Post: #26

(06-27-2014 07:04 PM)one-two Wrote:  I can't believe this is not on here already
[youtube]http://www.youtube.com/watch?v=4m37JkkGjAY[/youtube]

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Just helping out one-two.

Post: #27

(06-26-2014 07:07 PM)Feisbook Control Wrote:  



9:49

...wow...

Post: #28

(06-27-2014 06:03 PM)Gringuito Wrote:  There are two ways that people are looking at this. The first is based on net worth. The guys that manage money seem to talk about high net worth or ultra-high net worth. I would be in the latter group.

There's the class based way of looking at this. For example, I could afford a house in the Hamptons but I would never be comfortable living there. I'm distinctly in the nouveau riche category as I'm first generation money.

I completely agree with the comment about how you made your money being very important. It took me quite a few years of building up different companies, with more than a few failures along the way. I'm not a penny pincher like some wealthy people but I also make sure I spend less than I'm able to accumulate adjusting for inflation.

My own take on this is being rich/wealthy is not based on money. I have my health, good friends, a great family, and someone that means more to me than anything in the world. I know how completely lucky I've been.

That's a good and healthy take. There are plenty of studies out there which show, that money can buy a certain degree of happiness, but after the initial raise it plateaus, because the person does not change much. That means if you are not a balanced more or less happy individual before, you won't be one with money.

The guys I met and worked for were all either ranging from super-great super-happy people to grim assholes. But I am sure they were grim assholes before and most were nouveau rich, as old money works in different venues than I did.

I just don't like the whitewashing of the media, which is similar to the Christian church in the past - "the poor are the blessed ones - look for your reward in the afterlife" - nowadays the media goes like "money won't buy you happiness, a new study shows" - told by TV-presenters with very high net worth of 5M+.

As far as wealth and being rich goes - yeah Chris Rock's take is correct, though what does it matter? If you are not chasing after ever more power or consumerism then living perfectly happy and content with your 5M-200M is quite easy.

In the latter stages of wealth it is just necessary to ensure it for future generations and also to make sure that your children or family receive the proper education and attitudes in order not to blow it all away within generation 2 and 3. Those are the projects I am starting to work on currently trying to establish a family foundation especially focusing on my younger cousins (no children yet) to ensure the future success of the family line.

Post: #29

(06-27-2014 01:00 PM)samsamsam Wrote:  Zel, your story reminds me of something I heard where these parents gave their kid a box of cigarettes and made him smoke it all. He hated it so much, never wanted it again (could be an old wives tale).

Post: #30

The rich have money. The wealthy have freedom.

Imagine your nut is $10K a month, $120K a year. Living in NYC, considering Federal, state & local taxes, you need a yearly gross of $250K to earn $120K free-and-clear. Conservative investments net you 5% a year. Thus $250K ÷ 0.05 = $5M.

That's what you need to be wealthy—five million net. With that, you can live as you please, and you don't have to answer to anybody.

I know a lot of people who have a net worth far in excess of $5M—but the responsibilities they've taken on (often for no clear rationale) forces them to continue working, or chasing deals, or otherwise precludes their freedom.

They are RICH—they have a lot of money. But they're not FREE. Thus they are not wealthy.

Some people like to chase money for the sake of money. Some people like to accrue responsibilities—they like having others depend on them.

You have to decide how you want to live your life—how you see yourself living at age 50, and how you see yourself spending your day-to-day before you hit 50.

Then act on that.

My 2¢.

Post: #31

(06-28-2014 05:32 PM)OneIdea Wrote:  The rich have money. The wealthy have freedom.

Imagine your nut is $10K a month, $120K a year. Living in NYC, considering Federal, state & local taxes, you need a yearly gross of $250K to earn $120K free-and-clear. Conservative investments net you 5% a year. Thus $250K ÷ 0.05 = $5M.

That's what you need to be wealthy—five million net. With that, you can live as you please, and you don't have to answer to anybody.

I know a lot of people who have a net worth far in excess of $5M—but the responsibilities they've taken on (often for no clear rationale) forces them to continue working, or chasing deals, or otherwise precludes their freedom.

They are RICH—they have a lot of money. But they're not FREE. Thus they are not wealthy.

Some people like to chase money for the sake of money. Some people like to accrue responsibilities—they like having others depend on them.

You have to decide how you want to live your life—how you see yourself living at age 50, and how you see yourself spending your day-to-day before you hit 50.

Then act on that.

My 2¢.

There is an easy way to become 'wealthy' as you have said: Avoid debt. There are people who clear $2M+ a year and are forced to keep working because they have a mortgage on a $40M house in Connecticut and need to make car payments on $100k worth of vehicles. It's absurd! Buy what you can afford, and save your money. Retire when your money starts making significantly more than you do. If you save a bunch every year (usually some of it is tax-free too), you'll retire in no time.

As @gselevator on twitter so eloquently wrote: #1: You shouldn't retire until your money starts making more money than you made in your best year.

Post: #32

My grandmother use to say your only rich when you don´t need to work for a living.

I categorize wealthy with old money. And rich with both new and old money.

To be wealthy you need to be rich and have connections. The connections and heavy network of influence are to me what distinguishes someone who is rich and someone who is wealthy.
Being rich is not enough to open some doors.

It´s more like a plus since to be wealthy you need to be rich. But you can be rich without being wealthy.

Post: #33

Post: #34

The 5% rule is not always applicable. I know families with a 5-25MM dollar fortune that is mostly tied up in illiquid assets (RE) in overpriced areas ie LA- 500k house will get you 24k/yearly. Real yield pre-tax is about 12k/yearx 20 = 240k pre-tax on 10MM dollars of RE.

The fact is that many traditional "rich" (doctors, lawyers, engineers) have a heavy paranoia of financial institutions and often prefer RE around where they live. Yields are anemic, especially in wealthy cities. Living standards are high. Its long been established on this forum, that to feel financially secure in LA for a family of 4, you need to make upwards of 250k/year.

Many of these "rich" tried playing the stock-game, but got burned in 2000s or 2009 and have a supercompensation reaction to financial products.

While my family is well-off, we aren't in those aforementioned ranges. Still my dad (grew up in Soviet Russia) would rather buy a 500k house that yields 4.5% gross versus a REIT that yields 4.5% net (true yield is higher because part of dividend is tax-covered by depreciation). Truly mindboggling.

There is a reason why my family is just plain rich (or upper-middle class by LA standards) and not WEALTHY.

Post: #35

(07-02-2014 02:20 AM)DVY Wrote:  The 5% rule is not always applicable. I know families with a 5-25MM dollar fortune that is mostly tied up in illiquid assets (RE) in overpriced areas ie LA- 500k house will get you 24k/yearly. Real yield pre-tax is about 12k/yearx 20 = 240k pre-tax on 10MM dollars of RE.

The fact is that many traditional "rich" (doctors, lawyers, engineers) have a heavy paranoia of financial institutions and often prefer RE around where they live. Yields are anemic, especially in wealthy cities. Living standards are high. Its long been established on this forum, that to feel financially secure in LA for a family of 4, you need to make upwards of 250k/year.

Many of these "rich" tried playing the stock-game, but got burned in 2000s or 2009 and have a supercompensation reaction to financial products.

While my family is well-off, we aren't in those aforementioned ranges. Still my dad (grew up in Soviet Russia) would rather buy a 500k house that yields 4.5% gross versus a REIT that yields 4.5% net (true yield is higher because part of dividend is tax-covered by depreciation). Truly mindboggling.

There is a reason why my family is just plain rich (or upper-middle class by LA standards) and not WEALTHY.

As you progress through your income and net-wealth, you also have to continue learning and also doing what the most successful ones have been doing for generations.

Sticking to outdated axioms like "real-estate is something tangible and will always appreciate" is just nuts. Most somehow never change their thinking from the first million they made to the 20th. Thus they hardly diversify, invest too heavily in their companies, invest too much in real-estate and other illiquid assets, never shift to international investments etc.

It is no surprise that the world's elite families only take your family wealth seriously, if you have been able to hold on to it for at least 3 generations.