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-   -   Young Pup looking for wisdom (https://www.early-retirement.org/forums/f26/young-pup-looking-for-wisdom-22019.html)

PsyopRanger 07-04-2006 05:36 AM

Young Pup looking for wisdom
 
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 didnít 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 Kiyosakiís investment advice of ďDonít be AverageĒ* 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 Americanís arenít 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 (Caymanís, 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 07-04-2006 06:25 AM

Re: Young Pup looking for wisdom
 
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 07-04-2006 06:37 AM

Re: Young Pup looking for wisdom
 
Spideyman is a new member here too.

https://www.early-retirement.org/forums/i...p?topic=8227.0

Lance

PsyopRanger 07-04-2006 07:20 AM

Re: Young Pup looking for wisdom
 
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 Ė
Japanese Yen, Singapore dollar, Thai Baht, Hong Kong dollar, and the Chinese Yuan Ė - $33.74

Dow Jones Global Titans Euro - Purchase Price - Ä21.49
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 07-04-2006 07:24 AM

Re: Young Pup looking for wisdom
 
With all you have done you should be teaching us.

unclemick 07-04-2006 09:15 AM

Re: Young Pup looking for wisdom
 
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 07-04-2006 09:28 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by unclemick2
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 07-04-2006 09:35 AM

Re: Young Pup looking for wisdom
 
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 07-04-2006 09:43 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by Cute Fuzzy Bunny
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 OíNeil 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 07-04-2006 10:10 AM

Re: Young Pup looking for wisdom
 
I'm gonna go out on a limb and say you are a type A personality. :laugh:

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 07-04-2006 10:25 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
This is part of CANSLIM, developed by William OíNeil 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 07-04-2006 10:35 AM

Re: Young Pup looking for wisdom
 
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 07-04-2006 10:40 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by Cute Fuzzy Bunny
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 Ė 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: https://www.investors.com/

PsyopRanger 07-04-2006 10:45 AM

Re: Young Pup looking for wisdom
 
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 07-04-2006 10:48 AM

Re: Young Pup looking for wisdom
 
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 07-04-2006 10:53 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by HFWR
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 thenÖ.

TromboneAl 07-04-2006 10:55 AM

Re: Young Pup looking for wisdom
 
You have to work on your gleaning skills.

PsyopRanger 07-04-2006 11:00 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by 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.

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






PsyopRanger 07-04-2006 11:02 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by TromboneAl
You have to work on your gleaning skills.

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

Sorry 8)


vic 07-04-2006 11:04 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by HFWR
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 07-04-2006 11:31 AM

Re: Young Pup looking for wisdom
 
Well, I did say YMMV... :P

Nords 07-04-2006 11:39 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
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.

Quote:

Originally Posted by PsyopRanger
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.

Quote:

Originally Posted by PsyopRanger
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 07-04-2006 01:07 PM

Re: Young Pup looking for wisdom
 
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 07-04-2006 01:27 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
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.

Quote:

Originally Posted by 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.

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 07-04-2006 02:20 PM

Re: Young Pup looking for wisdom
 
Now I didn't mean to imply we're going to let you off without vigorously defending your heresy, Psyopranger! ;)

brewer12345 07-04-2006 03:32 PM

Re: Young Pup looking for wisdom
 
ranger, how much fundamental analysis do you do on your investments?

I'm suspicious of and not convinced by the various mechanical investing systems. Most of them work great right up until they don't. The "when they don't" moment is usually extremely painful for the devotees of these systems.

But welcome. It is nice to hear from someone who does such different things from most of us here. You will be challenged, simply because what you are doing goes against too much blue ribbon/Nobel prize-winning academic research, but keep talking. What you are doing is at least interesting.

PsyopRanger 07-04-2006 03:47 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by Nords
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.

So why when I posted my investing strategy did I get shucked away as heresy? This is my way; I make great returns, stop loss at 10%. I keep hearing that this way is wrong?

Quote:

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

A pension over $5000 per month at 45 isnít bad?


Quote:

Originally Posted by Nords
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.

First, CANSLIM is not my only strategy as I posted in my intro.
Second, I am motivated to get better returns and I only spend about an hour per week analyzing investments.
Third, I have done 3 deployments to Iraq since 2003; I have managed to maintain my yields during this time.

CANSLIM is not day trading, or market timing.

It is using Fundamental and Technical analysis in growth stocks.


PsyopRanger 07-04-2006 03:49 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by Cute Fuzzy Bunny
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.

Not market timing, read again.


PsyopRanger 07-04-2006 03:53 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by brewer12345
ranger, how much fundamental analysis do you do on your investments?

I'm suspicious of and not convinced by the various mechanical investing systems. Most of them work great right up until they don't. The "when they don't" moment is usually extremely painful for the devotees of these systems.

But welcome. It is nice to hear from someone who does such different things from most of us here. You will be challenged, simply because what you are doing goes against too much blue ribbon/Nobel prize-winning academic research, but keep talking. What you are doing is at least interesting.

5 out of the 7 CANSLIM principles are fundamental analysis.

As far as the rest of my investments, most of research is fundamental since I am not that great on the technical side.

PsyopRanger 07-04-2006 03:57 PM

Re: Young Pup looking for wisdom
 
Iíll put it all on the line.

Anyone pick 5 investments, Iíll pick 5 investments.

Iíll use my system, you use your system.

Letís see who is leading after 1 year?

If Iím wrong, I will apologize and claim that everything I am doing is heresy.


Cool Dood 07-04-2006 04:15 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
Iíll put it all on the line.

Anyone pick 5 investments, Iíll pick 5 investments.

Iíll use my system, you use your system.

Letís see who is leading after 1 year?

If Iím wrong, I will apologize and claim that everything I am doing is heresy.


I think the fact that you consider that an appropriate test reveals most of what's wrong with the approach...

73ss454 07-04-2006 04:21 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
Iíll put it all on the line.

Anyone pick 5 investments, Iíll pick 5 investments.*

Iíll use my system, you use your system.*

Letís see who is leading after 1 year?*

If Iím wrong, I will apologize and claim that everything I am doing is heresy.


Make it 30 years and you've got a bet!

macdaddy 07-04-2006 04:23 PM

Re: Young Pup looking for wisdom
 
Psyop you seem to be in a nice position... 2 points...

Are you sure that your pension will be 5k/month in today's dollars at 45? From my math you will have about 20 years in then. My dad retired after 30+ years and I think his pension is around 60k/year which of course equals 5k/month. From the material I read I think the difference between 20 and 30 years is 25% of your base rank pay, calculated after all special pay and bonuses are removed. An overlooked benefit may be health care for you and your spouse at 45 which would make it much cheaper to be self employed or to start your own business.

Second I wouldn't be in a hurry to convert your residential properties into NNN commercial properties. If you find them relatively low maintenance and easy to fill then why not hold on to them? NNN commercial is not "headache free" like a lot of people seem to assume and the vacancies can be more expensive and harder to fill. Since you will be in the military the residential properties will be an additional assurance that whenever you retire, you will be able to afford a house, no matter what the market does. The only investors I've known to transition from residential to commercial very successfully had multi millions to work with.

PsyopRanger 07-04-2006 04:32 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by macdaddy
Psyop you seem to be in a nice position... 2 points...

Are you sure that your pension will be 5k/month in today's dollars at 45? From my math you will have about 20 years in then. My dad retired after 30+ years and I think his pension is around 60k/year which of course equals 5k/month. From the material I read I think the difference between 20 and 30 years is 25% of your base rank pay, calculated after all special pay and bonuses are removed. An overlooked benefit may be health care for you and your spouse at 45 which would make it much cheaper to be self employed or to start your own business.

Second I wouldn't be in a hurry to convert your residential properties into NNN commercial properties. If you find them relatively low maintenance and easy to fill then why not hold on to them? NNN commercial is not "headache free" like a lot of people seem to assume and the vacancies can be more expensive and harder to fill. Since you will be in the military the residential properties will be an additional assurance that whenever you retire, you will be able to afford a house, no matter what the market does. The only investors I've known to transition from residential to commercial very successfully had multi millions to work with.

The retirement is based on your base pay when you retire, if someone retired 5-10 years ago, they do not make as much as today, though they are adjusted for inflation.

See the calculator here: https://www.dod.mil/militarypay/retir..._finalpay.html

Thanks for the advice on the NNN, didn't know that.

PsyopRanger 07-04-2006 04:38 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by Cool Dood
I think the fact that you consider that an appropriate test reveals most of what's wrong with the approach...

I used that as the example because I would be difficult to track 30 year performance.

What I am trying to prove is that for my age and risk tolerance, my investing style is sound.

I never said I would be chasing 30% returns into my 40ís-50ís.

So tell me, if you were making 30% gains from the time you were 25-35 and then switched to more stable, solid 6-8% performers, would it of helped you overall?

Note that one of my investments is a Dow Jones Indexed Fund in the Euro, hardly ultra-risky.

PsyopRanger 07-04-2006 04:52 PM

Re: Young Pup looking for wisdom
 
Let me ask this question in a different way.

You are 29, married with 2 kids in elementary school.
You make $70k per year, have $150K in a Roth IRA.
Your company does not match your 401(k)
You move every 3 years.
You have a pension at age 45, as well as health insurance and LTC if you stay at your job for another 14 years.
You own 2 real estate rental properties that bring in NOI of just over $500 per month.

Your goal is to have a net worth of at least $4M at age 45, be able to retire on at least $60,000 per year in todayís dollars and build a log cabin worth over $2M to retire to.

How do you do it?

cute fuzzy bunny 07-04-2006 04:59 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
Not market timing, read again.


Actually market timing is exactly what you're doing. You're merely putting a lot of analysis in the middle to make it look like you're making informed decisions.

If this process you describe was so foolproof and so easy, why havent any of the mutual fund managers employed these strategies to put out a fund offering to employ it? With such a sure fire approach with limited risk and downsides, and huge returns, people would flock to their doors.

Oh wait...exactly that has happened a bunch of times until the specific system being employed failed...

I'm sorry for beating you up a little, but the evidence is pretty much in. Index investing may not be the best, but the active strategies definitely dont work.

eyetri2 07-04-2006 05:09 PM

Re: Young Pup looking for wisdom
 
Wow! A long cabin that will cost you 2 million bucks to build? *How many of us can fit in that?

From one (soon to be former) military person to another, you are doing well, very well. *Just a couple of things:

I am overseas as well in Asia. *What time are the markets open for you that you can do your trading and not interfere with work? *I would have to be up at 2 AM.

I do systematic trading as well both in taxed and tax-deferred accounts. *It has done well up until the last few months of slaughter. *Will I stick with it? *Yes. *Has it been hard recently? *Yes. *But I am 30 and I can live with the volatility.

Having said that, is most of my taxable account money in dividend paying stocks where I currently make 8%/yr (not all qualified) no matter what the market does? *Yes. *You have to know where you can take your risks and sleep at night.

I do commend you for the success that you have had over the last decade. *But are you looking for wisdom or are you tooting your own horn? *It seems more like the latter.

Finally, I'll take you up on your stock game. *In fact, I will only pick one stock, dividends reinvested to be fair. *We can start the game on any day you want. *My pick (as much as some people will start screaming at me): NFI.

eyetri2

cute fuzzy bunny 07-04-2006 05:13 PM

Re: Young Pup looking for wisdom
 
Oh heck, CANSLIM's that old Investors Business Daily strategy. I used to fiddle with that in the late 90's.

Its a data mining product from looking at stocks since 1973, and its a momentum strategy using technical analysis that stresses bailing out when prices start dropping. Works great when theres good momentum in growth stocks.

Stops working when most of the stuff you buy all drops to your stop loss, and then the next stuff does too, and the next, and the next. Then by the time the signals go off to get back in, you've missed a big chunk of the upward movement.

It'll work for a couple of years, maybe 5, maybe 10. GREAT strategy for the late 90's. Really lousy strategy when Growth is out of favor or the markets 'drunk'...which is pretty often.

macdaddy 07-04-2006 05:14 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger

I put in an 06 with 20 years service and it came out to 4k/month... I don't see how this would increase over time since the active duty raises are probably the same as (or less than?) the mandated CPI pension raises. 4k/month + healthcare is a really nice pension at 45.

Quote:

Your goal is to have a net worth of at least $4M at age 45, be able to retire on at least $60,000 per year in todayís dollars and build a log cabin worth over $2M to retire to.
If you consistently save 50% of your pre tax income (so 35k this year and increase it as your pay increases) and earn a 10% + inflation return (the hard part... but maybe you have that covered) then you'll have (combined with your Roth account) a little over 2 million in liquid cash. If you add in your rental properties, any windfalls, and any money from your wife then you could have a shot at 4 million in assets plus the pension when you retire at 45. I see it as possible... the pitfalls are expensive kids (tuition for school?) and a less than 10% return, especially in the early years. Even if you don't hit it exactly I think you will come close, if you really can save 50% of pre tax income. Property tax on a 2 million dollar cabin, if the money is in the cabin and not the land, is probably a minimum of 10k or 15k a year... (1% of the structure cost).

Cool Dood 07-04-2006 05:21 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by Cute Fuzzy Bunny
Oh heck, CANSLIM's that old Investors Business Daily strategy. I used to fiddle with that in the late 90's.

Its a data mining product from looking at stocks since 1973, and its a momentum strategy using technical analysis that stresses bailing out when prices start dropping. Works great when theres good momentum in growth stocks.

Stops working when most of the stuff you buy all drops to your stop loss, and then the next stuff does too, and the next, and the next. Then by the time the signals go off to get back in, you've missed a big chunk of the upward movement.

It'll work for a couple of years, maybe 5, maybe 10. GREAT strategy for the late 90's. Really lousy strategy when Growth is out of favor or the markets 'drunk'...which is pretty often.

Ding ding ding!

Oh wait, that one's yours ;)

cute fuzzy bunny 07-04-2006 05:26 PM

Re: Young Pup looking for wisdom
 
You're in luck...on hollidays I only charge 50c to use one of my trademarks.

Uh oh...no you arent...you're Canadian...its not Independence Day for you...

That'll be five bucks.

PsyopRanger 07-04-2006 05:26 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by eyetri2
Wow! A long cabin that will cost you 2 million bucks to build? How many of us can fit in that?

From one (soon to be former) military person to another, you are doing well, very well. Just a couple of things:

I am overseas as well in Asia. What time are the markets open for you that you can do your trading and not interfere with work? I would have to be up at 2 AM.

I do systematic trading as well both in taxed and tax-deferred accounts. It has done well up until the last few months of slaughter. Will I stick with it? Yes. Has it been hard recently? Yes. But I am 30 and I can live with the volatility.

Having said that, is most of my taxable account money in dividend paying stocks where I currently make 8%/yr (not all qualified) no matter what the market does? Yes. You have to know where you can take your risks and sleep at night.

I do commend you for the success that you have had over the last decade. But are you looking for wisdom or are you tooting your own horn? It seems more like the latter.

Finally, I'll take you up on your stock game. In fact, I will only pick one stock, dividends reinvested to be fair. We can start the game on any day you want. My pick (as much as some people will start screaming at me): NFI.

eyetri2

I am not a day trader so I don't watch the markets daily. I really only check my investments, once a week.

Iíll take one from my own holdings:
Dow Jones Global Titans Euro (Ticker EXI2.SG) - Purchase Price - Ä21.49
It closed today at Ä21.59, so I will start there.

NFI closed at $32.42

Letís start there.

Glad to meet you, why do you like NFI?

Nords 07-04-2006 05:34 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
The retirement is based on your base pay when you retire, if someone retired 5-10 years ago, they do not make as much as today, though they are adjusted for inflation.*
See the calculator here:* https://www.dod.mil/militarypay/retir..._finalpay.html

Psyop, I hope you made a typo, because otherwise I hate breaking this news from that link: *"Remember, the Final Pay retirement system only applies to members who first entered Service before September 8, 1980."

If you're 29 today (born in 1975/6?) then you're looking at REDUX or High Three. *And I sure hope you're looking at High Three.

You mentioned "O-6 at 20" but to retire at that paygrade you'd have to have a minimum of two years' service at that rank, and perhaps three depending on the rules in effect when you apply for retirement. *Frankly I'd hate to be a member of a service where mortality rates are so high that they're selecting O-6s at 18 years of service, and perhaps DOPMA is still mandating O-6 selection at around the 20-21 year point. *Of course I may have missed a rule change and your community may be moving up the ranks a little faster.

For the rest of the board, military pay has improved dramatically over the last 10 years. *Recently it's been linked to the ECI, although Congress may change their mind at any time about that, so for now it's actually keeping pace with the wage growth at McDonald's. *(Maybe not GM or Silicon Valley, but at least it's linked to something that might go up every year.) *Some ranks are also targeted for higher pay raises to account for understaffed ratings or critical skills. *And I sure hope the Rangers are pulling down as much bonus/retention money as the SEALs...

Of course my spouse is still fuming that my military COLA increase (tied to CPI) this year was higher than her ECI-linked military pay raise. *It seems that I got more money for sitting on my butt than she got for working hers off.

PsyopRanger 07-04-2006 05:39 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by macdaddy
I put in an 06 with 20 years service and it came out to 4k/month... I don't see how this would increase over time since the active duty raises are probably the same as (or less than?) the mandated CPI pension raises. 4k/month + healthcare is a really nice pension at 45.

If you consistently save 50% of your pre tax income (so 35k this year and increase it as your pay increases) and earn a 10% + inflation return (the hard part... but maybe you have that covered) then you'll have (combined with your Roth account) a little over 2 million in liquid cash. If you add in your rental properties, any windfalls, and any money from your wife then you could have a shot at 4 million in assets plus the pension when you retire at 45. I see it as possible... the pitfalls are expensive kids (tuition for school?) and a less than 10% return, especially in the early years. Even if you don't hit it exactly I think you will come close, if you really can save 50% of pre tax income. Property tax on a 2 million dollar cabin, if the money is in the cabin and not the land, is probably a minimum of 10k or 15k a year... (1% of the structure cost).

Year of Retirement: 2020
Years of Service at Retirement: 25 (I have some reserve time)
Grade at Retirement: W-4

Economic Factors

Inflation Rate: 3%
Annual Active Duty Pay Raise: 2.5%
Tax Rate: 25%

Monthly Pay = $4,973

What if I simply invested in one of these investments with 10% of my holdings once per year and stayed in index funds the rest?

MLIIF World Gold, posted 116% returns in the first three years of the bear market.
Value Partners A, gained 113%.
Parvest China C, meanwhile, is up 440% in the last five years.
Baring Korea Trust is up 320%.
57% in the last three months from UBS EF-Asian Technology
85% in the last six months from RP Selection Europe
141% in the last two years from CA Funds Thailand Cla

This would put me at least around 15% gains per annum.

PsyopRanger 07-04-2006 05:45 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by Nords
Psyop, I hope you made a typo, because otherwise I hate breaking this news from that link: "Remember, the Final Pay retirement system only applies to members who first entered Service before September 8, 1980."

If you're 29 today (born in 1975/6?) then you're looking at REDUX or High Three. And I sure hope you're looking at High Three.

You mentioned "O-6 at 20" but to retire at that paygrade you'd have to have a minimum of two years' service at that rank, and perhaps three depending on the rules in effect when you apply for retirement. Frankly I'd hate to be a member of a service where mortality rates are so high that they're selecting O-6s at 18 years of service, and perhaps DOPMA is still mandating O-6 selection at around the 20-21 year point. Of course I may have missed a rule change and your community may be moving up the ranks a little faster.

For the rest of the board, military pay has improved dramatically over the last 10 years. Recently it's been linked to the ECI, although Congress may change their mind at any time about that, so for now it's actually keeping pace with the wage growth at McDonald's. (Maybe not GM or Silicon Valley, but at least it's linked to something that might go up every year.) Some ranks are also targeted for higher pay raises to account for understaffed ratings or critical skills. And I sure hope the Rangers are pulling down as much bonus/retention money as the SEALs...

Of course my spouse is still fuming that my military COLA increase (tied to CPI) this year was higher than her ECI-linked military pay raise. It seems that I got more money for sitting on my butt than she got for working hers off.

We have finally started to keep up with inflation. I got $20K for re-enlisting (tax-free), $20K for going warrant and the last three years, I haven't made any taxable income but got an extra $800 per month while being in Iraq.

They are finally starting to give bonuses to the experience rather than the newbees.


P.S. Not a Ranger anymore, when I was younger.

cute fuzzy bunny 07-04-2006 05:50 PM

Re: Young Pup looking for wisdom
 
Let me see if I can put this as simply as possible.

If you're pulling in more than about 6% before taxes, you're taking on some risk. The trick is finding out what it is.

If you're pulling in more than 10-11% before taxes, you're taking on a shitload of risk. It should be pretty obvious what it is.

Its not going to be a single drop thats going to kill you, your stop losses will protect you from that.

Its serial ongoing year after year sequential drops up to your stop loss limits, or sitting in cash for the couple of days that the market has a major movement upwards that'll kill you. Slowly.

Or its the day your stop loss kicks in and theres a liquidity problem and your order just doesnt sell for a while.

You do know about liquidity and stop loss problems, yes? There are probably far more investors than you with 6-9% stop losses, and their stop loss sells will accellerate the downward drop and the selling. I've heard of some people see a sale at a 35% loss due to sudden loss of liquidity. If it sells at all. Oh yeah, and within an hour after the sale the rebound kicked in and the issue closed flat or up, and there they were, holding their d--k in their hands...

Nords 07-04-2006 05:53 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
Year of Retirement: 2020
Years of Service at Retirement: 25 (I have some reserve time)
Grade at Retirement: W-4
Economic Factors
Inflation Rate: 3%
Annual Active Duty Pay Raise: 2.5%
Tax Rate: 25%
Monthly Pay = $4,973

Or, in today's High-3 dollars, $3446/month.

BTW two other recent changes may affect your investment options.

First, the Roth contribution on earned income has just been waived. *Even if you didn't have any earned income for 2006 (due to combat tax-free pay) you can still contribute to an IRA.

Second, you can contribute up to $15K to the TSP. *That may not be much help when you're in a combat zone but it'll sure boost your TSP balance and lower your taxable income when you get back. *Of course the TSP funds may not be the type of asset allocation you have in mind...

Nords 07-04-2006 05:56 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by Cute Fuzzy Bunny
Let me see if I can put this as simply as possible.

Geez, fellas, what if it turns out that PsyopsRanger really is the next Nicolas Darvas, Gary "How I Trade For A Living" Smith, Jesse Livermore, or Warren Buffett? Just because the odds are stacked high against him is no reason to give up!

My research indicates that I'm not the successor to those guys, so I'm pretty sure that the job is open...

PsyopRanger 07-04-2006 06:10 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by Cute Fuzzy Bunny
Let me see if I can put this as simply as possible.

If you're pulling in more than about 6% before taxes, you're taking on some risk. The trick is finding out what it is.

If you're pulling in more than 10-11% before taxes, you're taking on a ****load of risk. It should be pretty obvious what it is.

Its not going to be a single drop thats going to kill you, your stop losses will protect you from that.

Its serial ongoing year after year sequential drops up to your stop loss limits, or sitting in cash for the couple of days that the market has a major movement upwards that'll kill you. Slowly.

Or its the day your stop loss kicks in and theres a liquidity problem and your order just doesnt sell for a while.

You do know about liquidity and stop loss problems, yes? There are probably far more investors than you with 6-9% stop losses, and their stop loss sells will accellerate the downward drop and the selling. I've heard of some people see a sale at a 35% loss due to sudden loss of liquidity. If it sells at all. Oh yeah, and within an hour after the sale the rebound kicked in and the issue closed flat or up, and there they were, holding their d--k in their hands...

You keep insinuating that I am some sort of day trader, I buy and hold for 6 months Ė 3 years sometimes. If an investment drops below -10%, I replace it with another.

I also invest globally and get help from the rising Euro, Franc, etc. and I am also now investing in Canada.

I do not jump from cash to investments at the drop of a hat. I havenít been in all cash ever. Out of 10 of my investments, normally 6 go up, 3 go down and get stop lossed, 1 goes sideways.

The six that go up, outweigh the 3 that go down by 30% or more. Itís that simple?

I buy stocks, mutual funds, sometimes options and CTAís.
Look at my holdings I posted, what is risky in this?


brewer12345 07-04-2006 06:19 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
Look at my holdings I posted, what is risky in this?*


At some point, you will find out, I suspect.

I think you are advocating chasing return, but I'm not sure you are also paying adequate attention to risk-adjusted return.

cute fuzzy bunny 07-04-2006 06:19 PM

Re: Young Pup looking for wisdom
 
Hey, if you're happy, i'm happy.

PsyopRanger 07-04-2006 06:23 PM

Re: Young Pup looking for wisdom
 
I just read one of the Mod's quotes

"Live like you're dying, invest like you're immortal."

That's all I am trying to do ;)

PsyopRanger 07-04-2006 06:24 PM

Re: Young Pup looking for wisdom
 
Did I make a first impression as "Billy the Kid" investment risk slinger yet? ::)

Seriously, thank you all for your comments and critiques, it makes me think and challenges me to think of other options.

Nords 07-04-2006 08:22 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
"Live like you're dying, invest like you're immortal."
That's all I am trying to do ;)

The first part of the phrase you seem to have down.

The second part reflects that you can't predict your lifespan and so you shouldn't try to make your portfolio run out during your funeral procession. Maybe it's not such a bad idea to be able to live on a pension/annuity or dividends instead of consuming principal.

As for risk-adjusted return, have you run your asset allocation through some sort of volatility or risk-adjusted analysis like Financial Engines? "Six up, three down, one sideways" doesn't describe whether you're getting compensated for additional volatility or single-stock or single-asset risk...

OTOH if you're able to beat the losses with your cash flow (before retirement) or live within your pension (after retirement) then you should do anything you want with your retirement portfolio.

unclemick 07-04-2006 08:39 PM

Re: Young Pup looking for wisdom
 
Hmmmm

Here are some random 4th of July musings:

Be glad of your male hormones - both you and the Rangers need them. I too did well starting out - at about 15 years in investing I'm guessing here - my long term average begin to approach that of the market.

With the great benefit of hindsight - here's what I did (truth told, entirely by accident) - maxed my 401k every year - plunka, plunka boring DCA S&P 500 index fund - while I invested my real money(that was going to make me well off) - in rental RE, timberland, gold, foriegn stocks/mutual funds, even some raw semi precious stones and collector coins - missed commodities somehow - skipping a list of some boring VG funds like Wellesley(forum joke). 1966-1993 at the end of the period 'da benchmark' boring DCA Index fund was 80% plus of my ER stash - 200k, not a million. That came after in ER by doing mostly nothing except sitting in balanced index during the 90's. I'm oversimplifying here - but the point is - in my case the benchmark won.

Two winners I know - one a woman engineer(Home Depot) and an lead engineer(JNJ) knew when they bought right, invested big and just held with some diversifying around their primary winner. Two others I know were real estate - houses(8) in CA and apartment units in greater Denver.

Don't quote me on this - but I think Bernstein's 15 Stock Diversification Myth calculates your odds at 1 in 6. I think there was a Bogle article in the 80's estimating 2 in 5 of beating the then S&P over ten years. Any skill you bring to the party - gets buried in the stats.

So I owe my ER to indexing - lead sled dog is Target Retirement 2015.

However - hormones are incurable. At the ripe old age of 62/63 this month - 15% in individual stocks - I'll be sure to sure to let this forum know when I beat the stuffing out of my balanced index and begin posting from my villa in the Bahamas.

In life you gotta play your offense - but never forget your defense.

heh heh heh heh - 1966-2006 so no big rush - right. Off to see the fireworks.

Brat 07-04-2006 08:53 PM

Re: Young Pup looking for wisdom
 
As the mother of a son who got hooked by me on investing in middle school, I understand your point of view. *It is much easier for folks, other than a parent, to hoist a warning flag. *A lot of the guys who are giving you feedback have been there, done that - both professionally and investing. *We want to save you the hard lessons we have learned.

My Mother (who is pushing 90) used to tell me not to spend all my money in one place. *The lesson there is to parse out your resources. *There is nothing wrong with setting aside a portions of your retirement investments for your approach and another for another investment approach. *Enter more than one horse in this race.

I am at the other end of life's cycle (65+).. retired at 48 with a modest pension annuity, and IRA savings to suplement. *Even there our allocation in the IRAs is 20% international. *The other 80% is in TIPS, cash. and two balanced mutual funds with a Forbes "A" rating for bear markets. *Our IRR for ytd for the portfolio is 8.2%. *Not hot, but in this market where we are withdrawing less than 4%/yr, OK.

You have the advantage of folks who have nothing to gain by their comments.* We want you to win the race to financial independence.* Some will push your buttons, but only out of kindness.* We are your Great Aunts and Uncles who want the best for you and your family.

spideyrdpd 07-04-2006 10:36 PM

Re: Young Pup looking for wisdom
 
I told you its a conservative bunch. Compared to them your like General Custer going to attack the indians at bighorn

samclem 07-04-2006 10:55 PM

Re: Young Pup looking for wisdom
 
spideyrdpd,
Right--Custer had a plan . . .


Quote:

Originally Posted by PsyopRanger

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.

Lance,

Just to clear things up for others--the military does not provide long term care (or long term care insurance) to retirees. You can buy it if you want (through the federal program administered through OPM), but it is far from free.

And, as you've pointed out--a pension of $6k per month, for a guy who is retiring at 20 years, is not possible. The individual would need to be a O-9 at retirement (and to have held that grade for three years=a pin on at 17 years). Nope. Well, maybe not impossible, but it would involve a lot of luck, bosses who can write like Hemingway, stopping a bullet on the way to the POTUS, devising and implementing a Marshall Plan for Iraq, etc. Your revised number is a lot more realistic.

I'll add myself to those favoring a more "conservative" investment approach. Simple, dull, backed by boring peer-reviewed research, and something that has worked for milions for people without need to validate it in the rear-view mirror. What you are doing seems to be working (for you, to you), so I'll not try to disuade you from doing it. However, if you haven't done so already, I'd urge you to read William Bernstein's "The Intelligent Asset Allocator" or "Four Pillars of Investing." I think you'll find some useful stuff there.

I'm recently retired from the USAF, have spent a lot of time at Ft Bragg among all types of SOF characters. Best of luck to you--you know you'll be in high demand for a long time. The work being done by SOF today (all the SOF disciplines, including Psyops) is tough and incredibly important.

Cool Dood 07-04-2006 10:58 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by Cute Fuzzy Bunny
You're in luck...on hollidays I only charge 50c to use one of my trademarks.

Uh oh...no you arent...you're Canadian...its not Independence Day for you...

That'll be five bucks.

Heh... that reminds me of the sign a store in a touristy location could use:
Quote:

Milk: fifty pesos

Leche: cinco pesos
I guess it works even better in a language that bears little resemblance to English, but then the joke would be less clear ;)

Enigma 07-04-2006 11:44 PM

Re: Young Pup looking for wisdom
 
Psyop,

Way off topic, However I will say it. Make time to have some fun along the way and spend a little bit of dough too. I started at 19 and hit it hard. Investing like a maniac. Slamming as much as I could where ever I could.

At about age 33-34 "I melted" as I put it. Just flamed out big time. I figure I knocked at least 5-7 yrs off my life span watching the ticker like a maniac, trading on margin, etc. Age 40 next month for me. It looks like things are going to work out ok but "melting" takes a lot outta you and a huge effort to recover emotionally to find out who you are and who you want to be.

justin 07-05-2006 08:06 AM

Re: Young Pup looking for wisdom
 
Psyops - question for you re: your real estate investments. You said you are debt free, although you also have two residential rental units. I assume they are leveraged to some extent. They are held in a holding company from what you wrote. Did you not have to personally guarantee the loans on those properties, or did you get a non-recourse loan?

PsyopRanger 07-05-2006 10:00 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by justin
Psyops - question for you re: your real estate investments. You said you are debt free, although you also have two residential rental units. I assume they are leveraged to some extent. They are held in a holding company from what you wrote. Did you not have to personally guarantee the loans on those properties, or did you get a non-recourse loan?

I said I am ďbad debtĒ free, meaning liabilities that take money from my monthly income.

They are personally guaranteed and then quit claimed to the LP.

Both homes after PITI, management and expenses put $225-$275 per month into my pocket or actually into my LLC account with an emergency fund for repairs, that is aside from my personal funds.

The 1st home has been occupied by a widow for over 10 years who has no desire to leave.
The 2nd home has been occupied by a defense contractor for the last 5 years in an extremely high rental area. Most SFH rent within 1 week.

If I lose occupancy, I could easily pay both mortgages for at least 6 months.

I suppose you are now going to argue my definition of ďbad debtĒ?

So here is my definition:

Bad debt is a debt that takes money out of your pocket monthly: Credit Cards, HELOC used for liabilities, personal loans, etc.

Good debt is debt acquired with little capital risk that is then recouped as soon as possible and produces income or asset appreciation.

I buy my properties under 85% FMV, with 10-20 percent down. When the loan is seasoned, I refinance and pull my original capital out and apply it to another asset. Therefore my initial capital is never at risk of loss.

Of course the markets could tank, no renters, foreclosure, yada yada, and that is investment risk. However, I am risking my credit not any realized capital after it is pulled out.

I donít plan on holding these properties forever instead I will 1031 exchange into a multiple unit eventually.


Gumby 07-05-2006 10:20 AM

Re: Young Pup looking for wisdom
 
..

justin 07-05-2006 10:28 AM

Re: Young Pup looking for wisdom
 
And the bank will get all your shares of any LLC's or LP's you own that in turn own other rental properties!

PsyopRanger 07-05-2006 10:36 AM

Re: Young Pup looking for wisdom
 
[
Sure if they foreclosed and I couldn’t sell prior to the 6 month foreclosure process.

Isn’t this the same with a personal residence?

Could someone lose there job and have the same thing happen to there personal home?

You could get in a car accident today and be sued for everything in your name?

Does this keep you from investing?

justin 07-05-2006 10:40 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
I suppose you are now going to argue my definition of ďbad debtĒ?

I have no qualms with your definition of "bad debt". I misread your earlier post as you are debt free except the car loan, not "bad debt" free. I'm highly leveraged too with liabilities (in the GAAP-sense, not Kiyosaki-sense) multiple times my net worth. But very good debt.

PsyopRanger 07-05-2006 10:41 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by justin
And the bank will get all your shares of any LLC's or LP's you own that in turn own other rental properties!

No offense but this attorney says you are misifformed:

The purpose of holding your assets in a properly structured and drafted LP is that if you are ever sued, and if the plaintiff is successful in obtaining a judgment against you, then, (under the Uniform Limited Partnership Act as adopted in 49 states) all the plaintiff can get is a "charging order" against the income portion of your limited partnership interest. The plaintiff (who becomes a "judgment creditor" after a successful lawsuit) will not become a substituted partner, will have no voting rights in the limited partnership, cannot remove you as a general partner - so you continue in 100% control of the assets, cannot force you to dissolve the LP or distribute profits, cannot force you to sell or liquidate assets to pay the creditor, and only if the general partner(s) decide to distribute profits will the judgment creditor receive anything except (a nasty "poison pill" under Rev. Rule 77-137) the right to pay income taxes on the income "earned" by the LP - whether or not that income is distributed!





PsyopRanger 07-05-2006 10:44 AM

Re: Young Pup looking for wisdom
 
Not to mention that the General Partner of my LP is a LLC and then they would also have to sue the LLC.

If foreclosure however and the loan is in my name, it is my credit hit.

I also could partner with others in a syndicate and spread liability.

Forgive my ignorance, what is GAAP?

cute fuzzy bunny 07-05-2006 10:46 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
Sure if they foreclosed and I couldnít sell prior to the 6 month foreclosure process.

Isnít this the same with a personal residence?

Could someone lose there job and have the same thing happen to there personal home?

You could get in a car accident today and be sued for everything in your name?

Does this keep you from investing?

The jumps from specifics to global concerns are rather sudden, arent they?

I think the point being made is that the debt is only "good" if risk adjusted. I think Nords made that point sometime yesterday. You need a good broad risk analysis of your investments to see how much risk you've taken on in exchange for your returns.

Risks of a 'lose everything' car accident, foreclosure of personal residence and long term job loss for an employable person are fairly low in comparison to potential losses in investment properties.

Even if the risk is manageable, its nice to know the risk exposure.

I think Brat said we're just trying to help you identify which shovels might hit you in the face. One of them is thinking "good debt" doesnt need to be factored into a risk profile. Another is that stop losses dont fully protect you at 10%. I'll add a third that when you start getting a little nervous, throwing a lot of other "good" or "safe" points out doesnt mitigate the original question of risk or downside even a little bit.

brewer12345 07-05-2006 10:47 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
Not to mention that the General Partner of my LP is a LLC and then they would also have to sue the LLC.

If foreclosure however and the loan is in my name, it is my credit hit.*

I also could partner with others in a syndicate and spread liability.

Forgive my ignorance, what is GAAP?

I would be uncomfortable personally guaranteeing a loan taken out by an LLC that held property. *That is exactly the kind of entanglement that could be used to "pierce the corporate veil".

GAAP = Generally Accepted Accounting Practices. *The fact that you are asking tells me a lot about how much fundamental analysis you do. *But hey, different strokes...

Gumby 07-05-2006 10:51 AM

Re: Young Pup looking for wisdom
 
..

justin 07-05-2006 10:54 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
Not to mention that the General Partner of my LP is a LLC and then they would also have to sue the LLC.

If foreclosure however and the loan is in my name, it is my credit hit.

I also could partner with others in a syndicate and spread liability.

Forgive my ignorance, what is GAAP?

GAAP - you've seriously never heard of it? - Generally Accepted Accounting Principles. Business/Accounting 101 (which I never took).

So the GP in your LP is an LLC, which presumably you also own. A judgment creditor is going to attach and take your ownership interests in the LLC too. Then when the judgment creditor controls the LLC, they'll be the GP in your LP. Then they've got the power.

Or maybe you've tied up ownership of the LLC somewhere?

Then there's always corporate veil-piercing like brewer mentioned. You don't happen to have an undercapitalized business or a business that isn't sufficiently separated from other businesses or personal affairs do you?

Martha 07-05-2006 10:58 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
No offense but this attorney says you are misifformed:

The purpose of holding your assets in a properly structured and drafted LP is that if you are ever sued, and if the plaintiff is successful in obtaining a judgment against you, then, (under the Uniform Limited Partnership Act as adopted in 49 states) all the plaintiff can get is a "charging order" against the income portion of your limited partnership interest. The plaintiff (who becomes a "judgment creditor" after a successful lawsuit) will not become a substituted partner, will have no voting rights in the limited partnership, cannot remove you as a general partner - so you continue in 100% control of the assets, cannot force you to dissolve the LP or distribute profits, cannot force you to sell or liquidate assets to pay the creditor, and only if the general partner(s) decide to distribute profits will the judgment creditor receive anything except (a nasty "poison pill" under Rev. Rule 77-137) the right to pay income taxes on the income "earned" by the LP - whether or not that income is distributed!


You do not provide a link, but this information is not quite correct, thoughit may be close to accurate in some states. Here is a thread where I talked about limited partnerships and creditor rights: https://www.early-retirement.org/forums/i...31545#msg31545

I used to practice in this area of law and I used to be a bankrutpcy trustee. To quote myself responding to another poster:

"The Uniform Limited Partnership Act provides that a creditor cannot take assets of a limited partnership to satisfy the debt of a limited partner. Basically, the partnership isn't liable for the debts of the limited partners. It also provides that a creditor of a limited partner can "charge" that partner's interest to pay a judgement, and that the creditor will be treated like an assignee of the partnership interest. This does not mean that a creditor cannot take a limited partner's interest in the partnership to satisfy that partner's debt.

Some states do, however, limit the ability of the creditor to "take" the partner's interest. This is where your charging order comes in. The creditor will get an order of the court requiring any distributions to the partner be paid to the creditor. The creditor just sits and waits or settles with the debtor or other partners.

However, the trend is to allow the liquidation of partnership interests where the creditors judgment cannot be satisfied by the charging order. Because of this trend and the fact you can't be sure where you will get sued and what state's law applies, there is always the risk that a creditor or bankruptcy trustee will successfully obtain ownership of the limited partner interest.

The practical problem still remains, however. Even if the creditor gets ownership of the limited partnership interest, it is going to be hard to force a distribution. There also is the tax risk you mentioned, but I believe all the LPs will suffer the same consequence. Nevertheless, a determined creditor or trustee will likely be able to squeeze something out of the partnership interest.

It is worse for the debtor if the debtor is both the general partner and a limited partner. Say dad sets up a FLP. Dad is the GP and is a LP along with his kids. Dad ends up in financial trouble and files bankruptcy. As trustee, I would step into his shoes as GP and force a distribution to the LPS.

To protect himself, Dad might have formed a LLC to hold the general partner interest. This makes my job tougher but not neccessarily impossible. Dad files bankruptcy. His LLC is property of the bankruptcy estate. As trustee, I take action as the member of the LLC to cause the LLC to cause the GP to order a distribution to the LPs. It starts getting hard if the LLC has a number of members."



justin 07-05-2006 11:11 AM

Re: Young Pup looking for wisdom
 
He he, thanks martha for saying in more specific details what I was trying to say!

I often wonder if all these "shields" to liability and supposed tax benefits end up costing more in the long run than what they are worth.

You've got the annual LLC and/or LP filing fees w/ the Secretary of State where you are organized, any other states you are registered in, etc. Then you may have to pay an annual fee for a registered agent in each state if you don't have an office or some phyisical presence. Then you've got your corporate books to maintain for each entity, and all the annual board meeting/corporate forms to keep to show that it's a real entity. Then comes tax time with multiple professional fees for tax prep and more complications. Higher chance of an audit I'd assume.

You're probably already carrying a good bit of insurance on the properties since that's one of the standard mortgage's terms, why not pay the extra couple hundred bucks a year and buy a couple million in umbrella policies for the sue-happy tenants or car accident victim? Wouldn't those policies be 100x simpler and much cheaper than the complicated corporate shell game you are playing for (what I assume) is a rather small-time residential real estate rental business?

I've never really understood the point of all of the complications for what you are doing. And I do have some experience setting up my own business (as a general partnership w/ adequate insurance) and other businesses on a pro bono basis, and advising family/friends on pros/cons of different corporate structures.

That's just another complaint I have against the Kiyosaki mentality. It seems all of his followers have to develop some uber-complicated corp structures (that do next to nothing) for small time business enterprises. When asked about their rationale behind their structure, it is pretty simple to see there isn't a sound basis for their decisions. Sometimes these structures are appropriate, sometimes not.

PsyopRanger 07-05-2006 11:14 AM

Re: Young Pup looking for wisdom
 
GAAP Ė I guess Iím not hip to internet lingo and acronyms?

Trying working in the military, we have a 400 page manual of all our acronyms.


Okay, so there is risk, I never denied that.

If for some reason a have a property that I cannot rent or sell within a year, I could be held liable and foreclosed.

We are now mixing estate planning practices with foreclosure law?

How do you safely invest in real estate then?

Does anyone here own any investment real estate?

PsyopRanger 07-05-2006 11:17 AM

Re: Young Pup looking for wisdom
 
So I guess the only way to attain ER, in this forums opinion, is to invest in paper assets preferably ones that donít perform over 6-8% and make sure your risk exposure is a minimal as possible?

justin 07-05-2006 11:19 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
GAAP Ė I guess Iím not hip to internet lingo and acronyms?

You're missing the point. It isn't internet lingo! It's business 101!!!! Ever read an annual report for any of the companies you invest in? Ever notice some statement saying "prepared in accordance with GAAP" or some such boilerplate?

I feel like you're taking advantage of our free investor's seminar here! ;)

PsyopRanger 07-05-2006 11:22 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by justin
You're missing the point. It isn't internet lingo! It's business 101!!!! Ever read an annual report for any of the companies you invest in? Ever notice some statement saying "prepared in accordance with GAAP" or some such boilerplate?

I feel like you're taking advantage of our free investor's seminar here! ;)

As someone already pointed out, I am a type A personality, no time for the small print.

Is that what that prospectus thing is? ;D

laurence 07-05-2006 11:24 AM

Re: Young Pup looking for wisdom
 
Actually, if you wanted to paint us with an overbroad brush, it would be better to say, "The only way to ER, in this boards opinion, is to invest in low cost index funds from Vanguard and earn between 10-11% and live below your means!".

That's the long and short of it. *Except that's not everyone's complete take at this board, plenty of people agree to disagree on a myriad of points. *Nobody here is calling out your mom, btw, do what you want, let us know how it goes!

justin 07-05-2006 11:30 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
So I guess the only way to attain ER, in this forums opinion, is to invest in paper assets preferably ones that donít perform over 6-8% and make sure your risk exposure is a minimal as possible?

Maybe:

Invest in a widely diversified portfolio of low cost investments, the complication, liquidity and volatility of which do not prevent enjoyment of life.

In practice, yes, 6-8% is probably an appropriate range of expected returns (depending on one's risk profile) that many will settle for.

Many folks here passively (buy-n-hold) invest in index funds or low cost actively managed funds. Annual rebalancing. Frequently we see investors here (myself included) with a significant allocation to "risky" investments such as emerging markets, international funds, small cap funds, value funds, commodities, precious metals, foreign debt, etc. The goal, however is to have a sufficiently diversified portfolio such that the shocks felt by a severe correction in one or two asset classes will hopefully be dampened by decent performance in other asset classes. Some parts of our portfolios might produce 12% returns on average, other parts might produce 5% returns on average.

brewer12345 07-05-2006 11:31 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
So I guess the only way to attain ER, in this forums opinion, is to invest in paper assets preferably ones that donít perform over 6-8% and make sure your risk exposure is a minimal as possible?*

Uh-oh, he is talking about "paper" assets... *::)

Ranger, I think you misunderstand the intent of most of these posts. *Most people have pointed out some (fairly technical) holes in your armor. *Its not that investing in a risky portfolio/asset is bad, it is just that you need to be aware of the potential risks as well as the potential rewards. *I would have to say that you appear not to have a complete grasp of the risks you are running and/or are overly confident that the corporate structures you have set up will protect you if things get ugly. *You might consider listening to what you are being told, given that we are trying to help you.

justin 07-05-2006 11:38 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
As someone already pointed out, I am a type A personality, no time for the small print.

Is that what that prospectus thing is? ;D

Details are important, costs and fees matter.

I think you'll probably learn a lot about investing here. Hopefully we can challenge some of your beliefs, and you'll adopt a few of our practices.

It sounds like you started investing at a good time (2001-2002?). If you had started in 1998-1999 like I did, you would have received a great course in Investing 101 thanks to Mr. Market. Everyone who thought they were a hot shot investor in 1999 and 2000 very painfully realized that "dot com" didn't "endless 35-50% per year profits".

Hopefully you'll get your own personalized version of the Investing 101 course sooner rather than later since the tuition only goes up as your portfolio gets larger!

PsyopRanger 07-05-2006 11:42 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by brewer12345
Uh-oh, he is talking about "paper" assets... ::)

Ranger, I think you misunderstand the intent of most of these posts. Most people have pointed out some (fairly technical) holes in your armor. Its not that investing in a risky portfolio/asset is bad, it is just that you need to be aware of the potential risks as well as the potential rewards. I would have to say that you appear not to have a complete grasp of the risks you are running and/or are overly confident that the corporate structures you have set up will protect you if things get ugly. You might consider listening to what you are being told, given that we are trying to help you.

I understand that and appreciate the wisdom, it seems as though all my strategies are picked apart using the worst case scenario approach to prove they are very risky.

Maybe, you all are right, I haven't been slapped around enough by my risk, at least I am in the right place to find an alternative to that.

There are many people who use real estate, stocks, bonds, mutual funds, CDís and are able to retire comfortably.

Because I own 2 rental properties in some entities, they are now going to be foreclosed on and all of my assets seized?

A lot of doom and gloom in here?

I agree with Laurence, I will post only my investments that the people on this board feel comfortable with and let everyone debate my sanity and risk tolerance.

brewer12345 07-05-2006 11:53 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
I understand that and appreciate the wisdom, it seems as though all my strategies are picked apart using the worst case scenario approach to prove they are very risky.

Maybe, you all are right, I haven't been slapped around enough by my risk, at least I am in the right place to find an alternative to that.

There are many people who use real estate, stocks, bonds, mutual funds, CDís and are able to retire comfortably.*

Because I own 2 rental properties in some entities, they are now going to be foreclosed on and all of my assets seized?*

A lot of doom and gloom in here?

I agree with Laurence, I will post only my investments that the people on this board feel comfortable with and let everyone debate my sanity and risk tolerance.*

I suspect that you would have fewer critics and more engaged discussion if you had laid out what the rentals are, you rationale and business case for buying them in the first place, and where you think they will go in the future. Instead, we were treated to a bit of a huckster-ish "bow down and woship my investing acumen" spiel.

Believe me, there are times when some of us are willing to take QUITE a bit of risk in our portfolios ( I have a couple of large bets on volatile sectors right now). But most of us are well aware of the risks we are taking as well as the potential rewards, and usually we risk-takers have plumbed the effects of worst case scenarios at least as thoroughly as the upside case.

Gumby 07-05-2006 11:55 AM

Re: Young Pup looking for wisdom
 
I think Warren Buffett said that the first rule of investing was "Don't lose money." *That doesn't mean you never take a risk. *What it means is that you structure a diversified portfolio so that, over time, you do not run a significant risk of losing principal. *Simply put, if I lose 50% today, I need to gain 100% tomorrow to break even. *Avoiding losses means that you don't need to get such high returns on your winners.

Have you ever read the book "Money Ball"? *It is about baseball, but has some lessons for investing. *It turns out that, over time, the single most important statistic for players other than pitchers is on-base percentage. *Only by getting on base do you get a chance to score, and it doesn't matter how you get there -- a walk is a good as a hit. *A fearsome slugger whose every hit is a home run, but who only bats .225 and strikes out the rest of the time, is not as valuable to the team as the guy who draws a ton of walks and only hits singles but gets on base 50% of the time.

So it is with investing. *While it is exciting to watch one of your investments pound one out of the park, that excitement may come at the cost of watching three others strikeout. *It is far better for your portfolio over the long haul to hit a bunch of singles.


*

SteveR 07-05-2006 11:58 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
I understand that and appreciate the wisdom, it seems as though all my strategies are picked apart using the worst case scenario approach to prove they are very risky.

Maybe, you all are right, I haven't been slapped around enough by my risk, at least I am in the right place to find an alternative to that.

There are many people who use real estate, stocks, bonds, mutual funds, CDís and are able to retire comfortably.*

Because I own 2 rental properties in some entities, they are now going to be foreclosed on and all of my assets seized?*

A lot of doom and gloom in here?

I agree with Laurence, I will post only my investments that the people on this board feel comfortable with and let everyone debate my sanity and risk tolerance.*

Hi Ranger,
I am a bit late to the "party" but wanted to add my two cents.

I think the "doom and gloom" you think you see is actually, a reaction to your reaction to some of the comment being made here. *Some folks here invest for a living...not just for retirement funds but for wages. *That puts them miles ahead of what little I do and I tend to give them a hard listen when they have advice. *

Other folks live on their investments and have no other income. *That makes them very sensitive about what they buy, how long they keep it and when they sell. *Food on the table is a priority and gun slinging buying and selling is not in their best interest. *I don't read them as expounding doom and gloom as much as I see them trying to guide, advise, direct and caution a person they don't know. *

I am not a big time investor. *I got mine the old fashioned way... I earned it...saved it...invested it in a variety of companies I knew something about and kept my hands off of most of it most of the time. *I lost a bunch in 2000 and have not recovered it all yet ( and may never do so). *I was able to go from a six figure negative net worth in 1990 to a seven figure one today. *Not bad considering I am not a dumpster diver or am overly frugal. *The point is, if I can do it, anybody can. *I don't invest for a living... but my living will depend on my investments for the next 35 years. *

At your age you can afford to be speculate more than us old farts that need keep what we have and grow it just north of inflation. *Don't let the "tone" here fool you. *There are many very very sharp folks here and I for one would listen carefully if you want to do well over the long haul. *;)

Good luck and welcome to the board.

Enigma 07-05-2006 01:07 PM

Re: Young Pup looking for wisdom
 
The "what ifs" are given freely as a benefit to you. I too am relatively young and there are many more on these boards with more experience than I. I can learn from their mistakes. What worked for them and what did not.

That said, we all have our own life objectives and risk tolerance. For me the more information the better. I will carefully consider it. Some I may use some I may not, but its ALL worthy information to ponder and run what if senarios.

The information is given freely with the best of intentions and I greatfully accept the gift.

Rich_by_the_Bay 07-05-2006 01:11 PM

Re: Young Pup looking for wisdom
 
I think PsyopRanger just needs the thrill of the hunt; can't help it, really needs it. How many posts in just a few hours?

I don't think the usual approach many of us share around here would be a good fit psychologically at this time for Psy.

Sounds like a bright young guy, a bit of bravado, whatever. Probably will do just fine but has to do it his way.

Psy - I say, carry on as you must. Just watch your step and keep your mind open.

PsyopRanger 07-05-2006 01:25 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by Rich_in_Tampa
I think PsyopRanger just needs the thrill of the hunt; can't help it, really needs it. How many posts in just a few hours?

I don't think the usual approach many of us share around here would be a good fit psychologically at this time for Psy.

Sounds like a bright young guy, a bit of bravado, whatever. Probably will do just fine but has to do it his way.

Psy - I say, carry on as you must. Just watch your step and keep your mind open.

I prefer opinionated and cocky, hey I am in Special Operations.

As much as I am trying to defend my current strategy, these boards have started to make me re-think my aggressive nature.

Maybe easing off and putting 20-30% of allocation in safer investments?

I guess I want ER fast and now and feel this is the way to get there.

Oh man, did I say you guys were rubbing off on me?

justin 07-05-2006 01:31 PM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by PsyopRanger
Maybe easing off and putting 20-30% of allocation in safer investments?
I guess I want ER fast and now and feel this is the way to get there.
Oh man, did I say you guys were rubbing off on me?

I'll throw out a couple of books for suggested reading that helped clear my mind:

William Bernstein -
"Four Pillars of Investing" and for more detail of the same approach: "Intelligent Asset Allocator"

John Bogle
"Common Sense on Mutual Funds"

I found these books to be very persuasive and logical.

Enigma 07-05-2006 01:32 PM

Re: Young Pup looking for wisdom
 
Rich,

I too needed the "rush" I was a trading junkie a CNBC freak, margin maxing, ticker watching junkie. Then *I was hit by 9/11 ( in more ways than one) and Y2K tech collapse. I just finally sold some of my tech holdings at a loss (think money opportunity cost) Then I flamed out big time. Just broadly diversified mutual funds and diverse real estate holdings spread around in different markets and states now.

Still wish I held MSFT bought in 88 though

If you like to read try Confessions of a wall street addict by Jim Cramer. Its not at all like his CNBC programming. A good read about the dark side of the street.

Brat 07-05-2006 04:25 PM

Re: Young Pup looking for wisdom
 
Psyop, you are a great fit for your job, but investing for retirement takes a different mindset.* We want you to ER fast.* 30% in safer investments would be wise.*

A family member is on the management team of a venture capital firm.* Venture capital is the definition of risk investing.* That said, the fund managers are seasoned and very careful.*They have opinions based on their knowledge and experience, as a result they are not at all cocky - in fact they are almost humble.* They often have their own money in the funds.* They require that participants in their funds know the risks, and can sustain them if the investments tank.* Participants are allowed to only a small portion of their resources in this type of fund.* Investors balance with bonds, notes and large cap equities.

IMHO Jim Cramer's rehab didn't stick.

Enigma 07-05-2006 04:50 PM

Re: Young Pup looking for wisdom
 
No doubt on Cramers rehab. His veins are poppin as hard as ever.* :laugh: Interesting read though. I am sure he is following the $$$$ Hedge fund guys seem to be adreline junkies.

On the equity portfolio side. Once I made a solid committment to a 5 years out plan I shifted my equities big time.

I was full on risk cause I had plenty of time to catch up should I fall on my head (Ive been known to do that). Now its broadly diversified. Equities are all in my 401k so the company picks up management fees plus a very generous match.
20% global, 30% mid cap, 50% S&P 500 index / high grade bond hybrid fund.

What I sold a year ago at 50 is now at 57 which womps but you cant look back. I know for the long haul this will serve me better. I cant touch it for another 20 yrs anyhow.

That is tier 2 of my plan so it wont kick in for a long while by design. I am taking a bit of risk in that mix but nowhere near what I had. Not even close.

spideyrdpd 07-05-2006 06:40 PM

Re: Young Pup looking for wisdom
 
You post
they attack
You post they attack
Gee fun for dick and jane.

Do yall really think we are blind to the risk. Has stuff gone wrong ? Has stuff gone right ?
If the market tanked most of us would be hurting . Did we buy a mcmansion that if the tenant did pay the rent would we be screwed.
I didnt but I cant talk for that Lance guy . I could afford to pay 2 or 3 mortgages for awhile and I have the funds to do so. My last house cost 80k and the rent more than covers the mortage.
I do have most of my 401k money in the index's. Lance has his pension. That ok maybe it will be 4k instead of 5k, but thats equal to over a million dollars by your idea of taking 4%.
Could we be overly aggressive. Yes both of us will tell you that right of the bat.
He asked for wisdom. Which I can see in the posts but I think the deliver is a tad rough . Which is usually how I do it but you old folks peoples should know better

Ps - the 10% loss is a Burley/ Tharp thing not a RK thing.

Enigma 07-05-2006 07:13 PM

Re: Young Pup looking for wisdom
 
Sheesh Spidey, They are just trying to help. Point / counterpoint.

Isnt the* idea dialogue. Yeah I am sure there are old timers on this forum. Yeah I am probably more aggressive than some, less than others.

Its all about discussion of ideas. I am 39 and I have learned a whole lot from from the older set. My father in law got me started in land. He just sold his last 3 acre parcel on the strip in Las Vegas. Its next to that pyramid looking building.

He bought Pepsico in early 80s which spun off YUM the food service division.
Citibank at the bottom coming out of the savings and loan debacle, and the list goes on.

Oh yeah, he retired at 41

Sadly he died of a massive heart attack about 3 mo ago at age 62. Left my mother in law very well funded.

He was a high quality man of integrity and I really miss him.

He was much older than me but far, far from dumb.

PsyopRanger 07-06-2006 06:51 AM

Re: Young Pup looking for wisdom
 
Quote:

Originally Posted by spideyrdpd
You post
they attack
You post they attack
Gee fun for dick and jane.

Do yall really think we are blind to the risk. Has stuff gone wrong ? Has stuff gone right ?
* * * * * * * * * * * If the market tanked most of us would be hurting . Did we buy a mcmansion that if the tenant did pay the rent would we be screwed.
* * * * * * * * * * I didnt but I cant talk for that Lance guy . I could afford to pay 2 or 3 mortgages for awhile and I have the funds to do so. My last house cost 80k and the rent more than covers the mortage.
* * * * * Ps - the 10% loss is a Burley/ Tharp thing not a RK thing.

SFH, under $120k each, purchased around 85% FMV with 10% and 20% down which gives me $25-30k in equity in each give or take.

spideyrdpd 07-06-2006 04:32 PM

Re: Young Pup looking for wisdom
 
Enigma
Your right that I shouldnt lump all the responses together. We are just newbies and luckily we have thick skins. Many of the responses were great.

Justin
Its not like we just do things. I researched the llc's before I did them. I will say I didnt have mine to start. Yes I have the umbrella policy. Is the llc overkill ? I hope to never find out. Its really really not that expensive and the rules are not complicated. Corporations do have lots of rules.

Of and I knew what Gaap is I shop there all the time :)

PsyopRanger 01-13-2007 01:53 AM

Re: Young Pup looking for wisdom
 
Update:

Quote:

Iíll put it all on the line.

Anyone pick 5 investments, Iíll pick 5 investments.

Iíll use my system, you use your system.

Letís see who is leading after 1 year?

If Iím wrong, I will apologize and claim that everything I am doing is heresy.

My Challenge

Quote:

Finally, I'll take you up on your stock game. In fact, I will only pick one stock, dividends reinvested to be fair. We can start the game on any day you want. My pick (as much as some people will start screaming at me): NFI.

eyetri2
eyetri2's reply

Quote:

Iíll take one from my own holdings:
Dow Jones Global Titans Euro (Ticker EXI2.SG) - Purchase Price - Ä21.49
It closed today at Ä21.59, so I will start there.

NFI closed at $32.42

Letís start there.

Glad to meet you, why do you like NFI?

My Reply


As Jan. 12th Close

EXI2.SG Ė Dow Jones Global Titans@ $24.06 Gain of 11.44% (I also did not convert the Euro to dollars, which would make this a greater gain.)

NFI @$23.63 - Loss of 27.11% - Dividend Yield of 23.30% = Loss of 3.81%



martyb 01-13-2007 08:34 AM

Re: Young Pup looking for wisdom
 
Round Two!!! ;D


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