How would you invest $100K USD aggressively? | Hacker News Reader

How would you invest $100K USD aggressively?

23 pointsrateofchange69 comments

Say you want to double it in 3 to 6 months. What would you do?

Real estate. Buy a cheap house with leverage, fix it and either rent it out, or sell it. If you rent, cash out refi, rinse and repeat. Many fortunes built this way. High use of leverage means many shirts lost as well, however many of our laws (assuming US) are skewed to benefit real estate investment and speculation... with the current admin, I don't see that changing anytime soon. I don't think you can find better odds.

>If you rent, cash out refi, rinse and repeat.

Can you expand on that point?

If they rent it shouldnt they just sit around and collect payments?

Also, isn't this all highly reliant on location?

Cash out refi allows you to use your rental as leverage for a down payment on the new house.

Sure. You buy a distressed house with leverage. Improve it, which if done in a smart way should raise the value more than what you spend on renovations. You can then go and refinance at the new appraised value, taking cash out. You take that cash and buy another property. Do this over and over and eventually you have a portfolio of properties and consistent cashflow from your rent roll. Granted this will likely take longer than a few months. You could probably do one flip in that timeframe, however.

good advice. dont forget to start your own home renovation reality show. there seems to be an infinite demand for them.

Like gjmarsh said, this might only apply to the US. I would probably be skeptical of doing this in (say) Australia at the moment. OP didn't mention what country he's in...

Would real estate actually meet the conditions of being $100k to start with and double that in 6 months? Real estate seems low risk low returns.

Also assuming the question means $200k cash (and not assets), would one be able to sell off real estate that fast?

You are likely right. I have seen people pull off flips that are this profitable, but its pretty rare.

Roulette odds are 47,37% for doubling. So if you are not confident that your investment can beat that dont bother.

Otherwise use high leverage products in the stock market which will amplify your wins/losses. Best case would be to make a strategy write it down and stick to it. Your biggest Problem there is psychological strain if the 100K means a lot to you. You will at best have a miserable time and at worst panic sell in the wrong moment. So if you cant afford to lose most or all of the 100K dont invest it especially not in high risk products.

I doubt most of the answers here will provide you with better probability than going to Vegas and putting $100k on black.

Stock Market and Casino both have Fees/House Advantage.

The difference is that Casino is more or totally based on luck while there is a skill factor involved in the stock market. Also the stock market isnt a zero sun game because of economic growth

In the end Casino has nearly the same odds for everyone while in the stock market there is much more variance. But i would inclined to say that for most casino is the better option

Poker would give better odds I think.

Depending on your skill, opponents and in some cases alcohol tolerance Poker would be a better and definetly more fun option.

Saw this table from Crypto Voices the other day - basically you buy $1 worth of BTC every day: https://twitter.com/crypto_voices/status/926808236950306816

BTC seems like an interesting option provided cashing out isn't impossible.

If we had a valid answer to your question we would already be rich. There is no answer. Though, I'd look into bitcoin as a very risky investment today. Who knows? A bitcoin could be worth $20000 in 6 month. That's the only doable/crazy thing right now I could think of. 3-6 month is too short unless you go hard on day-trading and get super lucky trading futures, options, etc.

I think the error here is in thinking, well, inside the proverbial box. My question is serious an does have lots of valid answers.

For example, I did not say the answer had to be a passive investment. Flipping homes could do very well given one is willing to put in the effort.

I have a friend who decided to sell a product found in most homes in the US. He didn't even make it. Armed with a phone and a laptop he turned an initial investment of $50K into about three million dollars in approximately two years. He probably worked 16 hours a day, seven days a week. He is now in the process of selling the business for many millions.

It's interesting to see how many people are suggesting bitcoin.

I meant there’s no recipe for success, which doesn’t mean it’s not impossible. There’s nothing you can simply copy/paste. Though I agree, a lot of people do make millions daily/monthly/yearly, but you have to create your own path for that. Otherwise A LOT of people would be richer today.

Home renovations. New kitchen, bath, enclosed porch. It might not increase the appraised value by twice, but I could convince myself to believe it.

On first glance, I thought you would do a renovation business. That could certainly make $200k in 6 months.

In speaking with a local realtor he showed me a few examples where clients flipped properties within 90 days or less and came out $100K ahead or more.

Provided there are no surprises this seems like a solid option.

Are you willing to loose all $100k?

Risk correlates to expected returns. The higher the returns the higher the risk.

To get the sort of returns you seek, you will most likely need to use leverage, which means you could lose more than your initial $100k, lots more.

No it doesn't; that is just a broad principle that is inapplicable in many specific situations. For example, any of us here could offer an opportunity for very low returns at very high risk, it just wouldn't amount to an attractive proposition to a thoughtful prospective investor who understood the offer.

I don't think you can get fast, high returns at low risks. Correlation might not be the best word, but I don't know what a better word would be.

So far the best answer to my question seems to be flipping real estate, in which case losing 100% (or any) of the investment is highly improbable.

Given the criteria to double the capital in 3-6 months, you will need to do something very speculative, which at this point in time looks like crypto currencies.

Another aspect of this question that hasn't been explored is that of scale. What I mean by this is that one can do things with $100K or more that are impossible to do with less capital. For example, buy four container loads of e-Bikes, solar panels, screwdrivers, socks or whatever and go sell them.

I think the error in some of the comments is in thinking conventionally and equating being aggressive with gambling.

3X leveraged ETFs

https://www.direxioninvestments.com/etfs#!/

Good luck!

I have to disagree. These are some of the worst investments known to man. Overtime you are virtually guaranteed to lose money.

https://www.google.com/search?q=leveraged+etfs+lose+money+ov...

Disagree. The documentation on every 3x includes loads of warnings to make sure investors (traders) understand that these are daily adjusted securities.

Give it to me, I promise you the return you deserve.

Here's how you might be able to double your cash flow, but not necessarily your money. Use it in a down payment for a multifamily unit, preferably triplex or quadplex. Live in one and rent the other. in 6 months use a cash-out refi to buy another quad-plex. Brace yourself for the terrible aspects of landlordship.

Buy real estate overseas. You need to do some research though to understand which location to invest.

Aggressive means ready to lose all, same as gambling. Be smart, read and learn about investing while you find the right one for you. In the meantime keep it in the bank. There's no easy money to be made. Good luck.

To me aggressive means lots of things, one of them being working your ass off in order to make it happen.

For example, I'd love to have a good SaaS product...I just can't seem to come up with ideas. OK, this would likely not double the investment in six months but maybe achieving that run rate in six months is possible with the right product?

If you had all the time in the world, I'd watch the VIX. When it spikes, buy the XIV (inverse). It's practically guaranteed to increase in value throughout the day, volatility can't stay in a spiked state.

Just to clarify, this is the CBOE Volatility Index?

http://www.cboe.com/products/vix-index-volatility/volatility...

Yes. You cannot trade an index but there are financial instruments which do their best to mimic it.

VXX is an ETN that's long on the VIX. And XIV is an ETN that is short on the VIX.

ETNs have their own precautions to take into account.

This is not good advice. You can’t predict how much we will drop next time on stocks and how the VIX may be affected.

We are in a long term contracted state of volatility. Professionals who understand how to manage risk may make the trade(s) that you’re suggesting.

All the cryptocurrencies might be the place to go for the next few years.

bitcoin, you may get 10x in six months

I did this, sadly only a few hundred. Invested ~six months ago, and now it is worth double.

Are you talking paper gains or actual cashed out real money gains?

Bitcoin is virtual currency based on massive electricity consumption. Due to the ever increasing difficulty of mining, it is effectively a Ponzi Scheme.

Paper gains. Sure its a pyramid of assumptions that could topple at any moment.

But if it continues the way it has been, then it can accomplish the goal.

"Surely real estate prices will keep going up!"

The worry is that when the crash comes, no one will be willing to buy. Or even if you find buyers, what if everyone starts withdrawing their money from the exchange, and the exchange doesn't actually have that liquidity...

3-6 months time span? Ponzi Schemes are my weapon of choice.

Difficulty is not in any way ever increasing. Difficulty is set based upon the overall hashing power of the network. If it becomes more expensive to mine, miners drop out and difficulty decreases.

Yeah, but good luck cashing out on that $1M USD.

How do you mean? That's a rather trivial amount.

Well it's not fully liquid. Looking at the question more strictly, it could be put in $100k, get out $200k cash.

The volume is not great. You'll lose quite a bit on exchanges. It's probably the same for stocks or real estate, but something like gold is much more liquid for a million dollars. Or gambling.

You really need to get into the tens of millions before you start having any sort of liquidity problems with Bitcoin.

haha yeah seen a few threads mentioning that coinbase limits you to cashing out only 15-20k/week.

However I have heard of a few exchanges that will let you cash out 1m+ in BTC.

Well, you can trade forex at up to 50x leverage, so you could definitely lose half your money in 3-6 months. But maybe double it.

Dumb question: since leverage allows you to lose more than you have, what are the repayment terms like when you get yourself into debt? Are the interest rates, repayment term, monthly payments, etc. clearly disclosed like they are for a mortgage or car? How many amateur forex traders had it end in wage garnishment?

That's not quite how it works (at least, with most of the online forex trading houses like FXCM). At any given time, they know exactly how much you are up or down in total (ie, including your leverage). If you hit the point where you're going to lose more than what you have in your account, they will perform a margin call and close out all your positions.

The really sucky bit here is (I've had that happen) when the market then immediately turns - you simply couldn't buffer the immediate losses ;-)

Do be careful with Forex.

Lots of shady stuff about and what many people don't realize in many (most?) cases of consumer internet platforms (like FXCM), one is actually trading against the company (they are the market maker) not against other participants. Not saying what does or doesn't happen, but the situation is such that there is incentive to do things like widen spreads and hit stop losses.

What this guy said. I've known a handful of people who have made some money on forex, by being extremely diligent and patient. I know many, many more people (including myself) who have lost unhealthy amounts of money while trading forex.

Buy an ETF called Robo which invests in robotics and AI companies and the ones building components. It has had 42% YTD returns. I have been invested in it for a while on the idea that robots are at a precipice of taking off and most people don’t seem to see it. See Bonston Dynamics work and getting acquired by SoftBank which makes Pepper. See OpenAI and the other AI progress being made. See self driving cars and Nvidia which makes a lot of the processing chips for the SDCs.

Sounds interesting

Someone mentioned jumping into solar energy in some way. It looks like installations haven't slowed down at all.

No better way than a high risk high reward portfolio of crypto currency

Give it to a winning cash poker grinder with good table selection skills. Hire an auditor to rail all his sessions and be his banker.

There is an abundance of talent to pick through if you are on the buy side of this type of transaction.

The skill in this type of investing is in deal negotiation and crafting terms to deal with where your players are weak. They all are somehow, but in different ways.

Buy a condo in an cheap tourist destination to rent on AirBnB.

Bitcoin. It's only a bubble after it bursts.

How do you convert back to hard currency at that scale (hundreds of thousands of dollars)?

Cryptocurrencies.

$XIV

I'd buy SALT tokens

https://bittrex.com/Market/Index?MarketName=BTC-SALT

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