Random conversations regarding money

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ny_rn
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Random conversations regarding money

Post by ny_rn » Mon Feb 12, 2018 11:35 am

Last night I was at a gathering and found myself in a conversation regarding money and investing with another individual. He asked about what I invest in, etc and I told him, " mostly the US total stock market." He then proceeded to tell me how he only invests in physical gold bars, tax-deferred and tax-free accounts are a scam, etc. I kindly told him, "sounds like you have a plan, good luck." Has anyone ever found themselves in a situation like this? I could not hold a conversation with him any longer regarding this subject, so I excused myself to go get another beer.

Other things he said:

- "Gold has never declined."
- "I keep my gold bars in the house."
- "401k's will be wiped out in the future."

:oops:

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Sandtrap
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Re: Random conversations regarding money

Post by Sandtrap » Mon Feb 12, 2018 11:44 am

Investing Behavior Pitfalls: Wiki

https://www.bogleheads.org/wiki/Behavioral_pitfalls

The cup is already full.
j :D

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Pajamas
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Re: Random conversations regarding money

Post by Pajamas » Mon Feb 12, 2018 11:45 am

ny_rn wrote: โ†‘
Mon Feb 12, 2018 11:35 am
- "Gold has never declined."
That's true in a way. Gold pretty much just exists as gold relatively indefinitely. What and how much of what people are willing to exchange it for changes.

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nisiprius
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Re: Random conversations regarding money

Post by nisiprius » Mon Feb 12, 2018 11:47 am

ny_rn wrote: โ†‘
Mon Feb 12, 2018 11:35 am
- "Gold has never declined."
That is really amazing, but it falls in the all-too-common category of people accepting and repeating something they would like to be true, without spending ten minutes on a reality check.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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HomerJ
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Re: Random conversations regarding money

Post by HomerJ » Mon Feb 12, 2018 11:48 am

ny_rn wrote: โ†‘
Mon Feb 12, 2018 11:35 am
"I keep my gold bars in the house."
You should have said "So, where do you live?" :D

NotWhoYouThink
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Re: Random conversations regarding money

Post by NotWhoYouThink » Mon Feb 12, 2018 11:50 am

He tells people at parties that he keeps gold bars in the house? Did you ask about his security system?

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samsoes
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Re: Random conversations regarding money

Post by samsoes » Mon Feb 12, 2018 12:19 pm

You handled it well. Never get pulled into a spitting contest like this. It would eventually devolve into pressure to divulge actual numbers. Never a good thing.
"Happiness Is Not My Companion" - Gen. Gouverneur K. Warren. | (Avatar is the statue of Gen. Warren atop Little Round Top @ Gettysburg National Military Park.)

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baconavocado
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Re: Random conversations regarding money

Post by baconavocado » Mon Feb 12, 2018 4:52 pm

He was probably getting ready to give you exclusive early-bird access to his new hedge fund. You played him well by walking away.

Tanelorn
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Re: Random conversations regarding money

Post by Tanelorn » Mon Feb 12, 2018 5:16 pm

You missed some good opportunities, like asking whether he thought there was any real good behind "paper gold" investments like GLD, if JPM was manipulating precious metal prices and whether they were hoarding supplies more or less than usual lately, etc.

mak1277
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Re: Random conversations regarding money

Post by mak1277 » Mon Feb 12, 2018 5:22 pm

Wondering why it matters what anyone else invests in, or why anyone would get upset about another person's POV....

Tamalak
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Re: Random conversations regarding money

Post by Tamalak » Mon Feb 12, 2018 5:25 pm

mak1277 wrote: โ†‘
Mon Feb 12, 2018 5:22 pm
Wondering why it matters what anyone else invests in, or why anyone would get upset about another person's POV....
Same. If I encountered the guy OP did, I'd feel happy (at my own relative wisdom) and amused. I'd ask him for more of his thoughts.

BlackHat
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Re: Random conversations regarding money

Post by BlackHat » Mon Feb 12, 2018 5:25 pm

ny_rn wrote: โ†‘
Mon Feb 12, 2018 11:35 am
Last night I was at a gathering and found myself in a conversation regarding money and investing with another individual. He asked about what I invest in, etc and I told him, " mostly the US total stock market." He then proceeded to tell me how he only invests in physical gold bars, tax-deferred and tax-free accounts are a scam, etc. I kindly told him, "sounds like you have a plan, good luck." Has anyone ever found themselves in a situation like this? I could not hold a conversation with him any longer regarding this subject, so I excused myself to go get another beer.

Other things he said:

- "Gold has never declined."
- "I keep my gold bars in the house."
- "401k's will be wiped out in the future."

:oops:
All the time with my own father. I really try to avoid the subject all together which is hard because I care about his financial success. It's hard to give advice to him since he still views me as his little boy.
โ€œLife is really simple, but we insist on making it complicated.โ€ -- Confucius

livesoft
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Re: Random conversations regarding money

Post by livesoft » Mon Feb 12, 2018 5:26 pm

I talk to people I meet while out walking the dog all the time. A number of them will talk about the stock market, so I get them to open up about their investing habits. I find it quite entertaining to learn what weird things people do when it comes to money. But I also meet people who invest at Vanguard. Yes, even Vanguard investors will tell near strangers about their investments. :)
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MotoTrojan
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Re: Random conversations regarding money

Post by MotoTrojan » Mon Feb 12, 2018 6:45 pm

A very sharp government employee I work with started talking investments/pensions. I told him my buy & hold, low cost and diverse strategy. He told me he has physical gold/silver, and picks 1-2 stocks per sector to hold/trade using tight limit/stop-loss bands. Also told me he uses Roth entirely for Gold funds so itโ€™ll be tax free. Hmm.

The real kicker? He claims he gets 8-10%/year, but was shocked when I told him 2017 had a >20% return broadly. He also admitted to pulling out taxable assets after election.

Fortunately he maxes out his 401k/TSP and has that invested in a Bogle hands off way.

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bottlecap
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Re: Random conversations regarding money

Post by bottlecap » Mon Feb 12, 2018 6:54 pm

He (she?) wanted to talk about investing. He spends a lot of time researching, reading, and posting about gold on internet forums.

So he got to the party and wanted to talk about it.

There are probably a few Bogleheads like that...

You did the right thing. A goldbug, particularly that is so committed to keep physical gold (bars, no less!) in their home, is very, very convinced that is the ONLY way to invest. No sense discussing diversification.

JT

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Re: Random conversations regarding money

Post by cherijoh » Mon Feb 12, 2018 7:05 pm

Tamalak wrote: โ†‘
Mon Feb 12, 2018 5:25 pm
mak1277 wrote: โ†‘
Mon Feb 12, 2018 5:22 pm
Wondering why it matters what anyone else invests in, or why anyone would get upset about another person's POV....
Same. If I encountered the guy OP did, I'd feel happy (at my own relative wisdom) and amused. I'd ask him for more of his thoughts.
It goes against the grain for me to give people like this any more of my time than absolutely necessary. Bloviators like him are too self-absorbed to realize that you weren't amazed by his brilliance. :oops: I think the OP hit it just right.

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F150HD
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Re: Random conversations regarding money

Post by F150HD » Mon Feb 12, 2018 7:23 pm

HomerJ wrote: โ†‘
Mon Feb 12, 2018 11:48 am
ny_rn wrote: โ†‘
Mon Feb 12, 2018 11:35 am
"I keep my gold bars in the house."
You should have said "So, where do you live?" :D
I knew a guy whose entire retirement was 2 gold bars he got from somewhere (deceased parent? can't recall)

He talked about them openly to people. Dunno why :confused

Sure enough someone broke in and stole them few years ago lol....

FrankLUSMC
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Re: Random conversations regarding money

Post by FrankLUSMC » Mon Feb 12, 2018 7:32 pm

When the SHTF, only things to have are gold, water, bullets and firearms! Yeee Hawww

WanderingDoc
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Re: Random conversations regarding money

Post by WanderingDoc » Mon Feb 12, 2018 7:47 pm

ny_rn wrote: โ†‘
Mon Feb 12, 2018 11:35 am
Last night I was at a gathering and found myself in a conversation regarding money and investing with another individual. He asked about what I invest in, etc and I told him, " mostly the US total stock market." He then proceeded to tell me how he only invests in physical gold bars, tax-deferred and tax-free accounts are a scam, etc. I kindly told him, "sounds like you have a plan, good luck." Has anyone ever found themselves in a situation like this? I could not hold a conversation with him any longer regarding this subject, so I excused myself to go get another beer.

Other things he said:

- "Gold has never declined."
- "I keep my gold bars in the house."
- "401k's will be wiped out in the future."

:oops:
While I used to think 401k/IRAs etc. were a scam, I now think they are 50% a scam, but not in the literal sense of the word. People are told to go to college, get a job, contribute to the 401k, and work for 30 years. Then hopefully you will make it to 65, and possibly you will be alive, healthy enough, positive enough, or mobile enough to enjoy your 401k.

The only problem with that is, you are pigeon-holing yourself into working full time for decades, in a job or jobs you may or may not like, with people you probably (mostly) don't like. The average American making the average ($58K) or even higher ($75K) the family income probably cannot max their 401k and IRA ($24K/yr.), this is even more true if supporting a family. So if they contribute $12K per year, they are destined to work full time until they are old or dead. This may or may not be a good thing.

I find real estate investing pretty easy, and in only 5 years, it has given me the OPTION to work less, travel, etc. since the cash flow already covers my basic expenses.

The other side of the coin is too keep working I can no longer climb a mountain, eat a whole bunch of food without getting sick, or move to another country and actually have the energy to fully learn the language. If you are savings 15% of your income to put in a 401k, you are savings ALL the free cash you have to enjoy your life. Deferring all of it to some hopeful date that you will finally be wealthy (and I don't mean just in a financial way). This never really meant much sense to me. Why defer your life to be wealthy at a future date (which by the way, is never guaranteed). Most people have a lot of money when they are older anyway. ymmv
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

livesoft
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Re: Random conversations regarding money

Post by livesoft » Mon Feb 12, 2018 7:53 pm

FrankLUSMC wrote: โ†‘
Mon Feb 12, 2018 7:32 pm
When the SHTF, only things to have are gold, water, bullets and firearms! Yeee Hawww
There is a good article about that today: https://widerimage.reuters.com/story/ma ... less-roads
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Grt2bOutdoors
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Re: Random conversations regarding money

Post by Grt2bOutdoors » Mon Feb 12, 2018 7:59 pm

Let me guess, OP was your friends name Goldfinger?
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Masterblaster
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Re: Random conversations regarding money

Post by Masterblaster » Mon Feb 12, 2018 8:11 pm

ny_rn wrote: โ†‘
Mon Feb 12, 2018 11:35 am
so I excused myself to go get another beer.
Just tell him that you only invest in beer because it's a true liquid asset.

ImUrHuckleberry
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Re: Random conversations regarding money

Post by ImUrHuckleberry » Mon Feb 12, 2018 8:17 pm

The man lives by the golden rule
Whoever has the gold, rules

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unclescrooge
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Re: Random conversations regarding money

Post by unclescrooge » Mon Feb 12, 2018 11:06 pm

WanderingDoc wrote: โ†‘
Mon Feb 12, 2018 7:47 pm
ny_rn wrote: โ†‘
Mon Feb 12, 2018 11:35 am
Last night I was at a gathering and found myself in a conversation regarding money and investing with another individual. He asked about what I invest in, etc and I told him, " mostly the US total stock market." He then proceeded to tell me how he only invests in physical gold bars, tax-deferred and tax-free accounts are a scam, etc. I kindly told him, "sounds like you have a plan, good luck." Has anyone ever found themselves in a situation like this? I could not hold a conversation with him any longer regarding this subject, so I excused myself to go get another beer.

Other things he said:

- "Gold has never declined."
- "I keep my gold bars in the house."
- "401k's will be wiped out in the future."

:oops:
While I used to think 401k/IRAs etc. were a scam, I now think they are 50% a scam, but not in the literal sense of the word. People are told to go to college, get a job, contribute to the 401k, and work for 30 years. Then hopefully you will make it to 65, and possibly you will be alive, healthy enough, positive enough, or mobile enough to enjoy your 401k.

The only problem with that is, you are pigeon-holing yourself into working full time for decades, in a job or jobs you may or may not like, with people you probably (mostly) don't like. The average American making the average ($58K) or even higher ($75K) the family income probably cannot max their 401k and IRA ($24K/yr.), this is even more true if supporting a family. So if they contribute $12K per year, they are destined to work full time until they are old or dead. This may or may not be a good thing.

I find real estate investing pretty easy, and in only 5 years, it has given me the OPTION to work less, travel, etc. since the cash flow already covers my basic expenses.

The other side of the coin is too keep working I can no longer climb a mountain, eat a whole bunch of food without getting sick, or move to another country and actually have the energy to fully learn the language. If you are savings 15% of your income to put in a 401k, you are savings ALL the free cash you have to enjoy your life. Deferring all of it to some hopeful date that you will finally be wealthy (and I don't mean just in a financial way). This never really meant much sense to me. Why defer your life to be wealthy at a future date (which by the way, is never guaranteed). Most people have a lot of money when they are older anyway. ymmv
Would some one earning $58k, or a family earning $75k, be able to replicate your real estate success, especially if they can only invest $12k/year?

WanderingDoc
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Re: Random conversations regarding money

Post by WanderingDoc » Mon Feb 12, 2018 11:35 pm

unclescrooge wrote: โ†‘
Mon Feb 12, 2018 11:06 pm
Would some one earning $58k, or a family earning $75k, be able to replicate your real estate success, especially if they can only invest $12k/year?
Good point. Probably not in 3-4 years. In 7-8 years for sure. The thing is, you only need $500-600K in real estate equity to generate $80K per year to live off of. Maybe even less if you leverage a bit more. And don't forget the little to no taxes you'll be legally paying. I don't think $600K in mutual funds would throw off an $80K dividend?
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

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k66
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Re: Random conversations regarding money

Post by k66 » Mon Feb 12, 2018 11:43 pm

ny_rn wrote: โ†‘
Mon Feb 12, 2018 11:35 am
Last night I was at a gathering and found myself in a conversation regarding money and investing with another individual. He asked about what I invest in, etc and I told him, " mostly the US total stock market." He then proceeded to tell me how he only invests in physical gold bars, tax-deferred and tax-free accounts are a scam, etc. I kindly told him, "sounds like you have a plan, good luck." Has anyone ever found themselves in a situation like this? I could not hold a conversation with him any longer regarding this subject, so I excused myself to go get another beer.

Other things he said:

- "Gold has never declined."
- "I keep my gold bars in the house."
- "401k's will be wiped out in the future."

:oops:
401(k)s will be wiped out by what? I suppose you didn't get a chance to ask him that question!?
LOSER of the Boglehead Contest 2015 | lang may yer lum reek

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Pajamas
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Re: Random conversations regarding money

Post by Pajamas » Tue Feb 13, 2018 12:05 am

You missed a great opportunity to open up other conversational wormholes such as "fiat money" and "hyperinflation" and "prepping for SHTF".

Here's a classic look at some possible gold-focused topics for the next time you meet:

http://ritholtz.com/2013/04/the-10-rule ... ldbuggery/

Also don't forget to ask if he is worried about the government confiscating his gold if the conversation lags. An alternative would be to ask what he thinks about 90% silver bags. :beer

MrJones
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Re: Random conversations regarding money

Post by MrJones » Tue Feb 13, 2018 12:20 am

Pajamas wrote: โ†‘
Tue Feb 13, 2018 12:05 am
You missed a great opportunity to open up other conversational wormholes such as "fiat money" and "hyperinflation" and "prepping for SHTF".

Here's a classic look at some possible gold-focused topics for the next time you meet:

http://ritholtz.com/2013/04/the-10-rule ... ldbuggery/

Also don't forget to ask if he is worried about the government confiscating his gold if the conversation lags. An alternative would be to ask what he thinks about 90% silver bags. :beer
Hahaha!

Also you should have thrown this in: "Pssst... Are you a prepper too? I hear storing tons of Nutella is the way to go. Highest nutritional density, I hear. What do you think?"

gotester2000
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Re: Random conversations regarding money

Post by gotester2000 » Tue Feb 13, 2018 12:29 am

Is investing a percentage of your portfolio in physical real estate and physical gold not a diversification strategy,but keeping everything in stocks and bonds is a strategy?

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zTurtle
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Re: Random conversations regarding money

Post by zTurtle » Tue Feb 13, 2018 1:30 am

I haven't had a convo with someone like this, but your reaction was similar to mine when I first read about the Permanent Portfolio. Keep 25% of my assets in physical gold?! seemed bonkers to me, but now I can sort of see where this thinking is coming from, if you really do want to mitigate the risk of the government seizing your bank accounts and 401Ks.

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Re: Random conversations regarding money

Post by MotoTrojan » Tue Feb 13, 2018 1:50 am

gotester2000 wrote: โ†‘
Tue Feb 13, 2018 12:29 am
Is investing a percentage of your portfolio in physical real estate and physical gold not a diversification strategy,but keeping everything in stocks and bonds is a strategy?
Physical gold is considered a commodity and not an investment (it does not generate income/profits). Same with a non-income real estate property.

gotester2000
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Re: Random conversations regarding money

Post by gotester2000 » Tue Feb 13, 2018 4:36 am

It gives you diversification and inflation hedge. You can use it, take loan against it, sell it.
I am surprised that people dont consider these as investible assets and do not include them in networth.

Nekrotok
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Re: Random conversations regarding money

Post by Nekrotok » Tue Feb 13, 2018 1:54 pm

WanderingDoc wrote: โ†‘
Mon Feb 12, 2018 11:35 pm
unclescrooge wrote: โ†‘
Mon Feb 12, 2018 11:06 pm
Would some one earning $58k, or a family earning $75k, be able to replicate your real estate success, especially if they can only invest $12k/year?
Good point. Probably not in 3-4 years. In 7-8 years for sure. The thing is, you only need $500-600K in real estate equity to generate $80K per year to live off of. Maybe even less if you leverage a bit more. And don't forget the little to no taxes you'll be legally paying. I don't think $600K in mutual funds would throw off an $80K dividend?
What kind of return rate turns $12k/year into $500k after 8 years?

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unclescrooge
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Re: Random conversations regarding money

Post by unclescrooge » Tue Feb 13, 2018 1:58 pm

WanderingDoc wrote: โ†‘
Mon Feb 12, 2018 11:35 pm
unclescrooge wrote: โ†‘
Mon Feb 12, 2018 11:06 pm
Would some one earning $58k, or a family earning $75k, be able to replicate your real estate success, especially if they can only invest $12k/year?
Good point. Probably not in 3-4 years. In 7-8 years for sure. The thing is, you only need $500-600K in real estate equity to generate $80K per year to live off of. Maybe even less if you leverage a bit more. And don't forget the little to no taxes you'll be legally paying. I don't think $600K in mutual funds would throw off an $80K dividend?
That's a bit optimistic, especially if it's passive, but not impossible.

Also, might be difficult to scale up without high income under current lending guidelines. Unless you wait 2 years after each purchase so the underwriter will recognise the rental income.

I assume you've invested in the mid-west? Would you mind sharing cities and property types?

Dividends, would definitely not be on the same scale, although longer term total stock returns may be comparable or even better.

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unclescrooge
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Re: Random conversations regarding money

Post by unclescrooge » Tue Feb 13, 2018 1:59 pm

Nekrotok wrote: โ†‘
Tue Feb 13, 2018 1:54 pm
WanderingDoc wrote: โ†‘
Mon Feb 12, 2018 11:35 pm
unclescrooge wrote: โ†‘
Mon Feb 12, 2018 11:06 pm
Would some one earning $58k, or a family earning $75k, be able to replicate your real estate success, especially if they can only invest $12k/year?
Good point. Probably not in 3-4 years. In 7-8 years for sure. The thing is, you only need $500-600K in real estate equity to generate $80K per year to live off of. Maybe even less if you leverage a bit more. And don't forget the little to no taxes you'll be legally paying. I don't think $600K in mutual funds would throw off an $80K dividend?
What kind of return rate turns $12k/year into $500k after 8 years?
I don't think he meant $12k becomes $500k.

Just that $500k can generate $80k in income.

truenorth418
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Re: Random conversations regarding money

Post by truenorth418 » Tue Feb 13, 2018 2:18 pm

To each their own. Who knows, maybe the gold guy will be right!

I recently spent some time with an old high school friend. He and his wife have been investing in rental properties in the Los Angeles area where they live. They have 4 or 5 properties, and my friend described these as their "retirement fund". Sure, I can see how the properties will throw off some cash, and his wife enjoys the activity involved with fixing up the properties, working with contractors, marketing, so why not? It's not something I want to do with my time but I understand it. Of course, they were completely uninterested when I brought up the subject of stock market index investing, and my friend made some snarky comment about how they "lost all their money in the stock market" years ago. They took me on a tour of their rental properties which was fun; but what was I supposed to, whip out my Schwab and Fidelity statements to show them my index funds?

A few weeks later I was traveling down in Belize, and one of the guys I met on my cruise ship happened to encounter me on the beach. I mentioned that I was early retired, and so he decided to launch into his investment strategy - high dividend stocks. He wanted to know why I didn't own ConEdison, Philip Morris, and bunch of other high dividend stocks like he did because they pay such high dividends? I began to explain concepts like total return investing, diversification, withdrawal strategies, but it all just bounced off of him. He couldn't have cared less. Turns out he had retired at age 55 from the City of New York with a generous union pension. His dividend stock portfolio was basically just play money to him.

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220volt
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Re: Random conversations regarding money

Post by 220volt » Tue Feb 13, 2018 3:14 pm

Warren Buffett summed it up for me
You could take all the gold thatโ€™s ever been mined, and it would fill a cube 67 feet in each direction. For what itโ€™s worth at current gold prices around 7 trillion, you could buy โ€” not some โ€” but all of the farmland in the continental United States. Plus, you could buy 7 Exxon Mobils (XOM), plus have $2 trillion of walking-around money. Or you could have a big cube of metal to pet and look at. Which would you take? Which is going to produce more value for you?
"If I had only followed the advice of financial analysts in 2008, I'd have a million dollars today, provided I started with a hundred million dollars" - Jon Stewart

MnD
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Re: Random conversations regarding money

Post by MnD » Tue Feb 13, 2018 7:27 pm

Recently retired neighbor.....
"My Royal Bank of Canada advisor really proves his worth during down markets. I get all the upside when markets are up but when markets decline he knows how to protect things so my stuff only declines by maybe half what the market does. Worth every penny using that guy."

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whodidntante
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Re: Random conversations regarding money

Post by whodidntante » Tue Feb 13, 2018 7:38 pm

FrankLUSMC wrote: โ†‘
Mon Feb 12, 2018 7:32 pm
When the SHTF, only things to have are gold, water, bullets and firearms! Yeee Hawww
What good is gold?

FrankLUSMC
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Re: Random conversations regarding money

Post by FrankLUSMC » Tue Feb 13, 2018 8:31 pm

whodidntante wrote: โ†‘
Tue Feb 13, 2018 7:38 pm
FrankLUSMC wrote: โ†‘
Mon Feb 12, 2018 7:32 pm
When the SHTF, only things to have are gold, water, bullets and firearms! Yeee Hawww
What good is gold?
Paper money will be worthless. Only metal money, coins or bars will have some trading value. SHTF or TEOWAWKI (the end of the world as we know it)
will be really, really bad! LOL :P

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HomerJ
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Re: Random conversations regarding money

Post by HomerJ » Wed Feb 14, 2018 1:17 am

unclescrooge wrote: โ†‘
Tue Feb 13, 2018 1:59 pm
Nekrotok wrote: โ†‘
Tue Feb 13, 2018 1:54 pm
WanderingDoc wrote: โ†‘
Mon Feb 12, 2018 11:35 pm
unclescrooge wrote: โ†‘
Mon Feb 12, 2018 11:06 pm
Would some one earning $58k, or a family earning $75k, be able to replicate your real estate success, especially if they can only invest $12k/year?
Good point. Probably not in 3-4 years. In 7-8 years for sure. The thing is, you only need $500-600K in real estate equity to generate $80K per year to live off of. Maybe even less if you leverage a bit more. And don't forget the little to no taxes you'll be legally paying. I don't think $600K in mutual funds would throw off an $80K dividend?
What kind of return rate turns $12k/year into $500k after 8 years?
I don't think he meant $12k becomes $500k.

Just that $500k can generate $80k in income.
No, he absolutely believes that $12k becomes $500k, because he got into California real estate and did very well, where leveraging $30k to buy a $300k house quickly makes you $500k when the $300k house is worth $800k three years later, and where rental income is very high.

I'll go ahead and give WanderingDoc credit. He jumped on California real estate at the right exact moment.

But for some reason, he thinks it's super easy to do it again for anyone, anytime. He actually think it's repeatable, and easily repeatable. Just mortgage, buy rental properties, or flip, and let the money roll in. I assume he at least believes you have to move to his area for this to work.

I believe we have some Bogleheads here who did that in 2005-2007, and lost a ton of money in the 2008-2009 crash.. WanderingDoc hasn't experienced that yet.
Last edited by HomerJ on Wed Feb 14, 2018 1:29 am, edited 1 time in total.

quantAndHold
Posts: 1701
Joined: Thu Sep 17, 2015 10:39 pm

Re: Random conversations regarding money

Post by quantAndHold » Wed Feb 14, 2018 1:29 am

nisiprius wrote: โ†‘
Mon Feb 12, 2018 11:47 am
ny_rn wrote: โ†‘
Mon Feb 12, 2018 11:35 am
- "Gold has never declined."
That is really amazing, but it falls in the all-too-common category of people accepting and repeating something they would like to be true, without spending ten minutes on a reality check.
Itโ€™s true, though. Gold has never declined. Dollars go up and down relative to the value of the gold, but an ounce of gold will always be an ounce of gold. :?

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AtlasShrugged?
Posts: 572
Joined: Wed Jul 15, 2015 6:08 pm

Re: Random conversations regarding money

Post by AtlasShrugged? » Wed Feb 14, 2018 8:06 am

It gives you diversification and inflation hedge. You can use it, take loan against it, sell it.
I am surprised that people dont consider these as investible assets and do not include them in networth.
FWIW, I agree re: diversification. I buy very limited quantities of gold. I do include it in my net worth calculation. I used to buy American gold eagle coins, then elected to purchase 1 oz bars. By very limited, I mean the purchase of a 1 oz bar every other year or so.

For physical security, they are in our safe. And I am a gun owner. I figure those two factors (safe, gun) will make other people easier pickings.
โ€œIf you don't know, the thing to do is not to get scared, but to learn.โ€

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jadd806
Posts: 231
Joined: Mon Aug 17, 2015 4:34 pm
Location: New England

Re: Random conversations regarding money

Post by jadd806 » Wed Feb 14, 2018 8:15 am

HomerJ wrote: โ†‘
Wed Feb 14, 2018 1:17 am
No, he absolutely believes that $12k becomes $500k, because he got into California real estate and did very well, where leveraging $30k to buy a $300k house quickly makes you $500k when the $300k house is worth $800k three years later, and where rental income is very high.

I'll go ahead and give WanderingDoc credit. He jumped on California real estate at the right exact moment.

But for some reason, he thinks it's super easy to do it again for anyone, anytime. He actually think it's repeatable, and easily repeatable. Just mortgage, buy rental properties, or flip, and let the money roll in. I assume he at least believes you have to move to his area for this to work.

I believe we have some Bogleheads here who did that in 2005-2007, and lost a ton of money in the 2008-2009 crash.. WanderingDoc hasn't experienced that yet.
Thanks for the background. It seems like he attempts to derail every thread that he participates in towards real estate investing. At nearly 100 posts per month since he joined in August 2017, his schtick has become rather stale.

Other forums have an option to add users to an "ignore" list so their posts are automatically hidden from you. It would be nice if Bogleheads had this feature.

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unclescrooge
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Re: Random conversations regarding money

Post by unclescrooge » Wed Feb 14, 2018 8:19 am

HomerJ wrote: โ†‘
Wed Feb 14, 2018 1:17 am
unclescrooge wrote: โ†‘
Tue Feb 13, 2018 1:59 pm
Nekrotok wrote: โ†‘
Tue Feb 13, 2018 1:54 pm
WanderingDoc wrote: โ†‘
Mon Feb 12, 2018 11:35 pm
unclescrooge wrote: โ†‘
Mon Feb 12, 2018 11:06 pm
Would some one earning $58k, or a family earning $75k, be able to replicate your real estate success, especially if they can only invest $12k/year?
Good point. Probably not in 3-4 years. In 7-8 years for sure. The thing is, you only need $500-600K in real estate equity to generate $80K per year to live off of. Maybe even less if you leverage a bit more. And don't forget the little to no taxes you'll be legally paying. I don't think $600K in mutual funds would throw off an $80K dividend?
What kind of return rate turns $12k/year into $500k after 8 years?
I don't think he meant $12k becomes $500k.

Just that $500k can generate $80k in income.
No, he absolutely believes that $12k becomes $500k, because he got into California real estate and did very well, where leveraging $30k to buy a $300k house quickly makes you $500k when the $300k house is worth $800k three years later, and where rental income is very high.

I'll go ahead and give WanderingDoc credit. He jumped on California real estate at the right exact moment.

But for some reason, he thinks it's super easy to do it again for anyone, anytime. He actually think it's repeatable, and easily repeatable. Just mortgage, buy rental properties, or flip, and let the money roll in. I assume he at least believes you have to move to his area for this to work.

I believe we have some Bogleheads here who did that in 2005-2007, and lost a ton of money in the 2008-2009 crash.. WanderingDoc hasn't experienced that yet.
I was one of lucky few that turned $2,500 into $500k from 2003 to 2006, then sold and rented until 2014. I would never think that is a repeatable event for me, let alone anyone else.

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