Re: Just a off topic Hypothetical

Posted by Andy Martin on February 09, 2006 at 05:24:31 from (64.219.39.195):

In Reply to: Just a off topic Hypothetical posted by scott#2 on February 08, 2006 at 19:39:43:

I'd buy another rent house or other income producing property, having suffered enough in the stock market for the rest of my life.

The 18% return touted below is really great if it holds up. Usually good returns are offered because of a risk, otherwise the market drives up the price until returns don't look attractive. In other words, if their unit price is so low the dividend is 18%, the savvy investors are scared of it. If you want to gamble, stick to farming, buy 20 big steers and feed them out.

I bought Furr's Cafeteria stock years ago. They obviously had a business you could see, and were paying 12% dividend. After holding it a few quarters, I noticed their net worth seemed to go down by about the amount of their dividend each quarter. My broker talked me into keeping it, so I rode it all the way to worthless. If fact I still own $30,000 worth which I could sell at $10 but I'm counting on a rebound.

I've got a fair amount of rental property and pay a management firm to handle all contact with renters. You put the down payment into the property and rent pays the mortgage with enough left over to repay the down payment in a few years. After the mortgage is paid, it seems they gave you the property for worrying about it. I've never had one go down in value, most have gone up very well. The worst thing that can happen is urban renewal buys you out but they will always pay at least what you have in the property (in my limited experience).

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