All Forum Posts by: Marcus Johnson

@Joe Villeneuve  Your wrong about your comment "You have that backwards. Ramsey is for the undisciplined."    You may want to reread my post.  I was saying that when Dave Ramsey recommends saving up and paying cash for rental or flips, that it takes discipline to do that, unlike Kyosaki's plan which allows one to not delay gratification and to borrow money one doesn't have for the purpose of buying real estate for investments.   The definition of disciplined is the following:

control gained by enforcing obedience or orderb : orderly or prescribed conduct or pattern of behaviorc : self-control

Remind you it's much easier to be a Kyosaki follower then a David Ramsey, because your allowed to leverage yourself to buy things you cannot afford.  Dave Ramsey's plan is a more disciplined format where you actually have to save money and buy properties with no debt, then watch the magic happen because once you acquire a certain amount of paid for properties, because of the large amount of cash flow your able to outright purchase properties at a faster rate.  The snowball effect.  

Me personally, I use combinations of the two theories.  I try to keep my personal debt down to nothing, except my primary mortgage which I put 20% down on.  As for my investment portfolio I put down 25% on properties in good neighborhoods, with quality tenants that get the max rents which equals high cash flow due to the purchase price.   I am using the cash flow savings to bank and save up for my next duplex in the same area.   If I repeat this over and over again, I should be able to grow my portfolio and have a number of paid for properties that cash flow very large for retirement.  

What's wrong with renting cheap for a few years and saving a DP?   Why do you have to buy now?

@Brian Fouts

I just wanted to show you an easy website for you to try that shows you factual data collected on the S&P 500 since it's already happened.   Simply choose a month and year and you can easily get results for Index rate of return with dividends reinvested.   11% for the historical average.   I've run some options for you to view.  If you take January 1940 until the present, the S&P 500 has a yield of 10.91%.   January 1970 till the present, the S&P 500 has returned 10.30%.   January 2009 till the present, the S&P500 has returned 16.31%.   Go ahead and try anytime frame going back to 1871.  All of the data for the S&P500 is here.   

Personally, I invest in Index Funds with Vanguard because the fees are .04% which is nothing in the grand scheme of things, plus when I withdrawl money after 59 1/2 there aren't any taxes.  

@Logan Allec

I wouldn't worry about 6 of the worlds strongest companies carrying the S&P 500.  Your talking about Google, Apple, Amazon, etc..   That's a good problem to have.   That means the United States top companies are stronger then ever.   If your worried about nearly 80 years of 11% returns from the S&P 500, look into VTASX which is comprised of around 3000 of the top companies in the US which has averaged 9% since inception.  

I am also a real estate investor, so don't get me wrong that I don't like real estate, it's just the passive income investing in the stock market is to hard to pass up.  When you have a rentals, which I do, we'd all like them to be passive, but whether you manage them or a company does, there are still problems that come up that require unknown amount of cash to be spent.    What I like about rentals is owning something I can touch and work on with my hands.   It gives me something to think about daily, whereas my index funds simply require no more work then contributing to them monthly or yearly.  

@Jack B.

Regarding your guess that the S&P 500 has a yield of 3.26% is incorrect.  In fact the factual data on the S%P 500 has been calculated many a times over.   Just go to this website: http://politicalcalculations.blogspot.com/2006/12/...

and you'll see that if you take an example of January 1940 until the present the S&P 500 Index Rate of Return with dividends reinvested is 10.91%.  In fact the S&P 500 historical average is 11%.  Also you have to remember that the rule of 72 states that on average every 7 years your money will double so long as your invested in the S&P 500.   

So was your plan to be a short term investor in the stock market or long term investor?   The reason I ask is that if you think that because in 2008 we had the great recession where the market dropped 58% and trillions of dollars from investors were pulled out of the market due to fear.  Now the market has come back over 200%  from 2009 till 2014 and those investors lost out big time.   Here we are again in 2015 and the stock market is down 5% and people are nervous again.  

The point is that if your a long term investor and track the S&P 500 (SPX) since 1994

 http://www.marketwatch.com/investing/index/spx/cha...

Or you can move the chart to whatever your liking, but it has average 11% since inception.   Compound interest is our friend, so at 27 years old and 45k in a Roth, the average person has 30 years to save for retirement and if you made the average returns of 11% you'd have 1 million dollars tax free at retirement.    Also according to the rule of 72, your money doubles every 7 years on average.  

If I were you, I'd leave the Roth money alone and save money to invest in Real Estate.  

I had an applicant that wanted to pay the entire year upfront.   That did concern me, because it makes you wonder what's going on.   I did a background check on all applicants and found that although this person had good income, their job background showed that the moved around alot and changed jobs a lot.   I found a good applicant that had a decent job, stayed at their apartment for 5 years and held their current job for the past 3 years.