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Old 01-11-2017, 07:00 AM
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orangenomad orangenomad is offline
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Where you put your money has a lot to do with your risk tolerance and your age. We have really never lost in real estate, sometimes the gains have been great, sometimes not great but never a loss. I honestly dont think of PMs as an investment, more like a method of storage in case of monetary instability, not to say you shouldn't have some just that it won't be the investment that makes you ritch.

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Old 01-11-2017, 07:24 AM
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Where you put your money has a lot to do with your risk tolerance and your age. We have really never lost in real estate, sometimes the gains have been great, sometimes not great but never a loss. I honestly dont think of PMs as an investment, more like a method of storage in case of monetary instability, not to say you shouldn't have some just that it won't be the investment that makes you ritch.

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I would have agreed with real estate until my most recent divestment. But we bought after a major catastrophe and there was a housing shortage. Even including that loss house we are still up over $150k over a 25 year period, which isn't great, but considering these were our primary residences not too shabby. When you consider the whole picture (cost of buying vs. renting) we are up more like $300k.
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Old 01-11-2017, 11:39 AM
ppine ppine is offline
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There are a lot of millionaires in this country. They got that way by many different routes. Investing in equities like stocks, mutual funds, etc is a common form of wealth accumulation. Millionaires probably use them much more than the average person.

There a lot of wild assumptions being proposed here by people that wouldn't know a millionaire if they were sitting across the dinner table from one. A good example would be assuming that millionaires have their own businesses and reinvest in them and have no money left over to invest anywhere else. Millionaires understand cash flow. That is how they get rich, and they stay that way with investments.

I am currently making more money with rental real estate as a retired person than I made most of my working life even adjusted for inflation. I finally learned some important lessons about investing from some smart people who understand cash flow.
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Old 01-11-2017, 12:12 PM
txprep txprep is offline
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There are a lot of millionaires in this country. They got that way by many different routes. Investing in equities like stocks, mutual funds, etc is a common form of wealth accumulation. Millionaires probably use them much more than the average person.

There a lot of wild assumptions being proposed here by people that wouldn't know a millionaire if they were sitting across the dinner table from one. A good example would be assuming that millionaires have their own businesses and reinvest in them and have no money left over to invest anywhere else. Millionaires understand cash flow. That is how they get rich, and they stay that way with investments.

I am currently making more money with rental real estate as a retired person than I made most of my working life even adjusted for inflation. I finally learned some important lessons about investing from some smart people who understand cash flow.
The millionaire next door is a good source on statistics for millionaires which is where I pulled my statements from:

http://www.nytimes.com/books/first/s...llionaire.html

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About one in five of us is retired. About two-thirds of us who are working are self-employed. Interestingly, self-employed people make up less than 20 percent of the workers in America but account for two-thirds of the millionaires. Also, three out of four of us who are self-employed consider ourselves to be entrepreneurs. Most of the others are self-employed professionals, such as doctors and accountants.
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We are fastidious investors. On average, we invest nearly 20 percent of our household realized income each year. Most of us invest at least 15 percent. Seventy-nine percent of us have at least one account with a brokerage company. But we make our own investment decisions.

* We hold nearly 20 percent of our household's wealth in transaction securities such as publicly traded stocks and mutual funds. But we rarely sell our equity investments. We hold even more in our pension plans. On average, 21 percent of our household's wealth is in our private businesses.
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Old 01-11-2017, 12:41 PM
willthrill81 willthrill81 is offline
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The millionaire next door is a good source on statistics for millionaires which is where I pulled my statements from:

http://www.nytimes.com/books/first/s...llionaire.html
Thomas Stanley did excellent research regarding millionaires.

However, as a social scientist, I am now aware of some issues with his sampling methods (i.e. how he 'selected' the millionaires for his study). The short explanation is that he and a colleague used a geographic-demographic combination of data to identify neighborhoods with a high likelihood of many millionaires. This is all well and good if you're primary objective is simply to find millionaires, but it is not good for finding a representative sample of all millionaires.

To put it another way, his method could be compared to searching for drunkards by looking for them at certain bars. This would certainly help you find drunks, but by no means would it be a representative sample of all drunks.

Some of the data from Stanley's book "The Millionaire Mind" actually reveals this weakness. He acknowledges that the IRS has far better data on millionaires than he does, and the IRS's data suggest that the average American millionaire has significantly less wealth than those in Stanley's dataset. With certainty, I can tell you that other differences beside net worth are present to.

So Stanley's data gives us great insight into millionaires, but by no means is it the final word on the subject. If someone could get a better sample of all millionaires, they would surely find some notable differences from what Stanley discovered.
Old 01-12-2017, 10:16 PM
Rett Rett is offline
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Made my money in businesses and realestate, the businesses keep buying more realestate, and the realestate keeps buying more realestate. I couldn't tell you crap about stocks or commodities.
Old 01-12-2017, 10:49 PM
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There are two things I can tell you with great certainty.

1. Never invest in anything you don't understand. For example, I don't understand commodities futures.

2. A million dollars doesn't get you as far as it used to, no matter what you have it tied up in...
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Old 01-13-2017, 06:46 AM
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I read a book a couple years ago written by a 1 %er about 1 %ers. One thing he pointed out were many of the uber wealthy he was writing about didn't know squat about the stock market. Just about all of them have a well know, in their circles, and skilled financial advisor. If I recall correctly the reason most didn't have huge tracts of stocks was because they only invested in things they understood so their stock investments were the basic buy company A keep it for a while. For many, company A was a company they had been involved in for many, many years.

His experience was far from all encompassing, but was clearly anecdotal and his personal experiences from his immediate peer group.
Old 01-13-2017, 10:51 PM
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Millionaires do use stocks hell Warren Buffet Made his billions in stocks. The wealth in the stock market is pretty much buy blue chip companies when they are lower and price and reinvest the dividends though a drip or use the dividends to buy other currently undervalued blue chip companies. Generally true blue chip companies increase there dividend year after year so it multiples faster. Also true blue chips eventually at some point have stock splits which they multiple even more with more dividends. Then the shares go up more. The shares multiple and grow. This obviously won`t happen over night and will take some time to grow. Plus there are common shares and preferred shares.

Also there are other products to get rich like real estate, tax lien certs, investing in businesses as an equity partner(as in you do no work). All these things work. Most Millionaires I personally know Focused on working, multiplied there income sources, in things that they could scale up or scale down and automate to make things as passive as possible then work on other projects.

The good thing about stocks are they are pretty passive as long as you can analyst a stock property by reading a balance sheet, income to expense ratio, cash flow ect. Most people can`t read these things.
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Old 01-18-2017, 10:22 AM
bkrosco bkrosco is offline
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I am currently making more money with rental real estate as a retired person than I made most of my working life even adjusted for inflation. I finally learned some important lessons about investing from some smart people who understand cash flow.
ppine - Care to share some of those lessons with us? I am looking for places to invest outside of the stock market. I have considered a rental property, but the extra mortgage holds me back. I have about $20k I could invest. I do still owe $130k on my primary residence though also.

I would love to invest somewhere outside the stock market but it seems like everything I look at has high upfront costs. At least with stock market you can put in smaller amounts easily as you accumulate more.
Old 01-18-2017, 11:34 AM
willthrill81 willthrill81 is offline
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ppine - Care to share some of those lessons with us? I am looking for places to invest outside of the stock market. I have considered a rental property, but the extra mortgage holds me back. I have about $20k I could invest. I do still owe $130k on my primary residence though also.

I would love to invest somewhere outside the stock market but it seems like everything I look at has high upfront costs. At least with stock market you can put in smaller amounts easily as you accumulate more.
You can definitely make money in real estate, but it quickly becomes a job for many people. If you're fine with that, great. I've heard it said that you have to make about four real estate deals before you start to get a good hold on what you're doing.

Just to offer another investment option, I've been investing in peer-to-peer lending for nearly four years now and have been experiencing approximately 10% returns along the way. I like Lending Club, but some prefer Prosper; they're the two big players right now. Most people don't get returns as high as I do (I'm in the top 1%), but getting 7-8% returns is quite easy. Granted, stocks do better than that over the long-run (10.1%), but you experience a lot of volatility that you don't with P2P lending.
Old 01-20-2017, 04:40 PM
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Stocks with Drips and Share purchase plans make it easy to invest. Investing in cash flow positive real estate using a property manager takes the headaches out.

If you don`t like those. Other good ideas are tax lien certificates, peer to peer lending, investing in start ups or companies as an equity based person, becoming an investor in a business.

There are more but with myself I am more of a income based investor because once your income from your investments equals your expenses your good and reach financial independence.

Also investing in yourself. As you develop skills and knowledge your earning power goes up. There is no limits to improving yourself to learn whatever. Investing 10% of my income in myself to improve myself has yielded the best returns more so then any piece of real estate or stock.
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