Conservative High Yield Investments

stuckinpgh · #1 11-26-2007, 04:27 PM

I am interested to hear opinions on what the best high yield investments are out there. For those of you that don't know me I've been a pro gambler for a little over 5 years, which obviously involves quite a bit of risk. That being said, once the money arrives at the bank I become one of the most conservative people with money. I don't think it's really all that uncommon actually considering I have a wife and two young children, a big house, cars, etc and all of those things require the cash to be there every single month.

Up until this point I've invested a large chunk of my liquid net worth in Real Estate Trust Deeds that are fully secured and pay 12-13% annually. Our LTV's are usually less than 50% so I feel the risk is very minimal even in the worst real estate market. I also have some Fidelity mutual funds that seem to outperform the S&P every year in some IRA's that I've setup. Other than that the rest of the liquid cash is in a money market account getting about 5%.

A friend mentioned to me today that he's involved in some stocks that yield high dividends. PGH is one of the symbols he mentioned, which is a stock that seems like it never moves and has almost a 15% yield.

I guess what I'm asking for here is what else is out there that returns in excess of 10% a year that is safe? I really love the trust deeds because they are simple to get into and involve very little time to maintain, but I want to diversify a bit if possible. I don't mind the grind.. I've been doing it with poker every day for years.

maxtower · #2 11-26-2007, 04:42 PM

Anything yielding higher than 5% likely has a risk to principal, possibly a larger risk than you are estimating.

stuckinpgh · #3 11-26-2007, 05:04 PM

I should clarify that I accept SOME risk as I'm well aware that anything higher yielding than a bank CD will have to include risk in theory.

ahnuld · #4 11-26-2007, 05:33 PM

oxymoron by definition

SuperWhale · #5 11-26-2007, 10:35 PM

[ QUOTE ]
oxymoron by definition

[/ QUOTE ]

QFT

Also notice OP's name is "Stuck in PGH" and he mentions PGH stock . . .

DesertCat · #6 11-26-2007, 11:32 PM

[ QUOTE ]
[ QUOTE ]
oxymoron by definition

[/ QUOTE ]

QFT

Also notice OP's name is "Stuck in PGH" and he mentions PGH stock . . .

[/ QUOTE ]

He's a high limit player out of a PittsburGH.

stuckinpgh · #7 11-26-2007, 11:41 PM

superwhale - yes first thing I chuckled about when I saw the symbols

spex - this sounds interesting. Do you have any links where I can read more about buying discounted paper

I'm sure many of you agree that the stock market isn't looking too promising in the near future. I certainly understand "the long run" will produce good results in the market, but knowing that I will immediately lose money the day I invest more is really causing me to hesitate there.

edit: as always, Google is your friend. Would still like to see anymore links you may have.

spex x · #8 11-26-2007, 05:44 PM

Well, I was going to suggest buying some RE paper, but since you're already doing that...

You could get into hard money lending. Your experience with RE paper will help a lot. The HMLs that I know generally make about a 20% return on invested funds. Normally you're still getting a strong equity position on the property (i.e., 65% or so LTV).

stuckinpgh · #9 11-26-2007, 08:27 PM

What other forms of hard money lending are there that are secured by collateral? The Trust Deeds I do generally involve land development, commercial land improvements, or personal mortgage swing loans.

I've also dabbled in stuff like prosper.com, but from my short experience there lending money unsecured over the internet is a bad idea no matter what the interest rate is. I've actually only had one loan out of nearly 100 default so far but I'm counting on there to be more before the loans are paid off.

The idea of lending money and "being the bank" seems to interest me more than throwing money in the stock market and watching the dice roll on a daily basis though. I have a friend that has almost 3mil invested in trust deeds and is earning an extremely healthy salary at 13%, but even he wonders if he should be involved in other things to diversify.

geormiet · #10 11-26-2007, 08:40 PM

I share a lot of the same views as you so I'm interested to see how this thread turns out.

Regarding prosper, I don't think it's a good choice. I've got about 6k in there and thought i was doing great, until I realized that the ROI's prosper advertises and displays aren't really accurate at all. There are sites out there that will show you the real numbers (e.g. prosperlenders.com has a lot of links) and the overall avg return is something like 4%. I myself am averaging under 3% roi.