Last updated: 12/8/2018
Before I show you the juicy details of my investments, note the following:
Not all of my holdings reflect my current investment philosophy. Before I knew better, I was a stock picker. Prior to starting this blog, I didn’t even know what an index fund is! The humanity! Now, almost all new money that goes into the markets goes into index funds. When I play with individual stocks, it’s with very small amounts of money.
To better understand my financial picture, I’ve split my holdings up into 3 separate categories:
- Stocks (35.9%):
- Funds (14.0%):
- Real estate (48.3%):
- Cash (1.9%)
Individual stocks account for 35.90 percent of my portfolio:
I’m not thrilled that Facebook is my single biggest holding. The company has been in the news a lot lately and for all the wrong reasons. And beyond that, social networks are trendy. There are signs that Facebook is struggling and there will come a day when the network goes the way of MySpace and Friendster. When the calendar rolls over to 2019, I’ll be selling some of my shares.
My long-term goal is to rid my portfolio of all individual stocks, but I’m doing it slowly to avoid capital gains.
Funds, in the form of old-school mutual funds and ETFs, account for 14 percent of my portfolio:
When I put money into the markets now, this is where it goes. I’m a big believer in index funds.
My real estate holdings account for 48.3 percent of my portfolio are all over the place:
- Trailer park: We own a trailer park with two other partners. All income to date has been invested back into the park, so we haven’t earned a dollar yet. This will change in 2019.
- Vanguard REIT: VGSLX isn’t a bad way to invest in real estate passively.
- Private loan: We occasionally lend money to others to help make their real estate dreams come true. These have all performed exactly as expected.
- Mortgage notes: We invest in short-term loans which give us a steady 8% return. These have done very well for us.
- Syndications: A syndication is a deal where you invest in a large property with other investors. All of our syndications are apartment building where the syndicator rehabs units, raises rents and sells 5-8 years later, hopefully for a big profit. We get quarterly payouts and also get a big check (again, hopefully) at the end when the property sells. We have yet to have one resold and these investments are young, so it’s hard to evaluate the success of them now.
Most of our real estate holdings are in a self-directed solo-401(k), so we can’t touch the money. This works out well for us since these investments are long-term in nature.
We have $30,000 in cash. This is a little less than what I’d want to have going into full retirement, but since Mrs. 1500 still works, I’m OK with it now.
Ideally, I would like to have my portfolio equally balanced between real estate and the stock market. This provides for a simple way to rebalance. The real estate holdings generate cash flow and I let my allocation determine where the new dollars get deployed. For example, if the stock market drops 20%, new cash would get deployed into index funds. On the other hand, if the stock market were to grow 25% in 2019 (unlikely!), I’d look for new real estate investments to deploy money to.
With stocks/funds at 49.9% of real estate at 48.3%, I’m pretty close to equilibrium now. However, this will all change in 2019…
We already have big plans for 2019.
Investing in/growing a business: Mrs. 1500 and I will most likely be investing in and helping to grow a local business. We’ll be selling part of our stock portfolio to fund this purchase.
New (crappy) house: The real estate market has started to slow down here in Colorado, so maybe we’ll purchase another home to fix up. We looked at one recently that is an ideal candidate, but currently too expensive:
Some have asked why I still take on these projects. Why trouble yourself with a business or a house flip if you’ve already won the race? I don’t need more money.
Growing the business will not only be a fun
Regarding the home flip, I enjoy construction. Coming up with a design and then implementing it with your own hands is incredibly rewarding. It doesn’t hurt that live-in flips can be incredibly lucrative.
That’s all I’ve got for now. I’ll update this page again in the first half of 2019 after some of the dust has settled.
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