Investing 102

[GregWeld]

The difference here Jose is that you TRIED to do the right thing... and I commend you for that. If a guy tries -- and it doesn't work out... then that's the way it goes sometimes - but you made an honest attempt to do your best.

People don't start businesses because they're afraid they might fail. If you're young and have time to recover from the failure -- I always say go for it... failing is not strike against a guy in my book -- it's a plus because it tells me he was willing to take the risk to raise himself up. That takes guts - and most come out of the failure a better businessman. Most of the guys I know that are successful have failed at least once.. and it's also why we have LLC's and Corporations - because people know things can and do go wrong - and they protect their personal assets thru these.

I will also tell you - the only money I've ever lost - was investments in sure fire 100% the coolest ideas in the Universe... If I didn't think that way - I wouldn't have invested in the first place.

The Investing 102 school says -- that's okay -- as long as you keep those investments to a very small percentage of your investable dollars.

[Bucketlist2012]

Originally Posted by GregWeld

The difference here Jose is that you TRIED to do the right thing... and I commend you for that. If a guy tries -- and it doesn't work out... then that's the way it goes sometimes - but you made an honest attempt to do your best.

People don't start businesses because they're afraid they might fail. If you're young and have time to recover from the failure -- I always say go for it... failing is not strike against a guy in my book -- it's a plus because it tells me he was willing to take the risk to raise himself up. That takes guts - and most come out of the failure a better businessman. Most of the guys I know that are successful have failed at least once.. and it's also why we have LLC's and Corporations - because people know things can and do go wrong - and they protect their personal assets thru these.

I will also tell you - the only money I've ever lost - was investments in sure fire 100% the coolest ideas in the Universe... If I didn't think that way - I wouldn't have invested in the first place.

The Investing 102 school says -- that's okay -- as long as you keep those investments to a very small percentage of your investable dollars.

Words to live by...

The most successful people have failed more than they succeeded...

A Hall of Famer in Baseball needs to only hit the Ball 3 out of 10 times to make Cooperstown...A .333 average..

The post it note came from a failure at making a permanent glue....the opposite happened..

Edison and the Light Bulb..how many failures ? Hundreds? Then Boom...

It is the people who get up after failure, and learn to never repeat that failure, that make it..

Very few have hit the big one on the first shot...

I have had multiple successes, and multiple failures...

The times that I did not get up and move on, bad things happened..

EVERY time i got up from a loss or failure, and i moved on, great thing eventually happened..

Jose, this will make you stronger, and wiser..

And as Greg said, at least you tried..The example I used , was of family on a self destruction mode, that they caused.

You just got caught up in the big mess.

Mike V.

[Fluid Power]

Great question -- and I hope I don't come off as sounding arrogant or like a smart ass with my response.

#1 -- I don't need the money so I'm okay taking the capital hit.

#2 -- I live in Seattle - this place is a zillion miles away in Phoenix

#3 -- Running the numbers - the rent is $1250 (other 3 bdrms there) so after I pay $250 month HOA - Insurance - Property taxes etc - Utilities etc... my net might be $700 a month or less. Less if I hire a "professional" property manager cause they take their share. $700 a month to me is about like most people picking up a dollar... it just isn't the kind of money I think about.

Now -- IF I had a mortgage - and needed to cover "most" of it -- and didn't want to ruin my credit by walking away (or doing the morally correct thing of actually paying my bills)... then that would be one thing... and especially if I thought the market might come back within the next 3 to 5 years. Remember that the market would have to TRIPLE for me to get my money to break even - and then if you calculate time money line -- I'd own the dump for 10 years and still probably take a capital loss.

If I sell it for 100K --- net -- I can invest that and MAKE 5K per year tax free in Muni bonds and have absolutely no worries or hassles.... like when the renter fails to pay or pays late - or goes bankrupt and it takes me 6 months to evict - or runs off after trashing the place.... and it costs me everything I "made" for the year plus to rehab it (again).

So for me -- I'm not in a positon to have to cover my arse... I'm in a position to just be able to make decisions on what I "want to do" not what I should or could do.

It's why our boat was called "Options".... everyone thought I was a stock trader -- but it was really because the boat was just another "option" for how we wanted to spend our time. If I was a trader - and the boat named Options -- I'd have named the dingy 'Puts and Calls".



Not at all Greg, I just wasn't sure what you could rent the thing for. At those kind of numbers, I agree, not worth the hassle and the 100k could go somewhere else.

Darren

[GregWeld]

That's the whole deal in a nutshell Darren. Everyone has different financial circumstances - and fortunately for us - the "loss" just isn't worth the hassle of trying to "save it". While I would have felt better about the "investment" - because nobody wants to feel what they did was stupid... regardless of the dollar amount... this turned out to be a stupid move. I have a long list to which it can be added.

And - as I said - if I had a mortgage on the place - it would make more sense to rent it even if I had to subsidize it a little each month... and hold it til I could sell it for the mortgage. But I don't... so I look at it as cash (employees) not working real well that would need lots of management to do very little in the way of a return.

We've actually discussed just donating it to a worthy cause... but couldn't get it finished in time to do that in the 2011 tax year. I can not claim the purchase amount as a loss deduction If I could then it would really be worth it.

[WSSix]

"There's not such thing as a failure who keeps trying. Coasting to the bottom is the only disgrace" - Blues Traveler- Just Wait




Anyway, I've been absent from my own thread for too long and just caught up with it today. I'm going to sit down and figure out how to move things around within the accounts I already have since i have both a ROTH IRA and 401K. Both are set up on autopilot basically. I think I set the 401K at moderate growth level and I know I set the ROTH at a targeted retirement age of 2045 with in Vanguard's Star Fund. I'm not sure I want to touch the ROTH. I think it may be just fear on my part. I honestly am not sure how to read exactly what it's doing in terms of performance overall. I believe the most I can see is from 3 years ago on and I've had it longer. I don't know what I've put into it total versus where it is sitting right now. I know that's bad but I was kind of working on the assumption that I would always be able to pull that info up from day one on their website.

The 401K is new and for whatever reason I feel more comfortable playing with it. I just need to figure out Fidelity's website.

All the same, the point is, I'll be making my changes and posting the results etc as I said I would many many pages ago. I started the thread and I'm ok with being the guinea pig even if I walk into a wall, doh!

Alright, time to plug in the Rush In Rio DVD and get to work. I'll be back.

[WSSix]

This is a copy and paste from my Fidelity 401K account under the heading of Average Annual Total Returns(%) as of 9/30/2011. Yeaaaaaaaaaaaah


1 Year -0.35 -0.12
3 Year 6.07 4.45
5 Year 3.24 2.08
10 Year 6.30 N/A

I don't think that's too stellar personally.

[GregWeld]

Originally Posted by WSSix

"There's not such thing as a failure who keeps trying. Coasting to the bottom is the only disgrace" - Blues Traveler- Just Wait




Anyway, I've been absent from my own thread for too long and just caught up with it today. I'm going to sit down and figure out how to move things around within the accounts I already have since i have both a ROTH IRA and 401K. Both are set up on autopilot basically. I think I set the 401K at moderate growth level and I know I set the ROTH at a targeted retirement age of 2045 with in Vanguard's Star Fund. I'm not sure I want to touch the ROTH. I think it may be just fear on my part. I honestly am not sure how to read exactly what it's doing in terms of performance overall. I believe the most I can see is from 3 years ago on and I've had it longer. I don't know what I've put into it total versus where it is sitting right now. I know that's bad but I was kind of working on the assumption that I would always be able to pull that info up from day one on their website.

The 401K is new and for whatever reason I feel more comfortable playing with it. I just need to figure out Fidelity's website.

All the same, the point is, I'll be making my changes and posting the results etc as I said I would many many pages ago. I started the thread and I'm ok with being the guinea pig even if I walk into a wall, doh!

Alright, time to plug in the Rush In Rio DVD and get to work. I'll be back.

Vanguard Star Fund SUCKS! That is the fund you should move. It invests in other Vanguard funds --- how dumb is that (for them not you) and has a 5 year growth of a whopping 3%

This is a bunch of drunks throwing darts at a dart board of a bunch of drunks throwing darts. A fund investing in other funds all owned and managed by the same group. UGH!

In TEN YEARS its UP 23% -- so 10 grand invested is now 12 grand. OMG! Horrible.

Sorry -- it's just another Mutual Fund disaster du jour.

[WSSix]

Well crap. It appears I can't change my 401K around to the point where I can select what stocks I am in. I can only make changes based on a few premixed portfolios or single index funds like the S&P 500. Is that common with employer sponsored 401K plans? Can I have more than one 401K plan where I control everything or is controlling my ROTH the only option I have now beside going outside either of these plans totally and opening my own brokerage account with say Schwab?

I also finally figured out how to view the performance of my 401K since inception back in 2010 and it's at 7% since the start. Not bad but more would be nice, lol.