What would you do with $200,000?

South central Kentucky. Not long ago there was a very nice place just up the road from me that sold for 44k, it included a very nice 3br brick home on a full basement, good sized barn, pond, nice place overall. It was on only ten acres, but there was two other 10 acre tracts that brought 1000 per acre right across a small county road. Lots of other places in our area can be had very reasonable if one shops around and is patient.

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Id pay my house off, sell my sharpening shop, and live off my maple syrup income

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10% set aside for a tithe fund.

10% set aside for an emergency fund.

!0% set aside for my personal education fund. This might include a bit of travel.

At my age, I would be inclined to spend the rest.

................I'd look for a property that had a year round creek , then I'd build a small pond to power a water wheel to supply my energy needs and any other jobs it could perform . From there , I'd establish a homesteading business build around my energy supply . , fordy

Prince Edward Island, Canada

sorry but the past century of historical data prove otherwise. Attempting to time the market, and/or suffering from the delusion that you are smart enough to pull out just before TSHTF, is a fantasy. In the history of modern markets, a well diversified portfolio HAS NOT collapsed, and left any individual destitute, if they had the discipline to not panic and wait it out. I'm not talking about waiting for a few decades, the maximum time it has take a well balance allocation to right itself has been three years.

As for individual investors thinking that they can outperform, there is a great statistic to think about. In the time period from 1983 to 2004, average self directed "active" individual investor return 2.5% per year. Average balanced fund return 12.5%.

Hard to make it more clear than that.

Hey, Wharton. Can you link me to the info that shows which specific funds (if any) these investments were run on?

With $100,000 stuffed into these types of investments (which is part of my end-game goal) at 12.5% averaged return, I'd be looking at nearly 3.5 million after 30 years - without putting a single dollar into it again.

Factor in a somewhat self-sufficient homestead (permaculture), fully paid off, and I think I could spend the next couple of decades without worrying about money much at all.

Thanks!

-Stev

You have an excellent understanding of how it works. As for your previous comment about individual stocks, don't bother. They may work out great, and they may not. A fund gives you a chance to balance the risk, and still make decent returns. Don't forget fees are the killer here. I had two funds that opened at the same time a few years ago. One was with a traditional broker who did his own stock picking, and charged 1.25% per year for his "performance," the other was a Vanguard domestic stock index at a .1% fee. After three years the broker was up 11%, the Vanguard fund was up 52%. Two things happened here. The broker suffered from the delusion that he knew how to pick investments, and he got an oversized fee for doing so. Needless to say, he no longer has a dime of mine.

Sure, spend a few hours at jlcollinsnh.com Start with "stocks Part 1" and read the whole series. Have fun. There are many folks like him out there. Retired very young, and doing quite well thanks to investing wisely, and with out gimmicks, or EOTWASKI thinking polluting their strategies.....

Yes, a few years ago when I had my killer IT management job ($120k / year) I got to a point where I was ready to start investing... so I spent about a year reading up on it (Graham's intelligent investor, warren buffet's biography The Snowball, lots of reading on Motley Fool, and playing with the fantasy stock market websites). I then lost that job and never got a dollar into the market.

So far it sounds like you're really big on the Vanguard fund. I'll dig back into that and do some more research. After my last post, I found another calculator that helps you account for things like taxes and inflation... it don't look so pretty at that point, even if it turns into a few million. But it's better than sitting on it and letting the cash get whittled away to virtually nothing by inflation.

Any other funds you strongly recommend we research besides the Vanguard?

I look at it this way with EOTW stuff... it could happen, and I want to be as prepared as possible in case it does... but it isn't the driving factor motivating any of my major life decisions.

Thanks for all of your help, I'm going to dig into that site some more tomorrow morning!

This is a great idea. I had been thinking about having a creek to I can manage and maintain my own small hydroelectric system... but actually harvesting the Earth's energy and turning it into MITB? Genius!

Glad I joined this forum, it's already feeding me super ideas.

Factors:

1. Price of land.
2. Growing seasons.
3. Basic land fertility.
4. Government intervention. For example, can you build your own house or barn without myriad rules, permits and regulations?
5. Taxes. In some states a small homestead would pay NO property taxes.
6. Markets. Where can you work? Where can you sell what you produce?
7. Water access and Irrigation.

Lots of things to consider....

What would I do with 200k? If I was not attached to an area I would pick up some cheap land in the Ozarks or in NW NC with pretty mild weather and pay for it in cash with a small house or I would move an old farmhouse in, and be debt free and propety taxes are next to nothing.

I would especially be looking for a spot that had a good year round creek with a good elevation drop so I could go off grid with a dependable small hydro system for electricity rain or shine, night or day with no light bill.

I could get the cost of living down to under 12-15k a year growing/raising most of my own food.

Being 100% debt free, a bit of cash left in the bank, and a comfortable lifestyle even with poverty level income. Sounds pretty secure to me, any job I had would provide enough to save and invest on top of that. I can make that kind of money on my own repairing things for folks.

Can't do that where I am now, property taxes are in the top 5 of all states, over $200 a month for my place of 11 acres and a house, and only solar for possibly cutting the light bill and solar isn't cheap for a dependable round the clock system.

But I could sell my place for about 200k, and do just that, but I am committed to staying here and caring for my elderly parents who live a few miles down the road.

I would pay off our place...do the other things to it we want..buy me some new teeth and squrriel away the rest to look for good deals...

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No debt to pay off, haven't had debt in over 9 years.

Would be looking for land / property up to about $100k, maybe a little more if it had a home on it. Would want to reserve $30k or so for equipment to get going which would be some very modest equipment and a couple of high tunnels mostly as well as seed and orchard stock.

A lot would depend upon what was already there. I would love to be off-grid but realize that it may not be practical in every situation. And I know that's not cheap.

Definitely would like to make some investments with at least a portion of it but have pretty much zero confidence in Wall St. That old saying about "past performance is not guarantee of future returns" is likely to come home to roost in a big way as our economy continues downward. (Seriously, I don't see a "recovery" happening. None of the core issues of our failing economy have actually been addressed. The govt. at large just continues with the bandaids and never really fixes anything.) And as a former commodities broker, I do have some knowledge of how things work.)

I guess that's what I get for listening to my husband who is a stock broker of thirteen years, who has dramatically increased our money by investing in gold and silver and commodities. So instead of getting a meager 6-10% we multiplied our money by ten fold. I can retire at 35 instead of waiting until I'm 50, but hey that's just me, most people like you would rather wait until they are 50 and can barely move to enjoy their money.

FYI its illegal to give stock advice on a forum like this if you are a licensed broker or not.

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AMEN to the new Teeth

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We are presently thinking about retirement, although we are only in our late 40's. We are looking into southern Missouri, Kentucky and Tennessee for an affordable small farm, with 15 to 20 acres and a modest home, perhaps already with barns. There was a nice place in West Plains MO that went for $109,000, with 40 acres, large ranch house, and barns. So it is possible to buy some land/home reasonably, just not on the east coast. Things I'd want (already have) would be a good sized tractor with a bucket and a backhoe, and atv's. Animals I'd raise would most likely be chickens, goats and sheep, perhaps some rabbits. I'd grow the usual garden stuff for canning. I'd like to invest in a few windmills, and have a decent stream on the property as well for power. Would be great to have a good part of the property wooded, part pasture, etc. We have learned to live very simply these last few years, we don't want for much, could be though because we don't want very much. I could do quite a bit with $200,000, but not living here. Its too cold here in the winters, growing season is too short, and its too close to the coast, pushing up the property values. I could completely change our lives and location with $200,000, and have some left over, because I'm pretty darn frugal.

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We'd pay off the mortgage, and the C-card, buy another new vehicle, DSWife would retire, and we'd put the rest in the bank. We could quite likely live comfortably, on our combined Retirement Funds.

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