Disclaimer: This isn’t investing or financial advice, this is what I do with my own portfolio and the reason behind it – when I say you I’m talking to myself. Do your own research.
Some people make investing complex when in reality it’s super simple. This article contains a diversified portfolio and you can use as a template to crop your own investing portfolio.
Any good investment portfolio stars with an ETF; in this case I’ll use vanguard S&P500’s index tracker – a small piece of every company listed on the S&P500 for example Apple and google. Vanguard is a great company and The S&P500 is great for steady returns so this index fund is not only simple but a solid pick for you.
One of the easiest ways to get a hold of his index tracker is to go on to Robinhood and buy a share; it costs around $150 per share, which isn’t super expensive; this should makeup 50% of your investing budget so for example if you have $1000 spend around $500 on your S&P 500 index fund.
Real Estate –
Real estate is great because It’s something tangible, something you can touch and literally hold; that’s the authors preference for investing if you’re doing it yourself.
There are great sites out there that allow you to buy land acre by acre for rather cheap prices; ex: $1,000/acre. The only thing the author suggests is buying at minimum 1 acre per year; over the course of a 40 year working career that’s 40 acres, of tangible investments later on in life.
Another good type of real estate investment is buying worn down/ foreclosed houses for cheap, fixing them up and flipping them for more money.
Finally if you want something simple and hands off you can try an eReit; this is investing in a piece of real estate by funding a portion of it and getting a return based on how well it does. For example you have $1,000 which isn’t enough to open that apartment complex, but you still want to invest in real estate, so what do you do? How about joining hundreds of others each pitching in 1k adding up to millions; the apartment complex will still open and you’ll get money back based on how well it does.
Precious metals –
Precious metals shouldn’t be a large part of your portfolio, because they haven’t done well historically compared to an S&P 500 index fund, but they’re still a great addition because they’re a tangible asset that you can physically use to knock Uncle Sam out when he tries to tax you to death.
Gold is historically the most well bought precious metal, and now is a great time to buy because the price is expected to drop due to lowered interest rates – which will likely continue under a trump presidency, the author expects around $1,200 by late 2020. If you’re looking to flip gold for profit you should be able to do so for around $2,000 an ounce during the next recession (more on that in another article). The only recommendation with gold is a minimum of 5 g every year and if you can afford it 1 oz.
Silver is a super cheap precious metal that almost anyone can afford. At less than $20 an ounce at the time of this article it’s safe to assume that you can get an ounce a week, although the recommendation is at least one every month. If you’re looking to flip it the author expects it to double during the next recession so $40 an ounce is a great price point.
Platinum is a precious metal which has already been trending downward – it has lost 50% of its value – since 2010! and the author expects to rise again to more than double its current value during the next recession if you plan to flip it.
All are great choices, all have the possibility of being flipped for profit, but are great hold options if you choose to do so.
High yield savings account
A high-yield savings account is absolutely necessary for everyone so if you’re not signed up, do so right now.
This is a great way to accumulate a lot of money for emergencies, saving money to invest or going on that vacation to Fiji you’ve always wanted.
High yield savings accounts are super secure and offer a 1.5% – 2% return every year which may not sound like a lot but adds up to be a lot over time.
CD’s or certificates of deposit are a super secure way to get money back. The basic premise is this you give the bank a loan and after a set amount of time they give you the money back plus interest, but make sure you don’t get the money out early otherwise you’ll lose it.
You can get a CD online, or in a physical near you, in various time lengths and deposit amounts. A simple deposit is $150 for 12 months with a 2.5% return; not bad and it’s all federally guaranteed.
A classic investment since the foundation of America is the treasury bond. This is a super secure way to get back a little bit of money, it’s insured by the government which is unlikely to collapse anytime soon so your money will be safe. There are many different time frames for you to choose from when selecting a bond, but one of the simplest ones you can choose is a one year treasury bond, this protects you from currency inflation which is a huge issue and gives you a lot more flexibility than a 3 or 5 year bond Incase the markets collapse.
It’s a great skill to be able to pick the perfect socks all the time, and most people aren’t skilled enough to do that so I’m not suggesting you’re going to be the next warren Buffett but what I am suggesting is that by picking stocks yourself you gain experience the trial and error about how to become better at picking stocks. One of the simplest ways to pick stocks is to look at things that you use on a daily basis and investment for example if you drive a car Buy a share or a stock of the company whose car you drive such as Ford.
A 401k is a must have if you ever plan to retire, so if you don’t have an account open then open up one immediately. Second if you’re working at a company that matches your contribution then max that amount out. What that means is that if your company matches up to 10% of your paycheck then you should contribute 10% of your paycheck because the company will give you free money. If your paycheck is $1,000 a week and you deposit $100 (10%) then the company will match the 10% and also deposit $100. The only bad part about a 401k is the money will be taxed when you withdraw it.
The best part about an IRA is you pay taxes when you put the money in and can withdraw the money tax free. This is great because when you start saving for retirement at 18 you’ll be in a lower income tax bracket than later on in life, so you’ll save more by paying less in taxes. The great thing about an IRA is you can set one up right now, so I recommend you go and do that.