Open Side Menu Go to the Top
Register
What are the top 5 most common traits of people who have achieved financial freedom? What are the top 5 most common traits of people who have achieved financial freedom?

04-27-2010 , 07:46 PM
Quote:
Originally Posted by Melkerson
Are you wil's gimmick or something? Are you seriously suggesting that Salary has nothing to do with wealth? Really?

Of course spending less than you earn also has something to do with wealth, but it doesn't mean that "Salary has nothing to do with wealth". False dichotomy FTL.
I worded that bad, but there are lots of people making >$200k/year that are flat out broke, and lots of people making <$50k per year that end up millionaires.

Obviously if you have any financial sense and ability to control your spending what so ever, the higher the salary the better off you can become. It does not mean you will ever have any true wealth though, or even a positive net worth.
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 07:48 PM
Quote:
Originally Posted by Thremp
Can you show again why its better financially to buy a home after saving for 10 years rather than renting? I'm interested in:

1) Lowered quality of life at all points
2) Irresponsible use of money for "benefits of home ownership"
3) Absurd assumptions

CINCHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH HHHHHHHHHHHHHHHHHHHH-esque IMO
Can you show me how it is worse than how most people go about living their lives today?
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 07:49 PM
Net worth has nothing to do with social class.
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 07:50 PM
Quote:
Originally Posted by Shoe
Can you show me how it is worse than how most people go about living their lives today?
I didn't make an absurd statement that I said I could prove trivially and then have my grade school math blow up in my face.

Trying to argue that since you're only 99% stupid while everyone is 100% stupid is essentially what you do in every post. Unless you're just talking out of your ass (see your SE posts).
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 07:54 PM
Quote:
Originally Posted by Thremp
Net worth has nothing to do with social class.
I never said it did? I don't really care about social class though it is meaningless.
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 07:56 PM
Quote:
Originally Posted by Thremp
Net worth has nothing to do with social class.

Now you're making the same kind of mistake as Shoe. Those two things are obviously correlated. Unless you have some odd definition of "social class".

Generally, higher net worth people are of a higher "social class", but it's certainly no guarantee, and there are exceptions both ways.
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 07:56 PM
Quote:
Originally Posted by Thremp
lolololololololol at a 10% return. Try like 3% and that is generous. You're out of your damn mind.
An aggressive investment strategy should return about that. I'm not talking about buying a CD. The historical average S&P return is something like 10%. What is the average hedge fund return over say 10 years? I'm willing to risk the odds I may have to go back to work for a higher return.

Last edited by suzzer99; 04-27-2010 at 08:07 PM.
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 07:59 PM
Quote:
Originally Posted by Thremp
I didn't make an absurd statement that I said I could prove trivially and then have my grade school math blow up in my face.

Trying to argue that since you're only 99% stupid while everyone is 100% stupid is essentially what you do in every post. Unless you're just talking out of your ass (see your SE posts).
You twist and turn everything to the extreme. I put forth some good numbers and would encourage anyone to do their own calculations.

Renting + Investing will allow you to buy a home for cash quicker than taking out a mortgage and trying to pay it off early. (if home ownership is your goal, and no, that does not make someone stupid).
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 08:04 PM
Quote:
Originally Posted by Melkerson
Now you're making the same kind of mistake as Shoe. Those two things are obviously correlated. Unless you have some odd definition of "social class".

Generally, higher net worth people are of a higher "social class", but it's certainly no guarantee, and there are exceptions both ways.
Correlation and causation are separate. Being azn has correlation with networth. Being black is negatively correlated.

Quote:
Originally Posted by suzzer99
I'm not talking about buying a CD. The historical average S&P return is something like 10%. What is the average hedge fund return over say 10 years? I'm willing to risk the odds I may have to go back to work for a higher return.
Meh. That isn't financial independence. You also need to understand probability. You're guaranteed a high rate of failure with this plan. I'd be shocked if it was below 20%.
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 08:08 PM
Quote:
Originally Posted by Thremp
Correlation and causation are separate. Being azn has correlation with networth. Being black is negatively correlated.
Obviously. Doesn't change the fact that your original statement is innacurate.
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 08:09 PM
Quote:
Originally Posted by Shoe
Otherwise I think we have agreed that renting forever is often the best decision, from a strictly long-term financial perspective (obviously location dependent).
Yes except that renting is almost always the correct choice only with a type of property that you would never consider. Renting an entry level property is almost always a horrible financial decision. Renting only becomes the better option as you get into expensive properties. Further is renting is the correct choice then it remains the correct choice regardless of your ability to pay cash for a home. If buying a home is the correct choice when you can pay cash then it is also the correct choice when you take on a mortgage. These type of internal inconsistencies is why to an outside observer your ideology appears to be the result of a traumatic event rather than an actual thought.

Like I said before I can't understand your hate for mortgages when you felt that borrowing money at ~0% to make a projected X ROI was a good decision yet you don't believe borrowing money at Y to make a projected X is a good decision even when Y is less than the projected X. That is exactly what you did so it is hard to reconcile how before it was good and now it isn't?
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 08:11 PM
Quote:
Originally Posted by Thremp
Net worth has nothing to do with social class.
Quote:
Originally Posted by Melkerson
Obviously. Doesn't change the fact that your original statement is innacurate.
Could you explain how the amount of money you have corresponds to social class?

I'm interested how the ultra-rich who file bankruptcy are now members of the underclass. And its interesting you bring up correlation when you probably need to understand what it means.
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 08:15 PM
Quote:
Originally Posted by Thremp
Meh. That isn't financial independence. You also need to understand probability. You're guaranteed a high rate of failure with this plan. I'd be shocked if it was below 20%.
How many people do you think who retire at the age of 45 have guaranteed $500k+ for the rest of their lives at 3%?

I seriously doubt a plan to live off of $5M principal, where you already have all your major purchases paid for, has a 20% chance of failure. If it starts bad you can always cut back a little and leave more for the principal.

I think you'd have to invest pretty much at the top before a huge crash followed by a 25-year bear market to flat out fail. Basically you'd have to put all your money in the market in the summer of 1929.
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 08:17 PM
You should look again. Exactly how much risk are you going to take on to realize 10% real gains? How would the swings look? How do your balance look after a few down-flat years? Its pretty clear you have not considered any of this.

If you want to argue that you'd pull back on lifestyle/get a job, a % of the account each year would be far superior with a bottom floor. Like... 7% of the account or whatever, getting a jube below 300k. The 10% withdrawal each year makes it incredibly hard to last 40ish years.
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 08:26 PM
I don't know what it costs to live wealthy, but if you already have all that stuff paid for $500k seems on the high end. Remember your principal is going to go up as well. I really don't think anyone would have a problem living very very well on $10M. If the worst comes to pass you can always trade down on the house or sell the vacation house. That certainly might be preferable to going back to work. So it's not like outright failure, just scaling back. Or you might run good and double your principal relatively quickly.
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 08:28 PM
Quote:
Originally Posted by Thremp
Could you explain how the amount of money you have corresponds to social class?

I'm interested how the ultra-rich who file bankruptcy are now members of the underclass. And its interesting you bring up correlation when you probably need to understand what it means.
More important, I think, is that you need to learn what "nothing to do with" means.

You're smarter than this. But if you want me to explain something super obvious, it is fine.

First thing you need to understand is that if two things are correlated, then there is not necessarily a causal relationship. However, if there is a causal relationship between two things, then they are correlated. If two things are correlated, there may (or may not) be a causal relationship (as there is here), and that's how I intended to use the term in my response to you.

The second thing you need to understand is that two things can have a causal relationship even if the outcome is not guaranteed 100%. For example, shooting someone in the head generally causes that person to die. Those two events (shooting in head and death) are causally linked, even though shooting someone in the head will not result in death 100% of the time.

Now, lets move to the statement in question.

So the causal relationship here is that, generally speaking, people with higher net worths associate with people who they work and go to school with, who because of their similar jobs and schooling, generally also have high net worths. When these high net worth indivuduals interact, they pursue expensive hobbies, join country clubs, etc. and do the things that one generally considers to be "high class".

The causal relationship is not near 100% percent in the sense that shooting you in the head will almost certainly cause you to die. But it's still a causal relationship.

Yes, it is true that you can have a low net worth and live a high class life (like the example you gave) and it's also true that you can have a high net worth and live a lower class life. That doesn't change the fact that the assertion that net worth has *nothing* to do with class is inaccurate.
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 08:29 PM
Quote:
Originally Posted by suzzer99
I don't know what it costs to live wealthy, but if you already have all that stuff paid for $500k seems on the high end. Remember your principal is going to go up as well. I really don't think anyone would have a problem living very very well on $10M.
Well obv. If we now only need 300k a year instead of 500k a year, its a **** ton easier to manage. If we're flexible and take month long vacations to national parks instead of renting a fully staffed tropical bungalow for 6 months, it becomes even easier.

I don't disagree with your conclusion that 10m is enough. I disagree with a sustainable 5m investment that can provide 500k a year for 40 years. 200-300k?... probably. Would that be enough? Almost certainly.
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 08:37 PM
Quote:
Originally Posted by suzzer99
I seriously doubt a plan to live off of $5M principal, where you already have all your major purchases paid for, has a 20% chance of failure. If it starts bad you can always cut back a little and leave more for the principal.
I have no idea what the rate of failure is but the reason the $500k number is ridiculous is because if we are talking about anyone who is relatively young then the principle has to increase by an amount equal to inflation and that increase has to be paid for after tax.

Realistically with $5M you'd have about $150k/year to spend. Your $3M home would eat up $36k just on property taxes, your $1M vacation home would be another $12k. Even at 1/2% maintenance costs would eat $20k. Two nice cars will run you $7-12k a year on maintenance and insurance. It isn't a bad life but you basically are living on $70-80k which given the **** you have will make you a pauper in a rich man's world and that is pretty ****ty psychologically.
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 08:41 PM
Ok well again Henry, if dare you to give me the $10M so I can prove you wrong. I'll blog my progress every day.
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 09:18 PM
Quote:
Either the good looking, charismatic, intelligent tall male kid coming from a very wealthy family
doesn't coming from a rich family lead to a lack of ambition and motivation? or are we assuming that the kid isn't expecting to just sit back and be able to live off trust funds and collect a big check when his old folks croak? (same reason buffets not giving his kids sh*t)
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 09:47 PM
Quote:
Originally Posted by boobies4me
doesn't coming from a rich family lead to a lack of ambition and motivation? or are we assuming that the kid isn't expecting to just sit back and be able to live off trust funds and collect a big check when his old folks croak? (same reason buffets not giving his kids sh*t)
Not really.


http://en.wikipedia.org/wiki/Vanderbilt_family
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 09:48 PM
Quote:
Originally Posted by Thremp
lolololololololol at a 10% return. Try like 3% and that is generous. You're out of your damn mind.
Moron,

The 30 yr govt treasury currently yields 4.5%. I'm already above 3% at near 0 risk.

Not to mention that interest rates are currently the lowest in years. In 1981, you could invest in long dated treasuries at 15%+.

The 30 yr in normal times yields above 6%.
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 09:54 PM
Quote:
Originally Posted by Yowserrrs
Moron,

The 30 yr govt treasury currently yields 4.5%. I'm already above 3% at near 0 risk.

Not to mention that interest rates are currently the lowest in years. In 1981, you could invest in long dated treasuries at 15%+.

The 30 yr in normal times yields above 6%.
Real return broseph. I'd gladly prop bet you any amount of money you can't create a passive portfolio using broad asset allocations that will real return 10% with less risk than the SP500.

Ironically, this is already somewhat proved as anyone who is able to do this is quickly a nine figure bro(e).

Thanks for chiming in on another topic you don't understand.
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 10:08 PM
Quote:
Originally Posted by Thremp
Real return broseph. I'd gladly prop bet you any amount of money you can't create a passive portfolio using broad asset allocations that will real return 10% with less risk than the SP500.

Ironically, this is already somewhat proved as anyone who is able to do this is quickly a nine figure bro(e).

Thanks for chiming in on another topic you don't understand.
Moron,

You responded to a post discussing nominal returns. Maybe you should read more carefully before responding to Suzzer like a jerkoff.
What are the top 5 most common traits of people who have achieved financial freedom? Quote
04-27-2010 , 10:11 PM
Quote:
Originally Posted by Melkerson
More important, I think, is that you need to learn what "nothing to do with" means.

You're smarter than this. But if you want me to explain something super obvious, it is fine.

First thing you need to understand is that if two things are correlated, then there is not necessarily a causal relationship. However, if there is a causal relationship between two things, then they are correlated. If two things are correlated, there may (or may not) be a causal relationship (as there is here), and that's how I intended to use the term in my response to you.

The second thing you need to understand is that two things can have a causal relationship even if the outcome is not guaranteed 100%. For example, shooting someone in the head generally causes that person to die. Those two events (shooting in head and death) are causally linked, even though shooting someone in the head will not result in death 100% of the time.

Now, lets move to the statement in question.

So the causal relationship here is that, generally speaking, people with higher net worths associate with people who they work and go to school with, who because of their similar jobs and schooling, generally also have high net worths. When these high net worth indivuduals interact, they pursue expensive hobbies, join country clubs, etc. and do the things that one generally considers to be "high class".

The causal relationship is not near 100% percent in the sense that shooting you in the head will almost certainly cause you to die. But it's still a causal relationship.

Yes, it is true that you can have a low net worth and live a high class life (like the example you gave) and it's also true that you can have a high net worth and live a lower class life. That doesn't change the fact that the assertion that net worth has *nothing* to do with class is inaccurate.
Maybe I should change that to read "as much to do with it as not being black".
What are the top 5 most common traits of people who have achieved financial freedom? Quote

      
m