Author Topic: Accredited Investors - Why A 4% SWR?  (Read 63237 times)

innerscorecard

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Re: Accredited Investors - Why A 4% SWR?
« Reply #200 on: June 16, 2015, 09:55:07 PM »
I think mr_orange should also read Fooled By Randomness. Consistent good income really often does mean you're taking on blow-up risk.

regulator

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Re: Accredited Investors - Why A 4% SWR?
« Reply #201 on: June 16, 2015, 10:02:04 PM »
I think mr_orange should also read Fooled By Randomness. Consistent good income really often does mean you're taking on blow-up risk.

That is the nature of writing puts.

sol

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Re: Accredited Investors - Why A 4% SWR?
« Reply #202 on: June 16, 2015, 10:12:38 PM »
I also think you do a disservice to everyone when you continually talk about people cost cutting for the sake of doing so.  Sol provided a good answer for that already.  We're optimizing, and shooting for maximum happiness. 

Rereading through this thread, I've about decided that orange is here to talk, not to listen.

Which is fine, I welcome all voices.  It's just always kind of a let down when you think might have reached someone and then have your illusion shattered. 

The point of this blog, and the forum that supports it, is to help people see the error of their consumerist ways.  The rest of society tries to tell you that spending money is the secret to happiness, and if you're not happy then it must be because you're not spending enough.  Orange has rephrased that viewpoint over and over again, here and in other threads, as if it were a given truth.  If he hasn't heard us yet, then I don't think he's ready to hear.

clifp

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Re: Accredited Investors - Why A 4% SWR?
« Reply #203 on: June 16, 2015, 11:32:23 PM »
This thread may interest you, mr_orange:
http://forum.mrmoneymustache.com/investor-alley/when-compounding-returns-isnt-that-important/

From the article:
Quote
[This example assumes you can earn, though your hard work, 4% more than the market.] Say you are holding a pretty decent job at $50/hour, and you spend 15 hours/week studying companies and analyzing stocks. That is a total of 780 hours per year, valued at $39,000! [Based on your hourly wage.] So in order to justify spending that time this year, youíll need to have invested $975,000! You need almost a million dollars and a sure 4% increase [over the market] to breakeven on the amount of time you spent on it!

I found these arguments to be pretty silly really.  I am hard pressed to think of any investors who actually spend 15 hours a week studying stocks, perhaps Buffett when he was youngster. 
Analyst don't even spend that much time since most of their time is spent writing reports and giving presentations. Now traders certainly spend more time than that. Cramer recommends a couple hours for a portfolio of 10 stocks, I have 3 dozen stocks and probably spend 5.  You set targets, and leave most of  the stocks alone.  It is certainly much less time consuming easier to research and purchase a stock than a piece of real estate.    Even my most time consuming research which involved downloading the SEC filing for 5 years, and researching the prices of golf course in Ohio was something I spent dozens of hours and not hundreds.

Plus this isn't an on going process it is a one time thing. You don't need to read an option book every time you buy and sell and option. You should however read a couple, do some web search and start small.  Same thing is true for Master Limited Partnership, some Google search, perhaps a trial subscription to M* Dividend Newsletter.  Then buy one or two, and be prepared for confusing first year with Turbo Tax etc.   But it isn't necessary to learn this stuff each and every year.

The time you spend learning early is like compound interest.  I've probably averaged one investment book a year since I was 16, I don't remember all their titles much less all of their content, but most have added to my knowledge as investor. I've spent well under 10 hours reading them, plus while some like Graham the Intelligent investor, others like all of Lewis's book,and some of Berstein's books were a pleasure to read.  I can read an quarterly report now much quicker than did I was 20, cause I know what to look for.   

Same thing is true for hard money loans, to learned googled, talked to a forum members who had done lot, folks like yourself who were learning and a couple of realtors, and than I started small.  I can certainly spending a few weeks and  20 or even 40+ hours researching before you making your first loan. But even if you have 20 I doubt you'd spend more a couple hours a week managing them.  For an accredited investor lets say he takes $100,000 of his $400,000 in bonds and moves it to hard money loans. Lets say that after defaults etc he averages 7.5% that is $5,000 more than he gets investing in BND with 2.5% yield.  At our $50/hour figure will it really take him more than 100 hours of work to make say 1/2 dozen loans ranging from 1 to 5 years. How many hours would take to him save $5,000 by doing more cooking at home, firing the house cleaners,or changing his own oil?

deborah

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Re: Accredited Investors - Why A 4% SWR?
« Reply #204 on: June 17, 2015, 12:10:21 AM »
However, by your definition, many of the people who have answered you are accredited investors because they have followed the MMM "save most of your pay" philosophy. You are making assumptions that are not valid.

Which assumptions are those?
Let me see... That the people you are calling "lazy" are not accredited investors. That there is no way, following the "save most of your pay" philosophy that someone can become an accredited investor. That being an accredited investor matters, and somehow such people are "better" than others. That the "save most of your pay" philosophy is intrinsically going to end up with someone "scrounging". That the "save most of your pay" philosophy doesn't make people happy. That you are best off having as much money as you can (and this, of course, is the opposite of ER). That investing the way you prefer is the best and only way....

mr_orange

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Re: Accredited Investors - Why A 4% SWR?
« Reply #205 on: June 17, 2015, 04:34:08 AM »
However, by your definition, many of the people who have answered you are accredited investors because they have followed the MMM "save most of your pay" philosophy. You are making assumptions that are not valid.

Which assumptions are those?
Let me see... That the people you are calling "lazy" are not accredited investors. That there is no way, following the "save most of your pay" philosophy that someone can become an accredited investor. That being an accredited investor matters, and somehow such people are "better" than others. That the "save most of your pay" philosophy is intrinsically going to end up with someone "scrounging". That the "save most of your pay" philosophy doesn't make people happy. That you are best off having as much money as you can (and this, of course, is the opposite of ER). That investing the way you prefer is the best and only way....

You made this stuff up.  Look back through the thread:

-I never said that lazy people are not accredited investors - You made that up
-I never said that saving most of your pay will not make you an accredited investor - Again, you made that up
-I never said accredited investors are better than non-accrediteds - Again, you made that up
-I never said saving most of your pay will make you unhappy - Again, you made that up
-I never said that investing the way I prefer is the best and only way - Again, you made that up

I can't really address whatever random stuff you make up or read into things that weren't said.  Seriously, go back and read through the thread and see if any of what you claimed above is there.  You're reaching for stuff that doesn't exist. 

I do, however, think that cutting expenses past some point WILL lower your standard of living and WILL make some (many in fact) people less happy.  Perhaps those people are not prevalent on this forum....fine. 

I also believe that having more money gives you more options, allows you to continue growing more that can be passed down to heirs, and provides a better safety margin for independence and thus is better.  This doesn't seem like a controversial topic to me based on everything I have read on the forums and on the MMM blog.  If your portfolio's growth outpaces your WR in FI then by definition it will continue to grow over time. 

Regarding being here to talk and not to listen that is probably fair.  I have, however, learned a lot from posting on the site already and am certainly not bashful about sharing my thoughts.  Don't expect that to change.  I wouldn't expect any other posters to change their opinions over night either.  As long as these opinions are shared respectfully it is fine. 

arebelspy

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Re: Accredited Investors - Why A 4% SWR?
« Reply #206 on: June 17, 2015, 07:17:48 AM »
I do, however, think that cutting expenses past some point WILL lower your standard of living and WILL make some (many in fact) people less happy.

But NO ONE'S argued that you should cut expenses to the point you're unhappy.

Again, you're setting up a straw man that none of us here argue for.

We do say you should cut out the waste, and optimize.  Cut out spending that doesn't affect your happiness, and you can be just as happy, or even happier, spending less.
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Re: Accredited Investors - Why A 4% SWR?
« Reply #207 on: June 17, 2015, 07:39:07 AM »
I also believe that having more money gives you more options, allows you to continue growing more that can be passed down to heirs, and provides a better safety margin for independence and thus is better.  This doesn't seem like a controversial topic to me based on everything I have read on the forums and on the MMM blog.

You're right that it's not a controversial topic, but that's because there is a general consensus here that it is untrue (putting aside the issue of charitable giving, because balancing the tension that sometimes (but, thankfully, not always) exists between our own selfish pursuit of happiness and our moral imperative to improve the world complicates the equation and definitely is a controversial topic around here).  The quoted statement is simply another way of restating (yet again) the same point that everyone has been repeatedly objecting to -- your threads have attracted an all-star roster of some of the forum's MVPs, all tripping over themselves to show you the light, but you're still not hearing the message.  The optimal amount of money you can have is the amount that constitutes "enough"--no less, and no more.  Yes, having more provides you with more options -- for example, without billions in the bank, you don't have the option of building yourself your own private luxury submarine.  Yes, having a stash equal to 1000x your projected expenses provides more safety margin than a stash equal to only 25x (though I question on philosophical grounds whether amassing more money necessarily provides more safety).  But once you have "enough" (whatever amount "enough" may be for any particular individual), what good does it do to have more?  And, as everyone has been saying, most people don't realize that "enough" is a much smaller amount than our consumerist society has led them to believe.  Of course, having more doesn't hurt, but accumulating more almost always comes at a cost, so if it doesn't help, why pay the cost?

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Re: Accredited Investors - Why A 4% SWR?
« Reply #208 on: June 17, 2015, 07:51:01 AM »
Hard money loans generally are not used for apartment buildings.  They're short-term loans for other project types generally.

What kind of projects? Roads? Casinos? Salmon fisheries? Public bathrooms? The crowdfund site I went to wouldn't show me unless I registered, which I can't be bothered with right now. Or what I'd really like to know: how can they afford to pay 10%+?

Primarily small development projects, fix/flips, etc.   

The developers can afford to pay 10% plus because this money is very cheap relative to the amount of upside there is in the project.  There are many equity participation projects as well, but those offer less security interest and are harder to underwrite IMO.

aha, so short term speculative flips, that are dependent on quickly selling the property again at a much higher price (or the developer can't afford to service the loan). This sounds better and better!

What happens if they can't sell in time? If there is a crash, what happens to these shoe-string developers who's finances are so iffy they can't get a loan from a bank for their business? And since these are so short term you then have to go out and find another again, what is the cash drag cost while you wait/research?

forummm

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Re: Accredited Investors - Why A 4% SWR?
« Reply #209 on: June 17, 2015, 08:21:14 AM »
This thread may interest you, mr_orange:
http://forum.mrmoneymustache.com/investor-alley/when-compounding-returns-isnt-that-important/

From the article:
Quote
[This example assumes you can earn, though your hard work, 4% more than the market.] Say you are holding a pretty decent job at $50/hour, and you spend 15 hours/week studying companies and analyzing stocks. That is a total of 780 hours per year, valued at $39,000! [Based on your hourly wage.] So in order to justify spending that time this year, youíll need to have invested $975,000! You need almost a million dollars and a sure 4% increase [over the market] to breakeven on the amount of time you spent on it!

I found these arguments to be pretty silly really.  I am hard pressed to think of any investors who actually spend 15 hours a week studying stocks, perhaps Buffett when he was youngster. 
Analyst don't even spend that much time since most of their time is spent writing reports and giving presentations. Now traders certainly spend more time than that. Cramer recommends a couple hours for a portfolio of 10 stocks, I have 3 dozen stocks and probably spend 5.  You set targets, and leave most of  the stocks alone.  It is certainly much less time consuming easier to research and purchase a stock than a piece of real estate.    Even my most time consuming research which involved downloading the SEC filing for 5 years, and researching the prices of golf course in Ohio was something I spent dozens of hours and not hundreds.

Plus this isn't an on going process it is a one time thing. You don't need to read an option book every time you buy and sell and option. You should however read a couple, do some web search and start small.  Same thing is true for Master Limited Partnership, some Google search, perhaps a trial subscription to M* Dividend Newsletter.  Then buy one or two, and be prepared for confusing first year with Turbo Tax etc.   But it isn't necessary to learn this stuff each and every year.

The time you spend learning early is like compound interest.  I've probably averaged one investment book a year since I was 16, I don't remember all their titles much less all of their content, but most have added to my knowledge as investor. I've spent well under 10 hours reading them, plus while some like Graham the Intelligent investor, others like all of Lewis's book,and some of Berstein's books were a pleasure to read.  I can read an quarterly report now much quicker than did I was 20, cause I know what to look for.   

Same thing is true for hard money loans, to learned googled, talked to a forum members who had done lot, folks like yourself who were learning and a couple of realtors, and than I started small.  I can certainly spending a few weeks and  20 or even 40+ hours researching before you making your first loan. But even if you have 20 I doubt you'd spend more a couple hours a week managing them.  For an accredited investor lets say he takes $100,000 of his $400,000 in bonds and moves it to hard money loans. Lets say that after defaults etc he averages 7.5% that is $5,000 more than he gets investing in BND with 2.5% yield.  At our $50/hour figure will it really take him more than 100 hours of work to make say 1/2 dozen loans ranging from 1 to 5 years. How many hours would take to him save $5,000 by doing more cooking at home, firing the house cleaners,or changing his own oil?


Buffett basically spends all day every day reading stuff and gathering information. All kinds of data from a wide variety of sources, including business reports, inventories, discussions with CEOs, etc. He's done this for 60-70 years. He's talked about how even on weekends his wife and kids never saw him because he was just sitting in his office reading.

You can't read one mass market book per year and expect to have an edge on the huge financial services industry that do this full time with better information than you could possibly have. It takes more work than that to consistently identify the deeply undervalued stocks before everyone else does.

With all that reading he does, and the tens of billions of dollars he has at his disposal, Buffett says it's a good year if he has a half dozen good ideas.

mr_orange

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Re: Accredited Investors - Why A 4% SWR?
« Reply #210 on: June 17, 2015, 08:43:49 AM »
I do, however, think that cutting expenses past some point WILL lower your standard of living and WILL make some (many in fact) people less happy.

But NO ONE'S argued that you should cut expenses to the point you're unhappy.

Again, you're setting up a straw man that none of us here argue for.

We do say you should cut out the waste, and optimize.  Cut out spending that doesn't affect your happiness, and you can be just as happy, or even happier, spending less.

Ha!

The first few posts I made on the forums were laced with derision about wastefulness without even knowing what I spend the money on.  Saying this is a straw man is ingenious.  Maybe it isn't what you're arguing, but it is prevalent throughout both the forums and the MMM blog. 

Further, I have posted on the journal and elsewhere about what I spend money on.  Some like Sol and Another Reader were kind enough to comment on the spending.  Pretty much everyone else has used the blanket "you spend too much" statement.  This may very well be true, but it isn't very actionable or helpful.  It doesn't in any way try to tie spending to happiness either.  It just claims that reducing spending will make me happier.  This may very well be true, but I'm not prepared to just wholesale cut my spending in half by taking my kids out of Montessori school, ride my bike to work over 20 miles each day, sell my house to move closer to town, etc.  There is surely other waste to eliminate without making these tradeoffs.  I'm not sure that making these sorts of tradeoffs would even make me happier either.  I value mobility and a larger house and am willing to work longer for these items.  Saying this is "non-optimal" is pretty silly to me. 

mr_orange

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Re: Accredited Investors - Why A 4% SWR?
« Reply #211 on: June 17, 2015, 08:49:56 AM »
The quoted statement is simply another way of restating (yet again) the same point that everyone has been repeatedly objecting to -- your threads have attracted an all-star roster of some of the forum's MVPs, all tripping over themselves to show you the light, but you're still not hearing the message. 

No...I see it typed in print just fine.  I do not, however, agree with it entirely.  Doing things like riding my bike to exercise or many of the other things that people advocate WOULD NOT make me happier.  Everyone has different values in life.  Some are willing to work more, harder, and longer to fund additional items in their life.  Those that select this path are not choosing something non-optimal.  They're simply making different decisions and there is nothing wrong with it. 

Quote
The optimal amount of money you can have is the amount that constitutes "enough"--no less, and no more.  Yes, having more provides you with more options -- for example, without billions in the bank, you don't have the option of building yourself your own private luxury submarine.  Yes, having a stash equal to 1000x your projected expenses provides more safety margin than a stash equal to only 25x (though I question on philosophical grounds whether amassing more money necessarily provides more safety).  But once you have "enough" (whatever amount "enough" may be for any particular individual), what good does it do to have more?  And, as everyone has been saying, most people don't realize that "enough" is a much smaller amount than our consumerist society has led them to believe.  Of course, having more doesn't hurt, but accumulating more almost always comes at a cost, so if it doesn't help, why pay the cost?
Yes....and enough does vary by the individual in relation to their personal circumstances and values.  I have no beef with avoiding consumerism.  I also have no beef with others making different choices.  Live and let live; ya know?

I also agree that there is a tradeoff for accumulating more money. 

mr_orange

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Re: Accredited Investors - Why A 4% SWR?
« Reply #212 on: June 17, 2015, 08:53:06 AM »
What happens if they can't sell in time? If there is a crash, what happens to these shoe-string developers who's finances are so iffy they can't get a loan from a bank for their business? And since these are so short term you then have to go out and find another again, what is the cash drag cost while you wait/research?

If the developer is not liquid enough you don't invest.   Simple.

There are hoards of projects the bank won't finance that are good risk-adjusted loans for higher yields.  It does require time to find them though. 

The cash drag is non-zero, but shouldn't be too big.  It depends a lot on how much you invest in each project and how you spread your risk.  There are plenty of new projects being presented daily. 

regulator

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Re: Accredited Investors - Why A 4% SWR?
« Reply #213 on: June 17, 2015, 08:54:17 AM »
Hard money loans generally are not used for apartment buildings.  They're short-term loans for other project types generally.

What kind of projects? Roads? Casinos? Salmon fisheries? Public bathrooms? The crowdfund site I went to wouldn't show me unless I registered, which I can't be bothered with right now. Or what I'd really like to know: how can they afford to pay 10%+?

Primarily small development projects, fix/flips, etc.   

The developers can afford to pay 10% plus because this money is very cheap relative to the amount of upside there is in the project.  There are many equity participation projects as well, but those offer less security interest and are harder to underwrite IMO.

aha, so short term speculative flips, that are dependent on quickly selling the property again at a much higher price (or the developer can't afford to service the loan). This sounds better and better!

What happens if they can't sell in time? If there is a crash, what happens to these shoe-string developers who's finances are so iffy they can't get a loan from a bank for their business? And since these are so short term you then have to go out and find another again, what is the cash drag cost while you wait/research?

In short, it is a shitshow.  It is even more disastrous when there are several creditors at the table, because then you have to get way more parties to agree to any kind of workout.  Since the hard money loan fund manager likely will have disappeared over the hills in a fair fraction of cases, this will be messy.

mr_orange

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Re: Accredited Investors - Why A 4% SWR?
« Reply #214 on: June 17, 2015, 08:57:51 AM »
In short, it is a shitshow.  It is even more disastrous when there are several creditors at the table, because then you have to get way more parties to agree to any kind of workout.  Since the hard money loan fund manager likely will have disappeared over the hills in a fair fraction of cases, this will be messy.

How about we agree that you're speculating here?  Fair?

The deals are all structured differently as well.  Do your diligence. 

arebelspy

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Re: Accredited Investors - Why A 4% SWR?
« Reply #215 on: June 17, 2015, 08:58:12 AM »
I do, however, think that cutting expenses past some point WILL lower your standard of living and WILL make some (many in fact) people less happy.

But NO ONE'S argued that you should cut expenses to the point you're unhappy.

Again, you're setting up a straw man that none of us here argue for.

We do say you should cut out the waste, and optimize.  Cut out spending that doesn't affect your happiness, and you can be just as happy, or even happier, spending less.

Ha!

The first few posts I made on the forums were laced with derision about wastefulness without even knowing what I spend the money on.  Saying this is a straw man is ingenious.  Maybe it isn't what you're arguing, but it is prevalent throughout both the forums and the MMM blog. 

Further, I have posted on the journal and elsewhere about what I spend money on.  Some like Sol and Another Reader were kind enough to comment on the spending.  Pretty much everyone else has used the blanket "you spend too much" statement.  This may very well be true, but it isn't very actionable or helpful.  It doesn't in any way try to tie spending to happiness either.  It just claims that reducing spending will make me happier.  This may very well be true, but I'm not prepared to just wholesale cut my spending in half by taking my kids out of Montessori school, ride my bike to work over 20 miles each day, sell my house to move closer to town, etc.  There is surely other waste to eliminate without making these tradeoffs.  I'm not sure that making these sorts of tradeoffs would even make me happier either.  I value mobility and a larger house and am willing to work longer for these items.  Saying this is "non-optimal" is pretty silly to me.

You don't have to know all the spending to be able to guess there's waste there.  And no one said you should cut spending to the point of being unhappy.  That's the straw man you're presenting.

We're questioning if your spending is optimized, and if it is making you happy.

We're not saying you should cut what does make you happy.

If you're unwilling to critically look at it, and just claim that the bulk of it is essentials that you refuse to look at alternatives because it's important to you, fine, but don't be surprised when you get push back.
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mr_orange

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Re: Accredited Investors - Why A 4% SWR?
« Reply #216 on: June 17, 2015, 09:01:32 AM »
If you're unwilling to critically look at it, and just claim that the bulk of it is essentials that you refuse to look at alternatives because it's important to you, fine, but don't be surprised when you get push back.

How could this possibly be the case?  I have posted a lot of detail about this in the journal forum.  Activities like this seem to be the opposite of refusal. 

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Re: Accredited Investors - Why A 4% SWR?
« Reply #217 on: June 17, 2015, 09:03:37 AM »


This thread hasn't gone anywhere for a while. Just my opinion, but it might be time to agree to disagree and move on.

I don't see any progress happening given the opinions being expressed.

arebelspy

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Re: Accredited Investors - Why A 4% SWR?
« Reply #218 on: June 17, 2015, 09:17:37 AM »
You're right Vik.

Like sol said earlier, there are times where it seems he almost gets it, so you don't want to give up, but then it flops back to this:


It's just always kind of a let down when you think might have reached someone and then have your illusion shattered. 

:)
« Last Edit: June 17, 2015, 09:19:28 AM by arebelspy »
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Re: Accredited Investors - Why A 4% SWR?
« Reply #219 on: June 17, 2015, 09:18:55 AM »
Ha....I agree it is going nowhere.  That is because my values and yours are different.  Nothing wrong with that. 

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Re: Accredited Investors - Why A 4% SWR?
« Reply #220 on: June 17, 2015, 09:19:45 AM »
Ha....I agree it is going nowhere.  That is because my values and yours are different.  Nothing wrong with that.

Sure.

I am left wondering walt's question:
Presumably you would not be here at all if you weren't looking for *something*. We're not calling your character into question, we're saying the choices you are making are probably making you less happy, and chasing more money isn't going to help you there. You have enough money to do basically whatever you want. If your spending is truly making you happy, great. Then why are you here?

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mr_orange

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Re: Accredited Investors - Why A 4% SWR?
« Reply #221 on: June 17, 2015, 09:23:43 AM »
I am here to try to cut spending in line with my values; not someone else's. 

regulator

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Re: Accredited Investors - Why A 4% SWR?
« Reply #222 on: June 17, 2015, 10:05:52 AM »
In short, it is a shitshow.  It is even more disastrous when there are several creditors at the table, because then you have to get way more parties to agree to any kind of workout.  Since the hard money loan fund manager likely will have disappeared over the hills in a fair fraction of cases, this will be messy.

How about we agree that you're speculating here?  Fair?

The deals are all structured differently as well.  Do your diligence.

Nope, not speculating at all.  Been there, done that, got the scars and psychological damage that comes with shoveling a mountain of shit that other people spewed out during the last boom.  Just make sure that when the music stops next time you know where your chair is (and ideally it is one of those rocket-powered escape chairs the fighter pilots get).

mr_orange

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Re: Accredited Investors - Why A 4% SWR?
« Reply #223 on: June 17, 2015, 10:17:33 AM »
Nope, not speculating at all.  Been there, done that, got the scars and psychological damage that comes with shoveling a mountain of shit that other people spewed out during the last boom.  Just make sure that when the music stops next time you know where your chair is (and ideally it is one of those rocket-powered escape chairs the fighter pilots get).

Yup...you're speculating.  The risk management policies vary by company, project, etc.  How well-heeled the portals are varies as well as does the way the projects are constructed, what is offered, how they handle disclosures, etc. 

Again, we're painting with broad brushes like many do when they say cut, cut, cut spending without knowing the utility details to go with said recommendation. 

regulator

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Re: Accredited Investors - Why A 4% SWR?
« Reply #224 on: June 17, 2015, 10:31:00 AM »
Nope, not speculating at all.  Been there, done that, got the scars and psychological damage that comes with shoveling a mountain of shit that other people spewed out during the last boom.  Just make sure that when the music stops next time you know where your chair is (and ideally it is one of those rocket-powered escape chairs the fighter pilots get).

Yup...you're speculating.  The risk management policies vary by company, project, etc.  How well-heeled the portals are varies as well as does the way the projects are constructed, what is offered, how they handle disclosures, etc. 

Again, we're painting with broad brushes like many do when they say cut, cut, cut spending without knowing the utility details to go with said recommendation.

Just curious: were you in this business in 2006?  2008?  2010?

Scandium

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Re: Accredited Investors - Why A 4% SWR?
« Reply #225 on: June 17, 2015, 10:53:33 AM »
In short, it is a shitshow.  It is even more disastrous when there are several creditors at the table, because then you have to get way more parties to agree to any kind of workout.  Since the hard money loan fund manager likely will have disappeared over the hills in a fair fraction of cases, this will be messy.

How about we agree that you're speculating here?  Fair?

The deals are all structured differently as well.  Do your diligence.
We can only go of what you've told us: Loans for short term projects,  to people who clearly have been rejected by banks. high yields due to high profit projects and quick turnaround. Is any of this wrong? Then please tell us

mr_orange

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Re: Accredited Investors - Why A 4% SWR?
« Reply #226 on: June 17, 2015, 12:55:09 PM »
Nope, not speculating at all.  Been there, done that, got the scars and psychological damage that comes with shoveling a mountain of shit that other people spewed out during the last boom.  Just make sure that when the music stops next time you know where your chair is (and ideally it is one of those rocket-powered escape chairs the fighter pilots get).

Yup...you're speculating.  The risk management policies vary by company, project, etc.  How well-heeled the portals are varies as well as does the way the projects are constructed, what is offered, how they handle disclosures, etc. 

Again, we're painting with broad brushes like many do when they say cut, cut, cut spending without knowing the utility details to go with said recommendation.

Just curious: were you in this business in 2006?  2008?  2010?

Yes.  I have been investing since 2003.  We did just fine with our real estate investments through the crisis.  There was no bubble in Texas.  There was a decline, but not like there is in the other coastal states. 

mr_orange

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Re: Accredited Investors - Why A 4% SWR?
« Reply #227 on: June 17, 2015, 01:02:06 PM »
We can only go of what you've told us: Loans for short term projects,  to people who clearly have been rejected by banks. high yields due to high profit projects and quick turnaround. Is any of this wrong? Then please tell us

High yields due to short duration.  Thus the banks don't want to mess with them.  Try getting an interim construction loan from lenders in hot areas right now.  They are either:

1.  Not doing them because they're too much work relative to their effort given their overhead, or
2.  Are capped out on this type of loan by their regulators, or
3.  Are literally out of money

My partner brokers loans across central Texas and has written credit policy for small banks.  There are plenty of good borrowers that have situations that need bridge money, interim construction money, or fix/flip money to make projects work and the banks won't work because of timing or other issues.  I also know of many super-sophisticated lenders that issue hard money loans for a living. 

So yeah...what you have above is wrong.  The borrowers are not only people that have been rejected by banks.  I have a relationship with 10+ local banks and I would borrow hard money if my loan covenants would allow me to do so given the right project with unique timing issues.  So would a lot of other real estate investors for the right projects. 

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Re: Accredited Investors - Why A 4% SWR?
« Reply #228 on: June 17, 2015, 01:09:47 PM »
Yes.  I have been investing since 2003.  We did just fine with our real estate investments through the crisis.  There was no bubble in Texas.  There was a decline, but not like there is in the other coastal states.

How are you not retired yet?

mr_orange

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Re: Accredited Investors - Why A 4% SWR?
« Reply #229 on: June 17, 2015, 01:18:47 PM »
Yes.  I have been investing since 2003.  We did just fine with our real estate investments through the crisis.  There was no bubble in Texas.  There was a decline, but not like there is in the other coastal states.

How are you not retired yet?

Apparently because I spend too much.  My goal wasn't ever to supercharge the path to retirement though.  Being wealthier would certainly be nice though.

Oh...and the tech bubble in the early 2000s and the mortgage crisis didn't help much.  Not complaining....just slowed things down a bit. 

arebelspy

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Re: Accredited Investors - Why A 4% SWR?
« Reply #230 on: June 17, 2015, 02:00:29 PM »
Nope, not speculating at all.  Been there, done that, got the scars and psychological damage that comes with shoveling a mountain of shit that other people spewed out during the last boom.  Just make sure that when the music stops next time you know where your chair is (and ideally it is one of those rocket-powered escape chairs the fighter pilots get).

Yup...you're speculating.  The risk management policies vary by company, project, etc.  How well-heeled the portals are varies as well as does the way the projects are constructed, what is offered, how they handle disclosures, etc. 

Again, we're painting with broad brushes like many do when they say cut, cut, cut spending without knowing the utility details to go with said recommendation.

Just curious: were you in this business in 2006?  2008?  2010?

Yes.  I have been investing since 2003.  We did just fine with our real estate investments through the crisis.  There was no bubble in Texas.  There was a decline, but not like there is in the other coastal states.

Ah, so you didn't learn the lessons Another Reader and others were talking about (involving the cyclical nature of real estate).  Do you think Texas is immune to real estate problems like they discussed from various time periods (early-mid 90s, for example, certain times in the 80s, etc.)?

Yes.  I have been investing since 2003.  We did just fine with our real estate investments through the crisis.  There was no bubble in Texas.  There was a decline, but not like there is in the other coastal states.

How are you not retired yet?

Apparently because I spend too much.  My goal wasn't ever to supercharge the path to retirement though.  Being wealthier would certainly be nice though.

Oh...and the tech bubble in the early 2000s and the mortgage crisis didn't help much.  Not complaining....just slowed things down a bit. 


Even with high spending on can FIRE if they make enough.  Why would you cite spending as the problem and not your income?  ;)
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
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Re: Accredited Investors - Why A 4% SWR?
« Reply #231 on: June 17, 2015, 02:28:51 PM »
This is turning into another acrimonious thread, similar to the one on the $15 minimum wage.  Before I bow out and move on, I think Mr_Orange would do well to take some time off and come back to re-read this thread.  If you do, try to review this thread from the point of view of a potential investor. 

From one accredited investor's point of view, I see a fund manager/lead investor/general partner/whatever that is completely myopic.  His rose colored glasses are so thick, he sees no further than his own nose.  He refuses to acknowledge or discuss a future, possibly sudden downturn in the real estate market.  I would not invest in his ventures, no matter how profitable they could possibly be.  I have no confidence in his ability to deal with a setback or carry my investment through a prolonged downturn.

Regulator is right.  There is going to be blood in the streets once the commercial, industrial and multi-family markets turn.  All the small investors in these ventures will lose everything and not understand what happened.  Torches and pitchforks will make a virtual march on Washington, there will be another Financial Inquisition, and we will get yet another set of heavy handed government regulations that will accomplish nothing.


mr_orange

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Re: Accredited Investors - Why A 4% SWR?
« Reply #232 on: June 17, 2015, 02:42:14 PM »
Ah, so you didn't learn the lessons Another Reader and others were talking about (involving the cyclical nature of real estate).  Do you think Texas is immune to real estate problems like they discussed from various time periods (early-mid 90s, for example, certain times in the 80s, etc.)?

No...not immune.  We did have pretty much the worst financial crisis in around 80 years recently and Texas did pretty well.  Other markets did okay as well. 

Texas is also not the same economy in 2015 that it was in the mid 90s or the 80s.  With a precipitous fall in oil prices guess what happened to the Texas economy?  It is doing just fine.  That's called diversification.  Sure, some places fared worse than others, but that is why you diversify both in projects and in regions. 

Quote
Even with high spending on can FIRE if they make enough.  Why would you cite spending as the problem and not your income?  ;)

I am assuming there is a typo in your first sentence because it doesn't make sense as-is. 

It certainly would have been nice to have made more income in the last decade.  That would have definitely helped too. 

frugalnacho

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Re: Accredited Investors - Why A 4% SWR?
« Reply #233 on: June 17, 2015, 02:48:33 PM »
Ah, so you didn't learn the lessons Another Reader and others were talking about (involving the cyclical nature of real estate).  Do you think Texas is immune to real estate problems like they discussed from various time periods (early-mid 90s, for example, certain times in the 80s, etc.)?

No...not immune.  We did have pretty much the worst financial crisis in around 80 years recently and Texas did pretty well.  Other markets did okay as well. 

Texas is also not the same economy in 2015 that it was in the mid 90s or the 80s.  With a precipitous fall in oil prices guess what happened to the Texas economy?  It is doing just fine.  That's called diversification.  Sure, some places fared worse than others, but that is why you diversify both in projects and in regions. 

Quote
Even with high spending on can FIRE if they make enough.  Why would you cite spending as the problem and not your income?  ;)

I am assuming there is a typo in your first sentence because it doesn't make sense as-is. 

It certainly would have been nice to have made more income in the last decade.  That would have definitely helped too.

Yes on=one.  He forgot the e.

He is saying your spending isn't the problem, it's your earning that's the problem.  Just depends on how you want to look at it.

mr_orange

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Re: Accredited Investors - Why A 4% SWR?
« Reply #234 on: June 17, 2015, 02:49:00 PM »
Quote
From one accredited investor's point of view, I see a fund manager/lead investor/general partner/whatever that is completely myopic.  His rose colored glasses are so thick, he sees no further than his own nose.  He refuses to acknowledge or discuss a future, possibly sudden downturn in the real estate market.  I would not invest in his ventures, no matter how profitable they could possibly be.  I have no confidence in his ability to deal with a setback or carry my investment through a prolonged downturn.

Where have I refused to discuss this?  Kindly point to that passage. 

You have not seen our risk management policies, who underwrites risk, how workouts are handled, what special servicing we use, etc.  Saying that I don't plan for risk is completely inaccurate.  In fact, we go through EXCRUCIATING detail about risk in our offering circulars and have done a ton of work with underwriting processes.  I have partnered with a third generation banker with 30 years of experience to underwrite every project for our funding platform.  We take risk seriously.  I am purposefully not disclosing my identity on this forum, but if you could see my LinkedIn profile I am most endorsed for due diligence.  That, in fact, is an endorsement I have received from well over 100 people.

Quote
Regulator is right.  There is going to be blood in the streets once the commercial, industrial and multi-family markets turn.  All the small investors in these ventures will lose everything and not understand what happened.  Torches and pitchforks will make a virtual march on Washington, there will be another Financial Inquisition, and we will get yet another set of heavy handed government regulations that will accomplish nothing.
Perhaps.  It depends on how the project is structured.  This is impossible to discuss in the abstract. 

mr_orange

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Re: Accredited Investors - Why A 4% SWR?
« Reply #235 on: June 17, 2015, 02:52:39 PM »
He is saying your spending isn't the problem, it's your earning that's the problem.  Just depends on how you want to look at it.

Income won't be the problem in 2015 or 2016.  It certainly has been lean in other years; like during the mortgage crisis. 

We actually made more from our businesses last year than we did working.  Hopefully that trend will continue.  There is less setup and overhead for our new ventures this year so we should be able to apply almost all of what we make to capitalizing financial assets in some form (pay off debt, buy new projects, buy financial assets, etc.) from the earnings we have over the next 12-18 months. 

frugalnacho

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Re: Accredited Investors - Why A 4% SWR?
« Reply #236 on: June 17, 2015, 02:57:50 PM »
He is saying your spending isn't the problem, it's your earning that's the problem.  Just depends on how you want to look at it.

Income won't be the problem in 2015 or 2016.  It certainly has been lean in other years; like during the mortgage crisis. 

We actually made more from our businesses last year than we did working.  Hopefully that trend will continue.  There is less setup and overhead for our new ventures this year so we should be able to apply almost all of what we make to capitalizing financial assets in some form (pay off debt, buy new projects, buy financial assets, etc.) from the earnings we have over the next 12-18 months.

No he is saying in the overall scheme of things, the entire premise of this blog and early retirement in general is that you accumulate a chunk of money (usually about 25X expenses) and live off of that indefinitely.  Your actual income and spending are irrelevant, except how they compare to each other.  You can live off $1 per year? Great you need $25 to retire.  You spend $10M per year? Also great, you just need $250M to retire. 

So if you aren't retired yet it's because you spend too much.  Or it's because you don't make enough money.  You can phrase it either way and it means the same thing.

deborah

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Re: Accredited Investors - Why A 4% SWR?
« Reply #237 on: June 17, 2015, 02:58:17 PM »
However, by your definition, many of the people who have answered you are accredited investors because they have followed the MMM "save most of your pay" philosophy. You are making assumptions that are not valid.

Which assumptions are those?
Let me see... That the people you are calling "lazy" are not accredited investors. That there is no way, following the "save most of your pay" philosophy that someone can become an accredited investor. That being an accredited investor matters, and somehow such people are "better" than others. That the "save most of your pay" philosophy is intrinsically going to end up with someone "scrounging". That the "save most of your pay" philosophy doesn't make people happy. That you are best off having as much money as you can (and this, of course, is the opposite of ER). That investing the way you prefer is the best and only way....

You made this stuff up.  Look back through the thread:

-I never said that lazy people are not accredited investors - You made that up
-I never said that saving most of your pay will not make you an accredited investor - Again, you made that up
-I never said accredited investors are better than non-accrediteds - Again, you made that up
-I never said saving most of your pay will make you unhappy - Again, you made that up
-I never said that investing the way I prefer is the best and only way - Again, you made that up

I can't really address whatever random stuff you make up or read into things that weren't said.  Seriously, go back and read through the thread and see if any of what you claimed above is there.  You're reaching for stuff that doesn't exist. 

I do, however, think that cutting expenses past some point WILL lower your standard of living and WILL make some (many in fact) people less happy.  Perhaps those people are not prevalent on this forum....fine. 

I also believe that having more money gives you more options, allows you to continue growing more that can be passed down to heirs, and provides a better safety margin for independence and thus is better.  This doesn't seem like a controversial topic to me based on everything I have read on the forums and on the MMM blog.  If your portfolio's growth outpaces your WR in FI then by definition it will continue to grow over time. 

Regarding being here to talk and not to listen that is probably fair.  I have, however, learned a lot from posting on the site already and am certainly not bashful about sharing my thoughts.  Don't expect that to change.  I wouldn't expect any other posters to change their opinions over night either.  As long as these opinions are shared respectfully it is fine. 
ASSUMPTIONS - things that you seem to be assuming in your posts - if you had SAID them, they wouldn't be assumptions.

mr_orange

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Re: Accredited Investors - Why A 4% SWR?
« Reply #238 on: June 17, 2015, 03:06:21 PM »
So if you aren't retired yet it's because you spend too much.  Or it's because you don't make enough money.  You can phrase it either way and it means the same thing.

Yup...I understand this. 

mr_orange

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Re: Accredited Investors - Why A 4% SWR?
« Reply #239 on: June 17, 2015, 03:09:06 PM »
ASSUMPTIONS - things that you seem to be assuming in your posts - if you had SAID them, they wouldn't be assumptions.

https://en.wikipedia.org/wiki/Spin_(public_relations)

regulator

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Re: Accredited Investors - Why A 4% SWR?
« Reply #240 on: June 17, 2015, 03:15:31 PM »
There is going to be blood in the streets once the commercial, industrial and multi-family markets turn.  All the small investors in these ventures will lose everything and not understand what happened.  Torches and pitchforks will make a virtual march on Washington, there will be another Financial Inquisition, and we will get yet another set of heavy handed government regulations that will accomplish nothing.

Actually, when the next mess happens it will be quite interesting to see what happens.  As of now, the bank regulators are on a jihad to keep the stupidest garbage out of the banking system (and they are not entirely succeeding).  If the next crack up happens before the bank regulatory agencies get neutered/defunded/defanged (just a matter of time as memories fade), the worst crap will be outside the banking system.  People can piss and moan all they like in that scenario, but the regulatory agencies/gubmint will rightly be able to say "we did our job and we did it well."  Then what?  Ensuring we still have a banking system is clearly something that had to be done.  Saving the stupid/naÔve from the consequences of their poor choices?  Not so clear.

arebelspy

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Re: Accredited Investors - Why A 4% SWR?
« Reply #241 on: June 17, 2015, 05:35:15 PM »
Ah, so you didn't learn the lessons Another Reader and others were talking about (involving the cyclical nature of real estate).  Do you think Texas is immune to real estate problems like they discussed from various time periods (early-mid 90s, for example, certain times in the 80s, etc.)?

No...not immune.  We did have pretty much the worst financial crisis in around 80 years recently and Texas did pretty well.  Other markets did okay as well. 

Texas is also not the same economy in 2015 that it was in the mid 90s or the 80s.  With a precipitous fall in oil prices guess what happened to the Texas economy?  It is doing just fine.  That's called diversification.  Sure, some places fared worse than others, but that is why you diversify both in projects and in regions. 

That sounds to me like you're arguing Texas is immune to any sort of negative downturn, because it did okay in the last one, and it's more diversified than before.

(I also second the recommendation for you to read Fooled By Randomness.)

Let me ask you: under what scenario would things go bad for the investments you are hawking?

Quote
Even with high spending on can FIRE if they make enough.  Why would you cite spending as the problem and not your income?  ;)

I am assuming there is a typo in your first sentence because it doesn't make sense as-is. 

It certainly would have been nice to have made more income in the last decade.  That would have definitely helped too.

FrugalNacho was right--I typo'd a single letter.  :)   Regardless of spend, if income is enough, you can hit 25x assets if you save a sufficient percent.  For example, if you made 250k and spent 100k over that timeframe, you'd be FIRE'd now.  Maybe the problem is you spent more than 100k, or maybe it is you didn't make 250k.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

mr_orange

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Re: Accredited Investors - Why A 4% SWR?
« Reply #242 on: June 17, 2015, 06:13:02 PM »
That sounds to me like you're arguing Texas is immune to any sort of negative downturn, because it did okay in the last one, and it's more diversified than before.

(I also second the recommendation for you to read Fooled By Randomness.)

Let me ask you: under what scenario would things go bad for the investments you are hawking?

I'm not hawking anything.  I have nothing to sell here.  I really honestly couldn't care less if anyone changes their mind about anything.  I was just hoping to try to understand the focus on cutting spending and the lack of focus on earning money and improving investment performance. 

Nope...nothing is immune from a downturn.  How people are drawing these absolutes from what I write is a mystery to me. 

You have to place good risk-adjusted bets.  I simply think investing with quality sponsors in the senior debt part of the capital stack with 30% or more in margin in the middle of markets with strong fundamentals is a good bet when it delivers 10% yields or more.  This is especially true if you can spread your investments across projects and sponsors that fit with these parameters. 

Quote
FrugalNacho was right--I typo'd a single letter.  :)   Regardless of spend, if income is enough, you can hit 25x assets if you save a sufficient percent.  For example, if you made 250k and spent 100k over that timeframe, you'd be FIRE'd now.  Maybe the problem is you spent more than 100k, or maybe it is you didn't make 250k.

We haven't had level W2 salaries over that time period.  I also experienced an extended layoff during the crisis where I started some new ventures that were somewhat successful, but less lucrative than working.   We exited college each making about $50k/year and have roughly doubled our W2 salaries since then.  Our expenses are higher now than they have ever been because the family budgets have gone up with 3 kids in Montessori school of late.  When they go to public school later this year and 3 years from now this will eliminate our 2nd biggest expense; 2nd only to taxes. 

In the last several years we have made good money from real estate investments and we have done pretty well with rentals and small apartment complexes too.  A lot of profits have been reinvested into growing our business and infrastructure.  Those enterprise value numbers are not included in the net worth numbers I have been writing about.  I also don't include my carried interest in funds, etc. until they're realized.  Thus if things work out as planned there will be big spikes in my net worth in the future. 

Using napkin math our net worth is currently about half of what we earned over the course of our working careers thus far.  I haven't kept detailed enough records to know how much of that is savings and how much is from investment lift. 

innerscorecard

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Re: Accredited Investors - Why A 4% SWR?
« Reply #243 on: June 17, 2015, 09:13:25 PM »
You may be making good risk-adjusted bets, but that does not mean that those who refrain from doing so due to personal preferences are simply ignorant or wrong. They may have different risk preferences.

waltworks

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Re: Accredited Investors - Why A 4% SWR?
« Reply #244 on: June 17, 2015, 09:54:36 PM »

mr_orange

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Re: Accredited Investors - Why A 4% SWR?
« Reply #245 on: June 18, 2015, 02:49:52 AM »
You may be making good risk-adjusted bets, but that does not mean that those who refrain from doing so due to personal preferences are simply ignorant or wrong. They may have different risk preferences.

Agree.  I never called anyone ignorant or wrong. 

milesdividendmd

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Re: Accredited Investors - Why A 4% SWR?
« Reply #246 on: June 18, 2015, 02:26:56 PM »
Mr Orange. Are you or are you not Rick Santorum?

Wolf359

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Re: Accredited Investors - Why A 4% SWR?
« Reply #247 on: September 09, 2015, 09:07:32 AM »
I always enjoyed reading this thread, watching the clash of philosophies play back and forth.  Recently, I read a book that resonated with me and reminded me of this discussion.

"The Millionaire Next Door" is often quoted on this forum and is relevant to many Mustachians.  It describes a type of millionaire who achieved his/her millions through aggressive savings, living below their means, but not necessarily having a high income.  Although many MND-types have high incomes, many more achieved their wealth through frugality alone.

I recently read one of Dr. Stanley's later books, updated around 2009, "Stop Acting Rich ...And Start Living Like a Real Millionaire."  In it, he splits the millionaires he profiles into "glittering rich" and "frugal rich."  In the earlier book, he had lumped most of the glittering rich (those with assets who visible spend them on status badges) into inherited wealth or celebrities.  In the later book he more closely examined glittering rich who had accumulated their wealth on their own.  This was achieved by focusing on very high incomes, not frugality.

Both the self-made glittering rich and the frugal rich had one thing in common -- they lived within their means.  The self-made glittering rich person did not spend their money on the expensive toys and high status items until AFTER they became wealthy.  They had higher incomes and generally achieved their wealth at an earlier age.  They were frugal compared to the general population until they succeeded, then had no problems spending their wealth within their means.  (But their means are considerable compared to that general population.)  Glittering rich requires a higher realized income to support the higher spending level.  It also requires achieving a higher net worth to support that income.

Most aspirationals (almost everyone you know who has a luxury car or mini-mansion but is not wealthy) think that looking successful is the same as being successful.  Only the glittering rich type of rich are visible to the public.  Frugal rich (traditional MND-types) are indistinguishable from the general population.  That's why people equate status spending with rich people.

There are many paths to financial independence.  The OP's original question was why the focus on frugality on this site.  It's because it works, and is a legitimate path for many people.  It's also a key part of the philosophy MMM espouses.  While having a high savings rate is difficult or impossible for some people, it is easier to achieve for most people than a high income.  We don't live in Lake Woebegone, where everyone can be above average.  You can achieve frugal rich with fewer funds as well, because a lower net worth is required to support a frugal lifestyle.

As for the lack of focus on improving investment performance -- I disagree that there is a lack of focus there.  I have seen lots of discussion on using a passive approach to investments using indexing, there's a whole different subject forum for real estate investing, there have been people who are aggressively investing in individual stocks, and there is a very active thread on dual momentum strategies.  Having a high savings rate will offset the need for high returns, but having high returns will reduce the amount of money you need to accumulate to achieve FI.

In "Stop Acting Rich," Dr. Stanley points out that there are many more frugal rich than there are self-made glittering rich.  Of course, there are many, many more aspirational rich, who spend their money on status badges to "look rich" but never achieve much wealth. 

This thread is just an example of a clash between these two paths to financial independence.  Neither is wrong, and they both work.  But if you give a frugal rich person a super-high income, all they will do is achieve FIRE faster.  Example: Alfred Morris   http://gamedayr.com/lifestyle/athletes-2/alfred-morris-1991-mazda-626/

I'd love to acquire the skills that you have to generate income, but I'm also naturally a fairly frugal person.  Once my income goes over a certain amount, I don't feel the need to spend more.  It's just not important to me.  I also enjoy squeezing a buck.  Even if I don't have to.




mr_orange

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Re: Accredited Investors - Why A 4% SWR?
« Reply #248 on: September 09, 2015, 06:08:15 PM »
I read back through this thread again today as Another Reader suggested.  Since I was accused of "talking too much" and not "listening" by Sol I have not posted much in the last several months and have participated quite passively.  There were many good passages in this thread and the most recent one was very nice. 

I can't say that my positions have changed much in the several months since all of this was posted and I doubt they will much in the next several years. 

Another Reader

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Re: Accredited Investors - Why A 4% SWR?
« Reply #249 on: September 09, 2015, 06:58:39 PM »
Two and a half months is not the time frame I had in mind.    The Silicon Valley market is slowing down and I'm betting that Austin has started to slow as well.  Let's see how many of these projects that are going on the market over the next few months do.  Some nail biting and price reductions should curb a little of your enthusiasm.  Do a year end review and let us know how you finished.