MMND: Financially Independent?

[TickTock]

MMND claims her family is financially independent. Her husband works part-time, which covers their current expenses, but does so because he chooses to, not because he needs to.

There are many numbers on MMNDs website, but they are scattered; it's difficult to see the whole picture.

On reading the different pieces, they didn't quite seem to add up to me. Last night I got curious enough to start gathering all the pieces.


QUESTION:

Is the MMND familiy financially independent by traditional finanacial guidelines?


DATA AND SOURCES:

From the prospectus: FundX Upgrader 2007 year-end total return is 15.06%. From their site: YTD returns as of 1/31/08 are -9.31%.


From an ER Forum post: planned spending of $89,000 / year until 2025, then less. They spend less than that now. MDND (MillionaireDaddyNextDoor) still works part-time, which covers their expenses.

http://www.early-retirement.org/forums/showpost.php?p=607210&postcount=28


Housing expenses: $1,295 / month rent plus $250 / month utilities = $1,545 / month = $18,540 / year.

Millionaire Mommy Next Door: How I Bring My Dreams To Fruition


Budget: They spend almost as much on food as on housing. They budget $18,000 / year for travel, recreation, and entertainment. Minimum yearly budget: $18,540 housing + $16,000 food (guesstimate) + $18,000 travel/recreation/entertainment = $52,540.

Millionaire Mommy Next Door: We Live the Good Life, Not the Goods Life


MMND December Portfolio. Looks similar to FundX Upgrader.

http://millionairemommynextdoor.blogspot.com/2007/12/my-investment-portfolio-revealed.html


MMND Portfolio returns 2007 YTD as of 10/31/07. Up 28.05%, which is $258,563.

http://millionairemommynextdoor.blogspot.com/2007/11/my-investment-portfolio-has-been-kickin.html


MMND 2007 year-end results. Up 14.3%.

http://millionairemommynextdoor.blogspot.com/2008/02/my-2007-investment-portfolio.html


MMND Net Worth. At end of October 2007, $1,583,476. See website for detailed breakdown (table won't format properly here.)

http://www.networthiq.com/people/MillionaireMommy


CALCULATIONS:

As of 10/31/07, MMNDs portfolio was up 28.05%, which is $258,563. Therefore, her starting portfolio was:

$258,563 / 0.2805 = $921,793

And her portfolio as of 10/31/07 was:

$921,793 + $258,563 = $1,180,356


ANALYSIS:

First, MMND would have done slightly better simply by buying the FundX Upgrader fund.

Second, a 14.3% return for 2007 is excellent, beating just about any benchmark or combination of benchmarks you care to name.

Third, her 10/31/07 reported numbers do not match her 10/31/07 net worth statement. Taking only stocks, bonds, and retirement as portfolio = $936,547 + $29,335 + $359,594 = 1,325,476. I don’t know how to reconcile the difference. For now, I’ll continue to use her 10/31/07 reported numbers as a basis for the portfolio.

Fourth, in the months of November and December, her portfolio lost 13.75% (28.05% - 14.3%). This equates to $258,563 * (13.75 / 28.05) = $126,747.

Fifth, assuming that her 1/08 results were similar to FundX Upgrader, her portfolio would be ($1,180,356 – 126,747) * 0.9069 = $955,518.

Sixth, using the traditional 4% SWR, they could withdraw $955,518 * 0.04 = $38,221 per year.

Seventh, assuming that no part of their non-portfolio net worth changed, their NW at the end of 1/08 would be $1,583,476 – ($1,180,356 - $955,518) = $1,358,638.

Eighth, taking out $18,000 cars and $19,000 personal property, their total possible investment portfolio is $1,321,638, which would support a 4% SWR of $52,866.


CONCLUSION:

By traditional withdrawal guidelines, the MMND family is at best barely financially independent, and most likely not financially independent, certainly not spending $89,000 annually. MDND had better keep working, or the MMND family is likely to run out of retirement money.

 

[W2R]

Next: Kiyosaki?

A day or two ago I was approached by e-mail from one of our regulars here, who wanted to know what MMND's agenda really was and exactly what happened.

I told her what I will tell you; that MMND is gone now, and in my opinion there is no point castigating someone who is gone (other than to say the board is back to normal, thank goodness!). We can move on.

 

[TickTock]

Re: Kiyosaki - nah, I'd just link to John T. Reed's analysis!

I don't consider it castigating. Claims were made, I got curious enough to do an analysis, and thought I'd share it.

 

[Moemg]

Claims were made, I got curious enough to do an analysis, and thought I'd share it.

I also got curious and read all her blog .I came to the same conclusion that things just did not add up but you did a great job analyzing it . It's kind of scarey the kind of information that is given on these blogs .

 

[W2R]

Re: Kiyosaki - nah, I'd just link to John T. Reed's analysis!

I had the good fortune to read the material on John T. Reed's website concerning Kiyosaki, before I ever saw Kiyosaki on TV or read anything else by or about him. It was a great introduction to Kiyosaki, I must admit.

 

[Texas Proud]

For some reason I thought MMND was here for some other reason than to discuss matters with others.... she was trolling for people to go to her blog so she could get more advertisement money... OR to try and sell her book she was saying she wrote (or about to write)...

Never did go to any other thread instead of hers... and never did cough up info on her returns from the end of Oct or even this YTD....

Don't miss her a bit...

 

[Notmuchlonger]

I almost forgot about the "outrage" on how she was greeted... Oh well

 

[haha]

I almost forgot about the "outrage" on how she was greeted... Oh well

Outrage is the American National Sport. Naturally, blessed as we are by good Americans on this site, outrage must out from time to time.

Ha

 

[twaddle]

I'm curious about what motivates you folks. You obviously feel justified in attacking this person. Why?

TickTock has thoroughly "debunked" her by telling us that she's not rich enough to be considered financially independent.

Is that the new standard that posters here are to be held to? In that case, tell us your net worth and expenses and let's see if you're fit to post here.

 

[Texas Proud]

I'm curious about what motivates you folks. You obviously feel justified in attacking this person. Why?

TickTock has thoroughly "debunked" her by telling us that she's not rich enough to be considered financially independent.

Is that the new standard that posters here are to be held to? In that case, tell us your net worth and expenses and let's see if you're fit to post here.

Did you read the same threads I did? If so, then I do not know where your question is coming from.....


She came in with this rah rah story saying how great she was, how she worked her way up from a minimum salary job and in (IIRC) 10 years was financially independent and if you go read her blog she will tell YOU how to do it also.... and that she was on TV and writing a book and etc. etc.....

Then, when some people asked her some questions on 'how' this was done.... she did not answer or attacked... still trying to get people to her blog... still rah rah....

And then when it turns out that her husband was making BIG bucks (which was not how she presented herself)..... it was a lot easier to see how she could become 'financially independent'.....

But I never saw her on any other thread.... nor give any post that was interesting to me.... she was a tornado that came and went.... nothing more...

I could care less if she did or did not have the money she said... or was independent or not... saving or not... investing in her momentum funds or not.... and I suspect that most of the others did not care a bit either... there were many who said to stay and contribute.... she chose not to... again... HER decision...

 

[haha]

I'm curious about what motivates you folks. You obviously feel justified in attacking this person. Why?

TickTock has thoroughly "debunked" her by telling us that she's not rich enough to be considered financially independent.

Is that the new standard that posters here are to be held to? In that case, tell us your net worth and expenses and let's see if you're fit to post here.

No; but I can't see any reason that it should not be a standard for someone who trumpets his/her "the right way" for others to become financially independent, including those who are here on this board.

I know that living from capital is a tricky undertaking, and I would not normally try to tell some one what to do. The choices are huge, and can have huge effects on one's life.

Here's a quote from Buffet's recent letter that is germane to the issue-

Many helpers are apparently direct descendants of the queen in Alice in Wonderland, who said: “Why, sometimes I’ve believed as many
as six impossible things before breakfast.”

One of my interests in life is not being like that Queen. From time to time we get put to the Red Queen test around here; and most of us know when it is happening.

Ha

 

[twaddle]

Ha, you're the token anti-indexing pro-stock-picking guy here. You're strongly opinionated. And we still love you.

But you don't have a blog. So, is it her blog? We've had people with blogs here before. Even Real Authors(TM) and people with pretty specific agendae. But we still treated them with respect.

I have no qualms with skepticism. But, man, I'd be worn out and a bloody mess if I handled my skepticism the way you guys handled MMND.

 

[SteveR]

Al right folks....just keep moving along...nothing to see here...move along...

 

[jazz4cash]

Al right folks....just keep moving along...nothing to see here...move along...

Last I checked......there were a bunch more replies to this thread that have vanished......and now the cops are here...so, are you part of the conspiracy, SteveR?

 

[honobob]

Al right folks....just keep moving along...nothing to see here...move along...

PIGS OFF CAMPUS!!

 

[SteveR]

Not me. I don't delete messages without good cause.

The note was intended to be a friendly reminder that things can get out of hand rather quickly when the general content of a thread starts out the way this one has.

And don't call me a Pig. I am sure the real pigs would be offended.

 

[bssc]

The messages were deleted by the posters themselves. They were being civil.

 

[chinaco]

For some reason I thought MMND was here for some other reason than to discuss matters with others.... she was trolling for people to go to her blog so she could get more advertisement money... OR to try and sell her book she was saying she wrote (or about to write)...

Bingo.


She probably achieved her mission. Likely she did not intend to stay here. She is just casting a broad net to advertise for the book. The blog may get some ad $, but the book is her main project.

There are a fairly large number of lurkers who will read her initial post and go to her blog. I suspect many lurkers do not bother to read too deeply into the posts to follow our drama.

If she spreads the word on multiple sites, she will show up in more internet searches also.

Here we are still debating her claims and she moved on and probably never looked back.

 

[MillionaireMommyNextDoor]

As I said before leaving this forum over a month ago, I came to this forum to exchange thoughts with what I had hoped to be a group of like-minded, supportive people who share similar (ER) aspirations and experiences. While I have received private emails from several very friendly individuals from this forum (thank you), it appears that a few members here get their jollies by bashing and flaming one another. Upon looking through the forum archives, I see that I'm not the first, last and certainly not the only one to be on the receiving end of this bullying behavior. I'm simply not interested in participating in this kind of environment.

I repeat once again: I did not introduce myself here with the intention to sell anything. I write simply because I enjoy it as a hobby - and that's why I shared this about myself in my introduction post. I pledge my blogging revenue to non-profits. If I decide to write a book, I will likewise offer my profits to charity. Folks on this forum are not my targeted audience. I did not - and do not - want traffic from this forum. In fact, I wrote to the moderators of this forum and requested that they delete every mention of me and my blog from the archives (the links you folks have provided - not me). However, the moderators chose to refuse my request.

"It's really quite simple," the child related,
"To reject and rewrite the scripts we've created.
First, go to the place where your power resides,
Where your soul, your heart, and your mind are allied.
Send love and expect that all violence will cease,
Then fill up your thoughts with emotions of peace."

"If reflections of hate or distrust come to mind,
Embrace them, then release them, and leave them behind.
Bring your attention to the clear definition
Of what you expect from your thoughts and volition."

"Then give your thoughts wings! Let them fly! Let them sail!
They will carry the message that peace will prevail."

by Joan McWilliams, excerpt from The PeaceFinder: Riley McFee's Quest for World Peace

With wishes for peace, love and happiness for all of you,
Jen

 

[maddythebeagle]

I asked her a few questions in her into. and she answered them promptly...isnt the first poster here with a working spouse or side income

Jen...I hope you continue to post here...

 

[cute fuzzy bunny]

So, is it her blog? We've had people with blogs here before. Even Real Authors(TM) and people with pretty specific agendae. But we still treated them with respect.

Seems to me the difference is evident. As are the efforts of people whose primary purpose is to create dissension.

 

[quietman]

I see you want to make peace and perhaps revise a bit of the history of what happened here. Certainly your request that the moderators remove any mention of you or links to your blog is NOT motivated by your revelation that this community in not part of your target market, but more likely a result of the hugely unflattering trail you left behind here. Let's not pretend otherwise.

Still, if you want to join the community and discuss the topics of interest you would be welcome. Please check your arrogant attitude and know it all style and you will be more likely to receive cooperative responses. I'm happy you have found (unconventional) success for yourself, but like many here am resistant to proselytizing message that there is any ONE right way. A little humility is a strong asset on this forum. You should see many examples of (very) successful folks introducing themselves and receiving positive receptions. Try it. We are at heart a very friendly bunch.

 

[GoodSense]

I read her blog and enjoyed it. It's a good reminder of LBYM. I especially liked "8 Questions to Ask Yourself Before You Buy." For the long-term frugalists, it's nothing new. But for those who are still resisting the urge to buy things (which is most of the American public and maybe relatively few of the forum members), it's helpful. I guess it all depends on which leg of the FIRE journey you're on.

I don't know enough about investment to know the merit of each method. Since I don't have a lot of free time, I'm going the low-cost, index funds route. No matter what method, or whether she has reached FI as conventionally defined, she has accomplished a lot at her young age.

 

[twaddle]

Seems to me the difference is evident. As are the efforts of people whose primary purpose is to create dissension.

You and I have had plenty of disagreements over the years. But I've got to tell you that I'm impressed by your ability to modify your position in response to facts and logic. Sometimes.

Here's my simple logic on this one: MMND is a human being. If you forget this simple fact, here are some pictures of her to remind you:

Millionaire Mommy Next Door: Parenting With Purpose: This I Believe...

Now, I'm not a fan of all human beings. There are *many* whom I don't like. I can usually ignore the ones I don't like. If that doesn't work, I might even call the cops.

We have both of those mechanisms here. Ignore them or click on that little

to call the cops.

Now those mechanisms don't always work. For example, maybe somebody is trying to sell you something, and they just won't leave you alone. They're constantly in your face. In that case, kick some butt.

As far as I can remember, we've only had one case in the history of this site that required some butt kicking. This wasn't one of them.

 

[Texas Proud]

Twaddle...

It seems that you are reading and revising history yourself... and this is not to defend CFB as I know he can do it better than I can....

She introduced herself and promoted her blog.... against the rules...

She talked about how she was writing a book... not in and of itself a bad thing, but she was still 'new'...

She gave (IMO), false information on how she became a millionaire.... made it look like she did it from a minimum wage job... we then find out that her husband was making (again memory) $175K or so... I do not know how much she contributed to his company or their income... maybe a lot, maybe none... but that is NOT even close to minimum wages... AND, on that subject... I bet almost everybody on this site came from a 'minimum' wage job.... I know I had one back when....

She was hyping an investment style that is not backed by a good study... I read either hers or someones description.... something like 'you can bet on a horse race and change horses during the race'.. like you were always going forward (without losses) or could pick the winner just before you crossed the finish line... well, investing is not a horse race where there is a winner and you take your ticket to pick up your winnings... you are still running!!! So... to me it was like she was 'selling' this way of investing (my opinion)....

She was asked a number of times to put down if she had a loss since October or even this year... nothing... again, when selling an investment you don't want to talk about losses....

I also said that I would hold my opinion of her since she asked and start to read her posts in other threads and see if she added anything to the discussions... guess what... I have never see ONE... not ONE that she had not started OR is about her...

And she was very dismissive of the group very early on... a tirade if you will...

SO, I had an opinion of her very early on.... and said I would take another look with time.... and guess what.. my first impression is still what I am left with as there has been nothing written to change it.... could I be wrong... of course... but as I said, nothing has been posted at any time that would cause me to change it....


NOW, CFB will probably write 20 words and say this even better than my long post.... but hey..... that is him



PS... ever her post in this thread has nothing in it that would make me change my mind... but I am glad to see she is giving the 'profits' to charity..