What should I do now?

F

flier6

Hey all,

I need some advice. I've just sold my house in Orange County and am wondering what to do with the cash. I have about $300,000 from the house and $200,000 in my 401k. Right now I have the entire $500,000 in the money market because I'm bearish on the mkt.

I've also been reading a lot of Peter Schiff's writings and am starting to become very bearish on the dollar. I'm an airline pilot for a bankrupt carrier and have been HAMMERED from every direction as far as my net worth.

I feel a bit foolish getting on here and whining about "only" having a 1/2 million. I know I'm very lucky to have even that. But I also know that it isn't enough to retire on. I'm still only 45 so I have time to save more and let this money grow, but I don't feel like the mkt is going anywhere anytime soon.

I thought I'd seek help here because I know there are some DAMN smart people on this board. If you have time, I'd like your thoughts on the following:

1. There is no doubt in my mind that the real estate market is about to absolutely MELT DOWN here in Orange County (probably elsewhere too). In fact, it's already started. But is it logical to be bearish on the stock mkt right now as well? Should I just dump all the $ in the S&P, max out my 401k each year and stop worrying about it?

2. Is it logical to be concerned about the dollar resuming its 4 year plunge? If so, what should I do about it?

3. I like Peter Schiff's strategy at EuroPacific.net (foreign stocks, mostly utilities and materials companies) but they charge 3% to tell you where to put your money. I thought about giving them maybe $50,000 to manage and then managing the rest of my $ myself in accordance with their strategies. 3% seems outrageous to me for a stock brokerage.

Anyway, I think you can see my "conundrum." I feel like a dumbass for not knowing more about this stuff by now but over the years, the guys I knew that seemed to do the best were the ones who kept it simple and just rode the S&P up so I didn't get anymore "sophisticated" than that.

Thanks a lot for any insight you can offer.
 
The following little story has been quoted and posted around so many times that I'm not exactly sure who wrote it or from where it came...


A boat docked in a tiny Mexican village. An American tourist complimented the Mexican fisherman on the quality of his fish and asked how long it took him to catch them.

"Not very long," answered the Mexican.

"But then, why didn't you stay out longer and catch more?" asked the American.

The Mexican explained that his small catch was sufficient to meet his needs and those of his family.

The American asked, "But what do you do with the rest of your time?"

"I sleep late, fish a little, play with my children, and take a siesta with my wife. In the evenings, I go into the village to see my friends, have a few drinks, play the guitar, and sing a few songs...I have a full life."

The American interrupted, "I have an MBA from Harvard and I can help you!

"You should start by fishing longer every day. You can then sell the extra fish you catch. With the extra revenue, you can buy a bigger boat. With the extra money the larger boat will bring, you can buy a second one and a third one and so on until you have an entire fleet of trawlers.

"Instead of selling your fish to a middleman, you can negotiate directly with the processing plants and maybe even open your own plant. You can then leave this little village and move to Mexico City, Los Angeles, or even New York City! From there you can direct your huge enterprise."

"How long would that take?" asked the Mexican.

"Twenty, perhaps twenty-five years," replied the American.

"And after that?"

"Afterwards? That's when it gets really interesting," answered the American, laughing. "When your business gets really big, you can start selling stocks and make millions!"

"Millions? Really? And after that?"

"After that you'll be able to retire, live in a tiny village near the coast, sleep late, play with your children, catch a few fish, take a siesta, and spend your evenings drinking and enjoying your friends!"
 
It sounds like you are at a turning point in your life, which may not be the best time to be making major financial decisions.

Before you can decide what to do with your money, you need to decide what to do with yourself.

It's time to answer your own question:

What should I do now?

Once you know the answer to that question, everything else should start to come into focus.

I wish you the best of luck on the journey better known as life.
 
Quote from flier6:

Hey all,

I need some advice. I've just sold my house in Orange County and am wondering what to do with the cash. I have about $300,000 from the house and $200,000 in my 401k. Right now I have the entire $500,000 in the money market because I'm bearish on the mkt.

I've also been reading a lot of Peter Schiff's writings and am starting to become very bearish on the dollar. I'm an airline pilot for a bankrupt carrier and have been HAMMERED from every direction as far as my net worth.

I feel a bit foolish getting on here and whining about "only" having a 1/2 million. I know I'm very lucky to have even that. But I also know that it isn't enough to retire on. I'm still only 45 so I have time to save more and let this money grow, but I don't feel like the mkt is going anywhere anytime soon.

I thought I'd seek help here because I know there are some DAMN smart people on this board. If you have time, I'd like your thoughts on the following:

1. There is no doubt in my mind that the real estate market is about to absolutely MELT DOWN here in Orange County (probably elsewhere too). In fact, it's already started. But is it logical to be bearish on the stock mkt right now as well? Should I just dump all the $ in the S&P, max out my 401k each year and stop worrying about it?

2. Is it logical to be concerned about the dollar resuming its 4 year plunge? If so, what should I do about it?

3. I like Peter Schiff's strategy at EuroPacific.net (foreign stocks, mostly utilities and materials companies) but they charge 3% to tell you where to put your money. I thought about giving them maybe $50,000 to manage and then managing the rest of my $ myself in accordance with their strategies. 3% seems outrageous to me for a stock brokerage.

Anyway, I think you can see my "conundrum." I feel like a dumbass for not knowing more about this stuff by now but over the years, the guys I knew that seemed to do the best were the ones who kept it simple and just rode the S&P up so I didn't get anymore "sophisticated" than that.

Thanks a lot for any insight you can offer.
More...

you can get 4.5% in bank cds right now. park it there for now and think about it for a while. you could just wait for the market to have a big selloff and then move it to the s&p. not much risk in that. i would be very careful giving it to someone else.
continue to max your 401k. they probably give you a match and that is a gift.
stop reading so much crash nonsense. it can work on your mind and in truth nobody knows what is going to happen.
 
Hello flier,

I will give you some advice:

2. Is it logical to be concerned about the dollar resuming its 4 year plunge? If so, what should I do about it?
-> no, don't worry about currency, as long as you live in the US and never move out, it don't mean anything to you.

3. I like Peter Schiff's strategy at EuroPacific.net (foreign stocks, mostly utilities and materials companies) but they charge 3% to tell you where to put your money. I thought about giving them maybe $50,000 to manage and then managing the rest of my $ myself in accordance with their strategies. 3% seems outrageous to me for a stock brokerage.

Things you can do now:

1) Put 1/4 of your money in 5.5% CDS
Thats a lot of interest.

Considering S&P only returns 3-5% or so last year, 5.5% risk free is hot.

2) Wait till interest rate goes up to 6% cds
put another 1/4th of your money



3) Invest 1/4th in the Legg Mason Value Trust mutual fund (LMVTX).

This guy has beat the S&P for 15 years and is on a record.

Trust me, he'll bust his ass to beat it again and again to keep the record going :D

If it doesn't work out, you'll still get similar s&P gains :)

4) rest 1/4th , you'll have to think of this yourself.
some corp bonds?


I put a lot of my cash in

a) CDs
b) real estate


I use only 10-15% for stock market, but this year it will be increased to 25-30% , but I am a full time money manager now, so theres a big difference, I watch all my investments like a hawk, something I know most people won't be able to do since they aren't investment professionals.

But its all about guaranteed returns. Leave the speculation to only a small part of the fund unless its your business to speculate.
 
Quote from flier6:

Hey all,

I need some advice. I've just sold my house in Orange County and am wondering what to do with the cash. I have about $300,000 from the house and $200,000 in my 401k. Right now I have the entire $500,000 in the money market because I'm bearish on the mkt.

I've also been reading a lot of Peter Schiff's writings and am starting to become very bearish on the dollar. I'm an airline pilot for a bankrupt carrier and have been HAMMERED from every direction as far as my net worth.

I feel a bit foolish getting on here and whining about "only" having a 1/2 million. I know I'm very lucky to have even that. But I also know that it isn't enough to retire on. I'm still only 45 so I have time to save more and let this money grow, but I don't feel like the mkt is going anywhere anytime soon.

I thought I'd seek help here because I know there are some DAMN smart people on this board. If you have time, I'd like your thoughts on the following:

1. There is no doubt in my mind that the real estate market is about to absolutely MELT DOWN here in Orange County (probably elsewhere too). In fact, it's already started. But is it logical to be bearish on the stock mkt right now as well? Should I just dump all the $ in the S&P, max out my 401k each year and stop worrying about it?

2. Is it logical to be concerned about the dollar resuming its 4 year plunge? If so, what should I do about it?

3. I like Peter Schiff's strategy at EuroPacific.net (foreign stocks, mostly utilities and materials companies) but they charge 3% to tell you where to put your money. I thought about giving them maybe $50,000 to manage and then managing the rest of my $ myself in accordance with their strategies. 3% seems outrageous to me for a stock brokerage.

Anyway, I think you can see my "conundrum." I feel like a dumbass for not knowing more about this stuff by now but over the years, the guys I knew that seemed to do the best were the ones who kept it simple and just rode the S&P up so I didn't get anymore "sophisticated" than that.

Thanks a lot for any insight you can offer.
More...

If it were me, I'd take a job transfer to a location where the cost of living was a heck of a lot lower. The so called, "fly over" states. Then buy a house for less than half of what you have. In my neck of the woods (North Central Florida), a single guy could retire permanently, or take several years off on $500,000 by buying a small townhouse and investing the rest for dividends and revenue.

SM
 
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