Some people have asked for a Some people have asked for a net worth pole, so I created one.
kev374
September 20, 2013 @
6:21 PM
I doubt people are worth much I doubt people are worth much at all without their primary residence….most people have their wealth in their home.
I know many many people who would be ordinarily dirt poor but bought their homes in the mid 90s, their homes have appreciated so much that they are quite well off.
earlyretirement
September 20, 2013 @
10:48 PM
kev374 wrote:I doubt people [quote=kev374]I doubt people are worth much at all without their primary residence….most people have their wealth in their home.
I know many many people who would be ordinarily dirt poor but bought their homes in the mid 90s, their homes have appreciated so much that they are quite well off.[/quote]
Yeah, I agree probably many people have the bulk of their net worth in their primary residence. That’s why most high net worth and ultra high net worth individuals surveys almost always exclude primary residence which I agree with.
Many people I’ve met are house rich and cash poor.
CDMA ENG
September 20, 2013 @
11:11 PM
However I am worth even more However I am worth even more dead!
😛
SjV
an
September 21, 2013 @
7:42 AM
earlyretirement wrote:Yeah, I [quote=earlyretirement]Yeah, I agree probably many people have the bulk of their net worth in their primary residence. That’s why most high net worth and ultra high net worth individuals surveys almost always exclude primary residence which I agree with.
Many people I’ve met are house rich and cash poor.[/quote]I guess Piggs are a different group of people. Over 1/2 have >$400k in net worth on top of high income.
earlyretirement
September 21, 2013 @
9:26 AM
AN wrote:earlyretirement [quote=AN][quote=earlyretirement]Yeah, I agree probably many people have the bulk of their net worth in their primary residence. That’s why most high net worth and ultra high net worth individuals surveys almost always exclude primary residence which I agree with.
Many people I’ve met are house rich and cash poor.[/quote]I guess Piggs are a different group of people. Over 1/2 have >$400k in net worth on top of high income.[/quote]
Oh absolutely I’d venture to guess that many people on this website are in a better situation financially than the typical person out there.
I’ve met several people from this board in real life. Some of them that are more prolific posters and others that are just lurkers. The things they all had in common was they were all highly educated, professionals, very intelligent/articulate and didn’t seem like they were hurting financially. Several of them owned multiple properties so they had that link in common.
Boards like this seem to attract a higher sophisticated level of investor that typically have a higher net worth than the average person out there.
CDMA ENG
September 21, 2013 @
10:37 AM
AN wrote:earlyretirement [quote=AN][quote=earlyretirement]Yeah, I agree probably many people have the bulk of their net worth in their primary residence. That’s why most high net worth and ultra high net worth individuals surveys almost always exclude primary residence which I agree with.
Many people I’ve met are house rich and cash poor.[/quote]I guess Piggs are a different group of people. Over 1/2 have >$400k in net worth on top of high income.[/quote]
Yes but I would like to know if that net worth figure was affected by incoming heritence.
CE
spdrun
September 21, 2013 @
3:19 PM
I don’t know if excluding a I don’t know if excluding a primary is appropriate:
(a) if it’s paid off or nearly so, it can generally be remortgaged to 65% of value without too many questions asked
(b) it could be both a primary and an investment — i.e. 3 units, live in one, rent out the other two.
earlyretirement
September 21, 2013 @
5:42 PM
spdrun wrote:I don’t know if [quote=spdrun]I don’t know if excluding a primary is appropriate:
(a) if it’s paid off or nearly so, it can generally be remortgaged to 65% of value without too many questions asked
(b) it could be both a primary and an investment — i.e. 3 units, live in one, rent out the other two.[/quote]
Yes, I think excluding your primary is appropriate when talking about true net worth. My feeling is this… everyone always needs a place to live throughout their life.
Sure, you can “cash out” and sell and rent or downsize but the reality is that most people that say they rent and doing better things with that money or can generate higher returns typically don’t. I’d say the bulk of the people in this situation that are “serial life long renters” don’t save up NEARLY enough throughout their lifetime to cover their future rental needs/costs.
My primary residence is completely paid off along with Mello Roos and I’d NEVER even dream about counting that in my “net worth” in these kinds of surveys. I’ve filled out several of these surveys before and they always say to EXCLUDE your primary residence. I do own several other properties that I do include in my net worth but never my primary residence.
Nope. Even if you can rent out rooms or part of your house. I’d still not count it. Sure, you could count it maybe as part of your annual income/salary if you wanted in other surveys of how much you make a year. But IMHO in these high net worth surveys you never want to include or count on the equity in your primary residence.
ocrenter
September 21, 2013 @
6:00 PM
earlyretirement wrote:spdrun [quote=earlyretirement][quote=spdrun]I don’t know if excluding a primary is appropriate:
(a) if it’s paid off or nearly so, it can generally be remortgaged to 65% of value without too many questions asked
(b) it could be both a primary and an investment — i.e. 3 units, live in one, rent out the other two.[/quote]
Yes, I think excluding your primary is appropriate when talking about true net worth. My feeling is this… everyone always needs a place to live throughout their life.
Sure, you can “cash out” and sell and rent or downsize but the reality is that most people that say they rent and doing better things with that money or can generate higher returns typically don’t. I’d say the bulk of the people in this situation that are “serial life long renters” don’t save up NEARLY enough throughout their lifetime to cover their future rental needs/costs.
My primary residence is completely paid off along with Mello Roos and I’d NEVER even dream about counting that in my “net worth” in these kinds of surveys. I’ve filled out several of these surveys before and they always say to EXCLUDE your primary residence. I do own several other properties that I do include in my net worth but never my primary residence.
Nope. Even if you can rent out rooms or part of your house. I’d still not count it. Sure, you could count it maybe as part of your annual income/salary if you wanted in other surveys of how much you make a year. But IMHO in these high net worth surveys you never want to include or count on the equity in your primary residence.[/quote]
ER, I see what you’re saying, but to move down that line of thought, we should then subtract the mortgage obligation of the primary residence, no?
I can see Guy A using an FHA 3% down mortgage to purchase a $500k house, meanwhile he has $100k in his savings. Vs. Guy B who paid off his $500k house who also has $100k in his savings. If we don’t subtract the mortgage obligation, then Guy A would have the same net worth as Guy B.
earlyretirement
September 21, 2013 @
6:35 PM
spdrun wrote:I think it’s [quote=spdrun]I think it’s absurd not to. (Unless you can tell me that someone with $300k in a paid off house isn’t better off than someone with a house with a $30k down payment in it and a $270k mortgage, not paid off.)
Equity is equity, and generally some fraction can be pulled out without moving.
If you don’t include primary equity, and you have a paid off house worth $300k in Pocatello, ID, a rental property worth $100k in Phoenix, AZ, you’re worth $100k.
But if you move to Peoria, IL, rent an apartment, and rent out the house in Pocatello, your net worth jumps to $400k? Something stinks.[/quote]
spdrun,
Sure, if it makes you feel better about your finances and your “net worth” then go ahead and include it. No one is saying you MUST NOT exclude it from your “net worth”. If you want to make a personal spreadsheet and include that it’s all fine and dandy. And in many cases, yes it’s appropriate to maybe figure it.
All I’m saying is with the ‘big boys’ no one counts their primary residence. When I qualify an investor for a project when they MUST be an “accredited investor” (http://en.wikipedia.org/wiki/Accredited_investor) they have to have $1 million besides their house. It’s just how it is.
There are good reasons and principles for that. But sure, if you want to include that in your “net worth” there isn’t anything wrong with that. But it’s just how those surveys are structured and looked at. Or basic principles of “accredited investor”.
[quote=ocrenter]
ER, I see what you’re saying, but to move down that line of thought, we should then subtract the mortgage obligation of the primary residence, no?
.[/quote]
EXACTLY ocrenter. For net worth purposes that’s how I look at it. I wouldn’t count his equity in his PRIMARY residence but then again I wouldn’t count his monthly nut/mortgage as a liability either when calculating net worth.
No one is to say what is right or wrong. I’m just saying how they look at it when they are counting “high net worth” or “ultra high net worth” in most reputable surveys. And I suspect why AN structured the poll the way he did.
an
September 21, 2013 @
8:53 PM
The reason I exclude primary The reason I exclude primary is the same reason ER have stated. Sure, ATM, if you have a paid off house and no saving, then your net worth is the same as the guy who rent and have no saving. However, a few years down the road, your net worth will grow much faster. So, there’s no point in counting your primary unless it makes you feel richer. We all have to live somewhere at some cost. A paid off house just means your monthly housing cost is much much less than others. It’s kind of like prepaying your rent.
spdrun
September 21, 2013 @
9:06 PM
Except that a paid-off house Except that a paid-off house can generally be tapped for about 65% of its value relatively easily if it’s needed.
Paid-off house + no cash is a lot better off than a renter with no house and no cash, yet the net worth calculation treats both the same. Frankly, that’s insane.
And again, if I had a paid-off house, chose to rent it out and rent an apartment in another city, did I just raise my net worth by the value of the house?
an
September 21, 2013 @
9:12 PM
spdrun wrote:Except that a [quote=spdrun]Except that a paid-off house can generally be tapped for about 65% of its value relatively easily if it’s needed.
Paid-off house + no cash is a lot better off than a renter with no house and no cash, yet the net worth calculation treats both the same. Frankly, that’s insane.
And again, if I had a paid-off house, chose to rent it out and rent an apartment in another city, did I just raise my net worth by the value of the house?[/quote]
Again, if it makes you feel richer, go ahead and include your primary. I stated w/out primary resident for the reason I stated. Sure, you can tap the equity from it, but then you no longer have a paid off house and you would then have a higher monthly housing cost, which means your net worth growth from that moment would be slower than if you don’t tap the equity.
Yes, if you rent out your house and move into a rental, you would raised your net worth ATM, but your net worth would then grow at a much slower pace. So, in the long run, it net out to be the same. So, let me state it again, include it if it makes you happy and feel richer.
earlyretirement
September 22, 2013 @
6:36 AM
AN wrote: We all have to [quote=AN] We all have to live somewhere at some cost. A paid off house just means your monthly housing cost is much much less than others. It’s kind of like prepaying your rent.[/quote]
EXACTLY AN! That’s precisely how I look at a paid off primary residence. I don’t look at it as “net worth” but as “prepaid rent” just as you say. The way I look at it, my rent is prepaid for the rest of my life. All I’m responsible for is applicable property taxes, utilities and HOA fees.
I just reduce my monthly “nut” cost basis ahead of time. I don’t think about possible leverage schemes like some people try to do.
A mortgage is appealing to many people because it allows home buyers ahead of time to fix/cap their monthly obligation many years/decades out into the future. People mostly never look at cash buyers the same way. But in many respects, that’s all the cash buyer or person that ultimately pays their house off is looking to do as well. We are “buying” our rent down forever.
You nailed the thinking on that. Sure, eventually when I die the property will go to my kids (or grandkids) but I don’t think or worry about that now.
spdrun
September 22, 2013 @
8:43 AM
It’s a bizarre way of looking It’s a bizarre way of looking at things, because it implies that your primary has to remain a primary and remain paid off.
Maybe semantically correct, but you can’t say that someone with a paid-off primary isn’t better off than someone without one.
It’s not pre-paid rent since if you pre-paid rent, you wouldn’t have the underlying equity.
earlyretirement
September 22, 2013 @
9:06 AM
spdrun wrote:It’s a bizarre [quote=spdrun]It’s a bizarre way of looking at things, because it implies that your primary has to remain a primary and remain paid off.
Maybe semantically correct, but you can’t say that someone with a paid-off primary isn’t better off than someone without one.
It’s not pre-paid rent since if you pre-paid rent, you wouldn’t have the underlying equity.[/quote]
It is what it is. It’s the most conservative and most accepted method to calculate “net worth”.
spdrun, I’d say if you are feeling depressed one day then whip out your excel spreadsheet that includes that equity and you will feel better. On other days when you have goals to increase your net worth then remove it. 🙂
You certainly aren’t alone spdrun. Many, many people out there prefer to include their primary residence as it makes them feel better about themselves at the end of the day. Hey, whatever tricks your trigger I guess.
spdrun
September 22, 2013 @
9:12 AM
So basically, the Dodd-Frank So basically, the Dodd-Frank bill encourages people to convert their primary to a rental and rent something else if it gets them above the limit?
If I were anywhere close to the $1MM limit and I wanted to invest in startups, I’d do so in a heartbeat to end-run a law written by an overweight catamite.
earlyretirement
September 22, 2013 @
9:16 AM
spdrun wrote:So basically, [quote=spdrun]So basically, the Dodd-Frank bill encourages people to convert their primary to a rental and rent something else if it gets them above the limit?
If I were anywhere close to the $1MM limit and I wanted to invest in startups, I’d do so in a heartbeat to end-run a law written by an overweight catamite.[/quote]
Well, no not really. The Dodd-Frank Wall Street Reform and Consumer Protection Act passed a few short years ago, just basically put a bit of a barrier/clamp down and limits on setting who should be investing in higher risk, speculative investments.
Prior to that, you had a LOT of people investing in VERY HIGH risk investments that were truly not suitable for them.
And there are ways to get around the $1 MM in assets/cash. You can have over $200,000 salary/cash flow for several years as well. And not all start up investments dictate or require that you be an “accredited investor”. It just depends on the nature of the investment and also who is raising the funds.
spdrun
September 22, 2013 @
9:17 AM
I’m not being funny.
If I I’m not being funny.
If I actually had that kind of equity and wanted to invest in startups, I’d do that in a second (or mortgage the primary to the hilt) to end-run an idiotic law. I do NOT want to be fucking protected from myself, least of all by some fat clown from a state which breeds horrible drivers.
earlyretirement
September 22, 2013 @
9:20 AM
spdrun wrote:I’m not being [quote=spdrun]I’m not being funny.
If I actually had that kind of equity and wanted to invest in startups, I’d do that in a second (or mortgage the primary to the hilt) to end-run an idiotic law.[/quote]
Oh I don’t think you are joking at all. You do bring up some good points. And it’s healthy to debate about these types of things. Again, no one is right or wrong on these types of things as there are always different personal opinions on how things should be interpreted.
There are ALWAYS ways to invest in start ups without being an “accredited investor” but certain investments you will need to be accredited. As to if they would take you or not….LOTS of two bit players that should be qualifying investors do not.
I’ve seen PLENTY of examples where investors were supposed to be “accredited” and I know for a fact they aren’t. There are a LOT of PIKERS out there. And these laws serve to encourage pikers not to even try to bite off more than they can chew. But that doesn’t mean that it always works.
spdrun
September 22, 2013 @
9:22 AM
This being said, I don’t This being said, I don’t actually have any desire to touch startup investments with a 10-foot pole. Not unless I knew the founders personally in any case, and invested in some far less formal manner.
earlyretirement
September 22, 2013 @
9:31 AM
spdrun wrote:This being said, [quote=spdrun]This being said, I don’t actually have any desire to touch startup investments with a 10-foot pole. Not unless I knew the founders personally in any case, and invested in some far less formal manner.[/quote]
Let me tell you a true and funny story that happened several years ago. I was developing a 5 star luxury hotel abroad. And I was working with a NYC Hedge fund that was in charge of raising the funds. Basically I handled all the logistics on the back end of setting up the corporation, dealing with the banks, accountants, lawyers, City, developer.
Well, one time I was at this party in London and this guy there I met was going around telling everyone that he was an “investor” in the hotel project (which was in another Continent) and “he owned part of it”.
Just trying to impress people. The guy didn’t know that I was heavily involved in the project! LOL. We was certainly NOT an accredited investor although I know he was allowed to invest a small amount in the project.
Later, through it’s a small world I met an architect that was doing some renovations on a small property he bought and she told me he stiffed her on her work. He ordered all this furniture and couldn’t even pay for it so they had to remove it from his flat.
Yes, spdrun what you mentioned is wise. If it’s someone you personally know and trust or a family member or trusted friend it’s different. But I’ve seen a LOT of crazy things in my life. Even family member cheating family member. Best friend running to another country from a best friend with money. Money makes good people do bad things. So you just have to keep that in mind.
It’s really why on some more speculative type stuff, they require you to be an “accredited investor” for a good reason. There are sound principles behind these things, IMHO.
spdrun
September 22, 2013 @
9:33 AM
Haha.
Would accreditation Haha.
Would accreditation even apply if the hotel and corporation is in say Malaysia, or would local laws (possibly with lower limits) control?
Secondly, it will be interesting to see how/if/when the crowdfunding provisions of the JOBS Act will be implemented. Supposedly coming late this fall, though if there’s a gov’t shutdown, who knows?
earlyretirement
September 22, 2013 @
9:45 AM
spdrun wrote:Haha.
Would [quote=spdrun]Haha.
Would accreditation even apply if the hotel and corporation is in say Malaysia, or would local laws (possibly with lower limits) control?
Secondly, it will be interesting to see how/if/when the crowdfunding provisions of the JOBS Act will be implemented. Supposedly coming late this fall, though if there’s a gov’t shutdown, who knows?[/quote]
That’s a good point. This is where it gets really tricky. Because there are times when a USA hedge fund is based in the USA and all it’s clients are American. But the less ethical ones can easily set up a bank account abroad. And they DO legally set up a corporate entity in the foreign country where things may be more lax. Or maybe not even regulated at all.
It all gets quite complicated. And you nailed it about the complexity in policing this with crowd funding. It will be impossible to control or police. That’s a big concern right now with the government. They are trying to put policies in place to regulate and control it. But it won’t be easy do to all this fast paced technological changes.
I totally understand your point spdrun but you have to also understand many of the principles behind how/why they set these rules in place. There are a LOT of pikers out there. A lot!
I’ll leave you with one last example before I go work out and take the kids to the pool. I once was at a party. Mostly architects, designers, some developers. I was VERY heavily involved with real estate development. (Not so much now). But at the time yes. So I’m at this party and this guy comes up to me and I ask him what kind of work he does. He tells me he is an architect/designer. So I ask him who he has worked with and some of his portfolio projects.
This idiot actually says that he has worked extensively with my firm! LOL. And he says he is friends with “Earl Lee”. LOL. Can you believe it. I had to do everything to hold back from laughing. But I was so amused I continued asking him questions.
I asked, “really! How interesting. I heard Earl is a great guy. What’s he like?”. And the guy goes on to say of course how great of a guy I am. (He didn’t know it was me!).
I asked him what specific projects he worked on. And he quickly tried to change the subject. To this day I always wonder if he figured out he was talking to me. LOL. Lots and lots of pikers out there.
spdrun
September 22, 2013 @
10:21 AM
Let the pikers hurt Let the pikers hurt themselves. I personally don’t see the problem.
And if an American wants to invest in a foreign concern under their laws, I don’t think anyone should stop him.
We already have too many laws restricting US citizens abroad. Hell, they even tried to ban use of drugs by US citizens in places where it’s legal or accepted.
earlyretirement
September 22, 2013 @
11:56 AM
Yes the pikers do get killed. Yes the pikers do get killed. Some do get lucky and make great returns but what I’ve found is more times than not, they will roll those gains into another speculative investment and lose it all and sometimes more.
Not always. But in many cases it’s like gambling. Look at guys like Elon Musk. The guy IS a genius but he is also a gambler. He could have lost his entire PayPal fortune on Tesla. Of course things turned the other way for him but watch the movie on Netflix called Revenge of the Electric Car. See how close he came to losing it all. It is a MUST watch for any investor out there.
Pikers will always find ways to get out of rules and regulations and the government clearly knows that. It’s more or less just so the government can’t be blamed later. But everyone knows it goes on. The only difference is a piker can’t blame the government later and ask “why didn’t you outlaw this and protect me?!”
spdrun
September 22, 2013 @
12:20 PM
Piker = someone with less Piker = someone with less money than you,
Robbing scumbag = someone with more money than you?
😀
spdrun
September 21, 2013 @
6:03 PM
I think it’s absurd not to. I think it’s absurd not to. (Unless you can tell me that someone with $300k in a paid off house isn’t better off than someone with a house with a $30k down payment in it and a $270k mortgage, not paid off.)
Equity is equity, and generally some fraction can be pulled out without moving.
If you don’t include primary equity, and you have a paid off house worth $300k in Pocatello, ID, a rental property worth $100k in Phoenix, AZ, you’re worth $100k.
But if you move to Peoria, IL, rent an apartment, and rent out the house in Pocatello, your net worth jumps to $400k? Something stinks.
njtosd
September 22, 2013 @
8:52 PM
delete delete
njtosd
September 22, 2013 @
8:57 PM
earlyretirement wrote:spdrun [quote=earlyretirement][quote=spdrun]I don’t know if excluding a primary is appropriate:
(a) if it’s paid off or nearly so, it can generally be remortgaged to 65% of value without too many questions asked
(b) it could be both a primary and an investment — i.e. 3 units, live in one, rent out the other two.[/quote]
Yes, I think excluding your primary is appropriate when talking about true net worth. My feeling is this… everyone always needs a place to live throughout their life.
Sure, you can “cash out” and sell and rent or downsize but the reality is that most people that say they rent and doing better things with that money or can generate higher returns typically don’t. I’d say the bulk of the people in this situation that are “serial life long renters” don’t save up NEARLY enough throughout their lifetime to cover their future rental needs/costs.
My primary residence is completely paid off along with Mello Roos and I’d NEVER even dream about counting that in my “net worth” in these kinds of surveys. I’ve filled out several of these surveys before and they always say to EXCLUDE your primary residence. I do own several other properties that I do include in my net worth but never my primary residence.
Nope. Even if you can rent out rooms or part of your house. I’d still not count it. Sure, you could count it maybe as part of your annual income/salary if you wanted in other surveys of how much you make a year. But IMHO in these high net worth surveys you never want to include or count on the equity in your primary residence.[/quote]
Why would anyone fill out such a survey? The information sought would seem to be very sensitive and personal . . .
earlyretirement
September 22, 2013 @
11:27 PM
njtosd wrote:
Why would [quote=njtosd]
Why would anyone fill out such a survey? The information sought would seem to be very sensitive and personal . . .[/quote]
I got a free toaster. LOL. Just kidding.
Actually whether you know it or not, all kinds of information about you is shared all the time by banks, financial institutions, etc. Do you use Mint.com? Do you realize how much of your information is shared on a daily basis?
Let’s just say a LOT. There really isn’t such a thing as financial privacy these days. Unless you have cash literally under your mattress or you are hoarding gold or silver coins, there is a LOT of information out there floating around being shared.
So to answer your question about surveys with RBC Wealth Management or Capgemini… why not? If you are paying your taxes and reporting your income (which I am) …there isn’t really too much to worry about filling out a survey telling them what your net worth is.
It’s not like they are asking you for your account numbers to your banks or financial institutions. They are asking you for your total assets. And they aren’t releasing your personal information to anyone.
I’m not sure of all the ways that financial institutions share general information about you. But I do know that they do. Case in point, my 3 year old son has a financial/investment account. He’s had it since the day he was born. I set up a Custodial investment account for him under his social security #.
I manage it but the funds in it are HIS. He can’t touch it until he is 21. (I set up investment accounts for each of my kids when they were born and I gift tax free to him the annual maximum each year to be used for college expenses). But the point is that it’s set up under his social security #.
Well, I haven’t used his SSN for anything else besides that. Imagine my surprise when earlier this year at 3 years old he started getting PRE-APPROVED offers for an American Express credit card. NO LIMIT. 3 years old!
For kicks and giggles, I sent in the application back. I filled out the application with all his information including his birthday (which I assume they already know). I just wanted to see what would happen and if they would really send a pre-approved AMEX credit card to a 3 year old kid. It came with 25,000 bonus Membership Rewards point and $0 annual fee the first year.
Imagine my surprise when less than 2 weeks later comes a card to the house with the credit card! I kid you not. I will cancel the card after the first year as there is an annual fee.
But best as I can tell, he got approved because somewhere it was shared with AMEX that he has an investment account in his name and social security # with a 6 figure+ balance. How else would a 3 year old quality for an AMEX card?
(Incidentally, he has since received pre-approved offers for a Platinum Mastercard with Citibank). One thing I am puzzled about is he has an older sister that also has a custodial account in her name and SSN. Her investment balance is higher than his as she is almost 2 years older than him.
She hasn’t received any of these pre-approved offers. The only difference between the two is my son has gotten audited by the IRS (yes at 1 year old). So that’s the only thing I can think of. But if any of you know I’d be interested in hearing your thoughts on it?
It’s also a sign to me that credit is getting too lax again. For a while after the financial crises, they were really getting more careful. But this is a clear sign to me that credit lending (especially credit cards) is getting too lax again.
We’re back in a situation where anyone with a “heart beat” (even a 3 year old kid) can get an AMEX card with no limit credit card.
All kinds of financial information is shared about you whether you know it or not.
carlsbadworker
September 23, 2013 @
9:37 AM
earlyretirement, that’s a earlyretirement, that’s a good story. I am very tempted to try it as well.
njtosd
September 23, 2013 @
9:47 AM
earlyretirement – I doubt it earlyretirement – I doubt it was the investment account. My daughter got a pre-approved Am Ex Gold Card application when she was 7. The application was addressed with her nickname, which has an unusual spelling. The only things that had come addressed to her that way are over priced dresses from a European mail order company her grandmother likes. I sent an email to the General Counsel for AmEx about it – and was surprised when I got a response. They buy addresses from all kinds of sources, and I don’t think the sources are picky about the names they include in the list.
Cube
September 21, 2013 @
4:09 PM
Since I’m currently renting Since I’m currently renting (and watching my down-payment rust), I answered much higher than I would have if I were answering after I’d sunk the down-payment into the house.
UCGal
September 23, 2013 @
10:20 AM
It’s an interesting poll.
I’m It’s an interesting poll.
I’m wondering how much age fits into it, also.
My net worth is a lot higher now, then 10 years ago. Compounding, dollar cost averaging, more years maxing the 401(k), etc.
FWIW – when I calculate my “modified” net worth – I include my mortgage debt, but exclude the primary home equity. But that mortgage debt is shrinking rapidly. (Again – related to age/length of loan… more principal applied when you get further into the loan.)
My version of the modified net worth also excludes the kids 529s and my emergency fund.
But that’s because I’m calculating it from a “do I have enough to retire yet” perspective.
It’s all about your goals and what you are building the net worth for. For me – ditching the day job to pursue other things is why I scrimp/save/invest/etc.
(former)FormerSanDiegan
September 23, 2013 @
10:45 AM
I’m gonna take out a home I’m gonna take out a home equity loan so that I can increase my net worth.
earlyretirement
September 23, 2013 @
11:29 AM
njtosd wrote:earlyretirement [quote=njtosd]earlyretirement – I doubt it was the investment account. My daughter got a pre-approved Am Ex Gold Card application when she was 7. The application was addressed with her nickname, which has an unusual spelling. The only things that had come addressed to her that way are over priced dresses from a European mail order company her grandmother likes. I sent an email to the General Counsel for AmEx about it – and was surprised when I got a response. They buy addresses from all kinds of sources, and I don’t think the sources are picky about the names they include in the list.[/quote]
Hmm. Not sure my case is the same as your kid. I NEVER use my son’s full name on anything except this investment account and his US tax return. I don’t use his name or SSN for ANYTHING else nor would anyone even know he lived here (my house is owned under an LLC). So I’m not so sure it’s what you say although it sounds like your situation with your 7 year old was.
But yes, you mentioned, “they buy addresses from all kinds of sources”. That is precisely my point. I’m speculating that the bank that I use for his investment account must have sold his information or at the very least shared it for a fee to AMEX. There is NO other way that they would have his name or address. I don’t use his name on anything else for privacy reasons.
[quote=carlsbadworker]earlyretirement, that’s a good story. I am very tempted to try it as well.[/quote]
The story is totally true. In fact, I just put in the pre-approval code online this morning for that Citibank pre-approved card to see as I was curious. Guess what? 50,000 American AAdvantage miles for spending $3,000 within 90 days. $0 annual fee for the first year. They said his card will arrive in 5 business days. $9,000 credit limit! LOL.
It’s the Citibank Platinum American Airlines Mastercard. So now my 3 year old son has an AMEX and a Platinum Mastercard. How much faith does that give you in how the credit situation has eased up. It seems like another “aha moment” to me like when I saw my cleaning lady that couldn’t speak English buying a $400,000 house with no documentation.
Oh well…something to keep your eyes on. Maybe all these supposed “cash” offers for real estate or at the least the down payments on them are a result of cash advance checks from these VERY EASY credit cards that are being doled out. I’d have to believe if my 3 year old is getting unsolicited pre-approved credit cards from the likes of Citibank and AMEX then it means that actual adults that are working are getting TONS of credit as well.
We could/should reasonably assume that at least a portion of these people are using these newly found funds for real estate. Which should give all of us a bit of pause.
So this isn’t an isolated situation. But on the positive side, maybe I’ll ask him to buy me lunch this week. After all, he needs to spend that $3,000 soon so he can get his 50,000 frequent flyer miles! LOL.
[quote=FormerSanDiegan]I’m gonna take out a home equity loan so that I can increase my net worth.[/quote]
I know right?? LOL. If only life were so easy…..
an
September 23, 2013 @
11:55 AM
Wow, over 35% on here who Wow, over 35% on here who voted have >$1M excluding their primary resident. Seems like there are a lot of 1%er on here :-).
earlyretirement
September 23, 2013 @
12:28 PM
AN wrote:Wow, over 35% on [quote=AN]Wow, over 35% on here who voted have >$1M excluding their primary resident. Seems like there are a lot of 1%er on here :-).[/quote]
What I want to know AN is who the over $200 million is. Because at least we know who to expect to buy lunch when we meet with them. LOL. (Maybe Mitt Romney is a Pigg too!).
Seriously though..I’m not too surprised. Focused forums like this with the sole purpose of buying real estate in an expensive city like San Diego are going to trend towards more affluent people.
I’m not too surprised at all. I figure many of the Piggs are millionaires or multi-millionaires.
I’ve been on other focused forums similar in nature and I’ve met up in person with several members of those types of forums and every single person I met up with was a millionaire or a multi-millionaire.
Coronita
September 23, 2013 @
12:48 PM
earlyretirement wrote:AN [quote=earlyretirement][quote=AN]Wow, over 35% on here who voted have >$1M excluding their primary resident. Seems like there are a lot of 1%er on here :-).[/quote]
What I want to know AN is who the over $200 million is. Because at least we know who to expect to buy lunch when we meet with them. LOL. (Maybe Mitt Romney is a Pigg too!).
Seriously though..I’m not too surprised. Focused forums like this with the sole purpose of buying real estate in an expensive city like San Diego are going to trend towards more affluent people.
I’m not too surprised at all. I figure many of the Piggs are millionaires or multi-millionaires.
I’ve been on other focused forums similar in nature and I’ve met up in person with several members of those types of forums and every single person I met up with was a millionaire or a multi-millionaire.[/quote]
Damnit… I thought we were talking about pesos…Pesos….
carlsbadworker
September 23, 2013 @
12:53 PM
AN wrote:Wow, over 35% on [quote=AN]Wow, over 35% on here who voted have >$1M excluding their primary resident. Seems like there are a lot of 1%er on here :-).[/quote]
You clearly over estimate the ranking of $1M net worth in the current world. I believe you will need $20M to be top 1%. Therefore, we have only 1-2 people who surveyed qualify. If it is only 1 people, then than percentage is 1/40=2.5%, which is very reasonable based on the sample size.
Coronita
September 23, 2013 @
1:02 PM
carlsbadworker wrote:AN [quote=carlsbadworker][quote=AN]Wow, over 35% on here who voted have >$1M excluding their primary resident. Seems like there are a lot of 1%er on here :-).[/quote]
You clearly over estimate the ranking of $1M net worth in the current world. I believe you will need $20M to be top 1%. Therefore, we have only 1-2 people who surveyed qualify. If it is only 1 people, then than percentage is 1/40=2.5%, which is very reasonable based on the sample size.[/quote]
1.79M is the mean for the top 20% (sans house)
So 1/3 of us Piggs are in the top 20%… that’s a far cry from the top 1%…
So we skew 37% into the category that is 20% for the overall population.
(snapshot of the poll – 37% of pigs who answered are above $1M.)
earlyretirement
September 23, 2013 @
1:08 PM
carlsbadworker wrote:AN [quote=carlsbadworker][quote=AN]Wow, over 35% on here who voted have >$1M excluding their primary resident. Seems like there are a lot of 1%er on here :-).[/quote]
You clearly over estimate the ranking of $1M net worth in the current world. I believe you will need $20M to be top 1%. Therefore, we have only 1-2 people who surveyed qualify. If it is only 1 people, then than percentage is 1/40=2.5%, which is very reasonable based on the sample size.[/quote]
Yeah. I agree. The sad truth is that $1 million net worth I don’t think in this day and age and with inflation is anything special too write home about. Don’t get me wrong. It’s a LOT of money but I really don’t think it’s anything special to retire on these days if you are retiring younger and with health care costs like they are.
If you have a guaranteed government pension or free medical care for life it’s one thing. But if not, well then it’s nothing to write home about and you damn well better be prepared and save up for a rainy day.
[quote=flu]
Damnit… I thought we were talking about pesos…Pesos….[/quote]
Hey flu! Good to see you on the boards. I haven’t seen you in a while. I hope all is well. How is everything?
Also, to AN I’d say that really I don’t think it’s too difficult just reading these posts on this board who likely would fall into the categories above. I consider myself a newbie on this website at 2.5 years. Some of you practically live on here for many years. I still don’t know all of the personalities of the board.
But it’s not difficult for me to pick up who has their stuff together and who umm….. don’t. I’ve been a part of message boards since the Internet began and I even moderate some larger message boards. And for me it’s not too difficult to imagine how someone is in real life.
As mentioned, I’ve met several Piggs in real life and they were EXACTLY how they come across on this board. Level headed, highly educated, professional, highly intelligent, polite, successful. (Granted I’m only meeting up with those that I think we’d have things in common with). But the people I’ve met came across EXACTLY how they come across on this board.
And I’ve even made some really close friendships with some Piggs and have become close family friends where their kids play with my kids, they have babysat my kids, our kids go to school together, etc.
Coronita
September 23, 2013 @
1:37 PM
earlyretirement [quote=earlyretirement][quote=carlsbadworker][quote=AN]Wow, over 35% on here who voted have >$1M excluding their primary resident. Seems like there are a lot of 1%er on here :-).[/quote]
You clearly over estimate the ranking of $1M net worth in the current world. I believe you will need $20M to be top 1%. Therefore, we have only 1-2 people who surveyed qualify. If it is only 1 people, then than percentage is 1/40=2.5%, which is very reasonable based on the sample size.[/quote]
Yeah. I agree. The sad truth is that $1 million net worth I don’t think in this day and age and with inflation is anything special too write home about. Don’t get me wrong. It’s a LOT of money but I really don’t think it’s anything special to retire on these days if you are retiring younger and with health care costs like they are.
If you have a guaranteed government pension or free medical care for life it’s one thing. But if not, well then it’s nothing to write home about and you damn well better be prepared and save up for a rainy day.
[quote=flu]
Damnit… I thought we were talking about pesos…Pesos….[/quote]
Hey flu! Good to see you on the boards. I haven’t seen you in a while. I hope all is well. How is everything?
Also, to AN I’d say that really I don’t think it’s too difficult just reading these posts on this board who likely would fall into the categories above. I consider myself a newbie on this website at 2.5 years. Some of you practically live on here for many years. I still don’t know all of the personalities of the board.
But it’s not difficult for me to pick up who has their stuff together and who umm….. don’t. I’ve been a part of message boards since the Internet began and I even moderate some larger message boards. And for me it’s not too difficult to imagine how someone is in real life.
As mentioned, I’ve met several Piggs in real life and they were EXACTLY how they come across on this board. Level headed, highly educated, professional, highly intelligent, polite, successful. (Granted I’m only meeting up with those that I think we’d have things in common with). But the people I’ve met came across EXACTLY how they come across on this board.
And I’ve even made some really close friendships with some Piggs and have become close family friends where their kids play with my kids, they have babysat my kids, our kids go to school together, etc.[/quote]
Still a half-empty glass kinda of an FLU 🙂
earlyretirement
September 23, 2013 @
2:35 PM
flu wrote:
Still a half-empty [quote=flu]
Still a half-empty glass kinda of an FLU :)[/quote]
Hey Flu! half-empty is better than empty I always say. 🙂
I read on my Iphone earlier about an AMEX related warranty you mentioned. I think you deleted/edited your post to remove it but I’ll still respond as I think it will help you. AMEX is GREAT!!!
I’m not sure about the AMEX card you have but I have the Platinum and SPG and both are GREAT! AMEX is the only credit card that actually provides what they advertise. All the other cards pretty much suck.
But I’ve had an AMEX since I was 18 years old and they are really great. Probably at least once a year I’ve had to take advantage of it. They have always honored it and made it super easy.
And even losses are protected in the first 90 days of purchase. For example, my wife recently lost her Prada sunglasses on vacation. We just bought them about 3 months prior. $400 sunglasses. Well, we just submitted the claim online and they instantly within a week credited it back.
I’ve had other times for extended warranty and they made me whole quickly and easily. On the Platinum card I think that is the absolute BEST card to have. They cover you for so many things. Even if you buy something and the store won’t take it back, they will make you whole.
I’ve purchased expensive shoes that literally fell apart after a month and I tried to take them back and the store wouldn’t take them. This was a few years ago but I remember calling AMEX from the store and explaining the store wouldn’t take them back.
Keep in mind I’m NOT a complainer by nature. Very easy going guy but when $500 pair of shoes falls apart within a month I’m not going to sit by and not complain. The store wouldn’t take them back. So AMEX just told me to leave them there on the counter. The place wouldn’t give me anything so I left them there. AMEX refunded my $500 to my card.
Do yourself a favor and get one. They will always make you whole and protect you. Plus, $200 of it is rebated back each year. You can pick your favorite airline, buy $200 worth of gift certificates (that never expire) and also they will rebate your Global Entry/SENTRI (worth another $100). So net net the card only is like $150 a year or so.
But I get so many benefits with them it’s absolutely worth the annual fee. The UK Platinum card is even better if you can manage to get one which isn’t too tough. They have a US dollar card from the UK that most people could get. It’s $550/year but it’s really really really amazing!
It comes with medical coverage while you’re traveling. The benefits are too good to be true!
Check it out. I’ve literally been on vacation before where I’ve had emergencies (turned out to be nothing) but where both my kids had to go in an ambulance to an emergency room. Well, obviously I had medical coverage but AMEX picked up everything! You would be surprised how expensive it can get with City billing you for ambulance, hospital billing you for Emergency room visit, Doctor from ER room billing you. AMEX paid for everything.
Other times when I’ve got stuck in snow storms or weather related delays, AMEX (UK) has picked up my hotel, taxis, rental car, meals, etc. Other times when I traveled and my bags were delayed over 4 hours, AMEX allowed me to go out clothes, ($500 ) and supplies.
Sorry if this got off topic but really anyone that travels should get this UK Platinum AMEX card.
Coronita
September 23, 2013 @
5:43 PM
Thanks. I’ve decided to use Thanks. I’ve decided to use as few terse words as possible these days… Trying to be a conservative with my words.. Oops did I say that?????
Heresy, damnit… Heresy….I said the C words… Better go back into hiding….Otherwise the inquisition panel might find me and subject me to higher rates of audits…..
Damnit…There I go again posting TMI….Just forget it…
if you want to know what I posted, just call up the NSA, I’m sure they have a cached copy of it somewhere…
Damnit.. FLU stop it….Shut the heck up….Shhh…
Yeah, my mac got toasted. After I cutup my hand working on my car. Oh well…I’m not worried about the fact that I didn’t backup my HD on my Mac yet, I’m sure the NSA can help there too…..
Damnit, there I go again…. .Stop it. Just stop…
earlyretirement
September 23, 2013 @
5:43 PM
flu wrote:Thanks. I’ve [quote=flu]Thanks. I’ve decided to use as few terse words as possible these days… Trying to be a conservative with my words.. Oops did I say that?????
Heresy, damnit… Heresy….I said the C words… Better go back into hiding….Otherwise the inquisition panel might find me and subject me to higher rates of audits…..
Damnit…There I go again posting TMI….Just forget it…
if you want to know what I posted, just call up the NSA, I’m sure they have a cached copy of it somewhere…
Damnit.. FLU stop it….Shut the heck up….Shhh…[/quote]
LOL. You crack me up flu. Looking back, my post sounds crazy now that you deleted your original post. Oh well…. Is there any way to edit/delete posts after you post them and someone replies?
an
September 23, 2013 @
6:04 PM
earlyretirement wrote:LOL. [quote=earlyretirement]LOL. You crack me up flu. Looking back, my post sounds crazy now that you deleted your original post. Oh well…. Is there any way to edit/delete posts after you post them and someone replies?[/quote]
Nope, you’re screwed 🙂
Rich Toscano
September 23, 2013 @
6:23 PM
earlyretirement wrote: [quote=earlyretirement] Looking back, my post sounds crazy now that you deleted your original post. Oh well…. Is there any way to edit/delete posts after you post them and someone replies?[/quote]
The system disallows this… once something is replied to, you can’t change it. If this really bugs you I can override it with my admin privileges. Just let me know exactly what post to change, and what to change it to. You can PM me if you like.
earlyretirement
September 23, 2013 @
6:48 PM
Rich Toscano [quote=Rich Toscano][quote=earlyretirement] Looking back, my post sounds crazy now that you deleted your original post. Oh well…. Is there any way to edit/delete posts after you post them and someone replies?[/quote]
The system disallows this… once something is replied to, you can’t change it. If this really bugs you I can override it with my admin privileges. Just let me know exactly what post to change, and what to change it to. You can PM me if you like.[/quote]
Ah, thanks Rich for taking the time to answer. Ah, no big deal. I was just responding to flu’s original post which I read on my iphone in the car. By the time I posted back I guess he deleted it but no biggie.
The information probably can help all the high rollers on your site. LOL. I guess all these Pigg’s should be carrying around an AMEX Platinum anyway…right?
No worries at all Rich.. I’m easy.
Anonymous
September 23, 2013 @
6:57 PM
earlyretirement wrote:
Ah, [quote=earlyretirement]
Ah, thanks Rich for taking the time to answer. Ah, no big deal. I was just responding to flu’s original post which I read on my iphone in the car. By the time I posted back I guess he deleted it but no biggie.
The information probably can help all the high rollers on your site. LOL. I guess all these Pigg’s should be carrying around an AMEX Platinum anyway…right?
No worries at all Rich.. I’m easy.[/quote]
Deletion won’t be necessary. Let me summarize what FLU said before he deleted it, so ER’s reply isn’t out of context.
1. He broke his Mac. The mac is half working.
2. He just ran out of his 1 year warranty.
Which means, he’s sHxt out of luck to get it repaired by the manufacturer’s warranty… since to replace the motherboard, it costs half the price of a new computer.
3. However, he mentioned that since he purchased the Mac with his Costco American Express card, per terms of the card agreement, it’s suppose to extend the manufacturer’s warranty on all purchases made with the card for exactly the same amount of the original’s manufacturer’s warranty.
4. FLU is going to attempt to contact the Apple store to get an estimate of the repair cost, and then send it to American Express to see if American Express will reimburse FLU for the cost of the repair or the full cost of the original computer, whichever is less (per terms of the cardholder’s agreement)…
For more details on what FLU said, please don’t hesitate to ask..
Sincerely,
NSA Administrator..
earlyretirement
September 23, 2013 @
7:49 PM
NSA Administrator [quote=NSA Administrator][quote=earlyretirement]
Ah, thanks Rich for taking the time to answer. Ah, no big deal. I was just responding to flu’s original post which I read on my iphone in the car. By the time I posted back I guess he deleted it but no biggie.
The information probably can help all the high rollers on your site. LOL. I guess all these Pigg’s should be carrying around an AMEX Platinum anyway…right?
No worries at all Rich.. I’m easy.[/quote]
Deletion won’t be necessary. Let me summarize what FLU said before he deleted it, so ER’s reply isn’t out of context.
1. He broke his Mac. The mac is half working.
2. He just ran out of his 1 year warranty.
Which means, he’s sHxt out of luck to get it repaired by the manufacturer’s warranty… since to replace the motherboard, it costs half the price of a new computer.
3. However, he mentioned that since he purchased the Mac with his Costco American Express card, per terms of the card agreement, it’s suppose to extend the manufacturer’s warranty on all purchases made with the card for exactly the same amount of the original’s manufacturer’s warranty.
4. FLU is going to attempt to contact the Apple store to get an estimate of the repair cost, and then send it to American Express to see if American Express will reimburse FLU for the cost of the repair or the full cost of the original computer, whichever is less (per terms of the cardholder’s agreement)…
For more details on what FLU said, please don’t hesitate to ask..
Sincerely,
NSA Administrator..[/quote]
BINGO. Thanks NSA. Remind me to tell you guys the story about my NSA experience back in the early 2000’s. I had a “Snowden” type of nerdy guy that got drunk once and told me some crazy stuff! Spooky stuff! Worst thing is after he told me I called in a favor! (Yes, I’m bad)… I have the best stories…
I swear one of these days I’m going to finish writing my book….. My friends always tell me my life is crazy interesting…they wouldn’t believe half of it if they didn’t know me or were WITH me when I experienced it….. Spooky spooky stuff.
Yep. To recap, AMEX will pay for it. I’ve had all kinds of claims with them over the past many years and they have never declined a one of them. I do think they have a cap of something like $1,500 per item but I’ve had electronics that were like $1,000 that got stolen within 90 days of buying it and they covered it with no questions asked.
I have friends/clients that have totaled rental cars and AMEX paid for the entire thing. I’ve had damaged items on rental cars like broken windshield, dents (got hit while I was parked and the bastard didn’t leave a note). AMEX always paid for it.
Heck, I even have friends that will do idiotic claims like one guy bought an expensive Armani shirt and then he accidentally left his pen open in his shirt and it ran all over it. And they paid for it!
I never do any frivolous claims with AMEX but the ones that I’ve claimed they have always paid. Also, I travel about 100+ days each and every year (although those days are probably over now that both kids started school) and I can’t tell you how many thousands of dollars I’ve gotten with late baggage coverage or especially missed connections where I had to get a hotel.
Back when I was traveling a ton for work/business I’d secretly pray my bag would get delayed so I could go out and buy a new Hermes necktie…
AMEX even paid for me to stay in a 5 star hotel earlier this year when the blizzard hit Denver. I got snowed in and they paid for about $1,200 worth of rooms, rental car, and all the meals.
I can’t rave about them enough (The UK US dollar card). Plus if you travel enough, you don’t have to buy any medical coverage…they will take care of everything….
all
September 23, 2013 @
2:53 PM
flu wrote:
Still a half-empty [quote=flu]
Still a half-empty glass kinda of an FLU :)[/quote]
It’s neither half-empty nor half-full. The glass is simply twice as big as it should be.
SK in CV
September 23, 2013 @
6:26 PM
all wrote:flu wrote:
Still a [quote=all][quote=flu]
Still a half-empty glass kinda of an FLU :)[/quote]
It’s neither half-empty nor half-full. The glass is simply twice as big as it should be.[/quote]
f’ing engineers 🙂
njtosd
September 23, 2013 @
10:06 PM
earlyretirement wrote:njtosd [quote=earlyretirement][quote=njtosd]earlyretirement – I doubt it was the investment account. My daughter got a pre-approved Am Ex Gold Card application when she was 7. The application was addressed with her nickname, which has an unusual spelling. The only things that had come addressed to her that way are over priced dresses from a European mail order company her grandmother likes. I sent an email to the General Counsel for AmEx about it – and was surprised when I got a response. They buy addresses from all kinds of sources, and I don’t think the sources are picky about the names they include in the list.[/quote]
Hmm. Not sure my case is the same as your kid. I NEVER use my son’s full name on anything except this investment account and his US tax return. I don’t use his name or SSN for ANYTHING else nor would anyone even know he lived here (my house is owned under an LLC). So I’m not so sure it’s what you say although it sounds like your situation with your 7 year old was.
But yes, you mentioned, “they buy addresses from all kinds of sources”. That is precisely my point. I’m speculating that the bank that I use for his investment account must have sold his information or at the very least shared it for a fee to AMEX. There is NO other way that they would have his name or address. I don’t use his name on anything else for privacy reasons.
[/quote]
Why would they need a Social Security number? You realize “Pre approved” doesn’t actually mean they know anything about him/her, right? When you sign it (as you must have) you are applying for credit and stating that the information that is on the application is true. Your child probably received some sort of expensive gift at your address with his name as the recipient. This got him on a list of people who buy pricey things (even though s/he didn’t buy it). I think you are assuming a much greater level of knowledge on AmEx’s part than there actually is.
Hopefully you’ve registered privacy preferences with your bank that would prohibit them from selling information about your finances or your child’s, right?
earlyretirement
September 23, 2013 @
10:35 PM
njtosd wrote:
Why would they [quote=njtosd]
Why would they need a Social Security number? You realize “Pre approved” doesn’t actually mean they know anything about him/her, right? When you sign it (as you must have) you are applying for credit and stating that the information that is on the application is true. Your child probably received some sort of expensive gift at your address with his name as the recipient. This got him on a list of people who buy pricey things (even though s/he didn’t buy it). I think you are assuming a much greater level of knowledge on AmEx’s part than there actually is.
Hopefully you’ve registered privacy preferences with your bank that would prohibit them from selling information about your finances or your child’s, right?[/quote]
njtosd,
To be clear, I’m not saying I know 100% I know what happened. Because the truth is I don’t. I’m just speculating and trying to track back on these things.
No, I didn’t know pre-approved meant they didn’t have details about him. But I thought that with these pre-approved offers you at least have to have a FICO score (which he does not).
I mean I get these pre-approved offers all the time but what I noticed back tracking is that if you look at your credit report you can see that these banks (especially AMEX) are pinging your credit report and checking it so they can see things like what other credit cards I have, what the credit limits are, etc. They are “soft inquiries” not hard inquires but check out your credit report and you can typically see these things.
Well, a 3 year old kid doesn’t have a FICO score. I didn’t sign the application. He did. For occupation I put “Student” which he is (in pre-school). It asked to check boxes if he has a checking/savings/investment accounts. So I checked the applicable boxes. For salary I put in how much he made last year in investment income and I specifically wrote in “Investment Income – Capital Gains”.
I’ll have to take a photo and block out his face and post it with him holding his 2 credit cards! I’ll wait for the Citibank card to come.
NO, he has NEVER received any gifts at the house. We’ve only lived here less than 3 years and as mentioned, I don’t use his name for ANYTHING except (a) his investment account and (b) his IRS tax returns. That’s it. I don’t use his name to send gifts, etc. If I order something for him I’ll use my name.
No, I don’t recall seeing anything about privacy preferences on his investment account. Nope. I didn’t check anything about privacy. I opened the account when we lived abroad so I wasn’t getting mail there. I just opened it online. I don’t recall any privacy preferences.
But no he didn’t get any “expensive gifts” here or his name wasn’t used for anything whatsoever. Just what I told you.
And let’s not forget the fact that under NO circumstances should a bank be giving credit to someone so young. I have no knowledge how or why a 3 year old is getting a pre-approved offers from credit cards/financial institutions. I have even less knowledge why they would grant the actual credit card.
But then again, I was scratching my head when I saw people getting no-doc mortgages back in the bubble years as well. Part of why I decided to post this. I’m really not assuming anything. I just go by facts and logic and trying to back track. That’s all.
earlyretirement
September 24, 2013 @
6:36 AM
FYI.
“Also, when a card FYI.
“Also, when a card issuer makes a preapproval offer, says Papadimitriou, it is typically doing so on the basis of one credit report, so information held by other credit agencies may weigh against the applicant.”
“It works this way: After some market research, the bank discovers that you fit the general requirements for a particular type of credit account they are offering. It’s a sensible cost-cutting technique for issuers. By narrowing down their potential customer base to those who might be right for the card, they avoid wasting money sending letters to people who definitely do not fit their profile.”
I find all of this pretty interesting. I didn’t know too much about all of these pre-approved offers but from reading a few links it still seems like the credit card companies are buying lists either from the 3 major credit bureaus or other financial institutions. Or maybe there is a “sharing” of data amongst banks?
I’m not sure.
Also, I went last night to look at ANYTHING that my son may be received at our address. I keep a separate file as I’m fairly organized and I think I figured out how he got the Citibank Pre-approved offer. Actually I had to use his name and address to get his American Airlines frequent flyer card. Since we travel so much my son made Platinum on American Airlines so that must be how he got targeted for that credit card since American Airlines and Citibank work together on that card as partners. So that explains that.
Still not sure on the AMEX thingy. And even with these pre-approval offers yes I understand that they aren’t guaranteed but from everything I’m reading, the credit card companies still need to do a credit check and not sure how a 3 year old has a FICO score. He didn’t have one before. He might have one now that he has 2 credit cards. LOL. But he didn’t have one before.
All really interesting to me. I wonder if this type of thing is mainstream?
I guess it’s happened to other people with 3 year old’s. I just found this story.
did you check your 3 year old’s credit history? You might find some soft inquiries with one of the agencies – banks usually do those before they start sending you pre-qualified offers.
earlyretirement
September 24, 2013 @
9:31 AM
all wrote:ER,
did you check [quote=all]ER,
did you check your 3 year old’s credit history? You might find some soft inquiries with one of the agencies – banks usually do those before they start sending you pre-qualified offers.[/quote]
I tried getting the free annual credit report allowed by law. They told me they couldn’t as he didn’t yet have a credit history. They said there was nothing to get. But I will check after he gets the Citibank card. I’m sure after that he will have one and I will post back here what it says.
flyer
September 23, 2013 @
8:13 PM
This is a good poll–thanks This is a good poll–thanks to AN for setting it up.
IMO, the true value of a high net worth is, not just the lifestyle you can create for yourself and your family in the present, but, more importantly, it’s being able to pass the wealth along to your heirs, and, on and on. It’s a way of making life on earth more comfortable for those you love.
Even though we’re very grateful for what we have, we realize we are merely passing through this world, and keep it all in perspective. We really have our sights set on our eternal destination, which, to us, is far more important.
earlyretirement
September 23, 2013 @
8:45 PM
flyer wrote:This is a good [quote=flyer]This is a good poll–thanks to AN for setting it up.
IMO, the true value of a high net worth is, not just the lifestyle you can create for yourself and your family in the present, but, more importantly, it’s being able to pass the wealth along to your heirs, and, on and on. It’s a way of making life on earth more comfortable for those you love.
Even though we’re very grateful for what we have, we realize we are merely passing through this world, and keep it all in perspective. We really have our sights set on our eternal destination, which, to us, is far more important.[/quote]
Actually flyer this is probably the one time I disagree with you. Personally I don’t feel the need to pass on any wealth to my heirs. I mean they will end up getting significant real estate assets probably but I don’t feel any need or desire to give them vast amounts of wealth.
And in fact, if I saw they were deadbeats, trying to coast through life because they knew they were getting assets then I’d probably make it clear that they definitely weren’t getting any assets.
The only thing I think I owe them is a great college education and all the love, support and care while they are growing up. Including graduate or medical school, etc. But I disagree with wealthy people that feel the need to pass on large sums of money or assets to their kids.
I’ve read from others on the board in the past that also felt the need to pass on assets to their kids or grand kids but I don’t think that is necessary.
I put myself through college. I graduated with $100,000+ in student loans. I figure if I can give them a head start on life with NO debt that is a huge gift.
I do agree it’s nice for those that do want to make life “more comfortable” for those they love but I can tell you I know a LOT of people whose families and kids are dead weight and really coasting through life waiting for their parents to die. (Figuratively speaking).
My hope is that my kids are more successful than I am/was on their own merits. And by making it so they never have to worry about paying for their college tuition they can get a start on life. Also, even if they want a worthless degree, I’ll really push them to get another degree in a useful field.
I can’t tell you how many people I know that let their kids do what they wanted. They paid upwards of $200,000 for a worthless degree in History, Arts, Communications or some other worthless degree.
I’m absolutely not saying I’m right and you’re wrong because it’s just one of those totally subjective things in life. Neither of us is right or wrong. Just different philosophies.
But no way I feel the need to pass on any wealth or assets to my kids. I’m hoping that I can hit them up for some spare change when I’m older! LOL.
scaredyclassic
September 23, 2013 @
9:15 PM
i plan to leave nothing but i plan to leave nothing but some very strange memories.
flyer
September 23, 2013 @
9:22 PM
earlyretirement wrote:flyer [quote=earlyretirement][quote=flyer]This is a good poll–thanks to AN for setting it up.
IMO, the true value of a high net worth is, not just the lifestyle you can create for yourself and your family in the present, but, more importantly, it’s being able to pass the wealth along to your heirs, and, on and on. It’s a way of making life on earth more comfortable for those you love.
Even though we’re very grateful for what we have, we realize we are merely passing through this world, and keep it all in perspective. We really have our sights set on our eternal destination, which, to us, is far more important.[/quote]
Actually flyer this is probably the one time I disagree with you. Personally I don’t feel the need to pass on any wealth to my heirs. I mean they will end up getting significant real estate assets probably but I don’t feel any need or desire to give them vast amounts of wealth.
And in fact, if I saw they were deadbeats, trying to coast through life because they knew they were getting assets then I’d probably make it clear that they definitely weren’t getting any assets.
The only thing I think I owe them is a great college education and all the love, support and care while they are growing up. Including graduate or medical school, etc. But I disagree with wealthy people that feel the need to pass on large sums of money or assets to their kids.
I’ve read from others on the board in the past that also felt the need to pass on assets to their kids or grand kids but I don’t think that is necessary.
I put myself through college. I graduated with $100,000+ in student loans. I figure if I can give them a head start on life with NO debt that is a huge gift.
I do agree it’s nice for those that do want to make life “more comfortable” for those they love but I can tell you I know a LOT of people whose families and kids are dead weight and really coasting through life waiting for their parents to die. (Figuratively speaking).
My hope is that my kids are more successful than I am/was on their own merits. And by making it so they never have to worry about paying for their college tuition they can get a start on life. Also, even if they want a worthless degree, I’ll really push them to get another degree in a useful field.
I can’t tell you how many people I know that let their kids do what they wanted. They paid upwards of $200,000 for a worthless degree in History, Arts, Communications or some other worthless degree.
I’m absolutely not saying I’m right and you’re wrong because it’s just one of those totally subjective things in life. Neither of us is right or wrong. Just different philosophies.
But no way I feel the need to pass on any wealth or assets to my kids. I’m hoping that I can hit them up for some spare change when I’m older! LOL.[/quote]
ER–Always value your thoughts, and enjoy all of your posts, and I completely understand your thinking. I wouldn’t want to see “deadbeats” waiting around for an inheritance either.
We’ve seen exactly what you’re talking about, and, even worse, with people who really have no significant net worth. Their kids seem to have an “entitlement” attitude, but little else.
They don’t seem to realize Mom and Dad don’t actually have 7 figures stashed away for them, and they don’t seem to have the ability to create the life of their dreams by getting great jobs, or the ability to buy a home of their own–at least not in CA. IMO, that’s the worst case scenario for all concerned.
Just to clarify. I certainly don’t feel I “owe” my kids my assets, and all of them are already extremely successful in their own right. I’m extremely proud of them.
However, I do want to leave my assets to family members, to, conceivably be passed down to future generations, versus any other path. In that way, I’ll feel like what we accomplished during our time on earth had some real long-term meaning.
an
September 23, 2013 @
9:31 PM
flyer wrote:ER–Always value [quote=flyer]ER–Always value your thoughts, and enjoy all of your posts, and I completely understand your thinking. I wouldn’t want to see “deadbeats” waiting around for an inheritance either.
We’ve seen exactly what you’re talking about, and, even worse, with people who really have no significant net worth. Their kids seem to have an “entitlement” attitude, but little else.
They don’t seem to realize Mom and Dad don’t actually have 7 figures stashed away for them, and they don’t seem to have the ability to create the life of their dreams by getting great jobs, or the ability to buy a home of their own–at least not in CA. IMO, that’s the worst case scenario for all concerned.
Just to clarify. I certainly don’t feel I “owe” my kids my assets, and all of them are already extremely successful in their own right. I’m extremely proud of them.
However, I do want to leave my assets to family members, to, conceivably be passed down to future generations, versus any other path. In that way, I’ll feel like what we accomplished during our time on earth had some real long-term meaning.[/quote]I totally agree with you flyer. One thing I’ve noticed in life is, it takes many generations to build a dynasty (think Rockefeller, Kennedy, etc). So, unless you were lucky w/ the gene lottery and hit it big in your life time, it probably will take many generation to make it big. Just because you pass on your wealth does not discount parenting and prevent your kids from being dead beats. There’s no right or wrong answer here, but we all view inheritance differently. People like Bill Gates and Buffett will give most of their wealth away, while the original Rockefeller/Kennedy who made it big kept it in the family and built a dynasty. Different stroke for different folks.
Also, just because you have wealth doesn’t mean you have to flaunt it either. After all, Warren Buffett drives a Camry for many many years, even when he’s a Billionaire. If you live humbly and teach your kids the power of money and humility, then they might be able to do a lot with that money that you yourself were not able to think of. Like the ability to invest it successfully and take the profit and give it to charity. If you squander it all away, there will be no lasting impression. I want to be another rung in the ladder that build my family’s legacy.
earlyretirement
September 23, 2013 @
10:05 PM
AN wrote:I totally agree with [quote=AN]I totally agree with you flyer. One thing I’ve noticed in life is, it takes many generations to build a dynasty (think Rockefeller, Kennedy, etc). So, unless you were lucky w/ the gene lottery and hit it big in your life time, it probably will take many generation to make it big. Just because you pass on your wealth does not discount parenting and prevent your kids from being dead beats. There’s no right or wrong answer here, but we all view inheritance differently. People like Bill Gates and Buffett will give most of their wealth away, while the original Rockefeller/Kennedy who made it big kept it in the family and built a dynasty. Different stroke for different folks.
Also, just because you have wealth doesn’t mean you have to flaunt it either. After all, Warren Buffett drives a Camry for many many years, even when he’s a Billionaire. If you live humbly and teach your kids the power of money and humility, then they might be able to do a lot with that money that you yourself were not able to think of. Like the ability to invest it successfully and take the profit and give it to charity. If you squander it all away, there will be no lasting impression. I want to be another rung in the ladder that build my family’s legacy.[/quote]
Absolutely AN you came to mind when I read flyer’s post as I recalled you wrote this before.
You nailed it there is no right or wrong… Just personal philosophies and subjective opinions. I actually totally respect you and flyer for thinking the way you do.
I actually think it’s amazing. But for me, I just know 100% if I was in a situation where I knew my family was affluent then I probably wouldn’t have tried so hard. Struggled and worked so hard to pay off my student loan debt and strive for success.
It really shaped who I am today by going through that difficult time. And the truth is I wouldn’t change my life for a second. I wouldn’t have met my wife, I wouldn’t have had my kids. And a part of me thinks that is important in life to strive for that success which I think many times isn’t there when the wealth is just passed down from generation to generation.
I have other clients like you where they feel this strong urge to save for their future generations. They bust their asses but they aren’t really enjoying life if you know what I mean. I mean, what’s the point of busting your ass to provide for future generations if you can’t live and enjoy it?
I’m not saying this is your situation but I have many clients where they work 120 hour work weeks (I used to be one of these poor bastards..ha ha!). But they worry about everything. They might be worth $50 million but they might stress over spending $200 more for the 64 GB Ipad vs. a 32 GB. LOL. Just doesn’t make sense to me.
They don’t go anywhere fun. They don’t do anything fun with their family. They don’t travel. In short, they don’t really enjoy life. Will they pass on a fortune to their future generations? Sure. But then again, not sure that should be the priority.
Life is short. I’ve seen friends that were worth a fortune then died of a heart attack at 55. They wasted their lives working or being away from family when they were already worth tens of millions of dollars.
I’d rather experience life with my kids in MY lifetime. The memories and the social and cultural benefits for my kids is amazing. We lived in Paris for a month last summer, we stayed a month in the French Riviera… traveled a month in Rome, Amsterdam, Belgium. I mean I’d rather do stuff like this vs. worry about providing for my future generations.
earlyretirement
September 23, 2013 @
10:12 PM
flyer wrote:
ER–Always value [quote=flyer]
ER–Always value your thoughts, and enjoy all of your posts, and I completely understand your thinking. I wouldn’t want to see “deadbeats” waiting around for an inheritance either.
We’ve seen exactly what you’re talking about, and, even worse, with people who really have no significant net worth. Their kids seem to have an “entitlement” attitude, but little else.
They don’t seem to realize Mom and Dad don’t actually have 7 figures stashed away for them, and they don’t seem to have the ability to create the life of their dreams by getting great jobs, or the ability to buy a home of their own–at least not in CA. IMO, that’s the worst case scenario for all concerned.
Just to clarify. I certainly don’t feel I “owe” my kids my assets, and all of them are already extremely successful in their own right. I’m extremely proud of them.
However, I do want to leave my assets to family members, to, conceivably be passed down to future generations, versus any other path. In that way, I’ll feel like what we accomplished during our time on earth had some real long-term meaning.[/quote]
Hey flyer!
Yeah, maybe I’m a bit jaded because I see it more than the typical person. You see, the vast majority of my clients are high net worth or ultra high net worth individuals/families.
I see it over and over and over this entitlement issue/problem that you speak of. It’s really rampant amongst the high net worth crowd. I’m sure there are many people where their kids don’t have this problem and to be sure, I have many clients with successful kids in their own right.
But it’s mostly because their parents are the type of people to really push them and make them reach for their full potential. And make it clear to them that they might or might not get assets so it would behoove them to be successful in their own right.
YES, you nailed it. I’ve seen people where their kids have this entitlement issue where their parents really don’t have two nickels to rub together. The problem in these cases that I’ve seen is the parents project this lifestyle and image that isn’t reality. They live in a nice house (totally leveraged with 30 year mortgage that they might have refinanced on a few times), they drive high end luxury cars (on leases), they take fancy trips around the world (funded by credit cards), and they don’t have fully funded retirement plans to bank on.
In short it’s all a pipe dream! But they don’t dare tell anyone that they aren’t successful or wealthy. I also see that all the time! And the worst thing is the kids think this image of their parents is true!
I do agree with you that when the kids are successful in their own right and are “good kids” then absolutely there is nothing wrong with passing on assets to them. I think much of the responsibility for the kids going down the right “path” in life and reaching for their full potential lies on the parents and their attitude raising their kids.
My kids don’t want for anything. I know I spoil them with material things. But more important to me I spoil them with love and attention. I sold one of my companies so I could spend more time with them.
I drop them off at school, pick them up often, take them to extracurricular activities with my wife, and volunteer at their school. And you can bet as they grow up I’ll be the one pushing them to strive for their full potential.
I do agree with you flyer that it would be nice to pass on assets to “blood” vs. non-profit organizations but I totally admire guys that make it clear to their families that they better make something out of their lives or they aren’t getting anything.
Maybe my attitude will change as I get older and I have grandkids. But I’m not sure my thinking will change that I don’t have any desire to worry about accomplishing something in life by making future generations wealthy.
The thing I plan on doing with future grandkids is the same thing I do with my kids. My wife and I “gift” them tax free the maximum $26,000 per year per child ($28,000 starting this year). Then I invest it in an investment account for them. Fortunately their returns are pretty darn good. Pops isn’t too bad of an investor. LOL. Although we probably will start contributing less starting next year. Not sure.. just depends on how much I work.
I figure that will more than pay for college, they will get a new car when they are in high school if they get straight A’s (ok..do well…) and should be enough for a small property that I’d encourage them to buy in the college town they are going to college in. Then they can take on a roommate if they want and they can keep that cash themselves for spending money.
When they graduate they can keep it as a rental property or they can sell it and use the proceeds for a down payment to purchase a property where they will live. I figure that is a good enough start to life.
But really that’s all I plan to do for my grand kids. Make a spreadsheet. The power of compound interest is TREMENDOUS. The way I figure it, my kids are going to Harvard Medical School! LOL. So they will need every bit of what they have.
The thing that sucks is having to fill out a tax return for each of them each year as they make good returns each year with short-term capital gains.
But flyer, I can tell what kind of guy you are. You’re one of those great guys where your character and intelligence shines through with all of your posts. Absolutely I can tell you’re one of the “good guys” and your kids sound awesome!
UCGal
September 24, 2013 @
8:20 AM
flyer wrote:This is a good [quote=flyer]This is a good poll–thanks to AN for setting it up.
IMO, the true value of a high net worth is, not just the lifestyle you can create for yourself and your family in the present, but, more importantly, it’s being able to pass the wealth along to your heirs, and, on and on. It’s a way of making life on earth more comfortable for those you love.
Even though we’re very grateful for what we have, we realize we are merely passing through this world, and keep it all in perspective. We really have our sights set on our eternal destination, which, to us, is far more important.[/quote]
I’m a bit more on the side of ER on this one.
My kids know my plan is to be broke at age 100. If I die before that, they get some cash… No plans to sell the house – but that’s plan B if we need the cash to buy into a long term care continuing care community. So my kids can split the real estate if that doesn’t happen.
They know we plan to pay for the (public schools) college education. Same deal I was given – to be able to graduate with a degree that makes you employable, AND to have no student loans… that’s a big inheritance in/of itself.
But my financial gains, increasing nest egg aren’t to pass it on to the kids. I’m selfish… It’s so that I can retire (frugally) and spend more time with them.
all
September 24, 2013 @
9:35 AM
UCGal wrote:
I’m a bit more [quote=UCGal]
I’m a bit more on the side of ER on this one.
My kids know my plan is to be broke at age 100. If I die before that, they get some cash… No plans to sell the house – but that’s plan B if we need the cash to buy into a long term care continuing care community. So my kids can split the real estate if that doesn’t happen.
They know we plan to pay for the (public schools) college education. Same deal I was given – to be able to graduate with a degree that makes you employable, AND to have no student loans… that’s a big inheritance in/of itself.
But my financial gains, increasing nest egg aren’t to pass it on to the kids. I’m selfish… It’s so that I can retire (frugally) and spend more time with them.[/quote]
When someone passes away the kids are usually middle-aged with established lifestyle and habits. It is usually not the children but the grandchildren that are most affected by the inheritance. The same grandchildren that roll their eyes when they are forced to spend time with the grandparents. Whenever I hear stories about estate and inheritance I think of my childhood friends talking about money and goods they expect to inherit from their aging grandparents.
You are saving so your grandchildren and their insignificant and unappreciative others can spend a week on Bora Bora.
earlyretirement
September 24, 2013 @
10:59 AM
all wrote:UCGal wrote:
I’m a [quote=all][quote=UCGal]
I’m a bit more on the side of ER on this one.
My kids know my plan is to be broke at age 100. If I die before that, they get some cash… No plans to sell the house – but that’s plan B if we need the cash to buy into a long term care continuing care community. So my kids can split the real estate if that doesn’t happen.
They know we plan to pay for the (public schools) college education. Same deal I was given – to be able to graduate with a degree that makes you employable, AND to have no student loans… that’s a big inheritance in/of itself.
But my financial gains, increasing nest egg aren’t to pass it on to the kids. I’m selfish… It’s so that I can retire (frugally) and spend more time with them.[/quote]
When someone passes away the kids are usually middle-aged with established lifestyle and habits. It is usually not the children but the grandchildren that are most affected by the inheritance. The same grandchildren that roll their eyes when they are forced to spend time with the grandparents. Whenever I hear stories about estate and inheritance I think of my childhood friends talking about money and goods they expect to inherit from their aging grandparents.
You are saving so your grandchildren and their insignificant and unappreciative others can spend a week on Bora Bora.[/quote]
Exactly! That’s how I feel. Rather than worrying about if my great great grand kids will be going to Bora Bora I’d rather go! LOL. I just got back from Bora Bora a few weeks ago. Holy crap is it amazing!! It blew away my highest expectations. After that trip my wife and I committed to going back every 5 years now to celebrate our anniversaries.
I could care less if the future Earl Lee’s go to Bora Bora. ;P
flyer
September 24, 2013 @
3:52 PM
Agree that if my wife and I Agree that if my wife and I were having to give anything up in our lifetimes, in order for our kids and/or grandchildren to enjoy a large inheritances, I might think differently, but that’s not our situation.
We’ve always done everything we’ve wanted to do–great homes, travel, toys–you name it. We’ll continue to do so for the balance of our lives, and, thankfully, there should still be plenty left over for the family. Besides, I owe our kids big-time for the great film investment deals they’ve included us in!
BTW–love Bora Bora!
Edit–I also believe it’s better to “live it up” while you’re younger, if you can. That’s why we started in our 30’s. Lots of people wait until they are older, or “retired,” and their finances, health, or other issues prevent them from enjoying their later years.
an
September 24, 2013 @
3:57 PM
First off, not everyone likes First off, not everyone likes to travel. Some people I know LOVES working. They wouldn’t know what to do when they have a day off. They feel more happy working than traveling. So, just because they’re working hard doesn’t mean they’re not happy.
With that said, I love Bora Bora too. In some way, I like Moorea more. I didn’t mean to say you should sacrifice your life if it makes you unhappy. I also know people who find great joy in knowing that they’re setting up their kids/grand kids for success by offering them something they never had. That makes them more happy than a trip to Bora Bora. So, as long as you’re happy living your life and have no regrets, I don’t see anything wrong w/ sacrificing your life for future generations.
flyer
September 24, 2013 @
4:18 PM
Exactly, AN. I agree Exactly, AN. I agree everyone should do whatever they feel they wish to
do–whatever is most fulfilling to them, personally.
In my case, it’s a combination of being actively engaged in interesting and lucrative projects, enjoying life, as well as passing wealth along to future generations–and I’m happy with those decisions.
It’s truly a case of, “to each his/her own.” There is no “right” or “wrong.”
earlyretirement
September 24, 2013 @
5:09 PM
AN wrote:First off, not [quote=AN]First off, not everyone likes to travel. Some people I know LOVES working. They wouldn’t know what to do when they have a day off. They feel more happy working than traveling. So, just because they’re working hard doesn’t mean they’re not happy.
With that said, I love Bora Bora too. In some way, I like Moorea more. I didn’t mean to say you should sacrifice your life if it makes you unhappy. I also know people who find great joy in knowing that they’re setting up their kids/grand kids for success by offering them something they never had. That makes them more happy than a trip to Bora Bora. So, as long as you’re happy living your life and have no regrets, I don’t see anything wrong w/ sacrificing your life for future generations.[/quote]
[quote=flyer]Agree that if my wife and I were having to give anything up in our lifetimes, in order for our kids and/or grandchildren to enjoy a large inheritances, I might think differently, but that’s not our situation.
We’ve always done everything we’ve wanted to do–great homes, travel, toys–you name it. We’ll continue to do so for the balance of our lives, and, thankfully, there should still be plenty left over for the family. Besides, I owe our kids big-time for the great film investment deals they’ve included us in!
BTW–love Bora Bora!
Edit–I also believe it’s better to “live it up” while you’re younger, if you can. That’s why we started in our 30’s. Lots of people wait until they are older, or “retired,” and their finances, health, or other issues prevent them from enjoying their later years.[/quote]
Ahhhh. Ok..got it. Then if this is the case of what you gentlemen are speaking of then I agree it would be nice if you ARE doing all of these things and still comfortably have enough left over to pass it on.
I got the wrong impression that you felt some sense of urgency or need to sacrifice to provide it for future generations. Reading your follow up posts is a different perspective of my mistaken impressions of what you were referring to.
Message boards and posts are often times difficult to totally decipher so I think it’s AWESOME that you are living life at the level you want to do and still can build up for your future generations.
Absolutely AN you nailed it with, “as long as you’re happy living your life and have no regrets, I don’t see anything wrong w/ sacrificing your life for future generations.”. I just read before in one of your posts “sacrificing your life” and I took it the wrong way. Your follow up posts gave me a better understanding of what you are talking about.
flyer, GREAT! Yes, if you have all of those things already then totally agree with you. You aren’t really sacrificing anything or lifestyle to pass it on. GREAT!
I still don’t see a need to pass on large sums of money to future generations. That’s just me though. I do own a decent real estate portfolio (several properties in several countries) and we travel and stay in them throughout the year. And when we go I make the kids help clean the place, they go around and watch me fix stuff and hopefully they understand that these properties we’d really prefer that they never sell them.
So yeah, I guess in a way I’m like you guys where I will provide a legacy and inheritance with real estate. I guess they could always liquidate them after I die but hopefully the kids realize it will always be a source of cash flow forever. My favorite term to hold real estate is forever. And I’m confident I’ll instill in them this love of real estate rentals and cash flow.
Still, I don’t feel any need to pass it on but I understand now more of what you guys mean. Yes, if this is what you are referring to then I agree with you and fully understand what you mean.
AN, also you are correct that some people LOVE to work. I’m one of those types. I can’t see myself not staying busy and active and consulting and staying involved with real estate, serve on several Board of Director positions, my community and various causes that are dear to me.
Even today I get unsolicited offers for CEO positions that are GREAT opportunities that pay big $$$$ but not sure I want to ever work those kinds of hours again.
Before, it wasn’t healthy how much I was working. Literally 120+ hour weeks for years on end. I often wonder how I never had a heart attack. Extremely high stress type stuff. Having kids slowed me WAY down. But I still like to stay active.
I have several friends/clients that actually retired early and it literally killed them (they had a heart attack on the beach). It was more stress for them to be sitting on a beach with their wife doing NOTHING vs. doing high stress deals in the middle of some oil field in Yemen. There needs to be some balance.
Also, I don’t want to give the wrong idea that it’s ok to just spend spend spend and not think about anything with the future/kids, etc. Since I had kids I really haven’t bought anything for myself. I always felt guilty thinking, “this could buy X pairs of shoes/clothes, etc”. Or I could buy another apartment.
But here lately I figure that there also needs to be a balance and you have to treat yourself too. By FAR our largest expense each year is traveling. We spend an obscene amount of money traveling but I look at it as an education for the kids to see the world and they LOVE it.
It’s just recently that I started spoiling myself (new Model S and ordered the Model X..ha ha). I figure you have to treat yourself as well and if you can afford it why not?
And flyer I TOTALLY agree with you about “living it up when you’re younger”. I can’t agree enough…. I’ve seen too many people wait to “live it up” until they are older and by then they are either too tired, or too many medical issues.
earlyretirement
September 24, 2013 @
10:57 AM
UCGal wrote:flyer wrote:This [quote=UCGal][quote=flyer]This is a good poll–thanks to AN for setting it up.
IMO, the true value of a high net worth is, not just the lifestyle you can create for yourself and your family in the present, but, more importantly, it’s being able to pass the wealth along to your heirs, and, on and on. It’s a way of making life on earth more comfortable for those you love.
Even though we’re very grateful for what we have, we realize we are merely passing through this world, and keep it all in perspective. We really have our sights set on our eternal destination, which, to us, is far more important.[/quote]
I’m a bit more on the side of ER on this one.
My kids know my plan is to be broke at age 100. If I die before that, they get some cash… No plans to sell the house – but that’s plan B if we need the cash to buy into a long term care continuing care community. So my kids can split the real estate if that doesn’t happen.
They know we plan to pay for the (public schools) college education. Same deal I was given – to be able to graduate with a degree that makes you employable, AND to have no student loans… that’s a big inheritance in/of itself.
But my financial gains, increasing nest egg aren’t to pass it on to the kids. I’m selfish… It’s so that I can retire (frugally) and spend more time with them.[/quote]
Yep. I’m living to 150. Don’t you know with advances in science we will all live to be 150? Ha ha. Seriously though I worked pretty darn hard all my life and maybe it could be considered selfish but I plan on enjoying my retirement. I plan to continue to travel around the world, buy nice stuff that makes me happy in MY lifetime.
As long as my kids college is paid for I don’t really care about “future generations”. (And again, if/when I have grandkids I’ll do the same deal setting aside enough money to pay for their college ONLY in the event that my kids somehow couldn’t afford to pay for it).
My attitude is they can make their money working hard like I did. I would be content if by the time my wife and I pass if we still had a bit of money banked but plan to enjoy life as much as possible in our lifetime. I certainly wouldn’t want to die with a significant portion of my savings left unspent. If so, in my eyes it meant I didn’t enjoy life enough!
September 20, 2013 @ 4:57 PM
Some people have asked for a
Some people have asked for a net worth pole, so I created one.
September 20, 2013 @ 6:21 PM
I doubt people are worth much
I doubt people are worth much at all without their primary residence….most people have their wealth in their home.
I know many many people who would be ordinarily dirt poor but bought their homes in the mid 90s, their homes have appreciated so much that they are quite well off.
September 20, 2013 @ 10:48 PM
kev374 wrote:I doubt people
[quote=kev374]I doubt people are worth much at all without their primary residence….most people have their wealth in their home.
I know many many people who would be ordinarily dirt poor but bought their homes in the mid 90s, their homes have appreciated so much that they are quite well off.[/quote]
Yeah, I agree probably many people have the bulk of their net worth in their primary residence. That’s why most high net worth and ultra high net worth individuals surveys almost always exclude primary residence which I agree with.
http://en.wikipedia.org/wiki/High-net-worth_individual
Many people I’ve met are house rich and cash poor.
September 20, 2013 @ 11:11 PM
However I am worth even more
However I am worth even more dead!
😛
SjV
September 21, 2013 @ 7:42 AM
earlyretirement wrote:Yeah, I
[quote=earlyretirement]Yeah, I agree probably many people have the bulk of their net worth in their primary residence. That’s why most high net worth and ultra high net worth individuals surveys almost always exclude primary residence which I agree with.
http://en.wikipedia.org/wiki/High-net-worth_individual
Many people I’ve met are house rich and cash poor.[/quote]I guess Piggs are a different group of people. Over 1/2 have >$400k in net worth on top of high income.
September 21, 2013 @ 9:26 AM
AN wrote:earlyretirement
[quote=AN][quote=earlyretirement]Yeah, I agree probably many people have the bulk of their net worth in their primary residence. That’s why most high net worth and ultra high net worth individuals surveys almost always exclude primary residence which I agree with.
http://en.wikipedia.org/wiki/High-net-worth_individual
Many people I’ve met are house rich and cash poor.[/quote]I guess Piggs are a different group of people. Over 1/2 have >$400k in net worth on top of high income.[/quote]
Oh absolutely I’d venture to guess that many people on this website are in a better situation financially than the typical person out there.
I’ve met several people from this board in real life. Some of them that are more prolific posters and others that are just lurkers. The things they all had in common was they were all highly educated, professionals, very intelligent/articulate and didn’t seem like they were hurting financially. Several of them owned multiple properties so they had that link in common.
Boards like this seem to attract a higher sophisticated level of investor that typically have a higher net worth than the average person out there.
September 21, 2013 @ 10:37 AM
AN wrote:earlyretirement
[quote=AN][quote=earlyretirement]Yeah, I agree probably many people have the bulk of their net worth in their primary residence. That’s why most high net worth and ultra high net worth individuals surveys almost always exclude primary residence which I agree with.
http://en.wikipedia.org/wiki/High-net-worth_individual
Many people I’ve met are house rich and cash poor.[/quote]I guess Piggs are a different group of people. Over 1/2 have >$400k in net worth on top of high income.[/quote]
Yes but I would like to know if that net worth figure was affected by incoming heritence.
CE
September 21, 2013 @ 3:19 PM
I don’t know if excluding a
I don’t know if excluding a primary is appropriate:
(a) if it’s paid off or nearly so, it can generally be remortgaged to 65% of value without too many questions asked
(b) it could be both a primary and an investment — i.e. 3 units, live in one, rent out the other two.
September 21, 2013 @ 5:42 PM
spdrun wrote:I don’t know if
[quote=spdrun]I don’t know if excluding a primary is appropriate:
(a) if it’s paid off or nearly so, it can generally be remortgaged to 65% of value without too many questions asked
(b) it could be both a primary and an investment — i.e. 3 units, live in one, rent out the other two.[/quote]
Yes, I think excluding your primary is appropriate when talking about true net worth. My feeling is this… everyone always needs a place to live throughout their life.
Sure, you can “cash out” and sell and rent or downsize but the reality is that most people that say they rent and doing better things with that money or can generate higher returns typically don’t. I’d say the bulk of the people in this situation that are “serial life long renters” don’t save up NEARLY enough throughout their lifetime to cover their future rental needs/costs.
My primary residence is completely paid off along with Mello Roos and I’d NEVER even dream about counting that in my “net worth” in these kinds of surveys. I’ve filled out several of these surveys before and they always say to EXCLUDE your primary residence. I do own several other properties that I do include in my net worth but never my primary residence.
Nope. Even if you can rent out rooms or part of your house. I’d still not count it. Sure, you could count it maybe as part of your annual income/salary if you wanted in other surveys of how much you make a year. But IMHO in these high net worth surveys you never want to include or count on the equity in your primary residence.
September 21, 2013 @ 6:00 PM
earlyretirement wrote:spdrun
[quote=earlyretirement][quote=spdrun]I don’t know if excluding a primary is appropriate:
(a) if it’s paid off or nearly so, it can generally be remortgaged to 65% of value without too many questions asked
(b) it could be both a primary and an investment — i.e. 3 units, live in one, rent out the other two.[/quote]
Yes, I think excluding your primary is appropriate when talking about true net worth. My feeling is this… everyone always needs a place to live throughout their life.
Sure, you can “cash out” and sell and rent or downsize but the reality is that most people that say they rent and doing better things with that money or can generate higher returns typically don’t. I’d say the bulk of the people in this situation that are “serial life long renters” don’t save up NEARLY enough throughout their lifetime to cover their future rental needs/costs.
My primary residence is completely paid off along with Mello Roos and I’d NEVER even dream about counting that in my “net worth” in these kinds of surveys. I’ve filled out several of these surveys before and they always say to EXCLUDE your primary residence. I do own several other properties that I do include in my net worth but never my primary residence.
Nope. Even if you can rent out rooms or part of your house. I’d still not count it. Sure, you could count it maybe as part of your annual income/salary if you wanted in other surveys of how much you make a year. But IMHO in these high net worth surveys you never want to include or count on the equity in your primary residence.[/quote]
ER, I see what you’re saying, but to move down that line of thought, we should then subtract the mortgage obligation of the primary residence, no?
I can see Guy A using an FHA 3% down mortgage to purchase a $500k house, meanwhile he has $100k in his savings. Vs. Guy B who paid off his $500k house who also has $100k in his savings. If we don’t subtract the mortgage obligation, then Guy A would have the same net worth as Guy B.
September 21, 2013 @ 6:35 PM
spdrun wrote:I think it’s
[quote=spdrun]I think it’s absurd not to. (Unless you can tell me that someone with $300k in a paid off house isn’t better off than someone with a house with a $30k down payment in it and a $270k mortgage, not paid off.)
Equity is equity, and generally some fraction can be pulled out without moving.
If you don’t include primary equity, and you have a paid off house worth $300k in Pocatello, ID, a rental property worth $100k in Phoenix, AZ, you’re worth $100k.
But if you move to Peoria, IL, rent an apartment, and rent out the house in Pocatello, your net worth jumps to $400k? Something stinks.[/quote]
spdrun,
Sure, if it makes you feel better about your finances and your “net worth” then go ahead and include it. No one is saying you MUST NOT exclude it from your “net worth”. If you want to make a personal spreadsheet and include that it’s all fine and dandy. And in many cases, yes it’s appropriate to maybe figure it.
All I’m saying is with the ‘big boys’ no one counts their primary residence. When I qualify an investor for a project when they MUST be an “accredited investor” (http://en.wikipedia.org/wiki/Accredited_investor) they have to have $1 million besides their house. It’s just how it is.
There are good reasons and principles for that. But sure, if you want to include that in your “net worth” there isn’t anything wrong with that. But it’s just how those surveys are structured and looked at. Or basic principles of “accredited investor”.
[quote=ocrenter]
ER, I see what you’re saying, but to move down that line of thought, we should then subtract the mortgage obligation of the primary residence, no?
.[/quote]
EXACTLY ocrenter. For net worth purposes that’s how I look at it. I wouldn’t count his equity in his PRIMARY residence but then again I wouldn’t count his monthly nut/mortgage as a liability either when calculating net worth.
No one is to say what is right or wrong. I’m just saying how they look at it when they are counting “high net worth” or “ultra high net worth” in most reputable surveys. And I suspect why AN structured the poll the way he did.
September 21, 2013 @ 8:53 PM
The reason I exclude primary
The reason I exclude primary is the same reason ER have stated. Sure, ATM, if you have a paid off house and no saving, then your net worth is the same as the guy who rent and have no saving. However, a few years down the road, your net worth will grow much faster. So, there’s no point in counting your primary unless it makes you feel richer. We all have to live somewhere at some cost. A paid off house just means your monthly housing cost is much much less than others. It’s kind of like prepaying your rent.
September 21, 2013 @ 9:06 PM
Except that a paid-off house
Except that a paid-off house can generally be tapped for about 65% of its value relatively easily if it’s needed.
Paid-off house + no cash is a lot better off than a renter with no house and no cash, yet the net worth calculation treats both the same. Frankly, that’s insane.
And again, if I had a paid-off house, chose to rent it out and rent an apartment in another city, did I just raise my net worth by the value of the house?
September 21, 2013 @ 9:12 PM
spdrun wrote:Except that a
[quote=spdrun]Except that a paid-off house can generally be tapped for about 65% of its value relatively easily if it’s needed.
Paid-off house + no cash is a lot better off than a renter with no house and no cash, yet the net worth calculation treats both the same. Frankly, that’s insane.
And again, if I had a paid-off house, chose to rent it out and rent an apartment in another city, did I just raise my net worth by the value of the house?[/quote]
Again, if it makes you feel richer, go ahead and include your primary. I stated w/out primary resident for the reason I stated. Sure, you can tap the equity from it, but then you no longer have a paid off house and you would then have a higher monthly housing cost, which means your net worth growth from that moment would be slower than if you don’t tap the equity.
Yes, if you rent out your house and move into a rental, you would raised your net worth ATM, but your net worth would then grow at a much slower pace. So, in the long run, it net out to be the same. So, let me state it again, include it if it makes you happy and feel richer.
September 22, 2013 @ 6:36 AM
AN wrote: We all have to
[quote=AN] We all have to live somewhere at some cost. A paid off house just means your monthly housing cost is much much less than others. It’s kind of like prepaying your rent.[/quote]
EXACTLY AN! That’s precisely how I look at a paid off primary residence. I don’t look at it as “net worth” but as “prepaid rent” just as you say. The way I look at it, my rent is prepaid for the rest of my life. All I’m responsible for is applicable property taxes, utilities and HOA fees.
I just reduce my monthly “nut” cost basis ahead of time. I don’t think about possible leverage schemes like some people try to do.
A mortgage is appealing to many people because it allows home buyers ahead of time to fix/cap their monthly obligation many years/decades out into the future. People mostly never look at cash buyers the same way. But in many respects, that’s all the cash buyer or person that ultimately pays their house off is looking to do as well. We are “buying” our rent down forever.
You nailed the thinking on that. Sure, eventually when I die the property will go to my kids (or grandkids) but I don’t think or worry about that now.
September 22, 2013 @ 8:43 AM
It’s a bizarre way of looking
It’s a bizarre way of looking at things, because it implies that your primary has to remain a primary and remain paid off.
Maybe semantically correct, but you can’t say that someone with a paid-off primary isn’t better off than someone without one.
It’s not pre-paid rent since if you pre-paid rent, you wouldn’t have the underlying equity.
September 22, 2013 @ 9:06 AM
spdrun wrote:It’s a bizarre
[quote=spdrun]It’s a bizarre way of looking at things, because it implies that your primary has to remain a primary and remain paid off.
Maybe semantically correct, but you can’t say that someone with a paid-off primary isn’t better off than someone without one.
It’s not pre-paid rent since if you pre-paid rent, you wouldn’t have the underlying equity.[/quote]
It is what it is. It’s the most conservative and most accepted method to calculate “net worth”.
http://www.sec.gov/news/press/2011/2011-274.htm
http://www.sec.gov/info/smallbus/secg/accredited-investor-net-worth-standard-secg.htm
spdrun, I’d say if you are feeling depressed one day then whip out your excel spreadsheet that includes that equity and you will feel better. On other days when you have goals to increase your net worth then remove it. 🙂
You certainly aren’t alone spdrun. Many, many people out there prefer to include their primary residence as it makes them feel better about themselves at the end of the day. Hey, whatever tricks your trigger I guess.
September 22, 2013 @ 9:12 AM
So basically, the Dodd-Frank
So basically, the Dodd-Frank bill encourages people to convert their primary to a rental and rent something else if it gets them above the limit?
If I were anywhere close to the $1MM limit and I wanted to invest in startups, I’d do so in a heartbeat to end-run a law written by an overweight catamite.
September 22, 2013 @ 9:16 AM
spdrun wrote:So basically,
[quote=spdrun]So basically, the Dodd-Frank bill encourages people to convert their primary to a rental and rent something else if it gets them above the limit?
If I were anywhere close to the $1MM limit and I wanted to invest in startups, I’d do so in a heartbeat to end-run a law written by an overweight catamite.[/quote]
Well, no not really. The Dodd-Frank Wall Street Reform and Consumer Protection Act passed a few short years ago, just basically put a bit of a barrier/clamp down and limits on setting who should be investing in higher risk, speculative investments.
Prior to that, you had a LOT of people investing in VERY HIGH risk investments that were truly not suitable for them.
And there are ways to get around the $1 MM in assets/cash. You can have over $200,000 salary/cash flow for several years as well. And not all start up investments dictate or require that you be an “accredited investor”. It just depends on the nature of the investment and also who is raising the funds.
September 22, 2013 @ 9:17 AM
I’m not being funny.
If I
I’m not being funny.
If I actually had that kind of equity and wanted to invest in startups, I’d do that in a second (or mortgage the primary to the hilt) to end-run an idiotic law. I do NOT want to be fucking protected from myself, least of all by some fat clown from a state which breeds horrible drivers.
September 22, 2013 @ 9:20 AM
spdrun wrote:I’m not being
[quote=spdrun]I’m not being funny.
If I actually had that kind of equity and wanted to invest in startups, I’d do that in a second (or mortgage the primary to the hilt) to end-run an idiotic law.[/quote]
Oh I don’t think you are joking at all. You do bring up some good points. And it’s healthy to debate about these types of things. Again, no one is right or wrong on these types of things as there are always different personal opinions on how things should be interpreted.
There are ALWAYS ways to invest in start ups without being an “accredited investor” but certain investments you will need to be accredited. As to if they would take you or not….LOTS of two bit players that should be qualifying investors do not.
I’ve seen PLENTY of examples where investors were supposed to be “accredited” and I know for a fact they aren’t. There are a LOT of PIKERS out there. And these laws serve to encourage pikers not to even try to bite off more than they can chew. But that doesn’t mean that it always works.
September 22, 2013 @ 9:22 AM
This being said, I don’t
This being said, I don’t actually have any desire to touch startup investments with a 10-foot pole. Not unless I knew the founders personally in any case, and invested in some far less formal manner.
September 22, 2013 @ 9:31 AM
spdrun wrote:This being said,
[quote=spdrun]This being said, I don’t actually have any desire to touch startup investments with a 10-foot pole. Not unless I knew the founders personally in any case, and invested in some far less formal manner.[/quote]
Let me tell you a true and funny story that happened several years ago. I was developing a 5 star luxury hotel abroad. And I was working with a NYC Hedge fund that was in charge of raising the funds. Basically I handled all the logistics on the back end of setting up the corporation, dealing with the banks, accountants, lawyers, City, developer.
Well, one time I was at this party in London and this guy there I met was going around telling everyone that he was an “investor” in the hotel project (which was in another Continent) and “he owned part of it”.
Just trying to impress people. The guy didn’t know that I was heavily involved in the project! LOL. We was certainly NOT an accredited investor although I know he was allowed to invest a small amount in the project.
Later, through it’s a small world I met an architect that was doing some renovations on a small property he bought and she told me he stiffed her on her work. He ordered all this furniture and couldn’t even pay for it so they had to remove it from his flat.
Yes, spdrun what you mentioned is wise. If it’s someone you personally know and trust or a family member or trusted friend it’s different. But I’ve seen a LOT of crazy things in my life. Even family member cheating family member. Best friend running to another country from a best friend with money. Money makes good people do bad things. So you just have to keep that in mind.
It’s really why on some more speculative type stuff, they require you to be an “accredited investor” for a good reason. There are sound principles behind these things, IMHO.
September 22, 2013 @ 9:33 AM
Haha.
Would accreditation
Haha.
Would accreditation even apply if the hotel and corporation is in say Malaysia, or would local laws (possibly with lower limits) control?
Secondly, it will be interesting to see how/if/when the crowdfunding provisions of the JOBS Act will be implemented. Supposedly coming late this fall, though if there’s a gov’t shutdown, who knows?
September 22, 2013 @ 9:45 AM
spdrun wrote:Haha.
Would
[quote=spdrun]Haha.
Would accreditation even apply if the hotel and corporation is in say Malaysia, or would local laws (possibly with lower limits) control?
Secondly, it will be interesting to see how/if/when the crowdfunding provisions of the JOBS Act will be implemented. Supposedly coming late this fall, though if there’s a gov’t shutdown, who knows?[/quote]
That’s a good point. This is where it gets really tricky. Because there are times when a USA hedge fund is based in the USA and all it’s clients are American. But the less ethical ones can easily set up a bank account abroad. And they DO legally set up a corporate entity in the foreign country where things may be more lax. Or maybe not even regulated at all.
It all gets quite complicated. And you nailed it about the complexity in policing this with crowd funding. It will be impossible to control or police. That’s a big concern right now with the government. They are trying to put policies in place to regulate and control it. But it won’t be easy do to all this fast paced technological changes.
I totally understand your point spdrun but you have to also understand many of the principles behind how/why they set these rules in place. There are a LOT of pikers out there. A lot!
I’ll leave you with one last example before I go work out and take the kids to the pool. I once was at a party. Mostly architects, designers, some developers. I was VERY heavily involved with real estate development. (Not so much now). But at the time yes. So I’m at this party and this guy comes up to me and I ask him what kind of work he does. He tells me he is an architect/designer. So I ask him who he has worked with and some of his portfolio projects.
This idiot actually says that he has worked extensively with my firm! LOL. And he says he is friends with “Earl Lee”. LOL. Can you believe it. I had to do everything to hold back from laughing. But I was so amused I continued asking him questions.
I asked, “really! How interesting. I heard Earl is a great guy. What’s he like?”. And the guy goes on to say of course how great of a guy I am. (He didn’t know it was me!).
I asked him what specific projects he worked on. And he quickly tried to change the subject. To this day I always wonder if he figured out he was talking to me. LOL. Lots and lots of pikers out there.
September 22, 2013 @ 10:21 AM
Let the pikers hurt
Let the pikers hurt themselves. I personally don’t see the problem.
And if an American wants to invest in a foreign concern under their laws, I don’t think anyone should stop him.
We already have too many laws restricting US citizens abroad. Hell, they even tried to ban use of drugs by US citizens in places where it’s legal or accepted.
September 22, 2013 @ 11:56 AM
Yes the pikers do get killed.
Yes the pikers do get killed. Some do get lucky and make great returns but what I’ve found is more times than not, they will roll those gains into another speculative investment and lose it all and sometimes more.
Not always. But in many cases it’s like gambling. Look at guys like Elon Musk. The guy IS a genius but he is also a gambler. He could have lost his entire PayPal fortune on Tesla. Of course things turned the other way for him but watch the movie on Netflix called Revenge of the Electric Car. See how close he came to losing it all. It is a MUST watch for any investor out there.
Pikers will always find ways to get out of rules and regulations and the government clearly knows that. It’s more or less just so the government can’t be blamed later. But everyone knows it goes on. The only difference is a piker can’t blame the government later and ask “why didn’t you outlaw this and protect me?!”
September 22, 2013 @ 12:20 PM
Piker = someone with less
Piker = someone with less money than you,
Robbing scumbag = someone with more money than you?
😀
September 21, 2013 @ 6:03 PM
I think it’s absurd not to.
I think it’s absurd not to. (Unless you can tell me that someone with $300k in a paid off house isn’t better off than someone with a house with a $30k down payment in it and a $270k mortgage, not paid off.)
Equity is equity, and generally some fraction can be pulled out without moving.
If you don’t include primary equity, and you have a paid off house worth $300k in Pocatello, ID, a rental property worth $100k in Phoenix, AZ, you’re worth $100k.
But if you move to Peoria, IL, rent an apartment, and rent out the house in Pocatello, your net worth jumps to $400k? Something stinks.
September 22, 2013 @ 8:52 PM
delete
delete
September 22, 2013 @ 8:57 PM
earlyretirement wrote:spdrun
[quote=earlyretirement][quote=spdrun]I don’t know if excluding a primary is appropriate:
(a) if it’s paid off or nearly so, it can generally be remortgaged to 65% of value without too many questions asked
(b) it could be both a primary and an investment — i.e. 3 units, live in one, rent out the other two.[/quote]
Yes, I think excluding your primary is appropriate when talking about true net worth. My feeling is this… everyone always needs a place to live throughout their life.
Sure, you can “cash out” and sell and rent or downsize but the reality is that most people that say they rent and doing better things with that money or can generate higher returns typically don’t. I’d say the bulk of the people in this situation that are “serial life long renters” don’t save up NEARLY enough throughout their lifetime to cover their future rental needs/costs.
My primary residence is completely paid off along with Mello Roos and I’d NEVER even dream about counting that in my “net worth” in these kinds of surveys. I’ve filled out several of these surveys before and they always say to EXCLUDE your primary residence. I do own several other properties that I do include in my net worth but never my primary residence.
Nope. Even if you can rent out rooms or part of your house. I’d still not count it. Sure, you could count it maybe as part of your annual income/salary if you wanted in other surveys of how much you make a year. But IMHO in these high net worth surveys you never want to include or count on the equity in your primary residence.[/quote]
Why would anyone fill out such a survey? The information sought would seem to be very sensitive and personal . . .
September 22, 2013 @ 11:27 PM
njtosd wrote:
Why would
[quote=njtosd]
Why would anyone fill out such a survey? The information sought would seem to be very sensitive and personal . . .[/quote]
I got a free toaster. LOL. Just kidding.
Actually whether you know it or not, all kinds of information about you is shared all the time by banks, financial institutions, etc. Do you use Mint.com? Do you realize how much of your information is shared on a daily basis?
Let’s just say a LOT. There really isn’t such a thing as financial privacy these days. Unless you have cash literally under your mattress or you are hoarding gold or silver coins, there is a LOT of information out there floating around being shared.
So to answer your question about surveys with RBC Wealth Management or Capgemini… why not? If you are paying your taxes and reporting your income (which I am) …there isn’t really too much to worry about filling out a survey telling them what your net worth is.
It’s not like they are asking you for your account numbers to your banks or financial institutions. They are asking you for your total assets. And they aren’t releasing your personal information to anyone.
I’m not sure of all the ways that financial institutions share general information about you. But I do know that they do. Case in point, my 3 year old son has a financial/investment account. He’s had it since the day he was born. I set up a Custodial investment account for him under his social security #.
I manage it but the funds in it are HIS. He can’t touch it until he is 21. (I set up investment accounts for each of my kids when they were born and I gift tax free to him the annual maximum each year to be used for college expenses). But the point is that it’s set up under his social security #.
Well, I haven’t used his SSN for anything else besides that. Imagine my surprise when earlier this year at 3 years old he started getting PRE-APPROVED offers for an American Express credit card. NO LIMIT. 3 years old!
For kicks and giggles, I sent in the application back. I filled out the application with all his information including his birthday (which I assume they already know). I just wanted to see what would happen and if they would really send a pre-approved AMEX credit card to a 3 year old kid. It came with 25,000 bonus Membership Rewards point and $0 annual fee the first year.
Imagine my surprise when less than 2 weeks later comes a card to the house with the credit card! I kid you not. I will cancel the card after the first year as there is an annual fee.
But best as I can tell, he got approved because somewhere it was shared with AMEX that he has an investment account in his name and social security # with a 6 figure+ balance. How else would a 3 year old quality for an AMEX card?
(Incidentally, he has since received pre-approved offers for a Platinum Mastercard with Citibank). One thing I am puzzled about is he has an older sister that also has a custodial account in her name and SSN. Her investment balance is higher than his as she is almost 2 years older than him.
She hasn’t received any of these pre-approved offers. The only difference between the two is my son has gotten audited by the IRS (yes at 1 year old). So that’s the only thing I can think of. But if any of you know I’d be interested in hearing your thoughts on it?
It’s also a sign to me that credit is getting too lax again. For a while after the financial crises, they were really getting more careful. But this is a clear sign to me that credit lending (especially credit cards) is getting too lax again.
We’re back in a situation where anyone with a “heart beat” (even a 3 year old kid) can get an AMEX card with no limit credit card.
All kinds of financial information is shared about you whether you know it or not.
September 23, 2013 @ 9:37 AM
earlyretirement, that’s a
earlyretirement, that’s a good story. I am very tempted to try it as well.
September 23, 2013 @ 9:47 AM
earlyretirement – I doubt it
earlyretirement – I doubt it was the investment account. My daughter got a pre-approved Am Ex Gold Card application when she was 7. The application was addressed with her nickname, which has an unusual spelling. The only things that had come addressed to her that way are over priced dresses from a European mail order company her grandmother likes. I sent an email to the General Counsel for AmEx about it – and was surprised when I got a response. They buy addresses from all kinds of sources, and I don’t think the sources are picky about the names they include in the list.
September 21, 2013 @ 4:09 PM
Since I’m currently renting
Since I’m currently renting (and watching my down-payment rust), I answered much higher than I would have if I were answering after I’d sunk the down-payment into the house.
September 23, 2013 @ 10:20 AM
It’s an interesting poll.
I’m
It’s an interesting poll.
I’m wondering how much age fits into it, also.
My net worth is a lot higher now, then 10 years ago. Compounding, dollar cost averaging, more years maxing the 401(k), etc.
FWIW – when I calculate my “modified” net worth – I include my mortgage debt, but exclude the primary home equity. But that mortgage debt is shrinking rapidly. (Again – related to age/length of loan… more principal applied when you get further into the loan.)
My version of the modified net worth also excludes the kids 529s and my emergency fund.
But that’s because I’m calculating it from a “do I have enough to retire yet” perspective.
It’s all about your goals and what you are building the net worth for. For me – ditching the day job to pursue other things is why I scrimp/save/invest/etc.
September 23, 2013 @ 10:45 AM
I’m gonna take out a home
I’m gonna take out a home equity loan so that I can increase my net worth.
September 23, 2013 @ 11:29 AM
njtosd wrote:earlyretirement
[quote=njtosd]earlyretirement – I doubt it was the investment account. My daughter got a pre-approved Am Ex Gold Card application when she was 7. The application was addressed with her nickname, which has an unusual spelling. The only things that had come addressed to her that way are over priced dresses from a European mail order company her grandmother likes. I sent an email to the General Counsel for AmEx about it – and was surprised when I got a response. They buy addresses from all kinds of sources, and I don’t think the sources are picky about the names they include in the list.[/quote]
Hmm. Not sure my case is the same as your kid. I NEVER use my son’s full name on anything except this investment account and his US tax return. I don’t use his name or SSN for ANYTHING else nor would anyone even know he lived here (my house is owned under an LLC). So I’m not so sure it’s what you say although it sounds like your situation with your 7 year old was.
But yes, you mentioned, “they buy addresses from all kinds of sources”. That is precisely my point. I’m speculating that the bank that I use for his investment account must have sold his information or at the very least shared it for a fee to AMEX. There is NO other way that they would have his name or address. I don’t use his name on anything else for privacy reasons.
[quote=carlsbadworker]earlyretirement, that’s a good story. I am very tempted to try it as well.[/quote]
The story is totally true. In fact, I just put in the pre-approval code online this morning for that Citibank pre-approved card to see as I was curious. Guess what? 50,000 American AAdvantage miles for spending $3,000 within 90 days. $0 annual fee for the first year. They said his card will arrive in 5 business days. $9,000 credit limit! LOL.
It’s the Citibank Platinum American Airlines Mastercard. So now my 3 year old son has an AMEX and a Platinum Mastercard. How much faith does that give you in how the credit situation has eased up. It seems like another “aha moment” to me like when I saw my cleaning lady that couldn’t speak English buying a $400,000 house with no documentation.
Oh well…something to keep your eyes on. Maybe all these supposed “cash” offers for real estate or at the least the down payments on them are a result of cash advance checks from these VERY EASY credit cards that are being doled out. I’d have to believe if my 3 year old is getting unsolicited pre-approved credit cards from the likes of Citibank and AMEX then it means that actual adults that are working are getting TONS of credit as well.
We could/should reasonably assume that at least a portion of these people are using these newly found funds for real estate. Which should give all of us a bit of pause.
So this isn’t an isolated situation. But on the positive side, maybe I’ll ask him to buy me lunch this week. After all, he needs to spend that $3,000 soon so he can get his 50,000 frequent flyer miles! LOL.
[quote=FormerSanDiegan]I’m gonna take out a home equity loan so that I can increase my net worth.[/quote]
I know right?? LOL. If only life were so easy…..
September 23, 2013 @ 11:55 AM
Wow, over 35% on here who
Wow, over 35% on here who voted have >$1M excluding their primary resident. Seems like there are a lot of 1%er on here :-).
September 23, 2013 @ 12:28 PM
AN wrote:Wow, over 35% on
[quote=AN]Wow, over 35% on here who voted have >$1M excluding their primary resident. Seems like there are a lot of 1%er on here :-).[/quote]
What I want to know AN is who the over $200 million is. Because at least we know who to expect to buy lunch when we meet with them. LOL. (Maybe Mitt Romney is a Pigg too!).
Seriously though..I’m not too surprised. Focused forums like this with the sole purpose of buying real estate in an expensive city like San Diego are going to trend towards more affluent people.
I’m not too surprised at all. I figure many of the Piggs are millionaires or multi-millionaires.
I’ve been on other focused forums similar in nature and I’ve met up in person with several members of those types of forums and every single person I met up with was a millionaire or a multi-millionaire.
September 23, 2013 @ 12:48 PM
earlyretirement wrote:AN
[quote=earlyretirement][quote=AN]Wow, over 35% on here who voted have >$1M excluding their primary resident. Seems like there are a lot of 1%er on here :-).[/quote]
What I want to know AN is who the over $200 million is. Because at least we know who to expect to buy lunch when we meet with them. LOL. (Maybe Mitt Romney is a Pigg too!).
Seriously though..I’m not too surprised. Focused forums like this with the sole purpose of buying real estate in an expensive city like San Diego are going to trend towards more affluent people.
I’m not too surprised at all. I figure many of the Piggs are millionaires or multi-millionaires.
I’ve been on other focused forums similar in nature and I’ve met up in person with several members of those types of forums and every single person I met up with was a millionaire or a multi-millionaire.[/quote]
Damnit… I thought we were talking about pesos…Pesos….
September 23, 2013 @ 12:53 PM
AN wrote:Wow, over 35% on
[quote=AN]Wow, over 35% on here who voted have >$1M excluding their primary resident. Seems like there are a lot of 1%er on here :-).[/quote]
You clearly over estimate the ranking of $1M net worth in the current world. I believe you will need $20M to be top 1%. Therefore, we have only 1-2 people who surveyed qualify. If it is only 1 people, then than percentage is 1/40=2.5%, which is very reasonable based on the sample size.
September 23, 2013 @ 1:02 PM
carlsbadworker wrote:AN
[quote=carlsbadworker][quote=AN]Wow, over 35% on here who voted have >$1M excluding their primary resident. Seems like there are a lot of 1%er on here :-).[/quote]
You clearly over estimate the ranking of $1M net worth in the current world. I believe you will need $20M to be top 1%. Therefore, we have only 1-2 people who surveyed qualify. If it is only 1 people, then than percentage is 1/40=2.5%, which is very reasonable based on the sample size.[/quote]
http://www.joshuakennon.com/how-much-money-does-it-take-to-be-in-the-top-1-of-wealth-and-net-worth-in-the-united-states/
Between 13-19million gets you into the top 1% net worth, versus top 1% of income earners.
September 23, 2013 @ 1:58 PM
Here’s an academic article
Here’s an academic article (at least from an edu website. LOL) that breaks down networth sans primary residence.
http://www2.ucsc.edu/whorulesamerica/power/wealth.html
(See table one).
1.79M is the mean for the top 20% (sans house)
So 1/3 of us Piggs are in the top 20%… that’s a far cry from the top 1%…
So we skew 37% into the category that is 20% for the overall population.
(snapshot of the poll – 37% of pigs who answered are above $1M.)
September 23, 2013 @ 1:08 PM
carlsbadworker wrote:AN
[quote=carlsbadworker][quote=AN]Wow, over 35% on here who voted have >$1M excluding their primary resident. Seems like there are a lot of 1%er on here :-).[/quote]
You clearly over estimate the ranking of $1M net worth in the current world. I believe you will need $20M to be top 1%. Therefore, we have only 1-2 people who surveyed qualify. If it is only 1 people, then than percentage is 1/40=2.5%, which is very reasonable based on the sample size.[/quote]
Yeah. I agree. The sad truth is that $1 million net worth I don’t think in this day and age and with inflation is anything special too write home about. Don’t get me wrong. It’s a LOT of money but I really don’t think it’s anything special to retire on these days if you are retiring younger and with health care costs like they are.
If you have a guaranteed government pension or free medical care for life it’s one thing. But if not, well then it’s nothing to write home about and you damn well better be prepared and save up for a rainy day.
[quote=flu]
Damnit… I thought we were talking about pesos…Pesos….[/quote]
Hey flu! Good to see you on the boards. I haven’t seen you in a while. I hope all is well. How is everything?
Also, to AN I’d say that really I don’t think it’s too difficult just reading these posts on this board who likely would fall into the categories above. I consider myself a newbie on this website at 2.5 years. Some of you practically live on here for many years. I still don’t know all of the personalities of the board.
But it’s not difficult for me to pick up who has their stuff together and who umm….. don’t. I’ve been a part of message boards since the Internet began and I even moderate some larger message boards. And for me it’s not too difficult to imagine how someone is in real life.
As mentioned, I’ve met several Piggs in real life and they were EXACTLY how they come across on this board. Level headed, highly educated, professional, highly intelligent, polite, successful. (Granted I’m only meeting up with those that I think we’d have things in common with). But the people I’ve met came across EXACTLY how they come across on this board.
And I’ve even made some really close friendships with some Piggs and have become close family friends where their kids play with my kids, they have babysat my kids, our kids go to school together, etc.
September 23, 2013 @ 1:37 PM
earlyretirement
[quote=earlyretirement][quote=carlsbadworker][quote=AN]Wow, over 35% on here who voted have >$1M excluding their primary resident. Seems like there are a lot of 1%er on here :-).[/quote]
You clearly over estimate the ranking of $1M net worth in the current world. I believe you will need $20M to be top 1%. Therefore, we have only 1-2 people who surveyed qualify. If it is only 1 people, then than percentage is 1/40=2.5%, which is very reasonable based on the sample size.[/quote]
Yeah. I agree. The sad truth is that $1 million net worth I don’t think in this day and age and with inflation is anything special too write home about. Don’t get me wrong. It’s a LOT of money but I really don’t think it’s anything special to retire on these days if you are retiring younger and with health care costs like they are.
If you have a guaranteed government pension or free medical care for life it’s one thing. But if not, well then it’s nothing to write home about and you damn well better be prepared and save up for a rainy day.
[quote=flu]
Damnit… I thought we were talking about pesos…Pesos….[/quote]
Hey flu! Good to see you on the boards. I haven’t seen you in a while. I hope all is well. How is everything?
Also, to AN I’d say that really I don’t think it’s too difficult just reading these posts on this board who likely would fall into the categories above. I consider myself a newbie on this website at 2.5 years. Some of you practically live on here for many years. I still don’t know all of the personalities of the board.
But it’s not difficult for me to pick up who has their stuff together and who umm….. don’t. I’ve been a part of message boards since the Internet began and I even moderate some larger message boards. And for me it’s not too difficult to imagine how someone is in real life.
As mentioned, I’ve met several Piggs in real life and they were EXACTLY how they come across on this board. Level headed, highly educated, professional, highly intelligent, polite, successful. (Granted I’m only meeting up with those that I think we’d have things in common with). But the people I’ve met came across EXACTLY how they come across on this board.
And I’ve even made some really close friendships with some Piggs and have become close family friends where their kids play with my kids, they have babysat my kids, our kids go to school together, etc.[/quote]
Still a half-empty glass kinda of an FLU 🙂
September 23, 2013 @ 2:35 PM
flu wrote:
Still a half-empty
[quote=flu]
Still a half-empty glass kinda of an FLU :)[/quote]
Hey Flu! half-empty is better than empty I always say. 🙂
I read on my Iphone earlier about an AMEX related warranty you mentioned. I think you deleted/edited your post to remove it but I’ll still respond as I think it will help you. AMEX is GREAT!!!
Just enter your claim online or you can call.
https://www295.americanexpress.com/onlineclaim/
I’m not sure about the AMEX card you have but I have the Platinum and SPG and both are GREAT! AMEX is the only credit card that actually provides what they advertise. All the other cards pretty much suck.
But I’ve had an AMEX since I was 18 years old and they are really great. Probably at least once a year I’ve had to take advantage of it. They have always honored it and made it super easy.
And even losses are protected in the first 90 days of purchase. For example, my wife recently lost her Prada sunglasses on vacation. We just bought them about 3 months prior. $400 sunglasses. Well, we just submitted the claim online and they instantly within a week credited it back.
I’ve had other times for extended warranty and they made me whole quickly and easily. On the Platinum card I think that is the absolute BEST card to have. They cover you for so many things. Even if you buy something and the store won’t take it back, they will make you whole.
I’ve purchased expensive shoes that literally fell apart after a month and I tried to take them back and the store wouldn’t take them. This was a few years ago but I remember calling AMEX from the store and explaining the store wouldn’t take them back.
Keep in mind I’m NOT a complainer by nature. Very easy going guy but when $500 pair of shoes falls apart within a month I’m not going to sit by and not complain. The store wouldn’t take them back. So AMEX just told me to leave them there on the counter. The place wouldn’t give me anything so I left them there. AMEX refunded my $500 to my card.
Do yourself a favor and get one. They will always make you whole and protect you. Plus, $200 of it is rebated back each year. You can pick your favorite airline, buy $200 worth of gift certificates (that never expire) and also they will rebate your Global Entry/SENTRI (worth another $100). So net net the card only is like $150 a year or so.
But I get so many benefits with them it’s absolutely worth the annual fee. The UK Platinum card is even better if you can manage to get one which isn’t too tough. They have a US dollar card from the UK that most people could get. It’s $550/year but it’s really really really amazing!
It comes with medical coverage while you’re traveling. The benefits are too good to be true!
http://www.americanexpress.com/lacidc/iccsite/pdf/Platinum_Card_Summary_of_Travel_Insurance_Benefits.pdf
Check it out. I’ve literally been on vacation before where I’ve had emergencies (turned out to be nothing) but where both my kids had to go in an ambulance to an emergency room. Well, obviously I had medical coverage but AMEX picked up everything! You would be surprised how expensive it can get with City billing you for ambulance, hospital billing you for Emergency room visit, Doctor from ER room billing you. AMEX paid for everything.
Other times when I’ve got stuck in snow storms or weather related delays, AMEX (UK) has picked up my hotel, taxis, rental car, meals, etc. Other times when I traveled and my bags were delayed over 4 hours, AMEX allowed me to go out clothes, ($500 ) and supplies.
Sorry if this got off topic but really anyone that travels should get this UK Platinum AMEX card.
September 23, 2013 @ 5:43 PM
Thanks. I’ve decided to use
Thanks. I’ve decided to use as few terse words as possible these days… Trying to be a conservative with my words.. Oops did I say that?????
Heresy, damnit… Heresy….I said the C words… Better go back into hiding….Otherwise the inquisition panel might find me and subject me to higher rates of audits…..
Damnit…There I go again posting TMI….Just forget it…
if you want to know what I posted, just call up the NSA, I’m sure they have a cached copy of it somewhere…
Damnit.. FLU stop it….Shut the heck up….Shhh…
Yeah, my mac got toasted. After I cutup my hand working on my car. Oh well…I’m not worried about the fact that I didn’t backup my HD on my Mac yet, I’m sure the NSA can help there too…..
Damnit, there I go again…. .Stop it. Just stop…
September 23, 2013 @ 5:43 PM
flu wrote:Thanks. I’ve
[quote=flu]Thanks. I’ve decided to use as few terse words as possible these days… Trying to be a conservative with my words.. Oops did I say that?????
Heresy, damnit… Heresy….I said the C words… Better go back into hiding….Otherwise the inquisition panel might find me and subject me to higher rates of audits…..
Damnit…There I go again posting TMI….Just forget it…
if you want to know what I posted, just call up the NSA, I’m sure they have a cached copy of it somewhere…
Damnit.. FLU stop it….Shut the heck up….Shhh…[/quote]
LOL. You crack me up flu. Looking back, my post sounds crazy now that you deleted your original post. Oh well…. Is there any way to edit/delete posts after you post them and someone replies?
September 23, 2013 @ 6:04 PM
earlyretirement wrote:LOL.
[quote=earlyretirement]LOL. You crack me up flu. Looking back, my post sounds crazy now that you deleted your original post. Oh well…. Is there any way to edit/delete posts after you post them and someone replies?[/quote]
Nope, you’re screwed 🙂
September 23, 2013 @ 6:23 PM
earlyretirement wrote:
[quote=earlyretirement] Looking back, my post sounds crazy now that you deleted your original post. Oh well…. Is there any way to edit/delete posts after you post them and someone replies?[/quote]
The system disallows this… once something is replied to, you can’t change it. If this really bugs you I can override it with my admin privileges. Just let me know exactly what post to change, and what to change it to. You can PM me if you like.
September 23, 2013 @ 6:48 PM
Rich Toscano
[quote=Rich Toscano][quote=earlyretirement] Looking back, my post sounds crazy now that you deleted your original post. Oh well…. Is there any way to edit/delete posts after you post them and someone replies?[/quote]
The system disallows this… once something is replied to, you can’t change it. If this really bugs you I can override it with my admin privileges. Just let me know exactly what post to change, and what to change it to. You can PM me if you like.[/quote]
Ah, thanks Rich for taking the time to answer. Ah, no big deal. I was just responding to flu’s original post which I read on my iphone in the car. By the time I posted back I guess he deleted it but no biggie.
The information probably can help all the high rollers on your site. LOL. I guess all these Pigg’s should be carrying around an AMEX Platinum anyway…right?
No worries at all Rich.. I’m easy.
September 23, 2013 @ 6:57 PM
earlyretirement wrote:
Ah,
[quote=earlyretirement]
Ah, thanks Rich for taking the time to answer. Ah, no big deal. I was just responding to flu’s original post which I read on my iphone in the car. By the time I posted back I guess he deleted it but no biggie.
The information probably can help all the high rollers on your site. LOL. I guess all these Pigg’s should be carrying around an AMEX Platinum anyway…right?
No worries at all Rich.. I’m easy.[/quote]
Deletion won’t be necessary. Let me summarize what FLU said before he deleted it, so ER’s reply isn’t out of context.
1. He broke his Mac. The mac is half working.
2. He just ran out of his 1 year warranty.
Which means, he’s sHxt out of luck to get it repaired by the manufacturer’s warranty… since to replace the motherboard, it costs half the price of a new computer.
3. However, he mentioned that since he purchased the Mac with his Costco American Express card, per terms of the card agreement, it’s suppose to extend the manufacturer’s warranty on all purchases made with the card for exactly the same amount of the original’s manufacturer’s warranty.
4. FLU is going to attempt to contact the Apple store to get an estimate of the repair cost, and then send it to American Express to see if American Express will reimburse FLU for the cost of the repair or the full cost of the original computer, whichever is less (per terms of the cardholder’s agreement)…
For more details on what FLU said, please don’t hesitate to ask..
Sincerely,
NSA Administrator..
September 23, 2013 @ 7:49 PM
NSA Administrator
[quote=NSA Administrator][quote=earlyretirement]
Ah, thanks Rich for taking the time to answer. Ah, no big deal. I was just responding to flu’s original post which I read on my iphone in the car. By the time I posted back I guess he deleted it but no biggie.
The information probably can help all the high rollers on your site. LOL. I guess all these Pigg’s should be carrying around an AMEX Platinum anyway…right?
No worries at all Rich.. I’m easy.[/quote]
Deletion won’t be necessary. Let me summarize what FLU said before he deleted it, so ER’s reply isn’t out of context.
1. He broke his Mac. The mac is half working.
2. He just ran out of his 1 year warranty.
Which means, he’s sHxt out of luck to get it repaired by the manufacturer’s warranty… since to replace the motherboard, it costs half the price of a new computer.
3. However, he mentioned that since he purchased the Mac with his Costco American Express card, per terms of the card agreement, it’s suppose to extend the manufacturer’s warranty on all purchases made with the card for exactly the same amount of the original’s manufacturer’s warranty.
4. FLU is going to attempt to contact the Apple store to get an estimate of the repair cost, and then send it to American Express to see if American Express will reimburse FLU for the cost of the repair or the full cost of the original computer, whichever is less (per terms of the cardholder’s agreement)…
For more details on what FLU said, please don’t hesitate to ask..
Sincerely,
NSA Administrator..[/quote]
BINGO. Thanks NSA. Remind me to tell you guys the story about my NSA experience back in the early 2000’s. I had a “Snowden” type of nerdy guy that got drunk once and told me some crazy stuff! Spooky stuff! Worst thing is after he told me I called in a favor! (Yes, I’m bad)… I have the best stories…
I swear one of these days I’m going to finish writing my book….. My friends always tell me my life is crazy interesting…they wouldn’t believe half of it if they didn’t know me or were WITH me when I experienced it….. Spooky spooky stuff.
Yep. To recap, AMEX will pay for it. I’ve had all kinds of claims with them over the past many years and they have never declined a one of them. I do think they have a cap of something like $1,500 per item but I’ve had electronics that were like $1,000 that got stolen within 90 days of buying it and they covered it with no questions asked.
I have friends/clients that have totaled rental cars and AMEX paid for the entire thing. I’ve had damaged items on rental cars like broken windshield, dents (got hit while I was parked and the bastard didn’t leave a note). AMEX always paid for it.
Heck, I even have friends that will do idiotic claims like one guy bought an expensive Armani shirt and then he accidentally left his pen open in his shirt and it ran all over it. And they paid for it!
I never do any frivolous claims with AMEX but the ones that I’ve claimed they have always paid. Also, I travel about 100+ days each and every year (although those days are probably over now that both kids started school) and I can’t tell you how many thousands of dollars I’ve gotten with late baggage coverage or especially missed connections where I had to get a hotel.
Back when I was traveling a ton for work/business I’d secretly pray my bag would get delayed so I could go out and buy a new Hermes necktie…
AMEX even paid for me to stay in a 5 star hotel earlier this year when the blizzard hit Denver. I got snowed in and they paid for about $1,200 worth of rooms, rental car, and all the meals.
I can’t rave about them enough (The UK US dollar card). Plus if you travel enough, you don’t have to buy any medical coverage…they will take care of everything….
September 23, 2013 @ 2:53 PM
flu wrote:
Still a half-empty
[quote=flu]
Still a half-empty glass kinda of an FLU :)[/quote]
It’s neither half-empty nor half-full. The glass is simply twice as big as it should be.
September 23, 2013 @ 6:26 PM
all wrote:flu wrote:
Still a
[quote=all][quote=flu]
Still a half-empty glass kinda of an FLU :)[/quote]
It’s neither half-empty nor half-full. The glass is simply twice as big as it should be.[/quote]
f’ing engineers 🙂
September 23, 2013 @ 10:06 PM
earlyretirement wrote:njtosd
[quote=earlyretirement][quote=njtosd]earlyretirement – I doubt it was the investment account. My daughter got a pre-approved Am Ex Gold Card application when she was 7. The application was addressed with her nickname, which has an unusual spelling. The only things that had come addressed to her that way are over priced dresses from a European mail order company her grandmother likes. I sent an email to the General Counsel for AmEx about it – and was surprised when I got a response. They buy addresses from all kinds of sources, and I don’t think the sources are picky about the names they include in the list.[/quote]
Hmm. Not sure my case is the same as your kid. I NEVER use my son’s full name on anything except this investment account and his US tax return. I don’t use his name or SSN for ANYTHING else nor would anyone even know he lived here (my house is owned under an LLC). So I’m not so sure it’s what you say although it sounds like your situation with your 7 year old was.
But yes, you mentioned, “they buy addresses from all kinds of sources”. That is precisely my point. I’m speculating that the bank that I use for his investment account must have sold his information or at the very least shared it for a fee to AMEX. There is NO other way that they would have his name or address. I don’t use his name on anything else for privacy reasons.
[/quote]
Why would they need a Social Security number? You realize “Pre approved” doesn’t actually mean they know anything about him/her, right? When you sign it (as you must have) you are applying for credit and stating that the information that is on the application is true. Your child probably received some sort of expensive gift at your address with his name as the recipient. This got him on a list of people who buy pricey things (even though s/he didn’t buy it). I think you are assuming a much greater level of knowledge on AmEx’s part than there actually is.
Hopefully you’ve registered privacy preferences with your bank that would prohibit them from selling information about your finances or your child’s, right?
September 23, 2013 @ 10:35 PM
njtosd wrote:
Why would they
[quote=njtosd]
Why would they need a Social Security number? You realize “Pre approved” doesn’t actually mean they know anything about him/her, right? When you sign it (as you must have) you are applying for credit and stating that the information that is on the application is true. Your child probably received some sort of expensive gift at your address with his name as the recipient. This got him on a list of people who buy pricey things (even though s/he didn’t buy it). I think you are assuming a much greater level of knowledge on AmEx’s part than there actually is.
Hopefully you’ve registered privacy preferences with your bank that would prohibit them from selling information about your finances or your child’s, right?[/quote]
njtosd,
To be clear, I’m not saying I know 100% I know what happened. Because the truth is I don’t. I’m just speculating and trying to track back on these things.
No, I didn’t know pre-approved meant they didn’t have details about him. But I thought that with these pre-approved offers you at least have to have a FICO score (which he does not).
I mean I get these pre-approved offers all the time but what I noticed back tracking is that if you look at your credit report you can see that these banks (especially AMEX) are pinging your credit report and checking it so they can see things like what other credit cards I have, what the credit limits are, etc. They are “soft inquiries” not hard inquires but check out your credit report and you can typically see these things.
Well, a 3 year old kid doesn’t have a FICO score. I didn’t sign the application. He did. For occupation I put “Student” which he is (in pre-school). It asked to check boxes if he has a checking/savings/investment accounts. So I checked the applicable boxes. For salary I put in how much he made last year in investment income and I specifically wrote in “Investment Income – Capital Gains”.
I’ll have to take a photo and block out his face and post it with him holding his 2 credit cards! I’ll wait for the Citibank card to come.
NO, he has NEVER received any gifts at the house. We’ve only lived here less than 3 years and as mentioned, I don’t use his name for ANYTHING except (a) his investment account and (b) his IRS tax returns. That’s it. I don’t use his name to send gifts, etc. If I order something for him I’ll use my name.
No, I don’t recall seeing anything about privacy preferences on his investment account. Nope. I didn’t check anything about privacy. I opened the account when we lived abroad so I wasn’t getting mail there. I just opened it online. I don’t recall any privacy preferences.
But no he didn’t get any “expensive gifts” here or his name wasn’t used for anything whatsoever. Just what I told you.
And let’s not forget the fact that under NO circumstances should a bank be giving credit to someone so young. I have no knowledge how or why a 3 year old is getting a pre-approved offers from credit cards/financial institutions. I have even less knowledge why they would grant the actual credit card.
But then again, I was scratching my head when I saw people getting no-doc mortgages back in the bubble years as well. Part of why I decided to post this. I’m really not assuming anything. I just go by facts and logic and trying to back track. That’s all.
September 24, 2013 @ 6:36 AM
FYI.
“Also, when a card
FYI.
“Also, when a card issuer makes a preapproval offer, says Papadimitriou, it is typically doing so on the basis of one credit report, so information held by other credit agencies may weigh against the applicant.”
http://www.marketwatch.com/story/just-for-you-a-so-so-offer-we-may-revoke-anyway-2013-05-07
“It works this way: After some market research, the bank discovers that you fit the general requirements for a particular type of credit account they are offering. It’s a sensible cost-cutting technique for issuers. By narrowing down their potential customer base to those who might be right for the card, they avoid wasting money sending letters to people who definitely do not fit their profile.”
http://www.creditcards.com/credit-card-news/erica-sandberg-preapproved-credit-card-contract-rejection-1377.php
Found this interesting too:
http://www.privacymatters.com/credit-information/pre-approved-credit-cards-offers.aspx
I find all of this pretty interesting. I didn’t know too much about all of these pre-approved offers but from reading a few links it still seems like the credit card companies are buying lists either from the 3 major credit bureaus or other financial institutions. Or maybe there is a “sharing” of data amongst banks?
I’m not sure.
Also, I went last night to look at ANYTHING that my son may be received at our address. I keep a separate file as I’m fairly organized and I think I figured out how he got the Citibank Pre-approved offer. Actually I had to use his name and address to get his American Airlines frequent flyer card. Since we travel so much my son made Platinum on American Airlines so that must be how he got targeted for that credit card since American Airlines and Citibank work together on that card as partners. So that explains that.
Still not sure on the AMEX thingy. And even with these pre-approval offers yes I understand that they aren’t guaranteed but from everything I’m reading, the credit card companies still need to do a credit check and not sure how a 3 year old has a FICO score. He didn’t have one before. He might have one now that he has 2 credit cards. LOL. But he didn’t have one before.
All really interesting to me. I wonder if this type of thing is mainstream?
I guess it’s happened to other people with 3 year old’s. I just found this story.
http://money.cnn.com/2011/01/13/pf/credit_cards_for_kids/index.htm?iid=HLM
September 24, 2013 @ 9:23 AM
ER,
did you check your 3 year
ER,
did you check your 3 year old’s credit history? You might find some soft inquiries with one of the agencies – banks usually do those before they start sending you pre-qualified offers.
September 24, 2013 @ 9:31 AM
all wrote:ER,
did you check
[quote=all]ER,
did you check your 3 year old’s credit history? You might find some soft inquiries with one of the agencies – banks usually do those before they start sending you pre-qualified offers.[/quote]
I tried getting the free annual credit report allowed by law. They told me they couldn’t as he didn’t yet have a credit history. They said there was nothing to get. But I will check after he gets the Citibank card. I’m sure after that he will have one and I will post back here what it says.
September 23, 2013 @ 8:13 PM
This is a good poll–thanks
This is a good poll–thanks to AN for setting it up.
IMO, the true value of a high net worth is, not just the lifestyle you can create for yourself and your family in the present, but, more importantly, it’s being able to pass the wealth along to your heirs, and, on and on. It’s a way of making life on earth more comfortable for those you love.
Even though we’re very grateful for what we have, we realize we are merely passing through this world, and keep it all in perspective. We really have our sights set on our eternal destination, which, to us, is far more important.
September 23, 2013 @ 8:45 PM
flyer wrote:This is a good
[quote=flyer]This is a good poll–thanks to AN for setting it up.
IMO, the true value of a high net worth is, not just the lifestyle you can create for yourself and your family in the present, but, more importantly, it’s being able to pass the wealth along to your heirs, and, on and on. It’s a way of making life on earth more comfortable for those you love.
Even though we’re very grateful for what we have, we realize we are merely passing through this world, and keep it all in perspective. We really have our sights set on our eternal destination, which, to us, is far more important.[/quote]
Actually flyer this is probably the one time I disagree with you. Personally I don’t feel the need to pass on any wealth to my heirs. I mean they will end up getting significant real estate assets probably but I don’t feel any need or desire to give them vast amounts of wealth.
And in fact, if I saw they were deadbeats, trying to coast through life because they knew they were getting assets then I’d probably make it clear that they definitely weren’t getting any assets.
The only thing I think I owe them is a great college education and all the love, support and care while they are growing up. Including graduate or medical school, etc. But I disagree with wealthy people that feel the need to pass on large sums of money or assets to their kids.
I’ve read from others on the board in the past that also felt the need to pass on assets to their kids or grand kids but I don’t think that is necessary.
I put myself through college. I graduated with $100,000+ in student loans. I figure if I can give them a head start on life with NO debt that is a huge gift.
I do agree it’s nice for those that do want to make life “more comfortable” for those they love but I can tell you I know a LOT of people whose families and kids are dead weight and really coasting through life waiting for their parents to die. (Figuratively speaking).
My hope is that my kids are more successful than I am/was on their own merits. And by making it so they never have to worry about paying for their college tuition they can get a start on life. Also, even if they want a worthless degree, I’ll really push them to get another degree in a useful field.
I can’t tell you how many people I know that let their kids do what they wanted. They paid upwards of $200,000 for a worthless degree in History, Arts, Communications or some other worthless degree.
I’m absolutely not saying I’m right and you’re wrong because it’s just one of those totally subjective things in life. Neither of us is right or wrong. Just different philosophies.
But no way I feel the need to pass on any wealth or assets to my kids. I’m hoping that I can hit them up for some spare change when I’m older! LOL.
September 23, 2013 @ 9:15 PM
i plan to leave nothing but
i plan to leave nothing but some very strange memories.
September 23, 2013 @ 9:22 PM
earlyretirement wrote:flyer
[quote=earlyretirement][quote=flyer]This is a good poll–thanks to AN for setting it up.
IMO, the true value of a high net worth is, not just the lifestyle you can create for yourself and your family in the present, but, more importantly, it’s being able to pass the wealth along to your heirs, and, on and on. It’s a way of making life on earth more comfortable for those you love.
Even though we’re very grateful for what we have, we realize we are merely passing through this world, and keep it all in perspective. We really have our sights set on our eternal destination, which, to us, is far more important.[/quote]
Actually flyer this is probably the one time I disagree with you. Personally I don’t feel the need to pass on any wealth to my heirs. I mean they will end up getting significant real estate assets probably but I don’t feel any need or desire to give them vast amounts of wealth.
And in fact, if I saw they were deadbeats, trying to coast through life because they knew they were getting assets then I’d probably make it clear that they definitely weren’t getting any assets.
The only thing I think I owe them is a great college education and all the love, support and care while they are growing up. Including graduate or medical school, etc. But I disagree with wealthy people that feel the need to pass on large sums of money or assets to their kids.
I’ve read from others on the board in the past that also felt the need to pass on assets to their kids or grand kids but I don’t think that is necessary.
I put myself through college. I graduated with $100,000+ in student loans. I figure if I can give them a head start on life with NO debt that is a huge gift.
I do agree it’s nice for those that do want to make life “more comfortable” for those they love but I can tell you I know a LOT of people whose families and kids are dead weight and really coasting through life waiting for their parents to die. (Figuratively speaking).
My hope is that my kids are more successful than I am/was on their own merits. And by making it so they never have to worry about paying for their college tuition they can get a start on life. Also, even if they want a worthless degree, I’ll really push them to get another degree in a useful field.
I can’t tell you how many people I know that let their kids do what they wanted. They paid upwards of $200,000 for a worthless degree in History, Arts, Communications or some other worthless degree.
I’m absolutely not saying I’m right and you’re wrong because it’s just one of those totally subjective things in life. Neither of us is right or wrong. Just different philosophies.
But no way I feel the need to pass on any wealth or assets to my kids. I’m hoping that I can hit them up for some spare change when I’m older! LOL.[/quote]
ER–Always value your thoughts, and enjoy all of your posts, and I completely understand your thinking. I wouldn’t want to see “deadbeats” waiting around for an inheritance either.
We’ve seen exactly what you’re talking about, and, even worse, with people who really have no significant net worth. Their kids seem to have an “entitlement” attitude, but little else.
They don’t seem to realize Mom and Dad don’t actually have 7 figures stashed away for them, and they don’t seem to have the ability to create the life of their dreams by getting great jobs, or the ability to buy a home of their own–at least not in CA. IMO, that’s the worst case scenario for all concerned.
Just to clarify. I certainly don’t feel I “owe” my kids my assets, and all of them are already extremely successful in their own right. I’m extremely proud of them.
However, I do want to leave my assets to family members, to, conceivably be passed down to future generations, versus any other path. In that way, I’ll feel like what we accomplished during our time on earth had some real long-term meaning.
September 23, 2013 @ 9:31 PM
flyer wrote:ER–Always value
[quote=flyer]ER–Always value your thoughts, and enjoy all of your posts, and I completely understand your thinking. I wouldn’t want to see “deadbeats” waiting around for an inheritance either.
We’ve seen exactly what you’re talking about, and, even worse, with people who really have no significant net worth. Their kids seem to have an “entitlement” attitude, but little else.
They don’t seem to realize Mom and Dad don’t actually have 7 figures stashed away for them, and they don’t seem to have the ability to create the life of their dreams by getting great jobs, or the ability to buy a home of their own–at least not in CA. IMO, that’s the worst case scenario for all concerned.
Just to clarify. I certainly don’t feel I “owe” my kids my assets, and all of them are already extremely successful in their own right. I’m extremely proud of them.
However, I do want to leave my assets to family members, to, conceivably be passed down to future generations, versus any other path. In that way, I’ll feel like what we accomplished during our time on earth had some real long-term meaning.[/quote]I totally agree with you flyer. One thing I’ve noticed in life is, it takes many generations to build a dynasty (think Rockefeller, Kennedy, etc). So, unless you were lucky w/ the gene lottery and hit it big in your life time, it probably will take many generation to make it big. Just because you pass on your wealth does not discount parenting and prevent your kids from being dead beats. There’s no right or wrong answer here, but we all view inheritance differently. People like Bill Gates and Buffett will give most of their wealth away, while the original Rockefeller/Kennedy who made it big kept it in the family and built a dynasty. Different stroke for different folks.
Also, just because you have wealth doesn’t mean you have to flaunt it either. After all, Warren Buffett drives a Camry for many many years, even when he’s a Billionaire. If you live humbly and teach your kids the power of money and humility, then they might be able to do a lot with that money that you yourself were not able to think of. Like the ability to invest it successfully and take the profit and give it to charity. If you squander it all away, there will be no lasting impression. I want to be another rung in the ladder that build my family’s legacy.
September 23, 2013 @ 10:05 PM
AN wrote:I totally agree with
[quote=AN]I totally agree with you flyer. One thing I’ve noticed in life is, it takes many generations to build a dynasty (think Rockefeller, Kennedy, etc). So, unless you were lucky w/ the gene lottery and hit it big in your life time, it probably will take many generation to make it big. Just because you pass on your wealth does not discount parenting and prevent your kids from being dead beats. There’s no right or wrong answer here, but we all view inheritance differently. People like Bill Gates and Buffett will give most of their wealth away, while the original Rockefeller/Kennedy who made it big kept it in the family and built a dynasty. Different stroke for different folks.
Also, just because you have wealth doesn’t mean you have to flaunt it either. After all, Warren Buffett drives a Camry for many many years, even when he’s a Billionaire. If you live humbly and teach your kids the power of money and humility, then they might be able to do a lot with that money that you yourself were not able to think of. Like the ability to invest it successfully and take the profit and give it to charity. If you squander it all away, there will be no lasting impression. I want to be another rung in the ladder that build my family’s legacy.[/quote]
Absolutely AN you came to mind when I read flyer’s post as I recalled you wrote this before.
You nailed it there is no right or wrong… Just personal philosophies and subjective opinions. I actually totally respect you and flyer for thinking the way you do.
I actually think it’s amazing. But for me, I just know 100% if I was in a situation where I knew my family was affluent then I probably wouldn’t have tried so hard. Struggled and worked so hard to pay off my student loan debt and strive for success.
It really shaped who I am today by going through that difficult time. And the truth is I wouldn’t change my life for a second. I wouldn’t have met my wife, I wouldn’t have had my kids. And a part of me thinks that is important in life to strive for that success which I think many times isn’t there when the wealth is just passed down from generation to generation.
I have other clients like you where they feel this strong urge to save for their future generations. They bust their asses but they aren’t really enjoying life if you know what I mean. I mean, what’s the point of busting your ass to provide for future generations if you can’t live and enjoy it?
I’m not saying this is your situation but I have many clients where they work 120 hour work weeks (I used to be one of these poor bastards..ha ha!). But they worry about everything. They might be worth $50 million but they might stress over spending $200 more for the 64 GB Ipad vs. a 32 GB. LOL. Just doesn’t make sense to me.
They don’t go anywhere fun. They don’t do anything fun with their family. They don’t travel. In short, they don’t really enjoy life. Will they pass on a fortune to their future generations? Sure. But then again, not sure that should be the priority.
Life is short. I’ve seen friends that were worth a fortune then died of a heart attack at 55. They wasted their lives working or being away from family when they were already worth tens of millions of dollars.
I’d rather experience life with my kids in MY lifetime. The memories and the social and cultural benefits for my kids is amazing. We lived in Paris for a month last summer, we stayed a month in the French Riviera… traveled a month in Rome, Amsterdam, Belgium. I mean I’d rather do stuff like this vs. worry about providing for my future generations.
September 23, 2013 @ 10:12 PM
flyer wrote:
ER–Always value
[quote=flyer]
ER–Always value your thoughts, and enjoy all of your posts, and I completely understand your thinking. I wouldn’t want to see “deadbeats” waiting around for an inheritance either.
We’ve seen exactly what you’re talking about, and, even worse, with people who really have no significant net worth. Their kids seem to have an “entitlement” attitude, but little else.
They don’t seem to realize Mom and Dad don’t actually have 7 figures stashed away for them, and they don’t seem to have the ability to create the life of their dreams by getting great jobs, or the ability to buy a home of their own–at least not in CA. IMO, that’s the worst case scenario for all concerned.
Just to clarify. I certainly don’t feel I “owe” my kids my assets, and all of them are already extremely successful in their own right. I’m extremely proud of them.
However, I do want to leave my assets to family members, to, conceivably be passed down to future generations, versus any other path. In that way, I’ll feel like what we accomplished during our time on earth had some real long-term meaning.[/quote]
Hey flyer!
Yeah, maybe I’m a bit jaded because I see it more than the typical person. You see, the vast majority of my clients are high net worth or ultra high net worth individuals/families.
I see it over and over and over this entitlement issue/problem that you speak of. It’s really rampant amongst the high net worth crowd. I’m sure there are many people where their kids don’t have this problem and to be sure, I have many clients with successful kids in their own right.
But it’s mostly because their parents are the type of people to really push them and make them reach for their full potential. And make it clear to them that they might or might not get assets so it would behoove them to be successful in their own right.
YES, you nailed it. I’ve seen people where their kids have this entitlement issue where their parents really don’t have two nickels to rub together. The problem in these cases that I’ve seen is the parents project this lifestyle and image that isn’t reality. They live in a nice house (totally leveraged with 30 year mortgage that they might have refinanced on a few times), they drive high end luxury cars (on leases), they take fancy trips around the world (funded by credit cards), and they don’t have fully funded retirement plans to bank on.
In short it’s all a pipe dream! But they don’t dare tell anyone that they aren’t successful or wealthy. I also see that all the time! And the worst thing is the kids think this image of their parents is true!
I do agree with you that when the kids are successful in their own right and are “good kids” then absolutely there is nothing wrong with passing on assets to them. I think much of the responsibility for the kids going down the right “path” in life and reaching for their full potential lies on the parents and their attitude raising their kids.
My kids don’t want for anything. I know I spoil them with material things. But more important to me I spoil them with love and attention. I sold one of my companies so I could spend more time with them.
I drop them off at school, pick them up often, take them to extracurricular activities with my wife, and volunteer at their school. And you can bet as they grow up I’ll be the one pushing them to strive for their full potential.
I do agree with you flyer that it would be nice to pass on assets to “blood” vs. non-profit organizations but I totally admire guys that make it clear to their families that they better make something out of their lives or they aren’t getting anything.
Maybe my attitude will change as I get older and I have grandkids. But I’m not sure my thinking will change that I don’t have any desire to worry about accomplishing something in life by making future generations wealthy.
The thing I plan on doing with future grandkids is the same thing I do with my kids. My wife and I “gift” them tax free the maximum $26,000 per year per child ($28,000 starting this year). Then I invest it in an investment account for them. Fortunately their returns are pretty darn good. Pops isn’t too bad of an investor. LOL. Although we probably will start contributing less starting next year. Not sure.. just depends on how much I work.
I figure that will more than pay for college, they will get a new car when they are in high school if they get straight A’s (ok..do well…) and should be enough for a small property that I’d encourage them to buy in the college town they are going to college in. Then they can take on a roommate if they want and they can keep that cash themselves for spending money.
When they graduate they can keep it as a rental property or they can sell it and use the proceeds for a down payment to purchase a property where they will live. I figure that is a good enough start to life.
But really that’s all I plan to do for my grand kids. Make a spreadsheet. The power of compound interest is TREMENDOUS. The way I figure it, my kids are going to Harvard Medical School! LOL. So they will need every bit of what they have.
The thing that sucks is having to fill out a tax return for each of them each year as they make good returns each year with short-term capital gains.
But flyer, I can tell what kind of guy you are. You’re one of those great guys where your character and intelligence shines through with all of your posts. Absolutely I can tell you’re one of the “good guys” and your kids sound awesome!
September 24, 2013 @ 8:20 AM
flyer wrote:This is a good
[quote=flyer]This is a good poll–thanks to AN for setting it up.
IMO, the true value of a high net worth is, not just the lifestyle you can create for yourself and your family in the present, but, more importantly, it’s being able to pass the wealth along to your heirs, and, on and on. It’s a way of making life on earth more comfortable for those you love.
Even though we’re very grateful for what we have, we realize we are merely passing through this world, and keep it all in perspective. We really have our sights set on our eternal destination, which, to us, is far more important.[/quote]
I’m a bit more on the side of ER on this one.
My kids know my plan is to be broke at age 100. If I die before that, they get some cash… No plans to sell the house – but that’s plan B if we need the cash to buy into a long term care continuing care community. So my kids can split the real estate if that doesn’t happen.
They know we plan to pay for the (public schools) college education. Same deal I was given – to be able to graduate with a degree that makes you employable, AND to have no student loans… that’s a big inheritance in/of itself.
But my financial gains, increasing nest egg aren’t to pass it on to the kids. I’m selfish… It’s so that I can retire (frugally) and spend more time with them.
September 24, 2013 @ 9:35 AM
UCGal wrote:
I’m a bit more
[quote=UCGal]
I’m a bit more on the side of ER on this one.
My kids know my plan is to be broke at age 100. If I die before that, they get some cash… No plans to sell the house – but that’s plan B if we need the cash to buy into a long term care continuing care community. So my kids can split the real estate if that doesn’t happen.
They know we plan to pay for the (public schools) college education. Same deal I was given – to be able to graduate with a degree that makes you employable, AND to have no student loans… that’s a big inheritance in/of itself.
But my financial gains, increasing nest egg aren’t to pass it on to the kids. I’m selfish… It’s so that I can retire (frugally) and spend more time with them.[/quote]
When someone passes away the kids are usually middle-aged with established lifestyle and habits. It is usually not the children but the grandchildren that are most affected by the inheritance. The same grandchildren that roll their eyes when they are forced to spend time with the grandparents. Whenever I hear stories about estate and inheritance I think of my childhood friends talking about money and goods they expect to inherit from their aging grandparents.
You are saving so your grandchildren and their insignificant and unappreciative others can spend a week on Bora Bora.
September 24, 2013 @ 10:59 AM
all wrote:UCGal wrote:
I’m a
[quote=all][quote=UCGal]
I’m a bit more on the side of ER on this one.
My kids know my plan is to be broke at age 100. If I die before that, they get some cash… No plans to sell the house – but that’s plan B if we need the cash to buy into a long term care continuing care community. So my kids can split the real estate if that doesn’t happen.
They know we plan to pay for the (public schools) college education. Same deal I was given – to be able to graduate with a degree that makes you employable, AND to have no student loans… that’s a big inheritance in/of itself.
But my financial gains, increasing nest egg aren’t to pass it on to the kids. I’m selfish… It’s so that I can retire (frugally) and spend more time with them.[/quote]
When someone passes away the kids are usually middle-aged with established lifestyle and habits. It is usually not the children but the grandchildren that are most affected by the inheritance. The same grandchildren that roll their eyes when they are forced to spend time with the grandparents. Whenever I hear stories about estate and inheritance I think of my childhood friends talking about money and goods they expect to inherit from their aging grandparents.
You are saving so your grandchildren and their insignificant and unappreciative others can spend a week on Bora Bora.[/quote]
Exactly! That’s how I feel. Rather than worrying about if my great great grand kids will be going to Bora Bora I’d rather go! LOL. I just got back from Bora Bora a few weeks ago. Holy crap is it amazing!! It blew away my highest expectations. After that trip my wife and I committed to going back every 5 years now to celebrate our anniversaries.
I could care less if the future Earl Lee’s go to Bora Bora. ;P
September 24, 2013 @ 3:52 PM
Agree that if my wife and I
Agree that if my wife and I were having to give anything up in our lifetimes, in order for our kids and/or grandchildren to enjoy a large inheritances, I might think differently, but that’s not our situation.
We’ve always done everything we’ve wanted to do–great homes, travel, toys–you name it. We’ll continue to do so for the balance of our lives, and, thankfully, there should still be plenty left over for the family. Besides, I owe our kids big-time for the great film investment deals they’ve included us in!
BTW–love Bora Bora!
Edit–I also believe it’s better to “live it up” while you’re younger, if you can. That’s why we started in our 30’s. Lots of people wait until they are older, or “retired,” and their finances, health, or other issues prevent them from enjoying their later years.
September 24, 2013 @ 3:57 PM
First off, not everyone likes
First off, not everyone likes to travel. Some people I know LOVES working. They wouldn’t know what to do when they have a day off. They feel more happy working than traveling. So, just because they’re working hard doesn’t mean they’re not happy.
With that said, I love Bora Bora too. In some way, I like Moorea more. I didn’t mean to say you should sacrifice your life if it makes you unhappy. I also know people who find great joy in knowing that they’re setting up their kids/grand kids for success by offering them something they never had. That makes them more happy than a trip to Bora Bora. So, as long as you’re happy living your life and have no regrets, I don’t see anything wrong w/ sacrificing your life for future generations.
September 24, 2013 @ 4:18 PM
Exactly, AN. I agree
Exactly, AN. I agree everyone should do whatever they feel they wish to
do–whatever is most fulfilling to them, personally.
In my case, it’s a combination of being actively engaged in interesting and lucrative projects, enjoying life, as well as passing wealth along to future generations–and I’m happy with those decisions.
It’s truly a case of, “to each his/her own.” There is no “right” or “wrong.”
September 24, 2013 @ 5:09 PM
AN wrote:First off, not
[quote=AN]First off, not everyone likes to travel. Some people I know LOVES working. They wouldn’t know what to do when they have a day off. They feel more happy working than traveling. So, just because they’re working hard doesn’t mean they’re not happy.
With that said, I love Bora Bora too. In some way, I like Moorea more. I didn’t mean to say you should sacrifice your life if it makes you unhappy. I also know people who find great joy in knowing that they’re setting up their kids/grand kids for success by offering them something they never had. That makes them more happy than a trip to Bora Bora. So, as long as you’re happy living your life and have no regrets, I don’t see anything wrong w/ sacrificing your life for future generations.[/quote]
[quote=flyer]Agree that if my wife and I were having to give anything up in our lifetimes, in order for our kids and/or grandchildren to enjoy a large inheritances, I might think differently, but that’s not our situation.
We’ve always done everything we’ve wanted to do–great homes, travel, toys–you name it. We’ll continue to do so for the balance of our lives, and, thankfully, there should still be plenty left over for the family. Besides, I owe our kids big-time for the great film investment deals they’ve included us in!
BTW–love Bora Bora!
Edit–I also believe it’s better to “live it up” while you’re younger, if you can. That’s why we started in our 30’s. Lots of people wait until they are older, or “retired,” and their finances, health, or other issues prevent them from enjoying their later years.[/quote]
Ahhhh. Ok..got it. Then if this is the case of what you gentlemen are speaking of then I agree it would be nice if you ARE doing all of these things and still comfortably have enough left over to pass it on.
I got the wrong impression that you felt some sense of urgency or need to sacrifice to provide it for future generations. Reading your follow up posts is a different perspective of my mistaken impressions of what you were referring to.
Message boards and posts are often times difficult to totally decipher so I think it’s AWESOME that you are living life at the level you want to do and still can build up for your future generations.
Absolutely AN you nailed it with, “as long as you’re happy living your life and have no regrets, I don’t see anything wrong w/ sacrificing your life for future generations.”. I just read before in one of your posts “sacrificing your life” and I took it the wrong way. Your follow up posts gave me a better understanding of what you are talking about.
flyer, GREAT! Yes, if you have all of those things already then totally agree with you. You aren’t really sacrificing anything or lifestyle to pass it on. GREAT!
I still don’t see a need to pass on large sums of money to future generations. That’s just me though. I do own a decent real estate portfolio (several properties in several countries) and we travel and stay in them throughout the year. And when we go I make the kids help clean the place, they go around and watch me fix stuff and hopefully they understand that these properties we’d really prefer that they never sell them.
So yeah, I guess in a way I’m like you guys where I will provide a legacy and inheritance with real estate. I guess they could always liquidate them after I die but hopefully the kids realize it will always be a source of cash flow forever. My favorite term to hold real estate is forever. And I’m confident I’ll instill in them this love of real estate rentals and cash flow.
Still, I don’t feel any need to pass it on but I understand now more of what you guys mean. Yes, if this is what you are referring to then I agree with you and fully understand what you mean.
AN, also you are correct that some people LOVE to work. I’m one of those types. I can’t see myself not staying busy and active and consulting and staying involved with real estate, serve on several Board of Director positions, my community and various causes that are dear to me.
Even today I get unsolicited offers for CEO positions that are GREAT opportunities that pay big $$$$ but not sure I want to ever work those kinds of hours again.
Before, it wasn’t healthy how much I was working. Literally 120+ hour weeks for years on end. I often wonder how I never had a heart attack. Extremely high stress type stuff. Having kids slowed me WAY down. But I still like to stay active.
I have several friends/clients that actually retired early and it literally killed them (they had a heart attack on the beach). It was more stress for them to be sitting on a beach with their wife doing NOTHING vs. doing high stress deals in the middle of some oil field in Yemen. There needs to be some balance.
Also, I don’t want to give the wrong idea that it’s ok to just spend spend spend and not think about anything with the future/kids, etc. Since I had kids I really haven’t bought anything for myself. I always felt guilty thinking, “this could buy X pairs of shoes/clothes, etc”. Or I could buy another apartment.
But here lately I figure that there also needs to be a balance and you have to treat yourself too. By FAR our largest expense each year is traveling. We spend an obscene amount of money traveling but I look at it as an education for the kids to see the world and they LOVE it.
It’s just recently that I started spoiling myself (new Model S and ordered the Model X..ha ha). I figure you have to treat yourself as well and if you can afford it why not?
And flyer I TOTALLY agree with you about “living it up when you’re younger”. I can’t agree enough…. I’ve seen too many people wait to “live it up” until they are older and by then they are either too tired, or too many medical issues.
September 24, 2013 @ 10:57 AM
UCGal wrote:flyer wrote:This
[quote=UCGal][quote=flyer]This is a good poll–thanks to AN for setting it up.
IMO, the true value of a high net worth is, not just the lifestyle you can create for yourself and your family in the present, but, more importantly, it’s being able to pass the wealth along to your heirs, and, on and on. It’s a way of making life on earth more comfortable for those you love.
Even though we’re very grateful for what we have, we realize we are merely passing through this world, and keep it all in perspective. We really have our sights set on our eternal destination, which, to us, is far more important.[/quote]
I’m a bit more on the side of ER on this one.
My kids know my plan is to be broke at age 100. If I die before that, they get some cash… No plans to sell the house – but that’s plan B if we need the cash to buy into a long term care continuing care community. So my kids can split the real estate if that doesn’t happen.
They know we plan to pay for the (public schools) college education. Same deal I was given – to be able to graduate with a degree that makes you employable, AND to have no student loans… that’s a big inheritance in/of itself.
But my financial gains, increasing nest egg aren’t to pass it on to the kids. I’m selfish… It’s so that I can retire (frugally) and spend more time with them.[/quote]
Yep. I’m living to 150. Don’t you know with advances in science we will all live to be 150? Ha ha. Seriously though I worked pretty darn hard all my life and maybe it could be considered selfish but I plan on enjoying my retirement. I plan to continue to travel around the world, buy nice stuff that makes me happy in MY lifetime.
As long as my kids college is paid for I don’t really care about “future generations”. (And again, if/when I have grandkids I’ll do the same deal setting aside enough money to pay for their college ONLY in the event that my kids somehow couldn’t afford to pay for it).
My attitude is they can make their money working hard like I did. I would be content if by the time my wife and I pass if we still had a bit of money banked but plan to enjoy life as much as possible in our lifetime. I certainly wouldn’t want to die with a significant portion of my savings left unspent. If so, in my eyes it meant I didn’t enjoy life enough!