I have a decent 401k (fidelity with not many choices) that has just been riding along for about 10 years.

Should I be moving into something specific to keep it safe if things are going to take a dive. I honestly have not done much with it besides ocassionally rebalance of abandon stuff that sucks. I try to avoid anything with fees and have pretty much matched market or slightly better each year.

10 years in, it is now a decent chunk of change and should learn so strategy. Anyone want to help educate a dummy?

that is a fund I am in at about 20% of my 401 right now and have been thinking of putting more into.

Do you have any in bonds?

Should I be shifting to bonds over time to keep some.more of it safer?

anyone have experience turning a fidelity 401k into a real estate investment account and avoiding penalties?

My biggest investment is rental property and I like the residuals and hard material asset. I eventually plan that when I am ready for 'retirement' I will work my 401k the best I can in order to buy up more rentals. Also with rates likely continuing up for loans, I may want to use my 401k to but more properties sooner rather than later.

thoughts?

anyone have experience with this?

curious, how many of you are strictly in stock/bonds?

Obviously RD has done well in real estate. Anyone else have rentals?
I have a few single family homes and have done well thus far. I am trying to figure out a longer term plan that is less hassle and more money for my time.

Basically I started with the plan of building to 6-10 single family homes and then think about a like kind exchange to something bigger/consolidated. Thus far I have found that single families are pretty solid for the increase in value and rent over time, ease to find good tenants, and ability to keep tenants for more than just 1 year at a time.

Down sides to single families are that they always do a crappier job on required outdoor maintainence then you would like, plus you have the multiple roofs/yards/etc... compared to a consolidated property.

Thinking of 4/8/16 units in the future but the calibur of renter obviously goes down and brings in new headaches.
Also thinking of some mixed commercial/residentail but that is a whole new world to enter in to.

I am struggling with finding real world tips and research short of quiting my current real job to go work for a few different management companies in town and that is not desirable as I liek my regular gig.

I have the advantage of knowing my side of the city VERY well and have mapped out planned redistricting/redevelopment. I know in particular of a few places that are slated for large scale changes in 2022-2024 due to some major artery changes for roads, but dont have the funds/ability to get on these properties just yet. They are going to double in value in 5-8 years and would be an easy resell (purchase at 600k now and will be worth 1.2 at minimum after redistricting.) They are less desirable currently due to location but that is turning quick in the next few years as plans become more public/solidified. I have thought alot about making the jump into commerical but honestly dont know where to get started and am risk adverse on this (things are good and relatively stress free with current properties).

Advice from those with experience/knowledge is appreciated as I continue to think things over.

thanks trevorm and I will message you after the holidays for a discussion.

Would be greatly appreciated! Honestly would be a huge help and the screening, retention, and management process is my least favorite so the more I can learn and implement, the better!

I look forward to the talk and happy holidays!

I dont find it hard to manage. Upkeep is easy and I do the majority myself (I am a handy guy). Find good tenants and they pay rent on time and take care of the place. Most months I just take the money to the bank.

I keep a spreadsheet and write everything off on taxes.

I pay a very good tax man and he is worth every penny on what he saves me and keeps me legal.

I find the hunting for and screening tenants part to be a PITA, but in the long term I make good money for doing it as a side hobby and once I have a few places paid off then things will snowball a bit for me.

Why not?

5k can easily get you a down payment on your first rental property or flip to get it all started. With some time and energy that can quickly snowball.

Experts have always said to let it ride...

I personally have done well with moving things around and redistributing things once a year as I see fit. If there is another move like we had 10 years ago then I will push things over to bonds to weather the storm.

The experts are probably right in the longer term since that is the game you are playing with 20 years left.

loan qualification is VERY easy if you are buying the right property to start. (may be harder in some areas but almost always possible to get assistance to get started if you are willing to be in a less desirable area at the start; cities have incentives, there are all sorts of government incentives, etc...)

General and simple rule is monthly expenses + 10%(in the kitty for repairs as needed) + 10%("profit' which really should sit in the kitty also till you get a few properties built up)

If you pick the right area, fix up the right house, and price it accordingly then properties wont sit empty.
For example in Madison the vacancy rate is actually 6%. Once adjusted for the 13% student population and vacant homes from summer when students leave, it comes out to around 3%. You are doing something wrong if you cant keep a place rented in this town. I typically have 6 good tenants in the first 24hrs of putting a place on the market.

I am not going to say it is easy work, but real estate has been killing it for my entire adult life. What I like about it is the fact that I have more control, I have a real physical asset, and it generates annual cash flow that is relatively insulated from global BS, a corrupt government, or big sways... I also dont want to have to wait till my 60s to retire and real estate should get me to "F you money" in my 40s.

This was a great past 12 months for stock market, but it is the ONLY year it has out performed real estate in the past 12 years for me personally.

My 2 most recent properties have increase 50% in value the past 2 years, I make positive cash flow each month, and I am chipping away at loans for the triple win of building my base.

My simple math plans lay out that almost any house I buy, I will be able to pay off the loan in under 12 years with just rental incomes and then it is all free money as far as I am concerned. The real fun kicks in once the loans are all paid off.

Best part about the equity of real estate is that it is very easy to borrow against. Granted I am nowhere near as aggressive as I should be in that way, but it is available when the next right deal pops up.

Sorry, stupid question incoming...

What is the exit strategy from 401k for someone hoping to stop working before 50yo?

I honestly have just always put in the max match and made sure I have had a sprinkling of various stuff for my 401k. I move stuff around every year or so if it has not had a good return and put more into what has done well consistently (plus low fees). After over a decade at my current company and a roll over from a previous company, it is becoming real money. I basically have just prescribed to the 'let it ride' mentality and it has done well.

I turn 40 this year and by the time I am 50 I plan to have enough other investments (real estate mainly), home paid off, monthly expenses decreased, and health care taken care of for life; to be able to have F you money for my normal gig.

What is the exit strategy for someone like this? I don't expect to live to 65 when I could normally pull out (just the genetic reality of men in my family).

What do I do to plan and make the right moves? avoid taxes? etc??? I have 10 years to adjust.

thanks, I will check it out.

If anyone here has insights (lots of smart guys here and I value opinions of my pinball brothers) then feel free to share.

As for the dying at 65... I am a biologist and also understand the family tree well. It is a harsh reality of my family. Granted, you never know...
Either way, I will have enough residuals via real estate that the 401k is merely because I wanted to take advantage of the match from the company.

If I live past 65 then I figure we will be able to sell off real estate as we age and need any larger expenditures.

I know this is the stock thread but occasionally things divert to other investments.

I purchased another single family home I am fixing up to rent.
I really like my money in hard goods and this one will be positive cash flow as soon as I have a tenant (with Madison at all time high for occupancy rate I am thinking it will be easy to find a tenant like it has the other 2).

This is the first foreclosure I have purchased for this purpose and a steep but fun learning curve on this one.

I enjoy the work of fixing them up and with some help from a fellow Pinsider on the property management side, that to has become less stressful and more fun.

Over time, I hope to have enough income replacement to have F U money for the normal gig

In short, my properties are all single family homes with good bones, but inneed of fixes for deffered maintainence and some updating. i have been working to implement a strategy to find and keep good tenants and so far so good. i buy in nice middle class and upcoming area, where I live. It is in my budget and I find is bringing good tenants. Everything is cash positve on D1. So far, so good.

The longer term goal is a minumum of ten homes paid for which should pay me 100k per year for as long as I can maintain them. Of course when I get to ten the next goal it twenty and hire a mnagement company. Then as I age and need cash i sell one off every few years till death.

There are still deals out there. Most recent property was purchased at about 60% of current market value.

I paid 120k cash, will put about 14k into fix up and could easily sell it for 200-215k once done.
Granted I wont sell as I want rental active income, so my goal is buy, fix, and HOLD.

the real panic has not even set in...

why would gold matter if the world economy crumbles?

question for those much more knowledgeable.

I think this short surge is going to turn WAY WAY WAY down. My opinion and based on nothing other than my own thoughts on Covid as a whole (i.e. not market stuff) is that we are far from the bottom.

I have always been a max out the 401k as much as possible and let it ride sort of guy.
I have Fidelity and as of last week my 401k was -25%, but the bounce back up this week has me at like only -14% on the year.

Fidelity has a limited number of options (few index, large, mixed, small, international, and 2 bond options)
I have always had a little mix, slightly heavy on stocks but gradually putting more in a bond option over time.
I hope/planned to semi-retire in ~10 years so that gives you an idea of timeline. I expect that in the next 10 years we will see new highs in the market also, so I think plenty of time for me personally.

My question is...
Do I go move everything to Bonds 100% today to save myself on the continual fall? Then redistribute back to my previously successful mix after it bottoms out in 6-12 months?
OR
Do I just continue to "set it and forget it" given that I have 10 years left?

follow up question >> reading the fine print of a rebalance w Fidelity it says all stock re distributions have the option of waiting 7 days before they allow the rebalance. If I was making this change I would want it done today (I think Monday we see the real cliff and drop start as more major cities get blasted in #s over the weekend) Is this normal? or just shitty fidelity BS?

thanks

I am talking about a full rebalance where I move all my current stuff around (dump the index, small, mid, etc... and put it 100% in the bond)

I would leave my purchase for all future stuff the same to they catch some of the upswing.

My thought is I would be doing 2 rebalances. First is now, to decrease losses (the bond option is like -3% on the year compared to -25% for most other things). Second would be after I feel market has fully bottomed, to rebalance to a nice mix again and try to maximize the climb back.

I am very much a set it and forget it. I did the research and basically do a slight rebalance each year or 6 months to move more conservative with funds (as I get closer to predicted retirement).

Thinking that a rebalance today could easily save me from another 30+% losses (what I expect the overall market to do in the next 6 months), but pretty nervous about that since it is not my area of knowledge.

My primary investments are reall rental property, which is more scary in the short term (tenants paying???) but my bread and butter in the longer term.

thx

not much funds here...

How do I turn a 401k into cash?
I would be happy to just park it on the sidelines and wait.