Comments on: How Much is Enough? http://www.investorgeeks.com/articles/2006/10/13/how-much-is-enough/ Learning and sharing investment knowledge. Wed, 20 Aug 2008 08:38:06 +0000 http://wordpress.org/?v=2.0.4 by: prlinkbiz http://www.investorgeeks.com/articles/2006/10/13/how-much-is-enough/#comment-7559 Tue, 17 Oct 2006 12:12:43 +0000 http://www.investorgeeks.com/articles/2006/10/13/how-much-is-enough/#comment-7559 It's not a matter of 'enough'. For some of us it's a game - we're in it to win. Those who think it can't be done need to get out the way of those of us doing it. It’s not a matter of ‘enough’. For some of us it’s a game - we’re in it to win. Those who think it can’t be done need to get out the way of those of us doing it.

]]> by: Curly Tree http://www.investorgeeks.com/articles/2006/10/13/how-much-is-enough/#comment-7443 Sat, 14 Oct 2006 00:01:58 +0000 http://www.investorgeeks.com/articles/2006/10/13/how-much-is-enough/#comment-7443 Enough is when you've reached financial critical mass, when you can do whatever you want without worrying about money. So it's a different number for everybody. Plus "enough" for a billionaire has a different meaning altogether. Money represents something else to such a person (power, challenge, plaything), so there is never enough in this case. Enough is when you’ve reached financial critical mass, when you can do whatever you want without worrying about money. So it’s a different number for everybody.

Plus “enough” for a billionaire has a different meaning altogether. Money represents something else to such a person (power, challenge, plaything), so there is never enough in this case.

]]> by: Kimber http://www.investorgeeks.com/articles/2006/10/13/how-much-is-enough/#comment-7441 Fri, 13 Oct 2006 23:51:48 +0000 http://www.investorgeeks.com/articles/2006/10/13/how-much-is-enough/#comment-7441 Leveraged investing is for higher level investors. I only started to play with it after having a history (ten years plus) of returns much higher than interest costs and when I had the investments to cover it if the whole deal went south. One of the perks of being a good little investor. As for enough... I consider the first threshold to be Your Money Or Your Life's definition of financial independence. That is enough passive income to pay for current expenses. The hubby and I crossed that threshold last year and wow, did opportunities open up then. I quit my 9-5 job to work on independent ventures (doing contract work from time to time to stay current). Leveraged investing is for higher level investors. I only started to play with it after having a history (ten years plus) of returns much higher than interest costs and when I had the investments to cover it if the whole deal went south. One of the perks of being a good little investor.

As for enough… I consider the first threshold to be Your Money Or Your Life’s definition of financial independence. That is enough passive income to pay for current expenses.

The hubby and I crossed that threshold last year and wow, did opportunities open up then. I quit my 9-5 job to work on independent ventures (doing contract work from time to time to stay current).

]]> by: J Dawg http://www.investorgeeks.com/articles/2006/10/13/how-much-is-enough/#comment-7437 Fri, 13 Oct 2006 19:31:05 +0000 http://www.investorgeeks.com/articles/2006/10/13/how-much-is-enough/#comment-7437 Bitchen article glad someone said it. The only good debt is paid off debt. In all the examples noone, and let me say that again. N-O-O-N-E calculated in risk (stress), in higher econmics class there is an actual formula for calulating in risk. Also there was no devaluation of the money by either tax or inflation. On you $100,000 example if your making 3% then you are still losing, I am new to this but inflation is usually calculated at 6% usually (I thought) plus that most investments that would be capital gains so you are going to be taxed on it (unless of course you invested in tax free municple bonds) . Even if it was a house flip with the new laws they are starting to hit those harder now. But I am wondering . What also is being missed is what Steve said so well, You never know what is going to happen. I did worked at Country Wide Home Loans in their foreclosure department for 2 years. I delt with people that every day , day in and out that crap happened to. I bore my friends with horror stories all the time, from fire, to mold, to hospitalaztion, funeral expenses, lay offs, to something as minor as overtime being cut. They simpley lost the few hours of overtime they had come to rely on and it decrease their check enough they couldnt make the payment and still live. Debt is dumb, it is the anchor that holds you below the water period !! I like basic logic and here is how I look at it. You get a $1000 if you have no one to pay then you have $1000, if you owe $600 to different people then you only have $400 . I would rather have the full force of my money available to me to do what I want. J Dawg Bitchen article glad someone said it. The only good debt is paid off debt. In all the examples noone, and let me say that again. N-O-O-N-E calculated in risk (stress), in higher econmics class there is an actual formula for calulating in risk. Also there was no devaluation of the money by either tax or inflation. On you $100,000 example if your making 3% then you are still losing, I am new to this but inflation is usually calculated at 6% usually (I thought) plus that most investments that would be capital gains so you are going to be taxed on it (unless of course you invested in tax free municple bonds) . Even if it was a house flip with the new laws they are starting to hit those harder now. But I am wondering .

What also is being missed is what Steve said so well, You never know what is going to happen. I did worked at Country Wide Home Loans in their foreclosure department for 2 years. I delt with people that every day , day in and out that crap happened to. I bore my friends with horror stories all the time, from fire, to mold, to hospitalaztion, funeral expenses, lay offs, to something as minor as overtime being cut. They simpley lost the few hours of overtime they had come to rely on and it decrease their check enough they couldnt make the payment and still live.
Debt is dumb, it is the anchor that holds you below the water period !! I like basic logic and here is how I look at it. You get a $1000 if you have no one to pay then you have $1000, if you owe $600 to different people then you only have $400 . I would rather have the full force of my money available to me to do what I want.

J Dawg

]]> by: Steve http://www.investorgeeks.com/articles/2006/10/13/how-much-is-enough/#comment-7433 Fri, 13 Oct 2006 18:58:37 +0000 http://www.investorgeeks.com/articles/2006/10/13/how-much-is-enough/#comment-7433 The intention to immediately flip lowers risk greatly, but what if he held on to them to get closer to Christmas and on December 15th we come to find out that they are all recalled? Or that there's a fire hazard? Or that the eyes fall off and have killed 10 kids due to choking (heaven forbid.) Then the risk wasn't worth it. However, I find $4,000 to be a very small amount of debt vs the $500,000 people are going in debt to buy houses in California. I also forgot to mention, what if people get laid off? We had an employee at a company I worked for years ago who signed on her new house and the very next day got laid off and couldn't make her payments and lost her house. She had no way of knowing that was coming and bam! Lost everything. Another good example is Beanie Babies, awesome investment to start, cheap, didn't take much space, went up like crazy, but if you held them too long, you had beanie babies coming out your ass and a lot of money down the toilet. At least if you had paid cash you wouldn't have had a ton of bills coming at you that immediately had to be paid back with no income coming in. Believe me, when I was in my 20's, leveraging debt was my belief and I did use it to my advantage, but at almost 36 and starting a family, I'd rather not have the stress. Good comments Ken, thanks. The intention to immediately flip lowers risk greatly, but what if he held on to them to get closer to Christmas and on December 15th we come to find out that they are all recalled? Or that there’s a fire hazard? Or that the eyes fall off and have killed 10 kids due to choking (heaven forbid.) Then the risk wasn’t worth it.

However, I find $4,000 to be a very small amount of debt vs the $500,000 people are going in debt to buy houses in California.

I also forgot to mention, what if people get laid off? We had an employee at a company I worked for years ago who signed on her new house and the very next day got laid off and couldn’t make her payments and lost her house. She had no way of knowing that was coming and bam! Lost everything.

Another good example is Beanie Babies, awesome investment to start, cheap, didn’t take much space, went up like crazy, but if you held them too long, you had beanie babies coming out your ass and a lot of money down the toilet. At least if you had paid cash you wouldn’t have had a ton of bills coming at you that immediately had to be paid back with no income coming in.

Believe me, when I was in my 20’s, leveraging debt was my belief and I did use it to my advantage, but at almost 36 and starting a family, I’d rather not have the stress.

Good comments Ken, thanks.

]]> by: Ken http://www.investorgeeks.com/articles/2006/10/13/how-much-is-enough/#comment-7432 Fri, 13 Oct 2006 18:51:38 +0000 http://www.investorgeeks.com/articles/2006/10/13/how-much-is-enough/#comment-7432 I forgot to mention that the TMX investment had very good chances of success. Putting $4k on CC is very risky. But the risk to reward in my opinion was well worth it. Nobody wants to be stuck with 100 TMXs laughing at you! :) I forgot to mention that the TMX investment had very good chances of success. Putting $4k on CC is very risky. But the risk to reward in my opinion was well worth it.

Nobody wants to be stuck with 100 TMXs laughing at you! :)

]]> by: Ken http://www.investorgeeks.com/articles/2006/10/13/how-much-is-enough/#comment-7431 Fri, 13 Oct 2006 18:49:02 +0000 http://www.investorgeeks.com/articles/2006/10/13/how-much-is-enough/#comment-7431 Any investment can go bad. Personally I look at the security of the investment. If that $100k was used as a 1st mortgage for a $200k house, I'd feel pretty good about it. If it was used as capital for a new restaurant, I wouldn't, and I wouldn't be asking for only 11% either (risk not equal to reward). This all comes down to how and what you invest in. Now all investments are good and safe. I pick and choose sparingly. I want to point out that I don't think of this as a get rich quick thing. I don't advocate overleveraging either. You won't become rich overnight leveraging. Even using credit cards is using leverage. TMXs were going for $80-$100 on Ebay. I know someone who was able to buy 100 of them. He didn't have $4000 cash and used his credit card to buy them all. 3 days later he sold them all for a nice $4,000 profit, paid back the credit card. It's essentially a no money down deal for him. People do this in real estate all the time, just more zeros at the end. Any investment can go bad. Personally I look at the security of the investment. If that $100k was used as a 1st mortgage for a $200k house, I’d feel pretty good about it. If it was used as capital for a new restaurant, I wouldn’t, and I wouldn’t be asking for only 11% either (risk not equal to reward). This all comes down to how and what you invest in. Now all investments are good and safe. I pick and choose sparingly.

I want to point out that I don’t think of this as a get rich quick thing. I don’t advocate overleveraging either. You won’t become rich overnight leveraging.

Even using credit cards is using leverage. TMXs were going for $80-$100 on Ebay. I know someone who was able to buy 100 of them. He didn’t have $4000 cash and used his credit card to buy them all. 3 days later he sold them all for a nice $4,000 profit, paid back the credit card. It’s essentially a no money down deal for him. People do this in real estate all the time, just more zeros at the end.

]]> by: Steve http://www.investorgeeks.com/articles/2006/10/13/how-much-is-enough/#comment-7430 Fri, 13 Oct 2006 18:25:57 +0000 http://www.investorgeeks.com/articles/2006/10/13/how-much-is-enough/#comment-7430 It can be bad if say they want their $100,000 back now. Or the item you invested in gets destroyed in a flood, or a hurricane, or Interest rates in CDs jump to 12% returns, or you incur other debt on top of your $100,000 in debt such as a medical emergency, or you use the debt to buy a house but then are unable to sell it. Yes, debt speeds up your ability to do things. I used debt to buy my house and my first car. I guess you could seperate debt into 'stuff I don't care if it's taken from me' debt and 'oh my gosh, I lost my house!' debt. The thing is, you never know what's coming in the future. You could come out great or you could get reamed. You never know. I know a ton of people who borrowed a ton of money and got absolutely wiped out. They were smart people, had good investments and shit just happened. My dad met a man in Boise, ID who lost $25,000,000 when investments he thought were great, and had been for a long time, went in the shitter faster than he could say cheese and lost all of it. He even had to sell the dishes in his house to pay people back. While we're young, sure debt sounds sexy and many times it pays off, but as I get older, and as I realize I don't need $10,000,000 to be happy, I don't see the point in debt other than to buy a house and I don't see the point in sitting on a mortgage when I don't have to. Why have the added stress? If debt was so great, why doesn't everyone in the US mortgage their house at 5.5% and put the cash straight into an Index fund and get the average 11% return? Because it's not a smart thing to do. While I see your point, and many, many poor Americans follow your strategy of going in debt to get rich NOW, I still think over the long-term, the tortoise beats the hare and has a lot less stress and risk. It can be bad if say they want their $100,000 back now. Or the item you invested in gets destroyed in a flood, or a hurricane, or Interest rates in CDs jump to 12% returns, or you incur other debt on top of your $100,000 in debt such as a medical emergency, or you use the debt to buy a house but then are unable to sell it.

Yes, debt speeds up your ability to do things. I used debt to buy my house and my first car. I guess you could seperate debt into ’stuff I don’t care if it’s taken from me’ debt and ‘oh my gosh, I lost my house!’ debt.

The thing is, you never know what’s coming in the future. You could come out great or you could get reamed. You never know. I know a ton of people who borrowed a ton of money and got absolutely wiped out. They were smart people, had good investments and shit just happened. My dad met a man in Boise, ID who lost $25,000,000 when investments he thought were great, and had been for a long time, went in the shitter faster than he could say cheese and lost all of it. He even had to sell the dishes in his house to pay people back.

While we’re young, sure debt sounds sexy and many times it pays off, but as I get older, and as I realize I don’t need $10,000,000 to be happy, I don’t see the point in debt other than to buy a house and I don’t see the point in sitting on a mortgage when I don’t have to. Why have the added stress?

If debt was so great, why doesn’t everyone in the US mortgage their house at 5.5% and put the cash straight into an Index fund and get the average 11% return? Because it’s not a smart thing to do.

While I see your point, and many, many poor Americans follow your strategy of going in debt to get rich NOW, I still think over the long-term, the tortoise beats the hare and has a lot less stress and risk.

]]> by: Ken http://www.investorgeeks.com/articles/2006/10/13/how-much-is-enough/#comment-7429 Fri, 13 Oct 2006 18:16:28 +0000 http://www.investorgeeks.com/articles/2006/10/13/how-much-is-enough/#comment-7429 Some people do not like debt at all. Others use it to their advantage. I used to be very against debt, pay cash for cars, pay down the mortgage. But I've found that that is a slow way of getting wealthy. Borrowing money enables you to expand and grow alot faster than saving it first. You lose the time value of money while saving it. As an example, suppose you found an investment that was paying 11% return but didn't have the money for invest in it. Then you go borrow $100,000 at 8% return from other people. You've just made yourself 3%, or $3,000 in a year without investing your own money. How can that debt be bad. Some people do not like debt at all. Others use it to their advantage. I used to be very against debt, pay cash for cars, pay down the mortgage. But I’ve found that that is a slow way of getting wealthy. Borrowing money enables you to expand and grow alot faster than saving it first. You lose the time value of money while saving it. As an example, suppose you found an investment that was paying 11% return but didn’t have the money for invest in it. Then you go borrow $100,000 at 8% return from other people. You’ve just made yourself 3%, or $3,000 in a year without investing your own money. How can that debt be bad.

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