[Simon]

Thanks for reading. I am new here so apologize in advance if this post is similar to others.

My situation:

35, single, no kids.

Home paid for, vehicle paid for, RRSP maxed (funds, stocks and cash), healthy company pension (with paid-in enhancements maxed, tax deferred), TFSA maxed.

I have ~50K in cash, and free cash flow of ~$4k per month.

Where should I put it? Stocks, bonds, real estate, other?

Thanks in advance for your response. My risk tolerance is medium, I just am a little gun shy after the market meltdown and want to make good choices and be diversified.

 

[FrugalTrader]

Simon,

Let me start by saying congrats on your financial achievements. I think the biggest question is, what are your goals? Early retirement? If so, how do you plan on achieving that goal?

 

[Wealthy1Day]

How are you invested in your registered portfolio?

And how did you arrive at that strategy?

You might adopt the same strategy to your non-registered portfolio.

 

[Oldroe]

Don't see anything about fast cars wild boats vacation just generally fun thats were I would invest.

 

[lending]

Invest in Real Estate

i do not suggest to invest money in stock. Real Estate is a good choice.

 

[Dr_V]

i do not suggest to invest money in stock. Real Estate is a good choice.

Well, gosh, I would take that advice with a huge helping of salt.

(1) Simon has achieved a terrific financial position (I'm a bit envious ). But he hasn't stated what his goals are. Without knowing much more, it's hard to make any concrete recommendations other than to offer typical "portfolio theory" suggestions.

This kind of "theorycrafting" usually goes along the lines of: "You're 35 years old, so you may want to consider an exposure of ~60% in stocks and real estate, 30% in bonds, and 10% in cash." Now, how accurate would such a suggestion be? Very hard to say, since it's really so dependent upon his goals, his investing skills, and his risk tolerance.


(2) It's worth noting that investing in real estate is absolutely no safer than stocks. I, personally, view real estate as being substantially riskier than stocks, since you're investing a huge amount of money into a highly concentrated asset, the likes of which are not guaranteed to go up (witness the implosion in the US), and which offer you plenty of fantastically disastrous methods to lose everything. Longer-term returns also tend to favour the stock market (reference).


K.

 

[leslie]

To get to your position you must have developed good thriftyness. But really !! You are only young once. Believe me your body does not last. Now is the time to spend some money on active, fun stuff.

Since you are so well paid, I presume you have a good education. How was that paid for? If your parents paid, maybe now is the time to say thank you with a vacation for them ?? (Of course they would probably prefer a grandchild.)

As for investing $$ I would not put any $$ to work in any asset class right now. There is no rush. The risk/reward tradeoff is WAY too high right now.

 

[scomac]

(2) It's worth noting that investing in real estate is absolutely no safer than stocks. I, personally, view real estate as being substantially riskier than stocks, since you're investing a huge amount of money into a highly concentrated asset, the likes of which are not guaranteed to go up (witness the implosion in the US), and which offer you plenty of fantastically disastrous methods to lose everything. Longer-term returns also tend to favour the stock market (reference).

That is not entirely a fair comparison because investment in real estate usually involves a significant amount of leverage where as stock investing is most often done without it. The risk is in the leverage more so than the asset class. Why real estate investment seems to work better for most folks is the implied rental income when you live in the house and the leverage is a form of forced savings. There is a forced discipline with an investment in residential real estate that must otherwise be exercised voluntarily as a renter so that you can take advantage of the historical statistical superiority of equity investing.

 

[Rickson9]

Thanks for reading. I am new here so apologize in advance if this post is similar to others.

My situation:

35, single, no kids.

Home paid for, vehicle paid for, RRSP maxed (funds, stocks and cash), healthy company pension (with paid-in enhancements maxed, tax deferred), TFSA maxed.

I have ~50K in cash, and free cash flow of ~$4k per month.

Where should I put it? Stocks, bonds, real estate, other?

Thanks in advance for your response. My risk tolerance is medium, I just am a little gun shy after the market meltdown and want to make good choices and be diversified.

As some posters have mentioned, there is no rush. You should spend some time at the bookstore and find a few things to read. The education will be invaluable. Good luck!

 

[osc]

You situation sounds almost too good to be true . Where do you live and what are you doing?
I think that an investment in rental real estate involves more work and more risks than investing in stocks/bonds. Also it is more immoral than investing in stock/bonds as it leads to increased house prices for everyone.
A passive investing strategy in stocks/bonds is the easiest thing once you learn the mechanics.
If you plan to retire soon, then invest in a mix of stocks and government long-term bonds (or any two asset classes with negative correlation and reasonable expected returns - in the 8-12%/year range), moving towards bonds as you approach retirement.
If you don't plan to retire soon and you expect the same monthly cash-flow in the future, then I would recommend using the $50k cash to gamble in the futures or options market. You could easily make 100k-200k/year if you guess the right side of the market and apply an exponential strategy. However you could also lose most gambling funds very quickly, so be sure to periodically take profits out (and move them to your retirement funds).

 

[Rickson9]

I think that an investment in rental real estate involves more work and more risks than investing in stocks/bonds. Also it is more immoral than investing in stock/bonds as it leads to increased house prices for everyone.

Wha...?

If you don't plan to retire soon and you expect the same monthly cash-flow in the future, then I would recommend using the $50k cash to gamble in the futures or options market. You could easily make 100k-200k/year if you guess the right side of the market and apply an exponential strategy.

Wha...?

 

[msimms]

Thanks for reading. I am new here so apologize in advance if this post is similar to others.

My situation:

35, single, no kids.

Home paid for, vehicle paid for, RRSP maxed (funds, stocks and cash), healthy company pension (with paid-in enhancements maxed, tax deferred), TFSA maxed.

I have ~50K in cash, and free cash flow of ~$4k per month.

Where should I put it? Stocks, bonds, real estate, other?

Thanks in advance for your response. My risk tolerance is medium, I just am a little gun shy after the market meltdown and want to make good choices and be diversified.

I'd read up on Jon Bogle, what he's all about, and what he preaches. It's all easy to understand.
His idea of Index investing will give you decent results with minimal effort and investment fees.

 

[Simon]

Thank you all for your comments.

In terms of goals, I want to be in a position in about 10 years, at the age of 45, to not need to work as hard or be paid as much. I know my age 65 number, and I think if I keep earning and saving per my current trend line I can be in a position to slow it down in 10 years (not stop, just slow down, maybe leave corporate life and start a small consulting business) and still achieve it.

As background I have arrived at this position by a combination of being paid well, real estate (principle residence) gains, and being somewhat frugal.

I have difficulty sitting on a lot of cash, but want to find the best place to invest it for security and growth. I think the market will correct going forward (again), and don't seem to find many attractive cash flow positive real estate investments. I have considered moving up a category of house to feed cash into, but don't need anything more than I have (too big now).

 

[dogcom]

I would not suggest any gambling scenario like futures because if you do make some easy money you may become addicted to that and waste your future by taking huge losses down the road. Of course the other side would be you lose the money which would also not be good.

Invest a smaller amount like 20 percent of your monthly savings in an index fund for now and put the rest in something safe while you read up and have a little fun as suggested above.

 

[HaroldCrump]

Thanks for reading. I am new here so apologize in advance if this post is similar to others.

Home paid for, vehicle paid for, RRSP maxed (funds, stocks and cash), healthy company pension (with paid-in enhancements maxed, tax deferred), TFSA maxed.

I have ~50K in cash, and free cash flow of ~$4k per month.

As others have said, you are in an enviable position.
Given your state, I see no reason to take any type of risk at all, esp. leverage (real estate, stocks, options or whatever).
It appears that by using the ~ $50K or free cash and the ~ $50K disposable income every year, you can easily build up a nice passive income flow over the next 10 years.
If I were you, I wouldn't even consider hand picking stocks - just go with a broad ETF or a low cost Monthly Income Fund (like TD Monthly Income).
If you are consistently able to save $50 every year for the next 10 years, you should be in a very sound financial situation come 2020.
I see no reason to jeopardize that by trying to pick stocks, or play options, or buy investment properties and fix leaking toilets at 1:00 am.
And the time you will save by not actively investing can be spent on hobbies, outdoor activities, fitness, whatever takes your fancy.

 

[osc]

In terms of goals, I want to be in a position in about 10 years, at the age of 45, to not need to work as hard or be paid as much.

The future value of 10 $50k payments at 10% rate of return is about $800k. If we add the $50k initial cash, the future value will increase to about $925k.

The difference is small, so if I were in your place I would gamble the $50k (only if the odds are strongly in my favor - like in March when the market was obviously at its bottom). If I'd get another March bottom (or at least a drop to about 800) I would gamble the $50k cash in the futures market. The potential there is to make 10x the money in a few months with almost no work (at least that's what you would have made from March to October 2009 if you kept buying futures as the market grew - an exponential strategy). The trick is to do it only once (or at most once per market crash), get the profits and invest in something with much lower risks, like stocks/bonds ETFs.

 

[dogcom]

I don't think the March lows were as easy as it sounds now. Looking back the Nov. 2008 low could be considered easy money but it didn't turn out that way as we saw it lower in March 2009. Many thought this October would be an easy opportunity to short the market but we haven't really had that big of a decline.

 

[osc]

I don't think the March lows were as easy as it sounds now. Looking back the Nov. 2008 low could be considered easy money but it didn't turn out that way as we saw it lower in March 2009. Many thought this October would be an easy opportunity to short the market but we haven't really had that big of a decline.

That's why it's called gambling. The March low was too pretty to ignore. Why would anyone short now. It can go in any direction. The economy seems back on track and it had for a while now. When the market reached 660 in March everyone was talking about the second great depression. That's when you want to gamble. The probability for a great depression is very low.

 

[HaroldCrump]

That's when you want to gamble. The probability for a great depression is very low.

I'm sure a lot of people said the exact same thing on October 24th 1929

 

[Sampson]

The March low was too pretty to ignore.

That's right. Many people were losing sleep and freaking out, and talk about increasing suicide rates were in the media

I suppose if we all saw how good an opportunity it was, we'd all be rich now. I knew I should have leveraged my properties to the max and dumped it all in, I was just too busy changing my pants at the time