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Rethinking 'Fuck You' money

tonywright.com

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Re: Rethinking 'Fuck You' money

#161

Post by francoisdevlin »

nostrademons wrote: post #78
webwright wrote: post #43

A couple of folks are tossing in that you can get 2-4% returns nowadays. Here's the historical rate of inflation (scroll down for the recent years): http://www.usinflationcalculator.com/inflation/historical-in... Looks like about 2-4%. :-(

If we get deflation, as many people are predicting, then you can get several percent "interest" just by holding your money in cash. That's built into the interest rate expectations for a lot of securities right now. You wouldn't see these near-zero interest rates unless people were expecting the dollar itself to become more valuable in the near future.

The Fed, with all of the T-bills out there, will never allow deflation. It's not in the government's interests.

Re: Rethinking 'Fuck You' money

#162

Post by brianbreslin »

starkfist wrote: post #157
brianbreslin wrote: post #155

am I the only one who sees a flaw in the math here? I mean I wasn't a math major in college, but i did take financial math, and think he's forgetting a key thing called compound interest.

I can't figure out his math, either. In his second example, if you put $4M in a bank account that gets 2%, and can still save $10K a year you'll have $7.6 mil in 30 years. If you can get 8% (which I think you can, all arguments to the contrary) you will have $41M. Maybe he just means once you get the cash, you quit your job, put the money under the mattress and spend it all?

yeah, he ignores the money growing on its own.

Re: Rethinking 'Fuck You' money

#163

Post by logicalmind »

mattmaroon wrote: post #158

It's actually silly to think that stock market ROIs won't rise again. They're abnormally low now, but we've seen it many times before. Market returns are based on the amount investors need to take the inherent risks. Unless stock market investing gets considerably less risky (seems quite unlikely) investors will leave the market for less risky vehicles until rates return to the amounts needed to justify taking the ri…

One thing that worries me, and I'd love to hear other people's opinions, is that as baby boomers retire they will be removing their retirements from the stock market. Whether they move their money to other non-stock investments or whatever. But don't you think the transfer of money out of stock-related investments by such a large percentage of people is going to cause some problems for those of us who still have money in stocks in the market?

Re: Rethinking 'Fuck You' money

#164

Post by rortian »

GFischer wrote: post #130
rortian wrote: post #18

Earlier quoted context omitted.

How does crazy paranoid stuff get up-voted here? Very Sad. Cheaper countries can be fun, but there's lots of downsides as well. If you are asocial, it could be your dream to live there. I'll always want a vacation there, but not to live there.

It is a bit paranoid, but then again, you've never been in a country that locks down money transfers, right? You still believe you can emigrate anywhere. It's currently unlikely, but I suspect the U.S. could implement that much faster than you think if it keeps going downhill. It already implemented a ban on holding gold in the past, for example ( http://en.wikipedia.org/wiki/Executive_Order_6102 in place until 1974…

Keep in mind that 1974 was 36 years ago. I am working with a very different model of the world than you are I think. Capital controls exist in the world and some are quite harsh. However, no serious person is even close to advocating them (for wealth nations like the US). What problem do you imagine they would solve?

Re: Rethinking 'Fuck You' money

#165

Post by ewald »

mattmaroon wrote: post #158

It's actually silly to think that stock market ROIs won't rise again. They're abnormally low now, but we've seen it many times before. Market returns are based on the amount investors need to take the inherent risks. Unless stock market investing gets considerably less risky (seems quite unlikely) investors will leave the market for less risky vehicles until rates return to the amounts needed to justify taking the ri…

The author also seems to forget about dividends. If the market doesn't move at all in a period of time, it doesn't mean the companies I've invested in won't pay any dividends.

It is important to buy companies based on their fundamentals.

Re: Rethinking 'Fuck You' money

#166

Post by nileshtrivedi »

tkhoven wrote: post #125
nileshtrivedi wrote: post #98

Earlier quoted context omitted.

How about India? Indian economy has bounced back some time ago. Here is sensex over last 5 years. http://in.finance.yahoo.com/q/bc?s=^BSESN&t=5y&l=on&... Risk-free return rate is still at around 8%: http://www.bajajcapital.com/gss/nsc.html

If I'm reading it correctly, that risk-free return rate is only available to resident Indians. In addition, even if international investors would be able to access it they'd be adding currency risk to the equation.

Yes, and Yes. I quoted the risk-free rate to give an idea about the economy and its risk-level. Equity market here can be expected to give decent returns (~15%). I'm not sure about the citizenship requirements but the equity markets should be quite open.

http://new.valueresearchonline.com/funds/default.asp

Re: Rethinking 'Fuck You' money

#167

Post by lsc »

BrandonM wrote: post #76
lsc wrote: post #67

Earlier quoted context omitted.

in entertainment and sales, confidence is almost everything. The thing is, outside those fields, confidence is dramatically less useful. (granted, sales skills have a pretty wide applicability, but my point is there are jobs that don't involve much sales, where confidence doesn't matter that much.)

Confidence doesn't have to tie directly to the work you do. One aspect of confidence is knowing that you have the skill to find work, or the smarts and personality to get a new job and learn the necessary skills quickly. A person like that never needs to fear poverty, which is one aspect of wealth.

Not fearing and not needing to fear are two different things. Confidence can help get you jobs, but without competence, you will have a hard time keeping it.

Re: Rethinking 'Fuck You' money

#168

Post by loewenskind »

run4yourlives wrote: post #147
loewenskind wrote: post #143

Earlier quoted context omitted.

Initial citations/qualifications still needed and citations for these new claims needed as well. The countries you listed (aside from Greece of course) are having some issues, which they are addressing. So what. From where I sit (live in Europe, have family and friends still in the US) the US looks much worse off.

The initial argument was that investing in Europe as opposed to the US wasn't going to get you anywhere. While we could debate ad-infinitum which economy is "worse", the point stands. It's easy to establish that Europe is in at least as bad a position as the US. Your point as to Switzerland's health points exactly to why many (including myself) think this means that it is actually worse overall: Because of the Euro,…

>that it is actually worse overall

That what is actually worse overall? Europe or Switzerland? Switzerland isn't in the EU and doesn't have the Euro. It's true they've bought a lot Euros to try and keep the Franc down but they've bought a lot of US dollars as well (for the same reason).

Re: Rethinking 'Fuck You' money

#169

Post by 7d9bf2471be6f39 »

istari wrote: post #94
Eliezer wrote: post #89

Earlier quoted context omitted.

If what you say is true, why is all this free money still lying around? Is there some systematic reason for why hedge funds don't do it, or why too few people bid on courthouse auctions?

It's not free at all. Buying a rental property off the MLS means you have to manage it, and is like starting a small business. This is fairly safe to do even for beginners, and is a good way to leverage a few tens of thousands and a good credit rating. Buying at courthouse auctions is a completely different ball game, and requires you to 1. pay all cash(this eliminates 99% of competitors) 2. research title and liens…

I would like more info. I am in the position to invest on this scale and the idea of being a landlord is not too scary to me (actually sounds kinda fun in a twisted way). Some questions off the top of my head:

- What attributes constitute a good rental property?

- Is it ever worth it to hire a manager?

- How often do you have to visit the property? I live in SF but I understand being a landlord here is difficult due to renter protection. If I were to buy a property in an outlying area, how often would I need to visit it? I'd also like to take some extended travel in the future. Would being a landlord get in the way of that?

- What else should I be thinking about?

Thanks!

Re: Rethinking 'Fuck You' money

#170

Post by Daniel_Newby »

istari wrote: post #60

People who think 6-10% returns are unrealistic are sheep, and know nothing about real estate. A friend of mine, a complete novice, was able to buy a multifamily unit in downtown San Jose for 500K and rent it out for 5000 a month. His down payment is 100K. His expenses(400K mortgage, insurance, taxes, etc) is 2500 a month. His rate of return is (5000-2500)x12/100K = 30% or so. He did this while violating the #1 rule o…

> His expenses(400K mortgage, insurance, taxes, etc) is 2500 a month.

A different point of view is that his expenses are 12500 a month and FedGov is paying him a 10k/month interest subsidy, and that he is upside down by 150k and accounting for FedGov price supports as an asset. Tick. Tick. Tick.

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