All Forum Posts by: Joe O

Compounding. 7.35% annual.

Nathan, you are awesome! Upvoted, and thanks so much! Really appreciate it.

Natha, would you mind showing your work? I'm sure you're right, I'd just like to play with the numbers and am curious about the calculation you used to get that number.

Are rates really that low in Madrid?

Or did you not read he's in Spain?

Guillermo, the best advice is you need to experience with your local market. The return you get is going to be very dependent on where you are. A 10% cap rate might be great, or it might not be.

You also need to research the exact expenses and NOI of the property. I suggest you find an experienced investor near you that you can get advice from and discuss your deals with. Many (or any?) here won't be familiar with Madrid's market and won't be able to give you the advice you need.

Mr. Money Mustache posted his biggest mistake yesterday, it's an interesting read (as is the rest of his blog):

http://www.mrmoneymustache.com/2012/02/01/mr-money-mustaches-big-mistake/

EDIT: J Scott beat me to it and posted while I was typing. Much of the below is redundant, but basically reinforces what he said.

It'll take work. You're looking for a 30% cash on cash return - not impossible, but you'll likely have to build up to that 10K/mo through compounding.

That is, you may generate a lower return, say 10-15%, build your investment, and then getting that same 10-15% on a higher investment of 800K or so will net you 10K/mo.

Either way, it'll take work, it's not an invest it and forget it for passive cash flow.

More reward (the 30% returns you want) come with more risk and work.

Or to put it another way and directly answer your question:
"400k in liquid assets and is looking at a goal of 10k+ passive cash flow per month, what is the path of least resistance to get there?"

1) Put 400K in passive investment yielding 5% with no further work required.
2) Wait about 37 years without touching it.
3) Principal will now be approximately 2.4 million and should kick off 10k/mo at that 5% rate.

Watch out for inflation (hope that's a 5% real return, not nominal)

If you found yourself not liking that plan, you may want to get realistic and realize a few things:
1) 30% returns, while not impossible, are unrealistic
2) Getting to 10K/mo cash flow will be anything but "passive"
3) "The path of least resistance" won't get you there. It will require hard work

As for getting started, you're in the right place. Start reading! Good luck.

Cool. Well I'd love to hear more about how you structure it then to remove the fees and make it better than merely investing in equities in a Roth or something like that.

Those two things seem contradictory in nature to me.

Switch them all to one thing? Evernote is an all in one solution.

I like simplicity though, so I'd probably just stick with email. Just as easy to email yourself a photo as text it to yourself. And just as easy to have Siri create an email to yourself as it is to have her create a reminder.

So use your inbox for all 3?

There's a few ways - select it on the map in the reminders app. Or, if you want Siri to do it, add them to your contacts (with address) and give them unique names.

SO you'd have a contact named "Home Depot 1" "Home Depot 2" etc. and tell Siri to remind you at Home Depot 1.

Or a name like "Home Depot on Main Street" may work better.