My Plan

Thanks for all the replies guys. I do appreciate it. If anyone has any more advice to give, then please speak up. Even if it is harsh, I can take it.

I am definitaly going to seek a financial advisor. I am also going to trade with the 55k. Its less than 8 percent of my total capital, so its not incredibly risky. I need to learn and I need experience. That doesnt mean that I will constantly be trading 55k, at times I may just be trading with one or two thousand but my account will still be 55 thousand.

As for getting a "normal" job, why? I'm not a normal 18 year old. I dont need to eat ramen noodles or work at a mattress store:confused: Most 18 year olds dont have the opportunities that I have. And if they do, they have probably been rich all there life. I have not. I have never gotten anything handed to me. I worked all the typical crappy teenager jobs and I worked hard. I want to become a professional investor, thats the career I desire. I am going to work extremely hard to learn and gain the experience and skill I need to become successful at this, just like I would at a "normal" job. I am still going to go to college and I will not skip any steps in the learning process.

As for renting out the houses, thats not as simple as it sounds. Theres four. One I'm gonna live in, so that leaves three. Ones an apartment building, so of course thats gonna be rented out and I will hold onto that for a while. however the other two have problems and I will soon sell them. One of them is very run down and barely livable, but the lot is huge and in a growing suburb and the lot alone is worth about a quarter of a mil (according to an appraiser). The other house is 1800 miles away. So it would be very difficult to manage if I were to rent it out.
 
Keep the real estate. That is one of the best sources of income you could ever want. You don't realize what you really have, most people invest and have to wait years to own that much property free and clear. That fact that you are only eighteen makes it a no brainier to keep it. There are just so many reasons.

With that much property you should be able to live for free, and make a good living renting out the rest. I would recomend just living in one of the apartments in order to get more income renting out all the houses.

You will get the tax benefit of not having to pay social security taxes on rental income.

You will get the tax benefit of depreciation on the rental properties.

Long term you have much better odds of getting a better appreciation from real estate than in stocks and bonds.

If after you have done it awhile and establish that you have enough income to support it, you can always pull out a little cash tax free if you need to buy something. (You take out a loan on the property and then pay it back from rents}. I must caution you this is something that I wouldn't recommend that you do for at least five years, so you will have a true understanding of what you can afford. Also make sure not to take out to much where it becomes a real long term mortgage that you will be paying off for twenty years, but rather just an amount more reasonable. You might want to do that to buy a car, or small boat or something. But it should be something you could pay back in under five years or don't do it.

Learn everything you can about managing the properties. That should be your focus right now, not trading. If you find it a bit to overwhelming at first, hire a management company to handle it for you at first while you learn. That should cost you about 5-7% of the rents.

Do yourself a real favor and don't just dump everything your relative worked so hard and so long to accumulate. Keep it, this really is a great future for you if you manage it correctly.
 
Quote from Hester:

I am also going to trade with the 55k.
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You asked for advice and received plenty of top notch direction, and in typical 18 year old style, you've decided you know better.

Congrats. You've just made your first steps toward turning an advantage into one huge dumbass mistake.

- Spydertrader
 
Quote from monty21:

18 years old?

DO NOT TRADE!!!!

Get yourself a college education first!

At most open a $10,000 swing account. Get professional help too, instead of us here at ET... your aim now should be to conserve the money instead of making a profit.
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The best advice so far on this thread. The trading to make a living is a myth for almost everyone

Rent out the houses, and study something very marketable, like getting a bachelor's in engineering, accounting, computer science. If you get a degree, for heaven's sake, make sure the school is top 50 in that field.

If you are not the college type, study a blue collar field that pays well and has good prospects, such as becoming an electrician or plumber.

Don't piss away your money trying to become wealthy via trading. It does not work for over 99% of the people who try it.

Finally. sock away as much money as possible into IRAs. You would be amazed how it grows by the time you retire. You will not appreciate it now, but starting early makes a HUGE HUGE difference when you hit 65.
 
Quote from Spydertrader:

You asked for advice and received plenty of top notch direction, and in typical 18 year old style, you've decided you know better.

Congrats. You've just made your first steps toward turning an advantage into one huge dumbass mistake.

- Spydertrader
More...

Listen to this advice and listen well. Ah, to be 18 and not really understand the big picture. Many inheritances aren't given out until 25 for this reason.

I think you need to take a step back and not touch the money and only do what you must to gather facts on your properties and what needs to be done with any current tenants. Surely there must be some instruction with this gift or an executor that can help you, or your parents.

You really need to let what has happened sink in and let the emotions and euphoria in your case wear off so you can think clearly. This may take a month or more.

Trading may in fact be part of your plan at some point, but now is not the time to just jump in simply because you are capitalized.

Don't buy a BMW, pay for stuff for friends, give loans to people or other dumb things. Take this gift and think of how to grow it. I hate to hear how you blow a lot of it in the heat of the moment. You could piss it away faster than you believe.

Google what happens to typical lottery winners. That should be good reading for you.

700K is a lot, but it also isn't a lot if you don't manage it properly.

Hoping you take a step back and really give yourself the time to let this sink in. In the meantime, get a will of your own. You need one now.

Best!
 
Quote from Spydertrader:

4. Once you actually learn how the hell to trade, open a small ($5000) account and build it.

- Spydertrader
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Quote from Hester:

I am definitaly going to seek a financial advisor. I am also going to trade with the 55k. Its less than 8 percent of my total capital, so its not incredibly risky. I need to learn and I need experience. That doesnt mean that I will constantly be trading 55k, at times I may just be trading with one or two thousand but my account will still be 55 thousand.
More...
LOL, spydertrader just gave you some information that is priceless and you turned around and replied "I'm gonna do whatever I want to do, because I know better".

That is some really funny shit, and I don't know who the lucky broker is going to be, but you're gonna make someone really happy. :p :D

Ah ... "youth is wasted on the young", truer words were never spoken. :cool:
***
I wish I had some words-of-wisdom for you, but seeing as how I think you're stupid, I don't.
 
Of all the years I've been here, this is probably the single thread where everyone, who otherwise would be disagreeing on everything, is agreeing and giving very good advice. But the 18 year old won't hear of it; He wants to be told that he's made it now, and that he's doing the right thing.

Buddy, you got 700k. Not 7 million. Not 70 million. 700k. It's nice money, but it's not that much. It's certainly not enough for you become a "professional investor", whatever that means. Guess what, professional investors don't become professionals by trading their inheritance.

And instead of using that money to pay for your education, you are going to basically blow it. The money will be gone soon enough (700k ain't enough for you live off the interest). And guess what, the guys who ate ramen and worked nights to get through college will eat your lunch. You are done.

Quote from MandelbrotSet:

LOL, spydertrader just gave you some information that is priceless and you turned around and replied "I'm gonna do whatever I want to do, because I know better".

That is some really funny shit, and I don't know who the lucky broker is going to be, but you're gonna make someone really happy. :p :D

Ah ... "youth is wasted on the young", truer words were never spoken. :cool:
***
I wish I had some words-of-wisdom for you, but seeing as how I think you're stupid, I don't.
More...
 
#1 Rule- Don't blow it.

Hopefully you have more cautious genes in you then risk taking genes.

One of my biggest pieces of advice is to never trade a cent in the market until you have personally studied the market for around 6 months, 5 days a week, 8-10 hours a day.

Seriously, play it conservative bud.

I know your excited so create a 10K account and lock the 45k away for at least 6 months. SERIOUSLY!
 
Quote from Hester:


I am definitaly going to seek a financial advisor. I am also going to trade with the 55k. Its less than 8 percent of my total capital, so its not incredibly risky. I need to learn and I need experience. That doesnt mean that I will constantly be trading 55k, at times I may just be trading with one or two thousand but my account will still be 55 thousand.

As for getting a "normal" job, why? I'm not a normal 18 year old. and I will not skip any steps in the learning process.

As for renting out the houses, thats not as simple as it sounds. Theres four. One I'm gonna live in, so that leaves three. Ones an apartment building, so of course thats gonna be rented out and I will hold onto that for a while. however the other two have problems and I will soon sell them. One of them is very run down and barely livable, but the lot is huge and in a growing suburb and the lot alone is worth about a quarter of a mil (according to an appraiser). The other house is 1800 miles away. So it would be very difficult to manage if I were to rent it out.
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If you have not traded before, you will be throwing money to the winds. Buying high dividend companies, what happens when the market goes lower, cause it will, and how low will it still to drop? And the companies you buy just might go bankrupt, do you have the experience to know when to pull the plug as far as loss?

And if you never have traded, the 55k is lost before you begin. Following the markets and self educating is not nearly the same as saying you have designed a well backtested method of 3000 sample size min. going back several years.

I sold all my real estate two years ago when I saw both stock market and housing were peaked out. I got ready for the start of a huge slide into possible depression. I will not be accumulating any real estate for 3-6 years cause it will continue to go down. People getting layed off, they lose their homes. When Auto makers go belly up, this will be a huge tickle down effect Real estate will continue to decline. The start of summer, houses will stabilize, but after summer another slide.

Go to college, learn how to be an investor, learn what value is, other-wise you you will always be an 18 year old. You have a huge opportunity, learn the markets slowly while you get a degree, test and learn about trading. Do not trade anything unless you have tested it out on a computer, learn to program.
TEST TEST TEST. Automate your ideas, cause if it doesn't test out well, you will lose in real time.

Don't know where you live, keep one to live (maybe), depending on the 1800 miles away house, what kind of condition is it in? Can always get it HUD approved and get real estate co to manage. Keep apartments, sell the ratty one, cost too much to maintain. How are the apartments, might be more cost effective to move into it and rent out the house.

Wealth accumulation is done slowly, think out your steps ahead of time. Those who get rich fast, most of the time can't keep it cause they didn't learn how and more importantly why they made it.

I wish I was 18 and had this opportunity, cause above is exactly the direction I would take.

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