Trust me, its not that bad... ideally i can take it to probably 12k but this is a A Class property and appreciation is almost guaranteed (i know the world guarantee and appreciation aren't suppose to be in same sentence, but we are not in US).

Disagree - I am self insured by a very simple defination of self insurance. Lets take the top 3 things that can happen where i would need insurance. Car gets on fire, i need a heart transplant and my personal residence get set on fire.
Car gets on fire - if insured, it would take at least 1 month for me to get the check in mail from insurance company. I am saving around $1000 a year by not having car insurance on all 3 cars, saved around 4k so far in last 4 years. If it happens, i just buy a new car with a line of credit or cash out on my on going investements (its pretty liquid).
need a heart transplant - you got to a hospital, usually they want 3-4k deposit to give you a room (run a credit card) and then you usually have to wait for them to find out if they can get the heart (its not about money)... same thing, i just cash out my on going investement or touch the line of credit.
House gets set on fire - I explained in the past how in my country, we live in concreate houses and usually you don't see the entire house burning if fire gets caught to one thing. We have such a low rate of fire in this country that fire insurnace isn't even a thing, at least for residential. So i won't even think about it. If i was to loose everything, i would say 20k-30k of furniture and clothes? again the chances are super slim.


I am very familiar with US laws and the term 'anyone can sue anyone for anything' doesn't hold true in third world countries. infact, i have an LLC in US that i set up to buy some real estate that i never bought, so very aware of that kind of stuff.

I agree, i need to get more cash in hand, i do have friends who will send me 20k by a simple text but why do all that? The goal is to get in better shape financially and within next 6 months, this should change.

I have rent out the house i own and i am renting a place that we live in. So we were living in a house we own and saw this new place, which was going to rent for $12,00 and i knew i can easily rent out my house for $500
Wouldn't you move for extra $700 in expense if that means you can go from living in 245k house to 615k house (current house i live in). The lifestyle upgrade is just so awesome. My wife have been living in that 245k house and have never said a word and i think it was time for us to move to a better place. Its pretty sweet in here. Imagine 4000 sq feet vs 1200 sq feet.

The only investement thats generating any income is Real estate A and i think i can get the rentals up a bit more. Rest all are land and stuff i can't rent out, so the plan is to start disposing them one at a time and then buy another property similar to Real estate A

The only investement thats generating any income is Real estate A and i think i can get the rentals up a bit more. Rest all are land and stuff i can't rent out, so the plan is to start disposing them one at a time and then buy another property similar to Real estate A

No they will not, i got stuck in those properties in some ways that are hard to explain, for example - i got one property as inheretence.

These are all current market values and i am being conservative on these. They are all purchased at different times and some are up and some are down. For example Real estate A was bought in 2010 $600k and now is worth 1.5 mil. This has a lot to do with the fact that i am telling you numbers in USD and these are bought in local currency and dollar has done very very well in last 2 years.



This is my home country. I m not sure why i am not comfortable revealing my identity. It's a combination of alot of things. For example - i stake a player for live games in UK and he is here on forum. I don't want him to see my monthly profit & loss expense. I have a partner who worked with me for a long time in past and he is a decent poker player, there is a chance he might come across this post. I can tell you this though, i not in north america, europe, Australia, greenland or antartica... So south american, asia & africa i guess is all i can say at this point.

I take 100% responsibilty and i think i am doing bad because of my fault. Around the age of 26-27 i got into a comfort zone that i have enough that i can never loose everything and live a good life, that was the primary reason. Plus, i think i wasnt' doing what i love to the motivation automatically goes down. Right now i am in involed in business (Business V) that i absolutely love and that should transform in real numbers.

It's a combination of alot of things, hard work and made good money from 18 to 24, couple of flips ended up doing very very well. Lucky to get loan in time for real estate A and able to pay that off failrly quick. Some inheretence etc.

I Understand variance isn't so much fun afterall but it all comes down to math, infact i was hoping poker community would understand my thought process much better than anyone else. Say i save $1000 a year in car insurance and my odds of loosing a 30k car is 1 out of 50... isn't this all making sense?

I do have easy access to cash if needed, i agree with everyone also that i do not enjoy this situation i am in. I will change this, i will change this very very soon.

I am doing pretty good when it comes to taxes. I will post my annual P & L sometimes in the future to show much i pay in taxes vs how much i make. Not sure, if i still agree on the insurance part.

I don't think its that bad guys, i have good access to liquid cash when needed. Do i want this to get better? of course. Do i feel uncomfortable with this type of bank balance? Not at all.

It is liquid. The situation with friend is not going to come overnight. We are very close friends and he understand i don't have his cash liquid. If hell breaks down, he might want 10k in emergency. At this point he has around 50k liquid.


Thats really what my thought process is. I think liquid cash is just waste of money. I like to invest reinvest but sometimes i take it too far. Perfect balance would be 10k or less in liquid and access to cash if needed such as credit cards, line of equity etc.

I don't mean this condescending, but I don't think you understand insurance/risk...I can't imagine that insurance/risk in S. America / Asia / Africa is so dramatically different than the first world to completely change standard approaches to risk, particularly for someone very wealthy.

You don't just buy insurance on a car to protect you from the loss of the car's value. You buy it to protect yourself from liability if you kill someone, you buy it to protect yourself if someone cripples you and THEY don't have insurance, etc.

You don't just buy medical insurance to cover one procedure...you buy medical insurance to protect you from a chronic, long term super expensive condition. And so forth...

Insurance *IS* going to be minus EV; insurance companies are in business to make a profit. Even so, it is not smart or wise to try to be +EV in every single decision we make. Minimizing variance and protecting wealth cause you to take some small -EV situations in order to avoid major calamities.

I can't fathom wtf this guy, aged 30, with a 1.7 million net worth, living in a third world country is coming here, worrying about, uh, what? 3k liquid cash with that net worth seems really strange to me as others have said. I'm still trying to figure out why this guy is worried about spending and whatever else he is worrying about.

While I agree w/ your & other people's sentiments regarding insurance, we don't even know what country OP lives in, so we don't know how insurance does/does not work in his country. I would not be surprised in the least to learn that the practical reality of how insurance works (or more likely does not work!) in say Bangladesh or Kenya, is very different than how it works in USA, Europe, etc..

Regardless, several people have told OP they think he is severely under-insured. OP has addressed their concerns & stated he feels differently, so at this point I don't see what more there is to discuss regarding insurance; I think everyone should just "agree to disagree" about whether OP should purchase various types of insurance.

I have zero insurance and feel very good about it. Personal liability is the only one that makes sense, as that's the only thing that can wipe you out when you've got a couple of million. All the rest you're far better self insuring, especially since insurance is a) profitable for the insurance company and b) based on the average intelligence and carefulness of insurance purchasers, which frankly isn't very high compared to a person of means.

All I'd say wrt the OP is that he'd definitely want to insure the $1.5 million property, since OP is practically in poverty without that.

Having the means and not carrying at least some sort of catastrophic health insurance is not something I would "feel very good about."

What health problem is going to cost more than a couple of hundred grand?

Chemotherapy is for cucks. It's expensive torture for meaningless gain; most of it is worthless. It's one of the great medical frauds/quackeries of our age.

So you're left with major surgery - mostly heart if you're talking about high expense - and prolonged hospitalization. None of that goes above a couple of hundred grand. They're extremely rare events when you're under 50, and even if they happen you won't lose a meaningful portion of your net worth.

Nearly all other medical procedures can be had for a pittance relative to a million. Why would you get health insurance if you're 30 like OP and you have a couple of million? Seems stupid and -EV.

Healthcare costs in the developing world are way lower too meaning the worst case scenario is not likely to put a significant dent into his net worth.

From what I've heard settlements for accidental death / injury are shockingly low in some parts of the world.

Also important to mention is that a big part of why people buy insurance is because they're legally required to, not necessarily because it makes financial sense. This is especially true for people with low net worths since they're effectively free rolling everyone and can declare bankruptcy in the worst case scenarios, but also relevant to high net worth people since he can just put chunks of his net worth in his children or wifes name to limit potential liability.

Even better of an option though is to move to a part of the world where you don't have to worry about roads filled with uninsured drivers with nothing to lose.

In the US at least, a big part about having health insurance is having prenegotiated rates. If you walk in a hospital looking for a hear bypass without insurance, you are going to get billed about 100k (or more)even without complications although insurance companies may be paying rates significantly lower than that.

That alone makes insurance plus EV for a lot of people. You are not just paying for the "insurance" itself but also access to much lower costs.

It's shocking to me how few people understand this about the health insurance industry.

Yeah, that's a reasonable argument in the US.

Still. The threats to your wealth when you have a couple of million consist of:

- Real estate market crash. That's $300K to $1 million on 2 million worth of real estate; no way to insure it
- Marriage dissolution. That's half your wealth gone + possibly alimony/child support for decades.
- Gambling, women, other vices. This can wipe you out totally; no way to insure it.

It seems absurd to insure against extremely unlikely events, and for people to go bat**** and cuss out OP about not having that insurance, when by far the likeliest and most common paths of major wealth loss (10x - 10,000x more likely) and especially catastrophic wealth loss (100+x time more likely than a health event) are completely uninsurable.

It seems crazy, frankly. In terms of good advice, cussing out OP about insurance - basically peasant thinking - is the least helpful advice you can give him. Because it's dwarfed by other risks, which CAN be managed appropriately.

In terms of actual advice, OP needs to diversify away from real estate, particularly 2nd/3rd world real estate. He's a pauper aside from real estate. Plagues (don't laugh, they happen), wars, global trading shifts, repressive governments such as what happened in Venezuela, financial crises, can devastate a region very quickly; I'd say some of the 2nd/3rd world is > 20% to have one of these events happen in the next decade. It's an enormous risk, and OP seems to own nothing but real estate, and have no marketable skills looking at his income.

The best thing he could do in terms of insurance is:

- Diversify into a bunch of different global asset classes for at least 1/3 to 1/2 his wealth (I realize he enjoys his local real estate, but he doesn't need to be 100% in it).
- Develop marketable skills that earn him at least $1500/week.
- Sign a postnup, if possible.

That's some real advice. The insurance advice is mostly nonsense.

Well this thread is getting pretty damn interesting....

Agreeing a lot from Toothsayer in this thread. Especially with the risks associated with marriage and dating in general. Very often overlooked and not discussed....

A major problem with living in the third world is the ability to make $1500 a week in U.S. Dollars. OP will have to create/start an online business. Maybe poker? Trading? Problem with those is, if you're a cuck, you'll lose $$

Yeah, the risks to wealth (especially inherited wealth) are enormous, and they dwarf the things you can insure for, enough to make insurance meaningless in altering your odds of going broke. One study mentioned in Time says that 70% of rich families lose all their wealth by the second generation. It was commissioned by a wealth management firm, so take it with a grain of salt, but that's a number often bandied around.

Divorce, overspending, bad investments, getting defrauded, gambling, stock market and real estate crashes (and the corresponding loss of income meaning you draw down your assets and sell them at the bottom) are the big risks. Only way to insure against them is an annuity. If you have self discipline, diversification can do it too. Putting assets in legal structures (like corporate trusts) that are unobtainable by a romantic partner or someone who sues you is another important thing to do. All are far more important than insurance if you really want to protect your wealth.

With so little money or income outside of real estate, OP is set up for a some very -EV assets sales at the bottom the next time a recession hits.

Guy asks for advice

Gets advice

Argues and ignores it

Shocking

toothsayer, do you live in the u.s.?

having a high deductible health insurance plan is worth it just for the extra tax-advantaged investment space in an HSA

can you go into more detail on this?

Step 1) Develop marketable skills
Step 2) ???
Step 3) $1500/week profit

hmmm

​
​Finally, thank you (some of you) for understanding my thought process on self insuring. I also respect some of you that think not having insurance is negative EV. Lets all agree to a fact that this is not US and things are way different here in this country. I mean, where in US can you rent a 245k house for $500 a month? So i am working on digging deep into insurance and numbers and provide you guys with accurate data and that will help me also understand if i am on the right track. I am traveling to US tomorrow for few days and it will take time for me to deliver, just so you guys know.

The whole idea of this thread is to improve my personal finances by tracking everything better, I highly believe in a theory that you will see improvement in anything you track regularly, you want to increase sales in your company? put a chart on top every morning with all sales reps... you want to loose weight? start weighing your self every morning and put it on your fridge... etc etc... Having said that, i am once again behind on the whole tracking thing. I wanted to get solid numbers by 1st of May so i can have a clean slate to work on from 1st. For example my original post doesn't include around 8k of foreign currency i have from all the different traveling and left over cash. Anyways, i will get that fixed soon and provide solid numbers to start and perfect balance sheet and then monthly P & L and other reports pretty soon.

a lot has changed since, updating new balance sheet and should have for you guys shortly. Super invested in Crypto, to a point where i have shut down most of other businesses and really into crypto trading and couple of companies in cryptos

Updating earlier post on major risks to wealth:

I am not in US, and the market here isn't as crazy as in california. US market crash could bring it down 10-20% tops. The prices here have already corrected quite a bit in last 2 years. I don't worry about that

you just hit my nerve there, if i ever got in dispute with my wife. I rather have her and my kids take 90% of my net worth and be happy that they don't have to worry about money when daddy is ****ing other women. That's called love for your family, trust me it exists.

yea, i will admit that can take all away and i have lost quite a bit in poker and sports betting but i guess just i am not addicted to a point where it keeps me awake at nights. on the flip side, how to do you fold not Shove with flush draw on flop is beyond my intelligence level.

So if you believe in something, you go all in... Right? Plus, i am in for the "Technology"

So, yea its risky but i have about 20% of my net worth invested and i am doing couple of things in crypto that makes me money every day. Its like selling shovel in gold rush, rather than hoping price of gold goes up.

Should have everything updated soon along with crypto portfolios and businesses.

Does there even exist a country where real estate is that much of a lock? Using the past 10/20/xx years as a baseline metric is a crap way to evaluate risk. Developed countries are more stable if anything and there a lot of cities where real estate has completely bombed over the past few decades. If you can get fair market value for them why would you knowingly expose yourself to so much risk? What basis do you have to believe that it’s significantly undervalues at current market prices?

Will be interested in how you are selling crypto shovels this late in the game. My expectation is that most of the gains to be had here came from loading into investments pre 17.