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small business owner who thinks this forum is pretty cool..
Old 03-21-2012, 12:03 PM   #1
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small business owner who thinks this forum is pretty cool..

Hello,
I'm 33 a small business owner who found this forum a while back and finally jumped on in.. I honestly found this site after watching a family friend retire and having it blow up in his face, retirement is typically something we plan and strive for and after seeing him take a kick to the shins it made me want to go out and learn more so I can make sure that my family doesn't endure the same thing along with trying to find as many ways possible to bail this guy out of the position they're in.. He basically retired, the 1st 5-7 years was pretty cool then he had to deal with things like a car crash, market crash, ER visits, and handful of other things he's found himself in a pretty jacked position. another guy who's like a dad to me just took such a hard hit that he had to push his retirement back, but it only reminds me that who's to say that future ripples in the market aren't going to kick him when he finally leaves the shore?

For me personally I believe that the financial independence route is the the way to go, I'm not saying that because I'm a business owner either... I say that for 2 reasons

1. setting yourself up for fractional living for an unknown future is some pretty crazy stuff. sure iced teas, pond fishing, and book reading are things I can do all day everyday also but unless you know exactly what's coming which none of us do I just don't see it making sense unless you're super high 6 figure guy that made all the right moves with the things they limited themselves to.. I guess the eye opening part for me is that when looking to invest look for things much more open ended. When I look at the people that took the biggest hits on long term moves they were all intangible investments (paper investments) and all investments involve risk and it's an up and down game but if they lost that much money what would have happened if they truly diversified (went tangible and intangible) then they wouldn't have pigeon holed themselves so bad which leads me to point 2...

2. The only thing that kept this guy alive and what's fueling the crazy upside growth he's having right now are two things and here's what I've learned from him.. decades back he bought RE (Real Estate) back in the 80's when everybody else was at the tail end and took a crazy hit when the market crashed - much like buying a home in 2006 and being stuck in today's market. needless to say he got caught upside down and did everything he could to not lose the house. This was part of an investment cycle he started back years prior where he'd nickel and dime'd it nice and frugal until he could buy another house. so he basically started with one and ended up with 7 he was working at the time and thought he was too cool for school and stopped hunting for homes... and after enduring the growth and decline cycles of any investment found himself with money that came in no matter what.. his equity positions are so strong on some of these homes if he wanted to he could under cut the rents for miles around and still make it quite fine.. His only problem that he admits is that he stopped investing in homes he even says he would've held onto homes picked up in the 2000's because he's already lived that out and knows the other side of the rainbow and because it's just like Dollar Cost Averaging on a stock.. In short this one strategy alone has not only kept him from filing BK but would have put him in a position where he controls so much more of what he brings in because his long term growth put him in a position where he can beat the rents for miles around and still live okay. So if he never stopped his little cycle of buying homes his retirement and pension money would be his play and charity money while the other money would just keep coming. And he only looked at getting 1 tangible asset- homes, nothing else.

And the crazy thing about that is if you become a good sourcing person you don't even have to walk into a deal with any money. You can leverage homes with other peoples money which is free you just have to do the leg work.

Personally I'd consider some gold being we don't have a standardized monetary system which also makes part of option 1 look so scary - paper value when the paper is always losing it's value and isn't backed up by anything. we're literally playing with monopoly money.. ouch ya know..

The second thing that's bailing them out and paying off huge for them is that his wife started a new business in the house and after only spending 3K (2K went to a brand new mac btw) they're doing great, having fun with what they're doing because they chose it and actually saved them from death on the couch and meaningless days as he likes to look at it..

so back to me... being a small business owner the guys that I've mentored from in learning business and that are on the "glory train" didn't set themselves up for retirement but a means so that money just kept coming no matter what.. I'm not saying I'm some Trump or anything no way, just a guy looking to learn and do as much as I can with what I've learned ya know..

And that's why I like this forum so much people are open to putting themselves out there for good information so thanks for having me and all the best!!!
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Old 03-21-2012, 12:15 PM   #2
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When I was making my decision to ER two years ago I thought about future uncertainty. I decided that given the world and economy of the last 30 years it is basically impossible to predict the next 30 years. You do the best you can with the information you have at the time and in the end retirement is a bit of a leap of faith. Whether I am working or not you have to roll with the punches.

My philosophy through life has been to live/spend a little and also save a little. I was fortunate not to have any catastrophic setbacks in my life. My advice is be prudent financially and make sure you have a life outside of work. If you live at least a little below your means then you will go into retirement the best you can.
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Old 03-21-2012, 01:21 PM   #3
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Well, without uncertainty, life wouldn't be very interesting, and we're sure to get more of it soon. Having flexible plans and an ability to reduce expenses quickly, along with the more studied concepts of asset allocation and such that is discussed so well here is looking like the recipe to me. I am real-estate heavy myself, but I don't kid myself that it is a sure thing in the course of anybody's financial life. Liquidity is a serious problem as I'm sure your friend has remarked.

Having your own business, as you have, can be very rewarding and if even moderately successful, can keep you out of the cube rat game for your entire working life. There will be scary moments, and the enterprise lives and dies by your hand. I think of it as like a sea voyage in an old wooden ship, you are the captain. You have a long way to go yet, don't be too conservative, and enjoy the ride!
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Old 03-21-2012, 01:36 PM   #4
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I've known many business owners, but never one who wasn't overworked, overstressed, harried, and aged before his time. If you can escape that fate, I salute you!
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Old 03-21-2012, 02:07 PM   #5
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Originally Posted by bld999 View Post
Well, without uncertainty, life wouldn't be very interesting, and we're sure to get more of it soon. Having flexible plans and an ability to reduce expenses quickly, along with the more studied concepts of asset allocation and such that is discussed so well here is looking like the recipe to me. I am real-estate heavy myself, but I don't kid myself that it is a sure thing in the course of anybody's financial life. Liquidity is a serious problem as I'm sure your friend has remarked.

Having your own business, as you have, can be very rewarding and if even moderately successful, can keep you out of the cube rat game for your entire working life. There will be scary moments, and the enterprise lives and dies by your hand. I think of it as like a sea voyage in an old wooden ship, you are the captain. You have a long way to go yet, don't be too conservative, and enjoy the ride!
Right on!!!!
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Old 03-21-2012, 02:17 PM   #6
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I've known many business owners, but never one who wasn't overworked, overstressed, harried, and aged before his time. If you can escape that fate, I salute you!
Thanks!!! I guess I pretty fortunate in the fact that I've had some pretty good mentors and always had someone above me who's shown me the way and kept me from going any farther than needed. I am able to do a few different things as well as have my days free for the most part. =) Personally I've found starting as small as possible and growing organically makes everything pretty easy because you're never in more than what you'd consider "easy" and if it didn't work out you can toast a glass over it. It also helps you learn as you go and maximize your efforts before taking on too much and things of that sort.. We all hear and know about folks who have it hard in one thing or another - but one thing we can all do is see the good in it and do the exact opposite under the same umbrella.. Thank you so much for your kind words and have an awesome day!! =)
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Old 03-22-2012, 10:47 PM   #7
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While I do agree that someone could be very financially successful with real estate and no other investments -realize that it is far more localized and (to a degree) can be quite a bit of luck. Just like with a tech stock (or any industry for that matter), you have no clue what the value of a certain device/invention/technology or (with homes) community will be worth compared to 20-30 years from now: will it hold it's value, is it up-and-coming and be worth many times what it is now, or will it decline and be in a future ghetto and be worth 1/3 what it is now? However, unlike a stock, you have a relatively huge equity value tied up in a single "company", rather than diversified in a mutual fund or among several individual stocks for the same equity amount you have in that house.
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Old 03-23-2012, 11:31 AM   #8
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While I do agree that someone could be very financially successful with real estate and no other investments -realize that it is far more localized and (to a degree) can be quite a bit of luck. Just like with a tech stock (or any industry for that matter), you have no clue what the value of a certain device/invention/technology or (with homes) community will be worth compared to 20-30 years from now: will it hold it's value, is it up-and-coming and be worth many times what it is now, or will it decline and be in a future ghetto and be worth 1/3 what it is now? However, unlike a stock, you have a relatively huge equity value tied up in a single "company", rather than diversified in a mutual fund or among several individual stocks for the same equity amount you have in that house.
Right On Ya Know! =) We all have different tolerances and levels of uncertainty when moving money but that's exactly it, nobody truly knows so for me personally I try to learn as much as possible and move as I go. You did bring up a good point though that made me personally consider real estate is that those homes that were purchased were bought in what at the time was a middle class neighborhood. Over time (last 20-30 years) and with the economy taking such a hard hit the area is now pretty disenfranchised to say the least. The cool thing is that the assets themselves are still extremely sound and make good money. I took that as "it took a crap and still makes good money and still has plenty of years in her" - and when I learned that the bell went off in my head. I'm not definitely not saying I'm "betting it all on black", just something powerful to know. I still believe in paper investments completely, as matter of fact I'm a big fan of forex. It has so much of the same mobility and leverage with awesome swings in both directions as stocks do, I personally favor forex because it has a harder time breaking the floors and ceilings on both shorter and longer charts. The time value propositions are also stronger (in my humble opinion) with forex. Personally I'm not too much a fan of mutual funds, so many of them are pretty rough in the fact that as an investor I'd take 100% of the liability (my money) and on the returns get the smallest piece of the piece compared to the guy who takes my money with no liability to him (except for his "name") and makes a killing playing with my money. For me the more favorable move would be to study the broker dealer find what they're using to leverage and why - they'll tell you when they pitch you anyway, do the homework and do it myself with small money and eventually grow it. If anything model the moves they're making and if you take a hit, you should be okay because you pocketed the gains 100% (if they even pick decent positions in the 1st place) and didn't pay out the ridiculous margins they take. =)

Not to get too far off subject but just something that I've learned in my home and my upbringing is that the biggest travesty that's really going to , already has, and always will for many - is that people are happy work 8 hours a day for money and won't spend an hour a day to further educate themselves and grow what they just spent all day putting together. I say this because my parents are in this same group and also because I've lived out that difference. Like I said I'm no Trump or anything and I LOVE compound interest, especially when every cyclical pulse gets stronger and stronger what the losses and gains are by learning and doing a little. Sorry I went off on a tangent I just look at the returns and cash flow patterns of mutual funds and I not too fond of them. They can definitely do better for the people that are sticking their necks out more than they are that's all. But I am 100% in favor of intangible investments/paper investments, both sides have their strengths and weaknesses..

Have a beautiful day my friend!!!
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Old 03-24-2012, 12:30 AM   #9
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Welcome, James.
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Old 03-24-2012, 11:04 AM   #10
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Not to get too far off subject but just something that I've learned in my home and my upbringing is that the biggest travesty that's really going to , already has, and always will for many - is that people are happy work 8 hours a day for money and won't spend an hour a day to further educate themselves and grow what they just spent all day putting together. I say this because my parents are in this same group and also because I've lived out that difference.
This is the one thing that drives me crazy about people who just can't comprehend the concept of increasing your wealth!

You hear them complain non-stop about not having enough money, or having bill collectors call them (right before they decide to go out to eat for their daily lunch), or saying how they have an accountant do their taxes for "only" $100 (an easy tax form, not something complex that has 15 pages like mine!). People simply don't want to be bothered...but even worse is that a few of these people even do things like study to obtain different licenses or pursue side endeavors to earn more income, but then don't bother to find more ways to keep what they earn!
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