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BombayAg
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3:54p, 5/21/15
I am 42 and I am on course to hit 1MM in about 3 years.
My wife has been working for almost a year now that the kids are somewhat grown up. I have been investing for about 16 years.

I have aggressively paid off loans and have about 50% left on the house and about $23k left on my new car. I have more recently moved into Nasdaq ETFs and avoid trading.

My goal for this year is to duplicate my salary in capital gains (neglecting taxes).
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Ragoo
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4:25p, 5/21/15
AG
i am sure this was talked about but are you all considering total assets or investments plus cash?
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gigemhilo
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4:35p, 5/21/15
AG
I look at total assets less debt.

I'm sure others look at just total assets, but to me that is not an accurate representation. To me - when I think millionaire - that is talking about net worth. It is what you would get out of your estate if you were gone.

just my 2 cents.
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BombayAg
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4:35p, 5/21/15
Ragoo, I think the general definition for net worth as all assets minus all liabilities.
So I think it would be everything.

if I just look at assets, then I am very close to being a millionaire. All I do to become one today is get a loan out and VOILA!
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gigemhilo
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5:26p, 5/21/15
AG
BombayAg-

Sadly many people really do think this way. And thats why they are driving Porsches with debt up to their eyeballs!!
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Ragoo
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In reply to BombayAg • 5:31p, 5/21/15
AG
quote:
Ragoo, I think the general definition for net worth as all assets minus all liabilities.
So I think it would be everything.

if I just look at assets, then I am very close to being a millionaire. All I do to become one today is get a loan out and VOILA!
sorry, when i said total assets I meant total worth (assets minus liabilities). didn't think i needed to be that specific.
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The Original AG 76
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6:55p, 5/21/15
AG
The only assets I count ( non financial) is equity in real estate. I don't count cars, furniture, guns, jewelry ...etc. Other than the cars and perhaps the guns these other things are just NOT liquid. Try and sell furniture or piles of fancy china. I am sure that in an estate type sale my heirs could raise quite a bit by selling all this stuff but I just don't see any real reason to count this stuff.

Any of you guys count this stuff ??
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colonialag
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In reply to Ragoo • 7:08p, 5/21/15
AG
When you said total assets but didn't mean total assets you didn't think you had to specify that you didn't mean total assets?
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Ragoo
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In reply to colonialag • 7:22p, 5/21/15
AG
I assumed that subtracting liabilities was a given but wasn't sure which asset classes were being omitted, if any, which is why I asked specifically about investment and cash only.
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YouBet
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In reply to MaysAggie2015 • 7:45p, 5/21/15
AG
quote:
You offer a lot of good advice, but this is just flat out malarkey:

Other thing I should add to the list which I'm sure has been said multiple times: if you have a long-term horizon you should ignore near-term volatility and ignore temptation to invest in traditional bonds.

Short term volatility I agree (even though the 30/90 VIX has been the best leading indicator since 2009), but to saw avoid traditional bonds with no backing isn't something people need to take to heart.

I have a client with a 100% FI portfolio that has outperformed both the the 60/40, the NAREIT, and the S&P for the last 8 years. He went long treasuries and long high yield when the market was terrified of them.

People bond understand bonds. That doesn't mean people should avoid them. If more people became educated about expected vs actual YTM, risk neutral pricing, and duration/convexity (first and second derivative of interest rate movement on price), there wouldn't be a huge uproar.

Heck, well locked in 3.5% for 7 years with a net net zero convexity and a duration. That's 2x the 7 year CMS with little to no interest rate risk exposure.

The zero convexity shows the curvature in the relationship between bond prices and yields that demonstrates how the duration of a bond changes as the interest rate changes.

Not all bonds are created equally. Know the company and the prospectus. If you know those things, they can be very lucrative.


Come on, man. There are several of us on here that are MBAs and you keep trying to overwhelm us with intelligence. Speak English. Investing in bonds at a young age when you have a long-term horizon is a poor decision and anyone with any experience knows this. Math is against you.
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Pasquale Liucci
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In reply to YouBet • 8:14p, 5/21/15
AG
Let him validate himself talking over a lot of people's heads
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Ragoo
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In reply to YouBet • 10:00p, 5/21/15
AG
Benjamin graham was also not a big fan of holding bonds.
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anscag07
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In reply to The Original AG 76 • 10:44p, 5/21/15
AG
Count me in with you.
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Stive
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In reply to YouBet • 10:58p, 5/21/15
AG
I see y'all have met MaysAggie....haha.

Carry on.
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BombayAg
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In reply to The Original AG 76 • 11:04p, 5/21/15
quote:
The only assets I count ( non financial) is equity in real estate. I don't count cars, furniture, guns, jewelry ...etc. Other than the cars and perhaps the guns these other things are just NOT liquid. Try and sell furniture or piles of fancy china. I am sure that in an estate type sale my heirs could raise quite a bit by selling all this stuff but I just don't see any real reason to count this stuff.

Any of you guys count this stuff ??

I just count the current value of my 2 cars. The logic is I can sell them and make money. You can sell all your possessions like furniture but that makes things too complicated.
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Comeby!
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12:31a, 5/22/15
AG
I don't think you'll 'make' money. It's a depreciating asset and you probably have equity in it.
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SACR
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In reply to MaysAggie2015 • 6:52a, 5/22/15
AG
quote:
You offer a lot of good advice, but this is just flat out malarkey:

Other thing I should add to the list which I'm sure has been said multiple times: if you have a long-term horizon you should ignore near-term volatility and ignore temptation to invest in traditional bonds.

Short term volatility I agree (even though the 30/90 VIX has been the best leading indicator since 2009), but to saw avoid traditional bonds with no backing isn't something people need to take to heart.

I have a client with a 100% FI portfolio that has outperformed both the the 60/40, the NAREIT, and the S&P for the last 8 years. He went long treasuries and long high yield when the market was terrified of them.

People bond understand bonds. That doesn't mean people should avoid them. If more people became educated about expected vs actual YTM, risk neutral pricing, and duration/convexity (first and second derivative of interest rate movement on price), there wouldn't be a huge uproar.

Heck, well locked in 3.5% for 7 years with a net net zero convexity and a duration. That's 2x the 7 year CMS with little to no interest rate risk exposure.

The zero convexity shows the curvature in the relationship between bond prices and yields that demonstrates how the duration of a bond changes as the interest rate changes.

Not all bonds are created equally. Know the company and the prospectus. If you know those things, they can be very lucrative.
Just curious.

Are you Class of '15?

Have you made $1 million yet?

If your answers to these questions are 'yes' and 'no', I'd be quiet.
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cgh1999
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In reply to The Original AG 76 • 8:33a, 5/22/15
AG
quote:
The only assets I count ( non financial) is equity in real estate. I don't count cars, furniture, guns, jewelry ...etc. Other than the cars and perhaps the guns these other things are just NOT liquid. Try and sell furniture or piles of fancy china. I am sure that in an estate type sale my heirs could raise quite a bit by selling all this stuff but I just don't see any real reason to count this stuff.

Any of you guys count this stuff ??

I list the small amount of miscellaneous assets. This is really items like jewelry, collectibles, etc. that I might be able to sell for something. Cars are at KBB trade in value.

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GarlandAg2012
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In reply to SACR • 8:39a, 5/22/15
AG
He has a sordid history on texags and it isn't his first username. Pretty sure he's not c/o '15 and at one point I was convinced his account was used by multiple people.
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MaysAggie2015
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In reply to SACR • 8:41a, 5/22/15
No and Yes
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MaysAggie2015
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8:44a, 5/22/15
Fixed Income is the devil.

/Texags lunacy

At every point in history the arguement has been made against buying bonds and holding, yet FI investors have some of the highest returns with less volatility.

It isn't my job to teach you that you are wrong. But don't talk out of your ass and say all bonds are created equally.

Typical Texags one size fits all approach.
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Pasquale Liucci
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In reply to GarlandAg2012 • 9:01a, 5/22/15
AG
quote:
He has a sordid history on texags and it isn't his first username. Pretty sure he's not c/o '15 and at one point I was convinced his account was used by multiple people.
This has been a great thread that I've enjoyed reading through the first 14.5 or so pages. Let's just agree to disregard the schtick and not ruin an epic thread.
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GarlandAg2012
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In reply to Pasquale Liucci • 9:07a, 5/22/15
AG
quote:
quote:
He has a sordid history on texags and it isn't his first username. Pretty sure he's not c/o '15 and at one point I was convinced his account was used by multiple people.
This has been a great thread that I've enjoyed reading through the first 14.5 or so pages. Let's just agree to disregard the schtick and not ruin an epic thread.
Definitely. This is one of the best threads on this board.
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Ragoo
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In reply to GarlandAg2012 • 10:13a, 5/22/15
AG
quote:
He has a sordid history on texags and it isn't his first username. Pretty sure he's not c/o '15 and at one point I was convinced his account was used by multiple people.
there is at least a father and son using the same account, maybe two sons. They claim to be really wealthy, and might be, but choose to only use one account on an internet forum. very weird dynamic for sure.
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T Durden
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10:22a, 5/22/15
AG
One of them shorts stocks and another is in fixed income. Interesting dynamic for sure.
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Philip J Fry
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11:10a, 5/22/15
AG
This thread was awesome before and it just kicked up a notch.
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Ragoo
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11:25a, 5/22/15
AG
Can we change gears a little and discuss how you savvy people approach cutting consumption costs? Like cable, wireless, utilities, etc. I am very interested to figure how how i can minimize these recurring payments that i simply forget about because they are on auto payments.
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CrossBowAg99
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In reply to GarlandAg2012 • 11:28a, 5/22/15
AG
quote:
He has a sordid history on texags and it isn't his first username. Pretty sure he's not c/o '15 and at one point I was convinced his account was used by multiple people.
He is also an expert on Houston private schools
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JDCAG (NOT Colin)
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In reply to CrossBowAg99 • 11:32a, 5/22/15
AG
quote:
quote:
He has a sordid history on texags and it isn't his first username. Pretty sure he's not c/o '15 and at one point I was convinced his account was used by multiple people.
He is also an expert on Houston private schools


I've found that more often than not, if somebody speaks as if they are the unquestioned authority on one subject, they do it on almost any subject.
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Aggie-matic
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In reply to Ragoo • 11:41a, 5/22/15
quote:
Can we change gears a little and discuss how you savvy people approach cutting consumption costs? Like cable, wireless, utilities, etc. I am very interested to figure how how i can minimize these recurring payments that i simply forget about because they are on auto payments.
I have a great resistance to what I call parasitic expenses. I can't avoid them all, like cable TV and internet, but I have been somewhat successful getting rid of some of them. They don't add up to a lot of money per month or per year, but they still add up.

Examples:

- three XM/Sirius capable vehicles in the family, but no satellite subscriptions. Didn't take advantage of the free 90 days on my new car because I knew I would have trouble cancelling it.
- got rid of AT&T land line. Now using bundled digital phone with TWC, but plan to switch to OOMA soon. Will save at least $30/month
- review car insurance coverage. We have spare cars. Don't need rental car coverage.
- don't buy extended warranties on anything
- no newspaper
- almost no magazines
- programmable thermostats are a no brainer
- switch to efficient light bulbs when they need replacement but no sooner.

All of that to offset my expenses on good bourbon, beer, and prime steak when I cook steak at home.
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In reply to Ragoo • 11:41a, 5/22/15
Ragoo
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In reply to [removed post] • 12:17p, 5/22/15
AG
i will probably do this with uverse after GOT season is over and see what they say.
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Aggie-matic
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In reply to [removed post] • 12:23p, 5/22/15
quote:
quote:
Can we change gears a little and discuss how you savvy people approach cutting consumption costs? Like cable, wireless, utilities, etc. I am very interested to figure how how i can minimize these recurring payments that i simply forget about because they are on auto payments.
regarding cable, i call directv every six months and threaten to cancel. they will connect you to someone in retention, who will then cut you a deal on price. occasionally they'll try to offer you free stuff instead (IE showtime for 3 months) but if you stick to cancelling because its too expensive, they eventually knock $ off your bill. i've been doing this for years and it has never failed.
I did that when I switched to digital phone. My AT&T land line cost $45 or so, without long distance.
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Phat32
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12:27p, 5/22/15
AG
Good advice on the rental car stuff with insurance. Both sets of our parents are in Dallas, and we can WFH at any time. I've never once needed that coverage, but have always paid for it. Guess who's getting a call....
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AggieBQ03
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12:45p, 5/22/15
AG
If you want to cut costs to help become a millionaire, forget about cable, phone bills, and insurance.

Buy a smaller house.
Drive used cars of a non-luxury brand.
Limit discretionary expenses.
Save directly from your paychecks.
Have a written spending plan/budget of some kind.
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