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I'm wondering what the 2020 answer would be to what would you do to generate a steady 4-5% annual return from $5 million?
AT&T give 7% dividend. VZ give 4.5% dividend. There should be good quality stocks which easily pay 3% dividend. If you do drip in 4 to 5 years it might become 4%-5%. But always there is a risk though
The price/earnings ratio (or its inverse, the earnings yield), is a better measure of stock valuation than the dividend yield. In a taxable account it is better to get capital gains because of stock buybacks than to get dividends.
https://www.investopedia.com/terms/t/triple-net-lease-nnn.as...
Think of it like owning the property that a popular Starbucks location rents.
Obviously, the retail landscape has changed irrevocably in 2020.
Real estate should still be a good bet for 4% real. It would be better with leverage if you could borrow at least 50% at some outrageously low rates but it’s not passive.
The economy is in a strange place right now. Record high tech stocks with near record high unemployment. Incomes and stocks temporarily inflated by governement rescue money worldwide. An oncoming eviction/default bomb that governments keep kicking down the road.
If I had a significant amount of money I would half in US bonds and half in a Swiss bank account to ride out this volatility.
Look at Buffet, he's putting his money in Japan, a traditional safe haven currency outside USD
Real estate should still be a good bet for 4% real. It would be better with leverage if you could borrow at least 50% at some outrageously low rates but it’s not passive.
Real estate should still be a good bet for 4% real. It would be better with leverage if you could borrow at least 50% at some outrageously low rates but it’s not passive.
Could you please explain your thoughts on this? My current operating philosophy on real estate prices are that inflation is demand driven (buyer purchasing power), and that individuals are already maxed out (40 year mortgages, rents 50% of income). The only reason I can see real estate continuing its climb is if government policy continues to insist that home prices can never depreciate. If that plays true, then sure…
> government policy continues to insist that home prices can never depreciate
Those policies are for old people cashing out, rich people buying investment properties, and even richer people who own real estate developers. What do you think are the odds that in... let's say 5 years, either of these groups will have less weight in public policy making than they do today? I think it's very, very close to zero.
In markets like Canada, lack of government investment in small towns, NIMBYism preventing density, and high rates of immigration, mostly to big cities where the jobs are, put consistent upwards pressure on real estate prices despite the end result sucking people dry. I think we'll sooner see negative interest rates to prop up further spending than a government willing to address this crisis head on.