61–70 of 128 posts
Seriously? You want to get into real estate in the middle of the biggest depression we have ever seen? When property values are still way over-inflated? This is only the start of the article's problems. The next thing he advocates is putting 20% down on a $6.5 million apartment complex, effectively leveraging 5 to 1. Leverage has no place in any retirement account, period! This entire article is a recipe for disaster…
Seriously? You want to get into real estate in the middle of the biggest depression we have ever seen? When property values are still way over-inflated? This is only the start of the article's problems. The next thing he advocates is putting 20% down on a $6.5 million apartment complex, effectively leveraging 5 to 1. Leverage has no place in any retirement account, period! This entire article is a recipe for disaster…
sell one business, which you know really well (if you got offer - i think you are successful and know business well), and replace it with another business (real estate), which you do not know yet and probably loose money during initial period... doesn't make sense for me.
That's a fair point, but unless you're going to roll it all back into the same type of business that you just sold, you're going to have to learn something new, either the stock market or real estate or something.
Probably, we need to define what is retirement. =)) If it's doing nothing (business wise) - probably it's too boring anyway and learning new skills is good idea.
Seriously? You want to get into real estate in the middle of the biggest depression we have ever seen? When property values are still way over-inflated? This is only the start of the article's problems. The next thing he advocates is putting 20% down on a $6.5 million apartment complex, effectively leveraging 5 to 1. Leverage has no place in any retirement account, period! This entire article is a recipe for disaster…
Do you have any personal experience with multifamily real estate? It's valued based on the income stream, so unless the income stream is inflated, it's not really overvalued. And increasing population + more single-member households + fewer people buying houses now = more renters. Where the hell do you think all the people losing their homes right now are going to live?
Avoidance of the kind of knee-jerk reaction that you're espousing is what makes good real estate investors incredibly wealthy.
The leverage thing I'm more willing to concede, but the numbers aren't terribly different if you just buy the property outright. And let's be honest: this isn't a true "retirement account".
I didn't see Tony Wright's article the other day, but I've just read it and the article linked here. I have a few comments. First, for the rest of this comment I'll define income as 'what you've got coming in' and wealth as 'what you keep or what you grow'. Most people fail to make this distinction (If you ask somebody if they are wealthy they will start talking about how much they get paid), but it's important, espe…
how to you value the appreciation in somebody's house when the only meaningful way to value a property is to sell it? I think property taxes are fairly widespread in the US, actually. Your county has a group of assessors, who pick a SWAG based on comparable recent sales and -- ahem -- their desire to have the county generate tax revenue this year, and then you get to pay .8% or whatever of the assessed value in prope…
I didn't see Tony Wright's article the other day, but I've just read it and the article linked here. I have a few comments. First, for the rest of this comment I'll define income as 'what you've got coming in' and wealth as 'what you keep or what you grow'. Most people fail to make this distinction (If you ask somebody if they are wealthy they will start talking about how much they get paid), but it's important, espe…
"(2) That you would invest your $4m in a low-return investment."
My assumption is that you'd invest in a BALANCED PORTFOLIO. What sort of return do you think a balanced portfolio would get you?
I think Ryan's missing my point. When I talk about income %, I'm talking about across an entire portfolio (that real estate should certainly be a part of). So you're putting 25% of your cash down on a $5m property for $110k per year. Nice! How many such properties do you think the banks are going to let you buy? With the future values of these properties a bit murky, I imagine that someone with 4-5m in the bank ISN'T…
1) Commercial real estate underwriting much more heavily weighs the fundamentals of the property as opposed to the borrower. As a result, it's possible that you could have a lender who would be comfortable with you carrying several times your net worth in loans, provided the underlying collateral fundamentals are strong.
2) I'm skeptical that a long-term diversified portfolio will only return 5%, before inflation is taken into account. This would correspond to a real return of 2%, which seems overly-conservative. Don't wealth managers advise safely withdrawing 4% per year to protect your principal and keep pace with inflation? I may be mistaken here.
3) I'm not as gung-ho about diversification as you are. I think it can make sense, but as Buffett has said, it's a hedge against ignorance. If you sell a startup for $20m, you were highly under-diversified before the sale, but that doesn't make it a bad idea. Nor would it be a terrible idea to roll a significant portion of that capital back into a business that you knew well enough that the risk profile was low for you. This probably requires more work and self-assessment than most people are capable of or willing to engage in.
Anyway, thanks for your original post and your comment here. Food for thought, as always :)
Seriously? You want to get into real estate in the middle of the biggest depression we have ever seen? When property values are still way over-inflated? This is only the start of the article's problems. The next thing he advocates is putting 20% down on a $6.5 million apartment complex, effectively leveraging 5 to 1. Leverage has no place in any retirement account, period! This entire article is a recipe for disaster…
You could invest in Canada. Property values have been stable.
I didn't see Tony Wright's article the other day, but I've just read it and the article linked here. I have a few comments. First, for the rest of this comment I'll define income as 'what you've got coming in' and wealth as 'what you keep or what you grow'. Most people fail to make this distinction (If you ask somebody if they are wealthy they will start talking about how much they get paid), but it's important, espe…
Regarding my assumptions, you're largely right... Though I take issue with: "(2) That you would invest your $4m in a low-return investment." My assumption is that you'd invest in a BALANCED PORTFOLIO. What sort of return do you think a balanced portfolio would get you?
Many people would be willing to take risks, or don't want/need to hedge against everything. His real estate example is a good one - you are at the mercy of housing/renting markets. But over the long term these have been quite steady and wouldn't be outside most peoples' risk thresholds.
I didn't see Tony Wright's article the other day, but I've just read it and the article linked here. I have a few comments. First, for the rest of this comment I'll define income as 'what you've got coming in' and wealth as 'what you keep or what you grow'. Most people fail to make this distinction (If you ask somebody if they are wealthy they will start talking about how much they get paid), but it's important, espe…
how to you value the appreciation in somebody's house when the only meaningful way to value a property is to sell it? I think property taxes are fairly widespread in the US, actually. Your county has a group of assessors, who pick a SWAG based on comparable recent sales and -- ahem -- their desire to have the county generate tax revenue this year, and then you get to pay .8% or whatever of the assessed value in prope…