All Forum Posts by: Kevin S.

So, a million bucks.

This is Real Estate forum so I'm guessing you are looking for RE options.

If this million was for pure investment then I'd:

Look in the smaller markets from Western PA through Ohio, Indiana, Iowa, etc.  In those markets you can get multi's for 100k or less and put like 50k into them.  So a project would cost 150k without financing.  I do 6 of those for 900k.  That will provide me with 15 - 20 doors that are mortgage free.  If you average 1,000/door that will be 15k - 20k per month coming in and you still enjoy the appreciation of the buildings.  If you get around 25% appreciation over prject costs then your 900k is now worth 1.125 million and you are making 200k/yr in cashflow.  So in 5 years you are flush again with the Million.  Probably some where in year 4 you'll reach your breakeven.  Now you have 1.2 - 1.5 million in free equity to refi as well if you ever need to but you shouldn't cause the cashflow should be more than enough to stay liquid and just keep going.

 If he can give you 11% annualized return why not ;-) I myself could return you 11.05% no problemoooo LOL

@Kevin S. there are so many funds of all different ranges.  Yes, the higher funds tends to lose price value, especially just recently in the past few years.  But, the total return for many are up.  the bdc's actually have done very well even in price.  There are even more to choose from in the 7%-8% range.  That's the typical "high yield" range -- granted "high yield" can also means 3%-4%.  Its all variable.

One strategy is the "barbell" strategy where, for example, you use a small portion of funds to do 12%, and leave the rest of your funds at 4%-6% (which now you can do with the "blue chip" stocks) so you capture the high income, but also have dividend growth stocks that both appreciate in value and dividend.

@Kevin S. oh okay. Missed that.  But $80k generated by $2.1mil is a ~4% yield…. That’s back to the staple 4% rule.. and doubling of the base amount in some 13yrs is ~5.5% yield, assuming no withdrawals

…. I’m not even sure what we are discussing anymore LOL

 Kevin,

There are some really cool statements in your response. You definitely put many of my thoughts into actual words that I wish I could done on my own. You are spot on when it came to your philosophy on rearing the kids to allow them to pursue they interests and nudge the ones that may want to come back into REI later. All of my children are different and have opposite strengths and weaknesses. They are motivated and interested in things that are modern and out of my realm of understanding.

Thanks for redirecting me back to that understanding. I have always felt that way, but I had been a bit frustrated lately at their total lack of personal interest. I had given each a laundry room and allowed them to keep all the proceeds. It was great for about a year, then they all lost interest. Might just be their teen phase.

@Kevin S. https://www.schwab.com/ira/ira-calculators/rmd

This? So if you do born 1964 and $1mil, its says ~$80 rmd STARTING at age 73. So, for somebody TODAY at age 60, would have a ~$80k rmd WHEN they BECOME age 73 with I'm not sure how much IRA/401k balance at that time.....

As mentioned above.. there are a huge number of assumptions going on here.  You even said this post is a hypothecal example.  As mentioned, it all comes down to your strategies and goals.  That needs to be followed up with sufficient research/education.

Hi Kevin  just a quick note to connect and to say thanks for your thought provoking questions insights and analysis you bring to the forum. 

Will be 59 soon and looking to give up active work and the 1M questions was indeed where my emotions has/have been wondering. Am comfortable with income from 1M 4d nxt 30yrs at fairly moderate return of 7% ...Once again thanks and am following ur post keenly.