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View Poll Results: How much is enough (before you feel you can stop working and retire and go sailing)?
$1000 to $100,000 73 21.92%
$100,000 to $500,000 81 24.32%
$500,000 to $1,000,000 76 22.82%
$1,000,000 to $100,000,000,000,000,000s 103 30.93%
Voters: 333. You may not vote on this poll

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Old 13-12-2007, 05:56   #226
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Well we are in the same boat...as we are saving and counting each penny so as we can take off, after buying a motorcruiser and parting with the kids. so I think it's agreat question? How much is enough...to stay awhile, live, enjoy, and just be?.
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Old 13-12-2007, 06:12   #227
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Well we are in the same boat...as we are saving and counting each penny so as we can take off, after buying a motorcruiser and parting with the kids. so I think it's agreat question? How much is enough...to stay awhile, live, enjoy, and just be?.
All depends how much it costs to feed you and your boat in the location you choose to cruise.

Some places are waaaaayyyyyyy more affordable than others.

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Old 13-12-2007, 06:15   #228
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It is a great question but it's zen-like in that there is no direct answer. It represents the broader riddle that has solved by each individual making the transition.
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Old 13-12-2007, 16:20   #229
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One persons fortune is another persons pocket change.
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Old 13-12-2007, 17:48   #230
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cat man do...
Please tell me where to buy a house for, say $50,000, and sell it for $300K, or better yet $3 million (6,000% return), in a single lifetime.
I thought I did Ok at about 380% over nearly 20 years. It still didn't amount to a hill of beans.
A late reply to a post I missed.

6000% return was wrong, it was 1989%. (on original cash investment)

This is on original $$$ invested eg: $79,000 house at Rockhampton QLD purchased 3 years ago.

20% deposit = $15,800

Current Valuation based on recent sales in area $330,000
(^ 320% on purchase price sustainable??????)

$330k - $15.8k = $314.2k

$15.8k x 1989% = $314.26k

Sorry for the mix up and delay in reply

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Old 13-12-2007, 22:10   #231
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CMD - That formula makes no sense. Nobody netted 314.26k. The net is 330k - 79k = 251k. The gain is aout 400%

Now in a lifetime? My Dad purchased his house in 1963 for $9,000. The same crappy 1,500 sq foot frame house in SoCal just sold for 358,000. That's a gain of about 3900%. Anyone want to do the NPV? I do remember him bitchin about the $80 a month mortgage payment and telling mom we were going to have to tighten the belt...
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Old 13-12-2007, 22:34   #232
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I think you missed this bit

Quote:
(on original cash investment)
That place has only cost me the 20% deposit ,the tenant's rent covers for the loan repayments, Rates ,insurance ,managment fees etc.

I can access through a LOC the $314k in equity (or 80% of it) if so inclined.

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Old 13-12-2007, 23:05   #233
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Cat Man Do and Ex-Calif, you're both right - but you're talking about two different things.

CMD's calculation makes a couple of assumptions (that the property is currently worth $330k, and that he could actually consummate a sale at that price). And while that price would indeed net him $314.2k more than his initial $15.8k down payment (or 1989%) it ignores the fact that he still owes the balance on his original note of $63.2k less any principal paid down since the inception of the loan.

So only by selling the property can CMD calculate what his ROI actually is. And, as Dan has stated, selling the property for about $330k is only about four times more than its original $79k purchase price (or 400%).

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Old 14-12-2007, 04:42   #234
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Einstein dies and goes to heaven only to be informed that his room is not yet ready. "I hope you will not mind waiting in a dormitory. We are very sorry, but it's the best we can do and you will have to share the room with others." he is told by the doorman (say his name is Pete). Einstein says that this is no problem at all and that there is no need to make such a great fuss. So Pete leads him to the dorm. They enter and Albert is introduced to all of the present inhabitants.
"See, Here is your first room mate. He has an IQ of 180!" "Why that's wonderful!" Says Albert. "We can discuss mathematics!"
"And here is your second room mate. His IQ is 150!" "Why that's wonderful!" Says Albert. "We can discuss physics!"
"And here is your third room mate. His IQ is 100!" "That Wonderful! We can discuss the latest plays at the theater!"
Just then another man moves out to capture Albert's hand and shake it. "I'm your last room mate and I'm sorry, but my IQ is only 80." Albert smiles back at him and says, "So, where do you think interest rates are headed?"
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Old 14-12-2007, 12:29   #235
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This is an amusing piece Gord, and versions of it have been around for quite awhile. And while it's generally best if people don't look closely at just what's in their sausages, the same is probably true of what's in their humor.

Still, when I parse this story/joke/anecdote, here's what I see:

It probably originated in "the markets," where the short-term movement of interest rates can be as much as you need to know to profit handsomely. The problem is that rates can only do three things: rise, fall, or stay the same. There are passionate advocates for each of these three at any given time.

One will be right, two will be pissed. The one who was right may well have been right for all the wrong reasons, but will be no less smug in his firm belief in his superior reasoning ability.

That the originator of the anecdote places mathematicians at the highest level of intelligence probably indicates he is one of those who approach the markets by concentrating on the numbers, in the mistaken belief that this will eliminate "emotional static" from blurring the picture. "The sum total of all traders' emotional input is reflected in the numbers anyway," he will say. These people are referred to as "quants."

Placement of physicists in the second tier of intellect is probably because Einstein was a physicist and mathematician, and only one could be first. If this story did originate in the trading markets, it can't possibly be that the originator ever encountered any physicists there. There may be plenty of mathematically-inclined traders - there are few who can even spell physics.

The placement of "show-folk" on the penultimate tier reveals the disdain most people have for the entertainment crowd. After all, the Biz is overflowing with simple-minded, pretty people with gigantic egos and no ability to balance a checkbook. Everybody knows that, don't they? Oh, you don't actually know anyone who works in entertainment - well, still, everybody knows that, right?

Then there's the poor sap on the bottom tier, doomed to an endless, pointless discussion of the direction of interest rates. This person is usually given the title "Economist." Economists are regarded as one of the lower life-forms by those who don't understand economics, which pretty much describes most active traders in the markets.

The saying, "Economists [not markets - sorry Sean] have predicted five of the last three recessions," again reflects the frustration of the many who have no appreciation for the profession.

Economists attempt to step back far enough to keep the whole picture in focus, and as a result are accused by those engaged in the hand-to-hand combat in the trading pits of being aloof, and lacking in practical experience. This is probably true enough, but it devalues what an economist is attempting to do. It's not unlike what an architect brings to the building profession, as opposed to the general contractor.

All that said, it would seem to be true that we're better off not knowing what goes into our sausages, or our comedy.

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Old 14-12-2007, 15:20   #236
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Gluten Free...

I havn't felt the same about sausages since I found that most contained gluten, being gluten intolerant...
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Old 16-12-2007, 10:07   #237
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those home sales profit calculations are WAY off. There was no factoring taxes, mortage interest or maintenence. On the other side of that ledger is the interest deduction & the cost of renting somewhere else if you don't own your home. Homes are a good investment long term but not usually a huge moneymaker when ALL factors are included.
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Old 16-12-2007, 11:35   #238
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those home sales profit calculations are WAY off. There was no factoring taxes, mortage interest or maintenence. On the other side of that ledger is the interest deduction & the cost of renting somewhere else if you don't own your home. Homes are a good investment long term but not usually a huge moneymaker when ALL factors are included.
I respectfully disagree. I have walked away with at least 3 to 4 times (and sometomes more) the amount of down payment that I put down after paying realtor fees etc. on all of the six houses I've lived in over the last 15 years. BTW renters also pay mortgages just no their own.
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Old 16-12-2007, 22:09   #239
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I think Charlie and CMD are talking about cost of capital and leverage.

I take $10k. I invest it in a 100k property. That's 10:1 leverage and a good thing.

Someone pays the note (a renter) for 5 years. I sell for 110k. I double my capital. A good thing. It's like 20% (non-compounded) per year.

But I didn't make 100k on the property. I made 10k. Also as noted above we are discounting acquisition costs and selling costs which have to be factored in to the return on capital.

There is also an opportunity cost. If I stick my money in a bank and can make 5% that's my lost opportunity at alternate uses of the funds.
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Old 17-12-2007, 00:35   #240
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