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Old 14-09-2014, 14:47   #91
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Re: Retirement / Financial advice

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I always ask myself, If the financial planner is so good why is it that he/she is still working?
Is it that they haven't taken enough of "Other Peoples Money" yet for them to retire themselves?
That was why I trusted the CFP who told me about the whales, fish and guppies. He openly showed me his commission checks (well over $500K/yr) and his gains from his own investments, which were invested with his whales and were bringing in close to $3M per yr. He liked to brag, but could always back it up, like the time I bought his "old" 2 yr old 1998 BMW750iL and he bought a new Bentley turbo convertible for $250K. When I teased him about wasting money on a car in that price range, he said it made sense on many levels.

1. No matter how poor anyone's automotive knowledge was, they knew exactly how much that car cost when he pulled up. It made the statement about success for him.

2. It was the first time in history they offered 60 month 0% financing. "Any time someone lets you borrow $250K for 0% over 5 yrs and you get to drive a Bentley turbo convertible in the bargain, take it!"

3. It was a Bentley turbo, and not only did it ride great, it looked great in his private parking stall with no other cars for 10ft on either side. He made sure his name was on the plaque on the wall, in case anyone was wondering who was the only guy in that skyscraper with a parking spot like that.

This is waaay off topic, but shows how his mind worked.

He wanted to put his kid through college, but he didn't want to pay for it. His son was a defensive lineman, he was pretty good, but definitely not first round draft material. He hired a videographer to follow his kid around through most of his senior year and put together a highlights reel of his kid making plays and sacking quarterbacks. He made up several hundred of these DVDs and sent them off to colleges all over the country. They got an answer back from St Joseph's that they'd give him a full ride scholarship if he came there.

The father took the kid down to the Cadillac dealer and bought him a new Escalade, then gave him a few thousand to install a stereo, etc. Then they drove to the university and signed him up. They toured the area, and the father put a deposit on a 4 bedroom house close to campus and made him co-owner. He told his son - "find 3 guys you want to hang out with and rent the 3 other bedrooms to them. Collect enough rent to cover the mortgage, utilities and a couple of keggers a month. I'll send you some allowance money and cover the mortgage in the summer, when you come home to intern with me in the office."

So he had a built in "posse", drove a new Escalade and was on the football team for 4 yrs, as well as partying it up and being the landlord. His dad gave him the title to the house as a graduation present, as well as a desk in his office to start his career. I have no idea if he sold it or rented it out, but it had appreciated some in value in 4 yrs(1999-2003.) That's how he got his kid through college and only gave him a small allowance for books, fees, gas, etc.

I was impressed, compared to many people (like my parents) scrimping and saving for years to save up for tuition while tuition continues to get higher and inflation eats away at your savings. He set his kid up as BMOC, took tuition completely off the table, and made his kid a homeowner in the process with an appreciating asset. I never would have thought of all of that. I don't think most people would.
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Old 14-09-2014, 17:06   #92
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Re: Retirement / Financial advice

I never let someone's obvious affluence influence me - think Bernie Madoff. In fact, obvious affluence is one of the basic tools of the investment scammer. Too often the posh office, and the Bentley, are rented. More important is your perception of his market knowledge and analysis.

In the above situation I think I would have stood up in the middle of his story and said goodbye. If he asked me why I was leaving I would tell him I came their to talk about my situation, not his.

Unfortunately I am always getting calls from people soliciting investments. Lately gas and oil drilling seems to have come to the top again. My standard reply is "I don't invest in holes in the ground."

Recently I got a call from a guy who wanted me to invest in a wholesale distributor who specializes in "green" products. I told him there were tens of thousands of wholesale distributors out there, why did he think his was any better? No answer. Click.

Remember this. Skepticism, your first line of defense against scammers.
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Old 15-09-2014, 01:51   #93
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Re: Retirement / Financial advice

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I have a wonderful story to tell
TL;DR but were there any unicorns?
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Old 15-09-2014, 08:47   #94
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Re: Retirement / Financial advice

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I never let someone's obvious affluence influence me - think Bernie Madoff. In fact, obvious affluence is one of the basic tools of the investment scammer.
Excellent philosophy, absolutely true, and a good example. Read "The Millionaire Next Door" if you want to understand how TRULY wealthy people most often live their lives (as opposed to those who are up to their eyeballs in debt, living the high life, but paycheck to paycheck).

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Unfortunately I am always getting calls from people soliciting investments.
Here's a very easy way to get rid of these people in a heartbeat: When they call, say "Oh yeah! I would be very interested in spending some time talking to you about that. I've worked real hard over the last couple of years and managed to save what I think is quite a lot of money--about $300-$400. Now I need to decide how to invest it."

None of them--and I mean absolutely NONE of them--are going to want to waste their time talking to you if that's what you think is a lot of money! They will get off the phone as quickly as they can, and you will never hear from them again.
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Old 15-09-2014, 11:53   #95
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Re: Retirement / Financial advice

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...The father took the kid down to the Cadillac dealer and bought him a new Escalade, then gave him a few thousand to install a stereo, etc. Then they drove to the university and signed him up. They toured the area, and the father put a deposit on a 4 bedroom house close to campus and made him co-owner. He told his son - "find 3 guys you want to hang out with and rent the 3 other bedrooms to them. Collect enough rent to cover the mortgage, utilities and a couple of keggers a month. I'll send you some allowance money and cover the mortgage in the summer, when you come home to intern with me in the office."

...
Poor kid. I actually feel kind of sorry for him. What will happen to him if Daddy stops handing him everything on a silver platter? How does he actually grow up?

Sorry, way off topic.
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Old 15-09-2014, 12:08   #96
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Re: Retirement / Financial advice

Denverdon, that's a great book. I think he wrote a sequel to it but not certain. Some of the people in there remind me of a friend I grew up with in the Bronx.
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Old 15-09-2014, 12:26   #97
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Re: Retirement / Financial advice

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Poor kid. I actually feel kind of sorry for him. What will happen to him if Daddy stops handing him everything on a silver platter? How does he actually grow up?

Sorry, way off topic.
Probably exactly the same as every other father/son business in the world when the father hands the family business off to the son.

Is that how you view all of those family businesses?
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Old 15-09-2014, 12:44   #98
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Re: Retirement / Financial advice

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Excellent philosophy, absolutely true, and a good example. Read "The Millionaire Next Door" if you want to understand how TRULY wealthy people most often live their lives (as opposed to those who are up to their eyeballs in debt, living the high life, but paycheck to paycheck).
That's all very true if you're talking about someone who saved to barely become a millionaire, but there are plenty of people who are multimillionaires, or billionaires, and they don't really care what you think of their $40 million car collection, or their multiple mansions - it all just sounds like jealousy to them.

This guy bought the Bentley, paid cash for a house with a great view, donated the house to a charity for battered women, had an architect design a much larger, grander house that looked more like an amphitheater. When the next door neighbor complained it was going to ruin his view, he bought his house as well and donated that one to the battered women's charity.

That didn't even put a dent in his checkbook.

Sometimes being a millionaire is just a snapshot in time. A very intelligent, brilliant marketing guy told me he has been a multimillionaire twice. He started off living in the back of a station wagon, and his wife got pregnant. He vowed he wouldn't raise kids in the back of a car, and built up a bicycle business until he was worth a few million. He took a really big gamble, and it didn't pay off, and he lost most of it, he had less than a million, I don't know the exact figure.

He started over and got into bicycle mfg instead of parts, and now has a few million again, which is when I met him. His money doesn't define him, but he's not afraid to spend it on what he wants.
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Old 15-09-2014, 12:56   #99
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Re: Retirement / Financial advice

socaldmax, I never waste my time counting other peoples money. Doesn't earn me one cent. Someone very close to me spent most of their life talking about how much everybody else had, and died with no money of their own.
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Old 15-09-2014, 13:15   #100
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Re: Retirement / Financial advice

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socaldmax, I never waste my time counting other peoples money. Doesn't earn me one cent. Someone very close to me spent most of their life talking about how much everybody else had, and died with no money of their own.
Thanks for the parable. That doesn't address the fact that a lot of the recent observations about wealth were wrong. I think it's interesting how people actually made their money, and none of them were shy about discussing the basics of their business.

I have met more than my fair share of multimillionaires while playing in Glamis. Not a single one of them made their money in mutual funds, but I think that's a demographic/geographical thing. Most are construction, blue collar, or small business owner types with a few wildly successful business owners thrown in.

I suppose if one hung out in the Hamptons, one would run into plenty of mutual fund managers.
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Old 15-09-2014, 13:41   #101
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Re: Retirement / Financial advice

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Probably exactly the same as every other father/son business in the world when the father hands the family business off to the son.

Is that how you view all of those family businesses?
No, most family businesses in the world are pretty middle class, actually. The kids work their asses off helping out and earn their part of the modest results.

I guess the issue I have is trying to understand how a wealthy parent would best raise children who can stand on their own two feet. I'm sure it's a topic much discussed on richparents.com. I'm unlikely to have that issue with my kids, so it's idle speculation.

That's enough thread drift, though. Sorry to the OP.
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Old 16-09-2014, 18:15   #102
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Re: Retirement / Financial advice

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Read "The Millionaire Next Door" if you want to understand how TRULY wealthy people most often live their lives (as opposed to those who are up to their eyeballs in debt, living the high life, but paycheck to paycheck).
Very true.
And yes, my accountant tells us we are millionaires and have been for several years, but you certainly wouldn't know it by looking at us.
Think Beverly Hillbillies without the mansion.
The money was hard earned and I am not about to waste it driving a new car that loses thousands as soon as it leaves the showroom when my $3000 15 year old car drives perfectly well.
Same as my wife is not about to start drinking moet champagne when a $7 bottle of yellow works just as well for her.
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Old 16-09-2014, 19:45   #103
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Re: Retirement / Financial advice

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Over time money invested in the market out performs real estate.

In the meantime you should start looking at the tax impact of your owning your current land etc as a corporation. I think you need to ask a tax professional not a bunch of boaters
That is potentially faulty logic as the Dow indices are regularly changed... meaning you would need to stay on top of your money, not invest and leave.

Also, investments in gold/silver have out performed both the markets and real estate...
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Old 16-09-2014, 19:51   #104
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Re: Retirement / Financial advice

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Rental property for an absentee owner can turn into a nightmare! You will need a reliable property manager who will take at least 10% of the rent. Think about repairs and evictions! Better to talk to a financial planner about where to put your money. Remember you can not access the funds tied up in a rental property if you need them in a hurry.
Complaining about a property management fee ignores the reality of the investment... Any business/investment you own will have some fees to insure it is managed properly in your absence. Just part of the cost of doing business and should be used in your calculations.

Comparable to planning your cruising budget and ignoring the cost of maintenance...
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Old 16-09-2014, 19:54   #105
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Re: Retirement / Financial advice

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I have another story for you about how the stock market is rigged. There is a conglomerate of companies who spent billions building a fiber optic link between the traders on Wall St. and the other exchanges in order to intercept stock trades, place their own trades for those stocks within milliseconds and then resell those stocks at a small profit to the brokers who placed the trades before they knew what happened. They were skimming off of every stock trade, making hundreds of billions per year and it wasn't illegal, but it did steal those hundreds of billions from investors.

Just another conspiracy theory?
You shouldn't use the past tense for this... the entire HFT (high frequency trading) market is built on it. It is used by all major trading houses, as well as many smaller funds...

Also, you should consider the recently released information that the FED and ECB have been directly participating in the US market for several years...
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