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Old 10-09-2014, 10:45   #31
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Re: Retirement / Financial advice

My wife and I are in real estate. We are slum lords. We see close to a 60% return on our money. We currently have a dozen mobile homes (all paid for). We plan to have between 50 and 100 of them in 5 years (all paid for). We have set up our own property management company to rent, manage, and maintain these places. I figure all we will have to do is fly in every couple of months, drive around and see what is occupied, then compare that to the 'books' to be sure we aren't getting robbed blind.
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Old 10-09-2014, 11:36   #32
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Re: Retirement / Financial advice

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Originally Posted by socaldmax View Post
I invested in a mutual fund (Magellan was the highest rated at the time) and concentrated on my work, and let them invest my money.
No offense intended, but that's just about the worst possible way to invest in a mutual fund. Did you even understand that you were putting your money into an aggressive growth fund? Or did you just choose "the highest rated"? And then, of course, you have to ask, highest rated by whom and based on what criteria? Followed immediately by the question, did the rating criteria match your investment criteria? (Never mind the fact that these kinds of ratings change constantly.)

Frankly, over the time frame that you mentioned, the Fidelity Magellan fund performed almost exactly as anyone who understood its investment objectives would expect it to perform. It was, and still is, an excellent mutual fund for those who are looking to diversify a part of their overall investments into an aggressive growth fund. What it definitely is NOT is a place to just dump all of your money and forget about it. Heck! Even Fidelity would tell you that!
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Old 10-09-2014, 11:37   #33
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Re: Retirement / Financial advice

You guys have given me a lot to think about.

House has to go, it's a big old house sitting on 100 acres in an impoverished "entitlement" town that has a high tax rate and I have NO interest in ever living here, just do so now as I have the house and work is here. We save $500 a month to pay for the property taxes, the house is a white elephant and of course the purpose of a white elephant was to break you.

Don't know what to do, my 401K and my wife's retirement are in the market of course, I have an inherent mistrust of the market. I think way too much money is made by "playing with it" as Socal said about the fiber optic network between New York and Chicago, that really does exist, and that really does or did happen.

On the Slum Lord thing, my Father and I built a trailer park years ago, started out at 50 lots, ended up being about 200, there is good money in it, and you can sell a good honest product at a good price with honest interest rates (be a good guy) and still make money.

I'm still leaning towards buying us a nice place to live in a nice community and renting it out with the idea of being able to return there one day. Boat is a depreciating asset, I don't plan on it being worth much of anything by the time we are through, it will have some residual value of course, just I don't expect much.
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Old 10-09-2014, 11:54   #34
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Re: Retirement / Financial advice

Sounds like you have a good plan, A64. You still need to talk to a planner, but mostly a tax planner. If the stock market stresses you out, then you don't have to play there.

A lot of the talk on this thread has been about investing in the market vs real estate, which has been a great debate with many good points. However, you have a very complex situation tax wise because you have a significant asset owned by a corporation. That's the crux of the question, in my opinion.
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Old 10-09-2014, 12:05   #35
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Re: Retirement / Financial advice

The World Economic Forum does an annual risk report that you might find interesting.

http://www3.weforum.org/docs/WEF_Glo...eport_2014.pdf
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Old 10-09-2014, 12:16   #36
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Re: Retirement / Financial advice

something you didnt mention will who you be survived by and their interests.

you will do well to consider what is in the best interest of those persons before working with a planner.

will your wife want to own / manage a rental property? what about your kids? my son has forbade me from selling the house so that decision was made for me but, if he were to predecease me, i would sell it as the it is of little interest to anyone else named in my will.

real estate is not what it was 10 years ago and the experts dont expect it to be again in the next 25 years so i would steer you away form rental property especially as has already been said it can be quite volatile (crummy tenants, damage, repairs compounded by being absent).

the only other bug i will put in your ear is to consider your cruising plans... if you are going to said in the mediterranean you might consider keeping the value of having cash in an international bank so you have access to funds as needed or perhaps buy a slip or 2 so you have a hassle free 'home port'.

as important as your finances is you will... all part of a single late life plan.

i revisit and revise once every 10 years to make sure my assets are working for me and not against me and to accommodate for major changes (new business ventures, significant gains and losses, new nieces and nephews etc) and i am only 44.

spend it all... and have amazing adventures!

-steve
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Old 10-09-2014, 12:44   #37
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Re: Retirement / Financial advice

I'm 57 and plan to start cruising next November. We plan to rent the house to cover the remaining mortgage. It's waterfront so I don't want to sell it. Have a 2002 Hunter 460 that's paid for and a military retirement that pays about $4000 a month. I have a 401K, the wife has a small IRA and we have other investments that should pay at least $1000 a month. Hopefully this income will cover our cruising and the cost to store our belongings ashore. Plan to sell our cars or give them to the kids rather than pay to store them. We've already started selling larger things around the house (kayaks, surfboards, patio furniture, bikes, etc..). Lots of yard sales over the next year to turn into cruising cash.
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Old 10-09-2014, 12:56   #38
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Re: Retirement / Financial advice

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spend it all... and have amazing adventures!

-steve
This .... just don't run out of $$$$ before you run out of time/luck. That is the real trick
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Old 10-09-2014, 13:29   #39
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Re: Retirement / Financial advice

As a practicing financial planner, there is no right or wrong answer to your question. I would suggest finding a planner who you trust and sit and go over your needs and wants. There are many good guaranteed investments that you could invest in. You could buy another piece of real estate if you know where and when you plan on coming back to. I myself in 4 years am selling my home and moving down to the BVI to retire on an Island Packet 45. If I need to return to the mainland, I will bring back the boat and live on the boat. Probably every summer I will be back with the boat and return in the fall till the next year. Just a thought. Hope I was able to bring some clarity to your situation.
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Old 10-09-2014, 13:30   #40
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Re: Retirement / Financial advice

Read an article recently that stated you should be able to live comfortably on your $1k per month cruising.
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Old 10-09-2014, 13:41   #41
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Re: Retirement / Financial advice

I've read about that problem with line speed that gave some traders an advantage over others. But those guys are day traders. I'm a long term investor. I still hold some investments that I bought decades ago. In fact my last stock buys were made three years ago.
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Old 10-09-2014, 13:55   #42
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Re: Retirement / Financial advice

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I've read about that problem with line speed that gave some traders an advantage over others. But those guys are day traders. I'm a long term investor. I still hold some investments that I bought decades ago. In fact my last stock buys were made three years ago.

While I am far from anyone who knows anything about "the system" anytime you have someone pulling bucket loads of money out of anything, it has to come from somewhere, and they were / are pulling huge sums of money out of the system. Who's picking up the tab?

Long story short what has me worried about the stock market is long ago the actual earning potential of a company (dividends) whose stock we are talking about isn't what sets the value of a stock anymore, no it's the potential sales price.
Same thing happened to housing a few years ago, I had friends telling me it didn't matter what they paid for a house, they were going to sell it in a few years at a higher price. Anytime what drives the cost of something is not it's expected return or value, but an expectation of selling it at a higher price later, I want out.
A few years ago real estate .com's total stock value was higher than the entire stock of delta airlines. Delta had billions in assets in aircraft etc. real estate.com had a few rented servers and a url. Again a case of it didn't matter wha it's actual value was, you were going to sell it at a higher price, right?

Sorry, I know just enough about the stock market to be afraid, I'm the kid who touched the hot stove, I have no idea what happened or why, just know it hurt is all.
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Old 10-09-2014, 14:03   #43
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Re: Retirement / Financial advice

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Tacoma Sailor has an excellent story and it highlights some things we, as cruisers, have considered as well. I work in finance and am relatively sophisticated when it comes to investment (I still make stupid mistakes, however). When we first went long-term cruising from Asia to Europe we noticed an awful lot of retired cruisers (we were then in our 30s) who had sold their home and were living off the proceeds. Many/most of them found out a few years down the road while they had been out cruising the global property market had continued to rise and they now had NO WAY of ever returning.

If they had been living in a middle class house in the US, for example, their choice of a home which they could afford now would be in the ghetto. Not very palatable. Many of them continued living on their boats getting by on social security at cruiser end-of-the-road destinations, such as Malaysia, Thailand or the Philippines.

The lesson we took away from this is since no one can tell where markets will go you always need to keep a foot in the property market.

By the way, no financial planner will tell you this because they are only used to dealing with people who have "normal" steady jobs and live "normal" steady lives. You are right, in my opinion, to throw this out there to get some cruiser feedback.

Don't sell that house.

Cheers.

Dhillen
I think that this is a very important point and one that I personally struggle with. I think that it's a bit more complicated than you make it sound, though.

I think we need to assume that we will return and will want to live on land some day. Many of us (or our spouses) would like to own a place when we do return. Some even know what part of the world they'd like to return to.

However, it very much depends on your personal circumstances whether renting out a place makes sense. It depends on how much equity you have in the house and what the local rents are like compared to your mortgage. It also depends on whether you're willing to take the risk of being a landlord.

If you are going to be away for a while and don't want to try to be a landlord, you may be better off selling the house, investing the money, and then buying a new house with that money when you return. Since a mortgage is essentially a leveraged investment, though, it all depends on how much of your mortgage you already have paid off.
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Old 10-09-2014, 14:11   #44
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Re: Retirement / Financial advice

Find a fee based financial planner. Not a planner who makes a commission selling someones products.

Fee-only financial planners are in your best interest | www.clarkhoward.com

http://napfa.org/

http://garrettplanningnetwork.com/
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Old 10-09-2014, 14:15   #45
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Re: Retirement / Financial advice

I think this is the issue some of you are referring to about a "rigged market". It's an interesting read, but I don't think it affects too many of us here. Or maybe just a few

Canadian Brad Katsuyama profiled in new book 'Flash Boys' about 'rigged' stock market allegations | CTV News
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