This is the problem with many of them:




"Total market index funds are typically “cap-weighted”. In English, that means that most of your money, when invested, goes into the largest companies based on market capitalization. So if I buy a mutual fund investing in the entire US stock market I might own over 3,000 stocks, but most of the money I invested goes to buying companies like Apple, Exxon, GE, Chevron, IBM and other massive US firms.

That may sound good to some investors. “Great, I own the most successful US companies. Now I can sleep easily.” Here’s the problem. Concentrating too much money in ANY one area of the market can lead to less than desirable results over long periods of time. Case in point: From 1966 through 1982, the S&P 500 (another popular cap-weighted index) had an annualized return of 0% per year when inflation is considered. From 2000 through 2012, the index lost .7% per year to inflation. Those are long stretches of time to go without returns, especially if you depend on your investments for income.

What is important to understand is that different areas of the market, which are not well represented by these funds, did quite well during these periods in history. Smaller companies, which only make up a tiny fraction of the holdings of total market funds, can be the real game saver when large stocks go through their periodic seasons of draught. We also need to recognize, as investors, that the biggest and most important companies of today will likely become the “has-beens” of tomorrow due to changes in technology and competition. "

SOURCE:
An Easier Way To Invest? ? Paul Winkler, Inc

My side hustle used to be in Chicago, at an old department store.

I don’t work there anymore.....

Real Estate can make sense if you purchase at the right numbers. Remember it's not just the profit you make monthly but also paydown of the mortgage that makes you wealthier. The typically rule of thumb is look for deals where you can rent for 1% of purchase price. Obviously in many of the hot markets these days that is impossible, but here are areas where it does exist. Typically midwestern cities but the downside there is they generally are stagnant or in decline.

I've flown with guys that have so much side, either hustle or a little something, I don't know if they enjoy the time off. Remember the 3 F's and pick the right spouse. This is not brain surgery.

1) They have to be cap weighted or the valuations of small companies would be absolutely absurd. There are equal weight index funds available, though most have to close to new investors because once they are too large they can’t put new money to work in small companies without distorting the market. I have no objection to equal weight index funds. If you want more small cap exposure or international exposure there are index funds for those as well, all much cheaper and likely to outperform actively managed mutual funds.

2) Regarding the scenarios of low returns, who invests all their money at once? The use of those points by the source you cited shows either ignorance of how real people invest, or more likely, intentional intellectual dishonesty in an attempt to promote his coaching as being necessary.

Pilots at Delta are investing every two weeks like clockwork, not in one huge lump sum. Picking an absolute peak of the market like 2000 can look scary until you realize you aren’t buying in or selling at any one point, but spread out over decades.

Paul Winkler, ChFC®, RFC®, CLU®, LUTCF, CASL®, AAMS®, RICP® is the President and founder of Paul Winkler, Inc.

Thats a lota bling behind his name, but conspicuously absent is the "CFP"-gold standard IMHO. Caveat emptor.

A woman came in for a front door...

A front door from the store....

For the military guys their option to comply with USERRA is either do exactly that, or remove the restriction on mil

Yup, they are so stressed and work harder on their days off. Meanwhile the guys that just go to work and go home seem much more relaxed and more financially sound.

What kind of numbers are you interested in?

Texas. Laws are very landlord-friendly, barriers to entry are low (ie. houses are cheap, relatively speaking), market prices and economy are relatively stable, renters are plentiful and if you decide to incorporate your business, the income tax rate on corporations is extremely low (usually less than 1%).

Bingo! Great rule of thumb that has served me well. Don't look for the flashy condo in the trendy neighborhood in the sexy town. The ROI just isn't there (unless you want to go upscale AirBnB-type situation, but that's a whole 'nother conversation). If you wanna talk numbers: My first rental property I paid $135K (3BR, 2BA in a good subdivision on a nice lot). Currently rents for $1500/mo with my total cost being $800/mo (mortgage, insurance, taxes, HOA fees, management company fees). I've stuck to single-family homes and try to rent to families or young couples. The turnover tends to be lower which means lower costs and fewer headaches.

Everything I make goes straight into an account that I use only for business expenses (repairs, move-in/move-outs, taxes, pay down debt, etc). Whatever funds that accrue are then available to purchase additional properties when opportunities arise, repairs and upgrades to existing properties or cover expenses during periods of vacancy. Bad renters happen and stuff breaks so it's nice to not have to sweat it when you need to buy a new A/C unit, repair a busted door or just let a property sit vacant for a month while you wait for the right tenant to come along.

Like I said in my original post, it ain't glamorous or "cool" but the steady cash flow is nice, the equity is even better and for the most part, it's pretty headache-free. My advice to anyone looking to get into rental property would be this:

• Flashy properties in trendy neighborhoods are not for the small-time investor. Start small and be reasonable.
• Have a plan and be prepared for those inevitable unplanned expenses or extended vacancies. If you can't afford to let a property sit vacant for a month or two without sweating bullets, then you are probably over-extended.
• Be picky with tenants. Late/unpaid rent, damages or evictions are far more expensive than letting your property sit vacant for an extra month.
• If you don't live within an hour or two of your property, save yourself the headache and get a manager. It'll cost you a little bit but will save you a ton of headache and inconvenience. No one wants to have to cut a day at the lake short or try to find a handyman at the last minute just because your idiot tenant put a potato down the disposal (ask me how I know:rolleyes:).
• Even if you do live nearby, a good manager/management company will take care of a lot of the tedious, back-end "office stuff" like listing your property in MLS, showings, screening tenants, running background checks as well as keeping track of expenses and income for you which comes in very handy at tax time.

I stand on a street corner near Zoo Atlanta in biker shorts for tips.

Thinking of trying this at the Racetrac over near the landside employee lot.

Index funds are passive cheap and very diversified. I agree with the rest.

That is nearly an exact match of my first rental property purchase. It's amazing how good the numbers really are over decade or more. Splitting investments evenly between the DC plan and real estate for the last decade has created a buy and hold portfolio with more equity than the retirement plan. The portfolio also produces monthly cash flow that the retirement plan does not. I'm a huge fan of buy and hold real estate as part of a retirement plan.

There is plenty of liquidity in brick and mortar. Too many novices think you have to sell a piece of real estate to get liquidity. You can convert equity to cash with a cash out refi. As a general rule, this is non taxable event up to a cash out amount that doesn't exceed the original purchase price of the property. Liquidating mutual funds creates a taxable event when selling at a gain. If you sell at a loss, well, you lost money. When you liquidate a mutual fund all you have is cash. If you access the equity in real estate via a cash out refi, you still have the asset and the cash flow.

For small amounts of liquidity, cash or mutual funds are ideal, but don't be afraid of having too much tied up in real estate.

I’m not sure where you or Paul Winkler gets the numbers you quote. The S&P has increased by a mean of 11.7% over the past 60 years. A conservative index fund like Vanguard nearly matches that. Factor in that it cost next to nothing to manage the index fund and there’s not too many traders that can beat that performance. Plus the benefit of rarely looking at my account frees up my spare time to have fun on the lake and live stress free.

Latex is way better.

And there's also some civilian restrictions on flying and other aviation related things, including flight and duty time. But to say you can't do anything whatsoever "on the side" is completely unenforceable and so broad its slam dunk lawsuit material if even attempted.

The mil/USERRA issue is currently being challenged and I think they will probably prevail at least to some extent. But either way that's nowhere near a total and complete fantasy ban on 100% of all "side hustle" gigs.

I'll tag on to your thought. Over the years I've flown with a number of very good pilots who "weren't quite right" on a given trip. Most had personal/family issues, but often they were working hard on a side business, or doing projects for ALPA/DAL. There minds were somewhere else. I've had to ask a number of them to get off the cell phone so we could run the preflight checklist. Side businesses are great but you gotta set them aside when you get in the jet. OFG

Assuming it's true that Delta is going to impose a blanket restriction on other employment, I strongly suspect it's aimed directly at the military reserve guys.



One of the provisions in USERRA requires companies to treat military reservists exactly like other employees, so any restriction on outside work cannot be targeted only at the military. As long as it applies to everyone equally, it would be ok.


Delta isn't the only airline to get in a tangle over USERRA and military reservists. I remember seeing a lawsuit involving American from 10 or 15 years ago. Guys dropping trips, especially with little or no notice, for military stuff hits airlines hard and costs a lot of money in extra reserve coverage requirements, etc. Anything the airlines can do to minimize such disruptions, they're going to do.



I'm not picking sides here, just acknowledging reality. I retired out the reserves just a couple years ago, and was absent from my previous airline (a regional) for nearly 4 of the 10 years I was there. I've seen abuse from the company side, but I've also seen rampant and flagrant abuse from the pilot side as well. Actions by either party have consequences, and the proposed new FOM policy, assuming it's coming, is one of the consequences.

CFP is the gold standard of nothing. Aka "couldn't cut it in professional finance" or "scrambling for a job after partying through undergrad".

CFA and CPA are all that matter. Maybe CAIA if you're in some offbeat private equity profession. The rest are a joke.

Read "A random walk down wallstreet". It's all an airline pilots will ever need to know about investing.

-someone who worked in investment banking on wallstreet.

It is too hard to find a decent salesman.

I think the person who posted about a coming FOM change barring any outside employment was trolling.

Burton is my hero.

I think we’ve met :rolleyes:

Is that you, Boss? Lol

What about the booming MLM racket in candles and kitchenware? (My wife has bought her fair share of $30 apple peelers and miracle ice cube trays at wine-sipping parties.)

No, I wasn't trolling. Just making a point for those who aren't following the issue to be informed about what's going on with our military members. Outright discrimination, IMHO.

There's no effort to make those change for non-mil, although as alluded to above it would cause everyone to be treated the same...

Hmmmmm-always thought those were swinger parties....

IDK...if I were furloughed or took a massive pay cut tomorrow, I feel much more financially sound knowing that my house (and all my properties) is being payed off by my tenants.

If they are stressed and working hard on their days off, they're doing it wrong.

That only works if you have a medical and are on property. Plus...you have to go to work! I'll be on the water fishing while you're flying that green slip. :D

Smart, same here. Because of my rental properties, I live on ~15% of my income for day-to-day stuff. This allows me to diversify by maxing my 415/IRA and still have plenty left over for other investments/toys/vacations. It also is nice for months I decide I don't want to work that hard and I drop some (or all) of my trips. Time off is a wonderful thing!

For me, they're long term investments that may allow me to retire early. I don't NEED the money now, which is why I pay people to do the work on them. I'd much rather be out golfing/fishing/etc...

The reason you have the most money in a particular set of companies on a market cap weighted fund is because they GREW to that spot. And so did your money along with it. AAPL wasn’t always at the top.... If you choose another method then you’re looking for a small cap index, perhaps where the next Apple and Amazon will grow into their size, but there are likely to be wild fluctuations and greater risk associated. The S&P 500 or total stock index are hands down the best option we have available to us to “set it and forget it”. You can always zoom in on a particular point in time on a chart and say “HA, look at the lack of growth here” then I can zoom in on 2008-present day and say “HA, look at all this growth in the S&P” AND THEN we can zoom all the way out and see that, in general, the market has gone up over its life. So for us younger guys with decades ahead of us, it’s our safest bet. Runner up are target retirement funds, but they bring more managers into it and thus higher fees.

You cite Mr Winkler, so I’ll cite Mr Buffett;

___________

“Let me give you a figure that’ll blow your mind I think. I bought my first stock when I was 11 years old. It was the first quarter of 1942, shortly after Pearl Harbor,” Buffett recalls. “I spent $114.75, [for] shares [of a stock.] $114.75. If I put that $114 into the S&P 500 at that time and reinvested the dividends, think of a figure as to what it…would be worth today,” he asked me?

So, what do think?

$10,000?

$75,000?

I’ll give you some help. That’s way low.

Let’s pick it up with Buffett again: “The answer is about $400,000. So if I as a little kid had taken that 114 bucks I’d saved— shoveling snow (LAUGH) or whatever I’d done, [I’d have] $400,000 today. [In] one person’s lifetime. That’s America. I mean, that isn’t me. You know, it’s the huge tailwind the American economy gives to any equity investor.”

https://finance.yahoo.com/news/warren-buffett-says-couldve-turned-114-400000-230140222.html
____________

Not true. CFPs are more than just a test. They require a degree in the financial field, years of work experience under supervision and continuing education. This is one of the few designation that actually requires commitment. On the other hand I can go take a series 65 test for my “registered investment advisor” certificate by taking a weekend course and then passing the test. Same goes for insurance. This is kind of like the equivalent of taking an FAA written and then being considered a pilot. The CFP requires the training and experience. CFPs are geared towards individual financial planning. The counterpart to this is the CFA but they’re aimed more towards instituational investing and analysis. This doesn’t mean all CFPs are ethical, so you gotta find someone on a fee only basis and not assets under management basis, unless that’s something you want.

https://corporatefinanceinstitute.com/resources/careers/designations/cfp-vs-cfa/

Buffett's not wrong, but one can make the same amount of money for less risk by being more diverse.

A portfolio should be diversified among large and small value, large stocks, small stocks, large and small international. Those asset categories should be in certain proportions and then re-balanced when they get out of proportion. That achieves the highest reward with the lowest level risk, something an index fund doesn't do.

They may be more relaxed temporarily while times are good. When you have a medical, displacement, furlough, etc., the secondary income stream is very relaxing. The side hustle requires balance. Personally, the extra income provides more schedule flexibility and I'm less stressed at work.


That's not side, that's charging straight down the middle. It is probably the best option for trading hours for dollars though as you point out in your specialization remarks. It works great short term, but not so well long term unless the money is properly invested.

Too many miss this valuable point when embarking on a side hustle. If you are managing properties, fixing toilets, painting, etc, you might as well print up business cards that say handyman. Just because you CAN do this work, doesn't mean you SHOULD. Embrace your specialty and let the other trades embrace theirs. Besides, if the investment can't support market rates for repairs and maintenance, it isn't really an investment.

This right here! I CAN do lots of the work, but so can my handyman, who can do it quicker and likely better. Because I bought correctly, I can afford to pay the pros to do my repairs. This allows me to keep on golfing/fishing/etc... and stay relatively stress free. Today, I'm handling a minor issue (first one in over a year at this property), by letting the pros do it, all while tinkering in my garage.

Possibly, but again, that requires human hands making adjustments and thinking they’re timing it properly. Historically, that doesn’t work in our favor. If you can set it up to rebalance mechanically with a small, mid, large and international index funds it could work. But, the total stock index accomplishes almost the same thing. I think 500 companies (in the S&P) or 3000+ in the total stock market index is plenty of diversification. Really, how many more companies could you possibly need to own to feel diversified? Another thing is when people come involved multiple mutual funds both index and actively managed, they end up overlapping. So what they’re perceiving as security by diversifying amongst multiple funds, may be a false sense of security (although not necessarily adding more risk). Here’s an interesting article that uses the portfolio x ray tool at Morningstar.com to identify overlap. As you can see a lot of non s&p 500 fund allocations are pretty similar to s&p fund allocations.

http://genxfinance.com/avoid-fund-overlap-to-achieve-true-diversification-in-your-portfolio/

I’m not saying anyone is wrong here, the important thing is that money is being saved and invested. I can’t stand that the financial industry makes this seem so scary and over complicated and charge us huge fees to make us feel like we are safer, when it usually ends up the opposite. Just got to find what works for you and you’re comfortable with.

I’m an Importer/Exporter of latex goods.

Vandelay Industries by chance??

Serenity now.

I used to do occasional work on my brothers’ dairy farm. Didn’t earn a dime, but it made me grateful to be a pilot. :D

But sanding sheetrock mud on a rental house is how I relax ...

… and I would add, for a Delta pilot there are many advantages to setting this up in a self-directed IRA.

In 2015 my sort term gains were taxed at 51% after AMT, State and investment taxes specific to 1099 income from the company that runs the properties for me.

The real estate business was only ever intended to be a supplement to retirement. It makes sense to roll all of this forward in the IRA and tax it when you retire.