Datasheet for Wealth, Rich-People Investing, And Permanent Passive Income
#1
As the saying goes, "There is more than one way to skin a cat."  That is certainly true for getting wealthy, but what I want to explain my blueprint that worked extremely well for me after many years of trial and error.  Not everyone will agree on this, especially Wall Street types, MBAs, and those who have formally studied finance, but there is a reason why I turned out to be wealthier than the vast majority of them.

Managing your wealth is like being a mafia boss.  Every single one of your dollars is required to pay you 10 cents each year just for the privilege of belonging to you and being under your control, direction, and protection.  The mafia calls this concept "tribute money," but we'll call it our annual rate of return.  Some dollars will only manage 8 cents, others 15 cents, but those who lag without justification are liable to be fired and reassigned till they start performing as required.

Your sworn enemies in this wealth-mafia world are:

-The government which wants to tax you as much as it can.
-Wall Street which wants to keep you fully invested so it can shear you like sheep during market downturns.
-Banks which want to keep you as fully debt bound for as long as possible so they make money off of you.
-Commercial interests that want you to spend your money rather than save and invest it.

The enemies employ information warfare to keep you at a disadvantage.  The information warfare comes in the form of financial myths.  What are these myths actively perpetuated by government, Wall Street, the media, academia, and conventional wisdom?

Myth# 1 - The Stock Market is the best way to get rich over time.
Wealthy people generally do not become wealthy by investing in the stock market.  In fact the stock market is for the masses of middle class people to feel that they are taking part in the prosperity of commercial markets and for institutional investors to skim the profits off of the top while they tout the malarkey of being fully invested long-term.

Before anyone invests another penny in a stock market, he should read the book The Ponzi Factor by Tan Liu
Liu goes into great detail describing the great conspiracy to miseducate students, professors, Wall Street analysts, and investors by perpetuating the myth that companies' earnings, growth, stock price valuations, and all other touted measures of a good stock are wrong.  None of those factors affect stock prices.  Stock prices are only affected by one person being willing to buy that stock at the price another person is selling it, PERIOD.  It is pure speculation, nothing more, but the media fools people into thinking earnings and other metrics drive the prices of stocks.  The only exception would be dividend stocks because dividends ARE influenced by earnings and the company is paying you as an investor just as they should.  But the vast majority of stocks DO NOT pay dividends.

That is not to say one cannot make money on non-dividend paying stocks, but if you should stick to the safety of the major index funds if unless you are not getting paid regular dividends.

Perhaps the biggest deception that Wall Street peddles is concealing the impact of down markets on stocks.  What do I mean?  Well, if you purchase 100 shares of X stock at $10 a share you have $1000 worth of stock.  Say the stock goes down 50% the year after you buy it.  You now have $500 worth of stock.  Then the next year the stock goes back up 50%.  You now have only $750 worth of stock, but the company will boast that its stock had an impressive 25% average return over the past 2 years!  This is deception because you held the stock for the past 2 years, yet you are still down by 25% from your original investment. 

It should also dawn on you that when your stock goes down in price, it must exceed the percentage of lost just to break even.  That means that $500 worth of X stock has to achieve a 100% return just to offset that initial 50% drop to get you back to breaking even.  Most people don't think about that!

That being the case, I only recommend dividend paying stocks/ETFs, index funds of the major indexes (S&P 500, Wilshire 4500, or Wilshire 5000 only).  Stocks should ideally be no more than 20% to 50% of your overall investment portfolio depending on your age and risk tolerance.   

Myth #2 - Buying a Primary Residence is a Good Investment.
For some reason, Americans have been duped into using their primary residence as their most important wealth asset.   Many of them don't even realize that one never truly owns a home in the United States.  One can only hold title to a home while they lease it from the government.  Property taxes are the "rent" you pay to the government and if you don't pay the taxes, you get evicted via foreclosure and lose your entire "investment."  Yes, if you eventually sell your principal residence for a profit, you can be spared federal taxes in some cases, but why be in that home for a decade or more and not receive continuous rental income while the price appreciates?

A more sound strategy is to purchase several homes as income-producing properties ONLY, and simply rent the home you want to live in.  An even better strategy for investing in real estate is using platforms like Fundrise, Cardone Capital, Cadre, or other equity crowdfunding investment vehicles.  Those companies do all the difficult grunt work, and you get the benefit of simply sitting back and collecting the dividend and appreciation checks.  You just set it and forget it.  What's more, while stock market investors are losing their minds at the moment, the smart people invested in real estate passive income are leisurely still receiving their checks each month in a business as usual manner.

Finally, the BEST strategy for real estate investing with tax free income is the 1033 Exchange eligible investing.  When you invest in certain qualified real estate in partnerships, your passive income is tax free so long as you continuously roll it over into new 1033 eligible real estate when you sell it.  This is how rich people hold tax free real estate all their lives without paying taxes on the income and they often pass it down to their children.  There is a lot of red tape that goes into 1033 Exchange properties, but there are specialists that facilitate the purchase and transfers of the properties so that you can enjoy the tax free income indefinitely.  Robert Kiyosaki and Grant Cardone are two prominent people who have in recent years begun to shed light on 1033 investing, but it is still quite unknown to most investors.  If you want to know why the Democrats want President Trump's tax returns, it is to embarrass him by showing that he does not pay any federal taxes on his many 1033 eligible properties!  Now you know.....

Myth #3 - Financial Advisors Will Steer You in the Right Direction.
Most garden variety financial advisors are clueless about sophisticated investment vehicles.  What's more, they are usually limited in the investment options they are authorized to present for you to consider.  A family wealth manager or an alternative investment consultant will have a plethora of investment ideas that would be unknown the garden variety financial advisor.  Avoid using them unless you want to be veered into vanilla stocks, annuities, and other things that are less than ideal as investments.  

Myth # 4 - CNBC and Bloomberg Provide Reliable Commentary.
Financial networks and news media are all out to deceive you into buying and holding stocks for the long term so that Wall Street 
firms can "Shear the wool" from you whenever it needs to do so.

That being the case, their useless commentary is primarily stock market cheerleading to keep unsuspecting investors fully invested at all costs.  Only use financial news media for raw data information and NEVER rely on the ad nauseum commentary to make investment decisions.  They are bought and paid for by Wall Street firms to dupe you into losing the Ponzi factor to the large, institutional investors.

In Summary
Again, there are indeed other ways to prosperity and passive income, but this forever passive income approach has worked well for me over the years with only a minimum amount of effort.

The precious metals, crypto, and Forex, are largely gimmicks that only lead to real wealth for a relative lucky few.  Resist the temptation to fall for the overblown efficacy of them.  The stock market CAN be a good place to enhance your wealth but only if you time it right and you keep it less than half of your investment portfolio.  Don't believe me?  Just ask the people fully invested in stocks how much money they have been hemorrhaging the last 10 days in the Coronavirus hysteria. Virus or no virus, people and companies will still have to pay you rent which you can start receiving tax free in the proper investment vehicle! 

Remember, you have to preside over each of your dollars just like a mafia boss.  Every single one of your dollars is required to pay you at least 10 cents of tribute money each year just for the privilege of belonging to you and being under your control, direction, and protection!
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#2
All the rich people I know (multimillionaires) own assets that they bend to their will. Hate him or love him Jeff Bezos treats the Washington Post like a propaganda outlet. Most people can't influence gold, the stock market, or crypto. With that being said you can store value with those items. Another item I'd add to the list is not having a career. I know someone who works at a Fortune 500 company that probably makes more than most people here and he was looking around for ways to be a millionaire. It wouldn't be my place to tell him what to do because of his background.

I'm starting off small at the moment but give it another year and my business will make me 10x what I'm making now. When you sell things you are competing at low barriers of entry and it's hard to scale. God forbid I ever have to answer to some asshole that barely knows more than I do. Another aspect of making FU money is making money while you sleep. I'm not there yet but have heard there's nothing better to waking up to money in the morning.
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#3
Thank you for providing this information. I definitely learned a few things I was unaware of. That being said I have to point out that holding rental property is not the breeze you make it out to be.

Rental property requires insurance, can be 2000 per year on even a sfr rental, real estate taxes , sewer bills , water bills , which the owner usually pays , grass cutting, snow removal , repairs when needed and special assessments when they crop up. And all that is in a best case scenario. It goes up more when tenants don't pay rent , attorneys need to be hired , court costs , bailiffs etc.

Stocks , metals , crypto etc come without all these headaches.

There are downsides to every investment but I think rental property has very high downside.
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#4
(03-07-2020, 12:07 AM)Daryush Neubache Wrote: That being said I have to point out that holding rental property is not the breeze you make it out to be.

Rental property requires insurance, can be 2000 per year on even a sfr rental, real estate taxes , sewer bills , water bills , which the owner usually pays , grass cutting, snow removal , repairs when needed and special assessments when they crop up. And all that is in a best case scenario. It goes up more when tenants don't pay rent , attorneys need to be hired , court costs , bailiffs etc.

I 100% agree with you.  I probably did not make it clear enough that the BEST way to invest in real estate is where a company like Fundrise, Cardone Capital, or Cadre does all of that grunt work you mentioned for you, and you just invest the money and receive the flows of income which is what I do now.

Truth be told, I once held a portfolio of actual properties and had property managers handling all those issues.  That came with a cost and tax time headaches.  Real Estate Equity crowdfunding takes 90% of those headaches away.

(03-06-2020, 11:39 PM)ChicagoFire Wrote: I'm starting off small at the moment but give it another year and my business will make me 10x what I'm making now.
I believe you likely will make it to that level and make even 20x what you make now.  I am big into entrepreneurship, but I simply made the career choice early in life.  I worked for 2 decades in a capacity I did not like, but it permitted me to invest and retire very early.  So it was a trade off, or a deal with the devil depending how you look at it.

But yes, most multi millionaires do make their wealth from business ventures they create or buy into.  That being said, I very much support people buying already established businesses that owners want to sell.  Business brokers can assist with locating such businesses for sale, and they can help you avoid certain pitfalls.
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#5
(03-06-2020, 10:46 PM)Contrarian Expatriate Wrote:
Liu goes into great detail describing the great conspiracy to miseducate students, professors, Wall Street analysts, and investors by perpetuating the myth that companies' earnings, growth, stock price valuations, and all other touted measures of a good stock are wrong.  None of those factors affect stock prices.  Stock prices are only affected by one person being willing to buy that stock at the price another person is selling it, PERIOD.  It is pure speculation, nothing more, but the media fools people into thinking earnings and other metrics drive the prices of stocks.  The only exception would be dividend stocks because dividends ARE influenced by earnings and the company is paying you as an investor just as they should.  But the vast majority of stocks DO NOT pay dividends.

This is not really true.  Earnings definitely affect the prices of stocks.  Look at any company's stock after a big surprise in earnings.  It will often move drastically to the upside or downside.  Many stocks don't move according to what fundamental metrics dictate they should, this is true.  This depends on the specific stock, and also the time period.  For example, the past 10 years have been all about growth stocks.  These stocks jump in price based on no earnings, or even negative earnings.  If you've been a value (fundamental) investor the past 10 years, you've underperformed drastically because things have been so crazy in terms of valuations.  But that doesn't mean that valuation metrics mean nothing, and that it's all "pure speculation".

Also companies have largely switched from paying dividends to doing stock buybacks because the Reagan administration loosened the rules in 1982.  Stock buybacks are more tax efficient for both the company and the investor.  If you were to only invest in stocks that paid out dividends during this time frame, then you would've missed a massive bull market up until the present day.  Total return (capital gains + income) is important, not just income.

A big risk of dividend stocks is losing your invested capital.  Look at a company like Exxon Mobil.  It has a dividend yield of 7.3%.  Sounds good in this low interest rate environment.  But the energy sector is in a bear market right now.  What happens if Exxon's earnings drop and they have to cut the dividend?  Then your income goes down and your initial investment too, because people sell due to the lower dividend.  Looking for dividend yield in this environment is in general a good idea, but you have to put the work into fundamental analysis to identify opportunities with lower risk of capital impairment.  Dividend investing is not a silver bullet, especially depending on the time frame you're in.

Quote:Perhaps the biggest deception that Wall Street peddles is concealing the impact of down markets on stocks.  What do I mean?  Well, if you purchase 100 shares of X stock at $10 a share you have $1000 worth of stock.  Say the stock goes down 50% the year after you buy it.  You now have $500 worth of stock.  Then the next year the stock goes back up 50%.  You now have only $750 worth of stock, but the company will boast that its stock had an impressive 25% average return over the past 2 years!  This is deception because you held the stock for the past 2 years, yet you are still down by 25% from your original investment.

Basic stock market price data is public, and anyone can see returns.  It may be more difficult to factor in things like dividend reinvestment, but you can check any stock and even benchmark its return against an index like the S&P 500 with one Google search.


Quote:An even better strategy for investing in real estate is using platforms like Fundrise, Cardone Capital, Cadre, or other equity crowdfunding investment vehicles.  Those companies do all the difficult grunt work, and you get the benefit of simply sitting back and collecting the dividend and appreciation checks.  You just set it and forget it.  What's more, while stock market investors are losing their minds at the moment, the smart people invested in real estate passive income are leisurely still receiving their checks each month in a business as usual manner.

These platforms are not risk free.  The yield may be attractive, but one has to keep in mind that your biggest risk is loss of capital.  Real estate is an illiquid asset, and although you may be getting a monthly check, if liquidity dries up it may be hard to get your principal back.  It's a question if the yield you're getting is worth the risk.  There was this type of liquidity crunch in 2008, largely driven by the speculation in investment properties.  If you're not managing the properties yourself, I'm not sure why you wouldn't invest in REITs instead of crowdsourcing platforms.

I used Lending Club when it first came out and averaged something like 7% annualized over about eight years, it was pretty good comparatively.  But as the platform developed, institutional investors got first pick of the best loans.  Over time, the rate of return went down and the risk of capital loss increased due to worse loans being available.  Liquidity was also a problem.  Nowadays, you might as well just buy an ETF instead of investing on Lending Club.  I suspect crowdsourcing platforms for other asset classes will follow the same path, if they haven't already.  Admittedly, I don't have experience with these particular ones.

Quote:The precious metals, crypto, and Forex, are largely gimmicks that only lead to real wealth for a relative lucky few.  Resist the temptation to fall for the overblown efficacy of them.  The stock market CAN be a good place to enhance your wealth but only if you time it right and you keep it less than half of your investment portfolio.  Don't believe me?  Just ask the people fully invested in stocks how much money they have been hemorrhaging the last 10 days in the Coronavirus hysteria. Virus or no virus, people and companies will still have to pay you rent which you can start receiving tax free in the proper investment vehicle!

I think this is generally good advice.  Crypto is a bubble and will likely pop in the chaos that's shortly to follow this virus.  Forex is full of snake oil salesmen.  I wouldn't lump precious metals in with that those though.  The Fed has inflated a giant bubble in both stocks and bonds and gold has been steadily marching upwards as a safe haven.  I think it's a mistake not to own at least a small amount as a hedge.

Being invested in stocks and bonds has performed amazingly over the last century.  And passive investing was truly amazing for those who rode that wave.  But what we're witnessing now is a bubble in passive investing in index funds.  I think the lesson is that there is no such thing as passive investing anymore in any asset class.
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#6
This short video is a good explanation of Tan Liu's thesis that the stock market is a legally sanctioned Ponzi scheme.  He also destroys what he calls the great myth that stocks' increase in value are generated by the earnings and growth of a company.  Nothing could be further from the truth, but most people still believe that because that is what is generally taught in business schools and perpetuated in the media.  It is false.....



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#7
I think the video misses the mark.  Instead of dividends nowadays, you get capital gains.  Which are arguably better because you don't have to pay taxes on them right away, if ever.  And it provides more working capital for the business.

Tesla is a loaded example because it actually is sort of a ponzi scheme in and of itself (they collect cash deposits for nonexistent products).  Nowadays many companies, especially tech companies, are cash flow negative/earnings negative in their early days.  They do this to try to blitz a market and establish sustainable competitive advantages before other entrants.  If they succeed, let's say in the case of Facebook, then they can establish a monopoly and basically print money at scale.  This money is reinvested into the business as it grows because it's the most efficient use of the capital.  As the business grows and earns money, the value of the company's equity increases.

If they fail, likely in the case of Tesla and many other shitty companies nowadays, they go bankrupt.  The Fed has delayed this process by pumping cheap money into the system, so it's taking much longer for nature to take its course.

Valuations have become unmoored from fundamentals across the stock market, hardly anyone will argue with that.  What the video fails to grasp is that valuations represent consensus expectations of future earnings, not the current earnings of companies.  The stock market is a forward-looking mechanism by definition.  The consensus expectations of earnings are often wrong.  These are called inefficiencies in the market, which you can make money by exploiting if you know what you are doing.  As companies mature and their earnings become more predictable, their valuations generally settle into a tighter range, and they often begin paying dividends.

A discounted cash flow valuation model can be applied to both companies that pay dividends, using the dividend payments, or in the case of companies that don't pay dividends using their free cash flow.  In practice though, tech companies operating in the relatively new winner-take-all or winner-take-most environment that I described are harder to value.  They may lose money initially, and their future earnings are unclear, so that's why valuations can fluctuate so much.

There are some markets with a large percentage of cynical participants where the instruments being traded are largely just vehicles for speculation.  Private, permanently money-losing venture startups and crypto are recent examples.  The stock market has been in a bubble recently, but to paint it with the same brush in its entirety I think is exceedingly cynical and simplistic.
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#8
Nothing much to add except my 2 cents...Everything has been said here. It does indeed feel like a complete bubble war we are in right now, across the board, nothing for a value investor. I bring my money to different growth market countries, open time deposit and simply earn interest. No more stock market investments for me. Whichever stock I look at it is basically a disaster waiting to happen, not to mention that most algo-trading programs nowadays penetrating the small orders you just place trying to chase you out with a loss early.
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#9
(03-07-2020, 01:53 PM)El Puto Loco Wrote: I bring my money to different growth market countries, open time deposit and simply earn interest.

Can you elaborate what this means?
lmk if you have any questions man
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#10
I remember on the other forum someone took a swipe at Warren Buffet, and I think it was Irish who responded:

"What does Warren Buffet know about investing, bro?" - Some random guy on the Internet
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#11
Anyone who thinks the stock market is a 'ponzi scheme' is an innumerate moron. Period.

In the short-term, a stock is worth what someone is willing to pay for it - just like the houses you mention or ANY OTHER ASSET.

In the long-term, a stock is worth the series of cash flows it generates [plus voting rights but we can zero them out for most people].

Let's take a random well-known stock, say Clorox, ticker CLX.

40 years ago, it was worth $1. Now it is $173. You didn't need to find a greater fool to sell it to in the interim. So your starting assumption was 100% false.

But Wait! There's more!

It's currently paying a dividend of $1.06 per quarter, or a 424% annual cash return on your initial share purchase and growing each year as it has for the last 42+ years.

In 1989 you were getting a 12% cash return every year. By 1995 you were getting a 25% return every year. By 2000 you were getting a 50% return every year. By 2005 you were getting a 75% cash return annually. By 2010 it was 163% annual cash return.

So, you have a 17,200% price return and this growing massive cash return every year since you purchased it. No rental house comes remotely close, oh, and capital gains are nil until you sell and long-term AND dividends are tax-advantaged income as well.

This is why stocks are always the optimal investment for the Long Run. It's not even hard to choose among blue-chip stocks that pay growing dividends every year, Dividend Aristocrats have raised the dividends for the past 25+ years. firms like PG, KO, ADP, BDX, ROST, ABBV, CVX, WBA, WMT, PEP, HRL, KMB, MMM, CAT, UTX, JNJ, LOW, MCD, TGT, VFC & T. [and about 40 others] You don't have to worry about any of those firms going out of business either.

It's trivial now with no-cost trades to form a diversified portfolio that beats the market with lower volatility and outperforms in down markets, as these stocks have over time. There is literally zero money that 'Wall St' is supposedly shearing from you in a buy and hold investment when purchasing and owning stocks. None.

You can stop lying now about the stock market.
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#12
(03-07-2020, 04:26 PM)donnygately Wrote: It's trivial now with no-cost trades to form a diversified portfolio that beats the market with lower volatility and outperforms in down markets, as these stocks have over time.

Strongly agree with everything except that it's trivial to beat the market.  It is really hard to beat the market long term, and most professionals fail.  It is also harder when you are playing in large cap stocks, since there are fewer inefficiencies to exploit.

Your father's or grandfather's dividend portfolio was once seen as rock solid, but things change.  Younger generations don't consume as much processed food for example, so Kraft Heinz has taken a beating.  The problems that Boeing is experiencing now were once unthinkable.  Dividend stocks are great because they can outpace inflation, but there is still risk of dividend cut/principal loss, and they are not a silver bullet to beating the market long term.

Also remember, OP thinks dividends stocks = good, non-dividend stocks = ponzi, so your post basically agrees with what he's saying.  An example that refutes his point are the FAANG stocks (Facebook, Amazon, Apple, Netflix, Google).  These companies have paid barely any dividends, but have gone on one of the greatest runs of all time as their earnings have increased exponentially.  Some are overvalued, especially Netflix, but they are not ponzis.
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#13
(03-07-2020, 01:53 PM)El Puto Loco Wrote: I bring my money to different growth market countries, open time deposit and simply earn interest. No more stock market investments for me.
I was going to introduce that a bit later, but my international term deposits are earning 12.25% per year which far less risk than the stock market.  

People almost always try to warn me by saying that foreign banks could fold or defraud me, but the risk of that happening is far less than the risk of the stock market tanking as it is now.  Thus far, and I've been doing that for a decade now, foreign, high interest term accounts have been one of my most lucrative investment strategies.

(03-07-2020, 03:29 PM)churros Wrote:
(03-07-2020, 01:53 PM)El Puto Loco Wrote: I bring my money to different growth market countries, open time deposit and simply earn interest.

Can you elaborate what this means?
He means you could go to countries like Georgia or Armenia and open accounts (I recommend in the two best capitalized banks) and enjoy monthly interest at a rate of 10% to 12.25% just for parking your cash there.  

The caveat is that to get those rates you need to have it in local currency but you can convert that to dollars or euros with the click of a link now.  HUGE wealth expander for me over the years !

I recommend you monitor deposits.org to get a sense of what is out there, but Georgian and Armenian banks are widely thought to be the best choices by those who specialize in these things.

American citizens would just be sure to file annual FBAR reports on the accounts (5 minutes of work) online to the US Treasury to keep it all legal.
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#14
If foreign banks were safe they wouldn't offer 12% interest.

I recommend all normal people to put their money in a low fee mutual fund.

A 3% withdraw rate will last forever in the stock market. It will never empty your account to $0. Go to the fire calc and see for yourself.

$60K a year. You need 2 million in the markets. Do your own math to see what you need.

-------------

Abnormal people should put that monthly stock money into intangible skills and learn to trade them for tangible assets.
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#15
(03-07-2020, 03:29 PM)churros Wrote:
(03-07-2020, 01:53 PM)El Puto Loco Wrote: I bring my money to different growth market countries, open time deposit and simply earn interest.

Can you elaborate what this means?

Certainly, Georgia....going strong, 5% on usd deposit, 9.8% on GEL. Armenia going strong and will get even better, strong stable currency, 10.50% time deposit on dram. Vietnam still quite strong but fading, i started 12 years ago earning 13% nowadays still getting 7.8% but it's time to take the money now, Vietnam it's to late, the government changed rules for foreigners and i believe the pegging of vnd to usd will soon see an end of this era. I don't want to be on the receiving end of the vnd devaluation. At best times I had 3 billion vnd earning interest. 

Now I will look for a new growth market like Kazakhstan perhaps, not sure yet.

Who is earning 12% in which country? Interested to know more.
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#16
(03-08-2020, 01:44 AM)El Puto Loco Wrote:
(03-07-2020, 03:29 PM)churros Wrote:
(03-07-2020, 01:53 PM)El Puto Loco Wrote: I bring my money to different growth market countries, open time deposit and simply earn interest.

Can you elaborate what this means?

Certainly, Georgia....going strong, 5% on usd deposit, 9.8% on GEL. Armenia going strong and will get even better, strong stable currency, 10.50% time deposit on dram. Vietnam still quite strong but fading, i started 12 years ago earning 13% nowadays still getting 7.8% but it's time to take the money now, Vietnam it's to late, the government changed rules for foreigners and i believe the pegging of vnd to usd will soon see an end of this era. I don't want to be on the receiving end of the vnd devaluation. At best times I had 3 billion vnd earning interest. 

Now I will look for a new growth market like Kazakhstan perhaps, not sure yet.

Who is earning 12% in which country? Interested to know more.
Bank of Georgia is offering 12.25% on their 2 year deposits.  This blows the stock market to smithereens when you take into account that your invested principal is preserved and you have no down years to erode your returns.  It is not even close, but Wall Street has people brainwashed into thinking that the stock market is a better bet and less risky.

https://bankofgeorgia.ge/en/retail/depos...rm-deposit

(03-07-2020, 11:55 PM)captain_shane Wrote: If foreign banks were safe they wouldn't offer 12% interest.
That's what Wall Street types would have you believe because they can't suck trade and management fee profits off of you when you invest in foreign accounts.  I've been doing so for over a decade and it has made me far more wealthy than my stock market holdings ever have. 

I have been only 10% into stocks since before this pullback and about 30% of my portfolio is making me 12.25% while US stocks are already down more than that for the calendar year.  If the US stock market gets to the point where it is down 30%, I will start dollar cost averaging back in at that point to start hoarding dividend paying bargains.

But it takes investors with courage and a sophisticated understanding of risk to take advantage of these opportunities.
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#17
(03-08-2020, 02:10 AM)Contrarian Expatriate Wrote:
(03-08-2020, 01:44 AM)El Puto Loco Wrote:
(03-07-2020, 03:29 PM)churros Wrote:
(03-07-2020, 01:53 PM)El Puto Loco Wrote: I bring my money to different growth market countries, open time deposit and simply earn interest.

Can you elaborate what this means?

Certainly, Georgia....going strong, 5% on usd deposit, 9.8% on GEL. Armenia going strong and will get even better, strong stable currency, 10.50% time deposit on dram. Vietnam still quite strong but fading, i started 12 years ago earning 13% nowadays still getting 7.8% but it's time to take the money now, Vietnam it's to late, the government changed rules for foreigners and i believe the pegging of vnd to usd will soon see an end of this era. I don't want to be on the receiving end of the vnd devaluation. At best times I had 3 billion vnd earning interest. 

Now I will look for a new growth market like Kazakhstan perhaps, not sure yet.

Who is earning 12% in which country? Interested to know more.
Bank of Georgia is offering 12.25% on their 2 year deposits.  This blows the stock market to smithereens when you take into account that your invested principal is preserved and you have no down years to erode your returns.  It is not even close, but Wall Street has people brainwashed into thinking that the stock market is a better bet and less risky.

https://bankofgeorgia.ge/en/retail/depos...rm-deposit

(03-07-2020, 11:55 PM)captain_shane Wrote: If foreign banks were safe they wouldn't offer 12% interest.
That's what Wall Street types would have you believe because they can't suck trade and management fee profits off of you when you invest in foreign accounts.  I've been doing so for over a decade and it has made me far more wealthy than my stock market holdings ever have. 

I have been only 10% into stocks since before this pullback and about 30% of my portfolio is making me 12.25% while US stocks are already down more than that for the calendar year.  If the US stock market gets to the point where it is down 30%, I will start dollar cost averaging back in at that point to start hoarding dividend paying bargains.

But it takes investors with courage and a sophisticated understanding of risk to take advantage of these opportunities.

That rate sounds good as I will be in Tbilisi next month to put more money into usd time deposits. Unfortunately the GEL has become stronger, because of foreign investment inflow. I will go to bank of Georgia and open time deposit in usd and wait for GEL on the sidelines, i believe it will drop soon towards 3.30 to usd, that is 20%. I also add to my 10.50% Armenia dram deposit in Yerevan.

Besides these 2 countries being obvious favorites for many, what else is on the menu?
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#18
(03-08-2020, 03:05 AM)El Puto Loco Wrote:
(03-08-2020, 02:10 AM)Contrarian Expatriate Wrote:
(03-08-2020, 01:44 AM)El Puto Loco Wrote:
(03-07-2020, 03:29 PM)churros Wrote:
(03-07-2020, 01:53 PM)El Puto Loco Wrote: I bring my money to different growth market countries, open time deposit and simply earn interest.

Can you elaborate what this means?

Certainly, Georgia....going strong, 5% on usd deposit, 9.8% on GEL. Armenia going strong and will get even better, strong stable currency, 10.50% time deposit on dram. Vietnam still quite strong but fading, i started 12 years ago earning 13% nowadays still getting 7.8% but it's time to take the money now, Vietnam it's to late, the government changed rules for foreigners and i believe the pegging of vnd to usd will soon see an end of this era. I don't want to be on the receiving end of the vnd devaluation. At best times I had 3 billion vnd earning interest. 

Now I will look for a new growth market like Kazakhstan perhaps, not sure yet.

Who is earning 12% in which country? Interested to know more.
Bank of Georgia is offering 12.25% on their 2 year deposits.  This blows the stock market to smithereens when you take into account that your invested principal is preserved and you have no down years to erode your returns.  It is not even close, but Wall Street has people brainwashed into thinking that the stock market is a better bet and less risky.

https://bankofgeorgia.ge/en/retail/depos...rm-deposit

(03-07-2020, 11:55 PM)captain_shane Wrote: If foreign banks were safe they wouldn't offer 12% interest.
That's what Wall Street types would have you believe because they can't suck trade and management fee profits off of you when you invest in foreign accounts.  I've been doing so for over a decade and it has made me far more wealthy than my stock market holdings ever have. 

I have been only 10% into stocks since before this pullback and about 30% of my portfolio is making me 12.25% while US stocks are already down more than that for the calendar year.  If the US stock market gets to the point where it is down 30%, I will start dollar cost averaging back in at that point to start hoarding dividend paying bargains.

But it takes investors with courage and a sophisticated understanding of risk to take advantage of these opportunities.

That rate sounds good as I will be in Tbilisi next month to put more money into usd time deposits. Unfortunately the GEL has become stronger, because of foreign investment inflow. I will go to bank of Georgia and open time deposit in usd and wait for GEL on the sidelines, i believe it will drop soon towards 3.30 to usd, that is 20%. I also add to my 10.50% Armenia dram deposit in Yerevan.

Besides these 2 countries being obvious favorites for many, what else is on the menu?
Stick to those two and you'll be more than fine.  I watch Ukraine and Argentina, but the political risk and central bank mismanagement dissuades me from investing there.  Trust me, you'll be well ahead of your stock market investing peers if you do that!

Instead of keeping the funds in dollars, you'd be far better off with GEL then add dollars to the account each month via Transferwise.  3% versus 12.25% is too dramatic a difference to justify holding the funds in dollars.

Ensure you sign up for SOLO banking service at Bank of Georgia so you can renew your accounts and open new ones without having to return to Georgia!  I only have to return when I have to renew my expired debit cards which I use all over the world without a problem.

Whatever you do, DON'T LISTEN TO ANY NAYSAYERS who likely don't have half of your investing savvy (or courage) and will likely never be as wealthy as you are becoming.
Favorite Countries:  Finland, Latvia, Ukraine, Serbia, Montenegro, Georgia, Japan, Argentina.

Countries For Future Travel:  Norway, Sweden, Uruguay, Paraguay, Bosnia, Macedonia, Moldova, Uzbekistan.
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#19
https://en.wikipedia.org/wiki/Peso_problem_(finance)
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#20
(03-07-2020, 04:03 AM)Lampwick Wrote:
(03-06-2020, 10:46 PM)Contrarian Expatriate Wrote: The precious metals, crypto, and Forex, are largely gimmicks that only lead to real wealth for a relative lucky few.  Resist the temptation to fall for the overblown efficacy of them.  The stock market CAN be a good place to enhance your wealth but only if you time it right and you keep it less than half of your investment portfolio.  Don't believe me?  Just ask the people fully invested in stocks how much money they have been hemorrhaging the last 10 days in the Coronavirus hysteria. Virus or no virus, people and companies will still have to pay you rent which you can start receiving tax free in the proper investment vehicle!

I think this is generally good advice.  Crypto is a bubble and will likely pop in the chaos that's shortly to follow this virus.  Forex is full of snake oil salesmen.  I wouldn't lump precious metals in with that those though.  The Fed has inflated a giant bubble in both stocks and bonds and gold has been steadily marching upwards as a safe haven.  I think it's a mistake not to own at least a small amount as a hedge.

Being invested in stocks and bonds has performed amazingly over the last century.  And passive investing was truly amazing for those who rode that wave.  But what we're witnessing now is a bubble in passive investing in index funds.  I think the lesson is that there is no such thing as passive investing anymore in any asset class.

Of course, guys are not necessarily going to agree how to allocate their investments, and surely some of the tricks to investing and having security are to attempt to allocate and to diversify allocations in ways that the various investments are not correlated to each other. Sometimes during great price moves, a lot of the assets classes will move in the same direction in the short term, but that does not necessarily mean that they are correlated in the long term, and so frequently guys are going to differ in their perspectives regarding which assets to invest into, how to allocate their investments and how to attempt to prepare for both upward price movements and downward price movements.

Probably the most difficult time for any guy is going from zero (or even negative networth) to establishing a decent amount of capital that is under his control, and the richer folks frequently have profited so much from various investments, that they are not necessarily losing sleep over 50% corrections, and may even be figuring out ways to profit from the various panicking of others.

The way that the current money system is designed, there can be a lot of tools that can be used to make profits and even to attempt to generate passive income, including the use of debt. If there is so much irresponsibility in monetary approaches, frequently, debt can be used to make money and then pay the money back over time, and the money ends up being worth way less when it is paid back 5-10 years later, but each guy needs to consider his own circumstances and should not be engaging in such leveraging behaviors that he is not able to pay back his debt.. or at least I have never played like that, even though I know that some people do NOT have problems getting rich by scamming others or NOT paying back their loans. Regular people are frequently going to get fucked if they try to engage in those kinds of bridge burning behaviors.

Regarding passive income: I doubt that any of us can go from zero or negative networth into generating passive income, and instead, I personally believe that there is a need to build principle to a certain target level before feeling comfortable that you have established fuck you status in a kind of passive income way. The capital level is going to differ from guy to guy, and in recent times I have been using $2million as a kind of goal in order to demonstrate that $2million can generate about $6,667 in income per month (assuming that a 4% withdrawal rate is sustainable). So if a guy considers that $6,667 is a sufficient monthly amount for him, he still has to look at the value of all of his assets and to be realistic about their value. He might recognize that some assets have historically held their value better than others, but still historical performance is not a guarantee of future performance, so he should be assessing all of his assets in terms of how far they are likely to go down maximally rather than assessing them with rosey colored glasses in terms of their price peaks.

Many of these assessments are going to be based on probabilities and also trying to the best possible to achieve some kind of non-correlation between various asset classes, which is also not easy because a lot of the irresponsible fiat pumping across asset classes causes a large number of asset classes to be artificially inflated and likely to simultaneously fall in value with the fall of the economy (including fiat). All of that uncertainty does not necessarily mean that guys are not able to pull the fuck you lever when they reach $2million (if that were their goal), but instead that a cushion should be made... perhaps 100% or 200% would be sufficient? but also justifies that some of the capital might be assigned in ways that assure ongoing income, too.

I doubt that very many guys want to get to the stage where they said fuck you, and thought that they were going into passive income status, but then to realize that they did not assess the value of their assets or their guaranteed income from such assets in a sufficient way and either they have to come out of passive income status or to have to eat cat food in order to stay in such passive income status.
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