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Clothing and the rich - Page 4

post #46 of 157
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(AlanC @ Feb. 03 2005,07:35) The 70 year average rate of return in the stock market is 10.7%.
Of course, past performance is no guarantee of future returns... (And there are many economists I respect who believe that the mid-term outlook for the market is less positive than the recent past.)
And you have to subtract for taxes, investment management fees, and transaction fees.
post #47 of 157
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I am sure many of you have seen or heard of this, but for sage investment advice related to the ideas expressed in this thread, try "Rich Dad Poor Dad."
For an analysis of Rich Dad, Poor Dad check this link out... http://www.johntreed.com/Kiyosaki.html
post #48 of 157
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Someone once told me that the posher the family (in England) the crappier the television, both in quality and location. They say the inverse applies as well. From limited exposure--i.e. a few posh country house--it seems to hold water.
This makes absolute sense. Television is largely not a patrician medium. (This is said by Paul Fussell as well). Interest in gadgetry, electronics, "the latest X" is very middle-class. There's nothing the middle class in Asia change more often than their cellphones.
post #49 of 157
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There's nothing the middle class in Asia change more often than their cellphones.
Underwear?
post #50 of 157
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(johnw86 @ Feb. 03 2005,10:09)
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Originally Posted by AlanC,Feb. 03 2005,07:35
The 70 year average rate of return in the stock market is 10.7%.
Of course, past performance is no guarantee of future returns...   (And there are many economists I respect who believe that the mid-term outlook for the market is less positive than the recent past.)
And you have to subtract for taxes, investment management fees, and transaction fees.
Not a substantial factor if you contribute to an S&P Index Fund in a Roth IRA.
post #51 of 157
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(chorse123 @ Feb. 03 2005,07:22) Someone once told me that the posher the family (in England) the crappier the television, both in quality and location. They say the inverse applies as well. From limited exposure--i.e. a few posh country house--it seems to hold water.
This makes absolute sense. Television is largely not a patrician medium. (This is said by Paul Fussell as well). Interest in gadgetry, electronics, "the latest X" is very middle-class. There's nothing the middle class in Asia change more often than their cellphones.
Yes but the rich also change their phones ... not everyone has a Vertu.
post #52 of 157
Hey. This thread is getting interesting. Someone mentioned Roth IRAs. You are only allowed $2k in tax-free Roth contributions per year. Other tax-deferred IRAs are silly. It is not a tax-free investment. You are deferring your taxes, and will pay higher rates when you withdraw your capital (when you are retired... OUCH.). Tax-deferred IRAs are a financial spin on the roulette wheel, and a very poor strategy overall, IMHO. Better to put it somewhere with higher growth, and use your small business license to offset some of those capital gains (creative tax strategies... not sure I should list any in detail here). As to how I will make money on my car, the math is quite simple: The interest earned on the payments I make will exceed the depreciation on the value of the car, whether it is invested into funds or forex (I am doing 50% each, as the forex has much greater earning potential, and the funds are much lower risk). According to the average performance of my investments over the last 5 years - I should see approx. 8.7% annual growth on that capital over a 3 year term, and that is after taking the hit on depreciation (without depreciation, it's closer to 19%). If I were to keep it for 5 years, and took a 40% hit in depreciation, I would actually average about 9.1% annual growth on the investment. That is about the same growth I can expect with an index over that same period, yet it is backed with a usable durable good which can not lose more than the purchase value minus depreciation. I like to think of it as an extremely fun (and totally childish) stop-loss mechanism. Heh heh. Not sure how it works? I can post the raw equations for you if you'd like, and you can run those into your HP calculator and look at the graphs yourself. It is only the first two years where the capital is exposed to loss by depreciation of the durable good. It does, however, require paying for the car approximately twice, although capital is returned nicely, the upfront investment is quite large. As for those "millionaires" and their $200 suits... If you want to wear Walmart clothing and look like a sleezebag or a used-car dealer, go for it. I prefer that my clients see me as the epitome of SHARP. You do business with me, and you are doing business with a truly first-class organization in every regard. I want my clients to be so impressed when they meet me (with my appearance, my communication, my manners, etc) that they will feel the upmost confidence entrusting my firm with whatever needs they might have. I don't think twice about what our lunch will cost and I don't look at the bill, I just pay it, because that is merely a business expense, and it is proper ettiquette. Why should my attire, the first thing they notice, be any different? Just as I would NEVER consider meeting a client without brushing my teeth or shaving, I would NEVER show up in a cheap suit. And every real businessman knows that his clothing expenses are tax deductable, because they are a business expense. I showed a printout of the article to an associate at lunch today, and he got a laugh, too. He said something along the lines of, "I think that's how they do it out in the Midwest. That shit would never work in NY or LA, though. Especially on the East Coast. Nobody would take you seriously. A cheap suit... that's worse than ripping a huge fart at a business lunch." I don't know about that last line, but it's funny nonetheless, although somewhat crude. Overall, the point in the article was valid: "Live beneath your means, and invest aggressively". But it's so obvious and basic, it's not even worth mentioning. Why not say something a little less basic but more helpful to those just starting out, like "Always pre-plan your entry and exit, and NEVER trade without a stop", or describing some of the basics about using margin, or how to trade the ForEx. And, the author took it a little too far. Living beneath your means does not equate to being a cheapskate or wearing tacky cheap suits and second-hand clothing. I mean, get real. Take a walk down to the Financial District and see how many of those wealthy men you can find wearing cheap suits, and then compare that number to the well-dressed ones. You will find a very large differential here. And those boys don't even blink at a million bucks. It's nothing. $35m deals don't even make news on Wall Street. There are condos that sell for more than that on the Upper Eastside. Are these people not really wealthy because they're wearing a Kiton or Canali, or some bespoke Italian getup? If that's the case, half of the execs in America (and their attorneys) must be broke. A good suit is a business expense, period. And when I can afford one, you better believe I will be flying to either Milan or Manhattan (or possibly London) to pick up one of those snazzy $10k bespoke suits that are so gorgeous. And I will wear it every chance I get, and buy another to alternate when I can afford it. Heh heh. BTW - I like this forum. Some of you guys on here are pretty clever. This topic made for a fun lunchtime chat today, and my associate got a kick out of it too. Thanks. And sorry for the delayed reply, I had to wait until I got home from work.
post #53 of 157
I agree with the above post 100%. Doing business in NYC means looking sharp. No one would be taken seriously in a $300 suit. That shit just doesn't fly here.
post #54 of 157
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Someone mentioned Roth IRAs.  You are only allowed $2k in tax-free Roth contributions per year.
"In tax year 2005, you can make annual contributions to a Roth IRA of up to $4,000 or 100% of your earned income, whichever is less. An aggregate of $8,000 can generally be contributed per married couple ($4,000 per IRA) provided that either you or your spouse has earned income of at least that amount." First hit on my Google search. I understand sophisticates in NY & LA get a big chuckle over folks in flyover country, but you're simply not talking about the vast majority of Americans or millionaires. This may come as a shock, but the average American--nor the average millionaire--does not work on Wall Street.
post #55 of 157
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And every real businessman knows that his clothing expenses are tax deductable, because they are a business expense.
Whoa, back up. We've had this discussion on the forum before. Clothing outside of uniforms are not business expenses. Have you deducted suits before? How?
post #56 of 157
Thread Starter 
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Someone mentioned Roth IRAs.  You are only allowed $2k in tax-free Roth contributions per year.  Other tax-deferred IRAs are silly.  It is not a tax-free investment.  You are deferring your taxes, and will pay higher rates when you withdraw your capital (when you are retired... OUCH.).  Tax-deferred IRAs are a financial spin on the roulette wheel, and a very poor strategy overall, IMHO.
Yes, you still get taxed. However, you are deferring it to when you're not generating any more income, and so you end up getting taxed less. I'd like to see those calculations of yours, with regards to the car situation. I tried doing some calculations on my own, and I don't see how it was possible considering the precipitous deappreciation. linux_pro- if you don't mind, what exactly is your profession. I don't see how you could write off clothes as a business expense, unless perhaps you were a doctor who required the nurses to wear uniforms and thus could write off the dry cleaning of those nurses' uniforms. Otherwise, I wouldn't try to sneak this past the IRS. Its not worth it.
post #57 of 157
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Doing business in NYC means looking sharp. No one would be taken seriously in a $300 suit. That shit just doesn't fly here.
Totally agree with you Mike. However, despite what I've heard some New Yorkers say, not all commerce occurs in NYC. The vast majority of business in North America is done by medium to small sized firms. I've seen "city boys in fancy suits" literally laughed out of a room of rail-workers. And these "fancy boy" types getting screwed on a deal because they underestimated the business acumen of a man because he drove a 92' Buick to the meeting. It's all about context. A.
post #58 of 157
The type of men's clothing we discuss on this forum originated in the European courts, and I don't mean courts of law. It's never been worn in flyover country, nor can you buy it there. Will
post #59 of 157
Thread Starter 
Actually. most of these millionaires in the survey had their own business. Keep in mind, this book was published in 97, so the data about the price of the suits was probably from 95 or 96. So, we're talking about prices that are 10 years old. And, while it criticized those who spent excessive amounts of time trying to search for bargains, it didn't say anything about paying full retail either. Most likely, considering how frugal they are, these people waited for the year end sales, where some suits are 50% off. I think it raised an interesting point about how some hyper consumers justify their behavior because they spend excess amounts of time looking for deals. People post about how they found a great suit or tie at the thrift shops. However, these writers would question how much time, effort, and gas was used up doing this. In the end, would it have been better to have spent that time investing in your business or career? And, to be able to recognize these items in the thrift shop also requires a lot of time and study.
post #60 of 157
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I think it raised an interesting point about how some hyper consumers justify their behavior because they spend excess amounts of time looking for deals. People post about how they found a great suit or tie at the thrift shops. However, these writers would question how much time, effort, and gas was used up doing this. In the end, would it have been better to have spent that time investing in your business or career? And, to be able to recognize these items in the thrift shop also requires a lot of time and study.
I agree totally. For me it is a pastime, and it sometimes pays better than minimum wage. For others more serious about it, it can become worthwhile. The car equation is a strange one. It requires one to ignore the opportunity cost of spending a large amount of available cash (available to invest) on a quickly depreciating asset which brings minimal marginal return over a 92 Buick, oh who am I kidding, I dropped out of Econ.
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