[orko]

Hi guys

I have been working as a freelancer for a couple of years and i have been successful. I live in a latin american country and i'm able to save 3K dollars monthly. Although its great i'm wondering what can i do to do more with that money, instead of just stashing it i would like
it to "work" for me..
Any ideas??

[iknowexactly]

DRIP with dividend aristocrats. or buy rental properties in us state university towns.

[Akula]

Definitely hookers and blow!!

Seriously, spend a little of that on some things you'd like to do, travel a bit more on the weekends, get out and explore. Get a custom suit, some nice shoes....a watch for yourself that you’ll always have, just make sure it’s all good quality stuff that lasts and you can use for a long time.

Think about things you need that you really need that could make your lifestyle better and easier, and go get them. Or go somewhere you've always wanted to go. Or step up the quality of the wine or alcohol you drink, or restaurants you go to. Or just join a gym and get some MMA or boxing lessons, or art lessons, or whatever you like that is something you've always wanted to do. Or buy a nice gift for your Mom and Dad or someone. You don't have to go crazy, but try to 'step it up' where you can and have always wanted to.

I say this as a guy who's saved religiously all his life and after a point it's gotten me nothing really. Just money sitting in the bank while I worked to earn more and more of it, while not focusing on improving my inner self for quite a long time. It's nice to have a 'nest egg' all saved up and also to have something in reserve of course, or to pay for a down payment on a house, and I’m not saying ‘don’t save at all’, but I wish I'd spent a little more on myself throughout my 20s and 30s. All this 'you gotta work yourself to the bone till u retire' is just a bunch of BS that came from an era in America that no longer exists. Who the hell knows where 'saving's will end up in 10-20 years.

So I say spend a little bit more on yourself and live for the moment a little more. That doesn’t mean you need to blow the whole $3k every month, you can still save at least half of that, but just spend some money on some things that will help improve your life and make you a better, more interesting and help you get more fun and enjoyment out of life.

But to answer your question, investing is really hard these days with low growth, an overheated stock market, overinflated currencies and generally low returns on most asset classes, with a few exceptions. You can always put some cash in a diversified equity portfolio, some in gold, and some other fixed income bonds or say floating rate debt to hedge for the inevitable interest rate rise coming. But cash in the bank earns nothing, the equity markets have had a huge run already, and the credit markets are a bit overheated too. So just be careful and make sure you’re at least diversified. Ideally consult with some sort of investment professional or read up a lot on the various investment opportunities out there. There is a lot of ins and outs to the business of investing, and although there is some good advice on this forum, I seriously think you're going to have to do a lot more of your own research, including on the various investing websites, as opposed to having the guys on this forum tell you where to invest.

Investing in business ventures can be profitable, but I think they end up being a lot of work end of the day, so not sure how much time and money you would want to put into something that's outside what you do now for a 'job'.

The one caveat I'd say a little about is real estate. If you get something you can live in and use and/or rent out I think that's a good play now – housing should continue to maintain its value and it’s nice to have a hard asset that you can actually live in if a downturn happens (as long as you’re not overleveraged on it). Check out the various real estate threads on this site, there are some good ones, and many forum members really have some good advice if that’s an option. Plus hey have some good links to some good RE forums as well.

[iknowexactly]

it makes sense to be learning how to enjoy life as well. But if you're saving 3K/month and you have a job you don't hate, in about 7-10 years you should be set for life with rental properties. This is the oldest business a man can do, I did research on Ancient Egypt and they were renting lands for crop growing 4000 years ago.

In a country like the US property laws are very well-established and accepted, and only in very odd cases like where they condemn your property to build a highway there ( in which case they pay you well for it) can you lose it. You just need insurance, a property manager, and twenty years after you buy it it should be worth far more than you paid, and it will have been earning money the whole time. Just don't buy near a ghetto or anyplace that can turn in to a ghetto.

That is why good central state university towns a re good. No state will let its flagship universities decay unless they whole economy collapses. It's a matter of pride, and they can 't move the facility it's too big.

If you're worried about total economic collapse buy mountain cabin with good water and game supply and stock it up with all sorts of shit. Little return on investment however, but could be a good vacation spot.

[Vicious]

*Business equity (either direct investment or through mutuals )
*Real estate (that you in turn put up for rent)
*Blue chip stocks

[orko]

(12-05-2013 06:54 AM)Akula Wrote:  

Definitely hookers and blow!!

Seriously, spend a little of that on some things you'd like to do, travel a bit more on the weekends, get out and explore. Get a custom suit, some nice shoes....a watch for yourself that you’ll always have, just make sure it’s all good quality stuff that lasts and you can use for a long time.

Think about things you need that you really need that could make your lifestyle better and easier, and go get them. Or go somewhere you've always wanted to go. Or step up the quality of the wine or alcohol you drink, or restaurants you go to. Or just join a gym and get some MMA or boxing lessons, or art lessons, or whatever you like that is something you've always wanted to do. Or buy a nice gift for your Mom and Dad or someone. You don't have to go crazy, but try to 'step it up' where you can and have always wanted to.

I say this as a guy who's saved religiously all his life and after a point it's gotten me nothing really. Just money sitting in the bank while I worked to earn more and more of it, while not focusing on improving my inner self for quite a long time. It's nice to have a 'nest egg' all saved up and also to have something in reserve of course, or to pay for a down payment on a house, and I’m not saying ‘don’t save at all’, but I wish I'd spent a little more on myself throughout my 20s and 30s. All this 'you gotta work yourself to the bone till u retire' is just a bunch of BS that came from an era in America that no longer exists. Who the hell knows where 'saving's will end up in 10-20 years.

So I say spend a little bit more on yourself and live for the moment a little more. That doesn’t mean you need to blow the whole $3k every month, you can still save at least half of that, but just spend some money on some things that will help improve your life and make you a better, more interesting and help you get more fun and enjoyment out of life.

But to answer your question, investing is really hard these days with low growth, an overheated stock market, overinflated currencies and generally low returns on most asset classes, with a few exceptions. You can always put some cash in a diversified equity portfolio, some in gold, and some other fixed income bonds or say floating rate debt to hedge for the inevitable interest rate rise coming. But cash in the bank earns nothing, the equity markets have had a huge run already, and the credit markets are a bit overheated too. So just be careful and make sure you’re at least diversified. Ideally consult with some sort of investment professional or read up a lot on the various investment opportunities out there. There is a lot of ins and outs to the business of investing, and although there is some good advice on this forum, I seriously think you're going to have to do a lot more of your own research, including on the various investing websites, as opposed to having the guys on this forum tell you where to invest.

Investing in business ventures can be profitable, but I think they end up being a lot of work end of the day, so not sure how much time and money you would want to put into something that's outside what you do now for a 'job'.

The one caveat I'd say a little about is real estate. If you get something you can live in and use and/or rent out I think that's a good play now – housing should continue to maintain its value and it’s nice to have a hard asset that you can actually live in if a downturn happens (as long as you’re not overleveraged on it). Check out the various real estate threads on this site, there are some good ones, and many forum members really have some good advice if that’s an option. Plus hey have some good links to some good RE forums as well.

Amazing Post, Thank you for your hindsight!

[orko]

(12-05-2013 07:16 AM)Vicious Wrote:  

*Business equity (either direct investment or through mutuals )
*Real estate (that you in turn put up for rent)
*Blue chip stocks

When you guys say real state, you mean buying it with a mortgage right? the issue with this is that property in latin america is in an all time high now, and property in the US, although at low levels currently, still much higher than in latin american....

[iknowexactly]

(12-05-2013 08:10 AM)orko Wrote:  

(12-05-2013 07:16 AM)Vicious Wrote:  

*Business equity (either direct investment or through mutuals )
*Real estate (that you in turn put up for rent)
*Blue chip stocks

When you guys say real state, you mean buying it with a mortgage right? the issue with this is that property in latin america is in an all time high now, and property in the US, although at low levels currently, still much higher than in latin american....

I'm sure people have been saying real estate is "high" since 1000 BC.
The question is not that, but how good a relative return you can get for renting it out.

Cash is losing value almost continuously, although only at something like 3% per year. But rentable real estate in a cultural center that will almost surely never be abandoned can only increase in the long run. Here in the USA, the first thing many immigrants from poor countries do is get some real estate to rent out.

[OSL]

What kind of freelancer are you and how much have you saved up so far?

[SVK]

I have this same "problem" as well where I'm saving about $4k a month for the last 16 months or so, in July I started trading with $50k and currently the account is a little bit over $80k, not a bad return for 5 months. Most of this is still unrealized (as I think those particular positions are still going higher) and in stock options that are by definition pretty volatile. Bulk of my money has been made with AAPL options, usually at least 3 months out. Still quite aggressive and risky trading, but knock on wood it has worked out for me. But I have been down up to $5k at one point though as recently as September.
But not sure if I can recommend aggressive trading, especially starting as a novice right now. 2013 has been exceptionally great year for the stock market, 2014 will be almost certainly worse. I attribute my gains to good market and certain degree of luck (especially lately) and willingness to take risk, also I spend at least an hour (often more) daily studying the market and educating myself as I am still very much a beginner. What iknowexactly is suggesting is much much safer strategy.

[Remington]

I have a Scottrade account where I direct deposit money from paychecks at work. Pretty convenient way to trade and manage an evergrowing portfolio. Quite nice actually.

[samsamsam]

I think you got some solid advice. I think Akula put it into good perspective. It is about utility (think of it as happiness). Spend your money/invest your money to the point that optimizes your utility. For investments, do the ones that satisfy your risk/reward profile. Some need steady and safe (well as safe as you can get nothing is truly safe) and others wanna bet and bet big. Buying things that last do provide value for years. But saving and investing all your life (like I have) sometimes I feel guilty about wanting to blow money on something. Don't get to that point, you need to allow yourself some money just to blow/to feel free and not give a fuck.

As already discussed, growing internally as a man can be cost free and provide huge utility.

But there is HUGE value (I mean huge) - if you can get your fuck you money. I know you freelance, but it would be not having to freelance any more. That is what I am working on. The fuck you money, and just knowing it exists or are getting close provides huge utility. Knowing you can buy whatever you want (everyone wants different stuff so no need to argue what the dollar amount is) is oftentimes better than actually buying it.

Because you have freedom.

Edit: But in practical terms list out what makes you happy - don't filter your thoughts. Then rank them, figure out what things you need now to be happy and whatever is left over can be invested. Then re-assess your risk profile and start looking for investments that meet your needs. Maybe you will find out you need to save a little less to be able to pretty happy now.

[orko]

(12-05-2013 09:46 AM)youngmobileglobal Wrote:  

What kind of freelancer are you and how much have you saved up so far?

I work as a sysadmin / devops engineer and i have saved in the last 2 years like 70K, not a fortune but still good money for latinamerica.

[SVK]

orko,

Do you work (contracting I assume) remotely for US companies? Have seen a quite a few dev job postings (Bay Area startups mostly) that say something like "candidate ideally lives in the Western hemisphere". This is something that I'm seriously thinking about for my near future, living somewhere in Latin America (or EE or SEA) and taking Bay Area salary (well, probably lower, but still very good for the much cheaper location).

I'm a software engineer myself, would be extremely interested about your setup.

[bacon]

if you only have 70k I would actually not recommend putting all of your eggs so to speak in one basket and buy a rental property. It would be poor asset allocation and also not provide you the kind of growth equities could for retirement. I would recommend you to read this link below.

http://www.joshuakennon.com/the-kennon-r...ance-plan/

Also personally I recently allocated 15% of my investment porfolio in precious metals mining equities. The evaluations (p/e ratios) on mining companies are very low and I see lots of growth potential in the upcoming years with very low interest rates and an increase in the money supply. It is the most hated sector in the market and this means the upside potential is huge. If you are curious on reading more about this check out this link below.

http://zealllc.com/essays.htm

Finally you should meet with a financial advisor not affiliated with an investing company and that you pay by the hour not on a commision. Talk to him about your goals for investing, tax strategies etcs. You could likely set something up with skype or over the phone if you cant make it back in the US.

[zoom]

Precious metals. They are currently undervalued when compared to historical prices.

[orko]

(12-05-2013 02:40 PM)SVK Wrote:  

orko,

Do you work (contracting I assume) remotely for US companies? Have seen a quite a few dev job postings (Bay Area startups mostly) that say something like "candidate ideally lives in the Western hemisphere". This is something that I'm seriously thinking about for my near future, living somewhere in Latin America (or EE or SEA) and taking Bay Area salary (well, probably lower, but still very good for the much cheaper location).

I'm a software engineer myself, would be extremely interested about your setup.

Yeah i have worked with clients in the US, but currently im working with clients in Europe and Australia(although they have presence in the US),i only need a laptop, internet connection, Linux and SSH. As you said i live in a cheaper location earning maybe a low salary in the US but very good for latinamerica..

[OSL]

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Are you a programmer? Can you build apps?

What I would do if I was a talented programmer or had a talented programmer friend:


1. SAVE

Save another 30K to hit 100K, why not

2. ASIA

Move to Singapore, live frugally in an Airbnb apt, and begin aggressively networking with VCs to raise venture capital

3. VC $$$

Raise funding for a tech startup idea, build a team - create an app or website that has worked in the west - create it knowing specifically what sort of entities you'd want to sell it to, such as Singtel, Singapore Press Holdings (if local) - one of these juggernauts with tons of cash.

Or maybe a different international entity. The Japanese have been really active in acquisitions in Singapore in the past 18 months or so. You'd have to look around as CEO and be heavily active in fundraising and lining up potential acquirers as you grow.

Once you raise capital you will be able to replace burning through your own cash with paying yourself a salary of 4-5K SGD per month and live a reasonably good life.

Build a back office development team in Saigon. Lots of hungry young developers that are extremely hard working and talented that are flying under the radar because nobody thinks of Vietnam as a dev back office. Lots of extraordinarily talented designers too. You can snatch them up at 1000 bucks a month, a piece. You can set this back end office up with venture money once you raise it. Replace yourself with a trustworthy CTO once the MVP is built and you are bringing in some cash. Begin shifting full time to CEO roles like bringing in more talent, scaling up, watching the cash in the bank, and basically handling everything externally.

4. LIQUIDATION

Aim for an acquisition of 15-20M USD on a timeline of 2-3 years. Create a stock options pool for your employees to keep them loyal. Keep your VCs at arms length the entire time, these guys can be fucking snakes.

5. WEALTH PRESERVATION

Keep acquisition cash and assets offshore in Singapore, invest in precious metals and real estate. No reason to repatriate those earnings to the US.

6. INTERNATIONALIZATION

Become a permanent resident of Singapore, take advantage of world class and cost effective healthcare - become a traveling world investor, never freelance another day in your life

Use your net worth to purchase assets in places like Latvia where you can gain permanent residency and potentially eventually citizenship to the EU. Ditto Paraguay, Ditto Chile. Purchase agriculturally productive farmland in South America.

7. EXPATRIATION

If necessary, become a citizen of Singapore and renounce your US citizenship to get rid of worldwide taxation for the rest of your life

---

[babelfish669]

Buy 3 bitcoins.

Just kidding.

When you have a small amount of money (under $100k) the best thing you can do is just save it. If you are unmarried and without children, $100k means you can go anywhere and do just about anything for a long time. Your income can vanish and you'll have plenty of time to recover it with $100k.

Over $100k, and under to some degree, the best ROI is going to be investing in your own business that you know a lot about. Things that are nearly guaranteed to make money. Doubling or tripling the money should be the aim. If you can keep rolling it forward, or use it for collateral, you certainly can take $100k to $1 million. The key is having deep knowledge about what your doing -- and hard work.

Once you are over $1 million, the time spent personally investing, stocks, bonds, real estate, starts making more sense. The downside is it needs to be something your good at. Warren Buffet style investing is low-return short term, but achievable by the average guy. Continuous buy & sell trading is hard to the point of may be being random. Both require active investing and lots of learning.

The US stock market is at an all time high (more or less), interest rates are at a record low. I would be cautious about dumping money in to any asset class right now.

[VinnieVincenzo]

But bitcoins and hold them long

[Maciano]

First advice I give you: free advice is the most expensive one out there.

If you have 70K you shouldn't blow it. Invest it in something making you even more money.

Make sure you generate a cashflow, then use some of the cashflow to enjoy life a little.

[Maciano]

@youngmobileglobal

Agree on Singapore. Great place to live. Good weather, rich 'country', civilized people, class all around you. Expat scene is great too. I was there about a month and it was a mix of suburbian cleanliness & metropolitan energy

Damn, I should go there again.

[worldwidetraveler]

OP, you should partner up with YMG. He makes it sound like getting 15 to 20 mill pretty easy. Hell, I should have partnered up with him when I first started out.

[OSL]

(12-06-2013 09:08 AM)worldwidetraveler Wrote:  

OP, you should partner up with YMG. He makes it sound like getting 15 to 20 mill pretty easy. Hell, I should have partnered up with him when I first started out.

Hahaha no way this is easy.

What I laid out, in terms of difficulty/ease, is similar to that underpants gnome episode of South Park:

1. Underpants

2. ???

3. Profits

It's like how certain countries like Denmark, New Zealand, South Korea all rank in the top 10 for "ease of doing business in" - just because the administrative sequence of events is straightforward doesn't mean that your business idea is any good or that you will execute upon it well.

You will work your fingers to the bone for years to cash out. I probably should have mentioned that as well.

-

[OSL]

-

If you can build an MVP for a product that begins to take off while you are freelancing and saving money in Latin America then raising capital in Singapore will be way way way faster. There is a crapton of money in SG chasing too few deals. They are trying to build a startup ecosystem there from scratch. They are making all the right moves in terms of easing the tax burden (basically eliminated it until you pass a certain amount of revenue).

There are two sort of scenarios here IMO:

1. MERCENARY - you build something that you specifically think a specific type of acquirer will want. For example, Rocket Internet makes ecommerce clones all over in emerging markets so that they can be acquired by larger US or European entities. All the groupon clones in places like Germany and Korea are being snapped up by Groupon and Livingsocial. You can think to yourself "I can build something that one of these juggernauts will want and then get acquired" - you can begin with the end in mind.

2. PIONEER - Put a dent in the universe. Change the world, save the whales, end HIV, bring new tech to a new generation - that's a 10+ year business that you go into knowing that this is what you want to do for the rest of your life. No exit plan in mind - just create massive value and ride the wave. This will be way more personally fulfilling. Funnily enough, this approach and the passion that you produce from it [assuming you choose an idea that is needed and has a market] may end up going to the 9 or 10 figures range. Who knows?

Getting into startups it helps to know what kind of company you want to build. Are you a mercenary who is gunning for 5-20M in 3-5 years?

Or trying to put a dent in the universe?

Those two scenarios are not mutually exclusive. You can be in it for both. But knowing why you're getting into it will help you align your goals and manage your time better.

You've got some time and you're saving money. Maybe start taking on less freelance gigs, become more frugal, and begin bootstrapping an idea for a web platform or a mobile app.

You don't have to raise capital in Singapore either. If you are familiar with Latin America and speak Spanish then you have a huge competitive advantage. Ecommerce is a huge opportunity there.

Start hacking away man, if you have the chops to build something yourself. Once you start making some money and prove your MVP then you can choose who will fund you instead of the other way around.


My two cents.

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