MaxPowerParticipantStatus: PhysicianPosts: 289Joined: 02/22/2016
You can split up funds within an account. Especially with 401/403 accounts. You can just choose a percentage and then when your contributions are made it will buy according to the percentage that you set. For Roth accounts, you have to meet the fund minimum ($3,000 for a lot of funds at Vanguard), but early on don’t sweat it. Just pick an REIT fund or total stock fund for now and then you can contribute to a different class next year, or exchange part of your holdings for what you want it to look like down the road with no tax consequences (in your Roth and tax deferred accounts).June 11, 2019 at 10:34 pm MST #221177SportsdocParticipantStatus: PhysicianPosts: 7Joined: 05/30/2018
If you like real estate consider getting some rental houses. I have 3 rental houses that will be paid off (by the renters) well before I retire (15 year mortgages). It’s kinda like having an annuity, but you get to keep the appreciating principal. The three rental houses once paid off will generate a monthly income of $4000 (after expenses) for life that will adjust with inflation. Yes it does take a little bit of work, but I enjoy it. If you get the right property and renter, the work really is minimal.
I do have about 10% allocated to REITs, but that really doesn’t feel like real estate to me. REITs seems more tied to the stock market than real estate. If the stock market tanks, the REIT goes down with it. On the other hand rental income is unaffected by the market.June 12, 2019 at 12:21 am MST #221181ENT DocParticipantStatus: PhysicianPosts: 3168Joined: 01/14/2017
Rental income can absolutely be affected by the things affecting a market downturn. Recession, for example.
You have REIT exposure in a total stock market index. REITs kick off lots of dividends, which mandates they occupy a life within your retirement accounts. What if your retirement accounts at work don’t have a good/cheap REIT index? Then you’re relegated to making your Roth the de facto choice or paying high expense ratios for it.June 12, 2019 at 12:44 am MST #221182SportsdocParticipantStatus: PhysicianPosts: 7Joined: 05/30/2018Rental income can absolutely be affected by the things affecting a market downturn. Recession, for example.Click to expand…
I didn’t see rental income go down in the most recent recession 2007-09. In fact some might say rent could go up during a recession with less people buying homes. It’s all about supply and demand. I agree the property value can go down during a recession, but rental income…not in my experience.June 12, 2019 at 3:04 am MST #221184TimParticipantStatus: AccountantPosts: 2320Joined: 09/18/2018
REITs are a different animal. The sector investment is diversified. Rents ARE impacted. Many different segments behave differently. VNQ is broad.
Long term leases don’t protect occupancy rate when companies go belly up. Vacancies and projects under development are impacted. The long term nature of real estate simply move in a different timeframe than other segments.June 12, 2019 at 11:27 am MST #221336