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Re: What You Can Learn From 1,000 Millionaires
Old 12-20-2005, 11:16 AM   #21
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Re: What You Can Learn From 1,000 Millionaires

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Originally Posted by MRGALT2U
My position is that I can do anything rich people can do, just for a shorter time and on a much smaller scale.
I guess the dumpsters, rich folk search in for those hidden treasures, are much larger than the ones you frequent.
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Re: What You Can Learn From 1,000 Millionaires
Old 12-21-2005, 02:56 PM   #22
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Re: What You Can Learn From 1,000 Millionaires

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Originally Posted by Spanky
It is so difficult to live without insurance nowadays. We have medical, dental, vision, life, auto, and house insurances. It's about 10% of our household expenses.
One approach to insurance you might consider: only insure those items which have the potential to become really expensive if bad luck hits you. Don't buy insurance (in other words, self-insure) things that crop up which you just have to pay for, but which are unlikely to result in catastrophic damage to your net worth.

By that measure, we have dropped dental and vision insurance, preferring to just pay those expenses when they come up. We keep homeowners, auto and medical (and a boat loss policy and umbrella liability) in order to dodge a catastrophic loss should bad luck come. Wherever possible, we crank premiums down by using high deductibles, again only trying to insure against major losses, not everyday expenses.

For Life insurance, I had the kids' trust buy a cheap term policy on me, scheduled to expire around the time they reach maturity. The thought there was that they wouldn't suffer financially from my death after that. Also, since we have our ER nest-egg already, we don't own life insurance for our surviving spouse because again, there is no financial loss from either of our deaths, so why insure?

This thinking may seem simple and logical, but it is surprising how much insuracne people buy just 'to feel safe' and how they don't always need it.
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Re: What You Can Learn From 1,000 Millionaires
Old 12-21-2005, 03:04 PM   #23
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Re: What You Can Learn From 1,000 Millionaires

Just to amplify ESRBob's comments: consider dropping auto and boat too, at least for property coverage. Naturally, you'd have to figure out if this made sense, but if you are carrying comprehensive and collision for $750 a year on a $2000 car, it isn't hard to see how the insurer is making money...
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Re: What You Can Learn From 1,000 Millionaires
Old 12-21-2005, 07:19 PM   #24
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Re: What You Can Learn From 1,000 Millionaires

Insurance is just paying someone else to cover your risk - one needs to assess what they believe that risk will be and then act according to their level of risk tolerance. For example, life insurance may not be necessary if you have enough to cover your debts and pass on (if you wish and aren't of the Die Broke philosophy) what you wish to your heirs.

In business, many just insure for catastrophic loss, unless the insurance industry has pushed through laws mandating minimal levels of insurances (case in point, auto insurance). Day to day swings in operating costs can be covered in the cash flow and financial planning. If you are able to think of your finances as a business, then you too can think that way.

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Re: What You Can Learn From 1,000 Millionaires
Old 12-21-2005, 08:19 PM   #25
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Re: What You Can Learn From 1,000 Millionaires

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Originally Posted by Spanky
Life was much simpler when we were poor in Hong Kong. We had no insurance of any kind since we had no assets and medical care was covered by the government.
Not poor, and still in Hong Kong.

All we carry is life insurance on wife and I, sufficient to pay the mortgage balance on our home plus a bit extra. We also have a policy that pays out a lump sum in the event of critical illness (which we use to protect against loss of earning ability).

All health and medical issues, covered by the state, but we do have small coverage as a top up to provide private/specialist hospital care if we choose.

The apartment is covered by the buildings's umbrella policy. We carry no house contents insurance.

No car so no auto insurance. No boats either!

Employee insurance for the domestic helper to cover acccident, injury and death in service.

All up, it costs us less than US$1500 a year.

Cheers,

Honkie
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Re: What You Can Learn From 1,000 Millionaires
Old 12-21-2005, 09:49 PM   #26
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Re: What You Can Learn From 1,000 Millionaires

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Originally Posted by Honkie


All up, it costs us less than US$1500 a year.
Honkie,
Rather than us giving you advice, sounds like we should all just pull up tent stakes and move to Hong Kong!
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Re: What You Can Learn From 1,000 Millionaires
Old 12-21-2005, 11:44 PM   #27
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Re: What You Can Learn From 1,000 Millionaires

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Originally Posted by ESRBob
Honkie,
Rather than us giving you advice, sounds like we should all just pull up tent stakes and move to Hong Kong!*
More people leaving than settling here at the moment, but you're welcome to give it a shot!
But along with the upsides there are downsides too!
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Re: What You Can Learn From 1,000 Millionaires
Old 12-22-2005, 06:49 AM   #28
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Re: What You Can Learn From 1,000 Millionaires

Honkie,
What are the reasons for leaving Hong Kong? Is it concerns about the economy or the government? Where are they going?
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Re: What You Can Learn From 1,000 Millionaires
Old 12-22-2005, 09:38 AM   #29
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Re: What You Can Learn From 1,000 Millionaires

Currently my health plan shows 404 per month for a 62 year old retiree, double that if married, so 808 per month x 12 = 9700 per year. At 4% you need 243000 of your million to cover it (plus any taxes due on the withdrawals), and the cost is going up faster than the average inflation rate. You could end up with nearly 1/3 of your million just supporting health insurance.

You may have to buy cheaper tequilla in retirement.
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Re: What You Can Learn From 1,000 Millionaires
Old 12-22-2005, 09:40 AM   #30
 
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Re: What You Can Learn From 1,000 Millionaires

Scott Burns has some thoughts on ER and health care in today's column (second part).
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Re: What You Can Learn From 1,000 Millionaires
Old 12-22-2005, 09:42 AM   #31
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Re: What You Can Learn From 1,000 Millionaires

As an alternative, I will point out my 83 year old father in laws planning - if Medicare doesn't cover it, it doesn't get done. His income stream is SS, plus about $50,000 remaining from the sale of his property (he lives rent free next to me).
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Re: What You Can Learn From 1,000 Millionaires
Old 12-22-2005, 06:45 PM   #32
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Re: What You Can Learn From 1,000 Millionaires

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Originally Posted by WhodaThunkit
Scott Burns has some thoughts on ER and health care in today's column (second part).
Yeah, he takes another jab at ER -- because of the paucity of good health insurance options, "most people thinking about early retirement should abandon the idea." I feel this is throwing the baby out with the bathwater... then again, he's gets paid to do what most people here do all day for fun, so why should he want to retire early?
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Re: What You Can Learn From 1,000 Millionaires
Old 12-22-2005, 07:59 PM   #33
 
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Re: What You Can Learn From 1,000 Millionaires

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Originally Posted by ESRBob
Yeah, he takes another jab at ER -- because of the paucity of good health insurance options, "most people thinking about early retirement should abandon the idea."*
I wondered about the "most people" part. Would be interesting to hear more about this. Evidently, he believes that some people will be OK. I guess the obvious answer is people with a lot of money. But how much?
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Re: What You Can Learn From 1,000 Millionaires
Old 12-22-2005, 09:26 PM   #34
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Re: What You Can Learn From 1,000 Millionaires

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Originally Posted by Spanky
Honkie,
What are the reasons for leaving Hong Kong? Is it concerns about the economy or the government? Where are they going?
Spanky
Spanky,

No, the economy is picking up nicely and all things consdered the Hong Kong Government is, overall, the most efficient, effective and practical one I have lived in (under?).

I should have qualified the original post by saying more "western" expartriates leaving than arriving. Mainly because they are not needed. The "old days" of the western expat being deemed necessary are long over. Locals and western educated/raised Chinese are more than able to meet and exceed the abilities of most expats, plus they are bilingual and often trilingual (my wife is quad-lingual!!).

Additionally, many people who came here during the 90's have made their pile, are reaching midle age and are looking to relocate either homewards or onwards, particularly those with children.

Summer polution levels have been our big talking point recently, but in truth I don't think it is any worse here than in many major cities around the world. Most people have it pretty good and so the opportunities for true complaint are limited so the epolution issue is blown up into a "cause/crusade" among the chattering classes.

Just one man's view.

Cheers

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Re: What You Can Learn From 1,000 Millionaires
Old 12-23-2005, 08:09 AM   #35
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Re: What You Can Learn From 1,000 Millionaires

Honkie,

Thanks for the update about H.K. A friend of mine is returning to H.K. to apply for residency or citizenship for his daughter born in the U.S. He is from H.K. and his wife is from Shanghai. They have just established their permanent status in the U.S. They do however consider the possibility of returning to H.K. or moving to China when opportunities arise.

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Re: What You Can Learn From 1,000 Millionaires
Old 12-24-2005, 09:47 AM   #36
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Re: What You Can Learn From 1,000 Millionaires

Insurance wise, we carry high limit, very high deductible policies for home and cars and an umbrella. I think i'm at 10,000 ded for the house and 2500 on the cars. We'll drop the collision and comprehensive on the cars next year as they pass the magic 5 year mark. Hell, a few times when I couldnt find my Expedition in the mall parking lot I started praying it had been stolen...

So basically I self insure for all but a major disaster. We dont live in an area of hurricanes, tornados, earthquakes, and while we're in a flood plain (as is most of california) our odds of flooding are really, really low. I only filed a small home claim for water damage and wished later that I hadnt done it. Never had a serious car accident, just bumper cars in the parking lots and never my fault. Not sure I'd recommend this for anyone who lives in a hazard zone or drives like mr. magoo.

The fatter deductibles really knocks down the price tags.
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Re: What You Can Learn From 1,000 Millionaires
Old 12-24-2005, 10:02 AM   #37
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Re: What You Can Learn From 1,000 Millionaires

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Insurance wise, we carry high limit, very high deductible policies for home and cars and an umbrella.* I think i'm at 10,000 ded for the house and 2500 on the cars.*
I was surprised at the whining I heard from our mortgage holder when they learned we had a $5K deductible on our homeowner's insurance. They finally backed down when I threatened to take our refinancing business elsewhere.

That must be an impressive price break on the premium between a $5K and a $10K deductible. I'll have to see if our insurer even goes that high.
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Re: What You Can Learn From 1,000 Millionaires
Old 12-24-2005, 12:41 PM   #38
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Re: What You Can Learn From 1,000 Millionaires

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Originally Posted by WhodaThunkit
More generally, an entry-level millionaire is independently lower-middle-class today, not independently wealthy.* Especially if the million includes home equity. This is fine, and a good standard of living, and a worthy goal.* It's* just not rich!
If he is even lower middle class. I was listening to NPR the other day. They were interviewing workers from the Toyota plant in Elizabethtown, KY. One woman moved from Pikeville in the heart of depressed KY coal country to work at Toyota. She puts cup holders into the Camries that are built there. She makes $70,000 per year plus good benefits. She formerly was a shift supervisor at a McDonalds in Pikeville.

Now she isn't married, but she is in good shape. If she were married to another guy putting in cup holders or some equally skilled task, they would be pulling down $140,000 with benefits, 401K matches etc.

So, not only does the $1,000,000 not look like a helluvalot when mapped into income; doubling it wouldn't greatly change that.

To be rich you should be able at the very least to have the disposable income of a couple of non-union KY autoworkers. 4% of $3m? $4m? Its a depressing fact, but fact it is.

Unfortunately, I likely will never be rich.

Ha
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Re: What You Can Learn From 1,000 Millionaires
Old 12-24-2005, 04:11 PM   #39
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Re: What You Can Learn From 1,000 Millionaires

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Originally Posted by HaHa

Unfortunately, I likely will never be rich.

Ha
Ha: You ungrateful old fart you.

I've spent some time in your area, (Puget Sound) and it is hard to beat.

You've probably spent as much time as I have in the retired area. (Almost 20 years for me.) As near as I can figure, at least that amount of time for you.

Neither one of us has had to worry about reporting to work and taking care of "stuffing paper cups".

Seriously, do you really give a rats ass about what anybody else is making, as long as you are living your life the way you want to? (I think not).

Your point is understandable, but in the final analysis, so what?

In any case, have a great Holiday Season.
(Get out there and Salsa your butt off).
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Re: What You Can Learn From 1,000 Millionaires
Old 12-24-2005, 04:16 PM   #40
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Re: What You Can Learn From 1,000 Millionaires

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Seriously, do you really give a rats ass...
Hey, watch your mouth!
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