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 due to still-high interest rates and now trade wars, investing is now getting trickier. At the same time, inflation has peaked and now the Fed is embarking on its multi-year rate cut cycle. Stocks are also finally correcting. How should one invest?
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%. After a 23% increase in the S&P 500 in 2024, the stock market is expensive at roughly 21X forward earnings vs 18X the historical average. You don't want to give up all your gains in 2025!
On the other hand, mortgage rates are trending lower with some hiccups due to uncertainty and chaos regarding inflationary policies of the Trump administration. But overall, real estate demand should strengthen, potentially boosting prices up, especially as builders stopped building for the past three years. The more chaos, the more money finds its way to hard, tangible assets like gold and real estate.
In my opinion, the most attractive opportunity over the next 12 months lies in commercial real estate. Valuations are extremely attractive, almost declining by as much as they did during the 2008 global financial crisis. Yet, the economy and corporate and household balance sheets are much stronger today. If rates continue to fall, residential commercial real estate and office will benefit tremendously.
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 given inflation hurts your purchasing power.
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 and 2024. I also dollar-cost averaged in Sunbelt real estate, which struggled from 2022-2024 due to high mortgage rates. These purchases were usually in $1,000 – $5,000 increments.
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 47 and my wife is 42. Our kids are 8 and 5. We consider ourselves moderate-risk 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 at this stage.
Although we don't have day jobs, we do generate passive investment income to cover most of our living expenses. Our passive income used to cover about 120% of our living expenses until we bought a forever home and the second half of 2023.
We also generate online income, which we reinvest 80%+ of it to help 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.
If you have children and debt, get a term life insurance policy to protect your little ones. Both my wife and I got matching 20-year term policies during the pandemic through Policygenius. After we did, we felt a huge sense of relief.
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. Here’s how I’d invest $250,000 of cash today.
1) Treasury Bonds (30% Of Cash Holding)
Only about 2% of our net worth is in bonds, mostly individual muni bonds and Treasury bonds we plan to hold until maturity. Our target annual net worth growth rate is 3X the 10-year bond yield. We use the 10-year bond yield as the risk-free rate of return to help decide where else to invest.
The 10-year yield is currently at ~4.2%, UP about 0.9% AFTER the Fed Chair Jerome Powell CUT by 50 basis points on September 18, 2024 and another 25 basis points in November and December. The 10-year was as high as 4.4% again, but heightened fears of a recession have taken hold due to reciprocal tariffs.
Trump’s victory has caused concern for policies that may reignite inflation. With new tariffs for Chinese, Canadian, and Mexican goods, the trade wars for 2025 are now here. But I suspect there to be a compromise by summer given nobody benefits from higher prices and recessions.
After a huge gains in 2023 on 2024, I think there’s a 75% chance the 10-year Treasury bond and real estate outperforms the S&P 500 in 2025. The stock market is vulnerable given its valuations. It sells off with any type of uncertain news or tweet.
Although locking in a 4.2% Treasury bond return won't make us rich, it may provide you peace of mind in an upcoming recession. Bonds should do well due to so much uncertainty.
Below is a recent bond yield table for all the various types of bonds you can buy, by duration. The Treasury bond yield curve was inverted (short end 3-month rate is higher than the 10-year rate) for many months, but now it's back to normal. The Fed is likely to cut rates two-to-three more times for the rest of 2025.
Now that we've deployed 30% of our cash in Treasury bonds, the remaining 69.9% of our cash will be invested in risk assets.
2) Stocks (25% Of Cash Holdings)
Roughly 28% of our net worth is in stocks after paying cash for a new house in 4Q2023. The range has fluctuated between 25% – 35% since I left work in 2012. Hence, I'm slowly building back my public equity exposure to around 30% of net worth.
Since I started working in equities in 1999, I've actually tried to regularly 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.
If you invest in growth stocks in particular, you must take some profits from time to time given they generate no income. Selling is the only way to capitalize on your gains, especially if you have excess investment gains. Otherwise, there’s no point as their value could easily correct.
We almost always front-loaded our stock purchases for the year through our kids' Roth IRAs, custodial accounts, SEP IRAs, and 529 plans. This year is no different. So a correction in the stock market would be beneficial for our new cash flow.
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 and 2024, which has worked out well. Keep on investing consistently! The amounts add up over time.
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 before age 59.5. One of the biggest mistakes I’ve seen retirement planners commit is only focusing on building their tax-advantaged accounts.
Stocks Are Expensive And Vulnerable To A Correction
The median 2025 S&P 500 forecast is about 6,500. However, stocks are trading at 20X forward earnings (was up to 22X) versus 18X its historical average. If the S&P 500 reverts to its historical average valuation, it could drop to ~5,000, and keep going down to 4,500 as we trade at a discount to historical valuations due to the trade wars. At the same time, 2025 S&P 500 earnings are expected to increase by ~12%.
Given expensive valuations, I'm just buying in $1,000 – $5,000 tranches of S&P 500 only after every 0.5% – 1% decline. With another 20% correction that started at the end of February 2025, I've been buying the dip more aggressively.
We briefly entered a bear market in April and I'm aggressively dollar-cost averaging. The key is to always have some cash to be able to buy the dip. No cash, no benefit.
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. With Treasury bond yields declining, the opportunity cost of not holding them also goes down.
If I was in my 20s and 30s, I would allocate 50% of my cash to buying stocks instead of just 25%. The remaining 25% would go to online real estate as the sector rebounds, 15% to venture capital funds, and only 10% would go to Treasuries and education. Remember, every investment is based off an individual's personal financial situation and goals.
3) Venture Capital (20% Of Cash Holding)
As a hedge against not investing aggressively in public stocks, I am investing more in private growth companies. 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 as you meet capital calls over the years of deployment.
I've already made capital commitments to a couple closed-end venture capital funds and a venture debt fund. As a result, I will just keep contributing to these funds whenever there are capital calls.
Venture capital started making a comeback in 2024 given private company valuations took a hit since 2022. Capital often rotates toward the biggest underperforming asset classes.
Since November 2023, I’ve witnessed a significant uptick in capital calls as private funds start putting their committed cash to work. Venture capital could really see a huge boost in 2025 as more companies go public and get acquired. Releasing this new liquidity gets reinvested in new venture funds.
Investing In Artificial Intelligence
I'm excited about investing in artificial intelligence, one of the biggest investment opportunities over the next decade. My closed-end VC funds are actively making AI investments. But these funds are invite only with $100,000+ minimums.
Thankfully, Fundrise introduced their venture capital product at the end of 2022, which was at the bottom of the private market downturn. Fundrise was able to invest in private growth companies at more reasonable valuations, many of which have not re-rated higher yet on the books. Once these companies do raise a new round of funding or go IPO, given their continued growth, there could be upside potential in valuation.
I ended up investing $152,000 in Fundrise Venture in 1H 2024 and will continue to dollar-cost-average by $5,000 in 2025. My main goal is to build a $250,000 position. The investment minimum is only $10 and the product is open to all. Private companies are staying private for longer, which is why I'm logically allocating more to private companies to participate in their potential upside.
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. The successful IPO of ServiceTitan, a Fundrise Venture holding is great evidence the demand for private growth companies should continue to grow.
Here's a discussion I had with Ben Miller, CEO of Fundrise, about artificial intelligence and investing in growth companies. Roughly 75% of the venture capital product is invested in AI companies.
4) Real Estate (24.9% Of Cash Holding)
I’m bullish on real estate in 2025 as the sector plays catch-up to stocks. With mortgage rates slowly coming down and pent-up demand building, prices should move higher. In addition, stock investors are much wealthier, leading to more stock rotating into real estate. As a result, I’m actively investing in real estate funds today, where I expect the median home price to rise by another 4 to 5%.
Real estate is my favorite asset class to build wealth for the average person. 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.
In areas like San Francisco, where big tech and AI is booming, home prices could rise much greater than the national average. In 2024, there was a double digit percentage rebound in home prices due to intense bidding wars in the spring. .
I firmly believe there will be even stronger bidding wars in the Spring of 2025 given the economy strengthened further. The vast majority of investors are wealthier one year later with the S&P 500 up 23% in 2024. A lot of those gains will go into buying residential real estate and residential commercial real estate.
Strategically Investing In Private Real Estate
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. Valuations tend to be lower and yields tend to be higher in non-coastal states. The invest minimum is only $10 so contributing is easy. I've currently invested $300,000 with Fundrise so far.
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.
With the stock market up so much, investors are going to logically convert some of their funny money gains into real assets. In a stagflation environment, real estate will likely significantly outperform stocks. For commercial real estate, we are past the bottom with attractive prices currently. Big firms such as Blackstone are actively investing in commercial real estate today.
In my opinion, residential commercial real estate is the most attractive real estate to own. Apartment values are down almost as much as they were during the 2008 Global Financial Crisis, yet the economy is much stronger and corporate and household balances are much healthier. Hence, I see great opportunity to buy the commercial real estate dip at the current time.
5) Debt Pay Down (0% Of Cash Holding)
With the Treasury bond yields still higher than the average 30-year fixed mortgage rate, paying down mortgage debt is a suboptimal move.
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) Financial Education (0.1% of Cash Holding)
Education is one of the best long-term investments. The paradox of education is it is extremely important to help you build wealth, yet it is also inexpensive or free today. Rich people are reading all the time. Poor people are watching TV all the time!
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You could also join 60,000+ others and subscribe to my free weekly newsletter and my free blog posts to stay on top of timely financial topics. I've been publishing three posts a week since July 2009.
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Finally, can also go to YouTube, Khan Academy, or MOOC and watch hundreds of hours of free educational videos. Or you can pay for online courses to get even deeper into a subject.
Ignorance is no longer an excuse given how accessible education is today. 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 will encounter corrections and bear markets along the way, over the long term, risk assets such as stocks and real estate have historically yielded positive real 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:
- Give my family the best life possible
- Pay for expensive college tuition starting in 2035 and 2038
- Maintain the freedom I've had from full-time work since 2012
- Take care of my parents if needed
- Have a comfortable retirement lifestyle
- Travel internationally now that my youngest is almost 5 and can form strong memories
- Give back to my favorite non-profit organizations such as the Pomeroy Center for those with special needs
- Funding my children's retirement accounts so they have more financial security as adults
- Continue writing and recording on Financial Samurai freely
Diversify Into Real Estate And Venture Capital
To invest in real estate more strategically, check out Fundrise. Fundrise manages almost $3 billion across multiple funds for over 380,000 investors 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 venture capital at Fundrise. The product 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.
Fundrise is a long-time sponsor of Financial Samurai and Financial Samurai has invested over $300,000 in Fundrise products. Join 60,000+ others and subscribe to my free weekly newsletter.
What is the rationale for why real estate is performing or will perform so well in this economy? I am in a hot spot – NVA – and haven’t noticed prices rising or falling much. IT seems counter intuitive to me that if we have stagflation (interest rates won’t fall and may rise) or recession (interest rates may fall), that either scenario will enable people to rush out to buy high priced items like houses? Do you really buy a house when you are unemployed or future employment uncertain, or when your net worth has taken a major hit in the market?
Northern Virginia? If not, what is NVA? In Northern Virginia, it may be Duff for the next couple of years due to the mass firings in the federal government.
The rationale for real estate is lower interest rates, pent up demand, much lower evaluations, lag, and performance to the stock market, and the desire to own tangible and less volatile assets.
I encourage you to listen to the podcast episode. I had with Ben Miller about residential commercial real estate.
Yes, Northern Virginia. Yes, it is likely impacted by federal workforce layoffs.
I did listen to the podcast, but that is a world we no longer live in. There was no thought of a recession or stagflation back on January 16. I don’t think that historically real estate is a hot commodity during recessions. Historically recessions have led to decreased demand in the housing market. so I would say we are looking at possible opportunities to buy real estate at a discount, for later appreciation, as you would an oversold stock. If we go into a recession I wouldn’t real estate assets to gain value. IT will be interesting to see how it plays out.
Sadly, things have gotten worse since the conversation, but that is the direction Ben expected with stocks. And I do believe we discussed real estate outperforming during a recession.
However, the intense bearishness of the stock market should definitely be causing homebuyers to take pause at the moment since bonuses will be slashed and jobs will be lost.
It all depends on how much longer the bear market goes on. But if there is a compromise with the tariffs, then there should be some stability. But there will be immense distrust for the stock market for at least a year, which would benefit real estate tremendously.
Hey Sam, do you receive any commission from Fundrise? Honest question, I still trust your recommendation is genuine.
Yes, Fundrise is a long-time sponsor as our investment philosophy is aligned. Have a listen to some of our conversations on the FS podcast.
http://financialsamurai.com/itunes
http://financialsamurai.com/spotify
I plan to invest another $110,000 – $140,000 this July in commercial real estate and venture capital through them. I’ve got about $310,000 invested with Fundrise so far. My goal is to get to $500,000.
ok so I’m already pretty heavily invested in the S&P 500 for the long haul until retirement – several decades away. with a smaller chunk in bonds. I’ve got some real estate in San Fran and I’m already pretty heavy in tech/AI because of my employer.
I’ve got a small percentage in crypto (BTC) and a little in commodities (Gold).
Now… since LIBERATION DAY… I’m gonna be dollar cost averaging into the S&P 500 every week for awhile. Then maybe monthly after that.
I’ve got about $100k sitting in a high-yield savings account earning 3.9%. I guess that rate might drop…
With everything going on, do you think it’s worth looking into T-bills or T-bonds, or should I just stick with what I’m doing?
Now is NOT the time to be investing in tech stocks (well not US ones anyway, if anything invest in China ones).
Feel feel to elaborate why. Thx!
This was such an interesting (and timely!) read, thank you! When you look at real estate as a percentage of your net worth and as a percentage of future investment decisions, are you including your primary home as part of that math? I think you should and I have a unique situation where i’m mortgage free, BUT my home value is also ~50% of my net worth.
If i’m already 50% invested in real estate, it would seem foolish in my case to invest in real estate any more, whether through something like Fundrise or another means. I should be investing instead in the lower risk bonds and other “safer” places. Is that how I should be thinking about it?
Yes, I include the primary home as a part of one’s net worth
I encourage people to get their primary down to about 30% or less of their net worth, and limit total exposure of one asset class to 50% max.
With the stock market in full meltdown mode, real estate is finally outperforming like a champ. Mortgage rates are coming down and money is flowing to tangible assets that actually provide value and generate income.
Unlike stocks, real estate values just don’t go poof overnight. I see real estate as a bonds plus type of investment.
Thank you, couldn’t agree more on limiting exposure across assets, the 50% in real estate is not something that happened by choice! Working on it…
“Bonds-plus” is a new term for me. And now I’m wondering what other assets i may have labeled incorrectly or should be thinking about differently as i look at my net worth and investment allocations. Do you have an article how you categorize assets?
Yes, type on the search box in the homepage for anything you’re looking for. Thx!
Hi Xing , I use Morning star X ray provides a detailed analysis of portfolio with drop down lists and check in evening for 5 minutes. Now at 71 portfolio is Stocks 16%, Bonds 55%, Cash 25%, Gold 4%. I do not include paid off house 8% of wealth. In first 4 years retired the portfolio grew 50% with 50% stocks. We enjoy renting a condo in Waikoloa Beach Hawaii for 4 to 7 months to scuba dive and relax. All the best in reaching your life goals. Hint in retirement you just can not spend all the money.
If you were a young investor in your twenties with a few hundred thousand in capital that you do not need, would you go all in right now?
I’d probably invest 60% tech stocks that have corrected by 20%+ and the S&P 500, and 40% and residential commercial real estate, which is providing exceptional value relative to stocks. I might want to allocate 5 to 10% in Bitcoin as well.
I want to take a lot more risk in my 20s and 30s.
Thanks, Sam! I have picked up a lot of QQQ, AMZN, VOO, and GOOGL. Any other specific tech companies that you like? I got into NVDA back in 2020.
In terms of the residential commercial real estate, I just did a deal where I purchased a house on a promissory note for 12 percent interest over the next 90 days. I felt pretty good locking up that return. You recommend Fundrise a lot. Is there anything that I can be doing through Vanguard to incorporate the real estate? Or do I need to get out of my comfort zone and add a Fundrise, etc. to the mix?
I have invested about $300,000 in Fundrise to gain access to residential commercial real estate and private artificial intelligence companies. I would invest more, but am limited by my cash flow after buying a new house in 2023 with cash. Fundrise is also a long-time site sponsor, hence the mentions.
I encourage you to listen to some of my podcast episodes with the founder, Ben Miller on Apple.
It is one thing to take a lot more risk in your 20s and 30s and quite another thing to be stupid. Right now, America, on 2nd April, declared Suicide Day. For at minimum the next 4 years, probably a lot longer, we are going to a bear market as America isolates itself from the rest of the world, and the rest of the world takes all necessary steps to isolate themselves from America. And meanwhile we have a delusion fool signing executive orders with a high chance of making things even worse. This is an unprecedented disaster. Now is NOT the time to be investing in tech stocks (well not US ones anyway, if anything invest in China ones). While Warren Buffet once said, never bet against America, I believe now is the time to do just that – bet against America as it has decided to destroy itself intentionally.
Interesting view on the market situation. I think that this year the S&P 500 can bring more than 7.5%. However, there are too many unpredictable factors that can affect the situation…
Great insights on navigating the current market! I like the focus on commercial real estate as a potential opportunity, especially with favorable valuations and improving economic conditions. It’s a good reminder to stay strategic and cautious with investments, particularly after a strong run in the stock market.
Sam:
What about investing in something like the Ares Private Income fund. Through our advisor we have access to the I shares at no minimum and no fees except our 1% AUM fees through our advisor. Just FYI currently the I shares are paying 9.50% annually with monthly distributions and 1099 reporting.
If you have a 110K mortgage at 7.5% right now. Is that where you would be prioritizing your money?
I would happily be sending money in every pay check to pay down that mortgage rate at 7.5%.
I don’t think the S&P 500 will return 7.5% in 2025, so paying down a 7.5% mortgage for a guarantee return is a good move.
Hey Sam,
Marketwatch (https://www.yahoo.com/finance/news/u-population-growth-stalling-threatening-160100133.html) just posted an article regarding how a decrease in population will negatively effect the real estate market. What are your thoughts on this and does this concern you at all with how you’re currently investing? Personally I’ve always been long on real estate, but I do have some concerns with a population decline and lack of immigration. Thanks.
Definitely a long-term demographic trend to look out for. In extreme cases, like you see in China, there was massive overbuilding and a population cliff due to years of the one-child policy that is now coming back to haunt.
In the US, the undersupply of housing is estimated to be anywhere between 2-5 million, and we can have as many babies as we want. So the impact will take a longer time to play out.
I suspect superstar cities that face an international demand curve will fare better than those cities that don’t, and that have more space to build.
There seems to be an obvious arbitrage opportunity with the Fundrise Venture Fund. Between Open AI, Anthropic, and Anduril on the cusp of finalizing new fundraising rounds, the Venture Fund is poised for a 25%-30% increase in value. This might be the best risk return profile in the immediate term. I’m surprised this isn’t being discussed more.
I’ve been discussing this arbitrage in my newsletter consistently. When you can invest in these private AI companies before their next round of funding at higher valuations, you have a good risk reward ratio. Of course there are no guarantees, but I have invested over $155,000 in the Fundrise venture product so far. I wish I had more liquidity.
You can check out my FS podcast interview with Ben Miller, the CEO of Fundrise as well for more insights.
how should i build my portfolio in today’s valuatoin？ i have 250k all in cash right now, how to start building?
If you have a decade to retirement, one can invest in more aggressive portfolio of stocks. I want a rental property but the new laws in California punish landlords and reward bad tenants.
That’s actually quite an aggressive portfolio, but a well diversified one.
Sam, in addition to Fundrise, what are some good ETFs to invest in Commercial Real Estate and AI?
I just invested another $5,000 in Fundrise Venture today after seeing Databricks raise $6 billion on strength revenue and cash flow metrics. I feel the bull market in public stocks will create an even stronger demand for private companies. Look at ServiceTitan’s IPO, up 40% right after.
You can try the closed-end venture capital funds like Kleiner Perkins. But the fees are 3% and 35% of carry. Minimum investment about is usually $100,000 for friends and family. I’m an LP at that fund but it’s hard to get allocation. Networking is the key.
Those fees are crazy. I looked at the annualized returns (based on returns from their website) and it’s in the 4-5.5% annualized. It looks like Fundrise is definitely getting their cut but, as an investor, the returns are underwhelming…
Yes, KP charges a crazy amount, and I’m not having it anymore. I’m going to invest less in closed-end funds and more in open-ended funds from now on. I don’t want to pay a carry fee, which is one of the reasons why I’m sticking with Fundrise.
Commercial real estate has gone through a difficult time since 2022, with prices declining almost as much as the 2008 global financial crisis. As a result, I’m a buyer today as the economy and household balance sheets are much stronger, and commercial RE recovered handsomely after. If you looked at returns before 2022, commercial RE was solid.
I try to be forward-thinking as possible, which is why I’m continuing to dollar-cost average in.
Hey Sam — longtime reader.. and put $300k into 3 separate Crowdstreet investments.. then all the deals dried up over past year.. what are you thoughts on CS these days?
What years did you invest in these investments? We are at the beginning of a multi year, rate cut cycle, which should be bullish for real estate.
Looking forward to seeing commercial real estate and residential real estate start to outperform, after underperforming since 2022.
https://www.financialsamurai.com/maximizing-real-estate-returns-in-a-rate-cut-environment/
Thanks so much for explaining this so well.
Hi Sam
Wondering what you’d do in our situation. We’re good savers but not savvy investors, and pretty risk-adverse. We’ve been laddering CDs and Treasuries for the last several years, and most of them mature over the next 15 months. Some of the amounts are quite large (for us), between 50 and 250k per maturity, totaling 2.5 million.
My question is, once our equities mature, how do you comfortably enter the markets in such large amounts? We’re sad to see our easy, risk-free 10k a month windfall is over, but understand in hindsite we could have done so much better had we had more skin in the game. We’ve just never felt comforable buying into the markets in large chunks and don’t know how to approach it now, with markets at all-time highs.
We do have about 2.4 million in stocks and bond funds, between 401ks, Roths, and a taxable brokerage account, so we’re not only invested in safe buckets. Our taxable brokerage account has plenty of risk exposure, with some winners and some losers.
Other stats-
We’re both 51, I’m retired and my husband hopes to do so as soon as he comfortably can. 3 kids- 2 in college on full-rides and our oldest will get his MBA paid for his state school as well, and we have one child in middle school. We’ve gifted the older kids the modest amounts (40k) we had saved for them for college so as to help them launch to their next step when the times comes. Close to no mortgage (our payment is $800 a month, owe 20k, but in no hurry to pay it off since it’s 3% and at the stage where all but a few dollars goes toward principal.) We are not high-earners but have been saving since 18.
Even a 10k per month market buy-in scares me, so I’m totally overwhemled with what to do with 50k-250k a pop.
Hi Manda,
This situation requires talking to a professional who can better understand your entire situation and offer suggestions. It’s too hard to do over the comment system. I would set up a plan to dollar-cost average in with a target amount based on your net worth and goals.
You and your husband should definitely take advantage of speaking to an Empower financial advisor for free. They currently have a promo where households with over $250,000 in investable assets can talk to one of their financial advisors and get an analysis of their investments and where they can optimize for free. After the second video conference call session, you will even get a free $100 Visa gift card. There is no obligation to use their professional services either.
I said down with one of their financial advisors back in 2013 and it helped illuminate a blindspot that I had because I was way too conservative with my portfolio, with 52% of it in cash. I was 35 years old at the time, thinking that I needed to invest like a traditional retiree who is 65 years old. But the Empower financial advisor helped me realize I have plenty of life and financial opportunities left. As a result, I ended up investing 100% on my cash over the next one to two years in stocks in real estate, which turned out well.
I’ve been using their free financial pool since 2012 and I ended up consulted with them part-time from 2013-2015. They are great and well worth speaking to.
You can sign up for a free call here. Tell them I sent you!
Best,
Sam
Thanks for the reply! We definitely fall into the “investing like a traditional 65-year old retiree” category, too. Mostly because we assumed we’d be retired at 40 and funding our expenses with cash and other safe liquidities for 20 or more years, ’til we could touch 401ks and SS. But, here were are suddenly at 51, and while I’m retired, my husband is not. Time marches on. Sigh.
Thank you for the nudge on the FA, too:)
All the best!
Manda
My wife and I are big fans! Was wondering your thoughts on TMF bonds shares stock? Seems like a great time to buy with the fed pivot coming soon. Thanks!
I like to invest now in small caps making profits, which have a low PE and a high dividend. Look at German company Deufol or Austrian Agrana for example. 10% physical gold, 5% cerificates and 10% in crypto. I purchased Nividia, Microsoft, Meta and Alphabet in 2005 and I am glad, that I never took any profit till today.
How about REITTS? Thanks
1% market pullbacks are a bit micro for me. not unusual for the market to pull back 1% in a day and then gain it all back the next day or more. i just am not that focused to catch those small pullbacks. i look for 5% pullbacks to allocate new money.
i’m not good at selling winners. i tend to sell the losers if i need to raise a little cash and gain the tax advantage. they are typically underperforming for a reason and often my ego keeps me in them when i should have taken the loss and moved on anyway.
in general the money i have in stocks i never intend to sell. it is just a portion of net worth that grows and allows me to spend other cash and maintain or grow my net worth at the same time.
I’m buying the dip in big tech and artificial intelligence companies like NVDA at $100. This is the dip many people who missed the boat have been waiting for.
The Fundrise Innovation Fund looks great actually. I like it’s holdings in Databricks and Canva especially. These companies have been growing very fast, and should go public in the next two years, making previous and current round investors, a lot of money in my opinion
I’m buying the dip as well and dollar-cost averaging in.
I agree that Canva and Databricks have been growing well. I want to own the picks and shovels in the artificial intelligence space, and Databricks is one of the best beneficiaries. NVDA is too, but it’s obviously run up so much already.
I just invested $137,000 in the Fundrise venture capital product. It invested in most of their companies 1-2 years ago, and I expect when they raise new funds or go IPO, for these companies to have higher valuations.
Of course, there are no guarantees. But this is one of the arbitrage opportunities I see if people are paying attention and can see the growth of these companies.
Hi Sam, you mentioned that about 3% of your worth is in bonds. Do you have an article sharing your allocation? Thanks