Equity Management

50% is A LOT for collectibles. Obviously everyone has different risk profiles and if you live off of $70k a year and are worth $5 million you can tolerate more risk than others, but yeah usually 50% if anything is a bit risky.

I’ve never looked into it, but I’d imagine collectibles have a low, or no correlation to other asset types, which would actually make it somewhat ideal for diversification

Yea you need to consider inflation just storing pure cash (outside of money set aside for immediate and near-future living expenses) is generally not a very good thing to do. I think taking $600-1200/mo (a lot for most people) and investing it is a great thing to do. My father who was a UPS driver in rural NH his entire life just retired a millionaire with this exact principle. In general nobody is ever going to get rich with their own time, even if you make $500+/hr. Wealth typically comes with leverage, most often leveraging the work of others (equity), but sometimes it’s technology, sometimes it’s capital, it can be many things but it’s almost always required to actually acquire meaningful wealth.
I will say though that without a doubt your goals are what is most important. I view everything through the lens of wanting to retire early and extremely comfortable ($10m+) and just spend time with kids/family, but I have spent tons of time around the other side of the coin (father, friends, family) who just want steady and predictable and I understand that lens as well. I will say though I speak daily to a large number of people with 9 (and some even 10) figure net worth and the easiest common thread to see between them is that they don’t think linearly. Likely what you read in a book or heard from Dave Ramsey on a podcast is something used to sell you a vision/easy to follow method and not the actual optimal path

Also (sorry can’t help myself) I will say one final thing, that when it comes to small numbers spending your time investing is almost never practical. You can try to be a ‘day trader’ and beat the market at 11%/year using 100% of your time, capital, and probably only succeed 1/100 outcomes or you can put your $ in a vanguard S&P500 fund for 10%/year and have 100% of your time/etc to focus on building more wealth.

A simple shift in negotiation early on in your career, say, moving you from $42,000/yr to $50,000/yr starting pay, assuming you get 5% salary growth per year in both scenarios will net you $113,654 DIFFERENCE over the next 10 years of income (710k vs 596k). These small things that people take entirely for granted will give you a 100x personal return vs say, spending too much time figuring out how to manage $500/mo investment. If it’s a fun side hobby and of interest to you fine, but if you actually want to maximize financial gain over the time period focus on WAY different things.

A friend of mine left poker and went to a single year coding bootcamp and came out of it with multiple job offers of $250k+ for someone with no CS degree and 0 experience outside of the bootcamp. He wrote a lot about the experience back in 2015/2016 (2016 - haseeb qureshi) and, despite myself never having any ‘real job’ for the past 15 years, I found them to be a great re-framing of a common approach to problems and have sent many friends to them over the years. I’d highly recommend the average person spend much more time on optimizing early trajectory than anything else. Almost nothing will pay similar dividends early on (and you can passively put the increase into investments :blush:)

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The 50% came from the fact that my Pokemon card collection grew something like 7x over the course of 2020. After my huge selloff, my Pokemon cards are back to being roughly in the place they were prior to this year as part of my overall portfolio, which means I don’t feel any stress over the value of my collection anymore.

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Being very comfortable regardless of my portfolio has enabled me to basically “freewheel” my finances. I only invested in stuff that seemed fun at the time of investment.

Music Royalties
Hurricane Options
Hobby related Stocks
Hobby/Collectible items (Includes Gold and Silver coins I just like the looks of or relevant stories)

My credo is, invest in what you like just like you should collect what you like. Otherwise, what’s the purpose? That way there’s no such thing as a bad investment.
Keep in mind that if there really was a sure fire investment of any consequence, you would never hear about it. Never.

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I might’ve not explained this correctly.

Amassing between 72,000 and 144,000$ as an example is usually to show that either it be in a portfolio between those number, or having paid that much on a property, or even having it cash and sit there. Still grants you much greater financial opportunities specially at a young age. It does depend on goals but having somewhere around those numbers provides a much bigger leverage in life around that age-range.

Most people around that age are only putting money aside to pay debts like credit cards or student loans. Not mortgages. Also depending on the kind of lifestyle you want. The example shown is for the middle class worker with a average paycheck.

You do not need massive amounts of capital to retire early. Educated investment and a modest lifestyle will do it for anyone. Trimming down on payments, not accumulating useless debts and steadily amassing wealth will get anyone on top of their own finances!

The lifestyle required sucks for 5-10 years but its so worth it on the long term.

I wish you the best of luck in your financial goal!

I agree, there are some real sexy looking coins out there

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Realistic Expectation & Exit Strategy

The #1 Investment is yourself & The #1 reason for failure is fear

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I’m 22 and still in school.

last year: 50% pokemon 50% index funds.

This year: 94% pokemon 3% tesla 1% aapl 1% paypal .5% etfs .5% bitcoin.

Same. I have no idea what these guys are talking about

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I’ve got to ask about the music royalties

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Gary sold all his zords and bought the rights to “achey breaky heart”

:crazy_face::heart_eyes:

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50% in S&P 500, and 25% Diverse portfolio of corporate bonds purchased on the secondary market. Purchase at a discount and use risk analysis to determine the ones that are more likely to get the totality of the coupon payments. 25% section 8 Real estate, if you’re uncomfortable with real estate then add it to the bonds.

Why elect for personally owning real estate, rather than placing the capital into REITs?
Having helped friends with their rental properties, it seems like the hassle isn’t worth the slightly higher ROI from self-ownership (assuming REITs are placed into tax advantaged accounts to avoid capital gains).

The main issue is still yourself. If you have 500K why would you pay rent and have it all on REITs when you could easily get a property and assuming you haven’t went overboard 500K is plenty to get a home around most areas.

All in all it’s much more beneficial to invest in your own equity rather than someone else.

The big reason here has to do with the tax advantages afforded by Real Estate, and also the ability to manage it yourself as opposed to having no control over decision making as it relates to REITs.

Although, mainly for the tax advantages

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Going to be real with you, living in expensive single family homes aren’t good investments. They hemmorage money to repair (even if I did the repairs myself) and maintain(lawn, pressure washing, yard, gutters) and have property taxes($7k/yr). My current house I bought for 550k in 05, and now its worth 600k. I won’t get back the pool or upgrades that I put into it. I was much better off renting for $3k/month and investing the rest. However, my section 8 portfolio continues to deliver with appreciation and cashflow. All 1 bd/1bath so maintenance is non existant, all old people that keep to themselves, and the rent is more or less guaranteed because the gov pays part of it. And section 8 is really really easy to scale, I just need to keep buying condos in the same complex whenever they hit the market.

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If anyone buys a house and within a decade of ownership doesn’t make significant returns I can’t help. But I will say that the only thing I have ever done is look at location, what’s around and purchase when % interest are low and over only 7 years of ownership one property more than tripled in value due solely to the area it’s located in.

It’s like any market, do your research before buying!

At the end of the day whether you only make 50k or 20k return, it will always be better than paying for someone else property. And I say that as someone who is currently renting a place that the tenant pays me more than I need for payment on it.

This just isn’t true though… and the math is pretty clear on it. I mean you’ll make $, but you certainly won’t make MORE money than you would have in the alternative scenario.
Typical situation (obviously contrived) is something like – I’ll leave out utilities for both sides for now:

Buy - $200k house, $40k down.
Expenses per year (30 year mortgage, 3.5% interest):

Mortgage: $898 x 12 = $10,776Property Tax: ~$4,000 (New Hampshire)Maintenance (typically 1% value): $2,000
Renting: $0 down, $40k to invest
Expenses per year:

Rent: $1,000/mo

10-year outlook, we go to cash in both scenarios

Owner spent: $167,760Owner’s home appreciated 2.5%/yr (above national avg 2.2%) = 1.025^10 = 1.28 = 28%28% of $200,000 = $56,000Owner’s home is now worth $256,000Owner has earned $45,146 in principle ($62,624 went to interest)Owner now has $40k + $45,146 + $56,000 in principle in their home, i.e. $141,146 and still carries a $114,854 mortgageOwner sells home for now largely increased value of $256,000!
Owner pays 6% to realtor, and receives back 256000 * 0.96 - 114,854 = $130,906
Owner started with $40,000, spend $167,760, and ended with $130,906. They profited (final - initial) $130,906 - $40,000 = $90,906 and spent $167,760 meaning their net was 90,906 - 167,760 = -$76,854.

Renter:
Invested $40k in a reasonably conservative 8.5% blend40k grew to 1.085 ^ 10 = 2.2609x = $90,439
Renter spent $1,000 x 12 x 10 = $120,000Renter started with $40,000 and ended with $90,439. They profited (final - initial) $90,439 - $40,000 = $50,439 and spent $120,000 meaning their net was $50,439 - $120,000 = -$69,561
Renter spent LESS over this time period and maintained total flexibility… allowing them to move/adjust expenses easily when needed (manage tail risk), potentially pursue life improving opportunities (job, travel, etc.) often aligning with significantly higher trajectory in pay (i.e. move 1 city over and get a 40% bump in income), etc., etc., etc.

I think home ownership is fine if/when you run the risk of being PRICED OUT of an area you love and want to stay. The area I live in is quite expensive, median home is prolly $900k and most in my direct area are $3m+. This is AFTER an about 50% correction down (many quality cities are like this Melbourne, etc.). Many of the home owners here bought there houses for like ~$50-200k 20 yrs ago, this allowed them to stay, where it not for that they almost certainly would have been forced out of the area as they couldn’t have afforded the pricing adjustment upwards. If that is a major concern for you, buying early if you can afford it in an area you are certain you want to stay can be practical.
as a vanilla piece of financial advice home ownership is a trainwreck and usually one of the largest that people make (along with spending 30%+ of their income on cars). They constrict you opportunity wise, are sub par financial vehicles and people almost ALWAYS stretch themselves way too thin and expose themselves to way too much tail risk. If you want real estate exposure buy a rental property and keep renting yourself. Many friends of mine did this prior to having much $. One of my best friends who was one of the quickest from $0 → 7 figures did this during college. Bought a house in university area (Waterloo), rented 1 room from himself for 4 rooms to others. Paid off large chunk of mortgage during college while living rent free, sold house after.
Seriously… don’t buy a house to live in if you’re trying to optimize financial gain

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also… owning a house as an investment (vs living in) has all KINDS of additional tax benefits. Here is a simple sheet I made for analyzing potential properties for a friend (who bought almost 20 and completely crushed – Austin, TX)

being able to mark down depreciation makes a tremendous difference, even when barely cash flow positive it can become a massive ROI lever

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