to never worry for myself and my family.
I must admit I got lost in the babble of double talk so I tuned out to the theories of what you should do so that I could let you know what you can do.Open a roth IRA just like the last poster said and get that started.The Roth is able to purchase and flip properties within itsself TAX FREE.YEAH BABY!!! But for now USE YOUR HELOC. Its NOT your money. its the banks.and its cheaper than any hard money lender.But make sure you have learned the art of the deal so you do not loose it.Buy low Sell high . Its that simple ;D
Only thing is, I think the damn government requires you to be 21 to open a ROTH IRA…You need to check…I think it sucks that the government gets to regulate how much money someone can put into a retirement account each year and makes the smart people resort to investing with it to build it faster (though its good) but I hate the fact that someone tells me i can not put more than $4,000 a yr into it this yr…(or did it go upto 5K this yr, i forget)
Man, you’re not kidding. I’ve always been amazed at how the government gets to force employers to withhold 15% of citizens’ pay towards the Social(ist) Security retirement program. The money collected from you gets “distributed” to other retirees currently in the program – because the government either lost that money, or spent it somewhere else. And when you turn a certain age, (which can change at any time, when the gov’t decides it wants to) you’re allowed to have a certain portion of that money back – taxed by the gov’t of course – at a rate that the government can change anytime it wants to.
Oh by the way, should you die before the age when you’re allowed to get that money back – it’s gone. Your heirs have no right to it. I think you’ll get something like $215 towards funeral costs.
Quite a program don’t you think! If any private citizen came up with a scheme like that, they’d be thrown in jail.
“There is no minimum age limit for opening a Roth IRA. Anyone who earns “taxable compensation” during the year and has Adjusted Gross Income (AGI) of less than the established limit is eligible to open and make contributions to a Roth IRA. Taxable compensation simply refers to earned income, or income that is reported on Form W-2. Examples of taxable compensation include salaries, wages, commissions, self-employment income, and alimony received. Compensation does not include passive earnings such as rental income, interest income, dividend income, pension income or annuity income”
Well I have never had a job but after I do my first rehab I should have plenty of taxable income. What is the time period that the roth IRA works on, as in when is the last day that I can contribute to make it applicable to this years contribution? Is it fiscal year?
I was under the impression that you needed a self directed IRA to be able to purchase real estate with. Could you guys explain more about this.
If all this has not convinced you of what to do with the $200k just go to my web sith write down my address and mail it to me and you can stop all the confusion cause you finally made a decesion ;D