Or am I just a mental case? Haha...I currently have my own property maintenance biz which is currently in a slow spot. I have some money in the bank and am desperately trying to figure out what next venture I should partake in, but I cannot for the life of me figure out what to do. I have contemplated turning a building on my property into Airbnb, buying properties, buying land, even something like a vending machine business, etc, etc...the latest is buying a camper trailer and putting it on my property for an Airbnb.
A lot of it for me is mental because I want to feel like I am contributing fiscally somehow constantly, and with having inheritance contributing in my mind it doesn't count because it was my hard earned money from my family. I know many who get an inheritance would not even have these thoughts cross there mind but I suppose I am different. I do have money in a cd, and a financial advisor watching over some other money in an IRA.
What is equally stressful is all the different views and those are adamant in those particular views, but I suppose that's what makes the world go round. Thanks for reading!
So I understand your inheritance perspective. For me, I felt like I was a fiduciary - that I had a responsibility to guard and grow that money that was given to me. Real Estate was my answer. I would point you away from vending machines and such. While I know little about that business, I feel quite positive that it would be more work than real estate for less return. The biggest advantage is that real estate (rentals) are mostly passive. I say that with a background that I have 37 of them and self manage them. I went to New York City for five days last week... didn't have to lift a finger on my rentals... no calls, nothing. Then there are days when I get 3 AC calls and a septic issue. So it's not like it's no work.. but on a daily basis it is really easy. You obviously have to fill units, and maintain them, etc. But I can tell you that we manage about 95% of our business from our cell phone and use a cloud based rental system (RentecDirect.com) to collect rent directly to our bank account, screen tenants, receive maintenance issues, track expenses, advertise our properties, etc. There are many out there, and I know little about the others - but the point is - with a few systems in place and a couple of good phone numbers for the 3-4 typical maintenance issues you will have - being a landlord is a pretty easy gig. We worked our full time corporate jobs up until the time we had 20 doors - at which time we felt like we could start to step away from corporate.
We are utilizing high yield savings accounts - paying about 4.45% interest right now in lieu of a CD (Baskbank.com) which is FDIC insured. There are a couple of banks paying even more right now. CD's may be a bit higher right now, but I like the flexibility to access my money if a deal comes along - and rates continue to increase which you wouldn't be able to take advantage of if you are in a longer term cd. We also have some money in a US Treasury IBond that is paying 6.89% (but that rate is based on inflation... which is high right now)... but it's a good deal at the moment if you can leave your money alone for a year. You can put up to $10,000 per year in an I-Bond typically. There are a few exceptions that let you put in a little more... but it is somewhat limited. (TreasuryDirect.Gov).
Here was my motivation: To consider retiring you have to figure out how much you can spend in retirement. The common mantra is "the 4% rule" - which says that you should be able to withdraw 4% from a stock portfolio and not run out of money. And many would suggest that 4% is generous. I ran the math on that and said, "Ok, so if I have $1 million dollars in stocks I can 'safely' take out $40,000 per year. The problem is, that isn't enough money for me. With real estate, you get to multiply your buying potential by 4 - meaning that the bank only requires you to put 25% down. So now you can buy 4 million dollars of real estate with that same $1 million dollars. We are grossing over $500,000 a year in rental income using that formula - and netting well over $200,000 a year from real estate after the expenses to buy and maintain the properties. So $40,000 versus $200,000... I'll that the latter. Here's the crazy part... there is no "withdrawal rate" from the real estate account. Rentals are like an ATM that refills every month. You withdraw your money to live on and next month you still have all of your real estate AND the ATM is full again! It's pretty awesome! There are 3 legs to real estate: Your cash flow (the profit you make each month); then there is your tenant's paying down your mortgage by making their rental payments and you paying the loans which builds equity and future cash; then there is appreciation of the properties. We have seen the value of our portfolio more than double in the past 2 years due to market appreciation (housing getting more expensive). While that may be a once-in-a-great-while thing, it has been spectacular. So those are some of the perks of real estate. There are many branches though... there are flips as well. We have done about 5-6 of those and have profited anywhere from $50k - $150K each time we have done it. There is also short term rentals (airbnb, etc). It's not our thing... but everything I read says there is higher profit potential in it. I just prefer the simplicity of longer term rentals.
With all that said, right now would be a tougher time to get into the business. Prices are high, and money is expensive. So right now I would learn about the business, and watch for the opportunities which will eventually resurface as rates and housing prices (hopefully) come down some. Spread the word that you are looking for houses to buy. The fact that you know how to work on them would also help a lot!
One last thought... and it is a personal opinion only... I feel like financial advisors are highly overrated. Just keep this in mind: Their 1% management fee is 1% of everything you invest with them. It sounds 'so small'... but if you take the long term stock market growth rate of 7% per year, they are stealing... sorry... I meant "taking"... nope... "Charging" you 14.2% of your profits for managing your money (ie. 1% divided by 7% yearly growth). And on a down year it's even worse. You have no growth, and they are taking 1% of everything you have invested. That's $10,000 on a million dollar account a year. I would highly recommend doing some research and investing your money yourself with a brokerage account like Vanguard, where the fee is usually about 1/10 of what a broker charges. If you research enough you will find that index funds (funds that track whatever market you are investing in like the S&P500, etc) will likely do better than an account with your broker after you factor in his commission. No one has a crystal ball when it comes to stocks. Hedge funds use extreme techniques and do better... but you will pay them a hefty sum of your profits for the privilege if you could even get in with one. So for the common person. I actually had the ability to compare my broker's account of mine with a Vanguard account of mine for the period of 1 year. My index fund account of the same value as my Edward Jones account came out $35,000 ahead across the last year. They both lost money... don't get me wrong... but Edward Jones was down $35,000 MORE than my self-managed Vanguard account. It was a painful lesson. All my money is now self managed needless to say.
So my vote for you is Real Estate in some fashion.