This guys only 33 and hes already talking like some grey-bearded arm chair philosopher. "Listen closely sonny, here's what you should do if you want to retire comfortably like me." Reading "Rich Dad / Poor Dad" does not make you an expert on personal finance. Being CEO of a startup make you an expert on being successful.
Money and wealth
111–120 of 193 posts
Re: Money and wealth
#112Earlier quoted context omitted.
Disclaimer - I've never played Starcraft or Magic: The Gathering. But I expect that in both of them, just like in real life, there is some value to having unspent liquid assets, in that they give you optionality. Unspent liquid assets can be converted at a later time into marines/computing hardware/other 'real' assets, depending on what is most needed at the time. If you turn all of your liquid assets into illiquid a…
You know, I hear what you're saying, but I don't think I've ever heard that. Usually better players will give newer players a simple heuristic like "don't let your mineral count go over 1000", which seems generous even. Something more hard core would be like 800. The point is, there aren't many scenarios where "saving" your money would be a good thing. Except for "expensive" purchases, which usually hover around 400…
The problem is that Starcraft is a bad model, because in Starcraft, all the options are known in advance. In the real world, not so. Someone can invent something new tomorrow and all of sudden you may find those cash handy.
Also, 2-player Starcraft is an antagonistic game. In the real world, there are coalitions, and the game is more complicated. Having cash on hand can give you an edge when the coalitions change.
Re: Money and wealth
#113Earlier quoted context omitted.
This just seems like a complaint about illiquidity of certain assets, which is a legitimate concern, but also a pretty commonly addressed one, because it already arises semi-frequently. If you were one of Sam Walton's heirs, for example, you can't just dump all your Wal-Mart stock on day 1. But if you want to turn that in-practice-fairly-illiquid holding into more liquid and diversified holdings, you are not SOL. It…
I believe the original poster was worried about 'The People' not wanting to hold on to the stock for a few years. There seems to be no quick way to liquidate that much wealth without destroying some in the process.
> There seems to be no quick way to liquidate that much wealth without destroying some in the process.
That's not actually wealth that exists being destroyed, that's a poor measure of the wealth represented by a stockpile being revealed to be poor. The quoted market price of a unit (which is basically the marginal price of the last/next unit sold) times units held is not an accurate measure of the total value (wealth) represented by a stockpile of a marketable asset.
Re: Money and wealth
#114The takeaway from this article is that hoarding cash is not a good store of wealth, and that the key to long-term wealth is to acquire net income generating assets. Great points for sure, but I strongly disagree with his assertions that saving up for retirement is ill-advised and that traditional investments (stocks, etc.) are too volatile and risky to be useful. He never explicitly gives any advice for acquiring net…
I'm glad to see someone advocating sensible retirement planning here. Though the post had a few good points about how to perceive wealth vs. money, I cringed at the notion that most stocks are "buy and pray" investments. Stocks have a better risk/return profile than just about any other asset class with a given 10+ year time window over the last century, assuming proper diversification. I should also point out that s…
I also found the article to be lacking. The overemphasis on "income-generating" assets does indeed reflect a misunderstanding of any sort of risk profile, as does the "buy and pray" moniker.
Income-generating assets do have a place in your portfolio, but certainly should not be the majority especially if you are so far away from retirement. As you mentioned, as one ages the allocation can be changed. Towards retirement and into it, income-generation should have a much bigger proportion as it better reflects one's needs.
Re: Money and wealth
#115This is also why wealth redistribution works far less well than people who imagine it as money redistribution think it will. Part of the wealth is tied up in the owner, and that can't be redistributed without loss, sometimes great loss. Let's take a concrete example. Suppose that class warfare rhetoric utterly wins, and as its first scalp The People decide that the filthy rich Bill Gates needs to have 100% of his wea…
Following the logic of this post, you can't redistribute wealth , only money. ” The People” don't want to own companies, they want enough money to feed their families. The problem isn't that Bill Gates has a lot of money, it's that wealth is a system of exponential growth. It is somewhat unfair that his money allows him to make more money at such an outsized rate. Taxes are a way to put wealth on an logarithmic scale…
> ” The People” don't want to own companies, they want enough money to feed their families.
Actually, no. They want to feed their families, period.
Dumping a lot of money on people's hand to buy food doesn't necessarily solve the issue because spending = inflation.
Re: Money and wealth
#116Earlier quoted context omitted.
Based on your post it appears you're not profiting at all from your assets - presumably then you're currently selling up? Is this more "first world problems" and in fact you're making a reasonable return given your investment of time and money? I've several friends who're small time landlords - ie own a second residence they let out - they all make a tidy profit and none of them appear to have been exposed any more t…
How did your friends get the second residence? Do they have a mortgage on the rental property? That makes things much harder to break even. For a lot of people, the only rental property they can afford is in lower income neighborhoods, and the return on investment is often much better there too. But the headaches are also much greater.
> Do they have a mortgage on the rental property? That makes things much harder to break even.
You have it backwards. Borrowing money at 4.5% is way cheaper than using your own money. There is opportunity cost to tying up your own money in the real estate. Real estate loans allow you to leverage your 15-20% down. It was really bad when they let you leverage using 3.5% down.
Re: Money and wealth
#117This blog piece has a lot of rich learnings for financial well being. What I disagree with is the author's stance on savings. It is dangerous because the 'unwealthy' minds are going to read 'saving is not good' as 'go spend'
Re: Money and wealth
#118You said twice that children with great education are one of the biggest wealth. I'd have loved if you had given an example of how exactly. I'm curious to listen
Re: Money and wealth
#119The takeaway from this article is that hoarding cash is not a good store of wealth, and that the key to long-term wealth is to acquire net income generating assets. Great points for sure, but I strongly disagree with his assertions that saving up for retirement is ill-advised and that traditional investments (stocks, etc.) are too volatile and risky to be useful. He never explicitly gives any advice for acquiring net…
> I strongly disagree with his assertions that saving up for retirement is ill-advised and that traditional investments (stocks, etc.) are too volatile and risky to be useful. With my retirement age ~40 years away, it's not clear to me that locking my money into traditional investments is a good idea: existing historical records are not statistically convincing (to me) over such a term. A single stock market crash or…
> A single stock market crash or economic crisis may not matter over the long term, but I'm sure you're not suggesting there will be only one such occasion: it seems more likely that there will be several, which may or may not be timed in my favour.
Certainly, there should be several cycles expected in the economy and stock market every decade, but this is not entirely negative.
1) You are not investing all at once. Instead, you are dollar cost averaging - each paycheck, some of you money goes into the market, at either a high, or a low.
2) You are not divesting all at once. While taxable accounts have minimum distributions, no tax accountant is going to suggest that you take out all of your money at once. If you have 'enough' 1-3 years of divesting in a down market will leave you with a principle that will restore in a 1-3 year up market.
===== Other Note ====== > Whereas, people who remain in traditional jobs have some danger of being obsoleted
You are going to be in much more risk of obsolescence if you don't improve your skills as an entrepreneur than if you don't at a traditional job.
Re: Money and wealth
#120Earlier quoted context omitted.
Following the logic of this post, you can't redistribute wealth , only money. ” The People” don't want to own companies, they want enough money to feed their families. The problem isn't that Bill Gates has a lot of money, it's that wealth is a system of exponential growth. It is somewhat unfair that his money allows him to make more money at such an outsized rate. Taxes are a way to put wealth on an logarithmic scale…
> ” The People” don't want to own companies, they want enough money to feed their families. Actually, no. They want to feed their families, period. Dumping a lot of money on people's hand to buy food doesn't necessarily solve the issue because spending = inflation.
> spending = inflation.
Spending does not equal inflation.
Increased money available to the consumers who have non-zero demand for a set of goods can reasonably be expected, under most circumstances, to increase the market clearing unit price for the goods -- but with most reasonable sets of assumptions the relative increase in unit price will be less than the relative increase in available funds to consumers, and redistributing money from one group of people to another will increase the latter groups purchasing power, decrease the former groups purchasing power, and increase the number of units sold of goods and services which the latter group has a greater marginal propensity to purchase than the former.