You're impossible... I'm done, do what you want... hoard gold bricks... tax free gains, physical asset... can trade for bread after the apocalypse
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You're impossible... I'm done, do what you want... hoard gold bricks... tax free gains, physical asset... can trade for bread after the apocalypse
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http://canadiancouchpotato.com/model-portfolios-2/Originally posted by max_boost
Gimme a sample 1mill portfolio. Go.
Put all your money in just 3 ETFs. You'll be paying an average MER of 0.12-0.16%. You'll be diversified across assets classes (equities and fixed income), industries (a few thousand different companies) and geographically (a few dozen countries).
As for the argument of passive versus active investing, 10 years ago Warren Buffet offered to bet any taker $1 million that over ten years and after fees, costs and expenses, an S&P 500 index fund would beat ten hedge funds selected by his opponent. A hedge fund manager took the bet and with about 8 months to go, it is almost guaranteed that Buffet will win.
http://www.institutionalinvestor.com...#/.WLSYuRIrKsp
If you're interested in hearing the hedge fund manager's excuses, here is his response. Essentially he says that he lost becauase things didn't go they way he predicted they would. No shit.
https://www.bloomberg.com/view/artic...warren-buffett
Registered User
Wasn't there a study where researchers threw darts at a newspaper to select stocks, and beat the experts.
The experts must no have been enerchys right guys.
It's gambling, nothing more. Not that there is anything wrong with that if you like it.
This has gone comically, predictably, off the rails.
- Wealth management firms are like private banking, or other services for people with wealth: they are designed to free up time. They are NOT designed (or good) at earning outsized returns relative to risk. Personally I find the whole private banking schtick insufferable. And the wealth management industry is so smug.
- Serious money managers and the "insiders" as far as that goes know there the two dumb forms of money sitting at the table are: 1) pimply faced institutional PMs who think their CFAs matter 2) any and all retail investors, who are utilizing publicly available information to pick equities or "day trade" or even worse use charts like voodoo talismans. Note: I'm not calling anyone the dumb money, just expressing the consensus view.
- private placements are not products that generally beat the risk-reward curve. And if you are accessing one as a "passive investor" as implied here, then you are probably out of your depth. when I am asked to participate in an investment, my first question is always (ALWAYS): "why am I seeing this investment. who has turned it down ahead of me, and why." If you are seeing a private placement and you aren't an insider it is because people who had better information and better access to that investment have declined to participate. You had better know why. If you are some dude with half a buck with an wealth manager, and he is trying to get you into some private placement thingy, you are probably way further down on the food chain than you think. Unless you truly an insider (and you would know it), then these are just gambling plays.
- Active management/stock-picking/directional-investing whatever you want to call it, is really something from a bygone era when information and analysis wasn't so rapid and readily available. Nowadays, over a long time horizon (like post retirement is), a passive investment strategy is superior (think couch potato). Then just pay tax/accounting professionals by the hour to ensure that you are doing things tax efficiently and legally.
- speaking of hoarding gold bricks, a person who I know and would consider truly wealthy (ie. more than $100MM), met me for dinner once with a walking cast. Reason: "dropped a gold brick on my foot" while burying them on some land he owns and which will remain secret from me and everyone.
Last edited by Buster; 05-20-2017 at 07:59 PM.
Beyond Bully
Perfect. Thanks for the post.Originally posted by holden
http://canadiancouchpotato.com/model-portfolios-2/
Put all your money in just 3 ETFs. You'll be paying an average MER of 0.12-0.16%. You'll be diversified across assets classes (equities and fixed income), industries (a few thousand different companies) and geographically (a few dozen countries).
As for the argument of passive versus active investing, 10 years ago Warren Buffet offered to bet any taker $1 million that over ten years and after fees, costs and expenses, an S&P 500 index fund would beat ten hedge funds selected by his opponent. A hedge fund manager took the bet and with about 8 months to go, it is almost guaranteed that Buffet will win.
http://www.institutionalinvestor.com...#/.WLSYuRIrKsp
If you're interested in hearing the hedge fund manager's excuses, here is his response. Essentially he says that he lost becauase things didn't go they way he predicted they would. No shit.
https://www.bloomberg.com/view/artic...warren-buffett
This is realistically my situation in about 5 years give or take and I need to formulate some sort of plan lol Family business will be sold, gonna move away and probably rent a condo while getting acclimated to the new city (most likely Toronto).
Registered User
Jesus.
Clearly Gestalt has some wonky requirements for retirement and the math sucks. The only reason you need 10m if your requirements are 150k a year is if you are just hording it as cash. That is absolutely asinine; totally devoid of all logic. If you're afraid of investments you better believe you should be afraid of hording cash. If you are afraid of investments how do you get 10 million by 35 anyway?
There is only a few scenarios that work, and one is being gifted it; another is being a hockey player. That's a pretty tiny niche. Doesn't work for me, and doesn't work for anyone else on this board most likely.
Gestalt, your views on investing are a wonky too. Just from the numbers you gave for your parents we know they were in something high risk and likely not diversified at all: "lost half their investment in 1 year, then took 5 years to gain it back". That tells me they also likely panic sold. because if it was a diversified high yield fund that took a big bath in 2008 it likely would have recovered in 2009.
The next wonky thing you said is in reference to 'safe government style investing'. The government doesn't do safe conservative investing, they pretty much do a 65/35 split with risky stuff (say stocks) and conservative stuff (say bonds). Even the government knows putting your money in 'safe' investments is retarded. Letting it sit in a bank is even dumber.
The CPP owns 10s of millions of dollars of shares of SHOP. They own shares in cenovus. They have 500000+ shares of Home capital group for fuck sake lol. Those are not safe... they're high risk.
As far as i'm concerned skyline addict is preaching to the choir here and my views on what is necessary pretty much are spot on with what he's posted. I'd say everything he said would work for a majority of people too...
Last edited by zhao; 05-20-2017 at 08:06 PM.
Registered User
Read the Buffet bet.
Interesting the hedge fund guys bet money that was placed in a US Treasury bond outperformed their hedge funds.
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Wrong. The broad markets bottomed in 2009, losing quite a bit over half their value over about 1 and a half years.Originally posted by zhao
Jesus.
;. That tells me they also likely panic sold. because if it was a diversified high yield fund that took a big bath in 2008 it likely would have recovered in 2009.
spot on with what he's posted. I'd say everything he said would work for a majority of people too...
It took 5 years to just recover those losses. Check the indexes historical. didn't have much money but I watched with interest.
That's roughly 7 years to go nowhere except pay fees, and taxes from the buying and selling funds did.
If you look at it longer term, 2009 marked a 12 year low for the Dow. You definitely would have been better off with nickles.
Last edited by Gestalt; 05-20-2017 at 08:34 PM.
How did your/their fixed income portfolio do during that time?Originally posted by Gestalt
Wrong. The broad markets bottomed in 2009, losing quite a bit over half their value over about 1 and a half years.
It took 5 years to just recover those losses. Check the indexes historical. didn't have​ much money but I watched with interest.
That's roughly 7 years to go nowhere except pay fees, and taxes from the buying and selling funds did.
If you look at it longer term, 2009 marked a 12 year low for the Dow. You definitely would have been better off with nickles.
Banned
That's a great post.Originally posted by Buster
This has gone comically, predictably, off the rails.
- Wealth management firms are like private banking, or other services for people with wealth: they are designed to free up time. They are NOT designed (or good) at earning outsized returns relative to risk. Personally I find the whole private banking schtick insufferable. And the wealth management industry is so smug.
- Serious money managers and the "insiders" as far as that goes know there the two dumb forms of money sitting at the table are: 1) pimply faced institutional PMs who think their CFAs matter 2) any and all retail investors, who are utilizing publicly available information to pick equities or "day trade" or even worse use charts like voodoo talismans. Note: I'm not calling anyone the dumb money, just expressing the consensus view.
- private placements are not products that generally beat the risk-reward curve. And if you are accessing one as a "passive investor" as implied here, then you are probably out of your depth. when I am asked to participate in an investment, my first question is always (ALWAYS): "why am I seeing this investment. who has turned it down ahead of me, and why." If you are seeing a private placement and you aren't an insider it is because people who had better information and better access to that investment have declined to participate. You had better know why. If you are some dude with half a buck with an wealth manager, and he is trying to get you into some private placement thingy, you are probably way further down on the food chain than you think. Unless you truly an insider (and you would know it), then these are just gambling plays.
- Active management/stock-picking/directional-investing whatever you want to call it, is really something from a bygone era when information and analysis wasn't so rapid and readily available. Nowadays, over a long time horizon (like post retirement is), a passive investment strategy is superior (think couch potato). Then just pay tax/accounting professionals by the hour to ensure that you are doing things tax efficiently and legally.
- speaking of hoarding gold bricks, a person who I know and would consider truly wealthy (ie. more than $100MM), met me for dinner once with a walking cast. Reason: "dropped a gold brick on my foot" while burying them on some land he owns and which will remain secret from me and everyone.
Also, I lol'ed at the last bullet.
Registered User
i checked the funds I am familiar with, and they all recovered or came close to fully recovering by the end of 2009.Originally posted by Gestalt
Wrong. The broad markets bottomed in 2009, losing quite a bit over half their value over about 1 and a half years.
It took 5 years to just recover those losses. Check the indexes historical. didn't have​ much money but I watched with interest.
That's roughly 7 years to go nowhere except pay fees, and taxes from the buying and selling funds did.
If you look at it longer term, 2009 marked a 12 year low for the Dow. You definitely would have been better off with nickles.
Even the high yield stuff I looked at that was decimated still fully recovered by around the end of 2009.
I checked a bunch of mawer funds, i checked a bunch of bank funds, I checked some random stuff, and I found nothing that performed as bad as you claimed. Even the bank stuff which traditionally isn't amazing, i'll use atb's max growth fund as an example, it still averaged over 5% after MER when you start the clock 10 years ago. Then when you look at stuff like maw150 it's lol. ya, they were destroyed in 2008, but 10g invested 10 years ago is what, about 30g now in that fund? maybe more?
If they dumped hundreds of k or millions into one fund and it did poorly, well that's not a reason to never invest again... All your experience is is a walking advertisement for diversifying when you have a lump of money that actual hurts to lose.
Registered User
Quoted because it's the best post in this thread.Originally posted by Skyline_Addict
Many people who have millions of dollars don't want to live like millionaires. It most certainly doesn't become a requirement to live that kind of lifestyle regardless if you have the means. $10k property taxes roughly translates to a $2MM property. People can just be happy living in $500k property and not be "living poor". Why do you have to have such an expensive property?
Again, my analogy is based on living a bachelor lifestyle. I'm not sure if yours is the same, so I'm going to assume that $150k minimum means you talking about taking care of a family, a spouse that won't be working, etc. Also assuming that you've got your house fully paid off, $150k a year is quite excessive.
As posted below, smartly and even conservatively investing your money in properly diversified portfolio is NOT gambling on some market irregularities or banking on some IPO going up 500% in a day. As Warren Buffet said, compound interest is the most powerful tool in accumulating wealth. If you have a portfolio returning an extremely conservative average of 5% a year over 30 years, your $2MM investment is worth almost $9MM. Raise it to a still conservative average return of 7% and you're at $15MM.
Also as mentioned by Holden, another huge factor to the passive "retirement income" you'd have in this scenario is the taxation benefits. A properly managed / sheltered investment portfolio will produce income that is far more tax efficient than standard employment income. Considering that you can be taxed as much as ~40% on your employment income, this is significant.
Obviously you and I are picturing the retired lifestyle quite differently but you clearly don't need $10MM to live a very comfortable lifestyle long term. If you do it right and don't blow the majority of your wealth in the first 10 years , exercise a little bit of patience and heed the caution everyone has to abide by - live within your means - you will do just fine.
I will concur that it is quite different for people who come into big money suddenly, compared to those who are in the position to consider such a young retirement because of their current occupation (athletes, movie stars, etc). The latter is more likely to be accustomed to a higher standard of living and hence will have different considerations in mind when it comes to maintaining / improving their lifestyle in retirement.
Also as Holden pointed out, people who just want to live the life they live currently (with perhaps a few extra reasonable luxuries) sans having to go for work, $10MM is not necessary and certainly not a minimum. Afterall, most people don't even make anywhere near that in a lifetime of work and these people still end up retiring at some point all the while paying off a mortgage for 30 years.
My main message here is that with a reasonable sum of money ($2MM for me) , the opportunity to maintain and grow your wealth passively from the onset of an early retirement can be very simple to achieve. The rich don't get richer by dumping all their money in a chequing account and using it to fund their lifestyles. They also don't go about thinking a 2% ROI is the best they should expect.
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I can confirm this post. 2MM is the perfect amount for 2 people to retire / work a job you want at the rip age of 29.Originally posted by davidI
Quoted because it's the best post in this thread.
Professionally Retired
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Does anyone remember how nice the forums were when toma was banned and quit posting for awhile?
Registered User
Good to see this discussion shifting not only in terms of how much $$ and lifestyle choices, but WHAT to invest in.
Is passive investing (eg. couch potato and low MER funds) still the investment of choice if you are high net worth, or is there a point after which it makes sense to go to a money manager? I remember having drinks with a financial advisor and he strongly suggested that after $500k net worth that people go towards a "professional". Personally I think he was full of crap to sell his products, but just curious if there was any validity to his statement.
Do people tie up a majority of their wealth in the more "passive" investments, or do they still maintain some less passive but potentially higher return assets, such as rental properties, business ownership, or etc...?
Registered User
Of course a planner would say go to someone to manage it after 500k, because they get a piece of the action doing that. Of course they dont tell the plumbers with $500 to invest to go to a professional, because for how much time they'd spend dealing with that person they'd make nothing off them.
But then someone who lives and breaths investment who should know what they are talking about should be able to achieve goals better then you managing your own stuff. That is a lot of 'should', so the onus is on you to find someone that isn't a snake oil salesman trying to take his fees for gambling your money.
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There's a already a thread for long-term investment discussion: http://forums.beyond.ca/st/255987/of...tments-thread/Originally posted by nobb
Good to see this discussion shifting not only in terms of how much $$ and lifestyle choices, but WHAT to invest in.
Third Gear
As mentioned earlier in the thread, wealth management companies / higher level investment advisors are there to provide services which free up the time and create convenience for their clientele. They are no guarantee that you're financially better off vs. doing it yourself.
A qualified company or advisor will mostly likely have much more knowledge about investing than most of their clients. At a higher level, these advisors also need to be experts in taxation and estate planning which are a key proponent to growing and managing wealth. These advisors are also part of a network of other industry partners, such as accountants, lawyers, lenders, etc., which provides an overall "one stop shop" experience.
Regardless of their qualifications and advice, on your own you have the same access to the investments that they offer and more. Investing on your own can be fun for some, but also time consuming and daunting for others. I would think that the majority of wealthy people prefer to have everything taken care of for them - afterall, retirement is about doing what you want.
With the proliferation of ETFs, there has been a bit of a shift and certainly a lot of discussion about the redundancy of having your money managed by a middle-man, so to speak. Nevertheless, the overall convenience and sense of care that a good investment advisor provides is still enough for most people to be content paying for this service vs. the other option.
Beyond Bully
Is there anything to prevent these experts from messing up your portfolio? Or am I overthinking it lol I don't have the networth to even make a call lol
I am user #49Originally posted by rage2
Shit, there's only 49 users here, I doubt we'll even break 100
Third Gear
Yes, but that's because the onus is still on you to pick the investments.Originally posted by max_boost
Is there anything to prevent these experts from messing up your portfolio? Or am I overthinking it lol I don't have the networth to even make a call lol
The advisor doesn't pick your investments per se - they make recommendations and give advice based on your risk tolerance or profile, which is determined by a series of questions you answer (and sign off on, as being accurate). Then you decide whether you want to go for it, or discuss different options.
After your initial portfolio has been completed, it is still up to you to give instructions on the account going forward. They are not authorized to transact without your consent or direction I.E "Hey man. I just put in an order for $100k in the snapchat IPO for you a couple days ago. It's gonna be great. Just wanted to let you know, have a great weekend."
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