I have spare cash sitting in bank account and am looking to deploy them after reading your latest post.
Q1: Your recent post talks about investing in the tech components of the S&P 500. Any good ETF recommendations that tracks the tech components of the s&p 500?
Q2: Previously you guys stated that to determine whether the overall market is over/under valued, you look at whether the 10 year CAGR is below the normal average of 7%-8%. Based on this benchmark, tech ETFs all appear to be over-valued. Thus, should I still invest at this moment or wait till it drops?
– How does gold fit into Triangle Investing as an asset class? (It’s not mentioned)
– Do you think there would still be a draw down (correction) as predicted in 2019 post?
– Third question: please ignore if I’m over the limit. You spoke about maximizing cash flow instead of net worth in 2017. Why are you now advising to invest in tech stock that are mostly illiquid and never pay dividends? How do you obtain cash flow from said tech stock portfolio ?
1) 1-5% of net worth
2) It already happened? Not sure what this means. If there is another draw down you buy the same stuff in Triangle investing
3) Because you should have maximized cash flow and now its clear that the only investable space is Tech so it lines up perfectly actually
No. Because we’re saying tech and Healthcare is the future. The next 3 years do not matter discount rate is zero. We already covered this in the prior post so not going to re-write the whole thing.
John Krugersays
Is buying a blog that makes about $1000/mo (ads+affiliate) at 2-3x annual profit a reasonable investment? I’ve been intrigued by the idea of buying blogs as a higher cap rate alternative to rental properties, especially for people who are good with tech but bad with handyman-type work.
This is not part of the questions – this is a biz question and we’ve answered this over 50x. Please read prior Q&As, you only buy if you have success in building one yourself
Real estate exposure: when factoring in time and risk, is it better to own publicly-traded REITs, VNQ, Fundrise or physical real estate? And within physical real estate would you ever buy houses off of Roofstock/turnkey dealers or better to find deal yourself?
That’s a good question. Probably would keep it but wait on it for 4 years. See how taxes change and if they don’t then go back to it.
Taxes are a serious risk to scaled RE now
Michalissays
Why wouldn’t one invest in blue chip, well positioned listed REITs like EQR (Equity residential) and VNO ( Vornado realty trust)?
My assumptions:
1) remote work, even though it will gain a lot of popularity, will be a minority, or part of a hybrid office+remote work setup.
2)Tier 1 us cities return to some form of normal within 3-5 years
3) extra money printing
Summary – 26yo married. Joint AGI around 180-200k. Live in south. Only debt is small mortgage and one small car. Have savings for 12 months set aside.
For investing – we have been DCA all our net income into high beta small cap mutual funds for years and planned to continue for many years to come. We own 1.5 BTC that I got back in 2019 when it was under 7k. Late 2019 however I lowered our monthly payments because I thought stocks were too high (lol) and have about 20k sitting in our brokerage waiting for some golden opportunity.
Question 1 – do you think continuing to DCA into small cap funds for the next few decades is the right move?
Question 2 – what do you think I should do with my 20k. (Obviously 20k isn’t a lot but haven’t seen anything worth throwing that amount at)
1) no we think step one is pay off the car. Why pay interest when rates are at zero and you know the value of car will go down? Your net loss is really interest rate + depreciation so thats double digits. Would wipe that out immediately
2) yes DCA over LONG periods of time will work, but we’d guess that crypto is better risk reward now. get to 4.2 BTC at minimum given your situation
3) car + crypto makes the most sense based on your overview. Only alternative is pay down the home more
After being introduced to Monero (XMR) after reading Triangle Investing and previously being a Bitcoin maximalist, I’m having a hard time justifying my BTC holdings much anymore. With its dominance on the dark net markets, and the strength of its privacy features – at a time where the power of the surveillance state only increases – why should I still own BTC? ETH is a different beast in my mind and has its place, but what are you opinions on XMR essentially being BTC 2.0?
BTC is fixed supply XMR is not so thats a big difference. Also when you look at BTC, it has a lot more devout followers, BTC and Gold bugs fight a lot because they are the same person (unwilling to sell at any price)
So that alone makes a difference. But XMR does have an interesting off shoot chance at being the real future of money (hence why we mentioned it in the book).
ETH is totally different, we agree, it’s the platform for contracts.
1) Black Hat : SEO :: ? : Retail Investing
2) Maybe outside your scope, but what happens with your stocks in a scenario where the USD gets replaced (due to hyperinflation or w/e)? Do your dividends and share transactions convert to BTC or whatever the replacement currency is?
No clue what you’re saying in the first part and woulnd’t answer black hat questions as it’s not the point of the post
Second one is no clue as well, we haven’t lived through a currency collapse so we’d be guessing entirely. Generally though prices for everything go down as they are forced to do some sort of wealth transfer in a currency collapse
I have ~ $500K USD invested in a diversified portfolio of crypto.
In your *opinion* can I expect this alone to give me financial freedom in next 2 – 5 years?
I am asking this question for two reasons. I want your opinion and I remember you posting something on Twitter about a certain threshold of crypto portfolio value, i.e. “Don’t bet your future on a 100k in crypto portfolio” something like that.
No we won’t think it will buy financial freedom. This is lottery ticket seeking beliefs. You have to become a producer. Even if it goes to $1M+ you have no ability to hold onto assets and are forced to sell over a long period of time.
So while you can be risk on (that’s fine) you have to become a producer to society or else the long-term outlook is never good.
This has been covered 10x in the past use the search bar or check twitter.
It is for a beginner if you’re richer the number is higher
Dereksays
Early 40s, family of 4, home paid off. Hit my number so just investing for now, no full time job.
Per your previous post, it’s time to get out of cash (save for emergency fund) and intro productive assets. I have a healthy allocation to crypto, angel investments and VC. I still have cash to put to work so want to put it into the stock market. SPY is expensive at this moment vs March levels (obviously).
My question: in this scenario, do you dollar cost average or do you just throw it in?
Cash is enough to cover 12 months living expenses. The way I see it Bitcoin is either a 0 or massively higher over a 10-20 year horizon. Short term moves of even 50% don’t matter as much. Also thinking if another crypto is going to win, there will be signals that Bitcoin is on the decline. No debt/leverage so unlikely I would need to sell any of these positions in a downturn.
At that level you probably want to take future cash flows and buy something that generates cash flow. While you seem to be a huge Bitcoin bull (that’s fine), instead of selling it or changing allocation we would recommend buying other assets with future cash flows to organically bring it down as a percent
Your cash position looks fine, so if you have 5 years worth in BTC that’s pretty high already, so you should take future money and move into more stocks maybe even save up for your own place (assuming you don’t own a home)
Thanks and makes sense. I’ve been thinking if there’s another crypto bull run I should sell 10% of the BTC position to diversify into dividend stocks. But no reason I can’t start building that position out now.
Would you still recommend VYM for cash flows or something else?
Personally still not set on a city I would live in for 10+ years so would prefer to rent.
Sure but small position the future in health and tech no doubts about it.
GoldETFsays
Best gold ETFs or stocks to invest in? Or would you say it’s better to hold on to physical gold? The amount of the investment would be small, only about $5000-7000.
I want to invest about only $5000 in crypto, what is an ideal portfolio allocation between different coins? Am i better off staying with the major coins such as BTC/ETH or should I also add 1-2 lesser known ones such as XMR?
Just stick with major stuff, that’s too small to matter down the line so just buy one you believe in and don’t look at it for 5-10 years. Focus on becoming a producer
NW is about $4.5 million at 32yo: 43% Real Estate, 43% Equities, 10% Gold, 1% Bitcoin, rest is cash.
Tech makes up most of my equity portfolio: AMZN MSFT TTD TSLA and SHOP are my top 5 stakes.
I also have a smaller Dividend Portfolio, which yields about 4.5%… BUT. I live in California — tax rate on dividends is ~30%. So my after-tax yield on my dividend portfolio is about 3%, which barely beats 2% inflation.
Does it make no sense to have a dividend portfolio in a high-tax state? I’m considering just throwing that money into more gold and more tech.
This looks pretty good. Only one in there we’d be a bit concerned on is actually the individual exposure. Regulation may come for big tech so you may want to diversify a bit more
Looks pretty solid. You could also increase crypto exposure given your percent of net worth.
Not disagreeing with you–regulations for AMZN, MSFT, GOOGL and FB may be on the horizon.
But over the years these tech companies have cartelized. They have tentacles that reach deep into the political sphere.
Bezos owns the Washington Post, which has noted connections to the Democrats.
Facebook’s Sheryl Sandberg served in Clinton’s Treasury department and maintains long-term connections to the DNC. She’s considered a run at office.
Many members of the Obama administration took jobs as Google execs right after 2016.
Will there be regulations? Sure. But given the influence these tech companies have, I would bet that these regulations will take a form that will allow easy work-arounds.
And tech moves much faster than law. A law targeting tech that may take years to pass, but as soon as the law hits the legislative pipeline, all hands go to work on devising workarounds. Then as soon as soon as the law is passed, the code is pushed to deal with it, and business goes on as usual.
20 years old, in college with 20k and can live at home so no need to save living expenses. Should I be investing in crypto/tech stocks or just hold the cash for maybe a downturn, develop my skills through sales courses, use the money on affiliate marketing etc?
1. Since it doesn’t look like the gov is going to do anything big this time, do you think covid will resurge and lead to a substantial dip in Nov/Dec like this past March? Or do you think it’s all overblown and we’re back to slow but gradual growth.
2. What do you think of bank stocks like Wells Fargo? In terms of 6 month and 18 month horizons.
3. BTC has really just been tracking the market, besides that initial period when you said to buy (prob people had to use riskier assets to cover positions). Do you think it will break this trend soon?
1) we expect them to open now so Trump has a good shot to win again. We’ll see the virus flare up again and we’ll see what htey decide to do in January (we really doubt we get to full employment any time in the next 15 months)
2) No chance we would touch any bank stock
3) usually goes up 6-15 months after halving so in theory it would begin to do better by around year end
re: #2 – Why is that? Super low interest rates guarantee low profits for awhile? Defaults on mortgages in the winter because of covid? Or do you think a bigger change, like BTC, will mess them up?
Anonymoussays
1) Would you consider investing in residential RE right now in Brooklyn / NYC? (either primary residence or rental prop)
2) Thoughts on investing in self-storage RE?
3) If you were starting a stock portfolio today from zero, how would you allocate % wise (big tech stocks, healthcare, ETFs like VOO, etc.)
1) no we would not yet
2) have not looked into it
3) unless already rich pretty much all of it tech/healthcare and would ignore everything else for now
NW mid-high 6 fig, early 30s
Currently have 50-60%
20% RE
20% stocks
7.5% crypto
2.5% gold
Was planning to use a good chunk of the cash on another house but concerned about high prop taxes in future and I live in one of the worst states for that.
Should I just DCA the majority of the cash into stocks and crypto? At what rate should I DCA in?
What is your current allocation between gold/cash/crypto/stocks/real estate/bonds and what is your planned allocation for new cash coming in for next 12 months?
Your numbers in 2018 and 2019 were good so we can follow along
1) Been DCA into a basket of cryptos (different weighting with BTC highest and others smaller such as ETH, LTC, XMR, ADA, etc.). BTC total quantity is about 1.55 but total portfolio is about 4 BTC in value. Seeing your views on 4.2 BTC being the minimum, should I switch my DCA to be more BTC heavy or just keep with the diversified basket and throw extra at BTC whenever there is a price drop?
2) I was saving up cash to buy any first condo (live in NYC) with the goal of living in it for a couple of years then renting out and scaling. Since you mentioned tax risks with this and cash being worthless at the moment and for a while, should I invest in RE at all with a 2-3 year horizon to buy and if so, should I still save the down payment in cash or should it be in tech stock etfs? I remember Triangle Investing used to say DCA into IJR was a better play but guessing tech is the only real etf that’s worth it for a while.
1) Doesn’t mater too small to even worry about DCA into any crypto that makes sense to you until you’re at least at 4.2
2) Probably not smart, we would avoid buying high ticket price RE until a millionaire at minimum. Better to build stocks + crypto first
=Read your previous answers to other comments about Real Estate. At 24 with low income would you still advise RE (Brrr & Flips)? Or should I just plow all money into DCA of S&P?
What percentage of online business income should I invest back into the company vs. use to build my own portfolio? And/or should I be investing online biz income differently than career income?
I’m assuming the “risk on” answer is to plow all profits back into the company until its worth a couple million. But my online business could dry up, and I’m risk averse. I’d like to keep 50% of profits to add to my personal investments. Is this dumb?
If it matters… early 30s. Low cost of living area. Stable six figure career. $500K net worth. Online biz makes low four figures a month, but growth has plateaued lately.
The answer is 100% should go back into your own company if the return is there. Until the returns are low then you start looking at investing in stocks/other stuff.
It’s funny that now you understand why we just ignore these other question about “investing $25K” because we know they didnt take the first piece of advice from the blog which is a secondary income.
1. Would holding 32 ETH and 2 BTC be enough of an asset allocation of crypto going forward? (assuming it comprises of 4-5% of net worth?)
2. Would there be a specific point in which you would recommend going into real estate outside of the 2 properties you mentioned above in a prior answer? (1 home to live in, 1 investment property)
For example if prices decline by 20%. Surely, there must be a point where it makes perfect sense from a leverage perspective and even positive cash flow perspective (low interest rates vs rental yield) to warrant investing in more than 2 properties.
3. Do you think there will be any further economic downturns from here on out? (or would what happened in March-April be it?)
1) Depends on if you’re financially independent or not. If you are not, then it’s fine. If you are set for life already it is far too low.
2) No. Our stance here is that tax risk is high so you’re better off focusing online even more so than before. Online income = ability to move tax jurisdiction. RE is stuck on a plot of land
3) No clue, it’s possible but the Fed has proven they will print forever. So that was the opportunity and now risk/reward is neutral hence why we are only doing stocks/crypto now.
Sure you can do that the issue is you’re opening up geopolitical risk.
But yes tech stocks in USA and China will work assuming no issues in getting the money back/out.
Would immediately cancel capIQ subscription, won’t help you make money. Just look at guys like Chamath he doesn’t use that stuff and is the most successful investor in our generation. Your call though
income 4k/mo post tax, NW about 200k, 20% cash, 20% in RE (reits), 5% gold, 54% stocks (ETFs & mostly tech), 1% crypto.
1. Time to start DCAing into tech/pharma/crypto? (Provided that the money being used to invest left over after money spent on online biz)
2. Would you guys keep cash aside that you know you’re going to spend liquid or keep a higher chunk in “safer/boring” stocks? In my case, I’m going back to school for masters (~20k after employer assistance)
3. Do you guys anticipate a drop in residential real estate at some point in the near future as legislature protecting evictions unwind?
1) no you need to start a side business a long time ago. Again read the comment section only one guy got it right. The answer is always 100% re-invest in own business because you should be able to control the outcome. Until you’re making $25K+ a month after taxes, you shouldn’t even care about the stock market or crypto market at all.
2) 12 months is fine
3) Unclear we think risk is a lot higher on tax side so it is possible
I’m a mid-forties blue collar business owner.
$500,000 stocks
$50,000 cash
$600,000 in non cash flow producing land. They are lots upon which to build and sell. Very near but not on the beach.
$200,000 condo in Atl, no mortgage, but not rented and produces no income. Outflow are HOA’s and Taxes. I am seriously considering selling this
$500,000 primary residence in beach area no mortgage
No real debt outside of business and that balanced by A/R
My question is – do I go get a mortgage on the primary at present rates or just sit pretty? Or somewhere in between? Thanks much
might have just missed the q/a (busy working!), hoping you can answer
Mid 20s. On track with your 1m/30yo charts.
Large cash position currently and finance not my strong suit. Hoping you can expand on above you answering that if starting stock portfolio today from 0, “unless already rich pretty much all of it tech/healthcare and would ignore everything else for now”.
Looking to just do DCA portfolio. Knowing where markets are currently, are you saying just DCA mainly into nasdaq/qqq/other tech etf and a few healthcare etfs, or just weight heavy (2/3?) in those 2 and still buy voo/vym to round out the portfolio?
How quick to DCA in that cash – as in get it in quick, or draw out 6 months/etc?
Noted above on holding out a few years on multi family for the time being.
Same answer, plow 100% into your side business. IF you don’t have a side business investing is a waste of all of your time
If you have extra cash beyond that just buy stocks/crypto and DCA more into tech/healthcare
That’s really it! Keep it simple don’t think about this at all. Only smart people do basic things all the liars try to make trades with tiny amounts of money like $20K and lose it all eventually.
I have spare cash sitting in bank account and am looking to deploy them after reading your latest post.
Q1: Your recent post talks about investing in the tech components of the S&P 500. Any good ETF recommendations that tracks the tech components of the s&p 500?
Q2: Previously you guys stated that to determine whether the overall market is over/under valued, you look at whether the 10 year CAGR is below the normal average of 7%-8%. Based on this benchmark, tech ETFs all appear to be over-valued. Thus, should I still invest at this moment or wait till it drops?
Q3: DCA or lump sum in the current environment?
Thanks!
1) the NASDAQ is almost entirely tech
2) we haven’t done this calculation but it is probably about equal risk/reward
3) DCA always
Hi WSP,
As a follow-up to 1), so just DCA into an ETF like INVESCO QQQ or iShares NASDAQ 100 UCITS ETF?
Thank you
Sure those work.
– How does gold fit into Triangle Investing as an asset class? (It’s not mentioned)
– Do you think there would still be a draw down (correction) as predicted in 2019 post?
– Third question: please ignore if I’m over the limit. You spoke about maximizing cash flow instead of net worth in 2017. Why are you now advising to invest in tech stock that are mostly illiquid and never pay dividends? How do you obtain cash flow from said tech stock portfolio ?
1) 1-5% of net worth
2) It already happened? Not sure what this means. If there is another draw down you buy the same stuff in Triangle investing
3) Because you should have maximized cash flow and now its clear that the only investable space is Tech so it lines up perfectly actually
1) I mean which category is it in? As it’s not in Triangle Investing.
3) What about your advice to buy dividend stock. There is no dividend for tech stock
Just put it in the cash category, it’s not relevant as it’s single digits (low) as percent of net worth so it shouldn’t be important
That’s pretty much dead if you have a 10 year view. But you can still buy stuff like VYM if you want some dividend exposure, keep it low
Not sure why my comment is not posting. For #2 I was talking about the long 6 month draw down that goes with the recession.
We already had it? They printed us out of it.
What if I just DCA into VOO and VYM? Not sure what you mean by saying at VYM is dead when you have a 10 year horizon
No. Because we’re saying tech and Healthcare is the future. The next 3 years do not matter discount rate is zero. We already covered this in the prior post so not going to re-write the whole thing.
Is buying a blog that makes about $1000/mo (ads+affiliate) at 2-3x annual profit a reasonable investment? I’ve been intrigued by the idea of buying blogs as a higher cap rate alternative to rental properties, especially for people who are good with tech but bad with handyman-type work.
This is not part of the questions – this is a biz question and we’ve answered this over 50x. Please read prior Q&As, you only buy if you have success in building one yourself
Has your advice on not investing before $1M net worth changed at all?
Seems you would not be able to help many of your readers with this Q&A if that is still the case.
Not sure what you mean, you take all money and DCA into assets like crypto and stocks
Our point was you dont pick individual stocks unless you’re over a million, you just want to hit in-line with the market until you’re there.
Real estate exposure: when factoring in time and risk, is it better to own publicly-traded REITs, VNQ, Fundrise or physical real estate? And within physical real estate would you ever buy houses off of Roofstock/turnkey dealers or better to find deal yourself?
After everything that happened we would only own your own home/apartment and maybe one extra but that’s it
Tax risk way too high in our opinion
So should we ignore the real estate section of triangle moving forward?
That’s a good question. Probably would keep it but wait on it for 4 years. See how taxes change and if they don’t then go back to it.
Taxes are a serious risk to scaled RE now
Why wouldn’t one invest in blue chip, well positioned listed REITs like EQR (Equity residential) and VNO ( Vornado realty trust)?
My assumptions:
1) remote work, even though it will gain a lot of popularity, will be a minority, or part of a hybrid office+remote work setup.
2)Tier 1 us cities return to some form of normal within 3-5 years
3) extra money printing
What am I missing?
Pretty easy answer, taxes. When gov’t has to pay for all this real estate is the easiest to tax and they can easily see who owns it and go after them
Summary – 26yo married. Joint AGI around 180-200k. Live in south. Only debt is small mortgage and one small car. Have savings for 12 months set aside.
For investing – we have been DCA all our net income into high beta small cap mutual funds for years and planned to continue for many years to come. We own 1.5 BTC that I got back in 2019 when it was under 7k. Late 2019 however I lowered our monthly payments because I thought stocks were too high (lol) and have about 20k sitting in our brokerage waiting for some golden opportunity.
Question 1 – do you think continuing to DCA into small cap funds for the next few decades is the right move?
Question 2 – what do you think I should do with my 20k. (Obviously 20k isn’t a lot but haven’t seen anything worth throwing that amount at)
Thanks!
1) no we think step one is pay off the car. Why pay interest when rates are at zero and you know the value of car will go down? Your net loss is really interest rate + depreciation so thats double digits. Would wipe that out immediately
2) yes DCA over LONG periods of time will work, but we’d guess that crypto is better risk reward now. get to 4.2 BTC at minimum given your situation
3) car + crypto makes the most sense based on your overview. Only alternative is pay down the home more
After being introduced to Monero (XMR) after reading Triangle Investing and previously being a Bitcoin maximalist, I’m having a hard time justifying my BTC holdings much anymore. With its dominance on the dark net markets, and the strength of its privacy features – at a time where the power of the surveillance state only increases – why should I still own BTC? ETH is a different beast in my mind and has its place, but what are you opinions on XMR essentially being BTC 2.0?
BTC is fixed supply XMR is not so thats a big difference. Also when you look at BTC, it has a lot more devout followers, BTC and Gold bugs fight a lot because they are the same person (unwilling to sell at any price)
So that alone makes a difference. But XMR does have an interesting off shoot chance at being the real future of money (hence why we mentioned it in the book).
ETH is totally different, we agree, it’s the platform for contracts.
1) Black Hat : SEO :: ? : Retail Investing
2) Maybe outside your scope, but what happens with your stocks in a scenario where the USD gets replaced (due to hyperinflation or w/e)? Do your dividends and share transactions convert to BTC or whatever the replacement currency is?
No clue what you’re saying in the first part and woulnd’t answer black hat questions as it’s not the point of the post
Second one is no clue as well, we haven’t lived through a currency collapse so we’d be guessing entirely. Generally though prices for everything go down as they are forced to do some sort of wealth transfer in a currency collapse
If you have duel citizenship, you can invest in that foreign currency. For example, vanguard now offers the s&p in Europe (euro).
RE Wholesaling is grey-hat depending on how you do it.
I have ~ $500K USD invested in a diversified portfolio of crypto.
In your *opinion* can I expect this alone to give me financial freedom in next 2 – 5 years?
I am asking this question for two reasons. I want your opinion and I remember you posting something on Twitter about a certain threshold of crypto portfolio value, i.e. “Don’t bet your future on a 100k in crypto portfolio” something like that.
Thanks.
No we won’t think it will buy financial freedom. This is lottery ticket seeking beliefs. You have to become a producer. Even if it goes to $1M+ you have no ability to hold onto assets and are forced to sell over a long period of time.
So while you can be risk on (that’s fine) you have to become a producer to society or else the long-term outlook is never good.
I don’t understand this part:
“Even if it goes to $1M+ you have no ability to hold onto assets and are forced to sell over a long period of time.”
Can you please dumb that down?
Thank you
IF you don’t generate anything and never work you are forced to sell assets to pay for things.
(Not OP). Great advice, thanks. I’ve been browsing this place for upwards of 6 years, always really grateful for your perspectives.
Thanks for the clarification and dumbing down.
I have to ask –
If you have multiple millions and only live off the interest (~4%), never touch principle, and never work — does that counter what you are saying?
Yes because you match the dividend income to your annual spending. the rest goes back to the same recommendations.
Up to what price are you still a buyer of BTC?
If you don’t own any you need to get to 4.2 coins or so is our estimate.
If you already own more than that, then it’s just up to your risk tolerance
so 4.2 is top what X% of holders based on your calc? That seems lower than your previous tweets unless the 4.2 is based on some other reasoning
This has been covered 10x in the past use the search bar or check twitter.
It is for a beginner if you’re richer the number is higher
Early 40s, family of 4, home paid off. Hit my number so just investing for now, no full time job.
Per your previous post, it’s time to get out of cash (save for emergency fund) and intro productive assets. I have a healthy allocation to crypto, angel investments and VC. I still have cash to put to work so want to put it into the stock market. SPY is expensive at this moment vs March levels (obviously).
My question: in this scenario, do you dollar cost average or do you just throw it in?
If you’re not working we would work something (anything basic) and just take those cash flows and put into stocks you believe in.
If you’re already retired/set there is no reason to add risk in your position since it’s just irresponsible
So continue to work (on any consulting/side projects) and just dollar cost with that
Thoughts on investing in high end market gyms (equinox level). Hybrid brick and mortar + online model specifically.
We would be against investing in brick/mortar type businesses, just isn’t worth the headache
Thoughts on this asset allocation? Any changes you would recommend making to the percentages?
Bitcoin: 50.00%
Stocks (heavy tech, video games, healthcare, semiconductors): 25.00%
Gold/Silver: 15.00%
Cash: 10.00%
Cash is enough to cover 12 months living expenses. The way I see it Bitcoin is either a 0 or massively higher over a 10-20 year horizon. Short term moves of even 50% don’t matter as much. Also thinking if another crypto is going to win, there will be signals that Bitcoin is on the decline. No debt/leverage so unlikely I would need to sell any of these positions in a downturn.
At that level you probably want to take future cash flows and buy something that generates cash flow. While you seem to be a huge Bitcoin bull (that’s fine), instead of selling it or changing allocation we would recommend buying other assets with future cash flows to organically bring it down as a percent
Your cash position looks fine, so if you have 5 years worth in BTC that’s pretty high already, so you should take future money and move into more stocks maybe even save up for your own place (assuming you don’t own a home)
Thanks and makes sense. I’ve been thinking if there’s another crypto bull run I should sell 10% of the BTC position to diversify into dividend stocks. But no reason I can’t start building that position out now.
Would you still recommend VYM for cash flows or something else?
Personally still not set on a city I would live in for 10+ years so would prefer to rent.
Sure but small position the future in health and tech no doubts about it.
Best gold ETFs or stocks to invest in? Or would you say it’s better to hold on to physical gold? The amount of the investment would be small, only about $5000-7000.
At that size better to own physical if you’re doing long-term holdings.
At that size, best to only focus on physical and long-term since it shouldn’t be a significant portion of long-term net worth.
Make sure you’re in a position to never have to sell it though (at least for a few years)
Currently sit at 20% crypto (BTC, NEO, Monero), 20% Silver, 20% Commodities stocks, 20% Gold/Gold Miners, 20% Cash.
Do you believe I’m under/over exposed in any area?
Assuming you have a high net worth you’re not diversified at all
Too much metals and commodity exposure need some more tech stocks/healthcare stocks/ maybe even your own place to live
I want to invest about only $5000 in crypto, what is an ideal portfolio allocation between different coins? Am i better off staying with the major coins such as BTC/ETH or should I also add 1-2 lesser known ones such as XMR?
Thanks
Just stick with major stuff, that’s too small to matter down the line so just buy one you believe in and don’t look at it for 5-10 years. Focus on becoming a producer
NW is about $4.5 million at 32yo: 43% Real Estate, 43% Equities, 10% Gold, 1% Bitcoin, rest is cash.
Tech makes up most of my equity portfolio: AMZN MSFT TTD TSLA and SHOP are my top 5 stakes.
I also have a smaller Dividend Portfolio, which yields about 4.5%… BUT. I live in California — tax rate on dividends is ~30%. So my after-tax yield on my dividend portfolio is about 3%, which barely beats 2% inflation.
Does it make no sense to have a dividend portfolio in a high-tax state? I’m considering just throwing that money into more gold and more tech.
This looks pretty good. Only one in there we’d be a bit concerned on is actually the individual exposure. Regulation may come for big tech so you may want to diversify a bit more
Looks pretty solid. You could also increase crypto exposure given your percent of net worth.
Will look more into the crypto space.
Not disagreeing with you–regulations for AMZN, MSFT, GOOGL and FB may be on the horizon.
But over the years these tech companies have cartelized. They have tentacles that reach deep into the political sphere.
Bezos owns the Washington Post, which has noted connections to the Democrats.
Facebook’s Sheryl Sandberg served in Clinton’s Treasury department and maintains long-term connections to the DNC. She’s considered a run at office.
Many members of the Obama administration took jobs as Google execs right after 2016.
Will there be regulations? Sure. But given the influence these tech companies have, I would bet that these regulations will take a form that will allow easy work-arounds.
And tech moves much faster than law. A law targeting tech that may take years to pass, but as soon as the law hits the legislative pipeline, all hands go to work on devising workarounds. Then as soon as soon as the law is passed, the code is pushed to deal with it, and business goes on as usual.
Yep fair points. Everyone can make their own risk/reward decisions
When buying tech stocks, do you suggest just going for giants like Amazon, Google, FB etc only or also smaller, earlier stage type companies?
Just look at companies that for sure will be around we already gave many answers in the prior posts. Will Electric vehicles be the future or oil?
Now you know you have to position for that and what that looks like etc.
20 years old, in college with 20k and can live at home so no need to save living expenses. Should I be investing in crypto/tech stocks or just hold the cash for maybe a downturn, develop my skills through sales courses, use the money on affiliate marketing etc?
You should ignore all investing and become a producer. If you really want to invest then probably crypto is the right place to go
NW is 90K. $85K in cash. Business will be RE. So I’m saving up 50-100K chunks and then buying rentals.
In context of last post (hold as little cash as possible). Is it a bad idea to keep this in cash assuming I will buy the rentals in March 2021.
More generally – is it a bad idea to save up in cash for 1 year or so. Versus buying stocks etc. and selling when ready to buy rental?
(if helpful – 22 yo)
We would recommend diversifying away from RE unless its primary business.
Otherwise this seems to be okay only if it is your primary biz, we’re concerned with RE due to potential taxes.
But you’re young and the money is small so won’t matter in 10 years anyway
1. Since it doesn’t look like the gov is going to do anything big this time, do you think covid will resurge and lead to a substantial dip in Nov/Dec like this past March? Or do you think it’s all overblown and we’re back to slow but gradual growth.
2. What do you think of bank stocks like Wells Fargo? In terms of 6 month and 18 month horizons.
3. BTC has really just been tracking the market, besides that initial period when you said to buy (prob people had to use riskier assets to cover positions). Do you think it will break this trend soon?
1) we expect them to open now so Trump has a good shot to win again. We’ll see the virus flare up again and we’ll see what htey decide to do in January (we really doubt we get to full employment any time in the next 15 months)
2) No chance we would touch any bank stock
3) usually goes up 6-15 months after halving so in theory it would begin to do better by around year end
re: #2 – Why is that? Super low interest rates guarantee low profits for awhile? Defaults on mortgages in the winter because of covid? Or do you think a bigger change, like BTC, will mess them up?
1) Would you consider investing in residential RE right now in Brooklyn / NYC? (either primary residence or rental prop)
2) Thoughts on investing in self-storage RE?
3) If you were starting a stock portfolio today from zero, how would you allocate % wise (big tech stocks, healthcare, ETFs like VOO, etc.)
1) no we would not yet
2) have not looked into it
3) unless already rich pretty much all of it tech/healthcare and would ignore everything else for now
NW mid-high 6 fig, early 30s
Currently have 50-60%
20% RE
20% stocks
7.5% crypto
2.5% gold
Was planning to use a good chunk of the cash on another house but concerned about high prop taxes in future and I live in one of the worst states for that.
Should I just DCA the majority of the cash into stocks and crypto? At what rate should I DCA in?
Yeah you answered your own question we would go into crypto/stocks for sure but that’s our opinion
As much as you can as long as you have enough cash to be fine for 12-18 months if income goes to zero
What is your current allocation between gold/cash/crypto/stocks/real estate/bonds and what is your planned allocation for new cash coming in for next 12 months?
Your numbers in 2018 and 2019 were good so we can follow along
4%, 2%, 14%, 50%, 20%, 10%
Going forward, only crypto and stocks unless there is a necessary need for cash
Bond side is probably too high to be honest as yields dropped and the prices already went up
1) Been DCA into a basket of cryptos (different weighting with BTC highest and others smaller such as ETH, LTC, XMR, ADA, etc.). BTC total quantity is about 1.55 but total portfolio is about 4 BTC in value. Seeing your views on 4.2 BTC being the minimum, should I switch my DCA to be more BTC heavy or just keep with the diversified basket and throw extra at BTC whenever there is a price drop?
2) I was saving up cash to buy any first condo (live in NYC) with the goal of living in it for a couple of years then renting out and scaling. Since you mentioned tax risks with this and cash being worthless at the moment and for a while, should I invest in RE at all with a 2-3 year horizon to buy and if so, should I still save the down payment in cash or should it be in tech stock etfs? I remember Triangle Investing used to say DCA into IJR was a better play but guessing tech is the only real etf that’s worth it for a while.
Thank you.
1) Doesn’t mater too small to even worry about DCA into any crypto that makes sense to you until you’re at least at 4.2
2) Probably not smart, we would avoid buying high ticket price RE until a millionaire at minimum. Better to build stocks + crypto first
Any thoughts on betting the NBA finals?
Sure lakers will win series. No clue on exact games probably low if you force us maybe 5 games
=Read your previous answers to other comments about Real Estate. At 24 with low income would you still advise RE (Brrr & Flips)? Or should I just plow all money into DCA of S&P?
Start internet biz same as always wont change for next 20 years.
What percentage of online business income should I invest back into the company vs. use to build my own portfolio? And/or should I be investing online biz income differently than career income?
I’m assuming the “risk on” answer is to plow all profits back into the company until its worth a couple million. But my online business could dry up, and I’m risk averse. I’d like to keep 50% of profits to add to my personal investments. Is this dumb?
If it matters… early 30s. Low cost of living area. Stable six figure career. $500K net worth. Online biz makes low four figures a month, but growth has plateaued lately.
Ha! Best question of the day.
The answer is 100% should go back into your own company if the return is there. Until the returns are low then you start looking at investing in stocks/other stuff.
It’s funny that now you understand why we just ignore these other question about “investing $25K” because we know they didnt take the first piece of advice from the blog which is a secondary income.
1. Dividend stocks or growth?
2. Based on your comments about RE, would you suggest only focusing on stocks/crypto instead of RE at all for next 5 years?
1) growth the amount you are investing is small so the cash flow wont matter for you
2) Yes.
1. Would holding 32 ETH and 2 BTC be enough of an asset allocation of crypto going forward? (assuming it comprises of 4-5% of net worth?)
2. Would there be a specific point in which you would recommend going into real estate outside of the 2 properties you mentioned above in a prior answer? (1 home to live in, 1 investment property)
For example if prices decline by 20%. Surely, there must be a point where it makes perfect sense from a leverage perspective and even positive cash flow perspective (low interest rates vs rental yield) to warrant investing in more than 2 properties.
3. Do you think there will be any further economic downturns from here on out? (or would what happened in March-April be it?)
Thank you
1) Depends on if you’re financially independent or not. If you are not, then it’s fine. If you are set for life already it is far too low.
2) No. Our stance here is that tax risk is high so you’re better off focusing online even more so than before. Online income = ability to move tax jurisdiction. RE is stuck on a plot of land
3) No clue, it’s possible but the Fed has proven they will print forever. So that was the opportunity and now risk/reward is neutral hence why we are only doing stocks/crypto now.
Was in all in cash since I exited crypto mid 2018. Didn’t buy into the crash ~6 months ago. Have ~350k USD in cash/tether.
I watched the bridgewater outlook video you linked to. It seems China’s economy is recovering pretty well.
Thinking of investing in a few tech stocks on Shanghai/Suzhou Stock Exchange. Funny how no one here mentioned this?
I know you adviced to not pick stocks, but I already purchased a CapIQ subscription so might as well give it a go.
Thoughts on chinese stocks?
Sure you can do that the issue is you’re opening up geopolitical risk.
But yes tech stocks in USA and China will work assuming no issues in getting the money back/out.
Would immediately cancel capIQ subscription, won’t help you make money. Just look at guys like Chamath he doesn’t use that stuff and is the most successful investor in our generation. Your call though
income 4k/mo post tax, NW about 200k, 20% cash, 20% in RE (reits), 5% gold, 54% stocks (ETFs & mostly tech), 1% crypto.
1. Time to start DCAing into tech/pharma/crypto? (Provided that the money being used to invest left over after money spent on online biz)
2. Would you guys keep cash aside that you know you’re going to spend liquid or keep a higher chunk in “safer/boring” stocks? In my case, I’m going back to school for masters (~20k after employer assistance)
3. Do you guys anticipate a drop in residential real estate at some point in the near future as legislature protecting evictions unwind?
1) no you need to start a side business a long time ago. Again read the comment section only one guy got it right. The answer is always 100% re-invest in own business because you should be able to control the outcome. Until you’re making $25K+ a month after taxes, you shouldn’t even care about the stock market or crypto market at all.
2) 12 months is fine
3) Unclear we think risk is a lot higher on tax side so it is possible
I’m a mid-forties blue collar business owner.
$500,000 stocks
$50,000 cash
$600,000 in non cash flow producing land. They are lots upon which to build and sell. Very near but not on the beach.
$200,000 condo in Atl, no mortgage, but not rented and produces no income. Outflow are HOA’s and Taxes. I am seriously considering selling this
$500,000 primary residence in beach area no mortgage
No real debt outside of business and that balanced by A/R
My question is – do I go get a mortgage on the primary at present rates or just sit pretty? Or somewhere in between? Thanks much
Would just dump the rental and put into stocks/other biz idea for your line of work.
Remove a headache, gets you to remain debt free and opens up a new opportunity for you. No reason to lever up to open up doors in your situation
might have just missed the q/a (busy working!), hoping you can answer
Mid 20s. On track with your 1m/30yo charts.
Large cash position currently and finance not my strong suit. Hoping you can expand on above you answering that if starting stock portfolio today from 0, “unless already rich pretty much all of it tech/healthcare and would ignore everything else for now”.
Looking to just do DCA portfolio. Knowing where markets are currently, are you saying just DCA mainly into nasdaq/qqq/other tech etf and a few healthcare etfs, or just weight heavy (2/3?) in those 2 and still buy voo/vym to round out the portfolio?
How quick to DCA in that cash – as in get it in quick, or draw out 6 months/etc?
Noted above on holding out a few years on multi family for the time being.
Thanks for everything over the years
Same answer, plow 100% into your side business. IF you don’t have a side business investing is a waste of all of your time
If you have extra cash beyond that just buy stocks/crypto and DCA more into tech/healthcare
That’s really it! Keep it simple don’t think about this at all. Only smart people do basic things all the liars try to make trades with tiny amounts of money like $20K and lose it all eventually.
thanks
“Only smart people do basic things”
This could save many people years of their lives