Oh my! Cardone says we need $10m net worth

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Serie1926
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Oh my! Cardone says we need $10m net worth

Post by Serie1926 » Fri Jun 15, 2018 1:23 pm

Wow! I guess I’m going to be on the rock pile a bit longer 😳

https://www.cnbc.com/2018/06/15/self-ma ... etire.html

mountain-lion
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Re: Oh my! Cardone says we need $10m net worth

Post by mountain-lion » Fri Jun 15, 2018 1:35 pm

That analysis is a couple of tacos short of a combination plate.

"And all this assumes no inflation or critical life events:"

It also assumes no investment returns of any kind, in any way, whatsoever. No government bonds. No TIPs. No nothing--not even social security. Much less a reasonably diversified portfolio.

Put your money under a mattress and--big surprise--it won't last forever, even assuming no inflation.

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Re: Oh my! Cardone says we need $10m net worth

Post by Meg77 » Fri Jun 15, 2018 1:46 pm

I don't disagree with the message in general. He's talking to people who are aiming to be wealthy/affluent/financially independent or whatever you want to call it, not to the average American. I can't dispute his argument that $1MM or even $5MM is not enough to buy freedom from economic worries - especially considering that if you aim for the target now, it will be worth much less after inflation once you finally hit it.

I could retire comfortably on a few million TODAY (by which I mean feeling like I don't have to budget carefully, able to travel freely and give plenty away, and likely able to pay for top notch care in my later years). But if I plan to retire at the same lifestyle level that buys in 20 or 30 years, I'll need at least double that amount if not triple.
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Re: Oh my! Cardone says we need $10m net worth

Post by Jack FFR1846 » Fri Jun 15, 2018 1:47 pm

This piece needs a clip of Dr. Evil saying "One Hundred Billion Dollars".

What garbage.
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TravelGeek
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Re: Oh my! Cardone says we need $10m net worth

Post by TravelGeek » Fri Jun 15, 2018 1:51 pm

Who is Cardone and why should I care what he is saying? :shock: :twisted:

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Re: Oh my! Cardone says we need $10m net worth

Post by bottlecap » Fri Jun 15, 2018 1:52 pm

Well I might as well just spend it all now....

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Re: Oh my! Cardone says we need $10m net worth

Post by md&pharmacist » Fri Jun 15, 2018 1:55 pm

Now that was very timely!

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knpstr
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Re: Oh my! Cardone says we need $10m net worth

Post by knpstr » Fri Jun 15, 2018 2:02 pm

I'm not going to address the notion that people "need" $10M. Skimming it seems his $10M number is the number where you can "do whatever you want to do". This is the historic/popular idea of being a millionaire from decades ago - a millionaire can afford to do whatever they please. But people having been wanting to be a "millionaire" since the 1950s (or earlier)... that roughly equates to about $10M today.

So with that perspective, perhaps he is somewhat on track.
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greg24
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Re: Oh my! Cardone says we need $10m net worth

Post by greg24 » Fri Jun 15, 2018 2:05 pm

The troll certainly appreciates you putting his name in the thread subject.

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Re: Oh my! Cardone says we need $10m net worth

Post by WanderingDoc » Fri Jun 15, 2018 2:26 pm

GC (along with Benjamin Franklin and Richard Feynman) is one of my heroes. He teaches us (rightly so) that common convention, common advice, and common teachings, are often dead wrong.
Rent where you live, buy where others pay your mortgage for you. | I'm not looking to get rich quick, I'm not looking to get rich slow (indexing}, I'm looking to get rich.. for sure {real estate}.

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Re: Oh my! Cardone says we need $10m net worth

Post by Tycoon » Fri Jun 15, 2018 2:33 pm

TravelGeek wrote:
Fri Jun 15, 2018 1:51 pm
Who is Cardone and why should I care what he is saying? :shock: :twisted:
Precisely!
...I might be just beginning | I might be near the end. Enya | | C'est la vie

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munemaker
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Re: Oh my! Cardone says we need $10m net worth

Post by munemaker » Fri Jun 15, 2018 2:40 pm

He seems like one of those guys that advertise in cheap TV time slots about how to get rich quick by flipping houses, trading stocks or whatever using his own exclusive method, which he will be glad to sell to you.

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Re: Oh my! Cardone says we need $10m net worth

Post by KyleAAA » Fri Jun 15, 2018 2:49 pm

What exactly about his advice is wrong? Indeed, this article could be described as fairly bogleheadish even though he advocates a much less traditional investment strategy. He doesn't say anyone NEEDS $10 million, he says thereabouts is the threshold that most people can live a life of financial independence and not have to worry about stock market crashes, a family medical tragedy, or a deep economic recession. You are fairly resilient against almost all shocks at that point. He says $1mm doesn't qualify and $5mm doesn't either. He's not wrong...

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Toons
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Re: Oh my! Cardone says we need $10m net worth

Post by Toons » Fri Jun 15, 2018 2:50 pm

10 million?
Funny.




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Re: Oh my! Cardone says we need $10m net worth

Post by onourway » Fri Jun 15, 2018 3:02 pm

KyleAAA wrote:
Fri Jun 15, 2018 2:49 pm
What exactly about his advice is wrong? Indeed, this article could be described as fairly bogleheadish even though he advocates a much less traditional investment strategy. He doesn't say anyone NEEDS $10 million, he says thereabouts is the threshold that most people can live a life of financial independence and not have to worry about stock market crashes, a family medical tragedy, or a deep economic recession. You are fairly resilient against almost all shocks at that point. He says $1mm doesn't qualify and $5mm doesn't either. He's not wrong...
$10M provides an income of $400,000/year at the 4% rule. That means withdrawing 4% from that portfolio would last even the worst financial disasters of that past nearly 100 years.

How many people need $400k/year of income in order to be free? At $5M you can have $200k of income. If you have no debt and no longer need to save - $200k is an exceptionally high income. I suspect that is why most Boglehead's target seems to be in the $1-4M range.

$1M isn't what it used to be but it's still enough to put you well into the global 1%.

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Tycoon
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Re: Oh my! Cardone says we need $10m net worth

Post by Tycoon » Fri Jun 15, 2018 3:11 pm

Hey! Wait a minute! This guy has 10 million and he didn't go to an Ivy? What? How did that happen?
...I might be just beginning | I might be near the end. Enya | | C'est la vie

dknightd
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Re: Oh my! Cardone says we need $10m net worth

Post by dknightd » Fri Jun 15, 2018 3:34 pm

He is right, and wrong, at least in my mind.
When I was in high school $1M seemed like an impossible dream. If I'd that much money then I would have felt rich (and probably could have retired).
Many years later I realized that $1M was not just an achievable amount, but would probably be necessary if I wanted to comfortably retire at 65. (and 65 is no longer considered my FRA, it was back then)
A high school kid today may well need $10M to comfortably retire.

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Cyclesafe
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Re: Oh my! Cardone says we need $10m net worth

Post by Cyclesafe » Fri Jun 15, 2018 3:48 pm

Nobody knows what their number was until the day before they die. On that day it is the number they hoped it would be less their current net worth.

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Re: Oh my! Cardone says we need $10m net worth

Post by dknightd » Fri Jun 15, 2018 3:50 pm

onourway wrote:
Fri Jun 15, 2018 3:02 pm
$10M provides an income of $400,000/year at the 4% rule.
The 4% rule works fine for 30 years. At least it has so far. It might not work so well for 60+ years.

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Re: Oh my! Cardone says we need $10m net worth

Post by dknightd » Fri Jun 15, 2018 4:04 pm

Cyclesafe wrote:
Fri Jun 15, 2018 3:48 pm
Nobody knows what their number was until the day before they die. On that day it is the number they hoped it would be less their current net worth.
Are you assuming that they die with a significant amount left over? In that case I can see perhaps wishing you had not saved as much.
What about the other way around? I could probably live on just SS. But it would be a more or less subsistence poverty level existence. In this case I suspect I'd wish I had saved more. Even then, when I died, I'd probably have some net worth.
Perhaps you mean "investable income" (AKA money) not net worth.

CnC
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Re: Oh my! Cardone says we need $10m net worth

Post by CnC » Fri Jun 15, 2018 4:12 pm

:oops:

This guy is a clown. People "need" 1.8m to comfortably retire at any age in the United States.


At 1.8m you can withdraw 3.3% a year to get 60k a year which is the median national yearly income.


If you say you want more than that that's fine. You want more but you don't need it, if you live in LA and spend 60k a year on rent you are choosing to do so. There are plenty of cheaper places that you could move.


I find it hard to believe the argument that a retired couple 'needs' more than the median us family.


I personally "want" to make 2-3x the median income when we retire.

wrongfunds
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Re: Oh my! Cardone says we need $10m net worth

Post by wrongfunds » Fri Jun 15, 2018 4:15 pm

He may be a twerp (definitely comes across as one) but I am having hard time understanding how his advice is that far off from what is generally accepted advice here. We could change the number $10M to $3M but rest seems to be right on target. We could quibble about "where you cold lose your capital" but gist of his advice is not that far off from what we as BH take it for granted.
For those who want to create multi-million dollar wealth, try these simple steps.

Trade your $1 million target in for a net worth target of $10 million.
Avoid all showoff purchases until you hit $10 million target. That includes homes, fancy cars, watches, etc.
Get your income levels to where you can save 40 percent of your gross income before taxes.
Invest surplus cash in illiquid assets that produce additional flows of income. Invest for cash flow with the potential of appreciation long term and never invest where you could lose your capital.
Repeat this cycle until you have investments producing passive income equal or exceeding your main flow of income.

Snowjob
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Re: Oh my! Cardone says we need $10m net worth

Post by Snowjob » Fri Jun 15, 2018 4:21 pm

Well, below would be the 4% rule, and no social security.

Pretty sure if your going to be accumulating these sorts of assets, even under reduced SS payouts you can bank on at least another 20k on top of this. With a paid off house, I find it hard to believe I'd need 10 million. Anywhere above 2M frankly is appealing to me, and I'd strongly have to consider if giving up another 5-10 years of my youth would be worth it to stack another million on top...

1,500,000 --- [4% Rule] --- 60,000
2,000,000 --- [4% Rule] --- 80,000
2,500,000 --- [4% Rule] --- 100,000
3,000,000 --- [4% Rule] --- 120,000
3,500,000 --- [4% Rule] --- 140,000
4,000,000 --- [4% Rule] --- 160,000

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Sandtrap
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Re: Oh my! Cardone says we need $10m net worth

Post by Sandtrap » Fri Jun 15, 2018 4:28 pm


Snowjob
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Re: Oh my! Cardone says we need $10m net worth

Post by Snowjob » Fri Jun 15, 2018 4:35 pm

Sandtrap wrote:
Fri Jun 15, 2018 4:28 pm
Interesting source:

Grant Cardone
https://grantcardone.com/?gclid=EAIaIQo ... gJpfvD_BwE
How Grant Cardone built a $350 Million Empire
https://www.investopedia.com/articles/p ... empire.asp
How To Get Rich books.
https://www.amazon.com/Grant-Cardone/e/B0038X6X5W
If you looked at the piece his investment advice screamed real estate even though he never mentioned it specifically.

If you want to make a lot of money investing, you need to take concentrated risk and/or leverage. Real Estate offers both. Maybe one day I'll jump on the band wagon.

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Sandtrap
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Re: Oh my! Cardone says we need $10m net worth

Post by Sandtrap » Fri Jun 15, 2018 4:42 pm

Snowjob wrote:
Fri Jun 15, 2018 4:35 pm
Sandtrap wrote:
Fri Jun 15, 2018 4:28 pm
Interesting source:

Grant Cardone
https://grantcardone.com/?gclid=EAIaIQo ... gJpfvD_BwE
How Grant Cardone built a $350 Million Empire
https://www.investopedia.com/articles/p ... empire.asp
How To Get Rich books.
https://www.amazon.com/Grant-Cardone/e/B0038X6X5W
If you looked at the piece his investment advice screamed real estate even though he never mentioned it specifically.

If you want to make a lot of money investing, you need to take concentrated risk and/or leverage. Real Estate offers both. Maybe one day I'll jump on the band wagon.
love that "username".
"snowjob" :shock:

Snowjob
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Re: Oh my! Cardone says we need $10m net worth

Post by Snowjob » Fri Jun 15, 2018 4:50 pm

Sandtrap wrote:
Fri Jun 15, 2018 4:42 pm
love that "username".
"snowjob" :shock:
haha, promise i'm not trying to sell you a bridge in Brooklyn -- was a childhood comic book / action figure from the 80's when I grew up. I'm a skier and it just stuck with me (below), though the character had a little bit of BS about him, it was more mischievous than nefarious!

viewtopic.php?f=9&t=210591&start=350#p3789657

golfCaddy
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Re: Oh my! Cardone says we need $10m net worth

Post by golfCaddy » Fri Jun 15, 2018 6:46 pm

I can't tell if this is a parody or if he's that delusional about how normal people live.

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Re: Oh my! Cardone says we need $10m net worth

Post by tennisplyr » Fri Jun 15, 2018 7:06 pm

Please don't believe a word he says.
Those who move forward with a happy spirit will find that things always work out.

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Re: Oh my! Cardone says we need $10m net worth

Post by TravelGeek » Fri Jun 15, 2018 7:26 pm

wrongfunds wrote:
Fri Jun 15, 2018 4:15 pm
He may be a twerp (definitely comes across as one) but I am having hard time understanding how his advice is that far off from what is generally accepted advice here. We could change the number $10M to $3M but rest seems to be right on target.
Well, that extra seven million would take many a significant percentage of their remaining lifetime to acquire (if they even had a chance to get there). It’s not a rounding error.

dknightd
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Re: Oh my! Cardone says we need $10m net worth

Post by dknightd » Fri Jun 15, 2018 7:35 pm

I guess I'll go buy a lottery ticket. Or as I like to call them, the high risk portion of my retirement portfolio ;)

boglebill2015
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Re: Oh my! Cardone says we need $10m net worth

Post by boglebill2015 » Fri Jun 15, 2018 7:37 pm

I dont think Grant Cardone is famous enough to be referred to as "Cardone". Never heard of him before
'
The piece is poorly written, I wont bother to list the logical inconsistencies.

WOT (waste of time)

jminv
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Re: Oh my! Cardone says we need $10m net worth

Post by jminv » Sat Jun 16, 2018 4:38 am

His career is in the 'aspirational' industry so I suppose it's not surprising that he gives a $10m target and makes it seem easy to achieve since he's selling dreams.

I do agree that $1 million isn't what it used to be which is just a basic observation of inflation which he could have summed up in one line.

Interesting in his investment return analysis he...conveniently ignores all returns.

I found his points #2 and #4 particularly amusing

#2 Avoid all showoff purchases until you hit $10 million target. That includes homes, fancy cars, watches, etc.

Don't enjoy your money at all until you have $10 million...I agree to be careful with money but at some milestone before that you can get something nice for yourself.

#4 Invest surplus cash in illiquid assets that produce additional flows of income. Invest for cash flow with the potential of appreciation long term and never invest where you could lose your capital.

Never invest where you could lose your capital should mean buying treasury bonds direct whereas he is actually advocating illiquid investments that aren't marked to market so you don't have to admit to yourself that you've lost capital until you find a buyer. If we go further and look at how he has invested he uses his savings plus leverage to buy large apartment complexes. Not necessarily a bad strategy but

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telemark
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Re: Oh my! Cardone says we need $10m net worth

Post by telemark » Sat Jun 16, 2018 6:26 am

Oh my gosh! What if I retire on too little money and then lose my job? I never thought about that. He truly is an innovative thinker.

WanderingDoc
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Re: Oh my! Cardone says we need $10m net worth

Post by WanderingDoc » Sat Jun 16, 2018 4:00 pm

If getting really wealthy is your goal, perhaps listening to someone with a $150MM net worth is better idea than someone who thinks $10MM is a lot. Grant Cardone had a crippling drug addiction and $0 to his name at age 25.

Here is a powerful interview, very well done by London Real. If you want to get to know the real GC, beyond the outspoken showy one you often see him as:
https://www.youtube.com/watch?v=PujltB4VZlI
Rent where you live, buy where others pay your mortgage for you. | I'm not looking to get rich quick, I'm not looking to get rich slow (indexing}, I'm looking to get rich.. for sure {real estate}.

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Re: Oh my! Cardone says we need $10m net worth

Post by thx1138 » Sat Jun 16, 2018 7:56 pm

WanderingDoc wrote:
Sat Jun 16, 2018 4:00 pm
If getting really wealthy is your goal, perhaps listening to someone with a $150MM net worth is better idea than someone who thinks $10MM is a lot. Grant Cardone had a crippling drug addiction and $0 to his name at age 25.

Here is a powerful interview, very well done by London Real. If you want to get to know the real GC, beyond the outspoken showy one you often see him as:
https://www.youtube.com/watch?v=PujltB4VZlI
By that logic we should listen to lottery winners too! Hey they have a lot of money, worked out for them, let’s do what they did! How could it not possibly work out for me too?

Never confuse idiosyncratic results for a sound and robust strategy.

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Re: Oh my! Cardone says we need $10m net worth

Post by WanderingDoc » Sat Jun 16, 2018 8:19 pm

thx1138 wrote:
Sat Jun 16, 2018 7:56 pm
WanderingDoc wrote:
Sat Jun 16, 2018 4:00 pm
If getting really wealthy is your goal, perhaps listening to someone with a $150MM net worth is better idea than someone who thinks $10MM is a lot. Grant Cardone had a crippling drug addiction and $0 to his name at age 25.

Here is a powerful interview, very well done by London Real. If you want to get to know the real GC, beyond the outspoken showy one you often see him as:
https://www.youtube.com/watch?v=PujltB4VZlI
By that logic we should listen to lottery winners too! Hey they have a lot of money, worked out for them, let’s do what they did! How could it not possibly work out for me too?

Never confuse idiosyncratic results for a sound and robust strategy.
That statement makes no sense. He outworked his competitors, and still works harder than the vast majority of humans. He didn't get lucky. He became the BEST in the world at what he does (corporate sales training) through hard work, careful planning, and a lot of sacrifice. I suppose being envious and cynical is the better strategy? :oops:
Rent where you live, buy where others pay your mortgage for you. | I'm not looking to get rich quick, I'm not looking to get rich slow (indexing}, I'm looking to get rich.. for sure {real estate}.

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Sandtrap
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Re: Oh my! Cardone says we need $10m net worth

Post by Sandtrap » Sat Jun 16, 2018 8:27 pm

WanderingDoc wrote:
Sat Jun 16, 2018 4:00 pm
If getting really wealthy is your goal, perhaps listening to someone with a $150MM net worth is better idea than someone who thinks $10MM is a lot. Grant Cardone had a crippling drug addiction and $0 to his name at age 25.

Here is a powerful interview, very well done by London Real. If you want to get to know the real GC, beyond the outspoken showy one you often see him as:
https://www.youtube.com/watch?v=PujltB4VZlI
Highly motivated purpose driven individual that I can relate to at various levels.
Thanks for posting the link.
Good insight.
j

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Re: Oh my! Cardone says we need $10m net worth

Post by thx1138 » Sat Jun 16, 2018 8:44 pm

WanderingDoc wrote:
Sat Jun 16, 2018 8:19 pm
thx1138 wrote:
Sat Jun 16, 2018 7:56 pm
WanderingDoc wrote:
Sat Jun 16, 2018 4:00 pm
If getting really wealthy is your goal, perhaps listening to someone with a $150MM net worth is better idea than someone who thinks $10MM is a lot. Grant Cardone had a crippling drug addiction and $0 to his name at age 25.

Here is a powerful interview, very well done by London Real. If you want to get to know the real GC, beyond the outspoken showy one you often see him as:
https://www.youtube.com/watch?v=PujltB4VZlI
By that logic we should listen to lottery winners too! Hey they have a lot of money, worked out for them, let’s do what they did! How could it not possibly work out for me too?

Never confuse idiosyncratic results for a sound and robust strategy.
That statement makes no sense. He outworked his competitors, and still works harder than the vast majority of humans. He didn't get lucky. He became the BEST in the world at what he does (corporate sales training) through hard work, careful planning, and a lot of sacrifice. I suppose being envious and cynical is the better strategy? :oops:
You fail to distinguish necessary and sufficient conditions.

To win the lottery it is necessary to purchase a ticket. That is not sufficient to win the lottery.

To become an NBA star who makes millions it is necessary to practice endlessly with great dedication. Unfortunately most people who do that will still not become NBA stars who make millions.

To make lots of money the way he did it is necessary to do risky things on leverage and indeed work hard but of course again it isn’t a sufficient condition. Plenty of people do the same things and work just as hard but end up broke instead.

You are ignoring the selection effect, a common error and one that is the basis for self promoters such as GC. “To be like me just do what I did, pay me to hear all about what you need to do to be like me.” That’s a false promise, you can do what he did and likely won’t end up where he did. In fact you’ll have a higher probability of success doing completely different things than he did. Hence poor advice to follow.

As to envy, not in my case. I’d never trade my life for what he’s done. Much happier with the path I took, but that’s a personal decision. Glad his life ended up at a much better place than where he was before!

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Re: Oh my! Cardone says we need $10m net worth

Post by WanderingDoc » Sat Jun 16, 2018 9:10 pm

thx1138 wrote:
Sat Jun 16, 2018 8:44 pm
WanderingDoc wrote:
Sat Jun 16, 2018 8:19 pm
thx1138 wrote:
Sat Jun 16, 2018 7:56 pm
WanderingDoc wrote:
Sat Jun 16, 2018 4:00 pm
If getting really wealthy is your goal, perhaps listening to someone with a $150MM net worth is better idea than someone who thinks $10MM is a lot. Grant Cardone had a crippling drug addiction and $0 to his name at age 25.

Here is a powerful interview, very well done by London Real. If you want to get to know the real GC, beyond the outspoken showy one you often see him as:
https://www.youtube.com/watch?v=PujltB4VZlI
By that logic we should listen to lottery winners too! Hey they have a lot of money, worked out for them, let’s do what they did! How could it not possibly work out for me too?

Never confuse idiosyncratic results for a sound and robust strategy.
That statement makes no sense. He outworked his competitors, and still works harder than the vast majority of humans. He didn't get lucky. He became the BEST in the world at what he does (corporate sales training) through hard work, careful planning, and a lot of sacrifice. I suppose being envious and cynical is the better strategy? :oops:
You fail to distinguish necessary and sufficient conditions.

To win the lottery it is necessary to purchase a ticket. That is not sufficient to win the lottery.

To become an NBA star who makes millions it is necessary to practice endlessly with great dedication. Unfortunately most people who do that will still not become NBA stars who make millions.

To make lots of money the way he did it is necessary to do risky things on leverage and indeed work hard but of course again it isn’t a sufficient condition. Plenty of people do the same things and work just as hard but end up broke instead.

You are ignoring the selection effect, a common error and one that is the basis for self promoters such as GC. “To be like me just do what I did, pay me to hear all about what you need to do to be like me.” That’s a false promise, you can do what he did and likely won’t end up where he did. In fact you’ll have a higher probability of success doing completely different things than he did. Hence poor advice to follow.

As to envy, not in my case. I’d never trade my life for what he’s done. Much happier with the path I took, but that’s a personal decision. Glad his life ended up at a much better place than where he was before!
He never said "do what I did" or "be like me". Wondering if that is projection or did you read that somewhere else? What that article essentially said was - $10M is enough to ensure you don't have any money problems, no matter what life throws your way. $1M isn't what it used to be. I don't think these are outlandish statements. People in the U.S. can stand to aim much higher. It doesn't matter if you would trade your life for his or not, he is and will always be more successful. Success (not necessarily money) is important to every human being with a functioning brain and conscience. I think the only exception is the most enlightened Buddist meditator - and even then I have my doubts! :P
Rent where you live, buy where others pay your mortgage for you. | I'm not looking to get rich quick, I'm not looking to get rich slow (indexing}, I'm looking to get rich.. for sure {real estate}.

thx1138
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Re: Oh my! Cardone says we need $10m net worth

Post by thx1138 » Sat Jun 16, 2018 9:29 pm

WanderingDoc wrote:
Sat Jun 16, 2018 9:10 pm
It doesn't matter if you would trade your life for his or not, he is and will always be more successful. Success (not necessarily money) is important to every human being with a functioning brain and conscience. I think the only exception is the most enlightened Buddist meditator - and even then I have my doubts! :P
Depends on how you define “success” I guess. He doesn’t meet my or many of my peer’s definition of “success” very well, though clearly he’s met his own (good for him) and matches many folk’s definitions therein.

For me though his is a life mostly wasted really. But again, not really important what I think of his life and accomplishments. I’m sure many would look at my life and consider it comparitively wasted.

As to the specific article it appears many here don’t share your opinion of it. Indeed $1M isn’t what it used to be. The article goes quite a bit beyond that though.

Anyway, glad you’ve got someone you can look up to if he provides you with some level of aspiration or motivation. He’s the antithesis of what I’ve ever aspired to be and I’m very, very glad my life isn’t a “success” like his.

golfCaddy
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Re: Oh my! Cardone says we need $10m net worth

Post by golfCaddy » Sat Jun 16, 2018 10:01 pm

WanderingDoc wrote:
Sat Jun 16, 2018 9:10 pm
He never said "do what I did" or "be like me". Wondering if that is projection or did you read that somewhere else? What that article essentially said was - $10M is enough to ensure you don't have any money problems, no matter what life throws your way. $1M isn't what it used to be. I don't think these are outlandish statements.
$10M is ridiculous. If we use the traditional 4% rule, $10M results in $400k/year. Bogleheads tend to be a financially conservative group, CAPE10 is relatively high, and real interest rates are near historic lows, so let's say 3% is the new 4%. That's still $300k/year. Anyone who thinks $300k/year in expenditures is needed for retirement lives in an alternate reality.

visualguy
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Re: Oh my! Cardone says we need $10m net worth

Post by visualguy » Sat Jun 16, 2018 10:26 pm

golfCaddy wrote:
Sat Jun 16, 2018 10:01 pm
$10M is ridiculous. If we use the traditional 4% rule, $10M results in $400k/year. Bogleheads tend to be a financially conservative group, CAPE10 is relatively high, and real interest rates are near historic lows, so let's say 3% is the new 4%. That's still $300k/year. Anyone who thinks $300k/year in expenditures is needed for retirement lives in an alternate reality.
Have you priced a good CCRC recently?

I find it to be true that at $10M you can be worry free, even with early retirement. At $5M, not really - I can imagine scenarios which are not very far-fetched where that wouldn't be enough, although it would most likely suffice as long as the retirement isn't way too early.

Theoretical
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Re: Oh my! Cardone says we need $10m net worth

Post by Theoretical » Sat Jun 16, 2018 10:46 pm

I think what he's describing is analagous to Nassim Taleb's "[(removed) --admin LadyGeek] money" where you just don't have to worry about money anymore to live remotely comfortably. The real problem is that he's clearly selling his strategies by saying the only two options are a bank account earning nothing or illiquid assets. That's a false dichotomy and intellectually dishonest.

WanderingDoc
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Re: Oh my! Cardone says we need $10m net worth

Post by WanderingDoc » Sat Jun 16, 2018 11:24 pm

golfCaddy wrote:
Sat Jun 16, 2018 10:01 pm
WanderingDoc wrote:
Sat Jun 16, 2018 9:10 pm
He never said "do what I did" or "be like me". Wondering if that is projection or did you read that somewhere else? What that article essentially said was - $10M is enough to ensure you don't have any money problems, no matter what life throws your way. $1M isn't what it used to be. I don't think these are outlandish statements.
$10M is ridiculous. If we use the traditional 4% rule, $10M results in $400k/year. Bogleheads tend to be a financially conservative group, CAPE10 is relatively high, and real interest rates are near historic lows, so let's say 3% is the new 4%. That's still $300k/year. Anyone who thinks $300k/year in expenditures is needed for retirement lives in an alternate reality.
Don't get it twisted. Personally, I am already FI and have very low expenses (single person who values travel and learning over houses, boats, and country clubs). My general disposition is that I can be very content even if I was homeless. Lots of mental reserve that I purposefully cultivated. That said, all else equal, more money is better than less money.

$300K is a lot/enough only if you're selfish. Imagine you're in a high cost of living area. Start at $300K. $120K to taxes. $60K to send 2 or 3 kids to private school. $50,000 to pay your rent/mortgage. Guess what? You are now in poverty. What if you want to eat at a nice restaurant? What if you want to give to charity, your church, or your community? You can't - you've just run out of money. $300K is NOT even close to being enough in the scenario I outlined.

Also, I love it how the default answer to everything is "3/4% withdrawal rate". Come on, let think a little deeper. "Unexpected life circumstances" is the operative phrase. Here are a couple examples - *2008-like recession.. well your $5M in 80/20 stocks just became $2M. *Your aunt needs chemotherapy that will cost $500K (her insurance doesn't cover it). Will you be the guy that says "Oh sorry, I was stubborn and GC doesn't know what he is talking about, so stopped at $5M, so sorry auntie, I cannot help you." Thinking small like this is SELFISH.

$10M is actually a figure he uses to be reasonable. I think he is being optimistic. I may consider stopping before $10MM, but if I do, I will be certain in my heart that I was selfish for doing so.
Rent where you live, buy where others pay your mortgage for you. | I'm not looking to get rich quick, I'm not looking to get rich slow (indexing}, I'm looking to get rich.. for sure {real estate}.

thx1138
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Re: Oh my! Cardone says we need $10m net worth

Post by thx1138 » Sat Jun 16, 2018 11:41 pm

I think some confusion in the discussion here is down to ambiguity in the linked article. Parts of it sound like he’s referring to early retirement and other parts standard retire at 65ish. Obviously the “number” depends hugely on which it is. $10M to retire at 65 with kids out of the house and college, house paid off and reasonable SS benefits is hyperbolic crazy high estimate. On the other hand retire very early and choose to live HCOLA with a family and private education then his number makes more sense if you want to be safe from a whole lifetime of potential calamities while spending like mad on a family.

So I think it is a little pointless to argue about the details - the article is way too poorly written to suffer any sort of reasonable analysis. He even starts it with a ludicrous strawman scenario. And likely this is on purpose, written as a typical faux-controversial click bait post.

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Re: Oh my! Cardone says we need $10m net worth

Post by golfCaddy » Sat Jun 16, 2018 11:45 pm

WanderingDoc wrote:
Sat Jun 16, 2018 11:24 pm
golfCaddy wrote:
Sat Jun 16, 2018 10:01 pm
WanderingDoc wrote:
Sat Jun 16, 2018 9:10 pm
He never said "do what I did" or "be like me". Wondering if that is projection or did you read that somewhere else? What that article essentially said was - $10M is enough to ensure you don't have any money problems, no matter what life throws your way. $1M isn't what it used to be. I don't think these are outlandish statements.
$10M is ridiculous. If we use the traditional 4% rule, $10M results in $400k/year. Bogleheads tend to be a financially conservative group, CAPE10 is relatively high, and real interest rates are near historic lows, so let's say 3% is the new 4%. That's still $300k/year. Anyone who thinks $300k/year in expenditures is needed for retirement lives in an alternate reality.
Don't get it twisted. Personally, I am already FI and have very low expenses (single person who values travel and learning over houses, boats, and country clubs). My general disposition is that I can be very content even if I was homeless. Lots of mental reserve that I purposefully cultivated. That said, all else equal, more money is better than less money.

$300K is a lot/enough only if you're selfish. Imagine you're in a high cost of living area. Start at $300K. $120K to taxes. $60K to send 2 or 3 kids to private school. $50,000 to pay your rent/mortgage. Guess what? You are now in poverty. What if you want to eat at a nice restaurant? What if you want to give to charity, your church, or your community? You can't - you've just run out of money. $300K is NOT even close to being enough in the scenario I outlined.
First, he's talking about a normal retirement, he gives the example of retiring at 65. Obviously, if you have extreme early retirement, when your kids aren't out of high school yet, you'll need higher numbers.

Second, if the money is withdrawn from a roth retirement account, you won't be paying income taxes. If it's withdrawn from taxable, you still only pay taxes on the investment earnings, not the principal.

Third, I can't tell if you're trolling or serious, but anyone who thinks $300k is poverty must be on drugs. Even in NYC, that's way above the median income: http://www.slate.com/articles/business/ ... n_you.html.

WanderingDoc
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Re: Oh my! Cardone says we need $10m net worth

Post by WanderingDoc » Sat Jun 16, 2018 11:51 pm

golfCaddy wrote:
Sat Jun 16, 2018 11:45 pm
WanderingDoc wrote:
Sat Jun 16, 2018 11:24 pm
golfCaddy wrote:
Sat Jun 16, 2018 10:01 pm
WanderingDoc wrote:
Sat Jun 16, 2018 9:10 pm
He never said "do what I did" or "be like me". Wondering if that is projection or did you read that somewhere else? What that article essentially said was - $10M is enough to ensure you don't have any money problems, no matter what life throws your way. $1M isn't what it used to be. I don't think these are outlandish statements.
$10M is ridiculous. If we use the traditional 4% rule, $10M results in $400k/year. Bogleheads tend to be a financially conservative group, CAPE10 is relatively high, and real interest rates are near historic lows, so let's say 3% is the new 4%. That's still $300k/year. Anyone who thinks $300k/year in expenditures is needed for retirement lives in an alternate reality.
Don't get it twisted. Personally, I am already FI and have very low expenses (single person who values travel and learning over houses, boats, and country clubs). My general disposition is that I can be very content even if I was homeless. Lots of mental reserve that I purposefully cultivated. That said, all else equal, more money is better than less money.

$300K is a lot/enough only if you're selfish. Imagine you're in a high cost of living area. Start at $300K. $120K to taxes. $60K to send 2 or 3 kids to private school. $50,000 to pay your rent/mortgage. Guess what? You are now in poverty. What if you want to eat at a nice restaurant? What if you want to give to charity, your church, or your community? You can't - you've just run out of money. $300K is NOT even close to being enough in the scenario I outlined.
First, he's talking about a normal retirement, he gives the example of retiring at 65. Obviously, if you have extreme early retirement, when your kids aren't out of high school yet, you'll need higher numbers.

Second, if the money is withdrawn from a roth retirement account, you won't be paying income taxes. If it's withdrawn from taxable, you still only pay taxes on the investment earnings, not the principal.

Third, I can't tell if you're trolling or serious, but anyone who thinks $300k is poverty must be on drugs. Even in NYC, that's way above the median income: http://www.slate.com/articles/business/ ... n_you.html.
Median income is not my definition of "living well" or "not having to worry about money". Most Americans DO worry about money all the time, so they fail what we are talking about by a mile. The median income earner in NYC isn't even close to fulfilling what we are proposing here. 68% of Americans still live paycheck to paycheck. Most couldn't come up with $1000 in cash for a family emergency without borrowing the money. Average sucks. Middle class sucks. That is the idea here.
Rent where you live, buy where others pay your mortgage for you. | I'm not looking to get rich quick, I'm not looking to get rich slow (indexing}, I'm looking to get rich.. for sure {real estate}.

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telemark
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Re: Oh my! Cardone says we need $10m net worth

Post by telemark » Sun Jun 17, 2018 1:10 am

This is getting silly. What if you want to found a Moon colony? 10 million isn't going to be nearly enough.

Maybe we should focus on the last word in that sentence.

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Re: Oh my! Cardone says we need $10m net worth

Post by JBTX » Sun Jun 17, 2018 1:30 am

Fairly silly article with lots of holes. I would agree to be considered truly wealthy $10 million is a logical threshold.

While I agree $1 million may not be enough, he ignores impact of social security. $40k swr+$30k SS = $70K is livable, although not at all extravagant. $5 million would give you safely $150k, add in ss and you are approaching $200k per year, which is pretty comfortable.

He talks about how is wealth doubled with high interest rates in early 80s but says nothing about the high inflation that drove high interest rates.

The only ways you get to $10 million are mainly

You have really high salary (MD or Csuite executive, Investment banker etc)
You own a successful business
You do a lot of real estate investing and go about it fairly aggressively.
Got lucky and cashed in on stock options of rapidly growing company

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