We’re back…… Using home equity as ATM’s!!!!

[spdrun]

You hear about people who made $20MM selling .com stock in 2000, then were broke inside of 5 years, and you think Whiskey Tango Foxtrot. Say $10MM went to taxes. Why not put $2MM into property yielding 5% cash return, so worst case, you end up with a healthy $100k/yr from investments?

Spend the rest on hookers, llelo, and new startups.

[flyer]

Have heard many stories like that–sp. Unbelievably irresponsible. Hanging onto the big bucks is not as easy as some might think.

[Coronita]

[quote=flyer]Have heard many stories like that–sp. Unbelievably irresponsible. Hanging onto the big bucks is not as easy as some might think.[/quote]

A lot of the stories are fabricated or simply don’t add up. What really happened was during the dot.com days many employees were granted Incentive Stock Options… And a lot of employees were not fully vested. Or the ones that were fully vested decided to exercise at a really bad time and then tax year ended before they sold the following year.

A lot of them ended up with an unpayable AMT tax bill, because when you exercise ISO’s, you aren’t subject to ordinary income, but you are subject to AMT, even if you didn’t sell the shares the same year. It was commonly refered to as the AMT tax trap, and lot of people unknowingly got screwed because of it…Most people who never dealt with ISO would have been screwed given the number of paper shares people were granted. I was in the several IPO startups and saw that happen to others quite often.

Others simply didn’t hedge their unvested options with cheap put options, because it didn’t occur to them that in a lot of the startups, due to the nature of how small they were and how disclosures went, that even peon employees were considered “insiders” and hence the company subjected them to very limited trading windows to unload their vested options. And in an IPO company, a few months or even weeks of trading window made an huge difference between recognizing large gains or taking a bath. And yes, some folks did sell their options and buy property in the bay area… Typically people that did that (even if just 1 property) did pretty well, especially if they held on to it until today.

It wasn’t as much irresponsibility, it was more ignorance on how some of these compensations would work and general “old school of thinking” of “holding onto to things for the long term”….The ones that did well, pumped and dumped as soon as they could to retail “investors” who wanted in on the IPO action…Hence, why one really doesn’t want to buy ipo shared companies before any sort of lockup period expires…Winners ended up being insiders. Losers ended up being retail investors that were paying $400+/share for a .com stock.

[an]

[quote=flyer]Interesting article AN. If there are more millionaires than 10 years ago, that might be relative to the fact that there are also more people in the workforce, so the “net” might be about the same.

The section on “Millionaire Status Fleeting” was my favorite part of the article, and so very true. Many who are millionaires at 40 are not able to sustain that status for the balance of their lives–which is what really matters.[/quote]I was under the impression that you’re talking about total number of millionaires and not a % of the the population. However, even if you’re talking about % of the population, the number of millionaires went up by 38% over that 10 years. I highly doubt our population went up 38%. so the % of the population who are millionaires have to be higher.

I’m not surprise by the “Millionaire Status Fleeting” section. It’s always easier to make money than keep money. But the amount of millionaires are increasing, which means although it might be harder to keep the millions than make them, there are more people who make millions than those who lose them.

[earlyretirement]

Spot on target flu. That happened to a lot of people.

There are however some high flyers that made a LOT of money that squandered it. Many were fortunate at least they bought real estate with it but I know a few formally high flyers that pi$$ed it all away.

The tragic mistake of many that make significant amounts of money is they make the mistake of thinking they will always make that kind of money. So they spend as much as they made.

Others didn’t diversify enough. Ironically some of these guys on Wall Street that made 7 figures some years don’t have much to show for it. I know a guy that worked at Lehman Bros that pretty much lost it all as he leveraged much of his net worth during the financial collapse. He should have known better and he was in that industry but he didn’t think it would get so bad so quickly.

I lost touch with that guy but last I heard his wife left him and he lost his job and couldn’t find another. That was a few years ago but I do know that guy had several years where he was making over 7 figures each year. Hard to believe you would make that kind of money and have nothing to show for it.

Oh well.

[flyer]

Thanks for the interesting info all.

I think I might have been looking at some older stats, so here’s another article to support what AN stated. . .

http://blogs.wsj.com/wealth/2012/03/21/millionaire-population-grows-by-200000/

However, I was actually talking about the percentage of the population, and those numbers (per the above article) still seem fairly low to me.

IMO, for our purposes here, the main thing is to end up in the “I sustained my million(s) for a lifetime crowd!”

[earlyretirement]

“The brain tumor made me do it!”. LOL. Like some of us mentioned, some people can manage to squander away a $50 million fortune. Pathetic.

http://www.nbcsandiego.com/news/local/Maureen-OConnor-San-Diego-Mayor-Federal-Court-Arraignment-191209651.html#ixzz2Kuy8zVv9

[spdrun]

BWAHAHAHAHAHA! *schnarff*

This makes NYC (soda-boy Bloomberg) and Chicago politicians seem positively sane. Thanks for the larf.

[earlyretirement]

[quote=spdrun]BWAHAHAHAHAHA! *schnarff*

This makes NYC (soda-boy Bloomberg) and Chicago politicians seem positively sane. Thanks for the larf.[/quote]

Yeah. I laughed when I read that “brain tumor made me do it”. The brain tumor was only diagnosed in 2011. She is a degenerate gambler. Nothing less nothing more.

This goes along the same lines of what some of us were talking about before. People always seem to think they can grow their pot even larger. Sounds like she did pretty well for a while if she truly did win and lose a billion in 10 years. It says she started gambling in 2001 but who knows when it really began. But the thing with degenerate gamblers and their ilk is they rarely are able to “walk away from the table”. Then they loss it all.

And no doubt she spent countless hours telling friends how much she “won” and all the great poker hands she had. But something tells me she never told them about the ones she lost. Ouch!

http://www.huffingtonpost.com/2013/02/14/maureen-oconnor-gambling-losses-billion_n_2688929.html

[SK in CV]

[quote=earlyretirement][quote=spdrun]BWAHAHAHAHAHA! *schnarff*

This makes NYC (soda-boy Bloomberg) and Chicago politicians seem positively sane. Thanks for the larf.[/quote]

Yeah. I laughed when I read that “brain tumor made me do it”. The brain tumor was only diagnosed in 2011. She is a degenerate gambler. Nothing less nothing more.

[/quote]

You know usually I would agree with you. For those that knew her when she was mayor here, it is mind boggling. Something like a brain tumor is the only thing that makes any sense. If it was diagnosed in 2011, she could have had it for a decade.

And the article says she won and lost a billion, or something like that. She had a lot of money, (most all inherited from her late husband, one of the founders of Jack in the Box) but nothing like a billion.

[bearishgurl]

[quote=earlyretirement]”The brain tumor made me do it!”. LOL. Like some of us mentioned, some people can manage to squander away a $50 million fortune. Pathetic.

http://www.nbcsandiego.com/news/local/Maureen-OConnor-San-Diego-Mayor-Federal-Court-Arraignment-191209651.html#ixzz2Kuy8zVv9%5B/quote%5D

WOW, “Mayor Mo” isn’t very old and she’s aged so much! Not sure if the wrinkles are from too much sun in Vegas (where she spent a lot of time since she left office).

Her head is swollen also, indicating the brain tumor mentioned.

This isn’t the Mayor Mo that I remember. Not even close.

http://en.wikipedia.org/wiki/Maureen_O%27Connor_%28California_politician%29

She has a very, VERY good attorney, who will make a quiet deal for her behind closed doors where she will do community service or tap into a a few other (retirement) assets to make some kind of “restitution.” He’s “in like Flinn” with ALL the well-known Federal Prosecutors 🙂 She won’t have to go to (Federal) prison.

In any case, most brain tumors are incurable.

In spite of her falling down the rabbit hole into addiction, I kind of feel sorry for her.

Yes, there might be a few mil socked away in retirement accounts and some of her relatives are also loaded.

The “short sales” in Del Mar we discussed here now make a little more sense:

http://piggington.com/interesting_short_sales_in_del_mar

[bearishgurl]

Here’s a more in-depth article by the Reader (a SD free Thursday newspaper) reporter.

http://www.sandiegoreader.com/weblogs/news-ticker/2013/feb/14/mayor-mo-stole-2-million-from-late-husbands-founda/

It appears from the article that her attorney has already entered her into a “deferred prosecution agreement” where “all parties agreed that it would be improbable or impossible that she could be brought to trial.”

She (or a family member on her behalf) will make restitution to the foundation.

She likely won’t live long enough to stand trial, IMHO.

So sad…I think she made a lot of contributions to SD.

[bearishgurl]

SK is correct. Depending upon the type of tumor, it could have lain dormant (or growing very slowly) in her brain for a decade, causing problems with judgment, cognition, etc.

[bearishgurl]

Acc to the Huffpost article posted by ER, this is how she intends on paying the restitution to her (deceased) husband’s charity:

O’Connor sold the Heritage House Hotel in the Northern California coastal town of Mendocino for $7.5 million in 2005 to investors who defaulted, Iredale said. She sued and has pledged to turn over any damages she wins to repay the foundation.

This Inn was made famous by the 1978 movie “Same Time Next Year” with Ellen Burstyn and Alan Alda.

It’s an incredible place in an incredible location.

I’ve personally been to this area and can safely say that there’s no other place like it on earth!

I think it will all turn out okay in the end, folks, once she can find a buyer :=]

[earlyretirement]

[quote=SK in CV]
You know usually I would agree with you. For those that knew her when she was mayor here, it is mind boggling. Something like a brain tumor is the only thing that makes any sense. If it was diagnosed in 2011, she could have had it for a decade.

And the article says she won and lost a billion, or something like that. She had a lot of money, (most all inherited from her late husband, one of the founders of Jack in the Box) but nothing like a billion.[/quote]

I’m not even saying she was a bad attorney or a bad mayor because from most accounts she was good at both.

But NO way I’m going to buy that a “brain tumor made her do it”. Anyone that buys that story is gullible, IMHO.

I think the story was exaggerating a bit and sensationalizing it. I think they meant she won and lost and gambled repeatedly over the course of many years. So they are counting many years of winning and losing. NO, no way the Jack in the Box fortune was anything like a billion. From most accounts it was no more than $50 million.

I do agree she probably started gambling from depression when her husband passed away. But NO way I’m going to buy that any possible brain tumor made her do it. And I’m not disputing she might have had the brain tumor earlier and it was not diagnosed.

But let’s call a spade a spade. She just got addicted to gambling. Happens to a lot of people. It doesn’t take a brain tumor to turn you into a degenerate gambler. It’s sad that this happened to her. But I guess the point of why I brought it up, which shouldn’t get lost, is just one example of many where people have huge sums of money and just squander it away thinking they can turn their pot into a bigger pot. Happens everyday.

In this case it was gambling on video poker. But with other people it’s just gambling in the stock market or other “good idea”.

[Author]

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