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Old 10-12-2007, 06:41   #31
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Red face

Gentleman please, this is a family forum.

Maybe you lost our way to the "Raging Bull" forum?.

Raging Bull: Financial Message Boards
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Old 10-12-2007, 11:20   #32
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I am also scepticle about such a high return rate. Unless the finace company is run by Mafia or some other loan shark, 24% just is either wrong, or some Laonee is being truely ripped off.
As Seafox stated, NZ is one of the highest interest rates in the world. It is why our dollar is so high. It is a popular country for offshore investment.
There are two major points to consider with investment. Risk and average.
The higher your return above the "going" interest rate, the higher the Risk and for those that are in the game, you will all be watching the Domino effect of Finance institutions falling over in the last month and it ain't over yet. Although, if 24% is what the US house market is lent against, it is no wonder they are in the shape they are.
Secondly, the return may fluctuate, but over a 12mth period or even more, it tends to even out to a much lower average. It depends on how much time you want to spend behind your computer and buy and sell.
As a cruiser, you can spend a lot of time behind that computer if you wish, or you can get out cruising. So you should spread your investment over many baskets. One day you may obtain a 24% return and the next it may be a loss. If you place all your money in the one basket, you run the risk of losing it all. And trust me, many Kiwi's learn't that big time a few years back. Sadly, some are still learning.
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Old 10-12-2007, 19:49   #33
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Maybe we should all head over to Forbes.com - LOL

The diversity of the portfolio RH posted seems interesting. There is a fair amount of oil, medical and real estate in there. All volatile investments. The fund manager has been riding the post 9/11 wave and perhaps investing in war and has done well in the time frame.

Investing your entire egg in investments with this volaitlity is crazy. However RH is young and risk tolerant so he should be running and gunning.

Diversity and lower risk is key if you are tossing the lines for an extended time.

BTW - We are all invested in boats - How freakin' smart is that - LOL!
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Old 10-12-2007, 20:33   #34
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, 24% just is either wrong, or some Laonee is being truely ripped off.
.
ummm, I don't want to get into this debate as I am just new to this forum and I live in a different country etc and our financial dealings are, essentially, private. But a company that I invest with has a fund that I am not in - but I keep thinking about moving some bucks - thats been getting over 24% for each of the last 3 years with figures audited by a Government agency. See Tricom Aust website. Many other funds have not gone as well, but the point I am making is that this one has been there for all to see for a number of years.
I would have little doubt there are good, legitimate funds in the USA provided by large reputable companies that are making this or more.

The one piece of advice I would offer is many of these funds have a remarkable good start and then quieten down for a year or so. this fund is a classic example where they made 26% in their first month but if you were not in you would have lost out over the first year. The reason why they have a good start is their formulea is developed for the market that it enters... it catches to cycle.

To those that are close to having enough to go cruising please don't throw money into a fund that isn't well researched or recommended by your independant broker. It would really suck to lose a year....




Mark
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Old 10-12-2007, 23:11   #35
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Wow. Ok, I stand corrected. Man I am glad I am not the one borrowing.
One investment I woudl love to try...if I had the money...is gold. Mate does that stuff rocket up and down. You can be seriously rich one day and seriousely broke the next. But all you have to do is wait a day or two agin. The trick is knowing when to bail out and when to buy.
I am doing the smart thing. I am putting all my money into my boat :-)
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Old 10-12-2007, 23:26   #36
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Alan - Try commodities trading - Lamborghini to Hyundai to Lamborghini in 3 months.
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Old 11-12-2007, 01:45   #37
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Lotto is great.
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Old 11-12-2007, 03:15   #38
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Lotto is great.

I invest in that too
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Old 12-12-2007, 08:13   #39
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I started a new thread for ya guys in off topic forums.

http://www.cruisersforum.com/forums/...lth-11526.html

enjoy,
Jason
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Old 12-12-2007, 10:16   #40
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I am also scepticle about such a high return rate. Unless the finace company is run by Mafia or some other loan shark, 24% just is either wrong, or some Laonee is being truely ripped off.
As Seafox stated, NZ is one of the highest interest rates in the world. It is why our dollar is so high. It is a popular country for offshore investment.
The figures rebel heart has given are accurate. Seafox and Wheels are also correct that the Janus Contrarian Fund's average performance since inception (Feb '00) is 11.88%.

What does it all mean? Well, as the prospectus says,
"Data presented reflects past performance, which is no guarantee of future results and investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility, current performance may be higher or lower than the performance shown. . . . "

Wheels and Seafox are also correct that the Kiwi dollar is one of the world's strongest currencies, at the moment. By setting rates high relative to the rest of the world, the RBNZ (Royal Bank of New Zealand, NZ's central bank) has made the Kiwi dollar one of the world's most attractive investments for those who pursue the Yen carry trade.

The Yen carry trade is an investment strategy whereby a person borrows a sum of money in Japanese Yen (because of its incredibly low interest rate of .5%), and invests the borrowed funds in higher yielding currencies such as the NZ$ at 8.75%. The investor captures the difference in yield as his profit.

It looks like a no-brainer investment with a guaranteed return of 8.25% - so what's not to like? The inherent risk in this strategy is the forex uncertainty; i.e. the possibility that the rate of exchange between the two currencies will move adversely (Yen strengthen, Kiwi dollar weaken), thereby quickly eating into the interest rate differential before the investor can "un-wind" his position.

Further complicating the trade is that most people engaging in the carry trade do so by leveraging their investment. Leverage of 10:1 is not uncommon in the carry trade. If an investor borrows the equivalent of $1,000,000 US in Japanese Yen, and uses the funds to purchase the equivalent of $10,000,000 US worth of Kiwi Treasury Bonds paying 8.75%, he will earn $825,000 in interest differential (8.75% minus 0.5% times $10,000,000) each year he keeps the trade in place. He can thus re-pay his Yen debt in little more than a year, but it will be the longest year of his life.

If the Japanese maintain their incredibly low interest rate in an effort to keep their currency weak (virtually a necessity in an economy so dependent on exports), the carry trade is almost risk-free. However, an investor is exposed to incredible risk in the event the Japanese change their policy, and raise interest rates. See, for example: A Meltdown From The Yen-Carry Trade? - Forbes.com

The Forex (foreign exchange) Market is always moving, and in these uncertain times the swings can be fast and furious. Even a small change in interest rate policy can have an enormous impact on a highly-leveraged investment like the carry trade, and if you happen to be on the wrong side of the bet, you can be wiped out in a heartbeat.

Will the Japanese raise their rates at some point? Absolutely. Will the RBNZ lower rates at some point? Without a doubt.

High interest rates attract a flood of foreign capital, but eventually strangle the domestic economy. When enough people lose their jobs, increasingly intense political pressure forces the central bank to begin lowering rates to stimulate the economy and get people working (and earning and spending) again. As rates head down, all of that hot foreign capital is withdrawn, as the carry trade crowd moves it to the then-current strong (i.e. high-yielding) currency.

Dan (ex-calif) mentioned that commodities are "Lamborghini to Hyundai to Lamborghini" investments. This is true, but it's not because commodities are inherently riskier, or more volatile, than, say, stocks. It's true because of the incredible leverage offered in commodity investing.

An investment of as little as 5% can control a commodity contract - that's 20:1 leverage. Investing $1000 to control $20,000 worth of some commodity means that a movement of 5% either doubles one's investment, or wipes it out. If a person had invested $20,000 in that same $20,000 contract, the 5% move would only mean that it is now worth either $21,000 or $19,000 - not a major impact on the investment, nor a cause for either euphoria or depression.

The potentially devastating effects of over-leveraging an investment are currently on display in the American housing market (and will be coming soon to the British and other recently "hot" markets). Even those who put 20% down and took out conventional fixed-rate mortgages have had their investment effectively wiped-out if the value of their home has fallen by 20%, and they're forced to sell. So it won't be just bad credit risks (most of whom made far less than 20% down payments) who see their real estate fantasies go up in smoke.

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Old 13-12-2007, 07:13   #41
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Wow. Ok, I stand corrected. Man I am glad I am not the one borrowing.
One investment I woudl love to try...if I had the money...is gold. Mate does that stuff rocket up and down. You can be seriously rich one day and seriousely broke the next. But all you have to do is wait a day or two agin. The trick is knowing when to bail out and when to buy.
I am doing the smart thing. I am putting all my money into my boat :-)
Golds done nothing for 27 years until recently, a dud investment I'd reckon.



Dave
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Old 28-12-2007, 16:22   #42
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re. Giselle's comments back in November...

My husband and I along with our two bys (13 and 15) are planning on leaving Canada this summer to buy a sailboat and do the irresponsible (read: adventurous) thing. We are budgeting about $2000/month all inclusive. Giselle, I almost think that if you wait until you have "enough" money, you may never get to do it.... It's absolutely amazing to most people that we are just going to "pack up and go", but amazing too, are the people who hear about our plans and say things like "Wow, I wish I was brave enough to do something like that!". I don't think there's a better education for kids that exploring the world and learning about other cultures and history first hand....
I'm so excited for websites like this where we might be able to hook up with other families who are doing similar in a similar part of the world to compare stories and let the kids play/study explore together! Happy sailing!
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Old 28-12-2007, 17:29   #43
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I've not (yet) done the sell up and sail away thing, but from past experiances of extended travel what seems to work (for me) is a simple back of an envelope calculation broadly based on what I want to spend divided by how long I want to be away for - and my travels are based around this.......and my trips then end up simply longer or shorter than intended depending on how quickly the money goes in reality, am never out more than a month or 2......sometimes I wanted to stretch my time away, sometimes I did not mind coming home earlier.....but in any event within a month or so I quickly learn how much this trip is going to cost for me in practice. IMO not everything has to always be costed to the nth degree well in advance.

.....also I find that when "abroad" for an extended period (i.e not the usual 2/3 week holiday/ vacation) their is no time pressure to do "everything" "now"...which eats money quickly and IME it is perfectly possible to slow right down financially if one wants to - obviously boats do provide the opportunity of spending large dollops of cash unexpectedly, but that IMO is what some sort of contingency fund (or at least contingency planning) is for - not from planned day to day / month to month spending.

Plan for a year and come back in 8 months (or 14), not exactly a disaster is it? (etc etc).
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Old 16-01-2008, 15:25   #44
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costs and homeschooling

This is a great thread. After 3 circumnavigations, 2 with a kid, the answer of how much it costs can be answered by asking how you enjoy life. If you like to eat out every night and are reading this post you are in trouble. The rest of the world has caught up to the 'first world'. Third world countries are no longer that cheap and all of them have more fees for everything.

If you like to create your own fun, walking on beaches, playing scrabble with a loved one, home school your kid on the boat, cook for the pleasure of it, go spear fishing; you are in luck. With a good stock up, wind generator and solar panels, you can live on abandoned islands around the world for absolutely nothing.

If you are in the middle, at least for some months of the year, your costs will be in the middle. The main cost is not being able to say no. If everyone is going out to the new expensive restaurant, do you have the willpower to say no?

As for homeschooling on the boat, check out my latest book:
education.of.a.falcon - ** ** The Education of a Falcon

Education on a boat is the best way to go. Much better than schooling on land; as long as you don't mind your kid learning about other countries' history not just his own.

Costs? Nothing, if you are creative, zillions if you want to pay the man.

Mike Riley Beau Soleil lying Roatan, Honduras
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Old 16-01-2008, 16:23   #45
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I think the first question to be answered is, "How do you define cruising?"

A lot of the posters on this board seem to spend a lot of time at marinas, moorings etc. That can easily double the cost.

I and most of my friends have gone years without paying for moorage. The rest of your costs should be easy to figure. The only unknown should be surprise parts and repair bills.
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