How I’d Invest $250,000 Cash In Today’s Market

Let's say you've currently got a good amount of cash to invest. $250,000 in this case. With the potential for a global financial recession after 11 Fed rate hikes since 2022 and stocks near all-time highs, investing is now getting trickier. At the same time, inflation has peaked and there will likely be multiple rate cuts in 2024.

2022 was a terrible year for both stocks and bonds, but 2023 turned out to be a real winner with the S&P 500 up 24% and the NASDAQ up 43%.

Despite all the volatility in recent years, the main lesson from this post is to keep on investing, no matter what. Your capital deployment strategy may be different than mine, but so long as you keep on investing, you will likely benefit in the long run. Make your money work for you!

US treasury bond performance versus stocks - How to invest cash in this bear market
Nowhere to hide in 2022

How I'd Invest $250,000 Cash Today

Usually, I have between $50,000 – $100,000 in my main bank account. But at one point, I accumulated over $250,000 mainly due to a $122,000 private real estate investment windfall.

In addition to accumulating cash, I also dollar-cost averaged in the S&P 500 on the way down in 2022 and way up in 2023. I also dollar-cost averaged in Sunbelt real estate, which struggled in 2023 due to high mortgage rates. These purchases were usually in $1,000 – $5,000 increments.

After building a larger-than-normal cash balance, here's how I'd deploy it in today's market. I'm constantly updating this post as conditions change, so book mark it if interested. If you have less than $250,000, that’s fine too. I share the percentages of where I will allocate my money.

Background Info To Understand Our Investment Process

I'm 46 and my wife is 42. Our kids our 6 and 4.

We consider ourselves moderately conservative investors since we haven't had regular day job income since 2012 for me and 2015 for my wife.

We fear having to go back to work full-time, not because of work itself but because we fear losing our freedom to spend time with our young children. As a result, we are unwilling to take too much investment risk until both attend school full-time in fall 2024.

Although we don't have day jobs, we do generate passive investment income to cover most of our living expenses. This is our definition of financial independence.

We also generate online income, which we usually reinvest to generate more passive income. Therefore, our cash pile will continue to build if we don't spend or invest all the money.

Our children's educational expenses are on track after we superfunded two 529 plans when they were born. We also have life insurance and estate planning set up. The only foreseeable big ticket item coming up is a car in 2029.

Here's how we'd invest $250,000 cash in today's market. This is what we did and are doing with our own cash. This is not investment advice for you as everybody's financial goals, risk tolerance, and situation are different.

Please always do your own due diligence before making any investment. Your investment decisions are yours alone.

1) Treasury Bonds (50% Of Cash Holding)

Only about 3% of our net worth is in bonds, mostly individual muni bonds we plan to hold until maturity. Our target annual net worth growth rate is between 5% to 10% a year, depending on economic conditions. As a result, being able to earn 5% on a Treasury bond is enticing.

The 10-year yield is currently at ~4.3% and Fed Chair Jerome Powell has hinted at three Fed rate cuts starting in mid-2024. Investors can get up to around 5% for a one-year Treasury bond.

Although locking in a 4% – 5% return won't make us rich, it will provide us peace of mind. We also already feel rich, so making more money won't make us feel richer. Our focus is on optimizing our freedom and time.

Below is a recent bond yield table for all the various types of bonds you can buy, by duration. Risk-free Treasury bills and CDs look attractive. If you're in the highest marginal income tax bracket, municipal bonds look good too. Notice how the Treasury bond yield curve is still inverted.

bond yield table - how I'd invest $250,000 cash

Here's a tutorial on how to buy Treasury bonds, which includes some buying strategies to consider.

Now that we've deployed 50% of our cash in Treasury bonds, the remaining 49.9% of our cash will be invested in risk assets.

2) Stocks (15% Of Cash Holdings)

Roughly 15% of our net worth is in stocks after paying cash for a new house in 4Q2023. The range has fluctuated between 20% – 35% since I left work in 2012. Since I started working in equities in 1999, I've done my best to diversify away from stocks and into hard assets.

My career and pay were already leveraged to the stock market. And I saw so many great fortunes made and lost during my time in the industry. When I left work, I continued my preference of investing mostly in real estate.

We almost always front-loaded our stock purchases for the year through our kids' Roth IRAs, custodial accounts, SEP IRAs, and 529 plans. For over 23 years, we've always front-loaded our tax-advantaged accounts at the beginning of the year to get them out of the way.

Most of the time it works out, some of the time it doesn't, like in 2022. That's market timing for you. But we got to front-load our tax-advantaged investments again in 2023, which has worked out great. Keep on investing consistently!

In addition to maxing out all our tax-advantaged accounts, we've been regular contributors to our taxable online brokerage accounts. After all, in order to retire early, you need a much larger taxable investment portfolio to live off its income.

When it comes to stocks, it's important to invest for specific purposes. If you do, you will be much more motivated to save and invest since stocks provide no utility or joy.

Stocks Seem Fully Valued Now

Here are the 2024 Wall Street S&P 500 forecasts with an average year-end price target of about 4,850. In other words, there’s now downside at these levels for 2024 if the average prediction comes true. Although, some strategists are forecasting 5,100-5,500 for the year.

Given the situation, I'm just buying in $1,000 – $5,000 tranches after every 1% decline. The huge year-end rally in stocks has pulled forward the expected performance in 2024.

Here is a post that provides a framework for your stock allocation by bond yield. The higher risk-free bond yields go, the lower your stock allocation is recommended to be and vice versa.

If I was in my 20s and 30s, I would allocate 50% of my cash to buying stocks instead. The remaining 20% would go to online real estate as the sector rebounds, 20% to venture capital, and only 10% would go to Treasuries and education. Remember, every investment is based off an individual's personal financial situation and goals.

2024 S&P 500 Wall Street forecasts

3) Venture Capital (15% Of Cash Holding)

I enjoy investing in private funds because they are long-term investments with no day-to-day price updates. As a result, these investments cause little stress and are easy to forget about. Private investing forces you to invest for the long run.

I've already made capital commitments to a couple venture capital funds from Kleiner Perkins, Burst Capital, and Structural Capital (venture debt). As a result, I will just keep contributing to these funds whenever there are capital calls.

Venture capital is likely going to roar back in 2024 given private company valuations took a hit since 2022. Capital often rotates toward the biggest underperforming asset classes.

Investing In Artificial Intelligence

I'm most excited about investing in artificial intelligence, one of the biggest investment opportunities over the next decade. My Kleiner Perkins funds are actively making AI investments. But these funds are invite only with $100,000+ minimums.

The Fundrise Innovation Fund, on the other hand, is open to all with a $10 minimum investment. The fund invests in AI companies such as Databricks and Canva. Both are incredible companies and I look forward to the fund getting into more promising AI deals.

20 years from now, I don't want my kids asking me why I didn't invest in AI or work in AI given I had a chance to near the beginning. By investing in funds that invest in AI, at least I'll be able to benefit if I can't get a job in AI.

Here's an hour-long discussion I have with Ben Miller, CEO of Fundrise, about AI and investing in growth companies. Roughly 35% of the Innovation Fund is invested in AI companies.

4) Real Estate (20% Of Cash Holding)

I’m bullish on real estate in 2024 as the sector plays catch-up to stocks. With mortgage rates coming down, demand is going to rebound. As a result, I’m actively buying real estate funds today.

Real estate is my favorite asset class to build wealth. It provides shelter, generates income, and is less volatile. Unlike with some stocks, real estate values just don't decline by massive amounts overnight due to some small earnings miss. Real estate accounts for about 50% of our net worth.

No matter what happens to the value of our current forever home we bought in 2020, I'm thankful it has been able to keep my family safe and loved during the pandemic. When it comes to buying a primary residence, it's lifestyle first, investment returns a distant second.

Here are the 2024 housing price forecasts by industry experts. With the stock market up so much, pent-up demand building, and mortgage rates coming down, I expect home prices to rise by 4.5% or more in 2024. I've also noticed home price forecasts move up within just two months of the forecasts being made at the end of 2023.

2024 home price forecasts by industry veterans

Strategically Investing In Real Estate Online

I will continue to dollar-cost average into private real estate funds like Fundrise that invest in single-family homes and industrial properties in the Sunbelt.

Depending on where you are in the country, prices and rents are down 3%-18% from the highs, hence the opportunity to buy now at lower prices. Sunbelt real estate should be a long-term beneficiary of demographic trends, technology, and work from home.

I will be investing in $1,000 – $3,000 tranches. As pent-up demand builds, I fully expect there to be bidding wars again in 2024. With the stock market up so much, investors are going to logically convert some of their funny money gains into real assets.

Fundrise

5) Debt Pay Down (0% Of Cash Holding)

With the Treasury bond yields still higher than mortgage rates, paying down mortgage debt is a suboptimal move. I don't have any credit card debt or any other type of loans.

If you have debt, consider following my FS DAIR investing and debt pay down framework. It gives you a logical framework recommending how much of your cash flow you should use to pay down debt or invest.

If you do decide to aggressively pay down debt, just make sure you don’t compromise your liquidity too much in any market. Always have at least six months of living expenses in cash. You never know when a downturn will come.

6) Education (0.1% of Cash Holding)

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Ignorance is no longer an excuse given how accessible education is today. Please allocate some of your budget to continuing education. Over time, the combination of experience and education will dramatically improve your confidence, wealth, and peace of mind.

Keep On Investing For The Long Term

The key to becoming a successful investor is to consistently invest for the long term. While you may encounter corrections and bear markets along the way, over the long term, risk assets such as stocks and real estate have historically yielded positive returns.

However, it's essential not to lose sight of the purpose behind your investments. If your gains are sufficient to cover your intended goals, it's acceptable to consider selling. The objective is not to accumulate money endlessly but rather to utilize your funds to enhance your quality of life.

Personally, I'm investing to:

  • Buy a forever home
  • Give my family the best life possible while my kids live at home
  • Pay for expensive college tuition
  • Maintain my freedom from full-time work
  • Take care of my parents if needed
  • Have a comfortable retirement lifestyle

Reader Questions And Action Items To Invest Cash

Readers, how would you invest $250,000 cash in today’s? Even if you don't have $250,000, where would you invest your money? What type of investments do you think will generate over a 5% return over the next 12 months?

To invest in real estate more strategically, check out Fundrise. Fundrise runs over $3.3 billion across multiple funds that primary invest in the Sunbelt region where valuations are lower and yields are higher. I expect the real estate market to rebound as mortgage rates come down.

To invest in private growth companies, check out the Innovation Fund. The fund invests in private companies in the artificial intelligence, prop tech, fin tech, and datacenter space. Private companies are staying private for longer, meaning more gains are accruing to the private investor.

240 thoughts on “How I’d Invest $250,000 Cash In Today’s Market”

  1. Have you done a recent comment on your waterfall investment strategy considering taxes? Struggling with locking in longer term fixed income (CDs, t-bills or bonds, munis or muni bond fund) now vs. sticking with equities (not binary choice, just how much to shift and what approach, considering current outlook for interest rates, equities growth and potential tax changes. Perfect optimization not the goal because PASSIVE!

  2. A few months ago I told you the DOW was going to 50,000. You were not a believer. If you look at M2 balances plus the fed will lower rates in 2024 because our Govt. has to refi the debt. The Fed says they are not political but they are.
    So are you a believer now?

      1. Ok in the last 12 months the Dow is up 17% at 39,000 that’s only a 28% gain to get to 50,000. Maybe not 2024 but 2025 ???

  3. Hi Sam, how often do you check the Fundrise Innovation Fund performance update? With private venture funds, should the investor just check max once a year? It seems like so far most reviewed there has not been any appreciation and would you say you are not expecting appreciation until at least 3-5 or 5-10 years later?

    Also for something more risky, have you looked into or considered hedge funds?

    Thanks

    1. Hi Angela,

      I’ll check once a year. When I invest in venture capital, I have a 5-10 year time frame. Private companies can stay private for a long time, and there needs to be a liquidity event (acquisition, IPO) to see gains.

      Hedge funds haven’t performed great historically, especially in a bull market given hedge funds are supposed to hedge/short to protect against downside risk.

      1. Thanks Sam. I have seen Youtubers who are ordinary retail investors who said they put in $1000~$5000 in Fundrise’ Innovation Fund, and they were not particularly happy about the return (i.e. performance, fees, and illiquidity). However, I understand the Innovation Fund is < 2-year old and there is really not much to review given the short time span. I am considering putting $50~100K in Fundrise' Innovation Fund of the Real Estate Appreciation Fund but want to make sure I am setting the correct investment time line and expectation. Why are you willing to set aside money to put in their funds, vs just putting in S&P 500 which yields 10%+/annually? Is your main goal for diversification to reduce risk due to stock exposure, or do you believe Fundrise' returns over the long term will outsize S&P returns? Thanks.

        1. Hi Angela, instead of investing $50 – $100K in the Innovation Fund, why not start at a smaller amount and work your way up? I think it’s better to start small. Then again, I’m not aware of how big your net worth is, so maybe $50-$100k is small for you.

          I currently have between 15% – 20% of my investable capital in private real estate, venture capital, and venture debt. The rest is in the S&P 500, single public stocks, and some Treasury bonds. I also have multiple physical rental properties, so I’m pretty diversified and relatively defensive too.

          1. Hi Sam,

            My husband and I are in our 40s and have two grade school age children. We both have professional jobs and we’re in Coastal San Diego. Our net worth is right under $6M (half in physical real estate which include our primary home and two rental properties, and half in mostly 401K/rollover IRA/IRA and taxable investment accounts including index funds, stocks, tiny bit of treasury and some cash). I am more risk-taking than my husband but I had a hard time dumping all the cash we had in index last Oct when S&P hit its low during the correction. Thus we have about $200K still in cash and I’m looking for a good way to put it to work. $200K is not enough down pay to acquire another rental property given the high interest rate now.

            Based on our situation, do you think it should be reasonable to put in $100K in Fundrise (maybe $50K in real estate fund and $50K in innovation fund)? I thought about putting just 1/4 up front and then DCA every quarter to complete the investment). Do you think this is a better strategy? Or is it better to spread out the DCA time-frame even longer say over 18~24-months?

            Thanks!

  4. I retired 24 years ago when I was 30 after selling an internet dial-up company. Why complicate this? Throw everything in an all-market fund like VTI and call it a day. You can forget about it and get a nice dividend. You’re invested in everything will average like 8% return over time. I’ve done very well with this approach. Real estate is too much work and a major headache. I’m too retired for that.

    1. Mainly for diversification, enjoying your wealth with real estate, fine, art, watches, and collectibles, and the opportunity to make a much higher return then the S&P 500.

      All of my biggest life-changing returns came from taking concentrated bets, like buying a condo in San Francisco in 2003, or investing in a private start up through venture capital, or investing in heartland real estate in 2016.

      Yes, overtime, as you get wealthier and older, it’s nice to just take it easier and simplify. Capital preservation is great.

  5. TheGamingDiviend

    In still in my 20s so the way I would invest is as follows:

    $100,000 in stocks. Not index funds but individual stock picks. I currently have 40 different positions so I would probably spread this cash between 5 of my strongest convictions.

    $100,000 in real estate. Buy a nice little single family and transform it into a rental. I’d pick a market like South Carolina.

    $45,000 – crypto. Enough to buy a Bitcoin.

    $5,000 invest in my business. Buy or subscribe to services that are useful for boosting my income.

  6. So I am investing 1 million on a 3 million dollar deal… not 250k but thought it might be interesting. I have a 1031 exchange from timber/mountain land that closed this week. So I have been checking out Loop Net, bankers, and various realtor /brokers, trying to find deals. Finally have under contract a couple heavy equipment rental warehouses in the south east. They are owned by VCs that I’m familiar with from previous deal. Under contract at 8 1/2 cap cash on cash. Negotiating with two banks for a “swap” loan, which is new for me. Works out to be 6.5 % amortized over 20 years and adjusted every five.
    With that rate the deal with principal reduction, the 8.5 cap turns into ~13 cap. The lease is corporately guaranteed for eight years with a five-year option.
    Difficult time to be a real estate investor. Best deal I’ve seen in a while. I suspect 250 k investment in real estate would best be focused in the southeast, and either an REIT or single-family homes in Knoxville or Smaller outlines around it.

  7. Is there a way to invest in the Innovation Fund through the Fundrise Roth IRA account? I have that currently and can’t figure out how to add another fund or if its even possible.

  8. Hi Sam!

    Happy New Year and quick question on Fundrise…I’m noticing a number of their investment strategies are closed to new investment. Do you have any favorites among the mix that’s currently available?

    I’m seeing the following:

    Flagship Real Estate Fund
    Income Real Estate Fund
    Growth eREIT
    Growth eREIT II
    Growth eREIT VII
    Innovation Fund – however this is not real estate focused as I understand it.

  9. What are your thoughts on holding I Bonds? Have some of these that are currently paying less than 4%. Not sure if it’s worth holding onto them because you can only buy a certain amount per year. Was considering selling them and reposition them into higher yields such as T Bills.

  10. Hi Sam
    Is there any reason why you do not consider something like T-Bills (even if just for the short term). 6 month T-Bills is paying 5.3% (12/23/23) and 3 months at 5.376%. Pretty good interest.

    1. I think T-bills yielding 5%+ are great. Happy to investing 50% of my cash in them at this stage after a big year end really in the stock market. But I suspect real estate to bounce back in 2024 as mortgage rates come down.

  11. Hey Sam,
    Love your posts and your podcast. Your posts reflect my reality way more than other financial bloggers and analysts out there.

    Do you have a template or excel file that would help me to see if I should use $250k for Real Estate (considering someone else paying principle, income and appreciation metrics) vs stocks over a 20 year horizon? I feel like you might have had something like this in the past based on one of your past blogs. I feel overexposed to stocks being as I have a brokerage, 401k, Roth, HSA and 529 all tied to the S&P 500..

  12. Thanks for this wonderful article Sam.
    If you had recently purchased a house with the high interest rate of 5.65%, would it be best to recast and put all $250k on the house? (given that 5.65 is higher than most investment returns). Or would you still recommend applying your formula and paying 55% to the mortgage, and diversifying the other 45% on what you state on this article?

  13. I just put 250K in PE Credit for two reasons.
    1) Smaller banks are not loaning out money
    2) Banks in general are cutting back the overall % that they are willing to fund deals. Especially RE.
    This is forcing companies/investors to go to PE for funding. This cycle should last at least a couple years until the banks can unwind.

  14. Your Thoughts and/or Anybody here with the highly intelligent FS Crowd have any feedback on investing $100k locked for 10+ years with Coller Capital?

    and/or $250k with the Children’s Fund?

    I’ve always been a Real estate and index (SPY/TQQQ/VTI/VOO mix guy) for 99%+ of my assets and wanting to diversify more as I have not comfortably $1.5m liquid to invest against a $10m+ net worth for the full picture

  15. Sam, just a note on your website, this article has been left at the top of the list on the website, so it looks like there aren’t any new posts if you just check in casually and see the same article at the top. Would suggest you move it down and let the new articles posted be at the very top.

  16. Enjoy your site, was wondering if you would be willing to share how I could also invenst (100Kmin) in the AK Kleiner Perkins fund. Thank you. Ryan

  17. Always love the data. As for the real estate investments, I would say it’s time to look @ publicly traded REITs. MAA & CPT offer exposure to Southeast. Both will have marginally declining NOI for next couple years and prices could go well lower. However, private mkt prices are still near ATH’s while publicly traded apartment, mobile home and sfh REITs are off 33-55%. Bonus here is if/when we do enter a recession and job losses mount, these could trade at irrationally low prices. DCA from here is a sound plan. I started in the above names last Friday. -RP

  18. Hi Sam! Quick question for you on treasuries. Do you have a specific duration you feel is most appealing right now? Most of my bond money is currently in ultra short term bonds (VUSB), but I’m increasingly interested in long duration bonds (TLT) as it appears we may be reaching the end of the hiking cycle. Thank you!

  19. Sam,
    I would like to take advantage of the high interest rate for short-term Treasury bills/notes, and I am contemplating between buying the T-bills vs a short-term Treasury ETF (such as VGSH). If I buy T-bills, the interest is higher, but I have to hold till maturity for the full interest; for ETF, the interest distribution is lower, due to it being a mixture of T-bills/notes issued during the previous 3-4 years. However, ETF is more liquid. I am sitting on the fence, but I am curious about your thoughts on this. Always a pleasure reading your blog. Thank you!

    1. T-bills are very liquid as well. You should have no problems selling them. The market is huge.

      I’ve been dollar-cost averaging into bond ETFs once the 10-year yield breached 4.8%. And at 5%, I will buy more aggressively. But ETFs have no maturity, and those who bought last year got hammered.

      I prefer just building Treasury bond ladders and holding to maturity. No risk! Sleep well at night.

  20. Hi Sam –

    Love the information regarding Fundrise and the excellent podcasts with Ben Miller. Please keep them coming!

    What are your thoughts on Grant Cardone and Cardone Enterprises? Mr. Cardone also offers private real estate funds (equity investing and not debt) with monthly passive income distributions from cash flows.

    Would enjoy your thoughts and perhaps an article. Perhaps you could secure a podcast with Grant Cardone? I would suspect many readers of the website are well aware of Cardone Enterprises.

    Hope you are well.
    Tony

    1. I know he’s a good marketer, but I’m not aware of his deals and history. If you’d like to write a guest post based on your research, let me know.

      As always, start any new investment small and work your way up after a lot of due diligence.

    2. I would be wary of guys like Cardone. Read some good books on real estate investing, then meet up with local investors weekly and ask what they do. That’s the way to learn, not paying a fortune for a flashy sales pitch to buy more “mentoring”. Most successful real estate investors drive pickup trucks, not private jets. They’re not trying to show off.

  21. Great write up. Been saving for over 35 years. Passive income on investments including holding a couple of house notes and CD’s is over 350k per year. For those starting out, stay focused. Still working but only cause I want to, mostly special projects.

  22. Hi Sam,

    I’ve been closely following your insights on Fundrise’s REITs and innovation funds and have been an investor since 2019. I’m particularly interested in your perspective on the upcoming Fundrise IPO. Could you dedicate an article discussing its pros and cons?

    One aspect that caught my attention is the rapid growth in sales for their parent company, Rise. However, their net income remains in the negative territory, and the operating expenses appear to be on the higher side. Based on your analysis, do you foresee a trajectory towards profitability for them in the next 3-5 years?

    Thank you for your insights.

    1. Hi Morgan – Here are my thoughts on the Fundrise IPO.

      In general, I’m not a fan of investing in individual private growth companies. I’d much rather invest in a fund, such as the Innovation Fund or another venture capital fund with a portfolio of private companies.

      But with $3.3 billion in AUM and what I think will be a positive turn in the real estate market by 2025, I believe Fundrise will be a long-term winner. It’s worth listening to Ben Miller’s cautious view on real estate in this podcast episode.

      1. I invested in the Fundrise “IPO” back in the fall of 2017. It sounded exciting and I was a naive investor. On paper my shares have increased in value but with no cash flow it represents a huge opportunity cost. Over 6 years now my money has been in their hands.

        Plus it’s 100% illiquid and who knows if we’ll ever see return on capital or return OF capital. Did you invest in their “IPO”? What are your thoughts now?

        1. But you knew it would be an illiquid investment that could take 10 years to pay out right? If so, then that’s pretty good that you’re up and normal for a private equity investments. I always invest with a 10 year horizon for private equity.

  23. Great points, thanks! I wondered what are your thoughts on investing to expanding one’s exisitng house vs moving? I’m currently locked in a 30yr mortgage @ 5.5% and recently had a baby and in the next few years will need more space as they grow older. I can probably add on ~500sqft for a 100k investment or sell, potentially take a loss due buying at the top of the housing bubble and then either signing up for another 7%+ mortgage or renting which would be more appealing since our buying power is now significantly reduced, at least in any areas that we’d like to live.

      1. Sam, I’m adding an addition to my current house which will expand the square footage by around 300. It’ll be a nice sized sun room for the family to relax in and to create a nice sanctuary.

        I read your ‘expansion’ and ‘home improvement sanctuary’ posts, but wanted to ask you about some of the things you regretted or learned from doing addition projects. For example, do you regret not spending more money to add more lighting? Heated floors? Or other creature comforts that you may have overlooked? Or conversely, something that wasn’t really worth the money? TIA.

  24. Hey Sam, when you say 28% of your net worth is in stocks, do you include 401k, Roth, traditional IRA balances as well or is that purely based on your brokerage accounts only?

  25. I have been dollar-cost averaging into long-dated treasuries 10,20 and 30 years bonds buying on the secondary market. Also buying short-term treasuries and TIPS. Sooner or later yields have to fall in which time bonds will be the place to be. Every time yields go up I buy more. I am hoping for a stock market rally going into year end and then I will probably allocate even more to bonds from stocks. Stocks seem too expensive at the moment.

    After I lost about 20K in peerstreet (so it seems since they filed chapter 11 bankruptcy), I stay away from any and all fintech platforms. I will stick with the major brokerage firms.

  26. Nothing with Digital Assets? It’s de-flationary! Bitcoin is going to be “Halving” around next April, so the supply of new bitcoins available will be slowed immensely. Also, the potential for new Spot EFT’s from the likes of Blackrock, Fidelity, VanEck, etc will put restraints on supply as well. There will only be 21 Million of them, and roughly 4-6 Million are lost or permanently locked up.

  27. I’ve been researching treasuries, and my main issue is that you have to pay income tax as well as the net interest income tax (NIIT) if you make above 250k as a married couple. So basically even though you are getting 5+% interest, the real take home money is closer to 3-4% based on your income. That seems much less favorable to me, and I’m not sure it’s still worth investing. Might be better off to look toward long term cap gains and bet on the market even if short term outlook is bearish.

      1. OlderAndWiser

        This would not be a reasonable option for someone your ages (because withdrawals before 59-1/2 incur penalties), but we are 59/60 and still have some active income so have recently dipped our toes in the MYGA waters with excess cash. Rates are good enough for our purposes and income tax deferral is still attractive.

    1. It’s a very unfortunate situation for seniors who saved and invested to provide for themselves in golden years. In our first year of retirement we will be crossing this threshold in passive income and there will never be an escape from this once we start taking RMDs. Even worse, we see almost none of this money because most of it is reinvested anyway.

  28. Love your articles.
    We just sold off 3 investment properties but decided to hold 70% of the financing @ 11%, callable in 60 months with a 48 month prepayment penalty of 5%.
    This helps string out the tax on significant capital gains. Equities still bother us & these 3 properties are well over the $250k you alluded to, so we basically ‘parked it’ as an RE annuity.
    For another property we own & plan to sell we’re looking at a tax burden of $104k for capital gains & depreciation recapture, so a 1031 is our strategy, (while it’s still available). The intent is to hold it for the several years required, then take it over as a vacation home. At that time the tax burden for capital gains/depreciation recapture is negated.
    We currently hold the notes on about 40 properties @n 11-12%, all of which we bought cash, rehabbed, rented for some time then sold.
    In 35 years we have only had 2 foreclosures & both were immediately sold for double our investment plus costs & we continued to hold the notes.

    1. 11% sounds pretty good. What was the process to hold the financing?

      From the buyer’s perspective, I’m thinking about getting seller financing so I can get a lower rate, or even the seller’s existing mortgage rate. But if I had to pay 11%, I wouldn’t. Could you share why the buyer is willing to pay 11%? Must be pretty bullish on real estate or got a discount to market?

      I’d love to write a post on this topic.

      Thanks!

      1. HI FINANCIAL SAMURAI

        1. If I’m in high income bracket, or I have 2.5 million in Fidelity account, over 60 years old–what TBILL duration do you recommend?
        2. Regarding my Fidelity Annuity, I’m not given the option to purchase TBILLS…So I only can purchase Money Market fund…How is this a good option, given TBill offer slightly higher yield?

  29. Would you consider buying a luxury house worth 3-4mm right now or do you think the pain in commercial and ripple effects will cause prices to go down further in southern California markets and thus better entry points? Also, do you think luxury real estate is a good investment at this point or are we in for a few years or five years of stagnation in mid-luxury resi real estate in Californian markets?

    1. I’m buying bc prices are down and stock portfolios have rebounded. A double win.

      Then, I will accept no gains for 3 years as real estate down cycles take years to work its way out.

      I’m spending to enjoy life to the max while my kids are still living with us.

      How about you?

  30. Sam, question here regarding online high yield savings accounts versus treasury bonds. We are in the highest federal tax bracket and also in a state with high state tax. We have enough cash in checking and no immediate need for liquidity. Given the tax implications, does keeping cash in a high yield savings account at 5% make any sense at all or should we be putting it all in T-bonds?

    Also regarding T-bonds in general do you have any strategy for length of T-bonds 6 mo, 1 year or 2 year?

  31. So Sam, I disagreed again,
    I would not tie my money up for a year or longer in treasury bonds. Particularly not 60% of it. You can put it in the money market account and make close to 5%.
    Also venture capital investment to 20%? If you were an active investor you’ve invested be investing much more than 20%….venture capital is for guys that are all actually on the sidelines…people that won’t dive in and “0wn” or invest 100% on a deal. What I’m doing right now. I am putting my money in money market accounts. Waiting for good deals to arise… studying LoopNet, and reaching out to Broker’s, and Banker’s. Hoping to eventually invest big chunk of dough into a property and capturing all the of it myself. Also, I will pay down debt anything above 5.5%. I don’t have any of it anymore but if you have any debt above 5.5% I would pay it off.
    JJ

    1. Sounds good to me. It’s fine to disagree, as we all have different net worths, goals, and risk tolerance. Feel free to share where you would invest and why. Feel free to share your net worth as well. This will help readers think about different perspectives.

      To me, earning 5.5% and not having to pay state tax is more attractive than 5% and having to pay federal and state taxes.

      1. Jarret Toro

        Why do you think people disagree and then proceed to not share anything about themselves and where they would invest?

        Maybe too afraid of criticism? It’s kind of fascinating to observe.

        I love earning some 5.5% risk-free returns in Treasury bonds. I’m also buying real estate in weaker markets because they are lagging and mortgage rates will likely come down in 2024, bringing back demand, especially to the most laggard markets.

        1. I think it’s just easier to disagree and than to explain one’s investment positions. But I hope more people do as it brings value to the discussion.

          At the end of the day, everything is rational. We will invest according to our risk tolerance and goals.

      2. Disagree with the wrong word..my apologies
        Your points are all good and well thought out. It’s just for me actively managing my own building/ businesses and finding opportunities have paid the greatest returns.
        I am worth 20 million.

        1. Got it. But what type of investment opportunities? Not everybody can run and build a business. So discussing investment opportunities and why is most pertinent with this post.

          Congrats on $20 million. Might as well shoot for $50 million!

          1. Currently, I’m waiting for cap-rates to reflect higher interest rates. Hasn’t happened yet. I primarily buy warehouses dealerships and small grocery stores. (All triple net or near) What I’ve done last year is paid off 350 K mortgage at 5.4% interest. Put a new parking lot in a grocery store,100 k.
            Currently painting a 70,000 square-foot warehouse and a grocery store, 80 K.
            I think materials and labor will cost more in the future so seems like a good spot to put my money. I am building a stock pile of cash hoping for a big dumb warehouse to be available at a good cap rate somewhere in the middle of 2024. Also, in business building a new website that complements a successful web business I have. And dismantling ending a money losing business.

      3. Hi Sam-
        I *think* I know the answer to my question: why do you prefer treasury bonds vs CDs right now?

        Is it because the interest associated with CDs is subject to state tax?

        PS: Love your blog and writing style!

  32. I am retired and we keep 90% of our investments in stocks which produce significant after tax cash flow all which is reinvested. The rest is cash and T-bonds averaging 5% interest together with SS and royalties gives us about $150K in retirement income. With no debt and homes and cars paid off that’s enough to live on and we can still save some. Never in my life I could envision a situation that in retirement we would make more money than when we both worked.

      1. I am 72 and real estate is only 15% of our net as it’s much less trouble to collect dividends than rental income when you are retired. That is why higher interest environment is very beneficial to us because we are able to replace much of our rental income with interest.

          1. I want to hear more about your royalty income personally. Are you a creator or royalty investor? :)

  33. Sam, I am an avid follower of your website and read your book. What do you think about continuing to purchase I-Bonds for long term inflation and liquidity protection? I realize high yield savings accounts are currently earning more but looking to build a nest egg of 2-3 years expenses before possibly retiring at 55 in 7 years.

  34. Hi Sam, what do you think about the Fundrise VC fund? I recently started allocating some funds there.

      1. Listened to the podcast and Ben makes a compelling case. I invested yesterday and hope to keeping adding every few months.

        Your question about exit strategy was of great interest, in particular considering possible IPO timing for companies they’re invested in. If you’re in that fund, Sam, how long are you anticipating you’ll hold/participate?

        1. Thanks for listening. I invest in private funds with a 5 to 10 year time. Horizon has actually been great over the past 20 years. The money I invest today, I actually almost forgot about it on the distribution, 5 to 10 years from now. Feels like Bonus money because we end up living within our means as soon as the money goes out. It is true patient capital.

          Also, do more research on data bricks. Pretty exciting stuff, as well as anthropic, and open AI. My main goal is to build a healthy about of AI exposure over the next three years.

  35. Sam,
    As I read your investment strategies I realized you and I are alike in our investment strategy although we use different vehicles to get the returns we seek. To some outsiders our investments and strategies appear complex, although we consider them elementary to achieve to our success. I ask you: As the pilot of your families financial future, and with your spouse as co-pilot or passenger; have you considered or provided directives to your spouse in the terrible event you pass away? This singular question has hounded me over the past decade of my life.

    While this question may be considered morose by many, it still remains at the top of my mind and is an area of discussion as responsible adults – particularly aging adults that have serious medical issues. Over the past several years I have educated my spouse as much as possible on our portfolio, provided written directions where appropriate, but, admittedly, she has neither the time or inclination to manage it as I have. While this is disheartening, I am also relieved to know we have accumulated “enough” that she may find an advisor for the remaining portion of her life and live comfortably.

    Have you spoken with your spouse on your wants, needs or wishes for her and your portfolio in the event you pass away? Have you done any research into investment firms and what would be your criteria for selecting them to handle your business?

      1. Hi Sam –

        A couple of questions:

        1) Why don’t you invest in international mutual funds too?

        2) I thought you also invested in High Dividend Funds from iShares or SPYD S&P 500 High Dividend Fund?

        Thanks!
        Tony

  36. I like that you’re updating this article regularly. Could you include a graph of how you’re changing the percentages over time?

  37. California Expat

    Hi Sam – I’ve been buying I bonds each year as well, mainly because I like the fact that they can never lose value (the interest rate never goes below) and after the first year they’re extremely liquid if needed. But currently they yield less than Treasuries so interested to hear your thoughts on why you’re still buying I bonds.

  38. Hi Sam, I started investing with Crowdstreet a couple of years ago (I love the idea of passive real estate) with $150,000 spread over 4 deals (medical, self-storage, and multifamily). I promised myself that I would hold off on investing more with Crowdstreet until I saw my first distribution, which I saw last month, so I am ready to add more. I wouldn’t consider myself the strongest when it comes to evaluating deals; Frankly, it scares me. I was looking at the Crowdsteet Marketplace today and was reading about Crowdstreet Advisors, which has a minimum investment of $250,000. The fees seem a little high in the first year, but in subsequent years it looks like there would be an opportunity for decent returns without having to do my own due diligence. Do you have any knowledge or experience with Crowdstreet Advisors? If so, I would love to know what you or anyone else in this forum has to say about them.

    1. I’ve met CrowdStreet in person several times before. Good folks, but I have a difficult time spending time evaluating each deal once I became a dad in 2017. As a result, I’ve been focused more on investing in private funds from Fundrise and other platforms. Not as much upside (or downside), but I like less volatility.

      How many deals will be in the CS Advisors portfolio? I should look into it as someone else mentioned it.

  39. High quality private credit (private BDCs), including some IG CLO tranches

    Take the positive carry and floating rate protection

  40. Appreciate the article Sam. Do you ever look to invest in public reit stocks? They’ve been beaten down lately and now offer high yields. I feel like once there’s a pivot from fed could see some price appreciation. Obviously I’m looking to stay away from office sector. Let me know your thoughts. Just turned 40 so looking for some yield and price appreciation.
    Eric

    1. Yes I have. But I was disappointed in how public REITs tanked MORE than the S&P 500 during the March 2020 selloff. They are more volatile than stocks, which defeated one of the main reasons why I wanted to own them.

      I already had enough high beta tech stocks in my portfolio. As a result, I transitioned more toward private real estate investments in Sunbelt residential and industrial directly.

      1. Thanks. I will look into Fundrise. Do you know if they use a high amount of leverage/debt to fund their projects?

        1. They don’t. Much lower leverage as they are also vertically integrated as the sponsor, manager, investor, fundraiser. You are also investing in funds with dozens of holdings, which helps minimize volatile and protect on the downside, as opposed to investing in individual deals.

          I just spoke to Ben Miller, Founder and CEO of Fundrise for over an hour on the FS podcast. The episode is coming out this week. Check it out on Apple or Spotify.

  41. Thanks Sam, I always enjoy these types of posts because it gives me a sanity check on what I’m doing with our portfolio as a fellow conservative early retiree. I’m in a similar camp that despite the recent bull rally (whether its euphoria about inflation coming down or AI), I think the market is a bit too optimistic and overly expensive from a valuation perspective. Also, as you pointed out, Treasuries are paying over 5% right now and the Fed has signaled that they have at least 1 more rate hike and will at least keep rates high for a while.

    I know we can’t keep a huge cash pile on the sidelines for a long time, but the risk-reward to put additional capital doesn’t seem to be attractive beyond what we’ve already invested in the market.

    -Harvey

  42. The article had few changes in SP500 levels since it was initially published from 3900 to 4000 and 4000 to 4100. Was it mistakes or some fundamental changes like inflation/FED data affected it? Thanks

  43. Finance Ronin

    When you consider your Net Worth and investment allocations, do you include your home equity? The reasons I ask is that I have a lot of equity in my home. I had a been a serial refinancer, but I think I will be “stuck” with my 2.375% loan for quite some time.

    Your allocation feels more like capital preservation vs growth. I’m about 6 years older and my kids are 10 years older than yours. I’m also heavier than usual in treasuries and CDs at the moment; I’m waiting for an opportunity to jump back into stocks. I don’t need any more real estate–it’s 45% of my NW.

    1. Yes, home equity is included. Just need to be realistic about what that equity is.

      What are the purposes of this article on what to do with $250,000 in cash, yes, I would rather invest 60% of the cash, or a majority of it, and a risk for a 5% yielding asset. 5% is pretty rare, and I want to take advantage. 5% right won’t last forever.

      If you are trying to compare to me, it’s probably not beneficial since we have different goals and risk tolerances. What is your estimated net worth?

  44. What do you think about the USG debt above 100% above $31T and ironically this is actually better than nearly all other developed economies? If the world’s governments default causing US defaults – what would you invest in as a hedge besides land, food and ammunition? I’m personally not a big believer in precious metals but what else is there? And what to do with our 401ks which keep us locked into the markets? Thank you for all you do!

    1. I’d probably just spend money and enjoy life more. No need to save and invest as much for the future if you think there won’t be one.

      But one year and under certificates of deposits, and 5% sounds pretty good to me. So do three months and six months, treasury bills.

  45. New reader – love the site.

    I’m new to Fundrise, If you are a new investor, then which fund would you select? I cannot figure out how to invest in the Heartland fund, it now only provides me with a few vanilla choices such as “balanced, long term, income”.

    Have the investment options changed?

    1. Hi Michael – Welcome to FS! The Heartland fund was from years ago that has already been filled to the limit. I would focus on the funds they suggest based on your goals and risk tolerance. Start small, and work your way up.

      Fundrise’s main strategy is focused on Sunbelt/heartland single-family and multi-family residential real estate. The top down strategy is embedded in all their funds, while adjusting for income/growth/risk.

      I feel real estate is bottoming now, and as mortgage rates come down further demand will pick up this summer and beyond.

      Don’t forget to sign up for my free newsletter.

      Cheers

        1. You can certainly invest in public REITs as well. But you might discover public REITs are even MORE volatile than stocks. The March 2020 downturn was one such time. As a result, public REITs don’t help with diversification away from stocks.

          Here is an article comparing private real estate and public REITs.

          Personally, I like diversifying into a diversified fund from Fundrise that specializes in Sunbelt single-family and multi-family real estate. It helps me balance out my portfolio of expensive San Francisco, Honolulu, and Lake Tahoe real estate.

          I’m also a big believer in the long-term trend of working from home and relocating to lower cost areas of the country as a result.

  46. I pay a lot of attention these posts. When covid happened you were right on the mark and because of that I actually made quite a nice return. Thanks so much for all you do, Sam! Looking forward to your next book!

  47. Jordan Woods

    Sam- I made the mistake of buying cd’s and in hindsight I’m kicking myself (stcg) – I should have bought low coupon similar maturity t bonds. Tax treatment is much better. Turns out banks like the higher coupon ones because they can deduct the interest (that we pay full income tax on)

      1. Jordan Woods

        So another hack in that department – buying TIPS in the 401k. Tips yielding 1.5% is a pretty attractive level at the end of Feb. But because the annual CPI adjustment is STCG, you lose half the benefit to the IRS holding in a non-tax advantaged account.

  48. Ivaylo Vasilev

    Just a short comment from me:
    “Our approach to saving is all wrong: We need to think about monthly income, not net worth.” — Robert C. Merton, Nobel Prize winner.

  49. Hi Sam,

    With regards to T. Bills, why not just park your cash allocation in a money market settlement fund? I just park my cash allocation there and Vanguard is now paying 4.6% and I have liquidity.

  50. Any reason why you prefer CD’s or T- Bills over high yield savings or money markets? Should we think about them as interchangeable?

    1. Taxes. Treasury bond holders don’t pay state or local income taxes. The higher, your state tax rate, the more attractive treasury bonds are. I’m in California.

      Same logic applies to muni bonds.

      1. Robert Ruschak

        Why not invest $250,000 into something that will grow it to $2.5 million or much more?

        Invest 25% into an legitimate alt coin?

        Invest 50% into a real estate investment asset , such as multi-family or self storage faculty? It really depends on the NOI upside and to leverage into future assets.

        Invest 25% into stocks that will potentially produce 100% to 1000% returns.

        1. For sure. My portfolio is diversified and I definitely hope I can make a 10 bagger in 12-15 years. I just like to focus on paying for college via a tax-efficient 529 plan.

          How are you investing for your children’s college education? And how much do you expect for years of college to cost them?

  51. FedRatePrediction

    I’m shocked by how quickly the FED was able to raise interest rates. Even though they probably have caused a recession in by fall 2023, they should have a lot of ammunition to lower rates to dig us out of the recession quickly moving forward. If we do have a bad recession and high unemployment this fall with mass layoffs. I predict the FED lowering rates back to 0% to dig us out soon after. The new normal for interest rates is not 7-8%. This is a temporary FED decision to try to bust inflation with a recession. Once we officially start seeing layoffs in the middle class start up… the FED will start lowering interest rates back down to 0%. My humble prediction.

    1. This makes the most sense to me. But the big concern is the fact that they can’t seem to get the jobs number down. Such a weird time we live in. Plenty of jobs but no one can afford anything. Pay going up but we are so far behind it doesn’t matter.

  52. Thoughts on what to do if I’d like to purchase a home in about 1 year? I’m currently at 90/10 Equities/Bonds & Cash and renting a fairly affordable apartment. I just signed a year lease so I can’t move right now. Plus I like where I live. I’d like to invest in real estate, but mainly as a primary home in about a year. If I wanted to pay cash for the home I’d probably need to move my allocation to 80/20 or 70/30, but don’t really want to sell. Should I be hoarding cash for the next year or keep my allocation and adjust in a year?

  53. Would you apply the same percentages if instead of $250,000 the amount to invest was $50,000 to $5,000,000?

    If someone already asked the same questions, my apologies, I don’t have the opportunity to go thru all the comments.

  54. Instead of treasury bonds, why not leave it in savings which yield >4%these days? Robinhood gold has 4.4% on cash.

  55. What abount investing in farmland through FarmTogether? I notice you advertise them on your website but rarely ever talk about them as an investment

  56. Been buying 3 & 6 Month T-Bills too.
    Sam, one asset class that I really like is Equipment Financing.
    Been investing in equipment leases for commercial middle market companies (Typically Revenues of $20MM – $1BB).
    They’re normally paying 300-600 BPS over SOFR.
    These are typically revenue generating assets.
    We’ll originate and book Leases with the end-user and then syndicate to the banks that want to buy debt. Terms are typically 36 – 60 Months. Good way to get yield & diversify. May need to raise fund!

      1. Most of the portfolio is manufacturing & production equipment. However, we’re doing healthcare (Imaging Equip) and logistics too.

        All the Equipment remains at the Lessee’s (End-Users) facilities.

        Although the rates seem higher (SOFR – 4.8%), it’s the new norm. From a lending standpoint, we’re just in a tighter and higher rate environment.

        Normal payback on equipment is 1-3 yrs (including lease financing costs) for the end-user.

        Most of our clients use our external lease financing to diversify from their primary banks (Wells, Fifth Third, Zions, etc). Their banks are typically prime + spread & include blanket liens and covenants/warrants.

        Hope that helps.

  57. Urbano Menendez

    Hi Sam, conundrum, my sister and (we are 59 and 56) i have two properties paid off rented one worth 1m the other 500k. My sister wants to sell and cash out how can I keep properties buy her out and still have some passive income? BTW, the book was great.

  58. If you don’t have cash to buy treasury now, does it make sense to sell some of your current stock ( given limited return next year)? Might be hit with a tax bill for capital gain though..

    1. I really dislike selling anything to cause a tax liability. So I’m focused on investing incremental cash.

      It’s also hard to know where the S&P 500 will go in 2023. If you look at the estimates, the average is about 4000. So in other words, we’re not going anywhere. But some estimate down 20% from here.

  59. Sam,

    I’ve been a religious reader of the blog since my honeymoon in 2013 when I realized that I would be in charge of my family’s finances and had no idea what I was doing and started googling. Post reading/listening to you and a lot of others throughout the years, you all have helped me in my journey to pre-funding what I hope to be a great life with our now complete family of five. And as a Wall Street person myself (fixed income not equities) it’s been immensely gratifying to hear your perspective on the markets especially given how right you have been over the years (2020 bottom anyone?).

    As a trader my skill sets are with numbers not letters but given my lack of involvement in the Financial Samurai community (outside of a few comments) I wanted to at least try to provide your readers with a bit of information in the fixed income markets which, since cash is trash for the last decade, has been largely ignored. Given the Fed’s hawkish stance and the market’s willingness to buy every dip given everyone’s personal balance sheet has massively improved since the pandemic, I’ve come up with what I think is an interesting short term investment thesis.

    FLOT is the Blackrock floating rate ETF which seems pretty benign in nature at first and looking at the 12mo yield is currently 1.75%. However if you look at the indicated yield going forward with the last declared dividend it’s~5.1% and will only go higher given most FRNs are quarterly resets and the Fed keeps insisting it will keep hiking until it breaks the back of the economy. This protects your cash the best from inflation while you wait for the S&P to reset given most money market accounts have a 3 handle.

    My second investment thesis is that the S&P will not bottom until after student loans start to be paid again. A lot of the money in the economy being spent by young people has gone into consumer goods which has propped up earnings because of both all the stimulus being paid to people during the pandemic but also from a lack of having to be paid back to student loans. With the can being kicked until June or the Student Loan forgiveness question is answered I don’t see there being a catalyst for a big equity sell off until then.

    SCOTUS has recently announced they will hear the Student Loan forgiveness in February next year and given the current SCOTUS make up as well as frankly a pretty big question on the legality of the program from people on the center left, I would think it gets struck down. With some student loans floating the rate having to be paid will be much greater and will suck a lot of money out of the economy leading to the recession that the Fed hopes for.

    Therefore my investment thesis is to currently keep buying FLOT and wait for what I think is an overvalued equities market to fall to a more reasonable target (pre pandemic levels). The other side of the argument is that if SCOTUS allows the program or if they continue to keep kicking the can down the road for Student Loans that equities will soar and you will miss the rally. However it seems like Jerome Powell has taken the lessons from the 70s at heart and will do whatever he needs to take the economy to break the back of inflation and you can keep clipping a 5% coupon with downside protection until he does.

    Thank you so much for all the content you’ve put out over the year; I’m sure you constantly hear how much you’ve changed peoples lives with your hard work and research but from my perspective your blog has been an invaluable tool for helping me create the life that I want with my wife and three kids. It’s a lot of work but I hope that you continue to educate all of us; in a sea of negativity and complaining across the internet you are a joy to read with your optimism and logic. The best to your and your family in the holiday season.

    Best

  60. i really liked this post Sam! i’ve been sitting on and building cash all year. currently i have about 80k in checking. i recently put 130k in one year treasuries after reading this article when first posted, which are at 4.3%. i also have $360k in VMRXX. it advertises as a yield of 1.25% but over the past few months i have been getting a monthly dividend of over 1k, which is about 3.34% yield according to my math. and of course it is fully liquid.

    my fixed income/cash stands at 11% if net worth which is higher than i woukd like but in this uncertain environment i’m ok with it. i may use a portion to grab a property next year if real estate comes down like many predict.

    i am already 60% of net worth in stocks and 20% of net worth in business so don’t feel particularly like i need to do more than nibble on equities like you on selloffs. and i have no debt or mortgage on my home so good there. just sitting tight.

    my one regret is i sold my primary residence last year in a great area (northern VA inside beltway) and probably should have held onto it. could be getting 3-4k a month on rental income.

  61. Love these updates Sam! 9 months into this thing, would welcome another real estate market update as well, in terms of timing for a potential upgrade.

  62. Sam, just curious if you’re still holding the bag on BABA. I DCF’ed on the way down and learned a valuable lesson of trying to catch a falling knife. Curious on your thoughts of China at the moment.

    1. Manuel Campbell

      Personally, I’ve been buying Alibaba all year as much as I can between $70 and $90. I now have 110 shares at average cost of $150/share. This compare to my position of 50 shares @ $225/share at the end of last year.

      That’s the only purchase I’ve made this year. Waiting to see how the market settle next year with interest rates and inflation to start buying again in the US market.

      I think China fears are overblown. I’m sure things will sort out in a way or another. I just don’t know how. But when that happen, Alibaba will be a big benificiary. If things turn out badly, I can’t lose that much since Alibaba is now so low.

      And it’s not a big position anyway. So, I can’t lose that much. That’s the kind of investments I like to make.. Not a lot of downside risk. But a lot of upside potential if things go back to normal.

  63. CD rates for 1-3 years are really good right now and increasing. Likely FED will continue to avoid QE thru 2024, we could see high 4% 23 months CDs then.

    1. T-Bills right now are beating the hell out of most CDs. So are 2-year Notes. If you are interested in CDs, I’d buy direct from the Treasury instead.

      If you put your money in what is considered a high-rate CD today paying 3-3.5%, the bank will just take your money and buy Treasuries with it at 4.5% and rake 1-1.5% off the top. CDs are a total ripoff right now.

      I had my money in CDs for a long time. No more.

  64. Hi Sam –

    Im new to treasuries and trying to understand its interest rates. When buying bills less than 1 year maturity, are you actually getting the 3 to 4 % Interest rate for a 4 week or 8 week bill? Or does it equate to only 0.2%~ or so for that 4 week period of investment?

    Anthony

    1. You’re getting a 3-4% annualized rate, but you’re only getting the amount of interest for the 4 or 8-week term.

  65. “I enjoy being an author but it pays poorly.”

    Boy howdy. I do enjoy it, but with 600k to a million new books being published in the US each year, this makes it very hard to monetize. I’ve written several novels that were very well received, and even sold more than there are people in my hometown. But my wife and I each beat six figures and I knew it would never pay any bills of consequence unless I willing to work like a dog at writing things I didn’t especially enjoy.

    It’s enough for me that the few people who can still find them might still enjoy them a century after I am gone.

  66. Sam – I’m just writing to tell you to keep doing the podcast please!! It’s awesome, you are great at it, and it’s incredibly valuable. Thank you for all your hard work.

      1. They don’t allow/provide for reviews on the Google app, but I’ll quickly use Spotify or another platform so I can leave a review.

        I have allocated some funds to buy Treasury bills/bonds in the next few weeks but wondering now if waiting for the November Fed hike would be more advantageous? From what I read, it appears they will hike it at least 75-basis points again, which I assume leads to higher yield for short-term bills? I’m not looking into anything more than 2-3 years for treasuries.

        Your thoughts are appreciated!

  67. Just found your podcast and loving it. Thank you. A lot of my cash is tied up in my SEP401k. I actually moved a lot into bonds late last year as I thought markets were about to tank and got pounded by bonds. These bond funds don’t really have a maturity date in vanguard correct? So would you still invest heavily in bonds currently as I don’t have much in a brokerage account. Thanks!

  68. Great post Sam, I am intrigued by the Sunbelt Real estate Trust, I think that will be a great investment in 2023. I see the economic road getting even rockier after the November Elections, and that will just bring valuations of everything down. Not to mention the hurricane in Florida may hurt home values and people’s desire to want to move to Florida in the interim, but that will wane over time.

  69. With the dollar the strongest it’s been in 20+ years, would it make sense to hold some EUR, GBP, and JPY for the next year or so until the dollar drops back down? Could be a 15-20% gain, no?

    1. Yes, slowly going long into EUR and JPY. Confused by Sam advocating for the treasuries at 4.5% – as the fed hikes the bonds fall. Furthermore any international currency intervention will drop bonds. I don’t see bonds being a winner from here out. Proper hedging seems dipping into spy, I-bonds, and an international currency basket.

      1. If you buy actual bonds (not bond funds), you get your principal back at maturity. So 4.5% is a solid coupon and you don’t need to go far out to get that…

  70. I’m 58 and my wife is 51, combined income 400k-550k depending on how good my business is doing (i.e., distributions)

    No debt of any kind, including mortgage, kids just finished college (not gainfully employed….yet)

    Assets:
    1.4m – Company Stock (yields 30% yoy ave), restricted to sale till retirement
    3.0m – brokage accounts (80% stock, 10% bonds, 5% RE, 5% cash)
    0.8m – home

    We spend about $150k a year living comfortably but not lavishly in northern VA, save about 200k a year overall.

    I would like to retire in 2 years so continuing to save aggressively and would like to wait out the bear market.

    So we have about 20k a month in positive cash flow that I am very happy to put into the market sub 3900, still having a 250k (1-2 year) cash buffer.

    Biggest thing is I have no passive income streams, rentals, side hustles, except stock/bond dividends. I guess when I retire if 4.4 mill in brokerage and rates 4.0% I could put it all in treasuries and yields $176,000, which is more than our yearly expenses. Interesting….

      1. well said
        These yield are a dream, especially if we do believe inflation will not compound any longer (and because of demographics, it will not)
        This is a dream for the rentier, 1m can give you 50k risk free, 2m is 100k, guaranteed for 10Y. Not a bad deal IMHO

  71. Sam, thanks for sharing. I would have one caveat based on a certain scenario. If in your household you are cash flow positive through employment or passive income, and don’t think you need this money for 2+ years, then it is time to DCA into this market. Just go with an index fund like VTI. I would recommend 50k on the first of the month trading day over the next 5 months. I think the odds are well greater than 50% we are higher than 3750 on the SPY 10/23. Just step back and think about that. Buying now, that is all you need to outperform the 1 year return on the T-bills (4%), and taxes unless you sell. Sure we maybe lower over the next few months (hence DCA) but even so still believe we are higher than 3750 this time next year.

    Think about it – we are back over 4200 almost overnight if anyone of these happens in the next 12 months:

    1. Powell just hints that tightening soon ending.
    2. Russia declares “victory” and begins withdrawal.
    3. China opens up from lock-down.

    My guess we have a 90% chance of at least one of those occurring in the next year. greater than 50% chance of all 3 occurring in next year. If all three occur we will test new market highs by end of 2023/early 2024. Think of the potential gains you are missing out on (15-25% versus 4%). We are down from 4800 to 3600 – now is not the time to go into treasuries.

    1. Yes, there’s a good chance we will get out of this bear market within the next 12 months and stocks will be higher.

      The way you invest depends on your existing asset allocation and your objectives. This is why I wrote that I am sharing how I am investing my money. This is also the reason why I shared my background in this post.

      Everybody’s situation is different. Which is why this post is not relevant to everyone.

      Remind me again where are you on your financial journey? Sharing background helps understand your perspective better. Thanks

      1. I’m 58 and my wife is 51, combined income 400k-550k depending on how good my business is doing (i.e., distributions)

        No debt of any kind, including mortgage, kids just finished college (not gainfully employed….yet)

        Assets:
        1.4m – Company Stock (yields 30% yoy ave), restricted to sale till retirement
        3.0m – brokage accounts (80% stock, 10% bonds, 5% RE, 5% cash)
        0.8m – home

        We spend about $150k a year living comfortably but not lavishly in northern VA, save about 200k a year overall.

        I would like to retire in 2 years so continuing to save aggressively and would like to wait out the bear market.

        So we have about 20k a month in positive cash flow that I am very happy to put into the market sub 3900, still having a 250k (1-2 year) cash buffer.

        Biggest thing is I have no passive income streams, rentals, side hustles, except stock/bond dividends. I guess when I retire if 4.4 mill in brokerage and rates 4.0% I could put it all in treasuries and yields $176,000, which is more than our yearly expenses. Interesting….

        1. Paper Tiger

          I think you can get the best of both worlds by using 3 and 6-month Treasury Bonds. I am splitting an investment between the two so that every 3 months I can evaluate the market and decide if it is time to move back to equities based on the 3 variables you outline: Fed, Russia, and China.

          Maybe I miss a little upside by not going all in right away, but I like the option of having a little more information before I move.

    2. Those can be offset by recessions though and I’m not sure #2 will send US stocks that much higher (might european stocks) and I don’t think #3 will matter that much. China’s shut downs is only a small part of inflation at this point and its only about 6% of our GDP even with 100% disruption vs 5-10% today. #1 is the one thing that could send the markets soaring but again that could be offset by rapidly declining economic backdrop (which is likely to occur with #1)

  72. Thanks, good read. My allocations are very close to yours. My wife and I have two years of max ibonds and I recently bought 150k of laddered treasuries averaging 3.85% and another 150k in MM. I do have over 400k in mostly large cap dividend paying stocks which had been painful, but I figure it’s too late to sell now. The good news for me is I don’t need any of it now as my wife and I are both retired, all 4 kids educated and launched, and we earn around 130k in pension and SS. We have zero debt. In addition we get around 24k in dividend income which is all reinvested. The hidden benefit of a bear market is your dividends buy more stock. The other good news is it’s a great time to move depressed stock from a regular IRA to our Roth accounts. I have not started deploying cash back into the market yet, but likely will start slowly in November. Nobody know exactly when the market turn up again, but I’m quite sure it will be considerably higher in 3-5 years

    1. I’m confident the stock market will be higher within a couple years. But nobody knows, which is why I’ve been dollar cost averaging the entire year.

      If you’ve already won the game, as you already have, there’s really no need to take excess risk. And your equity exposure compared to your passive income is not large, unless you have a ton more equity exposure in non-dividend paying stocks.

      Either way, it’s nice you have a lot of cash on hand to deploy!

  73. Sam, really enjoy these types of posts about thought process in current market conditions! The upgrading real estate window of opportunity and how to deploy a large cash hoard in the current environment is content I can’t get enough of! Also, enjoy the posts about how to invest down payment money in current market conditions. Personally, evaluating and planning for a potential home upgrade, so sitting on about 120K with the idea that earning a few percent doesn’t really move the needle in my situation. That said, if sitting on 250K, I like the idea of maximizing I Bonds; however, 9.62% of 10K isn’t overly impactful. Could probably turn it into 9.62% of 40K with spouse and side businesses. Then, another 40K come January. That leaves 170K with S&P looking pretty appetizing at <3,600. However, in saving for a potential home upgrade, would probably be content just sitting on the 170K or entire 250K at the moment.

  74. I’ve been investing 10% of my cash in Mineral Rights (oil and gas wells) and they have done really well this year (annualized over 17% return so far after all fees.) I enjoy investing in alternate asset classes because it makes me pay more attention to the monetary policies, geopolitics, energy policies, etc. so I end up learning a lot too!

    As a small business owner, I also invest extra cash into my business via more advertising and improved branding.

    And, for my actively owned real estate, I’ve invested in separating out the utilities (no more master meter!) so I don’t have to pay the ridiculous utility bills anymore.

    1. How are you investing in mineral rights? When I look on mineral exchange it’s like owners are wanting > 6 figures for rights currently paying $100 a month. That seems highly speculative.

  75. Thanks for sharing and being so transparent! This is my first recession where I am solely an investor. I am 34 years young and phew what a ride (mentally more than anything). I’ve been fortunate to have accrue a 10m net worth thus far through mostly real estate investing. Even with all the passive income (no job here), I find myself unfulfilled at times. Watching the stock markets and crypto markets go down during this bear market gets real old as well. Looking to strengthen my spiritual soul while at the same time continuing to invest and grow my empire. Thanks for sharing your journey as you go!

    1. Enjoy the journey and hold onto the $10 million! Once you’ve reached about $10 million, you really have maximum freedom if you want. Especially if you are single with $10 million.

      Just think, if you decided to invest the entire $10 million into treasury bonds, you could earn up to $440,000 a year risk free. I’m not saying you should, but that’s the exercise you should take because opportunity cost is higher now.

      See: https://www.financialsamurai.com/10-million-dollars-the-ideal-net-worth-amount-for-retirement/

  76. I just sent my $200K to real estate syndication in Phoeniz, Arizona, where they locked in the cap rate of the interest rate to 5.10% on 124 units apartment complex. The apartment is only within a mile or a few miles from the university and the hospital that has more than 3000 employees. The loan to value on this deal is also low where investors put in a higher percentage on the down payment, they also have $1.5 M cash reserve to cover the vacancy up to 50% if bad scenario happens. I thought it is still safe to get in on this one. I have been investing in sunbelt real estate fund as you have been suggested all this time. Your thought please?

  77. As far as treasury investing goes, if rates continue to go up this sort of approach does not allow you to capture upside right? Effectively would the trading price of the treasurys you purchased go down?

    I take it the strategy is to hold to maturation and avoid the realm of bond trading. Is the approach you are taking, and most of your readers, is that this is like a CD where you are ‘locking in’ the rate? That said, I guess there is always the option to sell before maturation if you need the cash sooner.

    Thanks for the post! This is all new to me, as I imagine most of your readers. May also check out the podcast – you may get into these question there.

  78. I’ve been shifting 100% of my retired parents cash flow to 6-36 month bonds (after maxing I-bonds) – at 4%+, not going to get rich, but a decent risk adjusted return, especially int he current market and uncertainty. I have an investment from last year that will bring me in an extra $40k this week and I plan on sticking nearly all of it in short term treasuries. I think testing 3200 is highly likely, but I continue to invest around $800/wk in my 401k (counting match) which is 80% into equities so probably will not look at add extra to equities at the moment. If we breach 3200 downward, I’ll start re-allocating into equities a lot more aggressively.

    I did notice Fundrise had its first negative return quarter for me in 3Q, although still outperformed equities and bonds. My rentals I bought myself in the last 3 years are still my best performers with double digit cash flow annually + ~10% principal paydown on original investment even with flattening to slightly lower sale price now (I’m long term investor anyway)

  79. I’m focusing on reducing debt now interest rates are higher and meeting the capital calls from venture funds…

  80. Manuel Campbell

    $250K in cash is not that much when you have $5M or more in total assets. In percentage term, it’s only 5% of total assets. So, I would keep 100% in treasuries in this case.

    I rencently built a small cash position (around 5% of my total assets). Never had any in 25 years of investing. I always thought I would lose this money to inflation. But I realize today, having cash is more of a necessity than an luxury. When times like this happens it’s much more conforting to know you will be ok no matter what happens. And the cash gives you the optionality to take advantage of bad market conditions.

    The reason I would still wait right now is I would like to assess how companies are impacted by the recession with the coming quarterly reports in Oct/Nov. The other reason is I would like to know when the Fed will stop rising interest rates. As long as they are rising rates, there is no rush to buy other investments.

    I expect we may still get bad news in the coming months. But the recession may not be as bad as investors think. So, we may have a “green light” from companies and the Fed sooner rather than later.

    Time to get ready !

    1. Where did you get $5M or more in assets? That’s so arbitrary.

      What is your asset count?

      I agree about waiting to see earnings before buying stocks. Can’t be very good.

      1. Manuel Campbell

        Yes, that was an arbitrary number, for the example. My assets are much lower, so $250K would be too large as a cash position. For Warren Buffett, $250K cash would be too low – he would not be able to operate his businesses day to day.

        Everything is relative in finance. That’s why I prefer to think everything in term of percentage.

  81. I still can’t get over the cash flow aspect
    My mortgage rate is 3% but my principal pay down is 3% as well
    So total 6% cash drain per month
    This is after tax so I would have to earn 8%
    Cover this
    What am I missing?
    Fyi love you writing

  82. Great article. I’ve deployed some $$ into USOI. It’s current dividend yield is just over 40%. Pays out monthly and some months the dividend is enough to cover our mortgage. Thoughts on these types of investments?

  83. How many times can you say ‘therefore’ in one article?

    This article: “Hold my beer.”

    You wrote ‘therefore’ four times in a 2,200 word article. That’s at least one too many.

    I’m not able to contribute to the topic of this post, so I need to criticize your usage of the word. At the same time, I haven’t published anything online because it takes work.

    I have more fun being part of the Internet Grammar Police.

    1. Read Sam’s book and you will see what a fantastic author he truly is, so give him a break and get a hobby or something.

  84. Staying in the market. Weekly cash secure puts and covered calls 0.1-0.3 Delta at 0.3-0.5% portfolio value while nibbling away at my favorite stocks. Maxed out I bonds at the 9.62% rate and will do so for my wife and son as well. They reset every year so can buy more in January. Made modest much needed home improvements that generally add value i.e. new irrigation system. Before end of year will max HSA contribution.

    1. Sounds like a good play. Gotta love them I bonds. Too bad there’s the $10,000 limit per person per year. But we buy another $10,000 worth of I bonds if we open up an account for each child.

      I’m just happy we can now get up to 4.4% risk free on an unlimited purchase amount in Treasuries. Which probably also means stocks are getting more enticing. This happened in 2008-2010 when 5-year CD rates were at 4% as well.

      1. I’d be careful of getting the ibonds for your child, unless you’re gifting that money. You can’t just put in 10k and then take it out and use it for yourself. It belongs to the child at that point. I was going to do this as well but after reading up on it, it wasn’t worth the hassle and potential tax complications if I withdraw the money.

        1. That would be good – although with bonds in the low 4s and inflation probably heading that way within 12 months, their value is less so than 8 months ago when treasuries were sub 1% and Ibonds were at 8.12% and about to reset over 9%

          1. if inflation reset (and it will) long term treasury may rise even more than stock in the short term

  85. Mortgage rates have crossed 7% let alone 6% and confirming if Sam has honored his bet?

    Avid reader and very surprised myself mortgage rates have gone up this high. Feel it will quickly go down once this Russian war ends/the big supply chain hold up there and more sensitively unnecessary loss of human life that has exceeded even covid now.

    1. I have! Donated $5000 to the United Way Foundation and $2,500 to the Pomeroy Rec and Rehab center.

      I, too, am surprised by how high rates have gotten. But that’s the way things go as an investor. Always an exciting thing going on.

      1. Awesome, Sam always advocating for the most important quality in an investor: honor/integrity.

        You ever meet up with investors in Presidio/SF or San Diego/La Jolla readers?

        I have 10 million+ unique page views via Seeking Alpha and Motley Fool to share more outreach ideas?

      2. Wonderful, Sam always practicing in my opinion the most important quality regarding investing and life: honor/integrity.

        How best Sam can a reader/myself propose a collaboration? Have 11 million+ unique PV’s via Seeking Alpha and Motley Fool.

  86. Jim Johnson

    I am looking to take advantage of the strong dollar
    and current recession in Europe. I am going to invest 500k -1.5 mil in Portuguese real estate. If you Google golden visa, investors from the United States get citizenship with a 500 K investment. And access to all the EU countries. My investment is assuming the dollar continues to get stronger, I think in the spring could be a possible time with a strong dollar and very weak economy that will open up steep discounts. I have interest in getting money outside the United States so that’s part of it. Secondly I think this is a once in a lifetime opportunity to invest in a strong dollar overseas in conjunction with a weak real estate and complete instability in Europe.

    1. Where in Portugal are you looking to invest? I’m of Portuguese decent and already have dual citizenship and an EU passport. My parents had a home there in the North East but sold it a couple of years back.

      1. Currently investigating all over. Kids are home schooled so we are including this as a school project. Looking for cash flow warehouse ideally but could also buy a home that has VYBO access and built in management. Please recommend your favorite spots, and were you would not advise investing.
        Thanks
        Jim

        1. The real deal in getting any EU citizenship is the universal healthcare everywhere in Europe.

    2. Hi! I always wanted to invest money buying properties in South America: Chile, Argentina, Uruguay (I am a dual citizen) but when I start thinking about how to move the money from the US to a local bank, plus dealing with local taxes, I just forget about it. Any advice in how to move the money overseas that doesn’t cost me a huge fee? Thank you!

      1. Just be careful with buying anything overseas or in south America. Most people forget they have different systems and laws. Your investment could be gone in a second. Don’t get greedy.

  87. I love these financial thought experiments. I have a preference for dividend stocks (I love 100% passive income). With the market down, there are opportunities to buy great companies at a discounted price.

    If I had the $250K to invest right now at this moment in my life, the majority would go into the market to build up my dividend cashflow. But that is just me. :)

    Thanks for the awesome post!

  88. Living off of passive and online income, I’d probably do something similar to you. However, if I were still employed and this $$ came in as a windfall, here’s what I would do by priority:

    – Pay off all consumer debt immediately
    – Top off the emergency fund to 6 months’ expenses, maybe more depending on your confidence of future employment
    – Boost tax-advantaged investment vehicles and 529 plans only if they are not on track to max by EOY
    – Keep enough to offset maxing out your HSA (if your plan has one) if not on track to max by EOY
    – If the rest of the cash can pay off your mortgage, do it. If not, DCA into your aftertax portfolio according to your current allocation over the next 6-18 months.

    1. Thanks for sharing. Getting a $250K windfall is probably a little different than saving one’s cash flow each month to get to $250K. I do wonder how that would change how one invests the cash.

      I would certainly max out all tax-advantaged accounts. But as a windfall, where I didn’t earn it, I would probably take more risks and invest 40% in stocks, 30% in real estate, and 30% in bonds instead.

  89. Just wondering if you buy US treasures through their website or via your brokerage account?
    I couldn’t do it myself for whatever reason

  90. Emanuel Levy

    Great article but what about those of us who have only 3 or 4 thousand to invest on top of our emergency fund. How about an article for people like me?

    1. This article is not investment advice for you as we have different financial situations.

      But I do highlight my percentage allocation to each type of investment.

      I would talk to a financial advisor or trusted friend who is well-versed in finance and knows your situation if this article does not help you think about where to invest today.

  91. Sam, this article in addition to the tutorial on buying Treasury Bonds was both awesome and timely for me. Back in January, I moved all of my wife’s combined 401Ks into Stable Value funds thinking I would eventually put that money back to work in equities. Since these company plans do not have good fixed income options, and I now do not plan to jump right back into the equity market anytime soon, I intend to move these 401Ks to her Fidelity self-directed IRA account. Originally, I had planned to ladder up using brokered CDs but you have convinced me Treasury Bonds with slightly higher returns and the advantage of being tax-free at the State level are a better option.

    Thank you for all of the great advice. You certainly have paid me back in spades for the investment I made in your book ;)

  92. Canadian Reader

    I thought about locking in at 4.4% for one year, but the banks have been giving me 3.5-4.25% for 120 day periods in regular savings accounts without having to lock in. My current offer expires at the end of January.
    I’m working a part time job now which is adding more all the time. I will be taking 4-5 months off though for an unpaid maternity leave starting in November.
    So that is why I’m leaning toward staying liquid at this time.

  93. I’m in a similar situation with a different dollar amount then you. I’ve put 70 percent into treasuries, CD’S, and muni bonds ranging from 3 months to 4.5 years. I’m putting 25 percent into equities. I’ve bought some so far but the remaining is on autopilot. I Have buy orders in when or if the S&P hits 3600, 3400, 3200 and 3000. The remaining 5 percent I’m buying whiskey as a investment. Doing my diligence there are very wide price ranges for certain limited edition whiskeys and when I feel like I’m getting a good price I’ve been buying a few bottles. I got my very first Pappy Van Winkle 13 year old a couple days ago!

    Thanks, Bill

  94. Thank you for the post.

    One question – Venture Debt as an asset class is not easily available to most investors. Any alternatives in your mind (for a similar risk/return profile)?

  95. Stock market is down >20%…every penny invested goes straight into VTI. Don’t see the sense of not investing in this bear market aggressively if you are under the age of 50.

  96. Hi Sam, Avid reader of your blog since many years. you put things into succinct learning bytes for readers to absorb!

    How do you get in touch with the VC firms like Kleiner perkins? We as a group are planning to deploy $1M-$2M during this downturn into VC. best companies are funded during the downturn since all hype and easy money is not there to fund garbage.

    Appreciate if I can get an intro to these VC firms.

    1. No problem! You just have to build relationships and be a good LP. If you do and are, then you usually get to continue investing. Kleiner is doing well with Figma exit recently and now holding Rippling, which is worth $12 billion.

      If you have $1 – $2 million to invest, you should be able to gain access to top tier VCs, even though they are focused on institutional investors. Have you tried reaching out yet?

      Just curious, but have you read my book yet? thanks

    2. It is easy to join syndicates on AngelList. I am doing that and also invest with a local relatively small firm here in Australia with so far a good track record.

  97. I paid down mortgage debt earlier in the year, which felt great. I’ve been sitting on cash for a while since but am slowly deploying it. It’s very insightful and helpful to read your thought exercises on how you are investing your cash. You’re very thorough and methodical! thanks

  98. I’m continuing to DCA mainly in Vanguard’s Growth ETF and a little bit in Fundrise’s Growth REIT. Each time I log on though, it’s painful seeing my account balance!

    As someone heading into 40 and planning to continue working until traditional retirement age, I’d still consider myself in the growth stage a few years away from the balanced stage. So even though stocks are more volatile, I fee like they have more upside, at least at the moment.

    1. I feel your pain. It’s good to just keep on DCAing if you can.

      What’s more impressive is your positive outlook on being willing to work a day job into your 60s. You’re blessed to have found something you enjoy doing. And that’s great!

  99. Ross Elliot

    Sam, I enjoy your material. Are your kids going to have any “skin” in their education, etc costs? We have 15 grandchildren. The 4 oldest are working in addition to involvement in school activities. The 3 seniors are trying to attain scholarships and are at jobs in addition to school activities. Sports involvement is a very big deal in our family as it should be. Late practices, getting on a bus at 5:00 AM and being a teammate build a work and toughness attitude. 14 of 15 are in sports. One is 15 months. As for my college education I got $50 from my Dad, once, and repaid him 2 weeks later. I worked during breaks, school year and in summers along with some borrowed money. Sam, raise kids that are real kids! For you and your spouse that will be a mighty goal-maybe not possible? My $0.02 cents worth. Best to you. Ross

    1. Very cool. What do you and your children do now?

      They will get $0, not the $50 you got your dad, which sounds like a lot more in today’s dollars.

      Instead, they will work since a very young age to appreciate hard work and the value of money. That’s the great thing about opening up Roth IRAs for them and having a business they can work at.

      There is no better education than actual work experience while growing up. Utilizing what is learned in the classroom in real life is priceless. They will learn about marketing, communications, public relations, finance, business development, and branding.

      Might have to make them walk 5 miles in the rain as well. Builds character!

      Related: The Importance Of Being Uncomfortable For Personal Growth

  100. Thanks for sharing. This strategy mirrors a lot like mine…have you looked at SDIRA to invest in alternative investments with AltoIRA? I’m thinking of getting into art, farm and RE etc in this way.

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