Looking For Advice
I am new to REI, but have read various books on the subject. I was just wondering what the best area of REI to go into to avoid high risk, but yet get a good idea what REI is all about. I have a few thousand dollars to play around with and to finally try something. Thanks in advance.
Tough question, and only you have the answer. It really depends on your interests and capabilities. Some folks are suited to one area better than another, I know I am. I would check out all the different areas on this site and decide what interests you, once you do you should have a better idea of what direction you should go in.
You should also look for local REI groups. Go to a meeting or two and meet folks, they will provide a wealth of info specific to your area, which may help you make your decision.
[addsig]
Quote:I am new to REI, but have read various books on the subject. I was just wondering what the best area of REI to go into to avoid high risk, but yet get a good idea what REI is all about. I have a few thousand dollars to play around with and to finally try something. Thanks in advance.
), but on the stock market I have tons, and there I like to play it safe and minimize risk while maximizing profits. Thus, I put a good chunk into secure investments. With others I play with, and I have won some and loss some.
I think that would depend on the Rate of Return you wish to obtain. Personally, I like to be secure in my investments (in REI I have 0
My goal in REI is to grab a couple of rentals and use them as collateral for money in order to wholesale properties. To me that seems like minimizing risk, especially if the loans I mark with the property are also loans I could take without those properties (due to income from the rentals)...
japher,
Do you really consider the stock market safer than real estate?
If so, and if you have an open mind, you might try reading "Rich Dad''s Prophecy" by Robert Kiyosaki. He makes some points in that book that might be worth your consideration in the future.
Could you explain to me what a secure stock investment is?
[ Edited by jeff12002 on Date 01/12/2004 ]
My punctuation is horrid. I meant that while I have no RE investments I have stock investments... and yes I do feel that the stock market is somewhat secure, at least as secure as REI can be. It all depends on strategy.
While there is no single secure stock there are more secure stock strats, ways to cover. In the same way as there are ways to cover in REI. In the same way you don't buy RE willy-nilly you shouldn't by stocks willy-nilly or without a way out.
Perhaps I say this because I haven't been burned by the stock market. Yet, I started investing in 1993. I have seen inflated markets as well as markets with huge downsides, and still I have yet to go a year without positive returns. Maybe it's my strat? I have an open mind, but I also have a calculating mind, one that assesses my risk and works to reduce it.
On the flip side: My father lost a small fortune in RE, mostly because he didn't know what he was doing. He sold his first investment property for even cash, only to find out that the person he sold it to made a fortune with it a year later. My father however is a savy investor. This is probably why I trust the market more.
I have not read “Prophecy”. I have made it a point to stop reading books on other ppls predictions of market performance, instead I track market trends and data from the past 70+ years and decide my own course. I find that diversification is a key to reduce risk, but is not a key to beating the market. If I wanted to keep with the market I would just buy mutual funds and indices. Yet, these vehicles do not require you to learn anything about the market, how it performs, or even what it is you are buying.
I have read many of Robert's books (I like them), and the one thing I have taken away from them is that knowledge reduces risk. From my practices in the stock market I believe this. That is why I am here, on this board. I am learning about RE investing because it does have a better, or more consistent, performance history than the stock market, yet still possesses risk.
That is why in addressing the initial posters request to eliminate risk I suggest they also address desired return. If they know how quickly the wish to realize gains they will better be able to plot out a strategy and educate themselves on that strat so that the risk all but disappears.