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Clothing and the rich - Page 7

post #91 of 157
Quote:
Real money is not made by ignorant, back-woods, small-town cocky guys in $300 suits.  Period.  To make real money, you require a bit of capital, much more than could be easily obtained by the people you describe.  And to get that capital, all your ducks should be in the straightest, cleanest row possible, and being professional is a requirement, not an option.  Attempting to come off as clever, or acting in a conniving manner, will get you shut off from that capital so quickly, your only option at that point would be to sell your business to a larger firm, and guess who handles the backend of many of those transactions.  That's right... the very same guys you came to with your cocky attitude and the poorly-dressed attorney.  But this time, they know exactly what position you are in, how desparate you are, and will take full advantage (in a ruthless way) of the position you put yourself in by acting like a novice in earlier dealings. And, yes, most real business does happen in NYC.  At least, the business that matters.  When you start making real money, at some point you will have to go public, and when you do, guess where you will be headed to find your underwriters.  That's right... NYC, baby.
Let's try this again and actually look at the book in question. It's talking about the average millionaire, not the super-rich on Wall Street. Linux_pro, I understand you're discussing your experience with executives in major corporations. The point the book makes is that most millionaires are not in that group, and that it's a myth that they are. It focuses on individuals who have a net worth of $1-$10 million. It found most of them are older white guys who owned their own business and live a frugal lifestyle. That doesn't mean that the group you discuss doesn't exist, but the fact is that NYC is an anomaly, not the norm, as difficult as it is for folks to get their mind around that idea. Most Americans (aka, "ignorant, back-woods, small-town" types) are never going to play ball in your rarified Wall Street playground. Noting the habits of real people who in the span of one generation became millionaires is a rather sensible thing to do. Those habits include frugality on clothes purchases. That's a message that most Americans need to understand if they want to build wealth. Perspective, people, perspective. No one wants to take away your Kiton suits.
post #92 of 157
Quote:
Let's try this again and actually look at the book in question. It's talking about the average millionaire, not the super-rich on Wall Street. Linux_pro, I understand you're discussing your experience with executives in major corporations. The point the book makes is that most millionaires are not in that group, and that it's a myth that they are. It focuses on individuals who have a net worth of $1-$10 million. It found most of them are older white guys who owned their own business and live a frugal lifestyle. That doesn't mean that the group you discuss doesn't exist, but the fact is that NYC is an anomaly, not the norm, as difficult as it is for folks to get their mind around that idea. Most Americans (aka, "ignorant, back-woods, small-town" types) are never going to play ball in your rarified Wall Street playground. Noting the habits of real people who in the span of one generation became millionaires is a rather sensible thing to do. Those habits include frugality on clothes purchases. That's a message that most Americans need to understand if they want to build wealth. Perspective, people, perspective. No one wants to take away your Kiton suits.
LOL...that's what I was trying to say earlier, I guess I just didn't make it clear enough. It's all about the context. A.
post #93 of 157
Thread Starter 
Dakota Rube: I didn't mean to suggest that they're going to drag you to prison for making aggressive deductions. My point was that the potential fines, along with the interest, and headaches outweigh any potential savings. Was the $1200 fine just only for the TV incident, or was it for all the illegal deductions you made. I've heard that the IRS in the past few years has decided to crack down. linux: Its obvious that those people are making illegal deductions when they're writing off family dinners as business expenses. I'd also include the watches as an illegal deduction. Look at this way: if you do make all those type of deductions, what's the best thing that can happen and what's the worst that can happen? By the way, it doesn't matter what the cost of the suit is. Its all about the fit of it. A guy wearing a $300 suit that fits perfectly will look better than a guy wearing a $1500 suit that doesn't. The one thing I really disagreed with the book was it seemed to be discourage investing in housing. I always thought that housing was one of the best investments you could make, although I wouldn't buy a house now in what appears to be a housing bubble.
post #94 of 157
esq, I would argue that housing is still a good market to enter, if you can find the right property. Some areas in southern california are still good buys, as well as even some areas in NYC (brooklyn) and there are many good deals to be found in Arizona, Texas, Las Vegas etc. The best buys IMO are duplexs and condos, as they will be by far the easiest to rent out. The majority of my investments in the last 2-3 years have been in euro-denominated money markets, and real estate. I recently paid just over $1.1M for a 4 unit in long beach that gives me about a 15% ROI on my downpayment while paying my mortgage... Of course the well documented sharp rise in the Euro in addition to the relatively decent interest rates have yielded about a 15% annual return on the money markets as well. I haven't had more than token amounts in equities since 2000, but I've made a few plays here and there.
post #95 of 157
Currently, the greenback has made a slight retracement against the Euro... last I checked, the EUR/USD was fighting the 1.2920 support. If it breaks through, that pair should hit 1.2700 in no time. I'm not so sure that will happen, but it is very possible. If all those statements made these last few weeks by Bush and Snow about a total commitment to reducing the trade and budget deficits turn out to be valid, you will see some major selloffs of that pair, and the greenback should experience one hell of a good ride. The EU doesn't like the pair at 1.30, and there have been some strong statements lately about some behind-the-scenes maneuvering to get that pair back down to around 1.1000 - 1.2000, including reducing rates in the EU and of course, Greenspan's well-known recent policy of gradually increasing our own rate until it's back up around 6.00 (which will be sweet for those investing in real estate, it should pop some of the bubbles in areas like Seattle, which is currently highly overvalued). I've also heard a lot of talk lately that the central banks think the EUR/USD is way overbought, and the big players should start selling it in a pretty serious way soon, especially if it breaks that 1.2900 barrier. I'm standing aside until the pair breaks out of range and shows some kind of solid direction, which might take a few weeks to a month. Point being, I'd be hesitant putting my capital into euro MMA's at this point. The current word out now is to expect EUR to take a pretty serious slide, and the only thing stopping it is all the big boys' stops at 1.2900. The trends shown over the last few weeks seem to support that pretty strongly. If EUR/USD is able to break 1.2900, I'll be putting some serious capital into short on EUR/USD, SL 1.3010, TP 1.2750. You could make a sweet killing on that ride, much more than you'd make on that EUR MMA... although, I'm a damned gambler when it comes to that anyway, so...
post #96 of 157
Quote:
Real money is not made by ignorant, back-woods, small-town cocky guys in $300 suits.
Well, you can legitimately consider Seattle the backwoods, and the guy has the right to be cocky as all get out, but I would say that Mr. Gates migh take umbridge at your criticism of his $300 suits (please, lord, don't make him be spending more on the things he wears) and what appear to be Ecco comfort shoes.  And that guy probably makes more money in fifteen minutes than you can in a year. A trip down a very fast elevator in a three storey building, and he's made my annual salary, I'd say.
post #97 of 157
Quote:
Well, you can legitimately consider Seattle the backwoods, and the guy has the right to be cocky as all get out, but I would say that Mr. Gates migh take umbridge at your criticism of his $300 suits (please, lord, don't make him be spending more on the things he wears) and what appear to be Ecco comfort shoes.
Bill Gates is an excellent counterexample, but Sam Walton is a better one. Warren Buffett isn't bad either.
post #98 of 157
Eh, Warren Buffett at least buys Zegna suits ten at a time (at least on one occassion all were the exact same).
post #99 of 157
Yeah, with the way the Euro is trending down I've been shifting alot into dollars and more into some other real estate projects. I'm only lightly leveraged so I could really get into many more properties and I'll be looking. I think higher interest rates will actually help me because I'm buying properties that are intended for rental in any case. I've been fairly conservative lately with my investments, in the late 90s I was almost 100% tech (with good results) but got out well ahead of the bubble bursting.
post #100 of 157
Quote:
Quote:
Real money is not made by ignorant, back-woods, small-town cocky guys in $300 suits.
Well, you can legitimately consider Seattle the backwoods, and the guy has the right to be cocky as all get out, but I would say that Mr. Gates migh take umbridge at your criticism of his $300 suits (please, lord, don't make him be spending more on the things he wears) and what appear to be Ecco comfort shoes.  And that guy probably makes more money in fifteen minutes than you can in a year.  A trip down a very fast elevator in a three storey building, and he's made my annual salary, I'd say.
Sadly enough, I think he wears some bespoke suits. I saw an article about his tailor one time. Of course, could be the guy hemmed a pair of his trousers and made himself out to be his bespoke suitmaker.
post #101 of 157
drizz - I'm very nervous about forex overall. I've stopped all manual trades this week, since I lost about $8k last week (trading GBP/USD, EUR/USD and USD/JPY), and am totally standing aside. It sucks. But it's crucial to recognize when you're trading on emotion, and when you do, it's time to take a breather. I was getting desparate and started buying like 8 lots of 100k with TP at 20 pips and SL at 35 pips, crazy stupid stuff like that. It was truly bizarre, because I've never traded like that, and not sure why I was, but I noticed it and now am standing aside until things cool off a bit and the markets start showing some clear direction. At times, I wish Snow would just keep his mouth shut, and if you're gonna take on the damn budget deficit, just do it already and stop yappin about it and making the markets all choppy. Heh heh. I lost a bit in the late 90s too, but not too much (unlike some friends). I had my capital spread pretty even over a variety of industries, along with some funds, my forex stuff, a few CDs (I had one with the Royal Bank of Canada that was at 6.5% on a 3-yr term, talk about sweet, they of course did not offer me anything close to that when I asked to renew it), and some private investments. Risk management is not optional if you want to see growth on your capital, that's my mantra. Real Estate.. I've been waiting to start trying that. My girlfriend and I have been looking at some real estate here in Seattle and are seriously considering the jump, but we just can't see the sense in tying up so much capital for such low returns (they say, on average, RE grows at about 2%), and then having to deal with the taxes, property management and so on. Also, both of us have relatively modest income, so we are focussing more on income-producing investment strategies for now. But, I'd love to know how real estate has worked for you, any info you might wish to share would be highly appreciated, as like I said, we are considering taking our first few steps fairly soon, in the next year or two possibly. We see real estate as being a potentially strong form of risk management at the very least.
post #102 of 157
Thread Starter 
linux: I don't really believe any promises Bush makes about reducing our defecit. Under his leadership, our surplus turned into a defecit. He's got some political capital from his election, but it seems like he wants to spend it on social security. Even if he succeds, his plan would only increase the defecit, as the government would need to borrow at least a trillion dollars to cover current benefits. And, with such a large defecit, interest rates need to go up. And, mortage rates are corelated with interest rates, so any increase would hurt the housing market. An interesting point the book makes is to stick to what you know. So, if you're occupation involves foreign exchange currencies, stick to that instead of trying to be a investor in some other field. However, that same logic would suggest that we should invest in retail stocks as well but I don't know anything about them. Dz, I'm sure there are some exceptions, especially if you can find some distressed property, but when I look at the numbers, I think we're in a housing bubble. Of course, if you asked me this a year ago, I would have said the same thing and thought that prices would have started to drop this year. If you look at the historical house price to income ratio, today's ratio is around 4X greater than the historical ratio. Prices in housing have far exceeded increases in income. How much higher can they really go before everybody gets priced out of the market. That's why I feel that most prices will start to decline soon and it might be wiser for some people to just rent right now, and wait to buy houses a few years from now. But, overall, housing is almost always a good investment if you're in it for the long run and if its where you live. If you can hold onto the property for a long time, you can weather any volatility in the housing market. If you were to rent, you wouldn't build up any equity nor would you get the tax breaks. That's an interesting list. Why aren't you a fan of cities like NYC or SF. Even if they're overpriced, there's limited room for devolpment. So, as the population increases, there's still only the same number of apts and rooms. NYC is an island, and SF has the Pacific on one side and mountains on the other side. During the last recession in CA, the average price for housing in SF didn't drop as much up as it did in socal.
post #103 of 157
Real estate only getting 2 percent returns? Where? I think the average return last year nationwide was something like 12 percent. The DC metro area alone, in just the last quarter of 2004, had something like a 24 percent increase (almost 100 percent over the last 3 years, and parts of DC, such as tony Georgetown had nearly 200 percent increase in the last 3 years). Must be a Seattle thing...
post #104 of 157
Quote:
Dakota Rube: Was the $1200 fine just only for the TV incident, or was it for all the illegal deductions you made. I've heard that the IRS in the past few years has decided to crack down.
The $1200 ding was not a fine at all; as I said, the IRS doesn't get "nasty" over deductions as a rule. I paid a total of $1200, which amounted to the tax I had underpaid because of some deductions which were later disallowed; interest from 15 April of the year in which the taxes were due; and a penalty for not paying the full amount of taxes upon the 15 April due date. No fine, no tax court, no "record".
post #105 of 157
esquire, I am interested in some areas of NYC, but I live in Southern California, and for me to buy real estate there would involve a flight (or at least a long drive) at least once, and probably 3-4 times, that's too much time and effort considering my current work situation. It's much easier for me to pursue real estate projects here, and of course it's also much easier for me to supervise my properties. Right now I am involved in three projects here in Socal and a couple in my home state of WI. Even if we're in a bubble (and I'm not convinced housing prices will drop, if anything they will just stop their huge increases) rental properties will always be good, because when people can't afford to buy, they need to rent, and you'll always be able to rent a 2 bdrm condo for $1000-1500 min and a 3 bdrm duplex for $1500-2000 at least in the LA/OC area if you're not in Compton etc. Distressed areas are the best because of the possibilities of HUD loans. Right now some of my properties are on mortgages < 4% because of government subsidization. I know some people who have invested large amounts of money in South Central LA, with HUD loans that almost pay their interest completely. They are making money hand over fist while rehabilitiating urban areas. A developer in my hometown purchased hundreds of acres of downtown real estate for almost nothing in the 1980s when the downtown was run down, now that there's been a rennassiance of sorts, he made a killing, and is worth well over $100M. Real estate is a good investment if you can find the right properties, because it allows a relatively high degree of leverage with relatively little risk, and if you find the right properties you can have both capital gains and income streams. However, the key is, of course, finding the right property. linux, I got into the euro mainly because I felt that the US was going to devalue the dollar and was in it for the medium to long term, and it worked out quite well. To be honest, one of the main reasons that I wanted to get into the euro MM was because of the higher interest rates than the USD and IMO relatively low risk of the Euro falling beyond $0.83/1E.
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