Post: #1

Hi guys
Hoping to hear some life direction advice that relates to my situation

I'm early 20s, with an economics and operations management bachelor degree living in an English speaking country.

Two years ago a close family member passed away. They left me 2 houses, one, our family house, worth USD 1.1 million, and an investment residential house, worth USD500,000. They also left about USD105,000 in the bank.

Both houses are rented out, bring in about 53,000 dollars per year, from which i've been living off about 23,000 per year, other money goes to income tax, saved, repairing things in the houses.

Whilst some will be thinking that this means I'm set for life or something like this, I feel like I should be working to try and improve this situation, grow this wealth, through investment or something or starting some kind .

I was thinking that I should work towards saving for a third property, this time in the commercial sector (ie a small office or retail place).

After I finished university I traveled around Europe, but I felt after a time that it wasn't enough for me to just travel around here and there and have fun with girls, have to develop in other areas of life.

I came back to work on building a career but I don't really have a clear idea of what I should do further. I'm interested in trade, entrepeneurship, eastern europe, investment and real estate.

Was thinking about going back to university, (because it's hard to find a decent job with my degree and no experience (except for mini relationships with Slavic girls)), to study Finance or accounting, but I can't say I'm super passionate about doing this.

I was hoping you guys could give me some ideas on what to do next and grow my wealth

Post: #2

(11-02-2018 09:15 PM)369eyedea Wrote:  Hi guys
Hoping to hear some life direction advice that relates to my situation

I'm early 20s, with an economics and operations management bachelor degree living in an English speaking country.

Two years ago a close family member passed away. They left me 2 houses, one, our family house, worth USD 1.1 million, and an investment residential house, worth USD500,000. They also left about USD105,000 in the bank.

Both houses are rented out, bring in about 53,000 dollars per year, from which i've been living off about 23,000 per year, other money goes to income tax, saved, repairing things in the houses.

Whilst some will be thinking that this means I'm set for life or something like this, I feel like I should be working to try and improve this situation, grow this wealth, through investment or something or starting some kind .

I was thinking that I should work towards saving for a third property, this time in the commercial sector (ie a small office or retail place).

After I finished university I traveled around Europe, but I felt after a time that it wasn't enough for me to just travel around here and there and have fun with girls, have to develop in other areas of life.

I came back to work on building a career but I don't really have a clear idea of what I should do further. I'm interested in trade, entrepeneurship, eastern europe, investment and real estate.

Was thinking about going back to university, (because it's hard to find a decent job with my degree and no experience (except for mini relationships with Slavic girls)), to study Finance or accounting, but I can't say I'm super passionate about doing this.

I was hoping you guys could give me some ideas on what to do next and grow my wealth

If you are happy living off of the passive income you are making for now - I wouldn't bother about going to university or spending time trying to work a job right now.

I'd immerse myself in learning about investing everyday, and getting down a watertight investing strategy for the next 10-20 years that will provide you a mix of guaranteed returns, and some much smaller riskier but higher reward returns.

Once you have that figured out, you can then figure out a dollar amount of how much extra capital you need for your remaining investment plans, and you can use that information for figuring out if, what type and how long you want to work a job.

The general pyramid I have seen in life goes -

worker,
owner,
investor,
philanthropist.

There's no point going back to being a worker unless you need to money, some intangible thing you can get from only that job, or you want to do it for some happiness or fulfilment reason

RE the rest of your life - I don't think anyone can tell you what to do. Only you know what makes you feel fulfilled and happy. Generally, you have to keep trying things until you find this out.

From the people I've met in my life, there always seems to be two types of people - 1) people who are content playing the game of life making money and gaming the system, and 2) people who want something more such as helping others, improving the systems within society, developing meaningful connections etc.

Keep reading, watching videos and taking action in your life and you'll figure out naturally where you fit in and what you want to do.

I will say - in the last 2 or 3 years, I've met and talked to lots of people with a lot money and a lot of life freedom - and even the ones that are more materialistically driven get depressed because they generally hit dead ends and they don't understand they have to work on other areas of their lives.

I think it definitely pays to find something more out of life than material things, and to find ways to focus on other people than yourself, if you want to give yourself a greater shot at long term sustainable happiness.

That's just my experience though.

Good luck dude.

Post: #3

A lot of the people here would suggest investing in crypto.

I'd wait till the next recession before buying any real estate, should be able to pick stuff up at a significant discount.

Post: #4

Only you can really decide what you want to do.

TBH, I would just work ten years in any job that (1) might be fun doing and (2) would make owning houses cheaper, like plumbing (apprentice to journeyman in five years, after which it gets highly lucrative) and invest every penny into a vanguard. If you work a lot of hours in the last five years there could be well over half a million in that account by the time you're done. Then let it sit until you're at retirement age *(you're in your early 20s, it's going to get very large if you keep putting money into it) and volunteer at a homeless shelter or something.

Post: #5

What do you want to do?

Post: #6

1) Go back to university. You never know how the future will unfold.
2) Get a decent job. Keep in back of your mind this is only for 10 years.
3) With your salary now remortgage the two properties.
4) Use the money from your remortgage to invest in US bonds, in a low risk dividend paying equity index possibly yielding 5%+ on 400-500k, or in another property. Compare what gives the best passive income.
5) After 5 years have enough saved to buy another yielding asset.
6) Retire by the time you're 30 and have a life.

Post: #7

'I feel like I should be working to try and improve this situation, grow this wealth, through investment or something or starting some kind...'

Sounds like you're conflating two questions;

How to manage the inherited wealth,
Direction for your future.

You have no responsibility to build on the wealth, but maybe do to preserve it.

Managing the properties as rentals and saving as much as you can of the rental income is a good start.

I'd be careful about using the assets to fund a venture, as it's high risk and easy to burn through funds.

That said, if there's something you want to try, you could continue to manage the rental of the properties, and feel comfortable using that income to fund your enterprise. That should be enough funds to test and see if your project's gonna fly.

Hold on to the core assets for leverage and security.

Once you know what direction your taking, you could think about leveraging the assets and investing in other property.

Get some professional advice on that.

Post: #8

I'm assuming you already have some experience managing the rented out properties that have come into your possession since you mentioned fixing things.

Why not stick to that and keep scaling it up? Commercial real estate from what I understand is a different ball game.

I would say the only reason you could possibly justify going to college is if there's something you can learn there that you can't learn elsewhere. I can only speak to music education which was very rigorous in my university and wouldn't have been possible to replicate on my own or "on the job".

And if you do go, see if you can find a way to skip all of the prerequisite classes that most colleges force you to pay for but which you may or may not ever use (various maths, social sciences and english classes).

Finally, great sig.

Good luck.

Post: #9

Perhaps not university, but there are probably a bunch of classes related to real estate/property management and investing that you can take. This is a good opportunity to dive into various fields and see what peaks your interest, and you can walk away from any job that doesn't interest you.

Post: #10

1) Buy either stocks, crypto, forex and just learn how investments work. Can be as little as $500-$2500 so you can start learning and building up your knowledge. After a year or two, you should know if you're decent at it or not.

2) Pick up a job that makes you happy. For example, if you like banging girls - do something in the nightlife scene or something that gives you access to girls like a bartender.

3) Put your excess money into residential real estate. If you need something more active than the 2 houses and renting them out long term, just pick up stuff that would be good for AirBnB rentals and just keep getting more and more. Or, if youre good at step #1, do that and take profits every now and then and put into Real Estate. That should be your safe haven. Don't sell what you have if you're making money its your income.

Post: #11

(11-02-2018 09:15 PM)369eyedea Wrote:  Hi guys
Hoping to hear some life direction advice that relates to my situation

I'm early 20s, with an economics and operations management bachelor degree living in an English speaking country.

Two years ago a close family member passed away. They left me 2 houses, one, our family house, worth USD 1.1 million, and an investment residential house, worth USD500,000. They also left about USD105,000 in the bank.

Both houses are rented out, bring in about 53,000 dollars per year, from which i've been living off about 23,000 per year, other money goes to income tax, saved, repairing things in the houses.

Whilst some will be thinking that this means I'm set for life or something like this, I feel like I should be working to try and improve this situation, grow this wealth, through investment or something or starting some kind .

I was thinking that I should work towards saving for a third property, this time in the commercial sector (ie a small office or retail place).

After I finished university I traveled around Europe, but I felt after a time that it wasn't enough for me to just travel around here and there and have fun with girls, have to develop in other areas of life.

I came back to work on building a career but I don't really have a clear idea of what I should do further. I'm interested in trade, entrepeneurship, eastern europe, investment and real estate.

Was thinking about going back to university, (because it's hard to find a decent job with my degree and no experience (except for mini relationships with Slavic girls)), to study Finance or accounting, but I can't say I'm super passionate about doing this.

I was hoping you guys could give me some ideas on what to do next and grow my wealth

Serious props to your family for setting you up well. It's hard for more knowledge about accounting to hurt.

You are sitting in a great situation now and through the short to early medium term. One worry that pops up in the medium to long term is that homes, especially residential construction in the US style do not hold their value forever. They age and they can break down in ways that will often not leave any room for recovering value they might have once had. Water tables move, old mines collapse, soil settles, certain construction practices go from state of the art to pariah shit (aluminum wiring), and other hazards pop up. Your basket has two very nice revenue generating eggs, but if one of them cracks you go from a comfortable income to teetering on the edge.

In your situation you have enough illiquid capital that your priority should be you, as the business you find yourself being. Your family left you in a position of priviledge, and you have a responsibility as a moral actor to preserve and maximize that privilege.

You should know what a good offer on any of the properties you own looks like at any given time, and you should have an idea of what to do with the proceeds. Residential real estate goes through good and bad markets yes, but it can also get tied to other local trends. What is a good trendy neighborhood now may not stay one forever. Know what's going on in the neighborhoods around your properties including any demographic shifts. Locations that support 500,000 USD and 1.1 million USD home values don't always stay locations that do that.

It wouldn't hurt to watch the market for multi family residential properties. You might find a small apartment building for 65-85% of the price you might get from one of the single family homes in your current portfolio offering a similar rental income for you, even if you decide to outsource the day to day management to a specialist firm.

I specifically recommend against getting into day trading or short term investing. Maybe buy a couple of bitcoins while it still isn't too painful to buy Bitcoin in nice round whole numbers with the aim of sitting on them for 5 years. Do this specifically for the practice of weathering the noise and practicing the discipline you need to manage your fortune. Get in the practice of keeping a journal, because you want to record the information you are acting on when you consider making decisions as well as record the effects of the decisions you make. This gives you something to consult in the future.

If you want to stay in the property game, one of the best educations you can get is probably going to be taking a part time sales job at a big box home improvement store for a couple years. The money won't be great, but the intel you receive will be... If you commit to being the fellow who engages customers and works to solve their problems. Problems other customers have today are problems you or your renters can have tomorrow. Further not everything on the market is equal, and if you know where people consistently get fucked for pinching pennies down the line you know how to avoid that type of disaster yourself. Combine this with disciplined self study in accounting and there isn't going to be any university degree which will better prepare you to continue managing the business of you.

Being in your early twenties living on passive income you could also do a year abroad. If you like Eastern Europe, there is a good change you will like southern South America. You can take a couple months of one of the full immersion Spanish courses available in Argentina or Uruguay and then follow it with a couple months of living in and trying to get a macro picture of the country and its economy. Aside from the plane ticket, you might be able to do this with a budget no different than your current living expenses. Including taxes I do Uruguay for a bit under 2000 USD monthly now that I am renting an apartment two blocks from Playa Pocitos and paying utilities instead of doing the long term hostel thing.

Anyways, you are young and in a position that gives you a substantial amount of freedom. The big question now is "What do you want out of life?" There's no shame in taking some time and getting some experience trying to figure that out. You are sitting on a modest fortune of the sort that requires conservative management to maintain your current standard of living and calculated, well timed moves, to grow it. You have "fuck you money" capable of weathering many situations provided that they don't cut too deep. You don't have the wealth to weather a drunk driving accident or a criminal case touching drugs, so avoid those situations. You also don't have the wealth now to take on a wife and kids without another source of income (though by your late twenties or earlier 30's you could comfortably do so).

Treat yourself like a business and enjoy your high degree of freedom responsibly.

Post: #12

I hope those properties have a mortgage that is eating into your rental income. $53k for 1.6 million in properties? Where can I rent 1.6 million in property for 4100/mo? 3.3% is nothing.

If the houses are paid off outright, and you don't want to live in them, I'd sell them. 1.6 million is a lot to play with and invest. 53,000 a year is not.

As for career, you should only choose something that has billion dollar upside: tech, startups, real estate. No need for you to ever grind out 60 hours a week for no equity.

Commercial real estate sales is a really tough gig in the US-but that could be an option. It's commission only, so it works best with inherited money guys with a few shoes in the real estate game. Tremendous upside if you hit it big, plus the knowledge you gain could be invaluable with the amount of property you already own.

Post: #13

Given your young age, the number one thing you wanna do is avoid doing something foolish with the real estate assets. Your goal should be wealth preservation.

If you look up broke lottery winners or broke ex NBA/NFL players you see some common themes emerge in their demise. Besides spending beyond their means; they made risky investments often in a friends business, they got swindled by trusting the wrong people, and they developed a high expense drug/alcohol/party lifestyle.

If I were you I would do the following over the next 12 months:
-Spend lots of time reading books, blogs and watching youtube videos on economics, investing, real estate and investor psychology.
-Consult with a fee based investment adviser
-consult with an accountant
-Wait at least a year to sell your houses or make any new investments
-keep your lifestyle the same with maybe one splurge vacation or retail purchase under 10k.

Post: #14

(11-03-2018 06:47 PM)Graft Wrote:  I hope those properties have a mortgage that is eating into your rental income. $53k for 1.6 million in properties? Where can I rent 1.6 million in property for 4100/mo? 3.3% is nothing.

I thought the exact same thing. This isn't adding up at all unless there are mortgages involved and if they are, then it's nothing to balk at. $53k/year in passive income AND paying off the mortgages isn't a bad place to be, but if those properties are paid off, something very wrong is happening.

Post: #15

Are you considering applying for graduate school - most will offer free tuition and a stipend for living expenses. It could help build strong analytical skills and possibly a quantitative background, depending on what you choose to pursue. This way, you would have some time to figure out what you want to do with the properties and finances, all while saving money and building a career. In a year or two, you'll probably be in a better position to decide which way you want to go with your financial situation.

Post: #16

What's wrong with the property being unencumbered? Ie not having mortgages?

Post: #17

(11-04-2018 03:09 PM)369eyedea Wrote:  What's wrong with the property being unencumbered? Ie not having mortgages?

There's nothing wrong with it, but your net return off of the properties appears to be rather low versus their book values. There is a lot of math you want to start getting very intimate with before you start making any big decisions.

Post: #18

The house were paid off long ago before I began looking after them, also seeing as the local property market has flattened out recently and chance of capital gains is low, it seems too drastic to remortgage them right now.
I'm not fully aware of the benefits of having it on the mortgage rather than them being unencumbered, given I get to keep all the rent, other than remortgage for the purposes of buying abother property.

Also, if I may ask an auxiliary question, at what level of income would you say is appropriate to start thinking about starting a family. I'm a conservative and I really want to start a family one day when I'm older and wiser. Closer to ballpark 80,000k Usd? In order to leave a reasonably comfortable life for kids

Post: #19

(11-04-2018 03:50 PM)369eyedea Wrote:  The house were paid off long ago before I began looking after them, also seeing as the local property market has flattened out recently and chance of capital gains is low, it seems too drastic to remortgage them right now.
I'm not fully aware of the benefits of having it on the mortgage rather than them being unencumbered, given I get to keep all the rent, other than remortgage for the purposes of buying abother property.

The only reason to remortgage would be to purchase multi family rental properties with a higher return on investment than your current portfolio of two single family homes. Depending on the interest rates offered, it could be a better decision to sell one or both properties at the right price to do the same thing without borrowing.

Saying the local market is "flat" doesn't pass on a lot of information. Are there a lot of other single family homes being offered for rent in your area? Is your area economically depressed? Is there a demographic shift going on?

In the next few years you don't want to still be in the position where you are still dependent on renting out your properties at a bargain price. What you do want to do sooner instead of later is soberly assess "What direction are the values of my property headed and how is the local property market moving? Is anything permanent changing" If you find yourself in the position of an East Saint Louis homeowner in the 1950's or Detroit homeowner in the 1970's it may be prudent to liquidate the properties while you can still get a good offer and keep the proceeds in a similarly conservative investments.

[/quote]Also, if I may ask an auxiliary question, at what level of income would you say is appropriate to start thinking about starting a family. I'm a conservative and I really want to start a family one day when I'm older and wiser. Closer to ballpark 80,000k Usd? In order to leave a reasonably comfortable life for kids
[/quote]

75-80k sounds about right as long as you don't tie yourself to a woman who will burn your capital for her short term comforts. Unless you suffer sunstantial financial misfortune in the next two decades you kids are going to be looking at paying cash price for university education unless they get merit aid. It depends on the kinds of kids you raise and how your values shift over the intervening period as your wisdom and experience grows. You will probably want you kids to experience some financially lean times in their young adulthood as they play with independence, but as a parent it will be natural to want to pass on the priviledge you yourself are enjoying.

Take this decade to learn, grow, and maybe make a couple small aggressive moves to try to level up your wealth. Use your next decade to start plotting the legacy you want.

Post: #20

(11-04-2018 03:09 PM)369eyedea Wrote:  What's wrong with the property being unencumbered? Ie not having mortgages?

You don't see the problem of renting out a million dollar home and a half million dollar home for under $4,500/mo.??? Something is horribly wrong here.

You're asking for specific advice, but you've given only very vague information which is incredibly incongruent with what's considered "normal."

Post: #21

Hey guys
Have to thank all of you for your replies, really appreiciate your help.
I have a lot more clearer direction now after processing and researching your ideas for the last few weeks.

Post: #22

In terms of your money I would be conservative. Think government bonds and blue chip stocks.

An easy example would be:
Financials ETF 10%
Low Volatility ETF 40%
Treasuries 50%

I would definitely think about getting a job or studying whatever comes to mind. I think its awesome that you are questioning yourself. Its sometimes hard to find passions so just go with what moves you the most and don't doubt it.

Post: #23

(12-07-2018 04:31 PM)Road_Less_Taken Wrote:  In terms of your money I would be conservative. Think government bonds and blue chip stocks.

An easy example would be:
Financials ETF 10%
Low Volatility ETF 40%
Treasuries 50%

I would definitely think about getting a job or studying whatever comes to mind. I think its awesome that you are questioning yourself. Its sometimes hard to find passions so just go with what moves you the most and don't doubt it.

Do you think it's worth investing at the moment given the market's in a mature stage, or waiting until there is a correction?

Post: #24

(11-04-2018 05:48 AM)bacon Wrote:  Given your young age, the number one thing you wanna do is avoid doing something foolish with the real estate assets. Your goal should be wealth preservation.

If you look up broke lottery winners or broke ex NBA/NFL players you see some common themes emerge in their demise. Besides spending beyond their means; they made risky investments often in a friends business, they got swindled by trusting the wrong people, and they developed a high expense drug/alcohol/party lifestyle.

If I were you I would do the following over the next 12 months:
-Spend lots of time reading books, blogs and watching youtube videos on economics, investing, real estate and investor psychology.
-Consult with a fee based investment adviser
-consult with an accountant
-Wait at least a year to sell your houses or make any new investments
-keep your lifestyle the same with maybe one splurge vacation or retail purchase under 10k.

Thanks mate, really like this advice, I'm doing something like this right now

Post: #25

(12-07-2018 04:34 PM)369eyedea Wrote:  

(12-07-2018 04:31 PM)Road_Less_Taken Wrote:  In terms of your money I would be conservative. Think government bonds and blue chip stocks.

An easy example would be:
Financials ETF 10%
Low Volatility ETF 40%
Treasuries 50%

I would definitely think about getting a job or studying whatever comes to mind. I think its awesome that you are questioning yourself. Its sometimes hard to find passions so just go with what moves you the most and don't doubt it.

Do you think it's worth investing at the moment given the market's in a mature stage, or waiting until there is a correction?

Well technically now we are in a small correction. I'm not an expert enough to time the market. That being said I would expect when the market crashes odds are a portfolio like above will not be down too much. The treasuries should increase in value under most circumstances and the Low Vol shouldn't loose as much as the index. So yeah I'd say go for it.

But if you want to invest in risky tech stocks like Netflix or something like Crypto, I would strongly advise against it.