Question for Millionaire Mommy...

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twaddle said:
That implies a cap rate of around 9%. You should buy as many of those as you can find. Forget the stock market.
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Not that anyone uses cap rates for single family houses but how can you come up with a cap rate with only two pieces of information on any property? Best that can be said is that it has a gross rent multiplier of 10.3 and that's only good for comparing with properties in that area that are comparable in most physical characteristics.
 
I do not live in a basement in Missoula.

I will will conceed the Pat's have a good football team.

Even though I've owned for thirty years - I still like the idea of rent.

Debate? debate! We don't need no stinking debate - my mind is made up.

heh heh heh - and now that I'm older - Psst Wellesley. naner naner.
 
I just finished up responding to the questions posed on my introduction post.

After a break, I'll return to this thread.

I'd like to preface with a friendly reminder - I did not start this thread. REWahoo asked me a question and I started my partial response last night. In my reply, I asked for feedback on whether or not I was on the right track with how I was interpreting his/her question. I posted ONCE on this thread. I wake this morning to find the conversation took off without me - and I think some of it got a little "awkward". Perhaps my chauvinist antenna was not working properly this morning. I will disregard the comments I found offensive and move on.

We don't need to agree here, especially when we're talking about PERSONAL finance. But I'd like to keep it polite and respectful. And as we all know, real estate market conditions vary wildly depending on location. The blog post referenced is a comparison made that reflects MY local real estate market and is my response to one person's specific question about what would work best for ME.

Okay, taking a time out, then I'll respond further.
 
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toofrugalformycat said:
What you have jumped into is a very big pond, and you aren't necessarily the biggest fish.
Some of these people have enormous egos, and some have enormous IQs, and some have enormous nest eggs, and many have all three.
Sex is irrelevant.
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This is the money quote.
I'd add that many of been retired longer, and some of us younger.

On the other hand while a fair number of the people, and things like FIRECalc and books have been featured and quoted in Fortune, WSJ, Money Magazine etc. AFAIK you are a first TV celebrity so congratulations :)

Putting on my good cop hat. 80%+ of the stuff on your blog is good, LBYM, invest in equities, don't mistake your house for an investment strategy etc. I'd also add that I think you are a good writer and your blog contains a lot of content and obviously you have a fair amount of traffic.

I think the other 20% is debatable NoLoadX, rent vs buy, 10% returns etc. But just because it is debatable doesn't mean it is wrong.

If we define the positive goal of this forum as helping people achieve FIRE, then MMND is definitely an ally in this goal. Put it this way if the typical spendthrift 25 year old read her blog and followed her advice would they be financially better off or worse? I think much better so the comparison to Kiyosaki is unfair since he is dangerous to your financial wealth.

On the other MMND since you have sought out and recieved media attention for your message and you are writing a book you have a special obligation to be accurate. I dare say that if your book ideas can endure the scrunity of this forum than they'll hold up fine against any book reviewer.
 
honobob said:
Not that anyone uses cap rates for single family houses but how can you come up with a cap rate with only two pieces of information on any property? Best that can be said is that it has a gross rent multiplier of 10.3 and that's only good for comparing with properties in that area that are comparable in most physical characteristics.
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This is from a guy who assumes that forward appreciation will be 11%/year? :D
 
twaddle said:
This is from a guy who assumes that forward appreciation will be 11%/year? :D
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I think I said that I believe annual appreciation rates will be similar to the last 30 years in the areas I invest..oh, wait, that is 11% a year!! Yeah for me! Now back to this cap rate thing that you haven't responded to. Didn't we go thru this way back? I'm thinking I've discovered the weak link in your real estate investment strategy. :angel:
 
Texas Proud said:
And tell me, what is YOUR return since Oct or Nov of last year? OR, what is your YTD return?
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While MMND takes a short break in responding (I do have some sympathy for her as it does appear she's found herself drinking from a fire hydrant), I took a look at the performance of a couple of the momentum funds offered by NoLoad FundX, the newsletter MMND describes as what she uses to pick her stocks. These are some seriously volatile funds (not that there is necessarily anything wrong with that).

For comparison, the S&P 500 is down approximately 9.4% YTD.

3 month performance for FUNDX. Looks to be down 15.1% YTD.
img_607613_0_9b0c79d44ea2ef202054725d9b026fde.png


3 month performance for HOTFX which appears to be a more aggressive momentum fund. Looks to be down 19.2% YTD.
img_607613_1_f26324f76ccdc16c4ad3cd4ec00533f1.png
 
Texas Proud said:
MMND.... NOBODY that I know of that has any real training in portfolio analysis would be in equities 100%... and nobody would use a 10% rate of return for their calculations.
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I think the Kaderli's are 100% equities again; not completely sure. They were 100% before the 2000-2002 market slump.
 
clifp said:
80%+ of the stuff on your blog is good, LBYM, invest in equities, don't mistake your house for an investment strategy etc.
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True, your blog contains a lot of very good advice. As clifp points out it also contains advice many of us here might think questionable and worthy of a discussion from those who see things from a different perspective.

Others have said basically the same thing, but it appears to me that you have a lot of experience speaking to an audience who has little if any understanding of finances and investing (think the equivalent financial knowledge of your average HS senior). When you began posting here it looks like you weren't aware you were addressing a much different audience (think the financial knowledge of an average college graduate who took courses in finance...and many here well above that). Add to that years and years of real world investing experience and you will hopefully begin to get the idea that even someone relatively savvy in the financial world such as yourself might be able to learn a thing or two from some of these discussions.
 
MillionaireMommyNextDoor said:
I'd never suggest that anyone put 100% of their money in an S&P 500 fund and let it ride. Not enough diversification. Diversification reduces volatility and increases ROI. I am invested 100% in equities, but I spread my portfolio around (diversify) to include 18-20 different no-load mutual funds and ETFs. IMO, placing all eggs in one basket is gambling.
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I think you're talking about deworsification, not diversification. You can easily get adequate equity diversification in two or three ETFs ... 18-20 just unnecessarily complicates things.

If the S&P 500 isn't broad enough for you, consider the Vanguard Total Stock Market Viper. For international expsoure, use something like the iShares MSCI EAFE Index Fund and/or the iShares S&P Latin America 40 Index Fund.

Those are just examples. There are many good choices available; but that doesn't mean you gain anything by owning all of them!
 
REWahoo,

Good point. Kind of like the star high school student who goes to MIT and discovers they aren't the smartest kid in class anymore.
 
twaddle said:
Yes. She's the one making TV appearances and writing a book, but we're the geniuses. :)
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So I'll ask a dumb question..........what took her so long to get here, it's not like we're hiding or anything...........:D

And, to follow it up, since most people on here are on their way to FIRE, there might be a bigger audience that could benefit more, like most kids on MySpace.............;)
 
Fellow mommy, just know that you have to be able to back up your claims and be ready for challenges to your assumptions. As someone who is used to being the one in the "know" and offering advice, perhaps it's hard for you to swallow that you may not be making the most well thought out choices, or worse, leading others down the waterfall with you.

Folks here are quite nice, grumpy, inquisitive - but most of all don't stand for BS...You have to be able to back up your claims/info w/ DATA and/or pretty sound logic. It doesn't even have to be about money - everything is under the microscope (just do a search for "milk" and you'll see...:rant:)

People disagree here ALL THE TIME! so it's not about not thinking a certain way, but respecting where others come from and balancing/backing your own claims. Some of us even admit when we learn something or were wrong once in a while too.

If all else fails, the boyz here are easily distracted by naughty pictures, or even the suggestion of them ...>:D or beer.
 
bright eyed said:
You have to be able to back up your claims/info w/ DATA and/or pretty sound logic.
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Puhleease. She's stated her assumptions, and people are arguing that their assumptions are better than her assumptions.

They are all assumptions. As long as you state them up front, people can take them or leave them at face value.

I sincerely doubt that the "experts" here know any better than she does about the "correct" forward return rate, the "correct" allocation to stocks, or the "correct" number of mutual funds to provide diversification.
 
cute fuzzy bunny said:
So is Britney Spears' mother, but I think I'll take a pass on following her child rearing philosophy.
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I didn't mean that her advice was good, just that she's finding fame and fortune, while we're sitting in our underwear arguing on an internet forum. ;)
 
twaddle said:
Puhleease. She's stated her assumptions, and people are arguing that their assumptions are better than her assumptions.

They are all assumptions. As long as you state them up front, people can take them or leave them at face value.

I sincerely doubt that the "experts" here know any better than she does about the "correct" forward return rate, the "correct" allocation to stocks, or the "correct" number of mutual funds to provide diversification.
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hey, I said and/or sound logic :D

I think a few people have at least countered that some of her assumptions/logic are a bit faulty... and nobody said "correct vs. incorrect" but more often "unsafe vs. safe" particularly planning on 10% return.
 
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