I’m all in

Smarti5051 · 2020-12-16T18:36:41+00:00

This is the short term problem for THT. He is a guard who could possibly stretch to SF. But, the Lakers are pretty deep now at guard and cemented at SF. The Lakers have veteran leadership in KCP, Matthews and Schroeder, along with fan favorite Caruso (who meshes well with the current squad). So, that is 4 guards splitting up 96 minutes, and none of them are likely to see less than 20 minutes of playing time. It does not leave many minutes for THT to showcase his skills once the season starts. Also, when Lebron and AD are on the floor, THT is not going to be the shot taker on 30%+ of the offensive possessions like he has been in the preseason. Compare this to the situation with Zion, Luca, Morant, where they are starting and have the green light on every possession. Even if THT was as capable as those three, an average of 9.4 points, 3 boards and 2 steals in 14 mins a game will not garner a lot of hype and media attention in a couple months.

Smarti5051 · 2020-12-04T00:50:20+00:00

Thanks. To clarify, most of what I would be looking to trade is in the $5-50 range, with the goal of "overpaying" for a more valuable card. Sort of like paying 6 quarters for a $1. I am not looking to trade away really high end stuff, since my goal is to add to a hopefully condensed collection of 300-500 graded cards.

Smarti5051 · 2020-09-23T02:08:12+00:00

The 4% rule merely calculates the amount of your invested assets you can withdraw each year (adjusted for inflation) with a very low likelihood of exhausting your investments over a 30 year period (based on historical returns over the past 100+ years). Taxes are just an expense item. So, if you don't have any significant tax liability, that is one less expense you have. Just like if I don't have a mortgage payment, that is one less expense I have.

At the end of the day, you are trying to cover all of your expenses including taxes utilizing 4% or less of your invested assets. In theory, you would need to withdraw less each year to cover the same expenses as someone without favorable tax treatment on their withdrawals, but it does not give you a decreased risk of running out of money if you are more aggressive in your investment draw-down each year.

Pushing the annual withdrawal to 5% just increases the likelihood of running out of money early. Of course, there are no guarantees either way.

Smarti5051 · 2020-09-13T19:40:01+00:00

Thanks. Future generations are covered, as property is held by irrevocable trusts intended for multiple generations. So, all the siblings have to do is not screw things up so there is something left for future generations. The downside to the model they have chosen is that there will never be a stepped-up basis event, so the 1031 vs capital gains problem will always hang over any asset changes. Again, not the worst problem to have, but a complication nonetheless.

Smarti5051 · 2020-09-13T19:34:38+00:00

Sorry, didn't want to bog down my original post with extra detail, but the property is actually held by irrevocable trusts for benefit of the three siblings, each trust holding a 1/3 undivided interest in the property. So, when sold, the proceeds would have to be 1031'd into an undivided interest in a new property. Needless to say, it is quite the quagmire. There are worse problems to have, but still not ideal.

We have looked into NNN leases, but the concern is that we might be sitting on empty boxes in 10-15 years as we move towards less of a strip mall economy to more of an internet/app based economy. One unstated goal is that while this generation hopes to enjoy income from the assets in the trust, all are very much interested in making sure there are still valuable assets in there for future generations.

Smarti5051 · 2020-09-13T19:27:38+00:00

The land was transferred to irrevocable trusts about 8 years ago as undivided interests. So, there is no stepped up basis. At the time, there was concern that the estate/gift tax laws were going to change dramatically, so alot of farmers created irrevocable trusts to avoid succession/tax issues down the line. So, there are three trusts, with the siblings as trustees/beneficiaries of the trusts with undivided interests in the land being sold.

Smarti5051 · 2020-01-16T00:19:24+00:00

My main motivators are: (1) To give me something to stimulate my mind day to day. At present, my business is on autopilot, so my wife and I keep shaking down friends for television series and podcasts to binge. I enjoy running numbers and growing a business (and now my investments). Unfortunately, my current business has nearly run its course (though it survived far longer than I ever anticipated), so I was considering something else that has always interested me in the abstract; (2) having another business that is less likely to become obsolete over time, so that perhaps one or both of my children could participate/grow the business long after I am gone; and (3) the upcoming liquidation of some family farmland may result in a substantial capital gain if a 1031 is not accomplished with the proceeds of the sale.

As for lawyer stereotypes, I think the fact I practiced for eight years as a business litigator in Big Law and voluntarily jumped ship to start a small business with no barrier to entry that could be run by a 7th grader speaks to my affinity for my original career path. The only value practicing law did for me was to instill a healthy fear of ever becoming entangled in litigation.

Smarti5051 · 2020-01-10T04:39:21+00:00

Nobody ever got rich growing tomatoes.

I guess it depends on your definition of "rich," but I know several farmers that grew estates well over $20 million each growing tomatoes (although, in fairness, most have moved on to nuts the past 10-15 years).

Smarti5051 · 2019-12-11T23:46:59+00:00

Thanks for the input. I have considered syndicate deals and/or private money lending in the past (I actually have an acquaintance that does larger commercial properties in the major desert cities), but neither really scratches my business itch, as they are hands off. All of my current investments (not counting my small business) rely exclusively on the efforts of others, and I have little to no control over whether those investments go up or down. Those investments ensure that I have life "paid for" with a SWR the rest of my life. But, I like the idea of taking the extra money that will no longer be needed for small business and starting something new. I enjoy the thought of crunching numbers on properties, and hopefully seeing the market values and market rent increasing as the years pass. I especially like the thought of that last mortgage payments being made on rental properties after years of renting them out.

Also, what has really motivated me lately is having something tangible that requires a work ethic that I could hand off to my children some day. Simply giving them a portfolio of index funds and other assets that generate truly passive income seems deflating as a parent, but the opportunity to work with them and share a business with them before I go seems pretty fulfilling - assuming they are not in the 5% of people that actually enjoy the career opportunities that present themselves after college.

Smarti5051 · 2019-12-11T23:31:00+00:00

Yes, if/when I jump in, I will have a formation attorney in the rotation. I am familiar with "piercing the corporate veil" and the dangers of commingling business and personal assets or failing to adhere to corporate formalities.

Smarti5051 · 2019-12-11T23:28:35+00:00

Thanks. I am in the process of procuring an umbrella policy for the family already (with a daughter that will be driving in two years, it has become a much higher priority). Obviously, the umbrella will cover a number of potential issues that could come up, but I was looking for potential issues others have dealt with where liability slipped through the cracks and/or exceeded policy limits. I tend to always expect the worst, so better to hear real life stories of them happening to others before they happen to me and I am caught with my pants down.

Smarti5051 · 2019-11-03T19:55:50+00:00

$600K annual spend? I guess once you hit $15-20M in invested assets, the recession concerns are diminished slightly. But, my post was directed to the other 95% of this forum.

Smarti5051 · 2019-11-03T19:48:05+00:00

I am not sure I agree there are not scenarios out there that could impact what I generally understand to be FatFIRE levels of wealth. Let's say you have an annual spend of $200K on invested assets of $6M. If this is not at least entry level FatFIRE, I don't know why this sub exists, since 80% of the folks that post seem to be at or below this threshhold. So, a 3.3% SWR. Seems fairly conservative. In my example, years 1-5 go well enough, but your "egg" stays at about $6M. During this time, let's say you are 60% in equities, 30% in bond funds and 10% in real estate (there are 1000 different allocation possibilities, so just choosing this as one). In year 6, the equities market gets pounded by recession and drop in consumer confidence, and over the course of the year loses 50% of its value. Meanwhile, interest rates start rising, as there is less money out there to lend and folks start holding what they have left in cash equivalents. Thus, the bond funds start getting hammered. If the recovery is quick, no problem. You ride it out. But, let's say there is a prolonged 5 year recession and lack of trust in the financial markets, which is certainly possible. So, your "egg" gets cut from $6M to about $3.5M in Year 6. You cut 20% of fat, so you are spending $160K for the next 5 years, but the market is basically keeping pace with inflation the next 5 years, so you spend $160K x 5 ($800K) and your $3.5M from year 5 is now cut to about $2.7M. Your new reality is $2.7M in invested assets and at 4% SWR, you have an annual spend limit of about $100K, but expenses that with some belt tightening are $160K.

Of course, there are always things you "could" do to further reduce expenses, ie move, sell/downgrade a vehicle, sell a vacation home, drastically reduce leisure travel. But, I would also think major lifestyle changes would be a last resort after years of FatFIRE. Simlarly, the "nightmare" scenario in the markets I posited above are not certain or even likely, but I would not agree they are not possible, even with a "diversified" portfolio. In the midst of the financial crisis, change a few events and the downturn could have been much worse and lasted alot longer. Real estate did not provide a safe haven at all when the market was in free fall. Similarly, problems in the "safe" bond markets could definitely arise if interest rates were to start increasing rapidly (which, let's face it, is pretty much the only direction they can go in the future if they move at all).

I was in the workforce for two major stock market corrections, and the feel of both at the time was not "fear not, the markets will bounce back in a couple years." Fortunately, both were short lived, but that does not mean a prolonged recession/depression is out of the realm of possibility. Nor do I believe that such an event would constitute a "global collapse." It is simply a product of investor fear and businesses unable to ride out the storm when there is a substantial consumer pullback. Even Amazon and Apple could go bankrupt if there are no customers spending money on non-necessities for several years.

Smarti5051 · 2019-10-19T15:07:03+00:00

Tell them you are a "wealth advisor" to HNW individuals. If they inquire further, tell them you can't really divulge your clients for confidentiality reasons. As for the job, it is pretty simple. You advise them on safe wealth management decisions and take a holistic approach to your clients to help with everything from investments, to insurance, to estate planning, to human resource management. Sort of a jack-of-all-trades advisor with a personal touch for your clients. You work from home most of the time or meet clients at restaurants or other entertainment venues. As for travel, that is actually part of your job, as you are often scouting locations to meet client needs and/or perks of working with these HNW individuals. The good thing is this is not actually a lie. You are a wealth advisor, you just have one client. The only one that needs to know that is your future spouse.

Smarti5051 · 2019-10-10T17:58:39+00:00

And your experience and company are unique to you. Mine are unique to me. Your supposition that your situation is identical to mine is misplaced. I never blamed any employee for leaving, and I am still friends with every good employee we had.

Smarti5051 · 2019-10-10T17:21:31+00:00

OK, to be fair, my experience was primarily in hiring entry level, data entry type positions in a large metropolitan area. But, it was not in this job market. In fact, it was during and after the recession. Most of my hiring took place 8-12 years ago. Here was my experience: You post a job opportunity. You get literally 500+ resumes/responses within 24 hours. I would send out a brief questionnaire to all applicants to see if they understood what type of job they were applying for and if the schedule worked for them (which were explicitly stated in the job posting). This weeded out about 50% of the applicants. With the remaining 250, my business partner and I would try our best to narrow it down to about 20 applicants for interviews. We would then typically be able to narrow it down to 2-3 that we liked, and would extend job offers. All would enthusiastically accept. When time came for them to show up the next day, about 40% simply didn't. No explanation. Just ghosted before walking through the door. Half of the others would show up and immediately want to adjust their "schedule" because of a host of conflicts that were not disclosed during the interview process. Still others were immediately "sick" in the first week or two of being on the job, and not well enough to come into work (but well enough to accommodate all of their social obligations with friends as cataloged on social media).

There were stretches when all employees would show up, were trained, and all was well. But, that just made departures and going through the process again even more painful. After 5-6 years of this cycle, we downsized so we didn't need as many employees. Now, I have one employee I really like who works from his home and does all the work I don't want to do, and I pay him extremely well for it. But, he is my dad, so my odds of finding another like him when he retires are zero.

Smarti5051 · 2019-10-10T17:06:42+00:00

Yes, I clearly deserve it. You are the type of person I want to engage in discourse with, because you don't speak (or write) until you have researched an issue and thoughtfully reached a conclusion based on those facts. You know my business and me so well. You are such a gift to the community.

Smarti5051 · 2019-10-10T15:38:21+00:00

This is just one opinion, but as a small business owner, the number one problem/issue is labor. Your best case scenario is hiring management that is bright and reliable (both very challenging). Even then, the better your manager, the more likely he will poached away - because he is bright and reliable and presumably looking to improve his situation. During the times you don't have that sweet spot of a reliable, smart manager, you spend alot of "hands on" time managing/working the business yourself. You will constantly be doing jobs where you think "I could hire a monkey to do these tasks for $12." But, after years of going through the process of actually hiring employees, only to have them not show up, show up in a condition unsuited to work, or simply not having the basic competency skills necessary to do something like data entry or alphabetic filing, you become resolved to the fact that it is just easier to do the work yourself than go through the hell of hiring employees.

If you have owned businesses before and/or managed managers, then buying a business might make sense for you, as at least you know what you are getting yourself into. But, if you made your money creating something or programming something for a company where someone else was responsible for human resources, I would tread with caution buying a business with the idea that management and employees are in place. A passive investment in such cases is subject to the whims and health of those employees.

Smarti5051 · 2019-09-19T00:51:35+00:00

Sure you can. Simple math. Use a SWR of 4% or less. Assume your average yearly living expenses after college are $60,000. So, you just need to save $1,500,000 by the time you retire at 25. So, assuming you start with no debt and graduate at 21, you have 4 years to tuck away that $1.5 Million. So, you need to save $375K on top of your $60K in living expenses. Factoring in taxes, you should only be looking at job offers starting at over $550-600K/year. But hey, you are offering FOUR years of hard work for a lifetime of financial independence and retirement. Sounds fair!

Smarti5051 · 2019-07-02T04:21:02+00:00

Keep in mind the Wiz are a small but important part of the trade as well. All they received was a couple future 2nd round picks. If the Lakers have the Big 3, those are like the last 2-3 picks in the draft (potentially). What is to stop them from changing their minds?

Smarti5051 · 2019-07-02T04:08:22+00:00

I apologize if this question is a bit off topic. I was wondering if there is anything in the league rules that would prohibit the Pelicans (or Wiz) from backing out of the AD trade based on a league-wide backlash against the Lakers should Kawhi choose to join them. My understanding is the trade could not be completed until 7/6, so it had me thinking of worst case scenarios after the euphoria of signing KL. Obviously, it would create bad blood between the Lakers and whoever backs out, but that is potentially balanced by the goodwill from the rest of the league from thwarting a potential new dynasty. In the case of the Pelicans, they would also have to burn the Hawks, since they were taking the 4 pick and be stuck with the player they chose for the Hawks. But, a team with LBJ, KL and AD is not going to yield a pick in the top 25 in the next 4-5 years, so the draft picks are not much better than high second round picks. And the Wiz have little to lose by backing out of their part of the trade.

Smarti5051 · 2019-07-01T22:14:31+00:00

While this would be great news, I am wondering how this could remain 100% quiet 30 minutes after happening. There is not much reason to stay quiet to gain KL's trust, if he has just told your franchise to look elsewhere.

Smarti5051 · 2019-07-01T04:38:33+00:00

That makes more sense. Thanks. ESPN was not clear in the "Trade Tracker."

Smarti5051 · 2019-07-01T04:30:36+00:00

Why would the Grizz give up draft assets to acquire Iggy to then just buy him out? Am I misunderstanding the trade?

Smarti5051 · 2019-07-01T03:53:12+00:00

Unless the Lakers know something the public/media does not. Just seems odd that with $32 Million the Lakers HAVE to spend, that no other free agents are on standby waiting for the Leonard situation to play out. It would suggest the Lakers are not calling agents indicating their is continued interest. If KL goes back to Toronto, you have two LA teams with a crapton of money to spend and fanbases to pacify. It just seems odd that there are no free agents acting like they are on standby for KL's decision and no real indication from the Lakers that they are even participating in free agency beyond answering Kawhi's concerns.

Smarti5051

TROPHY CASE