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Lets Talk about Wealth and Money


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Posted (edited)

Lets talk about wealth and money.

I am interested in others perspective on how they maintain their independence and self sufficiency by maintaining and storing their wealth in an untraceable format outside the system. Also, how do you grow your wealth and manage it?

Do you have a percentage of your wealth outside the system?

How do they protect their wealth from currency devaluation.

Do others here know the difference between money and currency and how to short currencies?

Do others here make their living trading currency, stocks, or commodities.

Do others here know how to options trade?

Do others here buy tangible assets (gold, silver, gems, rolex, wine, art, etc.) to maintain wealth preservation over time? What kind of assets do you buy?

How will money behave in the future due to the rise of crypto.

Can crypto be used as a means of transaction?

Please chime in on any of the above. 

I do or can do most of these things already. I'm looking for any ideas that are not in my current wheelhouse.

 

Edited by ChompChomp
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Great subject for a thread.

1 hour ago, ChompChomp said:

I do or can do most of these things already.

I can't speak for other people, but I'd love if you have any starter posts / links / resources / knowledge to share on any of these subjects.  It's an area I am sorely lacking in, I admit freely. 😉

I think there are some guys who will chime in about Bitcoin here. 

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First things is first. Unless you are born rich you need to accumulate wealth over time. That being said, learn to save no less than 20% of your income no matter what. Learn to purchase assets with it that you can either collateralise with, generate income on, or will increase in value over time. If you do this you will be your own bank. If you have collateral you can always get capital when you need it.

Be wary of counter party risk. If you hold things that other people have a liability on, you stand to loose them in a bad situation. 

Ill add more later but I need to bow out for a few.

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Posted (edited)

Contrary to popular belief rich people hold the majority of their wealth in assets. Rich people don’t try to hoard cash in a bank account. One reason is its impracticable to do that if you have a lot of wealth. The majority of rich peoples wealth is held in assets.

Consider this scenario.

You have an asset you can collateralize on. You take a loan out on that asset. Now you take that cash and place it into your brokerage account. You buy shares of a stock with that cash. You also have a margin account in your brokerage account. If you have a margin account, a brokerage account will let you take out a loan on certain type of equities in your brokerage account. Now take a second loan against the shares you bought with the first loan and by more shares.

Two very important things happened here. The first thing to notice is that I can actively trade in the stock market but I am not using any of my money to do it. All gains are mine. Also, the original asset is still mine and all of the shares I bought are also mine too. Quality assets will fund your life style and grow your wealth and do it all with other peoples money. The second thing is that I took my asset and double leveraged or I was able to utilize twice its value to trade with. There are ways to leverage higher too.

Is there risk and liability? Yes. Its all in how you manage risk. I am not advising anybody to do this. You will get trouble fast unless you really know how to do this.

Don't underestimate the power of high quality assets.

This my friend is real Sigma Male knowledge. More to come. Set tight.

Edited by ChompChomp
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More food for thought.

Consider the scenario.

You have a 401k from your employer. Most 401k providers will allow the 401k investor to get a loan at 50% of the 401k principle.

Assume a theoretical balance of a 100k in your 401k.

A loan against the 401k would be 50k. Open a brokerage account and deposit the 50k into the account and buy the same investments you have in your 401k. Now add a margin account to your brokerage account and take out 80% in margin and buy the same investments. Margins are typically at 80% of the account value. This is 40k. Now you have 80k in equity in your brokerage account with same investments as your 401k.

The value of your retirement account hasn't changed but assuming you have bought the same investments in your brokerage account, the yields from your investments has increased 80%.

Again, not investment advice but theoretical scenario to contemplate.

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Posted (edited)
12 hours ago, ChompChomp said:

Lets talk about wealth and money.

I am interested in others perspective on how they maintain their independence and self sufficiency by maintaining and storing their wealth in an untraceable format outside the system. Also, how do you grow your wealth and manage it?

Do you have a percentage of your wealth outside the system?

How do they protect their wealth from currency devaluation.

Do others here know the difference between money and currency and how to short currencies?

Do others here make their living trading currency, stocks, or commodities.

Do others here know how to options trade?

Do others here buy tangible assets (gold, silver, gems, rolex, wine, art, etc.) to maintain wealth preservation over time? What kind of assets do you buy?

How will money behave in the future due to the rise of crypto.

Can crypto be used as a means of transaction?

Please chime in on any of the above. 

I do or can do most of these things already. I'm looking for any ideas that are not in my current wheelhouse.

 

Most of mine in gold and silver. I now invest in lifestyle, my 4x4 camping gear. Minimal debt and few wants. Buying land in the country as it's cheap and my lifestyle doesn't require me to be city bound. Drive for Uber snd work casual as a mine site cleaner I can work when I want. Had a career in contracts admin in commercial building no freedom. I now base all my decisions on freedom so simple that way. 

Your mind set is what guides you, having no wants is freedom, work on your mind set. That's the greatest investment. 

Edited by He-man
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Posted (edited)
10 hours ago, ChompChomp said:

Contrary to popular belief rich people hold the majority of their wealth in assets. Rich people don’t try to hoard cash in a bank account. One reason is its impracticable to do that if you have a lot of wealth. The majority of rich peoples wealth is held in assets.

Consider this scenario.

You have an asset you can collateralize on. You take a loan out on that asset. Now you take that cash and place it into your brokerage account. You buy shares of a stock with that cash. You also have a margin account in your brokerage account. If you have a margin account, a brokerage account will let you take out a loan on certain type of equities in your brokerage account. Now take a second loan against the shares you bought with the first loan and by more shares.

Two very important things happened here. The first thing to notice is that I can actively trade in the stock market but I am not using any of my money to do it. All gains are mine. Also, the original asset is still mine and all of the shares I bought are also mine too. Quality assets will fund your life style and grow your wealth and do it all with other peoples money. The second thing is that I took my asset and double leveraged or I was able to utilize twice its value to trade with. There are ways to leverage higher too.

Is there risk and liability? Yes. Its all in how you manage risk. I am not advising anybody to do this. You will get trouble fast unless you really know how to do this.

Don't underestimate the power of high quality assets.

This my friend is real Sigma Male knowledge. More to come. Set tight.

As said in my previous post, I was active in the financial markets from age 18 to 25. My biggest trade was just converting my EUR savings into USD, as the devaluation of the EUR happened due to the anticipation of Quantitative Easing measures implemented by Mario Draghi in 2014. I made +7k EUR (30% ROI) after commission on that trade alone in 4 months time, no leverage.

I have transferred all my knowledge gained from my time in the financial markets and (risk mng.) analytics into sports betting. As far as sports betting goes, I could not wished for better returns. +90% ROE with a sharpe ratio of 2.48 in 9 months time at the moment. Also less time consuming in matters of research, albeit less intellectually satisfying. 

98% of sports bettors do not make money long term from sports betting. Be warned, although how things are going now, it would be economically irrational for me to return to put my savings to use in the financial markets. I would only do it if I have a future shot in becoming a hedge fund manager later on in life and get rich from the fees on the AUM you'ld manage. Unfortunately the modern asset management industry in finance is small and swamped by Ivy League and STEM graduates, I'ld not make a chance to get hired even if I may possess the required talent.

Edited by YouSmallFish
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20 hours ago, ChompChomp said:

That being said, learn to save no less than 20% of your income no matter what. Learn to purchase assets with it that you can either collateralise with, generate income on, or will increase in value over time.

This was a wonderful idea for a thread, but I want to make it useful for the common man, the average man.  Then it wil become a valuable resource for all who peruse it (including me).  😉

1. So, assume I am a total beginner (which I am).  What assets would you say right now meet this criteria:

  • That you can collateralise with
  • Or generate income on
  • Or will increase in value over time.

If you name 1 or more, which of the above criteria will if fulfill, and why? What's the case? How "safe" an asset are these hypothetical recommendations (i.e. any likelihood they will be wiped out in the next 5 years?).

2. Mechanically, how do you "purchase" these assets? Any impediments such as regulations getting in the way? You mentioned a brokerage account (for example) - how difficult is it to get one for the average man?

I really appreciate the thread idea, but I want this to be as useful as possible for everyone.  I strongly suspect others reading it would agree. 😉

 

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He just seems to be into fiscal solutions, the guy is not willing to be putting in extra time to generate unconventional or above average returns than what is offered on a plate for the masses by financial institutions. Worthless tread, just consult a private bank and sort things out.

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1 minute ago, YouSmallFish said:

He just seems to be into fiscal solutions, the guy is not willing to be putting in extra time to generate unconventional or above average returns than what is offered on a plate for the masses by financial institutions.

Give the man a chance for Christs sake.  You need to wind your neck in on here and stop insulting people.

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Posted (edited)
30 minutes ago, Steve Jabba said:

Give the man a chance for Christs sake.  You need to wind your neck in on here and stop insulting people.

"You are such an asshole"..yeah maybe, that's because I have a short temper for guys trying to come off as big fellows when giving generic ideas and thoughts. I bet he never made a research paper on a investment position before, while trying to come off as "knowing it all". When I was active in the financial markets I made research papers and blog posts about my ideas.

Edited by YouSmallFish
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8 minutes ago, YouSmallFish said:

"You are such an asshole"..yeah maybe, that's because I have a short temper for guys trying to come off as big fellows when giving generic ideas and thoughts. I bet he never made a research paper on a investment position before, while trying to come off as "knowing it all". When I was active in the financial markets I made research papers and blog posts about my ideas.

7 day posting ban for YouSmallFish for:

  • Insulting other people
  • Trying to make every thread in which he appears about him

This thread and indeed forum is about the ideas and topics, not any 1 individual.

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12 hours ago, He-man said:

I now invest in lifestyle, my 4x4 camping gear. Minimal debt and few wants. Buying land in the country as it's cheap and my lifestyle doesn't require me to be city bound. Drive for Uber snd work casual as a mine site cleaner I can work when I want.

Your situation sounds fascinating @He-man

How much can you get land for where you are? (You're in the USA, right?)

Where do you live?  (are you renting / own a home or live in a tent?).  

I'd love to hear more if you're so inclined!

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23 hours ago, He-man said:

Most of mine in gold and silver. I now invest in lifestyle, my 4x4 camping gear. Minimal debt and few wants. Buying land in the country as it's cheap and my lifestyle doesn't require me to be city bound. Drive for Uber snd work casual as a mine site cleaner I can work when I want. Had a career in contracts admin in commercial building no freedom. I now base all my decisions on freedom so simple that way. 

Your mind set is what guides you, having no wants is freedom, work on your mind set. That's the greatest investment. 

Wise words. I think if your have a true Sigma Male mind you will be deeply focus what your idea of freedom is.

I buy a lot of gold and silver too. The first ounce of gold I bought was about $600. You cant go wrong with it as a long term store of value. 

 

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Posted (edited)
13 hours ago, Steve Jabba said:

This was a wonderful idea for a thread, but I want to make it useful for the common man, the average man.  Then it wil become a valuable resource for all who peruse it (including me).  😉

1. So, assume I am a total beginner (which I am).  What assets would you say right now meet this criteria:

  • That you can collateralise with
  • Or generate income on
  • Or will increase in value over time.

If you name 1 or more, which of the above criteria will if fulfill, and why? What's the case? How "safe" an asset are these hypothetical recommendations (i.e. any likelihood they will be wiped out in the next 5 years?).

2. Mechanically, how do you "purchase" these assets? Any impediments such as regulations getting in the way? You mentioned a brokerage account (for example) - how difficult is it to get one for the average man?

I really appreciate the thread idea, but I want this to be as useful as possible for everyone.  I strongly suspect others reading it would agree. 😉

 

Understand that the concept is scalable.  For example, it is impractical for most to purchase an apartment complex to generate income. However a individual with a smaller income could purchase small vending machine as an income producing asset and put it at a local restaurant entrance. It is impractical for most to purchase hundreds of acers of farm land as collateralizing asset, but an individual with little income could accumulate silver coins that he could leverage at a local pawn shop if short term capital is needed.  The concept is scalable. 

I personally have a business that I have  purchased equipment for as I could over time. This equipment is used for machining and manufacturing. This equipment will only increases in value over time. The steel in it alone will become more valuable over time. I use these assets to generate income. The bank will always loan 80% of its value and so I always have the ability to expand it with capital if I need. I also depreciate the equipment on my taxes so they help me there too. People that are self employed have a high net worth than those that who only work a job. Not because they make more because of the value of the assets of the self employed.

Again, if a person will save and buy assets they way I have mentioned with a little time will find they will have the ability to tackle larger business ventures and will be financially secure. 

I personally also buy collector and museum grade gem stones, gold, and silver bullion and I am currently flipping two houses. I have my fab and machine shop too.  I am also opening a large Maker Space in my local town. As far as I am concerning stocks are for trading. That said, I only buy and sell them. I don't buy and hold stocks. Especially now, the markets are all way overvalued and are a death wish. When the central banks start to raise interest rate to slow inflation the mother of all market meltdowns will occur. 

Understand, when this happens, the bond market and stock markets will melt down and all of that wealth  will be transferred to tangible assets. That is why I only hold tangible now and not digital or paper assets.

Edited by ChompChomp
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how do you guys divvy up your money for investments? I find the calculation to be impossibly long, especially when u consider things like the florida condo collapse. 

I was going to dump most my money into the stock market, but now i have to stretch every dollar to start up a coaching program teaching business psychology(turns out that's a market need - unbrainwashing people from the 9-5 psychology. go figure)

I'm glad I ignored the pitches online to invest in florida real estate.

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i can't find a way to edit my previous post

Edit: I decided just to help buddies get their mind right for business.  I'm not doing a official coaching thing.  that's too much work for something I don't plan to do long term

i don't really know how to prioritize money. it always runs thin no matter how much I have

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2 hours ago, Vince said:

i can't find a way to edit my previous post

Edit: I decided just to help buddies get their mind right for business.  I'm not doing a official coaching thing.  that's too much work for something I don't plan to do long term

i don't really know how to prioritize money. it always runs thin no matter how much I have

You have 60 minutes after it's published to edit.  That's by design for obvious reasons.

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On 7/5/2021 at 8:10 PM, Steve Jabba said:

Your situation sounds fascinating @He-man

How much can you get land for where you are? (You're in the USA, right?)

Where do you live?  (are you renting / own a home or live in a tent?).  

I'd love to hear more if you're so inclined!

I'm in Perth Western Australia I'm looking for 5-10 acres roughly 150k for the area I'm looking in but you can get cheaper if you go further into the wheat belt. I'm renting with my sister as I've been working away on a 2 week on 1 off swing I've just gone casual. Need to sort out land by the end of the year. Was looking at living in a yurt made by yurta.ca Canadian made but the councils here are to hard to deal with so will build a minimal cabin with a mate. 

The land is an opportunity to become some what productive with permaculture and regenerative agriculture. I'll expand operations when I drop the hammer on selling my metals. But at the moment looking to drive Australia America and Africa. Hence a cheap piece of land low repayments and a place to service my 4x4. 

Finalise my divorce (easy break thank goodness) no assets to split. Gained all my freedom allows me to focus on my plans hopefully find a minimalist adventurous girl. 

That's pretty much it. 

Cheers 

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Posted (edited)
On 7/5/2021 at 5:19 PM, ChompChomp said:

Understand that the concept is scalable.  For example, it is impractical for most to purchase an apartment complex to generate income. However a individual with a smaller income could purchase small vending machine as an income producing asset and put it at a local restaurant entrance. It is impractical for most to purchase hundreds of acers of farm land as collateralizing asset, but an individual with little income could accumulate silver coins that he could leverage at a local pawn shop if short term capital is needed.  The concept is scalable. 

I personally have a business that I have  purchased equipment for as I could over time. This equipment is used for machining and manufacturing. This equipment will only increases in value over time. The steel in it alone will become more valuable over time. I use these assets to generate income. The bank will always loan 80% of its value and so I always have the ability to expand it with capital if I need. I also depreciate the equipment on my taxes so they help me there too. People that are self employed have a high net worth than those that who only work a job. Not because they make more because of the value of the assets of the self employed.

Again, if a person will save and buy assets they way I have mentioned with a little time will find they will have the ability to tackle larger business ventures and will be financially secure. 

I personally also buy collector and museum grade gem stones, gold, and silver bullion and I am currently flipping two houses. I have my fab and machine shop too.  I am also opening a large Maker Space in my local town. As far as I am concerning stocks are for trading. That said, I only buy and sell them. I don't buy and hold stocks. Especially now, the markets are all way overvalued and are a death wish. When the central banks start to raise interest rate to slow inflation the mother of all market meltdowns will occur. 

Understand, when this happens, the bond market and stock markets will melt down and all of that wealth  will be transferred to tangible assets. That is why I only hold tangible now and not digital or paper assets.

I really like your post. You said it is scaleable (putting your money in assets). It there a book or a resource where someone just starting out can learn about different ways to buy assets (without much starting capital). LIke what you can buy for assets for low starting capital and how to go about it.

Edited by PerpetualTraveler
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I have invested in cryptocurrency the return is very attractive you dont need alot of money to make investment. You just do research look at cryptocurrency that is low value and has high returns in long term.

Edited by Mr soyaan
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  • 2 weeks later...

I like various liquid asset classes such as cash, gold/silver, collectibles and crypto. With a focus on increasing marketable skills and building net worth over time in ways that avoids total ruin. Additionally trying out various small business ideas.

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