Young Pup looking for wisdom

[PsyopRanger]

I found this site through spideyman; we have been on the richdad site for the last 4 years. 

I am still young but I am looking at gleaning some wisdom from those of you who have accomplished ER. 

Here is me: 

I am 29; I work in Army Special Operations and currently live in Italy. I have been married for 9 years and have 2 children ages 7 and 6.  From age 17-21, I built, operated and sold/transferred 2 small businesses.  I then joined the Army, the first time, and ended up outside Seattle.  During this time, I got involved with the infamous Amway/Quixtar business, although I didn’t build this business; I picked up many good habits and got the dream to retire young.  I also got to spend time with many self-made millionaires and tried to learn from them. I also got my Bachelors in Marketing during this time.

Next, I worked in sales and then insurance, because of my performance, I got a lot of face time and trips with the CEO's of a number of companies, I tried to learn as much as possible.  I then started working as a Financial Planner for 2 years.  I specialized in business owners and complex estate planning for wealthy individuals. 

I left Financial planning for two reasons: 

First, I felt like a glorified salesperson and second, I wanted to teach people about building wealth and smart investing habits.  My company wanted me to push products and numbers.  So I left and rejoined the military. 

I joined the military mainly for the pension after 20 years and the benefits (insurance, LTC, etc) I learned Arabic and have made frequent trips to the Middle East since 9/11. 

I really started investing around 2001.  I got really interested in accredited-type investments and how to access them without being accredited.  I follow Robert Kiyosaki’s investment advice of “Don’t be Average”  I have averaged 30% or more returns since 2002 using stocks, options, managed futures funds and mutual funds. 

I own 2 real estate rentals for positive cashflow.  I try to buy 85% under FMV and rent for cashflow.  I plan on buying a new rental at least once every 2 years (hopefully more) and then ultimately, 1031 exchanging into a Triple Net Lease commercial property.  I hold my properties using the PREMES, Professional Real Estate Multiple Entity Structure which is essentially a LP with an LLC as the general partner.   

I invest using CANSLIM for stocks and options and I am evaluating a service that uses LEAPs for above average returns. 

My new passion is global investments.  Since I am in Europe, I have a foreign bank account and foreign investment account.  This has opened doors to many investments that most American’s aren’t even aware of.  I have a team of advisors who specialize in legal offshore investing, tax planning, attorneys, etc. 

Using my knowledge and financial planning background, I have helped numerous soldiers set up retirement accounts, invest and develop financial plans. 

This is my exit strategy. 

At 45, I will be able to retire with a military pension of just over $5000 per month.  My Roth IRA will have at least $1M as will my spouses.  I will 1031 exchange my real estate into a Triple Net Lease commercial property for monthly cashflow of $8000 or more. 

I plan on retiring in the mountains and also have a condo in the Caribbean (Cayman’s, Belize,?)  I want to spend my retirement writing a book on wealth and spend a majority of my time giving and helping charities raise funds.  I am also active in my church and plan on working there as well. 

That is me.  Glad to meet you.

Lance

 

[Martha]

Welcome Lance. We have a number of early retired military here. You sure have done a lot for a 29 year old! What is spideyman?

 

[PsyopRanger]

Spideyman is a new member here too.

http://early-retirement.org/forums/index.php?topic=8227.0

Lance

 

[PsyopRanger]

I fogot to mention that I am "bad debt" free, except for a car loan around $20K

My current holdings in my/DW Roths: Agressive!

Strategic Energy Fund - SEF.UN - Purchase Price - $12.18
ProFunds UltraBear Investor Class - URPIX - Purchase Price - $18.32
PALL Corporation - PLL - Purchase Price - $27.90
Gold Corp. - GG - Purchase Price - $26.30 up 19% so far
Merrill Lynch World Energy Fund - Purchase Price - $20.90
Oppenheimer Real Asset Fund Class C - QRACX - $7.60

Asian Currency Sandwich –
Japanese Yen, Singapore dollar, Thai Baht, Hong Kong dollar, and the Chinese Yuan – - $33.74

Dow Jones Global Titans Euro - Purchase Price - €21.49
Zurich Financial - ZURN.VX - Purchase Price- 268.00 CHF
VIVIDAS GROUP - VDS.L- Purchase Price- $45.50



I use a -10% stop loss and sell off 1/4 of my holdings at +25%, +30%, +35% to lock in gains.

I don't use buy, hold and pray - as I only hold an average of 6 months - 3 years.


My recent winners:

BOOM - Purchase Price $22.64 up 52%
CHL - Purchase Price $22.60 up 29%
PKX - Purchase Price $51.42 up 30%

Note: These are not from my own devine wisdom, I use various advisory services and pick the ones I feel the best about.

 

[dex]

With all you have done you should be teaching us.

 

[unclemick]

Hmmm

I was where you are once - long ago and far far away circa 1966 - 1976 or so.

Good luck.

DeGaul and the Norwegian widow have patience.

heh heh heh - BTY I know a rare few who successfully pulled it off. They knew when to switch from offense to defense.

 

[PsyopRanger]

heh heh heh - BTY I know a rare few who successfully pulled it off. They knew when to switch from offense to defense.

That's the key, the closer you get to ER, the less you can be "all in" I using my age to my advantage and going defense slowly as I et closer.

I also use a 10% stop loss no matter what!

 

[cute fuzzy bunny]

You know whats funny? I've never used a stop loss in my life. Just a boring old buy and holder.

What happens if theres a sudden downturn due to some expected major event, your stop loss kicks in and saves you from more than a 10% drop, then things turn around and pop back up to where they were?

I dunno, say a report of a major terrorist attack that turns out to just be the staypuft marshmallow man float got away from his moorings?

Do you use a second mechanism to jump back in if things start popping back up after the stop loss kicks in?

 

[PsyopRanger]

Do you use a second mechanism to jump back in if things start popping back up after the stop loss kicks in?

This is part of CANSLIM, developed by William O’Neil the founder of Investors Business Daily.

If a stock comes back and shows signs of strength, say breaking above the 50 day moving average for three consecutive days or making a new high after the 10% drop, I would then re-enter the position.

The 10% stop loss insures you do not lose more than 10% in any investment, getting people to stay true to the principle is another thing.

 

[laurence]

I'm gonna go out on a limb and say you are a type A personality.

Your type of investing makes my head hurt, but I have a coworker who does the same type of stuff and has been succesful at it as well. Not for everybody, but more power to you! It sounds like you have a ton to offer the board by way of different viewpoints and rare experiences. There are a lot of buy and hold, rebalance once every other year, index fund types here, myself included. We can often sound a bit like we are chanting a mantra, but don't let that discourage you from injected your own opinion, we'll all be better off with a fresh take! Welcome, glad to have you here!

 

[cute fuzzy bunny]

This is part of CANSLIM, developed by William O’Neil the founder of Investors Business Daily.

If a stock comes back and shows signs of strength, say breaking above the 50 day moving average for three consecutive days or making a new high after the 10% drop, I would then re-enter the position.

The 10% stop loss insures you do not lose more than 10% in any investment, getting people to stay true to the principle is another thing.

Sounds like, in a knee jerk situation (which happens all the time), you'd lose your 10% and then get back in when opportunities for upside have already been taken.

It makes me uncomfortable to see automated systems laid over what is primarily psychological in nature...short term market movements. The downside protection seems fine, its that upside loss that worries me. Seems more like trying to predict short term movements while protecting yourself from the unexpected.

I mean this in the nicest way, but good luck with that over the long haul.

 

[TromboneAl]

Chances are that if you continue with your current investment strategy and if you track all of you investment expenses and taxes, in 20 years you'll find that you would have done significantly better had you just bought and held a low-expense index fund.

It took me 20 years to discover this for myself.  Maybe you'll be lucky and beat the averages.   Maybe you'll do some serious research and realize that playing the market rarely pays off.  But I'm guessing that you will have to learn it the hard, expensive way.

 

[PsyopRanger]

Sounds like, in a knee jerk situation (which happens all the time), you'd lose your 10% and then get back in when opportunities for upside have already been taken.

It makes me uncomfortable to see automated systems laid over what is primarily psychological in nature...short term market movements. The downside protection seems fine, its that upside loss that worries me. Seems more like trying to predict short term movements while protecting yourself from the unexpected.

I mean this in the nicest way, but good luck with that over the long haul.

Actually no, this is what CANSLIM stands for:

C= Current earnings per share should be up 25% or more and in many cases accelerating in recent quarters. Quarterly sales should also be up 25% or more or accelerating over prior quarters.

A= Annual earnings should be up 25% or more in each of the last three years. Annual return on equity should be 17% or more

N= A company should have a new product or service that's fueling earnings growth. The stock should be emerging from a proper chart pattern and about to make a new high in price

S= Supply and demand. Shares outstanding can be large or small, but trading volume should be big as the stock price increases.

L= Leader or laggard? Buy the leading stock in a leading industry. A stock's Relative Price Strength Rating should be 80 or higher.

I= Institutional sponsorship should be increasing. Invest in stocks showing increasing ownership by mutual funds in recent quarters. IBD's Accumulation/Distribution Rating gauges mutual fund activity in a stock.

M= The market indexes, the Dow, S&P 500 and Nasdaq, should be in a confirmed up trend since three out of four stocks follow the market's overall trend.


The market direction is key to your investing; right now CANSLIM investors are mostly in cash.

As for the results:

Numerous articles in the American Association of Individual Investors' monthly journal have spoken highly of the CANSLIM approach. In an independent study CANSLIM has performed at an 860.3% return from Jan. 1998 – Dec. 2005.

AAII is an independent not-for-profit corporation with over 170,000 members, formed in 1978 for the purpose of assisting individuals in becoming effective managers of their own assets through programs of education, information, and research.

source: http://www.investors.com/

 

[PsyopRanger]

So I guess on this forum there is only one way to skin a cat...

Make a lot of money, max your retirement accounts and buy index funds through dollar cost averaging and DRIPs?

I guess the millions of dollars of research by leading financial companies into the success of CANSLIM investing, is wrong by your account.

 

[HFWR]

Most of us have seen "research" by Bernstein, Bogle, Siegal, Schiller, etc. that says a well-diversified, low-cost portfolio of index funds will beat most actively managed funds in the long run...

YMMV...

 

[PsyopRanger]

Most of us have seen "research" by Bernstein, Bogle, Siegal, Schiller, etc. that says a well-diversified, low-cost portfolio of index dunds will beat most actively managed funds in the long run...

YMMV...

To retire when, at 65?

Believe me, when I am not making great positive returns on my strategy, I will change it.

Until then….

 

[TromboneAl]

You have to work on your gleaning skills.

 

[PsyopRanger]

Chances are that if you continue with your current investment strategy and if you track all of you investment expenses and taxes, in 20 years you'll find that you would have done significantly better had you just bought and held a low-expense index fund.

Investment expenses? About $9.99 per month
Taxes? I invest in a Roth IRA

 

[PsyopRanger]

You have to work on your gleaning skills.

Your right, I've been too busy defending my current plan.

Sorry 8)

 

[vic]

Most of us have seen "research" by Bernstein, Bogle, Siegal, Schiller, etc. that says a well-diversified, low-cost portfolio of index dunds will beat most actively managed funds in the long run...

YMMV...

Yes, actively managed funds will do worse than a low-cost portfolio of index funds. However, Lance is doing it himself with an incredible amount of discipline following an established method. I could not do it, because it requires me to stay on top of that stuff at all times (not interested in it either). I tried to look at the cups and handles and whatever combined witih the CANSLIM wisdom - I just did not see it.

I personally could not handle seeing my portfolio grow at a miserable 5-7%/year before inflation in a 'well balanced portfolio" - that would have required me to be a W-2 slave until I wouldl be well in my 50's and be a miser all the way. Instead I focus on aggressive tax strategies and very high yielding private investments and real estate.

Lance, congrats on what you are doing and you don't need any wisdom. Your investments are doing more than okiedokie and you got your liabilty with the real estate taken care of too. Now... I just wonder whether you can stick it out in that military for that long until you are getting that medical etc..

Vicky

 

[HFWR]

Well, I did say YMMV...

 

[Nords]

So I guess on this forum there is only one way to skin a cat...

No, but most of the fuss starts when people start claiming that one particular way is better than another. There's more than one way to invest, and more than one way to ER.

Make a lot of money, max your retirement accounts and buy index funds through dollar cost averaging and DRIPs?

Did the military recruiter mention that point? I hope people haven't been signing up again to make a lot of money...

I'd say that for passive investors it's more important to save money, max retirement accounts, and minimize expenses/turnover/taxes. As for active investors... well, if Nicolas Darvas could do it then so can anybody.

It's not that index investing is better or worse than active investing. It's that most investors do better with index funds because they aren't willing, able, interested, or motivated to do the work it takes to stay up with an active portfolio. Available time helps a lot, too-- Bill O'Neill's numbers would suck if he had to execute CANSLIM during a six-month overseas deployment without a data feed.

I guess the millions of dollars of research by leading financial companies into the success of CANSLIM investing, is wrong by your account.

It's the usual paradox-- if they're so smart then why ain't they rich?

I'd think that if leading financial companies were so successful at CANSLIM then they wouldn't need to be selling it to us!

 

[Brat]

PsyopRanger your investing style is in sync with your personality and age.  If you stick with it you should do well.  No one knows if it will be better or worse than that using index funds and balancing after 20 years.

In addition to Nords comment about using your system during deployment, there is another event that you may not have covered: your wife may need to manage the family retirement savings (you are in a riskier than average occupation) she may need a passive approach.   Don't overlook her financial education.

 

[cute fuzzy bunny]

Actually no, this is what CANSLIM stands for:
[...]
The market direction is key to your investing; right now CANSLIM investors are mostly in cash.

You're market timing. 99.9% of the credible research I've read says that you will lose over the long haul. But everybody has to start somewhere and learn as they go.

I'll read the link you pointed out, but chances are at best its backward looking datamining. I'll be glad to give you my perspective on it later, but I doubt anything I'd say would change your mind.

Missing out on hundreds of thousands of dollars or losing your shirt is what that'll take.

So I guess on this forum there is only one way to skin a cat...

Make a lot of money, max your retirement accounts and buy index funds through dollar cost averaging and DRIPs?

I guess the millions of dollars of research by leading financial companies into the success of CANSLIM investing, is wrong by your account.

Not necessarily. I always have my eyes and ears open to new ideas and approaches. Thing is, this isnt anything new to me.

People do get pissy when something they believe in isnt readily accepted by others. Hopefully that doesnt happen in your case.

The financial institutions have a huge vested interest in getting you to buy and trade expensively. Thats how they get paid.

Similarly (killing two birds with one stone), Kiyosaki makes money getting people to feverishly buy his books advising how you can do WAY better than stody old index funds, who clearly are for fools.

Like I said. One of us will learn a lesson from this, but it might take ten or twenty years.

 

[laurence]

Now I didn't mean to imply we're going to let you off without vigorously defending your heresy, Psyopranger!