Income Investing

[Axel]

We used to have a pretty robust stock discussion thread in here (which does need revived), but this year I've had a new experience: buying CDs and Treasury securities. Interest rates haven't been high enough to bother for practically my entire adult life (I graduated college in 2008). I should probably just leave my cash in VMFXX where the yield is almost as high with full liquidity, but I've had fun researching and building a ladder. I've also been parking small amounts in I-Bonds off and on since before the pandemic.

Where are you investing your cash?

[Grendel]

Land - a physical asset that appreciates over time especially if development is moving in its direction. I like unimproved agriculture property, low taxes and I can use to farm trees (pulp wood and lumber) to offset expenses. If I need to liquidate it is fairly easy if slow to do but like anything else investment wise you have to watch out for the taxes on any income.

Other than my work related retirement accounts I do not mess with stocks and bonds trading anymore. I took a bath years ago trading on margin (got greedy and stupid at the same time not a good combination). I do try and invest the max allowed into my retirements accounts but they are mostly invested in relatively conservative index funds, especially now. Retirement is just around the corner for me, have already been offered the opportunity to retire early by my company and gain 3 extra years so I am now at the point I need to lock things down. Even contemplating selling some land I have built up that is too far away from my other properties and use that to kibosh the existing mortgage on my home. I am a firm believer that interest avoided is the same as investment gains and is way easier to predict. The only debt I have left is a little bit of mortgage.

[Axel]

Extra points for the use of "kibosh"

[ford]

Ooohh Here's a topic I've been nerding out on lately.

I've been laddering 13 week t-bills for about a year and a half and pretty happy with the returns. I say pretty happy because my accountant charged me an extra half hour this last tax year and I think part of the reason were all these extra treasury notes they had to figure out (wild guess, I did not ask).

Not that long ago Vanguard introduced VTEB and VTES which are municipal bond ETFs which are tax exempt with a lower return than a standard T-bill (because science) but are ranged in short/medium term bonds so the rate is a little better than longer ranged ETFs they've had in the past.

I also mix in some I-bonds monthly because why not? I was one of those who maxed what I could in I-bond when the rate was 9.4% or whatever. I've cooled since, but the principal rate lately has been very enticing.

Fidelity has a really cool calculator to try and estimate what bond gives you best bang/buck based on your location and tax bracket.

On top of all that, I've been trying to segway some of my funds from a credit union which historically pays fairly paltry interest on accounts to Capital One with a high yield savings account. Capital One isn't perfect. I would never move more than half my savings to a bank that doesn't have any real physical locations (yes, they have the cafes but not the same).

[tyronejk]

I max out my company 401k matching program and put the rest into SPY. I did some covered calls last year to try to take advantage of volatility but come tax season, realize I was close to net zero, so the effort of watching stocks wasn't worth it for me.

I also save a handful of cash in SoFi's decently high interest savings account these days, although who knows how long that'll last.

[ford]

I max out my company 401k matching program and put the rest into SPY.

Hey it's me from the past! I was heavily leveraged SP500 up until fairly recently. I've converted about 30% of my stock related portfolio to include international stocks (mostly Europe and some Asia).

Historically they haven't performed anywhere near as well as SP500 but I've been falling for that argument SP500 is overvalued and wanted to hedge with some non-US stocks.

[tyronejk]

The argument that the S&P500 is overbought also makes sense to me. But I thought the same thing 2 years ago, switched to a handful of individual stocks, and missed out on a lot of gains, so I've decided that I don't know what I'm doing and just parked my money in the index fund.

[Chuck E Ducky]

I’m with Grendel, I buy land, income properties, vehicles, heavy equipment, I like physical assets. I dabble with the market (retirement accounts, deferred Compensation) averaging about 12% overall so far but that could change tomorrow. It’s funny money till I buy something with it as far as I’m concerned. Definitely want to be out of the market before Social Security falls off a cliff in 9 years.

I’m getting out of rentals it’s likely a bubble and big government is already getting their hands in the cookie jar. People are running out of money something’s got to give. I don’t want to be left holding the bag. Local government is already stepping in and Putting restrictions on the market.

I think AI will break blockchain eventually (so no crypto for me) I have dabbled in it and like the idea behind it. I don’t trust it.

I have a bunch of passive income plans with the money I have made buying, selling and investing. A lot of them are location dependent.

I live small within my means and carry little debt.

Depending on what the next few years bring, I would like to liquidate my assets and buy a big chunk of FU land in middle America far from any populated area. Farm what I need, build cool shit in my massive garage and buy a Brush Plane.

[Grendel]

I hear you, wife and I are debating building on property we already have in SC or liquidate it and our house to build a retreat in the mountains. I grew up with parents that were big on self sufficiency and really want to get back to that. We have always been big gardeners and I want to raise some goats, pigs, chickens and Guinea Fowl. Trying to convince the wife we should add rabbits to the list but she has a soft spot for rabbits and will not eat them <rolls eyes>

[Daniel Tiger]

If you already have a VG account and are just looking for a simple way to keep your cash, take a look at their cash plus accounts. If you are looking for investing for fun than it doesn’t make sense but if you just don’t like no return in a bank than it could make sense to look.

[BrickHaus]

I'm far from a guru, or a day trader but I'm putting 10% of my pay into the company match 401k. Then another 10% I to the company Roth 401k.

I otherwise don't pay any attention to it. I'll just let it stack til I'm ready to retire and hope there's enough there.

[Blackmagic71]

My target date 401k performance has been fairly poor the last couple of years, so out of disgust I started investing in stocks on the side (in addition to continuing my 401k contributions).

Nice boring, dividend paying companies - preferably on goods or services that most people are fairly well stuck using. Companies that do things like trash collection, telecommunications, water utilities, electric utilities, healthcare, etc…. Once I buy something I just hold onto it and soak up the dividends.

I won’t be driving a Lamborghini anytime soon, but boring seems to be working so far because my % return on my stock trading is substantially higher than the % return on my 401k and it is fun to watch the monthly dividend payments grow.

[sniper97]

The last 5 yrs, the S&P 500 has averaged approx a 12.5% annual return. Since 2007-2008 International stocks have not out preformed US stocks in a meaningfully way. Maybe a couple years. Supposedly small cap stocks are the way to go. Big tech is leading the way. 2022 was down and 2023 was up, probably most broke even over those 2 years. Always good to diversity. Property is up, US is in a lomg term housing shortage. Tough real estate mkt with rates and values up + the other inflation.

Last 10 yrs, most semi-conductor (chips) mutual funds/etfs averaged 25% annual returns. Interesting to see where Navida goes from here. Are we in the early innings? Chips can be super volatile. Definitely buy when they are down.

If you are years from retirement, the mkt is where you need to be.

[The Hobbit]

This is a topic I’ve been thinking about recently. Currently only debt is our house and one car payment. I’ve started putting 1k a month into savings and once it grows to ~10k I want to take the excess and do something with it. A piece of property that I can build a little camp is on that list.

any good resources for learning things to invest in both short/medium term and long term.

short/medium term stuff that I can roll over frequently but access for down payment on a vehicle or larger home renovations.

longer term stuff to supplement 401k.

[maggot]

Sounds like we are doing the same thing as you, Axel. First time ever with a) savings and b) interest rates worth taking advantage of. We have a mix of money market savings accounts, bonds, t-bills. Still doing the 401k as well, but it's really neat to get "free" money monthly from those other investments.

[Axel]

If you are years from retirement, the mkt is where you need to be.

Yeah, I'm not talking about reinvesting 401(k)s or IRAs, I'm talking about places to park short term cash like emergency funds, vacation funds, things of that nature where capital preservation is tantamount

[sniper97]

Yeah, I'm not talking about reinvesting 401(k)s or IRAs, I'm talking about places to park short term cash like emergency funds, vacation funds, things of that nature where capital preservation is tantamount

Short term, CDs are paying around 5%, Money Market, Savings...all FDIC insured.

Maybe emergency funds or at least 1/2 of the funds belong in an index fund. Compare both over the last 5 yrs

[flyweightnate]

I'm of the opinion "emergency" should be cash or equivalent, so if the market collapses and it costs me my job, I'm not taking money from a stock account that just lost 30%.

As a result, most of my savings is 401k and Roth 401k, or an actual savings account at 5%. The little bit left over, I got some "YALL" because it's a hilarious name and yet I think it's a smart portfolio. It's done better than 30% this year, so good compared to everything but Nvidia. I never buy enough to really enjoy a good success, though.

What dividend stocks look good right now, especially from a value perspective?