5% won't be enough to outpace inflation in the next 10 years. Invest 100% now in 20 different companies at $50,000 each, with the expectation that one will go 30, 40 or 50 to one.
Ask HN: What's the best way to get 5% on a million dollars?
61–70 of 87 posts
Re: Ask HN: What's the best way to get 5% on a million dollars?
#62Contact a commercial real estate agent, invest in a NNN property in most major cities. Getting 5% unleveraged is extremely easy, if you leverage you should be making over 10% per year.
Re: Ask HN: What's the best way to get 5% on a million dollars?
#63If you use Wealthfront (www.wealthfront.com), a risk score of 6.5/10 supposedly has a median return of 5%/year. Pretty risky, though. Over 70% stocks.
How does that compare to Betterment?
Wealthfront is very rigid on its asset allocation. You pick a risk score, and that's it.
Thus, they can do some pretty interesting things that Betterment can't. Such as, if your assets are more than 500k, they replace the S&P 500 index with all 500 stocks, which increases the amount of tax loss harvesting.
Re: Ask HN: What's the best way to get 5% on a million dollars?
#64Pretty simple. Buy an index fund. Average return of 10%.
Unless you happen to be buying near the top of another stock market bubble. Then you might easily see a negative 50% return over the next 10 or 15 years inflation adjusted.
Re: Ask HN: What's the best way to get 5% on a million dollars?
#65I think you're looking at this the wrong way. Decide the level of risk first. That dictates your stock/bond mix. After that, you get whatever the market gives you. If you're looking for a guaranteed 5%, it doesn't exist right now, and it won't be back unless inflation spikes close to 5%.
AT&T pays a 5.3% dividend. Given they're still effectively splitting a monopoly with Verizon, that's pretty close to guaranteed. You'd want to track the company's quarterlies, the competition (risk of a combined Spring + T-Mobile hurting them), and any big business moves, but otherwise it's predictable. The stock itself - and your principle - would get compressed in any market down turn though. The nice thing about holding T, is that you can liquidate your entire principle at any time easily.
Re: Ask HN: What's the best way to get 5% on a million dollars?
#66I think you're looking at this the wrong way. Decide the level of risk first. That dictates your stock/bond mix. After that, you get whatever the market gives you. If you're looking for a guaranteed 5%, it doesn't exist right now, and it won't be back unless inflation spikes close to 5%.
AT&T pays a 5.3% dividend. Given they're still effectively splitting a monopoly with Verizon, that's pretty close to guaranteed. You'd want to track the company's quarterlies, the competition (risk of a combined Spring + T-Mobile hurting them), and any big business moves, but otherwise it's predictable. The stock itself - and your principle - would get compressed in any market down turn though. The nice thing about h…
The last big bond issue by AT&T paid 1.4%
http://www.bloomberg.com/news/2013-11-20/at-t-said-to-plan-o...
I'd not call the NPV of any tech stock predictable.
Re: Ask HN: What's the best way to get 5% on a million dollars?
#67Earlier quoted context omitted.
He doesn't say how to choose the right stocks. And I assume he's choosing them after the fact for his graph. I'd be curious to see a random sampling of S&P 500 in autumn vs. spring. That would give a better idea of if it works.
> And I assume he's choosing them after the fact for his graph. So it's possible to edit tweets or change their timestamps? https://twitter.com/DogsOfTheSeason
Hi, I'm Tomo - the owner of the DogsOfTheSeason site.
I don't know about the timestamps, but I guess it's possible to write several stock recommendations and delete the ones that do not make profits. Also, it is possible to build dozens of sites like DOTS and promote only those who consistently earn money.
I can assure you that I don't do any manipulations with my performance. I don't do almost any marketing for DOTS. The number of my subscribers is very small and if it starts to grow significantly, I'll limit the maximum number of subscribers or raise the subscription price.
I guess there are sites that do manipulate with the performance, so you have to decide for yourself whether you're going to believe me or not.
I noticed that links on my page http://dogsoftheseason.com/subscribe (actual emails) were not working due to a missing script. Now this is fixed.
Re: Ask HN: What's the best way to get 5% on a million dollars?
#68I'd buy a small newer (post 1979 construction so no rent control) rental property in San Francisco. With that much down you should be able to get it cash flow positive plus increase your equity at the same time if you needed to liquidate.
I realize this is San Francisco we are talking about but the idea that $1,000,000 is merely a down payment for a small living space is mind boggling to me (yes, I live somewhere much less desirable and much cheaper).
I think what he means is that with $1MM you'd be able to pay off a large chunk of the house which would reduce the amount of interest owed. It doesn't necessarily equate to just being a 20% down payment.
Re: Ask HN: What's the best way to get 5% on a million dollars?
#69There are a few startups that are letting investors fund student loans. People pay 7% to sallie Mae, so I think these investors get about 5%.
one of them is prodigy
Re: Ask HN: What's the best way to get 5% on a million dollars?
#70> What do you think is the best way to get the lowest risk, 5% annual return on a million dollars? You won't find a zero-risk 5% return; those don't exist. Bank accounts pay approximately zero interest these days. The lowest-risk return would be to buy an index fund based on the entire stock market, balanced with a fund that buys low-risk bonds; choose a stock-to-bond ratio based on your desired level of risk. Vangua…
Yes, thank you. This is the only sane answer.
Putting money in the stock market in anything other than an index fund is just folly. Over any significant amount of time, any other stock investment will do worse than the index fund. It must, by definition (plus or minus a little bit for imperfect efficiency... but the stock market is pretty damn efficient)... plus index fund fees are just so much lower than anything else, which just increases the lead they already have.
And yes, then bonds to smooth out the ups and downs if you can't afford to ride out some big swings (like 2008) without some insurance.