Post: #76

Lots of stuff on here. but i'll do a quick take on this.

Portofmanteu - Pm'd me regarding his set up of using credit cards to buy goods at lower rates if you are already left the country. Yes this scheme will be fine because you are buying goods. What i am saying is you going down to any pegged interest rate country and trying to make a "quick buck" is basically impossible for most people on here and you'll likely get caught by the US Govn't so as i said multiple times before don't do this unless you know what you are doing.

Yes absolutely use the exchange rates to buy goods if you have already expatriated, you'd be a fool not to.

Goober: Regarding your PM i think you did a good job doing the "first level" of research and even found a few funds that I would recommend for newbies. I would dig more though, pitch me an idea and i'll happily respond. Right now your comments are too high level, but you've done the baseline work.

The last question on here is on:
Overseas Bank Accounts
In my opinion there are only really 2 types of accounts.
1. Tax Shelters
2. Leaving the Country

Option #1 is ONLY FOR THE RICH You will not be making or saving ANY money if you are sub $100K net worth(still poor). You have to typically wire money amongst other fees and charges that add up if you don't have any money.

To address the college question, i would get a CASH only job. Your best bet is to tutor kids, do some side gigs etc. At the same time, calculate out how much you can make before your financial aid gets tapped in your regular jobs then switch over and start doing side gigs on the amount surplus. This way you can max out your savings.

Option #2. This is a tough one, there are at times rates where it makes sense to invest in a country. New Zealand is an example of stupid high rates where you can invest indirectly using a brokerage accounts. You can also invest in 99.999% of assets through a simple brokerage account so i see very little reason in opening a foreign bank account UNLESS you are leaving for good.

I looked into the DR one just for a short while but didn't see it as lucrative. Looks like inflation there is in the 8%, you have govn't issues and on top of that who knows what currency it is in. Finally, never ever do foreign accounts unless you are doing it in that country in person the amount of corruption in 3rd world countries is absolutely insane! So even on a quick glance looks like its not worth the risk to me, but i could be dead wrong. Only way to find out is to go and dig into the banking system yourself in the DR and put the chasing girls part aside.

Post: #77

I know you prefer that people look for new ways to save money rather than make money through investing and trading, but for someone who wants to at least try that route, do you have any tips on how to get started?

I kind of have something of a plan on how to go about doing this, but I think it could use some guidance from someone who already knows what their doing. My plan is as follows:

1. Start following the markets, and seeing how the prices of stocks respond to various news stories. I'll just read the financial section of the newspaper, and a few sites that deal with the market.

2. Limit the number of stocks that I follow closely. I think I'll focus on around 20 or so, any more and there might be too much for me to handle.

3. Find an industry or two to focus on learning the ins and outs of. Maybe consumer technology/IT, health care, or financial services/banking. Then trade primarily in these areas.

4. Get an account on one of those virtual stock market games and start trading there for a start. I'm not sure how useful this will be but I think it will be good to get any kind of experience I can without risking losing money. When I have a good level of experience, start trading real money.

5. Just keep learning more finance and macroeconomics. Eventually I'll learn about how to use options and other tools. Hopefully this stuff will help me, but I'm not so sure again.

Post: #78

If you want to learn how to invest I would start with the following:

1. Read the intelligent investor
2. Read More Money Than God
3. Read a book on technical analysis (I dont have one to recommend because i kind of learned this from multiple mistakes)

You'll see many "types" of ways to invest. The number one rule for sure is "Invest in what you know" this applies to everything in life from starting a biz to knowing a venue well to pick up girls.

With that said I would do the following

1. Choose a SPACE to learn that you are interested in. I don't just mean "technology/consumer/medical", maybe choose "restaurant consumer companies" or "Mortgage backed securities" or "Handsets (AAPL/RIMM/NOKIA etc.). This way you know at least one sector. Trying to become the next macro guru implies stupidity thats like me saying I am going to start from the beginning by learning exactly how to predict the next Financial crisis... good luck.

2. Do not play "virtual stocks". The mental and physical damage from losing real money is severely different than "play money". I would get a part time job and save up enough money that i am okay "losing all this money". Thats the mentality you need. If i lose every single penny that i have invested today I certainly wouldn't be happy but my financial well being would still be good enough for my age.

3. Once you know a space, put your money where your mouth is and invest. Remember just because a "stock goes up" does not mean you are right. It needs to go up because what you said would happen happens. Lets say you think XYZ company will sell much more of product Z. The stock will subsequently rip. However, if XYZ prints strong earings and does rip, BUT product Y sold more than expected... you were wrong and got lucky the game is much harder this way and forces you to understand changes in companies, products and trends over time.

After a while you'll realize one and only one thing. The only way to make money is to figure out where the money is going to go next. THIS IS NOT EASY. Most people don't have the skillset to make above market returns and will fuck up. This is why You NEVER bet more money than you can afford to lose.

You make investments based on your own bold predictions, not Jim Cramer, Not my opinion, not no ones but yours. This is why my very original post here had very little to do with stock picking because you need to build up capital so you can have new capital that you can afford to lose.

(07-21-2012 01:37 PM)Newb#3 Wrote:  I know you prefer that people look for new ways to save money rather than make money through investing and trading, but for someone who wants to at least try that route, do you have any tips on how to get started?

I kind of have something of a plan on how to go about doing this, but I think it could use some guidance from someone who already knows what their doing. My plan is as follows:

1. Start following the markets, and seeing how the prices of stocks respond to various news stories. I'll just read the financial section of the newspaper, and a few sites that deal with the market.

2. Limit the number of stocks that I follow closely. I think I'll focus on around 20 or so, any more and there might be too much for me to handle.

3. Find an industry or two to focus on learning the ins and outs of. Maybe consumer technology/IT, health care, or financial services/banking. Then trade primarily in these areas.

4. Get an account on one of those virtual stock market games and start trading there for a start. I'm not sure how useful this will be but I think it will be good to get any kind of experience I can without risking losing money. When I have a good level of experience, start trading real money.

5. Just keep learning more finance and macroeconomics. Eventually I'll learn about how to use options and other tools. Hopefully this stuff will help me, but I'm not so sure again.

Post: #79

The dollar has strengthened against the Euro considerably the past year.

Does anyone seeing it reaching 1:1?

I have a large mortgage on a flat in Euros (two loans, 25K @ 9,5 and 90K @ 6,85) + credit card debt and nearly no liquidity because I'm a moron and blew it all fixing up the flat - still want to finish the last half). Don't plan on selling for at least 2-3 years. My net rent (after subletting) is pretty low.

Have landed a new job, sold a lot of stuff lying around and am subletting a room, so I expect I will have cleard most credit card debt by end of this quarter. Then I want to get rid of the expensive loan within a year.

I am a US citizen as well, so i was thinking of using my credit union in the US. Right now dollars are more expensive than before, but I see it appreciating further. I am thinking I should start borrowing small sums in USD to get a good credit rating. If and when the dollar appreciates, borrow larger sum to shave off more debt and spread risk. How good an interest rate could I hope to find in the US?

As stated, I am with a credit union in California and I put $100 into it a year ago. They hardly know me. What proactive measures can and should I take at this point?

Post: #80

(07-21-2012 07:56 PM)ElJefe Wrote:  I have a large mortgage on a flat in Euros (two loans, 25K @ 9,5 and 90K @ 6,85) + credit card debt and nearly no liquidity because I'm a moron and blew it all fixing up the flat - still want to finish the last half). Don't plan on selling for at least 2-3 years. My net rent (after subletting) is pretty low.

Have landed a new job, sold a lot of stuff lying around and am subletting a room, so I expect I will have cleard most credit card debt by end of this quarter. Then I want to get rid of the expensive loan within a year.

Is there any reason why you can't refinance the loan in Euros?

With the Euribor sitting at about 1%, you should be able to get a variable rate of 2 point something. With your refinance funds, you pay out the two existing loans and the credit card debt.

A lot depends on where your asset is located. It will be much easier to borrow six figure sums in the US if you can secure it against an asset located in the US legal jurisdiction. Reading between the lines, you don't have that?

I don't get the benefit of borrowing in USD if you think it's going to strengthen from here. Surely you would want to do exactly the opposite? That is, avoid borrowing USD if your income is in EUR.

Post: #81

I'd like to know more about where I as an individual can get a loan at the market rate? The bank sets my rate and the margins have exploded. Interest rate on this loan has gone up 1,5 percent in a year and a half. Refinancing locally (DKK which is pegged to the EUR) does not look attractive given all the costs associated with it - the entire sector has increased interest rates on this type of mortgage even though financing costs in DKK have fallen and some interest rates are negative.

The reason I wanted to star in the US is to improve my FICO score by borrowing and quickly paying back small sums. I would do still be paying off the expensive loan at a rate of USD2000 a month, but if I reasoned if I started a credit history in the US, this could help me down the road especially if the dollar appreciates significantly.

Post: #82

@WestCoast

Thanks for the help, man.

Post: #83

(07-18-2012 05:24 PM)portofmanteau Wrote:  

(07-18-2012 09:42 AM)chyamor Wrote:  https://servicing.chase.com/reo/property...Properties

I'm surprised how cheap some places are going for. Condo's in prime places in chicago are going for 150's. It almost makes sense to buy 1 and airb&b, vrbo the shit out of it

Orlando seems like a great spot for this. Cheap and brings tons of families for Disney/Universal studios.

2br/2ba condo for 78k, on the market for a while so will probably sell significantly below, looks to be across the street from Universal Studios, building w/ pools, tennis, gym, etc. & building rental center offers to rent out when not in use:

http://www.zillow.com/homedetails/6165-C...3154_zpid/


This guy looks to be like 75% booked up at $150/night in his 3br/3ba:
http://www.airbnb.com/s/orlando--florida...home%2Fapt

http://realestate.yahoo.com/news/america...-2012.html
1. Orlando, Fla.
The emptiest city in the United States is Orlando, Fla. The 12-month average for rental vacancies stands at a staggering 18.8 percent

Post: #84

(07-03-2012 04:32 PM)Zeus Wrote:  Why not taxi cab plates.?

Let's break it down. Where I am, a plate costs roughly $300,000. The city is not issuing anymore plates, so they are in limited supply. 10 years ago they were worth $90,000.

Some numbers in BSAS.

Plates are ~120k ARS, that's 20k dollars at unofficial rates. Car + equipment another 100k, total investment ~220k (36k us). Rent 400 pesos/day, 12,000 pesos/month = 2k USD. So basically the return is the same here... with 10% of the investment. That's an amazing business if the economy doesn't completely explode here.

Post: #85

This isn't counting your yearly insurance + other expenses. I'm going to look into this more, sounds too good to be true.

(07-27-2012 01:25 PM)portofmanteau Wrote:  

(07-03-2012 04:32 PM)Zeus Wrote:  Why not taxi cab plates.?

Let's break it down. Where I am, a plate costs roughly $300,000. The city is not issuing anymore plates, so they are in limited supply. 10 years ago they were worth $90,000.

Some numbers in BSAS.

Plates are ~120k ARS, that's 20k dollars at unofficial rates. Car + equipment another 100k, total investment ~220k (36k us). Rent 400 pesos/day, 12,000 pesos/month = 2k USD. So basically the return is the same here... with 10% of the investment. That's an amazing business if the economy doesn't completely explode here.

Post: #86

1. Don't aim for crazy returns. The world's best investors get like 20% a year. Anybody who got 50% last year got lucky, don't try to emulate them, you'll end up broke.

2. Pick stocks with fat dividend yields and a long, uninterrupted history of raising their dividends. That way you're not relying completely on price increases for your returns.

3. Don't buy on margin or try to short-sell if you're a newbie.

4. Don't invest in treasury bills right now, the interest rates are awful.

5. Don't look at charts, technical analysis is hocus pocus. None of the richest people in the world are technical analysts.

6. Price divided by earning divided by growth is the most important ratio you'll ever come across. Look is up now!

7. Don't hop on trends. Most people who try to buy into something that's super-hyped get in too late and get hosed. See the Facebook IPO as an example.

8. Buy stocks in industries you know something about.

9. Don't buy real estate unless you're good with your hands. Real estate investing usually ends up being a de facto second job, and the job involves a lot of handy work that most dudes in our generation don't know shit about. But if you are good at that stuff, it's often a sweet investment. Aim to flip or rent out houses, never speculate on real estate prices.

Post: #87

I read mutual funds like vanguard or fidelity or any no-load with low operational fee diversified mutual fund are really good at least that what a 1998 mututal fund book said. People if they had money should switch over most of their money from bank to funded managed money market as their default checking account, u can get debit card on that shit, and it is 3-4% internet rate instead shit .05% percent interest on saving. I read USD is inflating at 4.7% right now, HS!.

Post: #88

Knight losses $440 million in seconds

http://news.yahoo.com/knight-seeks-finan...nance.html

Post: #89

I don't know if this has been mentioned before but Harry Browne (and Josh Kaufman) advocate an investment portfolio split into four asset classes in order to minimise the effects of market volatility on your investments. Do you reckon it's sound?

http://personalmba.com/permanent-portfolio/

Post: #90

A lot of the "set and forget" stuff works for a ton of people because they don't want to dig through the weeds. That's fine.

If you are not good at saving money, set and forget is fine. If you are very good at saving cash it means you have a high level of discipline and it may be smart to start looking for opportunities.

Anyway, as always never invest more than you are willing to lose. For some this is 3 months pay, others 2 years. Just be honest with yourself. You willing to lose that $$$? If not don't put it in the market bonds or equities.

Post: #91

Hey WestCoast, how would you update your advice for 2013? For example lending club returns has gone down a whole bunch.

Post: #92

Thanks WestCoast. This thread inspired me to finally open a brokerage account.

How do you all fund your accounts? Wire transfer, direct deposit, check, something else?

All my cash is in a checking account and I'd like to transfer a chunk of it to get me started investing, but I'd also like to avoid the transfer fees. The cleanest way seems to be writing myself a personal check, so that's probably what I'll be doing on Monday. The delay will be annoying but I can't see any reason why it won't work unless my bank gets pinged with a fraud alert or something because of the size of the check. I feel like I'm missing something by resorting to this.

Any thoughts or advice?

Post: #93

I use E-trade and don't recall paying a wire transfer or any fee. You will pay a commission when trading though.

Post: #94

I'm on Fidelity. Fidelity doesn't charge for transfers either, but apparently my bank does (Bank of America).

I did look into Merrill Edge for the convenience since they're connected with BofA and had some good promotions going for a while. I actually have an account with them, but they pissed me off so much that I never funded the account and decided to postpone and eventually go elsewhere.

Fidelity recently lowered their trading fees to be more competitive and they have an initial bonus that allows for 300 free trades (over two years) with an initial deposit of $50K or something like an average "net" balance of $50K (don't know what the latter means and it could screw me...) I won't be trading close to 300 times, but it'll be nice to have the fees waved for the 10 or so trades I'm planning on and I'm comfortable relying on a brokerage that's consistently rated near the top.

Post: #95

almost choked when i saw lending club being promoted but realize the OP is 2012. I mean the stock in that company tanked hard, but maybe people are actually getting their 7% return? Anyone using it?

Post: #96

I own some real estate but I do not claim to be a real estate expert.

One thing I will say about real estate that I learned a bit too late, is that in my opinion is you should focus on purchasing something with a decent sized block of land, assuming your cash flow situation can tolerate the lower yield.

I remember once reading a report (I would have to go and dig it up) showing that in New York City over a 20 year period condo prices increased 400% while prices for vacant land increased 2000%. For example according to this link:
https://www.domain.com.au/news/sydney-ho...23-gtryjd/

From March 1997 to March 2017 in nominal terms Sydney home prices increased 429%, while Sydney apartment prices 310%. The extra 0.5-1.5% in net yield is not enough to compensate for the difference, especially when you consider that income/rent is taxed every year whereas the un-realised capital gain is not taxed until/if you sell the property. Also unrealised gains can be leveraged by refinancing your property to buy another property. Also with owning an apartment/condo you potentially have less control/flexibility about what you can do in regards to air bnb, in regards to renovating or developing the exterior of the building/land, etc. A house on good block of land potentially later on you could subdivide the land or at least build a granny flat (to rent out) in the backyard.

Over time buildings depreciate in value and land appreciates in value. If you are buying in a "blue chip" city lets say for example L.A., London, Paris, Sydney, Berlin, etc where over the long-term you expect decent capital growth then buy a house or land. The extra yield you get from owning an apartment, or condo, etc will not make up for the lower capital growth. I know in Australia and its probably similar in a lot of countries in capital cities an apartment will typically have a gross rental yield 1-2% higher than a house. The difference in net yield is typically less than 1% because you have to pay a strata fee for the apartment. Now, I understand that if you are buying a house or block of land you will have to move further from the centre of the city so your choice for example may be something like:
a) Buy a 1 bedroom apartment 20 minutes walk from the centre of the CBD/downtown
b) Buy a 3 bedroom house with a good backyard 40 minutes by train from the CBD.

Assuming its just an investment and you do not want to necessarily live in the property then in the majority of cases plan b is the superior option.