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Financial People, Halp

Howard said:
Seriously Alt, I know Montana land and I wouldn't steal it from you. Depending on what you wanna use it for and other things, I could give you a hand. Hell, I might even know the people (I wouldn't say anything to them).
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Maybe it's your land? Think pops would take an option?
 
Cunning Linguist said:
do the stocks only have a certain time period to go up?
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Yes. It's negotiable. Obviously the longer your option the more your fee.
My aunt is senior exec for Merrill Lynch and she said she typically does 3 month option for 5% fee (of the current stock price), 15% fee for 6 months and a year will cost close to 50%.

That's why I do land. I can buy and sell/find a buyer myself and not reliant on too many outside forces.
 
Howard said:
Seriously Alt, I know Montana land and I wouldn't steal it from you. Depending on what you wanna use it for and other things, I could give you a hand. Hell, I might even know the people (I wouldn't say anything to them).
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Super early. I would say the chances of anything coming of it are like 10%(better than zero anyway). 1% I could buy it for myself. I'm going to politely show interest and gather details. Running a ranch/farm would be a dream come true for me. If I could make it work I will totally hit you up expertise and advice.
 
Sounds good. I don't know a ton about ranching, but farming is my thing. Just lemme know, I'd love to be of some help. Just know that not all ground is suitable for those things.
 
Howard said:
Depending on the areas, yes.
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For example, we looked at a farm that had access to river water but was on a plateau of some sorts. So when you figured out the incline, you'd need 70 pounds of pressure at the river just to get it to where you were, (where it would be at 0 pounds of pressure). That equates to a high pumping cost. Little things like that matter.
 
Dr. Jones said:
That's a long answer. Here's the gist;

Example: let's say you think Apple is going to increase in price from a current $40 per share to $60 per share. You can purchase an option to buy the stock at the current price and pay an option fee rather than buying the whole $40 amount up front. Say, $4/share.

So let's say you have $10k in your retirement, you could take $1k and buy a call option of 250 shares of Apple. The stock rises to $60 as expected and you strike. You now buy/sell at $40/$60 and you now have increased your position from $10k to $15k and no taxes paid on the gains.

Here is how I do it, though.

Using same example. Instead of buying a call option on 250 shares, I will buy it for 2500 shares... even though I don't have enough money to buy the stocks when I strike. The stock raises to $60. Now my option is "worth" $20 x 2500 or a profit of $50k. I then sell my option for $40k and let some other person or firm make an immediate and easy $10k.

So I made a fast $40k.

Now, I actually don't play the market. Real estate is my thing.
So I find a deal on real estate, buy an option to purchase it, and then find another buyer that will pay me a nice profit to purchase my option.

Real example: I bought an option on a ranch for $5k. I then found a buyer that was willing to pay $1m more for the ranch than what I had negotiated. I sell him my option for $500,000. He gets a deal, I get a profit of $495,000 that is not taxed because it was profit earned from money in my IRA.
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I remember you explaining this in a different thread, but it made way more sense to me this time.
 
nightmare3983 said:
I remember you explaining this in a different thread, but it made way more sense to me this time.
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It's all greek to me. I am very interested in investing for future/retirement, but I don't know crap about any of it. So my little bit of money sits in a savings account/cd earning virtually nothing.
 
bigb said:
It's all greek to me. I am very interested in investing for future/retirement, but I don't know crap about any of it. So my little bit of money sits in a savings account/cd earning virtually nothing.
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If you ever want to throw in on one of mine let me know.
I earn low end 12% and average 26%.

And I have NEVER lost money on a deal, ever.
 
bigb said:
It's all greek to me. I am very interested in investing for future/retirement, but I don't know crap about any of it. So my little bit of money sits in a savings account/cd earning virtually nothing.
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Peeks can correct me if he feels otherwise but put that **** in a money market at least which should urn much, MUCH better interest and is essentially liquid. I'd do that and put some in mutual funds as well.
 
Howard said:
I'm trying to slowly plan for retirement. I was thinking of putting some money each year into a mutual or index fund, and then just using that as my retirement fund since savings accounts are practically useless. Not sure what the penalty rate is for taking it out though, and do I get taxed at the full amount on it? Am I better off putting it in a 401? Or maybe putting it in a 401 for a while, and then taking some of that out and putting it in a mutual fund?

Any other ideas/suggestions? Thanks in advance.
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vote bernie! free college, free retirment money.
and dont save for tomorow.

socialism will take care of us all!
 
Howard said:
Don't ruin this thread. Add valuable input, or get out.

Please.
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here is my valuable input then, you should get in now in the stock market, because for now it is non taxable, but if bernie and or clinton win. they might tax the **** out of stock gains. thereby screwing up the stock market.
 
Here's my advice, invest into low-cost (low expense ratio) index funds. It's the fees that end up killing you. DON'T try to play the market. 90% of ivy-league educated portfolio managers that spend every waking minute devoted to it can't beat the Dow when fees are counted, why would you be able to? Now watch this video before reading on, https://www.youtube.com/watch?v=SwkjqGd8NC4. No seriously, watch it. You will finally understand what you need to do next.

How you invest toward retirement is one of the most important decisions you will ever make. Do it right. Invest all the way up to what your company is willing to match in your 401k. Any additional money should go toward a Roth IRA. Again, invest in low-cost index funds. If you happen to be able to max your IRA ($5500 for 2016) then lucky you and you're well on your way. Put the rest of the money you devote to retirement into the unmatched portion of your 401k. If you are fortunate enough to be able to max your 401k then my suggestion would be to open a HSA account if your company offers it. You can invest up to $3350 this year. Basically, any of the money you use from the HSA account can be used for healthcare in a high-deductible plan, tax-free. But here's the awesome part; you get to invest it and when you turn 65, you can use the money for non-medical reasons. Basically, it's another IRA. I recommend using a laxy portfolio strategy as described by bogleheads: https://www.bogleheads.org/wiki/Lazy_portfolios

Finally, tax-efficient fund placement is really important and everybody overlooks it. People lose on average ~2% annually by simply putting their funds in the wrong spots. You should always put your international index funds (because you are smart and you index) in your taxable brokerage account. At the end of the year, you will get a foreign tax credit. Similarly, always put your bonds in your 401k. Domestic stocks can typically go anywhere but I keep them in my 401k. Now take some time and read this because this is one of the most important things you will ever do for yourself and your family: https://www.bogleheads.org/wiki/Principles_of_tax-efficient_fund_placement

Finally, live within your means. Retiring comfortably is well within your grasp if you can put away 15-20% of your money annually. Read some Mr. Money Mustache https://www.mrmoneymustache.com/ dude will get you MOTIVATED! Also, don't hire someone to manage your investments. They typically charge around 1% of your total investments annually. Not 1% on your gains, 1% on your whole damn account! That's whether it goes up or down, he gets it. And if you do the math, you're likely to withdraw 4% of your savings annually in retirement. That means, your financial advisor just quietly took 1/4th of your retirement income. Not cool. This investment stuff is easy, just read up on it and you'll be better than fine if you follow through. Hit me up if you have any questions!
 
Just to clarify (and speak for him) PKM is using stock options as a teaching example and not as a viable retirement strategy. Invest in options and you will get your ******* cleaned out with a large wooden spoon, cooked with your entrails and fed to you.

His controllable real estate use of options is pretty bad ***.
 
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