If you are already wealthy, what keeps you motivated?

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softwaregeek
Posts: 58
Joined: Wed May 08, 2019 8:59 pm

Re: If you are already wealthy, what keeps you motivated?

Post by softwaregeek » Wed May 15, 2019 10:13 pm

I am in my 40's and could probably retire now. Several reasons I won't.

1. Wife isn't ready to retire.
2. I work everyday with the most brilliant engineers in the world in Silicon Valley. If I retired, who would I have the fascinating discussions with?
3. I don't want my kids to see me loafing.
4. Retiring in style would probably require me to move to a cheaper area. I like this area.
5. My work is pretty cushy. I usually get fed gourmet breakfast, lunch and sometimes dinner. And many other perks as well.
6. Leave more to my kids. I am determined to leave them with more than I had.
7. Honestly, imposter syndrome. Even though I'm very wealthy by most people's standards, I feel like it could be peeled away tomorrow. Many of us who went through the dot.com bubble of the early 2000's feel this way.

OldAtHeart
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Re: If you are already wealthy, what keeps you motivated?

Post by OldAtHeart » Wed May 15, 2019 10:31 pm

Why don’t you own a primary residence? I would think that is the next logical step assuming you want to stay in your current location long term.

My situation is *very* similar to yours and I don’t feel wealthy, mainly because I am in a VHCOL area.

As others have asked, it would also be interesting to know the breakdown of property value vs mortgage amounts on your rentals. Hard to determine exactly how well you are doing without knowing the full picture. Obviously doing great but big difference between $2m in equity or $2m purchase price with significant mortgages.

HEDGEFUNDIE
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Re: If you are already wealthy, what keeps you motivated?

Post by HEDGEFUNDIE » Wed May 15, 2019 10:35 pm

softwaregeek wrote:
Wed May 15, 2019 10:13 pm
I am in my 40's and could probably retire now. Several reasons I won't.

1. Wife isn't ready to retire.
2. I work everyday with the most brilliant engineers in the world in Silicon Valley. If I retired, who would I have the fascinating discussions with?
3. I don't want my kids to see me loafing.
4. Retiring in style would probably require me to move to a cheaper area. I like this area.
5. My work is pretty cushy. I usually get fed gourmet breakfast, lunch and sometimes dinner. And many other perks as well.
6. Leave more to my kids. I am determined to leave them with more than I had.
7. Honestly, imposter syndrome. Even though I'm very wealthy by most people's standards, I feel like it could be peeled away tomorrow. Many of us who went through the dot.com bubble of the early 2000's feel this way.
Have you considered that these two goals could be in conflict?

SovereignInvestor
Posts: 174
Joined: Mon Aug 20, 2018 4:41 pm

Re: If you are already wealthy, what keeps you motivated?

Post by SovereignInvestor » Wed May 15, 2019 10:46 pm

tomtoms wrote:
Wed May 15, 2019 11:57 am
I am in my late 30s. Here are my stats:

- Own $2M in rental properties. Mortgage/property tax/insurance is $9,500/month. Rent is $12,500/month. Have a property manager.
I'm not sure why many are ripping the ROE.

He is making $36K/year before misc expenses. Even if it's down to say $20K to be conservative due to fees, maintenance etc.. I'm not sure of exact mortgage and if OP said it would help, but if it is in the $1-$1.5M range, he's probably getting anywhere from $20K to $40K per year in additional equity from mortgage principal roughly. Assuming 2.5% appreciation on $2M of RE is $50K as well.

$20K income, take the low figure of $20K mortgage principal equity building, and an inflationary $50K appreciation, that totals to $90K total profit, mostly tax free since a lot is appreciation. Unless he has more than $1.2M of equity, then that's a solid high-single digit after tax return on a somewhat passive RE holding. Nothing poor about it. Don't know specifics, but ballparking it. If there's less mortgage/leverage, then yes the ROE drops, but risk does too.

goldendad
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Re: If you are already wealthy, what keeps you motivated?

Post by goldendad » Wed May 15, 2019 10:48 pm

Managing what we have well (not losing it). I’d keep my day job. Never know what is coming over the hill.

hansatsu
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Joined: Wed May 01, 2019 2:41 pm

Re: If you are already wealthy, what keeps you motivated?

Post by hansatsu » Wed May 15, 2019 11:12 pm

Financially set and don't need to work, but keep my skills sharpened always because I get a rush out of learning and solving new problems, and of course to hedge against black swan scenario so I can always jump back in if needed with full leverage against the job market.

Hulu
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Re: If you are already wealthy, what keeps you motivated?

Post by Hulu » Wed May 15, 2019 11:49 pm

Helped my dad shovel mulch for six hours today. Good company, good weather and we had a laugh when he dropped my already cracked phone and pretended he broke it. That’s my motivation

khh
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Re: If you are already wealthy, what keeps you motivated?

Post by khh » Thu May 16, 2019 1:17 am

I like money.

visualguy
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Re: If you are already wealthy, what keeps you motivated?

Post by visualguy » Thu May 16, 2019 1:28 am

Transitioning from a mostly increasing or stable net worth to a mostly decreasing net worth can be traumatic even if you can afford it. There's a lot of difficulty in making this transition voluntarily, and avoiding it is at least somewhat motivating. In many cases, motivating-enough unless you really dislike your job, or you have something else that you very much want to do instead.

SoAnyway
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Re: If you are already wealthy, what keeps you motivated?

Post by SoAnyway » Thu May 16, 2019 2:12 am

tomtoms wrote:
Wed May 15, 2019 11:57 am
I am in my late 30s. Here are my stats:
- Own $2M in rental properties. Mortgage/property tax/insurance is $9,500/month. Rent is $12,500/month. Have a property manager.
- Have $500 k in stocks
- Have $450 k in cash
- Have no debt (besides my rental properties)
- Own a business/also 9-5 job = $275-300 k a year
- No kids/do not own a primary residence

I have been thinking about quitting my 9-5, M-F job (makes $140 k a year) but it is not a stressful job. I also work about 4-8 hours a week on my business.

My question is...for those who are doing well financially, what keeps you motivated? When is time more important than money?
OP, with all due respect I don't care about your (carefully-curated) "stats". If you feel like you've accomplished everything you want to accomplish in your job and business at your tender age, and you feel you've accumulated "enough" to accomplish the (as yet-undefined) things you'll do with that "time" not spent working on them, then stop. It's your life, not anyone else's.

SoAnyway, to be frank I'm way unimpressed with your numbers - and many of my former students at your age are doing waaaay better - but I'm not judging. If you think you have "enough" to support spending your "time" in the way you desire for the next 50-60+ years, then stop. Let us know how it works out for ya. Personally, I couldn't sleep at night in your situation but I'm not you.

To answer your question about what keeps me and maybe some others here motivated, in my case it's in doing my best to contribute whatever talents I was blessed with from birth and the skills/knowledge gained from others on the BH forum to help others. You know (or maybe not), that whole "Pay it Forward" thang. But btw, with the understanding that many of those to whom we give might not want/appreciate it or even "get" why we do it and think we're a bunch o' suckers. That's ok too, if that's what you choose to believe.

Wishing you great success.
Last edited by SoAnyway on Thu May 16, 2019 10:36 am, edited 1 time in total.
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Stormbringer
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Re: If you are already wealthy, what keeps you motivated?

Post by Stormbringer » Thu May 16, 2019 6:27 am

tomtoms wrote:
Wed May 15, 2019 11:57 am
If you are already wealthy, what keeps you motivated?
I enjoy my work, but I'd also be lying if I said that other people I know having a higher score wasn't a motivating factor.
"Compound interest is the most powerful force in the universe." - Albert Einstein

bearcub
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Re: If you are already wealthy, what keeps you motivated?

Post by bearcub » Thu May 16, 2019 6:34 am

Fear. Medicare + Social Security. I do not trust D.C.

FireProof
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Re: If you are already wealthy, what keeps you motivated?

Post by FireProof » Thu May 16, 2019 6:54 am

Well, wealthy is a matter of perception. For most people, it's the next level above whatever they have, and they'll never feel secure. So the issue doesn't arise.

SovereignInvestor
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Re: If you are already wealthy, what keeps you motivated?

Post by SovereignInvestor » Thu May 16, 2019 7:02 am

SoAnyway wrote:
Thu May 16, 2019 2:12 am

SoAnyway, to be frank I'm way unimpressed with your numbers - and many of my former students at your age are doing waaaay better - but I'm not judging.
Okay now, but OP seems to be doing well.

aqan
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Re: If you are already wealthy, what keeps you motivated?

Post by aqan » Thu May 16, 2019 7:12 am

Malaria eradication

Olemiss540
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Re: If you are already wealthy, what keeps you motivated?

Post by Olemiss540 » Thu May 16, 2019 7:20 am

tomtoms wrote:
Wed May 15, 2019 11:57 am
I am in my late 30s. Here are my stats:

- Own $2M in rental properties.

- Have $500 k in stocks

- Have $450 k in cash
I have yet to find where you answered the repeated questions regarding your debt load.

You have somewhere between 950k and 3 Million. Assuming you are asking the question because you yourself are "wealthy" and want to know what to do with your time, you must have very small amounts of debt and expect to soon receive the entirety of the monthly cash flow (minus management fees) into your checking account?

I wouldn't worry about quitting ANY jobs until I had the $2 million dollar mortgage paid off hanging over your head.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

Topic Author
tomtoms
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Re: If you are already wealthy, what keeps you motivated?

Post by tomtoms » Thu May 16, 2019 7:52 am

Olemiss540 wrote:
Thu May 16, 2019 7:20 am
tomtoms wrote:
Wed May 15, 2019 11:57 am
I am in my late 30s. Here are my stats:

- Own $2M in rental properties.

- Have $500 k in stocks

- Have $450 k in cash
I have yet to find where you answered the repeated questions regarding your debt load.

You have somewhere between 950k and 3 Million. Assuming you are asking the question because you yourself are "wealthy" and want to know what to do with your time, you must have very small amounts of debt and expect to soon receive the entirety of the monthly cash flow (minus management fees) into your checking account?

I wouldn't worry about quitting ANY jobs until I had the $2 million dollar mortgage paid off hanging over your head.
My mortgage debt load is $1.4M ($600 k down payment). All expenses are paid by tenants. Positive cash flow. Appreciation has not been factored in.

I am probably around $2M in NW not including the value of my business.

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Sandtrap
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Location: Hawaii😀 Northern AZ.😳 Retired.

Re: If you are already wealthy, what keeps you motivated?

Post by Sandtrap » Thu May 16, 2019 8:07 am

tomtoms wrote:
Thu May 16, 2019 7:52 am
Olemiss540 wrote:
Thu May 16, 2019 7:20 am
tomtoms wrote:
Wed May 15, 2019 11:57 am
I am in my late 30s. Here are my stats:

- Own $2M in rental properties.

- Have $500 k in stocks

- Have $450 k in cash
I have yet to find where you answered the repeated questions regarding your debt load.

You have somewhere between 950k and 3 Million. Assuming you are asking the question because you yourself are "wealthy" and want to know what to do with your time, you must have very small amounts of debt and expect to soon receive the entirety of the monthly cash flow (minus management fees) into your checking account?

I wouldn't worry about quitting ANY jobs until I had the $2 million dollar mortgage paid off hanging over your head.
My mortgage debt load is $1.4M ($600 k down payment). All expenses are paid by tenants. Positive cash flow. Appreciation has not been factored in.

I am probably around $2M in NW not including the value of my business.
According to averages here, you are not wealthy yet :shock: :shock: . (search forum archives for "net worth", "Milestone", etc)
Wealth is based on income, expenses in retirement, age, years to retirement (age 65 non rule of thumb), and portfolio size, and nature of income stream, etc.
Suggest posting a portfolio review at each additional 1 million milestone over time. (Keep the form updated).

What is the nature of your rental properties? (debt free? what net ROI?)
What is the nature of your business? (debt, income, net ROI)?

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alpenglow
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Re: If you are already wealthy, what keeps you motivated?

Post by alpenglow » Thu May 16, 2019 8:26 am

I am fairly wealthy (still probably chump change for this board though) for my age group and could probably FIRE within the next 5 years. I'm motivated to provide for my family (quality health insurance, saving for college, etc.).

blackholescion
Posts: 62
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Re: If you are already wealthy, what keeps you motivated?

Post by blackholescion » Thu May 16, 2019 9:27 am

SovereignInvestor wrote:
Wed May 15, 2019 10:46 pm
tomtoms wrote:
Wed May 15, 2019 11:57 am
I am in my late 30s. Here are my stats:

- Own $2M in rental properties. Mortgage/property tax/insurance is $9,500/month. Rent is $12,500/month. Have a property manager.
I'm not sure why many are ripping the ROE.

He is making $36K/year before misc expenses. Even if it's down to say $20K to be conservative due to fees, maintenance etc.. I'm not sure of exact mortgage and if OP said it would help, but if it is in the $1-$1.5M range, he's probably getting anywhere from $20K to $40K per year in additional equity from mortgage principal roughly. Assuming 2.5% appreciation on $2M of RE is $50K as well.

$20K income, take the low figure of $20K mortgage principal equity building, and an inflationary $50K appreciation, that totals to $90K total profit, mostly tax free since a lot is appreciation. Unless he has more than $1.2M of equity, then that's a solid high-single digit after tax return on a somewhat passive RE holding. Nothing poor about it. Don't know specifics, but ballparking it. If there's less mortgage/leverage, then yes the ROE drops, but risk does too.
It's not tax free when he goes to sell. You can't count on RE appreciation at 2.5% because many areas are still down from 2008 and we don't know where OP is located. I live in a hot market and our house hasn't gone up in value in 2 years. Therefore, all he has from the passive holding is 36k a year which is 0.5% return on 2 million (he mentioned 1.4 mortgage so let's bump this to 0.75%). If he took out a series of loans and invested, he would be better off than the RE holdings.

If your RE isn't making you the same as investing in an index fund, why bother? He dumped 600k into a downpayment. What would that have looked like in a fund by now depending on when he bought the properties? If he did it earlier this year, that down-payment would have generated 90-120k YTD. Obviously cherry picking a time period.

SovereignInvestor
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Re: If you are already wealthy, what keeps you motivated?

Post by SovereignInvestor » Thu May 16, 2019 9:39 am

blackholescion wrote:
Thu May 16, 2019 9:27 am
SovereignInvestor wrote:
Wed May 15, 2019 10:46 pm
tomtoms wrote:
Wed May 15, 2019 11:57 am
I am in my late 30s. Here are my stats:

- Own $2M in rental properties. Mortgage/property tax/insurance is $9,500/month. Rent is $12,500/month. Have a property manager.
I'm not sure why many are ripping the ROE.

He is making $36K/year before misc expenses. Even if it's down to say $20K to be conservative due to fees, maintenance etc.. I'm not sure of exact mortgage and if OP said it would help, but if it is in the $1-$1.5M range, he's probably getting anywhere from $20K to $40K per year in additional equity from mortgage principal roughly. Assuming 2.5% appreciation on $2M of RE is $50K as well.

$20K income, take the low figure of $20K mortgage principal equity building, and an inflationary $50K appreciation, that totals to $90K total profit, mostly tax free since a lot is appreciation. Unless he has more than $1.2M of equity, then that's a solid high-single digit after tax return on a somewhat passive RE holding. Nothing poor about it. Don't know specifics, but ballparking it. If there's less mortgage/leverage, then yes the ROE drops, but risk does too.
It's not tax free when he goes to sell. You can't count on RE appreciation at 2.5% because many areas are still down from 2008 and we don't know where OP is located. I live in a hot market and our house hasn't gone up in value in 2 years. Therefore, all he has from the passive holding is 36k a year which is 0.5% return on 2 million (he mentioned 1.4 mortgage so let's bump this to 0.75%). If he took out a series of loans and invested, he would be better off than the RE holdings.

If your RE isn't making you the same as investing in an index fund, why bother? He dumped 600k into a downpayment. What would that have looked like in a fund by now depending on when he bought the properties? If he did it earlier this year, that down-payment would have generated 90-120k YTD. Obviously cherry picking a time period.

2.5% is pretry conservative. Nationwide prices have been rising much fasterror OVERALL. Yes thered areas that are weaker but you're comparing prices to a tippy top.bubble and OP likely didn't buy a bubble.

In my area it's not thst hot and priced are 10% over 2006 bubble sky high peak. Nominal GDP is projecred to grow about 3.5% long run so 2.5% price appreciation isn't real.unrealistic. Total housing stock grows with GDP but assume 1% new house builds each year to go with population growth.

It could be 4% is better number or closer to 0%. I said ballpark.

But he is likely taking less risk thst an index fund or higher ROE.

He said he has 600K down and is netting around 35K a year after mortgage. One a 1.4M mortgage the equity pay down is probably at least 20K a year even if rate is high around 5-6%.

That's 55K of income right there on 600K down which is solid. That's not even including appreciation. If you're going to assume RE doesn't even appreciate at all then how can you possibly like index funds..no inflation or income growth at all which is only way RE wouldn't rise has to be bad for stocks.

Yes you pay tax when you sell but a lot is at a lower rate and on a higher amount bevause you compound it each year without having to pay taxes
It's no different than paying tax on stock gains. The rate may be higher bevause recapture.


The long you hold the less.impact the tax on CAGR. If you lose 25% to tax when you sell 50 years from.now that's 0.5% CAGR hit...if you lose 20% to tax by selling in 10 years from now that's 2% CAGR points hit.

Depends on OP goals.

ruhigste
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Re: If you are already wealthy, what keeps you motivated?

Post by ruhigste » Thu May 16, 2019 9:43 am

bloom2708 wrote:
Wed May 15, 2019 12:28 pm
You have 50+ years to go (hopefully, knock on wood).

What should motivate you is moving your time from the "I am doing something I don't want to do" column to the " I am doing exactly what I want to do right now" column.

Is your business the rental properties or do you have a side business that makes $150k+, a 9-5 job and the rental property business? I can't tell from the way it is worded.

Others pointed out that your return on $2 million is probably average. Maybe your goal is simplification, a more passive approach and buying back your time. I want all/most of my time to eventually be in the "I am doing exactly what I want to do right now" column. That is why we save/invest.

Stuff won't do it. Cars, nope. Bigger house, nope. Travel? Don't think so, but some travel is nice as a break and it sure helps to have time. New golf clubs? Probably not.

I know high leverage is part of the rental property business. Maybe if you get far enough ahead, you don't have to use leverage and can still do just fine.

Good luck!
What should motivate you is moving your time from the "I am doing something I don't want to do" column to the " I am doing exactly what I want to do right now" column. - This is excellent! It's good motivation for me.

Topic Author
tomtoms
Posts: 98
Joined: Wed Mar 06, 2013 11:56 pm

Re: If you are already wealthy, what keeps you motivated?

Post by tomtoms » Thu May 16, 2019 9:43 am

blackholescion wrote:
Thu May 16, 2019 9:27 am
SovereignInvestor wrote:
Wed May 15, 2019 10:46 pm
tomtoms wrote:
Wed May 15, 2019 11:57 am
I am in my late 30s. Here are my stats:

- Own $2M in rental properties. Mortgage/property tax/insurance is $9,500/month. Rent is $12,500/month. Have a property manager.
I'm not sure why many are ripping the ROE.

He is making $36K/year before misc expenses. Even if it's down to say $20K to be conservative due to fees, maintenance etc.. I'm not sure of exact mortgage and if OP said it would help, but if it is in the $1-$1.5M range, he's probably getting anywhere from $20K to $40K per year in additional equity from mortgage principal roughly. Assuming 2.5% appreciation on $2M of RE is $50K as well.

$20K income, take the low figure of $20K mortgage principal equity building, and an inflationary $50K appreciation, that totals to $90K total profit, mostly tax free since a lot is appreciation. Unless he has more than $1.2M of equity, then that's a solid high-single digit after tax return on a somewhat passive RE holding. Nothing poor about it. Don't know specifics, but ballparking it. If there's less mortgage/leverage, then yes the ROE drops, but risk does too.
It's not tax free when he goes to sell. You can't count on RE appreciation at 2.5% because many areas are still down from 2008 and we don't know where OP is located. I live in a hot market and our house hasn't gone up in value in 2 years. Therefore, all he has from the passive holding is 36k a year which is 0.5% return on 2 million (he mentioned 1.4 mortgage so let's bump this to 0.75%). If he took out a series of loans and invested, he would be better off than the RE holdings.

If your RE isn't making you the same as investing in an index fund, why bother? He dumped 600k into a downpayment. What would that have looked like in a fund by now depending on when he bought the properties? If he did it earlier this year, that down-payment would have generated 90-120k YTD. Obviously cherry picking a time period.
$36 k on $600 k down payment is actually 6% return, not including appreciation. I am not too concerned with cash on cash return....making $36 k is nice but not great. As long as it cash flow, then I am good. Remember, even if the neighborhood appreciate just 2.5% on average, some houses in that neighborhood would appreciate 5%.

The key is buying the right house, in the right neighborhood for the right price. Initially it does take time. It is like learning a new skill. That being said, I am not planning to live off my rental income. My real estate investment is a long term play.

SovereignInvestor
Posts: 174
Joined: Mon Aug 20, 2018 4:41 pm

Re: If you are already wealthy, what keeps you motivated?

Post by SovereignInvestor » Thu May 16, 2019 10:02 am

It's not 6% because some of mortgage is equity gaims via principal. It's likely closer to 10%, without appreciation. Unless he has sky high rate..assuming ~4-5%interest rate about 1-2% of loan would be equity in first year or around 14K to 28K.... that adds maybe 2-3% pts to ROE.


And appreciation is real and must be included to get ROE even if we agree that it is hard to estimate. Or use a 0% with asterix showing much conservativism.

And all the aboverall items are likely tax free since 2M/ 30 is about 60K or so depreciation allowable each year which is above the Net income.

LikEly around 9% after tax ROE is very good. Using 2% appreciation which is inflation...that bumps ROE to 15%.

Somewhere between10-15% ROE seems about right....but ROE drops as time goes on as equity builds. But in theory as equity builds leverage and risk decrease..
Last edited by SovereignInvestor on Thu May 16, 2019 10:04 am, edited 1 time in total.

blackholescion
Posts: 62
Joined: Fri Mar 22, 2019 6:41 pm

Re: If you are already wealthy, what keeps you motivated?

Post by blackholescion » Thu May 16, 2019 10:04 am

tomtoms wrote:
Thu May 16, 2019 9:43 am
blackholescion wrote:
Thu May 16, 2019 9:27 am
SovereignInvestor wrote:
Wed May 15, 2019 10:46 pm
tomtoms wrote:
Wed May 15, 2019 11:57 am
I am in my late 30s. Here are my stats:

- Own $2M in rental properties. Mortgage/property tax/insurance is $9,500/month. Rent is $12,500/month. Have a property manager.
I'm not sure why many are ripping the ROE.

He is making $36K/year before misc expenses. Even if it's down to say $20K to be conservative due to fees, maintenance etc.. I'm not sure of exact mortgage and if OP said it would help, but if it is in the $1-$1.5M range, he's probably getting anywhere from $20K to $40K per year in additional equity from mortgage principal roughly. Assuming 2.5% appreciation on $2M of RE is $50K as well.

$20K income, take the low figure of $20K mortgage principal equity building, and an inflationary $50K appreciation, that totals to $90K total profit, mostly tax free since a lot is appreciation. Unless he has more than $1.2M of equity, then that's a solid high-single digit after tax return on a somewhat passive RE holding. Nothing poor about it. Don't know specifics, but ballparking it. If there's less mortgage/leverage, then yes the ROE drops, but risk does too.
It's not tax free when he goes to sell. You can't count on RE appreciation at 2.5% because many areas are still down from 2008 and we don't know where OP is located. I live in a hot market and our house hasn't gone up in value in 2 years. Therefore, all he has from the passive holding is 36k a year which is 0.5% return on 2 million (he mentioned 1.4 mortgage so let's bump this to 0.75%). If he took out a series of loans and invested, he would be better off than the RE holdings.

If your RE isn't making you the same as investing in an index fund, why bother? He dumped 600k into a downpayment. What would that have looked like in a fund by now depending on when he bought the properties? If he did it earlier this year, that down-payment would have generated 90-120k YTD. Obviously cherry picking a time period.
$36 k on $600 k down payment is actually 6% return, not including appreciation. I am not too concerned with cash on cash return....making $36 k is nice but not great. As long as it cash flow, then I am good. Remember, even if the neighborhood appreciate just 2.5% on average, some houses in that neighborhood would appreciate 5%.

The key is buying the right house, in the right neighborhood for the right price. Initially it does take time. It is like learning a new skill.
Yeah, when I look at the RE investment, I look at 1% of total price as cash flow. You're cash flowing 1.5% so it's good long term for NW growth. My main point is, it's not a magical (just like index investing isn't) silver bullet and it isn't free in terms of no taxes. You can't count on appreciation but you can count on the cash flow increasing your NW over time. We bought near the middle of a hot market in an area that is currently being built up with 700k+ homes. There's a development of 150 of them just a half mile down the road. Despite all that and having a better location, larger lot (3x larger), etc, our house hasn't appreciated at all.

To get back to the topic, my 2 cents. If you're not enjoying your 9-5 as much as you want to be, then it's fine to leave it. You still have RE holdings cash flowing plus your business. You'd take a 50% or so pay cut but you'd only be working 10-15 hours a week. With the new time, you could even work to grow your business and be even more passive 5 years down the road.

Olemiss540
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Re: If you are already wealthy, what keeps you motivated?

Post by Olemiss540 » Thu May 16, 2019 4:33 pm

So you have $1.5 Million of invested assets in your late 30s with 300k per year income? I would double that figure prior to being worried about what the wealthy are doing. LBYM and investing can be boring, but it takes time to see serious, life altering gains.

Late 40s maintaining your current pace and you should fairly easily be in the fold with the wealthy folks. Nothing personal and depending on your spending levels you could easily downshift soon and live the rest of your life cruising with us non-wealthy plebians.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

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tomtoms
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Re: If you are already wealthy, what keeps you motivated?

Post by tomtoms » Thu May 16, 2019 5:03 pm

:D
Olemiss540 wrote:
Thu May 16, 2019 4:33 pm
So you have $1.5 Million of invested assets in your late 30s with 300k per year income? I would double that figure prior to being worried about what the wealthy are doing. LBYM and investing can be boring, but it takes time to see serious, life altering gains.

Late 40s maintaining your current pace and you should fairly easily be in the fold with the wealthy folks. Nothing personal and depending on your spending levels you could easily downshift soon and live the rest of your life cruising with us non-wealthy plebians.
I am not really concerned about being “wealthy”. I am more interested in what is motivating people to work when money is no longer a big factor.

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dogagility
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Re: If you are already wealthy, what keeps you motivated?

Post by dogagility » Thu May 16, 2019 5:47 pm

Money and wealth aren't typically long term, satisfying motivators. I suggest you read Enough by Jack Bogle and How to Think About Money by Jonathan Clements.
Taking "risk" since 1995.

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Re: If you are already wealthy, what keeps you motivated?

Post by TheHouse7 » Thu May 16, 2019 6:23 pm

My sense of purpose comes from service to others. I go to work knowing that things keep on getting better and better. I appreciate my humble beginnings most days. I take pride in what I do, it is not just for money. :beer
"PSX will always go up 20%, why invest in anything else?!" -Father-in-law early retired.

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Re: If you are already wealthy, what keeps you motivated?

Post by Progman » Thu May 16, 2019 7:27 pm

tomtoms wrote:
Thu May 16, 2019 5:03 pm

I am not really concerned about being “wealthy”. I am more interested in what is motivating people to work when money is no longer a big factor.
When I got enough money I got out of megacorp, went back in time, and took the path I passed up long ago. I want to play the piano well enough to please myself and others. It is insidiously difficult at times BUT does great thinks for your brain and will probably change your personality in some way - pretty cool.

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Re: If you are already wealthy, what keeps you motivated?

Post by devdude » Thu May 16, 2019 8:28 pm

Tomtoms-
We find meaning (motivation) in our lives when our activities are aligned with our values. I discovered this in a book called The Values Factor by John Demartini. This is one of a handful of books that changed my life. It might be worth reading.

The questionnare in the book helped me discover a handful of my own unique personal values:
-Growing as a musician
-Learning
-Helping others
-Physical fitness
-Wealth building

I've been working hard to reach my 10,000 hours of "deliberate practice" on the drums. I'm almost halfway there!

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Re: If you are already wealthy, what keeps you motivated?

Post by junetree » Thu May 16, 2019 9:08 pm

Our motivations: Adventure & Exploration / Fitness. We've been taking up a new sport every year. About to climb 1,500 ft of vertical rock in a month. Just took up climbing 3 months ago. That will be extended to climbing a lot of mountains around the world over the next few years. Diving is another interest. Also signed up to ride a private (small bubble) sub to get down thousands of feet deep. Roaming the world's archeological spots/digs. Exploring the world's largest caves. Encountering the world's greatest mysteries and being in tip top shape to cover all that ground. Took up photography/digital media editing some years back to capture all these experiences in detail -- video/photo-editing all the material feels like living the experiences all over again. When work/life balance is achieved, it's pretty awesome.

There's just too many things to do and too little time. A certain amount of wealth can help with these goals.

If you start with what you want to achieve in life and knowing what your missions/goals are, then you can figure out the amount of resources needed to support that. Everyone has a diff answer.

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Re: If you are already wealthy, what keeps you motivated?

Post by Mako52 » Fri May 17, 2019 10:03 am

Some things I've learned....

1. Don't drink too much of your own KoolAid.

2. Don't underestimate becoming a victim of your own success. If you're successful within a company, industry, industry subsector, etc it will draw attention. And you'll paint a large bullseye on your back.

3. Don't work or consult for a family-owned company if there's a good chance you will be making more $ than the owners.

4. If you get jaded, change jobs, company, or better yet, industry.

I keep going because I enjoy business development and creating value, but it would be very hard to do as a W-2 employee, and that's what I'm currently struggling with. I'm OK with triggering a low single-digit SWR now, but we want to be permanently retired in 10 years, and I don't want a steady SWR over the next 10 years. In 10 years I will be happy to have a consistent SWR.

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Re: If you are already wealthy, what keeps you motivated?

Post by ruralavalon » Fri May 17, 2019 11:08 am

tomtoms wrote:
Wed May 15, 2019 11:57 am
I am in my late 30s. Here are my stats:

- Own $2M in rental properties. Mortgage/property tax/insurance is $9,500/month. Rent is $12,500/month. Have a property manager.

- Have $500 k in stocks

- Have $450 k in cash

- Have no debt (besides my rental properties)

- Own a business/also 9-5 job = $275-300 k a year

- No kids/do not own a primary residence

I have been thinking about quitting my 9-5, M-F job (makes $140 k a year) but it is not a stressful job. I also work about 4-8 hours a week on my business.

My question is...for those who are doing well financially, what keeps you motivated? When is time more important than money?
I retired at age 65, 8 years ago, and did well financially. (Edit, not "wealthy" just comfortable.)

I almost always enjoyed the work I did, and would probably have continued a few more years except for physical limitations. I was an attorney doing civil litigation, and often said that trying lawsuits was more fun than working a real job.

Even the few times I was not enjoying my work I could not think of any job I would rather have.


KlangFool wrote:
Wed May 15, 2019 12:22 pm
OP,

I am an engineer. Money is not my main motivation in life. Solving interesting and technically challenging problems are my main motivation.

KlangFool
Not an engineer, but this was my attitude as well. Every day there was a unique problem to solve.
Last edited by ruralavalon on Sat May 18, 2019 10:12 am, edited 1 time in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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goodenyou
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Re: If you are already wealthy, what keeps you motivated?

Post by goodenyou » Fri May 17, 2019 10:55 pm

“What is the matter with the poor is poverty; what is the matter with the rich is uselessness”
— George Bernard Shaw
"Ignorance more frequently begets confidence than does knowledge" | "The best years you have left are the ones you have right now"

DonIce
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Re: If you are already wealthy, what keeps you motivated?

Post by DonIce » Fri May 17, 2019 11:48 pm

tomtoms wrote:
Thu May 16, 2019 5:03 pm
I am not really concerned about being “wealthy”. I am more interested in what is motivating people to work when money is no longer a big factor.
Pick what is important to you in life, and do that.

For some people (seemingly most on this forum), the most important thing is to retire early and spend time on their hobbies, at home with their families, etc.

For some people, the most important thing is to gain status and respect in the corporate world.

For some people, they want to "help other people and make the world a better place". Some people approach this goal through volunteering their personal time. Other people approach this goal by getting really rich, and then contributing lots of money to philanthropic causes.

For some people, they may want political power or influence. If you want the wealth to influence national politics, you're gonna need to keep saving up til you're a billionaire or at least a centimillionaire.

For some people, they want to start their own private space program. Not cheap. Will need to keep saving up til you've got a few tens of billions.

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Re: If you are already wealthy, what keeps you motivated?

Post by White Coat Investor » Fri May 17, 2019 11:52 pm

tomtoms wrote:
Wed May 15, 2019 12:08 pm
Jack FFR1846 wrote:
Wed May 15, 2019 12:05 pm
Define "wealthy".

I'd think:

On Reddit/pf, that would be $50k in assets.
MMM, probably $800k.
Bogleheads: from Dances with Wolves: "more than the stars"
More than $3M in NW
Motivated to do what? Work for money? I like to spend and give it away. I also like helping people and that happens to pay me pretty well. And I like building something bigger than myself and provide jobs to others. But some days I'm less motivated than others.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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Re: If you are already wealthy, what keeps you motivated?

Post by mac808 » Sat May 18, 2019 12:07 am

I was motivated by money until my passive income hit a few hundred K annual. After that, it’s usually about ego. In my experience, the smaller your ego the more likely you are to retire young and take it easy.

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Re: If you are already wealthy, what keeps you motivated?

Post by joeschmo » Sat May 18, 2019 3:30 am

I'm in my mid-thirties and made a bunch of money (a couple tens of millions...) selling my business a while back. I was always motivated by a love of the work, though of course the end result played a role in the final decision. I'm still motivated by a love of the work, though I do a lot less of that same work now. The hardest part is dry spells between projects. Interestingly, I know I'd say the same thing if I had "only" $10k.

As far as what motivates me to keep making money, this is one that I have been rethinking. I am currently ~50% stocks and making 10% return overall (post expenses, taxes, fees) in an up year like 2017, despite having 25% in cash and a good chunk managed by a percentage-AUM-fee investment advisor that has been doing worse than a Vanguard portfolio (which was 20% up in 2017). (Re the advisor, I was afraid when the acquisition happened and didn't think I could handle such a huge chunk of money myself - I'll fix that once I can figure out what to do about all the cap gains...)

But what's the use of a 10% return when I clearly already have more than one person needs? My friends and I don't have expensive tastes. My answer is that I am working on giving away more money to charity. I think I will probably have a "cap preservation" piece that's just for me and a riskier endowment-style piece where I try to maintain constant real value by investing in risky assets (a more aggressive, diversified portfolio) and giving away any returns. Though probably I should try to draw down to zero by the end of my life, like the clued-in billionaires do...
Last edited by joeschmo on Mon May 20, 2019 4:55 pm, edited 1 time in total.

EddyB
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Re: If you are already wealthy, what keeps you motivated?

Post by EddyB » Sat May 18, 2019 9:37 am

SovereignInvestor wrote:
Thu May 16, 2019 7:02 am
SoAnyway wrote:
Thu May 16, 2019 2:12 am

SoAnyway, to be frank I'm way unimpressed with your numbers - and many of my former students at your age are doing waaaay better - but I'm not judging.
Okay now, but OP seems to be doing well.
Of course. The site linked below suggests the OP is around the 99th percentile for 35-40 year olds. Statements like SoAnyway’s can be off putting not only to the OP, but to others. They fuel the impression of this forum that one sees on other sites, that the users are out of touch with reality.

https://www.shnugi.com/networth-percent ... 00#results

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Re: If you are already wealthy, what keeps you motivated?

Post by Wiggums » Sat May 18, 2019 10:03 am

I loved my job and the people that worked for me. Benefits were great and not too much mega Corp management craziness going on. I put in my time and decided to retire. I learn new things everyday and spending quality time with family. Time goes by quickly and life is too short. We were able to save well because we never needed much. But we have everything that we want and more.

Living the life that I choose with my family keeps me going. Our retirement savings is something that pays the bills along the way. Charities is another way that I share my time and wealth. Very satisfying.

Good luck to you.

KandT
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Re: If you are already wealthy, what keeps you motivated?

Post by KandT » Sat May 18, 2019 9:35 pm

NW of $2 million. Keep working because I want to do things that will delay my retirement more than I want to retire. I know I am spending money that I could use to retire earlier but I want to RV (I buy them used and hunt for a financially distressed one) with my kids and give them opportunities that I didn't have. I could live on a lot less or save a lot more but I want to provide for my family. I also could have a career I liked more BUT that would be a pay cut. It's all a balance to me.

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Re: If you are already wealthy, what keeps you motivated?

Post by HEDGEFUNDIE » Sat May 18, 2019 9:51 pm

EddyB wrote:
Sat May 18, 2019 9:37 am
SovereignInvestor wrote:
Thu May 16, 2019 7:02 am
SoAnyway wrote:
Thu May 16, 2019 2:12 am

SoAnyway, to be frank I'm way unimpressed with your numbers - and many of my former students at your age are doing waaaay better - but I'm not judging.
Okay now, but OP seems to be doing well.
Of course. The site linked below suggests the OP is around the 99th percentile for 35-40 year olds. Statements like SoAnyway’s can be off putting not only to the OP, but to others. They fuel the impression of this forum that one sees on other sites, that the users are out of touch with reality.

https://www.shnugi.com/networth-percent ... 00#results
I’m pretty sure you misinterpreted SoAnyway. Her point was that finding motivation only through money is a loser’s game.

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Re: If you are already wealthy, what keeps you motivated?

Post by AerialWombat » Sat May 18, 2019 10:40 pm

I could scrape by on the cash flow from my rentals. While nowhere close to the million you have, I have more invested than I ever thought possible. And I net roughly what you do from my business, working ridiculously few hours per week.

I keep doing it because I spent the majority of my life dirt poor, including stints of homelessness, and I **refuse** to ever be there again. That’s probably the only reason I still work: Plain old fear.
“Life doesn’t come with a warranty.” -Michael LeBoeuf

fanmail
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Re: If you are already wealthy, what keeps you motivated?

Post by fanmail » Sun May 19, 2019 6:47 am

When OP quits, he still has a 300k annual side business. I’d say he could do something more useful with those 40 hours/week if he wants to.

poppa23
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Re: If you are already wealthy, what keeps you motivated?

Post by poppa23 » Sun May 19, 2019 10:09 am

I personally have a great deal of wealth. Well over 15M. I have launched my children. They all have advanced degrees and are working in well paying jobs. When I was in my late 30's my motivation was providing for my kids. College. Family,,Taking family vacations which we did to build and foster the family unit. I also had a fear that if medical need arose for my family I wanted to be able to handle whatever arose. Im just that kind of guy where I used to always feel I needed more "just in case" . Now in my 60's I still have that feeling which is not a good thing. I find it difficult to take the foot off the gas pedal. Im trying to change. Im trying to step back and see that Ive done well its time to enjoy life with my kids and family and to that end I have dropped down to 3 days a week. I guess what im trying to say is find your own personal motivation but keep perspective. Understand that you have done well for yourself and stop to smell the roses. You may have a family in the future..you may have some unexpected expenses ,costs or an event which may effect your ability to earn. For that reason I would continue to produce, earn and develop separate streams of income and diversification so that little "just in case " voice in your head is satisfied...Best wishes.

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