Money question

[Bugsinrugs]

The stock market being what it is I want to take some of our nest egg that’s been in mutual funds and pay off one of our rentals. My wife wants to ride out storm. I tend to panic while my wife has ice water running through her veins. Like the debacle in 08, money goes poof while property values may decline at least it’s still there. Any advice?

[RWebb]

Yes.

Listen to your wife.

This has dual benefits. 1. you avoid selling at a loss, and 2. your wife will be happier

[wildthing]

Let's say you take it out now. If we take the 2009-2019 average rate of return of the longest bull run in recent memory, it's about 15%. The average long term is about 10%. Assume you have 10 years until you need the money.

If you put your money into your rental, will it return 10%, rental + appreciation?

[stomachmonkey]

We will take it in the shorts for now but if you play this right you will be in a better position 2-3 yers from now than you would have been had this not happened.

[JavaBrewer]

Originally Posted by RWebb

Yes.

Listen to your wife.

This has dual benefits. 1. you avoid selling at a loss, and 2. your wife will be happier

Wow agree with this poster. A first

[Cajundaddy]

Originally Posted by RWebb

Yes.

Listen to your wife.

This has dual benefits. 1. you avoid selling at a loss, and 2. your wife will be happier

+1

The market is at or near the bottom and the only way for it to go over time is up. A great time to buy and a lousy time to sell. Depending on how it is invested you may also generate capital gains tax which will compound the losses you just locked in by selling. If invested in blue chip companies it will come back over time. How long? Historically 1-5 years.

Caveat- These are uncharted waters and there may be significant shifts in the economy after this thing passes. There will be winners and losers in business, emerging markets, and real estate. YMMV

[LWJ]

"Ice water running through her veins."

Love that.

[Jon B]

Originally Posted by Cajundaddy

If invested in blue chip companies it will come back over time. How long? Historically 1-5 years.

Even Boeing?

[Evans, Marv]

Back in the 2000's when the market dropped 50%, I told my wife I wished I had $100K to buy in. With the market acting like that again, I think I'll buy a chunk of the fund I have one of my IRA's in. It's closed to institutional investing, but individuals that already own it can buy in.

[wdfifteen]

Originally Posted by stomachmonkey

We will take it in the shorts for now but if you play this right you will be in a better position 2-3 yers from now than you would have been had this not happened.

I hope so. I have 2 years until I have to start taking IRA distributions by law. I can stretch it to 4 years before tapping the money I have left in the market by drawing from non-market investments first. So things have 4 years to straighten out before I get hit by this.

[Bugsinrugs]

Originally Posted by wildthing

Let's say you take it out now. If we take the 2009-2019 average rate of return of the longest bull run in recent memory, it's about 15%. The average long term is about 10%. Assume you have 10 years until you need the money.

If you put your money into your rental, will it return 10%, rental + appreciation?

No, I’m sure it wouldn’t. 5-7% most likely. My thoughts are, in these uncharted waters we are experiencing I’m concerned my tenants will be laid off or just stop paying the rent. This is a townhouse in Walnut Creek,a City in the S.F. Bay Area. They are in a shelter in place order(?) Ihave two vacancies in another building nearby and have already experienced people calling to look but then backing out because of being afraid to go out. Strange times indeed.

[flatbutt]

Originally Posted by Bugsinrugs

The stock market being what it is I want to take some of our nest egg that’s been in mutual funds and pay off one of our rentals. My wife wants to ride out storm. I tend to panic while my wife has ice water running through her veins. Like the debacle in 08, money goes poof while property values may decline at least it’s still there. Any advice?

I was freaking out because I'm 68 yo and not sure I can recover from this downturn. I crowd sourced the collective opinion here, which happened to agree with my FA. Selling now is a big ouchy, I'm riding it out.

A serious question on the stock market situation.

[cabmandone]

Debt free takes a lot of the worries away.

[flatbutt]

Originally Posted by cabmando

Debt free takes a lot of the worries away.

true and I've enough liquid assets to last a year or two.

[MBAtarga]

I wish I had a couple extra million in cash right now to start buying across the market. I'd dollar cost average (even if the market is heading down), as I'm pretty certain the bull market will return in a few months. Hopefully sooner.

[Bugsinrugs]

Originally Posted by cabmando

Debt free takes a lot of the worries away.

That’s how I feel. My wife has no problem with debt.

[flatbutt]

Originally Posted by Bugsinrugs

That’s how I feel. My wife has no problem with debt.

I have a relative who likes to say " hey if I'm in debt when I die...I'm still dead right?"

[sammyg2]

Originally Posted by Jon B

Even Boeing?

BA is $93 right now.
Anyone with enough balls could buy it and do very, very well when it doubles by next year.
or they could looose their arse
Same could be said about chevron or XOM.

No one ever got rich from buying high and selling low

[cabmandone]

Originally Posted by Bugsinrugs

That’s how I feel. My wife has no problem with debt.

A wealthy guy told me "You don't get rich by paying interest. You get rich by earning interest" I took that to heart.

[MBAtarga]

Originally Posted by sammyg2

BA is $93 right now.
Anyone with enough balls could buy it and do very, very well when it doubles by next year.
or they could looose their arse
Same could be said about chevron or XOM.

No one ever got rich from buying high and selling low

CVX - I've owned it for over 20 years as a DRIP (well - started with Texaco, but post merger CVX.) Forward looking dividend on it is 9.37%

XOM - forward looking dividend yield of 10.51%