Investing 102

[toy71camaro]

Originally Posted by GregWeld

I wonder to myself every day if anyone is actually reading, or if they are, are they seeing some success with any of it. So it's heartening to hear that someone is!

I check it multiple times a day. Trust me. I'm reading. Seeing the differences of opinion is actually nice, it re-iterates some of our lessons learned into a new way of saying it.



<the silent one> lol

[glassman]

^^^^^^^^

[sik68]

Originally Posted by GregWeld

I wonder to myself every day if anyone is actually reading, or if they are, are they seeing some success with any of it. So it's heartening to hear that someone is!

I read and learn from every post!

I built a spreadsheet to track my dividend earnings. I also compare it to my monthly expenses... The dividend payouts are only ~5% of my expenses now, but my goal is to always increase that % from here on out.

[GregWeld]

Originally Posted by toy71camaro

I check it multiple times a day. Trust me. I'm reading. Seeing the differences of opinion is actually nice, it re-iterates some of our lessons learned into a new way of saying it.



<the silent one> lol

Originally Posted by glassman

^^^^^^^^

Thanks guys.


I have to tell ya --- that what I've been trying to do -- is to "dumb down" the entire process of thinking about "investments". I run around with some pretty smart people - professionally… Doctors/lawyers/CEO's etc… and they're the WORST investors ever (in the universe) and the reason for that - I've discovered - is that they all try to make too much of it. The Doctor goes to his accountant to try to figure out all manor of "tax" avoidance investments. The lawyer tries to take the opposite side of every issue -- that's his training -- I get it. The CEO's are too busy trying to build their futures with all manor of deferred compensation - and Options and such.. that mostly all depend on the current company doing exceptionally well (i.e., going public).

They all sit at my dinner table and ask me about my investments. And what I keep trying to tell them is that what I concentrate on is MAKING MONEY in a very simple fashion. I don't try to invest to avoid taxes… in fact… I pay a fortune in taxes! Why - because I'm making an even larger fortune on my investments. Taxes are only a small percentage of what I make. To me - the more taxes I pay - the more I've made! And while I understand Options and deferred income -- that's putting all your eggs in one basket - a big no no!
Lawyers are just lucky that they make partner level and never retire so are always on the payroll. They stop "practicing" but are still on the board of their firm etc…

The theme is -- too much thinking and not enough doing… and keeping it simple and making some money. You want to make money in real estate - you can't do that living in the place -- you have to buy INCOME property. You let the tenant pay the mortgage - and give you a bit of cash flow… and down the road it's either all paid for and you pocket the "rent" (which after 20 years is like dividend increases - it should be far higher than when you started!)… I don't care if that's houses - apartments - or commercial property. The premise is the same. Someone else paying your debt - and paying you. OVER TIME this works out real well.

Stocks are the same -- You put your money into great stuff -- get paid while your price grows.. eventually it's paying you nicely -- and or you can sell some when you need to not because you have to. It takes TIME to get to that point - and it takes you putting your money in on a consistent basis…

Some guys invest TOO MUCH --- and then they're forced sellers at the wrong time. When do people get laid off? When business is crappy! When is the market crappy? When business is bad! If you've put every dime into the market -- and you have too much debt service -- and you have no cash… you become a forced seller and lose your butt! So putting too much into the market -- while at the same time having too high of a lifestyle -- can defeat everything you've worked for.

Some guys - my friends - try so hard to talk themselves into so much BS style investments because "they don't pay any taxes" -- or they invest in "annuities" (that is NOT an investment and you'll never convince me otherwise!). What I say to them is -- they want to abdicate their future to someone else rather than taking control -- keeping it real simple -- and just banking the proceeds.

When I show them I make 3 or 4 times what they make - and I don't do anything to earn it…. they're always shocked. Then they always say to me -- ah ha! Now I understand why you're always going to some race somewhere -or some car show - or some trip… YEAH! Because I keep it simple… I have all my money in great stuff that pays me to do nothing. How hard is that?

[GregWeld]

Originally Posted by sik68

I read and learn from every post!

I built a spreadsheet to track my dividend earnings. I also compare it to my monthly expenses... The dividend payouts are only ~5% of my expenses now, but my goal is to always increase that % from here on out.

AWESOME!


How much time do you have before retirement??

[gearheads78]

Originally Posted by GregWeld

I wonder to myself every day if anyone is actually reading, or if they are, are they seeing some success with any of it. So it's heartening to hear that someone is!

I watch this thread and spend my nights reading and learning on seekingalpha now. Its really the only thing other that cars that has ever grabbed this much of my attention.

[sik68]

Originally Posted by GregWeld

AWESOME!


How much time do you have before retirement??

I'm 30, and we're on a single income right now as my wife is just finishing up school. once we go dual and move out of SF, that ratio should be much easier to increase.

[gearheads78]

Originally Posted by sik68

I'm 30, and we're on a single income right now as my wife is just finishing up school. once we go dual and move out of SF, that ratio should be much easier to increase.

Man I wish I knew this stuff at 30 10 years ago. I would be so far ahead of the game right now.

[toy71camaro]

Originally Posted by sik68

I read and learn from every post!

I built a spreadsheet to track my dividend earnings. I also compare it to my monthly expenses... The dividend payouts are only ~5% of my expenses now, but my goal is to always increase that % from here on out.

Awesome.. I've got spreadsheets tracking my income, expenses and then my retirement account (i dont have any non-retirement investment accounts). I need to add that to my list, to see how much my investments spin off to make up my expenses. I'm a far cry from 5%, Im sure of that. 3/4 of my retirement is still in a 401k that doesnt only sorta pays dividends, but, i cant "see them". Unlike a normal stock, the funds I'm in I dont get really daily updates on their performance. I mean, i can see when the open/close, and my total amount invested in it. But not the # of shares, not when it pays me a dividend (some i have DO pay them), etc.

I should be done with my Emergency fund soon, and can start getting back into investing into my future. My goal is 10% of my income into a non-retirement account and 10% into a retirement account (Roth).

[GregWeld]

Originally Posted by gearheads78

I watch this thread and spend my nights reading and learning on seekingalpha now. Its really the only thing other that cars that has ever grabbed this much of my attention.

Investing is part of my daily routine - even though I don't often move money around - meaning - I'm not selling and buying and trying to figure out the next greatest investment - I still LOVE to know what's going on. I think it's like car stuff -- if you're not reading and going to shows etc - you completely miss the TRENDS. I think the reason that it's FUN is that I'm not stressed out about this stock or todays "action". It's more just liking the action but at an arms length.

Originally Posted by sik68

I'm 30, and we're on a single income right now as my wife is just finishing up school. once we go dual and move out of SF, that ratio should be much easier to increase.

Okay -- so you've got 60 years of growth and dividend collecting.

Somewhere in this monstrosity of a thread… there's real math showing that if you put away 2,000 a year from 21 to 31… and at 31 you stopped adding to your pile -- you'd have a million bucks at retirement. At 31 you need to add MORE than that and you'll have to do that until you retire. Not a big deal - because you're at least reading and learning and planning. Maybe you'll get to retire EARLY. Gotta like that plan!

Originally Posted by gearheads78

Man I wish I knew this stuff at 30 10 years ago. I would be so far ahead of the game right now.

Yeah --- as above. TIME is the big deal. I've shown it before but here's a quicky…



2,000 in 7 years is 4,000 in another 7 years is 8,000 in another 7 years is 16,000 in another 7 years is 32,000 in another 7 years is 64,000 ----- but here's the kicker in just another 7 years --- it's 128,000


It's that LAST 7 year period that really made all the difference in the world.

SO if you're starting late (it's never too late!) Then you have to take the years off the beginning. In other words - to get to the 128,000 if you only have 21 years to retirement - you have to put away 32,000 and so on.

Your money quits compounding at retirement - because that's when you switch from money growth - to INCOME to live on. Like me - I save absolutely not one penny -- and some years I might spend more than I make net. But I'm a little different story and have been luckier than most.