OT: Best investment/use of real estate profit

[Stinger92860]

Hi, we ended up with a profit from a 2nd home sale (without being specific, it is between 50k and 100k). This was a rental property. Should we use it to pay down the existing mortgage on our regular home? Should we look for another rental property and use it as a down payment? Is it smarter to invest it in the stock market? Is some other investment a better choice? We are still working but hope to retire in 1-2 years, and we could boost our retirement savings too.
Thanks!

Definitely invest in wine.

EDIT: or Bitcoin

 

[Yardigan]

Hi, we ended up with a profit from a 2nd home sale (without being specific, it is between 50k and 100k). This was a rental property. Should we use it to pay down the existing mortgage on our regular home? Should we look for another rental property and use it as a down payment? Is it smarter to invest it in the stock market? Is some other investment a better choice? We are still working but hope to retire in 1-2 years, and we could boost our retirement savings too.
Thanks!

weed

 

[mussels]

I’m with Hawk here. There is no one size fits all answer.

Depends on the interest rate of your current house loan, how many other assets you have, how they are allocated, your income requirements during retirement, and risk tolerance. You probably don’t want to share this stuff on the boneyard, so talk to a professional.

If you already know that, and just want to take an informal poll of what “some guy” on the boneyard thinks, here is my contribution:

Stocks are traditionally a solid long term investment (think low cost index funds not trying to pick winners). However, due to historically low interest rates, we have recently seen an unparalleled period of uninterrupted growth (other than a short COVID blip) and this will not continue indefinitely.

There are increasing headwinds - inflation which will force the fed to increase rates, supply chain interruptions from COVID, China developers defaulting on foreign debt, China’s increasingly militaristic stance regarding Taiwan, and the proposed multi trillion federal spending (and taxing) programs which are a total wild card with respect to the market. So what to do?

If you’re already in the market with a long term view, pretty much stay the course, and fasten your seatbelt.

If you’re looking to get in now, it’s a little trickier, and really depends on your horizon. The generally accepted advice (which I agree with) is don’t try to time the market.

With this in mind - if your horizon is 10 plus years out, then dollar cost average your way into an index fund over the next year and go to sleep. If it less than that, consider dollar cost averaging a percentage of it, and keep some on the sidelines waiting for the dip. Also, be aware that when it comes to the economy and the direction of the market -nobody knows nothin. Good luck.

 

[Goatmeat]

Definitely invest in wine.

EDIT: or Bitcoin

Lol. No.

 

[Conndog]

Our house sold last fall and the profit went temporarily into a money market fund, so I think it's too late to use the 1031 re-investment for a another rental, but I'll check with our tax guy and see. I just thought we might acquire a rental with the down-payment being provided by this money.

So, I guess we are just looking to see what is a smart strategy for investing this money- let's say it is $75,000. My wife and I are in late 50s/early 60s and have good health. We are remodeling and have set aside some money for that job. Hope to live into our 90s! We have good health insurance that will continue whether we work or not until age 65 and Medicare. Most expensive hobby is travelling- once free from work, want to do some long-term travel (go somewhere for several months, African safari, etc)

 

[Stinger92860]

Hi, we ended up with a profit from a 2nd home sale (without being specific, it is between 50k and 100k). This was a rental property. Should we use it to pay down the existing mortgage on our regular home? Should we look for another rental property and use it as a down payment? Is it smarter to invest it in the stock market? Is some other investment a better choice? We are still working but hope to retire in 1-2 years, and we could boost our retirement savings too.
Thanks!

donate all of the profits to pay for the next coaching staff.

 

[Jay-Bone]

weed

Weed is actually quite low right now, might not be a bad idea.

Unfortunately bitcoin is not low, that train has left, for now. My fun money is on Bitcoin Private awakening from the dead, but that is way too complicated.

Travel pumped 10% on the Merck pill alone. This is the way if there are no further more contagious mutations.

 

[Conndog]

When people say “invest in weed”, what do you mean?

 

[husky429]

When people say “invest in weed”, what do you mean?

I assume they mean stocks for companies that produce cannabis. There's even some ETFs at this point.

 

[Yardigan]

I assume they mean stocks for companies that produce cannabis. There's even some ETFs at this point.

Not exactly...but, that's probably not a bad idea either...

 

[Stinger92860]

Lol. No

Bitcoin, lol, I told ya

 

[Samoo]

If another property is even remotely on your radar, 1031 is the answer here. Sounds like it might be too late though.

1031 doesn't actually save you any money on taxes, just lets you decide when to pay them.

 

[WestHartHusk]

1031 doesn't actually save you any money on taxes, just lets you decide when to pay them.

Even if you are just deferring, it increases your ROI and is an interest free loan from Uncle Sam. And there are definitely ways to avoid ever paying taxes in your lifetime using 1031.