Author Topic: Retired at 27, looking to grow my income more.  (Read 32152 times)

Honest Abe

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Re: Retired at 27, looking to grow my income more.
« Reply #50 on: December 18, 2014, 01:34:32 PM »
Why do people talk about paying taxes on gold? Very few bullion collectors actually pay taxes if they do sell.

rmendpara

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Re: Retired at 27, looking to grow my income more.
« Reply #51 on: December 18, 2014, 01:50:01 PM »
Hey everyone, I'm retired at 27 in North Carolina. Primarily through multifamily rental property and some private lending.

I am looking to expand my income and maybe branch out into more passive buy and hold strategies that pay dividends.

I'm fond of the idea of index fonds, not paying someone huge amounts to underperform, However, nothing I can really find is standing out to me as impressive. I'm used to making 15% returns minimum, and the best options I really see elsewhere average out to 5-7% and I feel like I would be better off buying silver bullion or gold and sitting on it. Any thoughts? Suggestions?

There are no passive strategies in the public markets with expected returns in that range. Stick to what you know and keep doing it. If you want to "work" less for a portion of your assets, then accept a lower return.

If you prefer income to capital growth, since it seems you are earnings new investable capital through rentals, check out preferred stocks, master limited partnerships, closed-end funds, and option income strategies. Plenty of resources online showing how it can be done, but most of these aren't really "passive" as you stated you wanted. If you have substantial assets, maybe >5 million, you can hire a qualified investment professional to replicate some of these tedious strategies for you for a relatively small fee.

To be even more honest, if you are skilled at identifying undervalued real estate, then you should stick to that. Given even 70% loan to value  on investment properties, the return on invested capital will far outpace what you can achieve in public markets, and free cash flow will grow over time as you build up equity and property management and maintenance expenses should decrease as a percentage of cash flow as your portfolio grows.

perhaps someone would be so kind as to enlighten me, lets go with this article:

http://www.forbes.com/sites/perianneboring/2014/02/03/if-you-want-to-know-the-real-rate-of-inflation-dont-bother-with-the-cpi/

Please, refute them on a point by point basis. I am genuinely interested in seeing where their mistakes are exactly, and if so, will happily admit I am wrong.


No.  The points aren't valid because they throw up a screen of untrustworthiness "the government has a reason to lie" without showing any data.  Actually, no, I'm wrong - the one piece of data she uses is that according to the CPI "the average price of beef and veal increased 20 percent over the past five years" while according to the FDA "beef prices have increased 26 percent over the past five years."  If you can't see how including veal might change prices, then I don't know what to say.  But even so, the difference between 20% over 5 years and 26% over 5 years is a difference of 1.0% annualized.  In other words, the best data point that an author arguing that the CPI is inaccurate has shows a difference of 1.0% annually.

That's the biggest difference that she could find.  To me, that says the maximum error is 1.0% annually, and that's only if you go looking for it.  When other people check the CPI's work, they come up with a difference of at most a few tenths of a percent: http://bpp.mit.edu/usa/ 
Point by point, let's see. I can go section by section.

Why does the government want low inflation numbers? --> I don't disagree. Any entity is "incentivized" to keep expenses low.

So how is the CPI calculated? --> Also correct. Author just describes the process told by the govt agency which produces the data. We still have yet to hear any concrete evidence that the govt is wrong, just plausible reasons why they may be tempted to provide misguided information.

The CPI doesn’t even meet the government’s definition of inflation --> I honestly have no idea what this paragraph means. Living standards change over long periods of time, so over time it becomes necessary to substitute certain products/services within the index.

The CPI doesn’t meet other government agency’s inflation measurements either --> I can say this paragraph is very misguided. Author is confusing two separate topics, price inflation and monetary inflation. Money supply is correlated with inflation, but it has a significant standard deviation. It's not yet known whether money supply is a leading or lagging variable to price inflation, while controlling for all other variables.

A few other quotes which stood out as misguided in the final paragraph:

"It doesn’t make sense that the BLS’s measurement of inflation was only 1.5% last year, while at the same time, monetary inflation grew 4.9%.*" --> Again, price inflation and monetary inflation are two different things.

"According to the BLS the average price of beef and veal increased 20 percent over the past five years. However, according to the USDA, beef prices have increased 26 percent over the past five years. I asked a statistician at the BLS about this discrepancy and he said “I would expect those numbers to be a little closer together.”" --> Now, author is arguing that beef/veal prices, as one small subsection of overall price ifnlation, is proof that the govt is lying? False. If cows become a rare species and the price of beef quintuples in the next 5 years since only specially grown cattle can produce beef, do we call this inflation? No.

"Given that the CPI is calculated secretly, is no where near comparable to monetary inflation, and doesn’t even meet its own definition of inflation, we should use our common sense to count the value of our cents, not the CPI." --> Again, confusion of monetary inflation and price inflation.

The goal of investing, overall, is to beat price inflation... assuming your goal as an investor is be able to consume more in the future than today based on a fixed amount of capital being deployed. The author does not do a good job of much of anything besides showing that CPI is not an absolutely correct method of measuring price inflation. That is correct, but it's not a measure... it's an estimate by definition. Prices across the country vary considerably, so changes in certain products will unevenly affect different people in varying amounts.

Anyway, that was fun.
« Last Edit: December 18, 2014, 02:31:48 PM by rmendpara »

hodedofome

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Re: Retired at 27, looking to grow my income more.
« Reply #52 on: December 18, 2014, 02:48:54 PM »
Some of the most dangerous people in the world are smart kids who have never had their teeth kicked in. Until you've lost a lot of money, you'll never have enough respect for the market.

Chase your high returns without managing your risk at your own peril.

Xanatosnemos

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Re: Retired at 27, looking to grow my income more.
« Reply #53 on: December 18, 2014, 02:49:30 PM »
Quote
@Xanatosnemos - i'll try to address the topic post.

if you're looking for income strategies, i'd throw out the idea of you trying your hand at purchasing websites/online businesses.

i'm averaging 45-60% ROI on my portfolio of websites, and it's scalable if you have good systems in place. i plan on funneling these profits into my portfolio of stocks and my portfolio of real estate acquisitions after it reaches a certain monthly threshold.

i'd say 95% of the battle is finding a website to buy on an auction site that isn't a scam. the remaining 5% is whether or not you can monetize it better than the previous owner and sustain/grow the traffic. i feel i do excellent due diligence on these ends, which has helped contribute to my profitability.

it's a great side job/hobby, and the stuff you learn (thought the learning curve is steep) is quite useful.

my two cents.

Now we're talking, I'd like to learn more about this.

And the Ruble/russian investing, that is very intriguing as well.


maki

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Re: Retired at 27, looking to grow my income more.
« Reply #54 on: December 18, 2014, 02:58:10 PM »
i wish i could give you specific resources, but there's a ton of information out there on ranking websites and growing traffic, and whatnot. take everything with a grain of salt, and try to view every recommendation from different perspectives (i.e. google's).

a solid site is searchengineland.com. two decent auction sites are empireflippers.com and flippa.com (the largest).

i've spoken to the ceo of flippa before, and it remains to be seen how they address the issue of providing a more stable marketplace for buyers. with that being said, though, i prefer volatility because your risk is correlative to the amount of knowledge/due diligence you have/have done, and at the end of the day, this works to my benefit.

in a nutshell, look for websites where you can either a) fix a problem, or b) provide something of value to the end user in a way that is difficult to duplicate. if you aren't serving some purpose, then you're not really doing much, and why would people ever come back?

Fallenour

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Re: Retired at 27, looking to grow my income more.
« Reply #55 on: December 18, 2014, 03:00:16 PM »
@Xanatosnemos - i'll try to address the topic post.

if you're looking for income strategies, i'd throw out the idea of you trying your hand at purchasing websites/online businesses.

i'm averaging 45-60% ROI on my portfolio of websites, and it's scalable if you have good systems in place. i plan on funneling these profits into my portfolio of stocks and my portfolio of real estate acquisitions after it reaches a certain monthly threshold.

i'd say 95% of the battle is finding a website to buy on an auction site that isn't a scam. the remaining 5% is whether or not you can monetize it better than the previous owner and sustain/grow the traffic. i feel i do excellent due diligence on these ends, which has helped contribute to my profitability.

it's a great side job/hobby, and the stuff you learn (thought the learning curve is steep) is quite useful.

my two cents.

Now that's something I understand & can process. We should talk sometime. PM me.

Fallenour

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Re: Retired at 27, looking to grow my income more.
« Reply #56 on: December 18, 2014, 03:01:45 PM »
Looking for ideas.

Ive been buying the ETF SDOG.  They use the dogs of the dow theory but spread funds equally over the 10 sectors of the S&P 500.  They invest in the 5 highest yielding stocks in each sector. The idea is that the highest yielding stocks could be the most undervalued. It kicks out a solid +3% dividend. I think dividend payers are an important investment right now with basically zero yield on savings accounts and cds. Dividends, diversification and the possibility having stocks that are undervalued are 3 things im constantly looking for and this investment caught my eye.
High yielding is that way for a reason. Risk. See Detroit munis..

Blue chip dividend payers is a good bet now? After 5 years of people chasing yield and pouring money into them, pushing them well above average P/E? Sure.. Unless you need income right now why do you care about yields?

Detriot? Municipalities? You mean the great magical machine that once gave the city water? Or the giant iron cactus that once made the lands glow yellow?

thenextguy

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Re: Retired at 27, looking to grow my income more.
« Reply #57 on: December 18, 2014, 03:31:44 PM »
Doing due diligence and managing a portfolio of websites is more work than setting up a portfolio of indexed funds. It's not really accurate to compare the returns of the two. Also, a true comparison would consider the risk adjusted returns.

Scandium

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Re: Retired at 27, looking to grow my income more.
« Reply #58 on: December 18, 2014, 04:20:25 PM »
Doing due diligence and managing a portfolio of websites is more work than setting up a portfolio of indexed funds. It's not really accurate to compare the returns of the two. Also, a true comparison would consider the risk adjusted returns.

I went to one of the site. A website in the "beauty" category sold for $80,000, and claimed income of $4000/month. Smells a little too good to be true to me, but what do I know..
Internet advertising would have been near the bottom of the list of ways to get rich if I were to think of something. What do you get? Fractions of a penny per clickthrough?

Xanatosnemos

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Re: Retired at 27, looking to grow my income more.
« Reply #59 on: December 18, 2014, 04:22:41 PM »
Actually buying an internet business, one would expect to recoup ones initial investment within 1-2. I've considered selling an ebay business before and never really did. But  I did look into it.

maki

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Re: Retired at 27, looking to grow my income more.
« Reply #60 on: December 18, 2014, 04:36:13 PM »
Doing due diligence and managing a portfolio of websites is more work than setting up a portfolio of indexed funds. It's not really accurate to compare the returns of the two. Also, a true comparison would consider the risk adjusted returns.

This is 100% accurate. I'm not at all comparing the two, and I don't think anyone else was, either. Or at least, I hope they weren't. If I missed something, please let me know.

There is tremendous risk in investing in websites, but that can also lead to a higher return. if there is a high return with low risk, run -not walk- away from said deal.

surfhb

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Re: Retired at 27, looking to grow my income more.
« Reply #61 on: December 18, 2014, 06:42:28 PM »
Fallenour and Xanatosnemos know each other and this thread is becoming a silly joke

waltworks

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Re: Retired at 27, looking to grow my income more.
« Reply #62 on: December 18, 2014, 06:54:15 PM »
Did I miss something? If OP is retired, WTF do they care about growing their income?

-W

Cpa Cat

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Re: Retired at 27, looking to grow my income more.
« Reply #63 on: December 18, 2014, 07:01:31 PM »
Ultimately, people buy gold because... they want to decrease their taxes (gold helps you do this surprisingly enough),

This is terrible tax advice.


Xanatosnemos

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Re: Retired at 27, looking to grow my income more.
« Reply #64 on: December 18, 2014, 07:10:17 PM »
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Did I miss something? If OP is retired, WTF do they care about growing their income?

-W

What kind of statement is that?

I'm retired because its no longer desirable for me to work and my passive income covers my expenses, how do you define being retired?

Doesn't mean I want to stop investing or growing my income/net worth..

Primarily income.

I am 100% focused on lifestyle at this point. I want it to keep improving through cashflow/income investments.

DirtCheapDirtyDeedDoer

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Re: Retired at 27, looking to grow my income more.
« Reply #65 on: December 18, 2014, 07:13:42 PM »
Fallenour and Xanatosnemos know each other and this thread is becoming a silly joke

dingdingdingdingding we have a winner

waltworks

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Re: Retired at 27, looking to grow my income more.
« Reply #66 on: December 18, 2014, 08:00:39 PM »
I feel sorry for you, I guess.

-W

Quote
Did I miss something? If OP is retired, WTF do they care about growing their income?

-W

What kind of statement is that?

I'm retired because its no longer desirable for me to work and my passive income covers my expenses, how do you define being retired?

Doesn't mean I want to stop investing or growing my income/net worth..

Primarily income.

I am 100% focused on lifestyle at this point. I want it to keep improving through cashflow/income investments.

Xanatosnemos

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Re: Retired at 27, looking to grow my income more.
« Reply #67 on: December 18, 2014, 08:27:04 PM »
And why would you feel sorry for me, exactly? I'm confused, @Waltworks

Fallenour

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Re: Retired at 27, looking to grow my income more.
« Reply #68 on: December 18, 2014, 08:33:27 PM »
Ultimately, people buy gold because... they want to decrease their taxes (gold helps you do this surprisingly enough),

This is terrible tax advice.

I'm just going to leave these two here for you CPA Cat. If you can't put these two pieces of the puzzle together, your not much of a "CPA".

http://www.businessdictionary.com/definition/capital-investment.html

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Deducting-Business-Expenses

waltworks

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Re: Retired at 27, looking to grow my income more.
« Reply #69 on: December 18, 2014, 08:38:44 PM »
Because it sounds like you are still worried about money, even while "retired". I can tell you that if I were FI, I would not be spending my time trying to find high-yield, high-risk investments. Sounds sucky.

But at least you have a crazy buddy to chat with and entertain us all online!

-W

Cpa Cat

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Re: Retired at 27, looking to grow my income more.
« Reply #70 on: December 18, 2014, 08:54:05 PM »
Ultimately, people buy gold because... they want to decrease their taxes (gold helps you do this surprisingly enough),

This is terrible tax advice.

I'm just going to leave these two here for you CPA Cat. If you can't put these two pieces of the puzzle together, your not much of a "CPA".

http://www.businessdictionary.com/definition/capital-investment.html

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Deducting-Business-Expenses

Good luck with your audit, dude.

Xanatosnemos

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Re: Retired at 27, looking to grow my income more.
« Reply #71 on: December 18, 2014, 10:06:58 PM »
Quote
Because it sounds like you are still worried about money, even while "retired". I can tell you that if I were FI, I would not be spending my time trying to find high-yield, high-risk investments. Sounds sucky.

But at least you have a crazy buddy to chat with and entertain us all online!

-W

Care to elaborate? Where did it sound like I was worried? That makes absolutely no sense, like the previous things you've said. You're drawing conclusions from thin air, and making yourself sound like a fool in the process.

I enjoy investing, its a hobby, I do it not only for fun, but for a better life tomorrow just like everyone else.


waltworks

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Re: Retired at 27, looking to grow my income more.
« Reply #72 on: December 18, 2014, 10:41:22 PM »
More power to you, then.

-W

OracleOfAtown

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Re: Retired at 27, looking to grow my income more.
« Reply #73 on: December 18, 2014, 11:20:43 PM »
Looking for ideas.

Ive been buying the ETF SDOG.  They use the dogs of the dow theory but spread funds equally over the 10 sectors of the S&P 500.  They invest in the 5 highest yielding stocks in each sector. The idea is that the highest yielding stocks could be the most undervalued. It kicks out a solid +3% dividend. I think dividend payers are an important investment right now with basically zero yield on savings accounts and cds. Dividends, diversification and the possibility having stocks that are undervalued are 3 things im constantly looking for and this investment caught my eye.
High yielding is that way for a reason. Risk. See Detroit munis..

Blue chip dividend payers is a good bet now? After 5 years of people chasing yield and pouring money into them, pushing them well above average P/E? Sure.. Unless you need income right now why do you care about yields?

Dividends are a major part of investing success. I was told the same thing when Altria was trading at $15 and yielding close to 10%. That it was a huge risk. I bought anyways and said people will stop paying their mortgage or credit cards before cigarettes and alcohol.  Almost everything is above average P/E and thats because there are no cds or bonds or savings accounts to park their money in. I would say a solid yielding company has less risk than chasing Gopro, Facebook, twitter etc.  Reinvested dividends is enormous in long term investing. I also think you proved my point by saying people are pouring money into chasing dividend payers pushing their price up. a 3 or 4% dividend yield right now is equivalent to getting and 7 or 8% dividend a few years ago when you could get 5-6% interest on online savings accounts.     

Left

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Re: Retired at 27, looking to grow my income more.
« Reply #74 on: December 18, 2014, 11:47:47 PM »
sounds like op wants to be in venture capital? angel investing. doesn't want to be in stock market since returns arent hbigh enough.

heard someone saying startup scene is following the same tech/dotcom bubble though. maybe try to short it? or buy now and sell right before bubble pops?

space

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Re: Retired at 27, looking to grow my income more.
« Reply #75 on: December 19, 2014, 12:20:39 AM »
sounds like op wants to be in venture capital? angel investing. doesn't want to be in stock market since returns arent hbigh enough.

heard someone saying startup scene is following the same tech/dotcom bubble though. maybe try to short it? or buy now and sell right before bubble pops?

I don't think it works that way - VC is a much more illiquid affair - you either give them money and support or you don't, and you kinda become embedded in their operations for many, many years if you do. Startups will generally also expect services that support their growth - things like talent recruitment, legal support, that kind of thing.

ScroogeMcDutch

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Re: Retired at 27, looking to grow my income more.
« Reply #76 on: December 19, 2014, 02:09:00 AM »
I fail to understand just how im supposedly profiting from a 4-6% stock return when inflation is just at 6% (http://www.shadowstats.com/alternate_data/inflation-charts)

In this instance, gold/silver's ability to preserve against inflation is better than the stocks slowly losing out against inflation. I want to grow my purchasing power, not just my total $s.

Already refuted by others, but let me try to phrase this in a way that you cannot just throw numbers at to confuse and muddle a discussion. There is such a thing as general inflation (price increase for the average consumer), and personal inflation (price increase for you). For example, if you, in the mustachian idea, bike everywhere instead of taking the car, you will hardly be hit by a price increase or decrease on gasoline. If you own a Ford F150 and fancy cross country trips everywhere, then you will be heavily hit by a price increase or decrease on gasoline. Regardless of whether or not general inflation as measured by CPI is correct and defined correctly, there is a percentage, let's call it Ig, which is the correct general inflation percentage for the average consumer in the US. There is also a percentage, let's call it Ip, which is the correct personal inflation percentage for you and your consumption pattern. Basically, if you would do exactly the same next year as this year, it would have an Ip price difference. For example, if you take a 6 month trip to Russia every year, then 2013 will have been more expensive than 2014, which in turn will be more expensive than 2015 due to the fall of the Ruble, giving you a negative Ip

I do not know how high each of these percentages are, and for the dicussion of investment results, you also do not necessarily need to know how high they are. Because, if you invest, you will get a percentage result of R in a year when measured in US$, without correcting for inflation. R is actually something that's easy to measure. If you invest 100k today, and have 120k next year at the same time, R was 20%. Any investment you do on the modern markets you will be able to put a monetary value on, and any investment you do outside of the modern markets you have calculation methods to put a monetary value on them. You can discuss how you measure and calculate it, but that also doesn't matter for the argument.

Regardless of how high your result R is, your personal inflation adjusted result is R - Ip. Your general inflation adjusted result is R - Ig. The higher the R, the better. Of course, you don't know R in advance, nor do you know Ip or Ig. So we work with estimating R and adjusting for risk, as well as estimating Ig.

The point is, regardless of how you look at an investment, the one with the higher monetary value after the same period of time, is the superior investment over that time.

Your point that gold/silver is a better hedge against inflation than the US stock market is not supported by proof. In fact, the graph I posted earlier shows the opposite, even when not measured in $ but in ounces of gold. One ounce of gold, buys you less of the US stock market today, than it did 10, 20, 30 or 40 years ago (and that's not counting the dividends received). As a blanket, generic statement, it is not supported by facts. That at any given time, gold/silver may be over/undervalued and the same is true for the stock market, that is true. I do not know if at this time gold/silver is over or underappreciated, nor do I know it of the stock market (although indications are that it is slightly overvalued).

Looking at empirical evidence however, more wealth was created by the stock market than by gold and silver.

Quote


Quote
@Xanentosnemos:
If you are able to generate 15% return on investment, regularly and with confidence, my suggestion would be to start an investment firm, charge a 2% management fee, and show you do it year in year out. The amount of money flowing to you should be enormous, especially if you can multiply using leverage. If the above does not apply, because the investment itself doesn't lend to leveraging and you're only able to get the 15% on smaller scale investments (say up to 5 million) then just invest the money there yourself.

I tend to be great with investments, I have no idea about opening an investment firm, but I can already guess theres a license required for it, and I am vaguely aware that when recommending investments your hands are tied by law to force diversification etc. So in reality, even if I went to school (I dont plan on being active that much longer, I plan on retiring completely and living off the income) and got the license, then opened the business. I'd never be able to recommend to my clients to do exactly what I do.


-----
For side note: http://www.cmi-gold-silver.com/monetarydigests/warren-buffett-buys-silver/

Buffett bought silver.

It was a slight joke to illustrate the point. On these forums, you will not find an advice for passive investments returning 15% or more annually, because if there was a consensus that these existed, they would already be the generic advice. The generic advice is, stuff your money in a low-cost index fund and leave it there until you retire, then withdraw 4% per annum.

I do not know what one would have to do in order to make an investment firm. With proven 15% annual returns over a longer of period of time, I'm sure hedge funds would also hire you for a hefty salary if you can replicate it with leverage and larger funds. Just saying, 15% annually over a longer period of time with larger amounts of money is absolutely slaughtering the market.

If you want the income passively, then settle for the market return.
If you want to work for it, then try to exploit and scale up your current 15% returns.

Fallenour and Xanatosnemos know each other and this thread is becoming a silly joke

I thought this the minute I read the response by Fallenour, but decided to try and answer anyway.

Fallenour

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Re: Retired at 27, looking to grow my income more.
« Reply #77 on: December 19, 2014, 05:30:25 AM »
Ultimately, people buy gold because... they want to decrease their taxes (gold helps you do this surprisingly enough),

This is terrible tax advice.

I'm just going to leave these two here for you CPA Cat. If you can't put these two pieces of the puzzle together, your not much of a "CPA".

http://www.businessdictionary.com/definition/capital-investment.html

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Deducting-Business-Expenses

Good luck with your audit, dude.

I'm not meaning to be offensive sir, and I have been audited in the past, twice more specifically, and each time I've passed without amounts owed, as per the IRS.

Now if there is something new that I am not aware of, please by all means, feel free to let me know. I have non-profits that I donate to on a regular basis, and their budgets depend on a stable flow of income from myself, so if you know something, now would be a much more preferred time to speak up. It's not in my benefit to play the tax game as I do, it's in the interest of others that I do it. Otherwise I'd just go buy a truckload of hops and sealable beer bottles. I love Irish Reds way more than money.

Fallenour

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Re: Retired at 27, looking to grow my income more.
« Reply #78 on: December 19, 2014, 05:35:49 AM »
sounds like op wants to be in venture capital? angel investing. doesn't want to be in stock market since returns arent hbigh enough.

heard someone saying startup scene is following the same tech/dotcom bubble though. maybe try to short it? or buy now and sell right before bubble pops?

If anyone is interested in the startups rage or angel investing in small tech companies, let me know. I have direct connections in all three major IT mechas, and can put you in contact with the small business reps and tech councils.

I'll just tell you now, start to expect an exodus of tech companies from the california area to regions like colorado, texas, florida, and maryland.

The reasons behind it are the recent cutting of many of the tax breaks that brought them in, combined with the massive landlord/tenant issues, such as landlords requiring in many of those areas a credit score of at least 700, and a 100k or higher income.

The major moves Ive seen so far are to texas, which favors big business, and land is cheap.

NoraLenderbee

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Re: Retired at 27, looking to grow my income more.
« Reply #79 on: December 19, 2014, 12:08:39 PM »
sounds like op wants to be in venture capital? angel investing. doesn't want to be in stock market since returns arent hbigh enough.

heard someone saying startup scene is following the same tech/dotcom bubble though. maybe try to short it? or buy now and sell right before bubble pops?

If anyone is interested in the startups rage or angel investing in small tech companies, let me know. I have direct connections in all three major IT mechas, and can put you in contact with the small business reps and tech councils.

I'll just tell you now, start to expect an exodus of tech companies from the california area to regions like colorado, texas, florida, and maryland.

The reasons behind it are the recent cutting of many of the tax breaks that brought them in, combined with the massive landlord/tenant issues, such as landlords requiring in many of those areas a credit score of at least 700, and a 100k or higher income.

The major moves Ive seen so far are to texas, which favors big business, and land is cheap.


The same predictions were made in the early 90s. Sure enough, some tech companies moved to Texas or opened offices there and moved some jobs. Then the 90s boom came and California was full of new startups.

After the dot-com bubble, more of the same predictions were made. More companies moved out of California. Eventually another boom came, and CA is bursting with new companies again. And so are Texas and other places. It's not a zero-sum game.


FarmerPete

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Re: Retired at 27, looking to grow my income more.
« Reply #80 on: December 19, 2014, 01:35:43 PM »
Quote
Furthermore, I am expanding my 15% Returns every single month, but at this point, I was beginning to look for something better, hence I came here to bounce around ideas in a serious fashion, not deal with childishness.

Nope.  You can't get anything better than 15% safely and consistently.  Sounds like you are an investing god.  You should write down your secrets in a book and then sell the book via infomercials.

On the other hand, if you are just a troll with nothing better to do, you should go back under your rock and leave us alone.

P.S.  Always bet on black.  Statistically, 47.37% of the time when black hits, it hits 100% of the time.  How can you fail at 100%??!?@#?!@#?!@#!@#!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

svi

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Re: Retired at 27, looking to grow my income more.
« Reply #81 on: December 19, 2014, 02:27:36 PM »
Your ideas are intriguing to me and I wish to subscribe to your newsletter.


sounds like op wants to be in venture capital? angel investing. doesn't want to be in stock market since returns arent hbigh enough.

heard someone saying startup scene is following the same tech/dotcom bubble though. maybe try to short it? or buy now and sell right before bubble pops?

If anyone is interested in the startups rage or angel investing in small tech companies, let me know. I have direct connections in all three major IT mechas, and can put you in contact with the small business reps and tech councils.

I'll just tell you now, start to expect an exodus of tech companies from the california area to regions like colorado, texas, florida, and maryland.

The reasons behind it are the recent cutting of many of the tax breaks that brought them in, combined with the massive landlord/tenant issues, such as landlords requiring in many of those areas a credit score of at least 700, and a 100k or higher income.

The major moves Ive seen so far are to texas, which favors big business, and land is cheap.

Xanatosnemos

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Re: Retired at 27, looking to grow my income more.
« Reply #82 on: December 19, 2014, 02:50:02 PM »
What I do is not exactly rocket science. I have a combination of equity in multifamily rental properties (passively, with partners, one of whom is a well respected expert in the field in my area and handles management) and also hard money loans for real estate investors with sufficient assets....fairly safe and hard money loans are pretty standard 15%. This can probably be found in any city in the states by looking at your local REIA meetup, some cities are better for RE investing than others, of course..

I just don't lend without assets or collateral

sirdoug007

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Re: Retired at 27, looking to grow my income more.
« Reply #83 on: December 19, 2014, 02:55:26 PM »

I told you guys, the ruble wouldnt be down forever, and KGB dont play SOOON! Vladimir is many things, and stupid isn't one of them.

Now of course, my account is leveraged heavily at the moment, with a massive amount of cash on the line, so its a make it or break it bet for me. I have to ride out to at least 50 to meet my requirements and make my objective, but yes, ruble is good bet. Always trust mother russia, she shit on you for breakfast, pour you top shelf vodka for dinner.

This forum needs the popcorn emoticon!  I'll be interesting to see how this massive bet (not investment, a bet) plays out...
http://www.bloomberg.com/quote/USDRUB:CUR

sirdoug007

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Re: Retired at 27, looking to grow my income more.
« Reply #84 on: December 19, 2014, 03:29:49 PM »
Why do people talk about paying taxes on gold? Very few bullion collectors actually pay taxes if they do sell.

Tell me more about this tax evasion scheme, Honest Abe :)

Chuck

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Re: Retired at 27, looking to grow my income more.
« Reply #85 on: December 19, 2014, 04:55:50 PM »
Buying a company is just a bet that the company will still be there in the future. Dividends do generate income, but generally the amount is less than the true inflation rate (As calculated by the rising cost of goods, not the governments new 'system' of accounting for inflation, which is incorrect and understated)
This is simply not true. Most "dividend aristocrats" pay higher dividends than the current inflation rate, much higher when you factor in future dividend growth.

Xanatosnemos

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Re: Retired at 27, looking to grow my income more.
« Reply #86 on: December 19, 2014, 05:12:24 PM »
I believe the formulas used to calculate the official rate of inflation are deceptive and inaccurate, and the actual cost of goods and services is much higher.

That said, even the aristocrats don't seem to be doing enough.


Honest Abe

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Re: Retired at 27, looking to grow my income more.
« Reply #87 on: December 19, 2014, 06:13:29 PM »
Why do people talk about paying taxes on gold? Very few bullion collectors actually pay taxes if they do sell.

Tell me more about this tax evasion scheme, Honest Abe :)

Lol... I'm not a goldbug so I don't speak from experience. However unless someone is unloading a lot of coins at once they would likely go to a coin show or local jewelry/coin store to trade in their bullion for cash in small lots. My point being is that talking about taxes paid on bullion sales is a theoretical exercise at best. (And that's if these guys sell their bullion at all, since in many instances they are hoarding it until the zombie apocalypse happens.)

Cpa Cat

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Re: Retired at 27, looking to grow my income more.
« Reply #88 on: December 19, 2014, 11:21:45 PM »
I'm not meaning to be offensive sir, and I have been audited in the past, twice more specifically, and each time I've passed without amounts owed, as per the IRS.

Now if there is something new that I am not aware of, please by all means, feel free to let me know. I have non-profits that I donate to on a regular basis, and their budgets depend on a stable flow of income from myself, so if you know something, now would be a much more preferred time to speak up. It's not in my benefit to play the tax game as I do, it's in the interest of others that I do it. Otherwise I'd just go buy a truckload of hops and sealable beer bottles. I love Irish Reds way more than money.

Sure. There are two primary ways that people try to invest in gold bullion in a tax preferred way.

1) Within an IRA. Most custodians won't deal with bullion, so if you can find one who does, the fees will seriously erode any gain. The problem with out of the box investments within an IRA (and bullion is out of the typical IRA box) is that there are very specific rules regarding self-dealing and custody. When people do it wrong, the IRS comes along and shreds the tax-preferred status of the IRA. That means - you pay taxes, interest, and various penalties - not just on the gain, but on the withdrawal of your IRA funds. People screw it up all the time. This is why it's unadvisable for the typical investor to try to get creative with their IRA.

2) The 1031 exchange. AKA a like-kind exchange. In truth, when executed appropriately, a like-kind exchange doesn't avoid tax - it just defers it. The problem with a like-kind exchange is identifying what "like kind" means with gold bullion. The answer isn't as simple as gold=gold. Now if you go to a trade show and exchange your gold bullion for something else, technically you're supposed to report that exchange to the IRS and then they can flag it and decide if what you did actually qualified as a 1031 exchange (it probably didn't). If you don't report it, you didn't really avoid taxes so much as you evaded them. Screwing up your 1031 exchange leads to - you guessed it: taxes, interest and various penalties.

But wait - there's more!

A couple of people on this thread have suggested that you can use gold to "lower your taxes." The only way gold could do this is if you sold it for a loss. That's totally legitimate. Except that making bad investments for the sake of getting a loss is... well... a mathematically unsound idea.

Now, in a rebuttal to my previous post, a couple of seemingly random links were posted about capital expenditures. And I don't want to put words in your mouth, but you did leave me to draw my own conclusions about what you were getting at. You seemed to be suggesting that your gold investment could be capitalized. You're wrong. Unless you are buying an actual gold mine, you may not capitalize and depreciate your gold. That's not even touching on the implication that you'd also have to create a fake business for the sole purpose of generating losses. You might have guessed that doing this will result in.... taxes, interest and penalties (these penalties are extra big due to your flagrant abuse of the tax code).

Note that if you were not suggesting a fake business, but rather a real one with a profit motive, then you haven't really avoided taxes, you've just converted your gain to ordinary income (subject to self-employment tax).

That didn't even get me started on the actual transaction costs of owning gold bullion - even supposing it's a wonderful investment. Many states impose sales tax on gold; gold is subject to the 28% capital gain rate on collectibles; trading gold may require costly trips to trade shows; shipping costs; illiquidity; the bid-ask spread. And, to top it off, the time and monetary cost of defending your shady gold dealings during audits.

Regarding your two audits: I believe you that you've been audited.

In conclusion:

This is terrible tax advice.

KingCoin

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Re: Retired at 27, looking to grow my income more.
« Reply #89 on: December 20, 2014, 11:07:27 AM »
You can buy ticker OXLC which is a fund of CLO equity/mezz tranches. It should yield 15-17%. It's obviously risky, but CLOs did OK if you held through the financial crisis without capitulation selling.

It's certainly not an appropriate investment for your whole portfolio (or even a large part of it), but it fits your criteria of 15%+ passive return if you want to want to take some levered credit risk.

You could also buys some regular-way closed-end high yield bond funds and lever them 70%. That would also get you close to 15% in passive income. You'll be wiped out if bond funds fall 59%. Not probable, but certainly possible.

It's only with reluctance that I'd advise an unsophisticated investor to invest in a complex financial product or use significant leverage, but it beats gambling on the ruble by a long shot.

Your best bet is to read and learn about investment, risk, and portfolio management. There's a lot of good advice in this thread, but it sounds like you're looking for silver bullets rather than a robust knowledge framework. Or perhaps you should stick to what you're good at. If you're retired at 27 based on your success in real estate investing, why not stick to it? Why deviate from something that works to speculate on the currency of some banana republic or whatever? It doesn't make any sense at all.
« Last Edit: December 20, 2014, 12:32:30 PM by KingCoin »

ScroogeMcDutch

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Re: Retired at 27, looking to grow my income more.
« Reply #90 on: December 20, 2014, 12:39:31 PM »
I believe the formulas used to calculate the official rate of inflation are deceptive and inaccurate, and the actual cost of goods and services is much higher.

That said, even the aristocrats don't seem to be doing enough.

You dodged my response. It doesn't matter how high inflation is, as a higher expected return on investment is always better, no matter how high or low your personal or the general inflation is.

As such, it is no point in arguing whether or not the number reported by the government is correct.


EricL

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Re: Retired at 27, looking to grow my income more.
« Reply #91 on: December 20, 2014, 01:11:09 PM »
An obvious recommendation for the OP: Invest in yourself.  Get a job!  At 27 and retired you are well ahead of the game.  So if you get a job, any job, and invest the highest income stream chances are you won't only be FI but flat out rich in a decade.  Since you already have FU money, your need for pointy haired bosses = 0 (though you should be extra patient with employers so impulses to quit don't lead to a slacker rep)  If you really win the lottery you'll find a job you love at the average US income and want to do forever.  Then we're talking Warren Buffett rich.

Getting back on topic:
Gold is a wonderful investment if:
1. You're savvy at playing the markets' irrational obsession with this not especially useful element.  Granted, it's more glamorous than frozen concentrated orange juice.
2. You just like diversified investments.  The best reason, IMO.
3. Your life has extra legal elements where a Krugerrand stash (and fake passports, fake credit cards, etc) are convenient. 
4. You expect a semi catastrophic economic collapse like the 1930's German Weimar Republic and think you'll need Krugerrands for groceries (don't expect a fair trade, BTW).

Gold is not an especially good investment if:

1. You tend to leave a generally brave, optimistic life and don't subscribe to vague fears of this or that.
2. You're really afraid of a global catastrophe.  In which case instead buy guns, ammunition, rice, beans, fresh water supplies, and a bunker in Idaho.  Or possibly a black muscle car with matching leather clothes, illegal length shotgun, fly swatter with concealed blade, and a dog.

surfhb

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Re: Retired at 27, looking to grow my income more.
« Reply #92 on: December 20, 2014, 01:15:32 PM »
Stop feeding this troll!    Hes not 27 and not retired

ascZend

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Re: Retired at 27, looking to grow my income more.
« Reply #93 on: December 20, 2014, 01:57:38 PM »
Stop feeding this troll!    Hes not 27 and not retired

This.

Xanatosnemos

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Re: Retired at 27, looking to grow my income more.
« Reply #94 on: December 20, 2014, 02:47:31 PM »
Quote
You dodged my response. It doesn't matter how high inflation is, as a higher expected return on investment is always better, no matter how high or low your personal or the general inflation is.

As such, it is no point in arguing whether or not the number reported by the government is correct.

because taking a loss by chasing inflation and not catching it is unacceptable for me.


I expect a currency crisis with the dollar, yes. How is that not inevitable at this point?

Quote
You can buy ticker OXLC which is a fund of CLO equity/mezz tranches. It should yield 15-17%. It's obviously risky, but CLOs did OK if you held through the financial crisis without capitulation selling.

Interesting, id like to learn more here.

MikeBear

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Re: Retired at 27, looking to grow my income more.
« Reply #95 on: December 20, 2014, 10:15:37 PM »
Stop feeding this troll!    Hes not 27 and not retired

This.

Interesting things you can learn when you Google a username, and click on hyperlinks to learn a bit more about a person... Especially when that username is fairly unique...

He's a (former?) pornstar, with RE on the side. Read through this thread: http://www.getrichslowly.org/forum/viewtopic.php?f=2&t=72947&start=15

http://xanatosnemos.wix.com/viaticusinvesting#!about2/c4nz
« Last Edit: December 20, 2014, 10:31:47 PM by MikeBear »

ascZend

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Re: Retired at 27, looking to grow my income more.
« Reply #96 on: December 20, 2014, 10:40:10 PM »
Interesting things you can learn when you Google a username, and click on hyperlinks to learn a bit more about a person... Especially when that username is fairly unique...

He's a porn star, with RE on the side. http://www.getrichslowly.org/forum/viewtopic.php?f=2&t=72947&start=15

Very interesting, indeed.  Here's a nice excerpt from Xanatosnemos in that thread:
"Well guess what. I'm a porn star. I'm also a successful investor. Get over it. I do not need your money, and I am not asking for it."
« Last Edit: December 20, 2014, 10:44:42 PM by ascZend »

Xanatosnemos

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Re: Retired at 27, looking to grow my income more.
« Reply #97 on: December 20, 2014, 10:49:58 PM »
Of the many responses I could go with, some leaning more towards the stupidity of those comments, I could even mention the immature nature of ad hominem attacks against someone who posted in a forum to ask a question..

In the end, I decided to settle on this:

"So, whats your point?" (Corrected, its late)
« Last Edit: December 20, 2014, 10:59:35 PM by Xanatosnemos »

Xanatosnemos

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Re: Retired at 27, looking to grow my income more.
« Reply #98 on: December 20, 2014, 11:01:06 PM »
Quote
You happened to jump in at the bottom of a market cycle, got lifted by a rising tide, and are ready to declare yourself the winner?

I would love for you to point out exactly where I claimed to be a winner, or an expert, or better than anyone else. Arbelspy

Xanatosnemos

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Re: Retired at 27, looking to grow my income more.
« Reply #99 on: December 20, 2014, 11:05:43 PM »
Listen folks, I'm not here to compare dick sizes or play your online drama games. I am here to learn, if you don't have anything constructive to add to the post, then please refrain from replying. If you can't help yourself, just realize you look like an idiot/troll for further taking this topic offpost (As if that hasnt already been done enough)

Heres a reminder: This post is about discussing methods of generating hefty cashflow in the now, not in terms of growth.. not in terms of deferred income, not in terms of 'the norm' 4-5% ROI most of you are getting while trying to sidetrack this post.

Without meaning to sound cocky - I am not here to talk to most of you. I am here to talk to the few of you who ARE making 10-15%+ ROI and income cashflow. If anyone on this board is. And bounce ideas around to that end.

That means that 90% of you have nothing to contribute, while I appreciate your desire to help and respectfully mean you the best, Please do not tell me about your strategy to get 3%. You're rowing against the stream and I am not interested in being a normal investor.