# The concept of GREED



## tech/a (1 March 2008)

> Greedy pig - "Oh I've made shyt loads of money from RE... Best I double my position now so I can make double a shyt load in the future".




I was going to post this as a reply to Snakey in the thread https://www.aussiestockforums.com/forums/newreply.php?do=newreply&noquote=1&p=266151

However I find the concept of greed held by quite a few here very interesting.

Before I give my own personal view I thought what is peoples *definition of GREED* and how do they quantify and justify the level of financial succes as greed.

(1) *My own view of greed *is one of a Dictatorship,or Government who have no regard for their constituents---simply bleeding them dry with no concern for their well being---quelling up rising with force--read death.

(2) On the other side of the coin---people who CHOOSE not to take care of their own finances now or in the future and expect in fact demand they be taken care of by Government and in turn YOU and I by way of welfare--Welfare cheats.

I do not classify those who have spectacular success in creating financial wealth through legal means as greedy---IF when they reach the point where they have ample wealth they can and do help others---at their DISCRETION.
*Packer* was a perfect example-- Gates does---many "Movie Stars" do.
Some here do.


----------



## Wysiwyg (1 March 2008)

*Re: The Concept of GREED.*



tech/a said:


> I do not classify those who have spectacular success in creating financial wealth through legal means as greedy---IF when they reach the point where they have ample wealth they can and do help others---at their DISCRETION.




Says alot there tech.People are quick to label someone greedy with their own situation (usually worse off) as a comparison.


----------



## numbercruncher (1 March 2008)

*Re: The Concept of GREED.*

I cant speak for Snakey, but, I think he means in the context of Greed _and_ the absense of perceived risk.

ie/ People with 10 IPs, some theoretical equity and looking for more debt and more risk all whilst believing RE is some eternal equity gravy train. Like the gambler continually doubling his bets till he hits the table maximum.

I wouldnt think many on this forum would have issue with the pursuit of wealth, this is infact probably why so many use this forum.

Another example would be the pure unadulterated greed that has landed so many banks in strife at this very given point in time.

I've seen the old saying proven so many times "The Greedy become the Needy".

Happy Investing


----------



## julius (1 March 2008)

*Re: The Concept of GREED.*

- Taking more than you deserve - of course this depends on who you ask :

- Benefiting at the expense of others. Once again a blurred distinction, given many markets are zero sum.

tech/a I agree with the point re government, but worth considering that most of the time it starts with good intention (ie. left wing leadership)

I know you are a business man and I am sure respect honest financial success as much as I do...but we should spare a thought for the other side of the argument. Even honest money is not necessarily deserved - markets have a path dependence (QWERTY), chance can and does play a huge part...

I disagree with the notion that helping others is at your discretion, as soon as you have more than you need, then you are as far as I see it, obligated to help others. I don't reserve my judgement in this regard.


----------



## Bill M (1 March 2008)

*Re: The Concept of GREED.*

Greed is when money is more important to someone than anything else in their life. Their health and family come second and their excessive desire for more and more money makes them lose sight for what they are really working for. 

Working hard for your money and investing in stocks or property is not greed, it is bettering yourself and setting up yourself for the future.


----------



## Wysiwyg (1 March 2008)

*Re: The Concept of GREED.*



julius said:


> - i disagree with the notion that helping others is at your discretion, as soon as you have more than you need, then you are as far as I see it, obligated to help others. I don't reserve my judgement in this regard.




Just this bit julius, my see on the discretion meaning - giving and helping others is from wanting to do so, not upon demand or expectation.

People have expectation thrust upon them and that is not right.If the individual is not expected to act in this manner then they may well help less fortunates of their own free will.This is a mark of a genuine person and not someone meeting  other peoples expectations.There is the difference.  

If it is noticed that those with way more than they need are not giving of their own free will, then that is not a human trait to desire.Pity not of them.


----------



## julius (1 March 2008)

*Re: The Concept of GREED.*

Wysiwyg I appreciate the sentiment but it's more about the practical results of charity that I am concerned with.


----------



## motorway (1 March 2008)

*Re: The Concept of GREED.*

I think greed is

looking for reward with no effort and 
blinked to risk..

It is joining a bandwagon
too late

getting in on tops with margin..

It is wanting what everybody else has
but free riding..

It is mindless following along instead of doing.

looking back
and coveting what others have achieved

It is reactionary
It is stealing

motorway


----------



## Garpal Gumnut (1 March 2008)

Greed is accumulating and never having to say you are sorry.

Like love and hubris, it is only in the future, that past sins can be appraised.

Greed is still a sin, I am told. 

I think it should be, when I look at it.

More for others though,  than for me.

gg


----------



## Timmy (1 March 2008)

*Re: The Concept of GREED.*



Bill M said:


> Greed is when money is more important to someone than anything else in their life. Their health and family come second and their excessive desire for more and more money makes them lose sight for what they are really working for.




I second this definition, thanks Bill.


----------



## nioka (1 March 2008)

Greed is trying to be the richest man (or woman) in the cemetary and not caring if anyone attends the funeral.


----------



## Julia (1 March 2008)

For me, greed is seeking personal security and wealth at the expense of others.  If no one else is being disadvantaged in  the pursuit of wealth (e.g. Bill's example of family being ignored etc.) then I don't see why what skills we have in terms of wealth creation should not be used.  Such pleasure, then, in being able to help those who do not share those skills.


----------



## Birdster (1 March 2008)

*Re: The Concept of GREED.*



Wysiwyg said:


> Says alot there tech.People are quick to label someone greedy with their own situation (usually worse off) as a comparison.




Reminds me of a quote Wysiwyg;

“Greed: A word commonly used by liberals, low achievers, anti-capitalists and society's losers to denigrate, shame and discredit those who have acquired superior job skills and decision-making capabilities and who, through the application of those job” - Neal Boortz (US "Shock Jock")


----------



## Snakey (1 March 2008)

Greedy investors

What is a greedy investor? We are all investors trying to make the best result at the end of the day. So are investors greedy for trying make maximum profit. No I dont think so. Everybody wants to get out at the top or close to it.
Webster says;
greed - : marked by greed : having or showing a selfish desire for wealth and possessions
Being greedy is being given a  house for twelve months easy work and wanting another house for the next twelve months work. That to me is greedy.
Wanting ten times what everybody else has got, thats greedy.
seeing something you own going up 100% in value so you double your position then it goes up another 100% so you double your position again untill you get burnt. Thats being to greedy for your own good. Simular to what numbercruncher is talking about. Not even thinking about risk, only thinking about the reward.
Tech please feel free to disect my post into little peices but please give longer replies and put more thought into your analizations. Sometimes you miss the point all together.
As far as my post in the RE thread you refer to, Alot my friends have multiple properties because, lets face it, one is not enough for them. They can only live in one but they have several. Why? because they want to be richer than the average joe. Fair enough I guess but this greedy tendency has not only given them more money, its taken money from others in a less fortunate positions. Which also happens to be their children that now need to have dual income to pay for a house. Many RE pigs will say OH thats OK Ill just give them one of my properties. Thats fine but that doesnt help guy next doors children. Anyway such is life things should soon balance themselves out as far as income to the price of RE goes.
 Many first home buyers are wanting to by a house, not 5 just 1. People that are buying RE now are fearful that they will miss this run away gravy train. But people who are waiting for a better opportunity to enter the market will be the ones who are better off because they wont be over commited with pending interest rate rises and will pay less for their property IMO. I mentioned that I have a small position in RE not to become filthy rich but to own the place where I live. No one can tell me to get out and I can do things to the house that I want to do. So I wont be selling now tech. 
  Remember tech we are all here to give are opinion and we dont have to all agree with one idea.  We are all individuales and we are expected to have different ideas. I refuse to debate endlessly on forums because I dont have the time or the patients. these are my views like or lump em.


----------



## chops_a_must (1 March 2008)

*Re: The Concept of GREED.*



Wysiwyg said:


> Just this bit julius, my see on the discretion meaning - giving and helping others is from wanting to do so, not upon demand or expectation.



I don't think you have to have more than you need in order to help others...

But not helping others doesn't mean you are greedy. It could just be apathy or the belief you don't have anything worthwhile to teach or express, that stops you from helping others.

Everyone has ther own threshold for greed. I could probably say when I am personally being greedy, if I breech certain conditions recently listed on my blog for instance. But they certainly wouldn't apply to others, and even if I did breech those, it wouldn't mean to others that I was being greedy.

However, what my personal threshold for greed is, and what most people's thoughts of it are, are probably similar.

i.e. deliberately foregoing, or at the expense of, the benefits of everything else, and of everyone else, in order for personal gain. 

Might be at the expense of the family, environment, fellow workers, employees etc. and may be inividual as well as communal, in society or business. As nations, the US and Australia are greedy when it comes to resources for example.


I've always thought of wealth and money building to be the side effect of doing things correctly, whatever that may be. I don't think you can continue to build capital (in all senses of the word) indefinitely, with greed. For greed is folly, and with folly comes destruction.

My land lord for my clinic rooms, 3 years ago, bragged to me that he could afford to retire. Now, he claims that he is broke, and he can't afford to pay his employees' super. He would be earning well into the six figures... but he had to have a 70k car on credit, had to buy another few houses, has to have $100 dinners each night, has to have many credit cards (and has to pay off the minimum amount).

Not only is that greedy, but it is also ****ing stupid! I don't think you see greed without stupidity very often...


----------



## Mofra (2 March 2008)

nioka said:


> Greed is trying to be the richest man (or woman) in the cemetary and not caring if anyone attends the funeral.




As far as short summations go, I quite like this one 

I wouldn't say greed is related to consumption per se, more related to the constant re-evaluation of goals & ideals. Once you reach a particular goal & decide you will not be satisfied and want more, and constantly re-set your goals based on the accumulation of assets of others, that is greed.


----------



## noirua (2 March 2008)

Mofra said:


> As far as short summations go, I quite like this one
> 
> I wouldn't say greed is related to consumption per se, more related to the constant re-evaluation of goals & ideals. Once you reach a particular goal & decide you will not be satisfied and want more, and constantly re-set your goals based on the accumulation of assets of others, that is greed.




Spot on Mofra.  I saw a programme where multimillionaires went to Africa to help with projects. One broke off before the project was finished as he had to leave for a meeting to add a few more millions to the hundreds of millions that he'd already made.


----------



## tech/a (2 March 2008)

The point I'm attempting to make on the Concept of Greed by SOME I have made here.

https://www.aussiestockforums.com/forums/showthread.php?p=266315#post266315

To retire Financially Independant we need to have un encumbered wealth in excess of 4 Million at a constant 3.1% inflation rate.

Have a look at the charts and I look forward to comment.


----------



## Ferret (2 March 2008)

tech/a said:


> The point I'm attempting to make on the Concept of Greed by SOME I have made here.
> 
> https://www.aussiestockforums.com/forums/showthread.php?p=266315#post266315
> 
> ...




I'll bite -  that $4M is a bit of a scare figure.  If that's in 15 years time, at 3.1% inflation its about $2.5M in today's money.  Today's money is what we can relate to and that's the figure to quote.

5% investment return during retirement is also rather pessimistic.  Most large super funds aim for and achieve 7% over the long term.

Personally I think I could retire very comfortably with $2m in today's money.  At 7% return I could draw down 3.9% or 78,000 every year tax free.  This would rise each year to match inflation, I could live off it indefinately and when I'm gone the $2M of todays money would still be there to pass on as an inheritance.


----------



## Mofra (2 March 2008)

tech/a said:


> To retire Financially Independant we need to have un encumbered wealth in excess of 4 Million at a constant 3.1% inflation rate.



It is probably as good a measure as any, but that would be aimed at an "average" standard of living would it not? 

$50k pa in todays dollars, although slightly below average salary, can still afford a reasonably high standard of living. Given many retirees "downsize" their homes, often moving to cheaper areas, grow their own vegetables etc. I'd say retiring with less does not necessitate a determined move away from financial independance.

Or maybe I'm just not greedy


----------



## Bill M (2 March 2008)

tech/a said:


> To retire Financially Independant we need to have un encumbered wealth in excess of 4 Million at a constant 3.1% inflation rate.




I have been retired for 7 years now and I can assure you that you don't need 4 million $$, that is too high a figure.


----------



## krisbarry (2 March 2008)

The greatest example of greed is the River Murray, a few contol it and squander it, just like the housing market.  Taking a step back from both examples we see a choking filthy mess on the horizion.  Greed kills us all!


----------



## krisbarry (2 March 2008)

Here is a great example of filthy greedy behaviour...Cathy Jane and Myles Pearce.  Both well known property gurus, buying squillions of properties. Looks like they have been caught in their own little web.  Beaten at their own game...lol

I have no sympthay!!!!!!!!!!!!!

Got caught up in the greed thing

http://www.search.asic.gov.au/cgi-bin/gns030c?acn=007_861_716&juris=9&hdtext=ACN&srchsrc=1


----------



## Wysiwyg (2 March 2008)

Greed is not sharing.I like the Robin Hood story.


----------



## krisbarry (2 March 2008)

Greed can also be defined as a person who begins hoarding a basic need, item or service, which in turn hikes up prices above inflation, then average folk are denied that basic need item or service.


----------



## xoa (2 March 2008)

It's true that greed manifests itself in selfishness. But everybody wants money, most of us want as much as possible - this does not necessarily equate to greed. 

I think greed emerges when a person's lust for money overcomes rationality. Their subprime cognitive state then causes them to do stupid things, like give money to Nigerian scammers, or borrow to "invest" in $800,000 Perth townhouses. The greed syndrome is inevitably cured by massive financial losses.


----------



## julius (2 March 2008)

Gekko

_The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind._


----------



## theasxgorilla (2 March 2008)

*Re: The Concept of GREED.*



julius said:


> I know you are a business man and I am sure respect honest financial success as much as I do...but we should spare a thought for the other side of the argument. Even honest money is not necessarily deserved - markets have a path dependence (QWERTY), chance can and does play a huge part...




So true.

Should we also have threads, 'The Concept of ARROGANCE' and 'The Concept of HUMILITY'?  Failure to acknowledge what you describe above and disproportionately attributing success to oneself is what I find distasteful.  Humility is a virtue.  If you make a mint, I don't expect you to give it away or let people live in your IPs for free.  I don't think you're greedy if you set your sail and  managed to catch a big gust of win which takes you even thrice around the world.  But please, at least acknowledge that it was the wind that blew you there.

ASX.G


----------



## wayneL (2 March 2008)

*Re: The Concept of GREED.*



theasxgorilla said:


> So true.
> 
> Should we also have threads, 'The Concept of ARROGANCE' and 'The Concept of HUMILITY'?  Failure to acknowledge what you describe above and disproportionately attributing success to oneself is what I find distasteful.  Humility is a virtue.  If you make a mint, I don't expect you to give it away or let people live in your IPs for free.  I don't think you're greedy if you set your sail and  managed to catch a big gust of win which takes you even thrice around the world.  But please, at least acknowledge that it was the wind that blew you there.
> 
> ASX.G



Profound, that is.

Henry Blodget has a good article on the topic of luck in investing.


----------



## motorway (2 March 2008)

That is why one way or another
it is important to say grace ( as in thanks giving)

Wealth is not having all the gold ( what would you do with it.. eat it ? )

Wealth is a network effect
Wealth is a win win effect

Gold is only useful if there are good things to buy, see and do.

This only happens when everyone has some gold..
Wealth comes from trade and exchange..

Greed destroys wealth
because it would hoard , monopilize
and stifle...



motorway


----------



## theasxgorilla (2 March 2008)

*Re: The Concept of GREED.*



motorway said:


> It is wanting what everybody else has
> but free riding..




Some of your points remind me of Mark Hudson's talk on the real estate bubble in the US in late 2006.  I remember distinctly when he refutes the statement by Milton Friedman that there is no such thing as a 'free lunch'.  He contends that the _economy_ is all about getting a free lunch, because if it's not free it's not worth having because everyone else is getting that free lunch.  The only people who say there isn't a free lunch are the people who are getting it 

ASX.G


----------



## 2020hindsight (2 March 2008)

I notice the new dental check govt assistance ( $150 towards $300 cost) will be effectively means-tested.

We are starting to talk "need" vs "greed" I suspect.  

I wonder what the key to happiness is?   Wealth and poverty have both been shown to have failed. (quote by .. forget .. let's say 'anon')


----------



## wayneL (2 March 2008)

2020hindsight said:


> I wonder what the key to happiness is?   Wealth and poverty have both been shown to have failed. (quote by .. forget .. let's say 'anon')



Epicurus had some good ideas. imo

Regarding money, it's hard to be happy without enough. So to have a chance of happiness, enough money is required. How much is that? Debatable, but enough to function in society, eat well, roof over your head etc. Anything over that amount, does not help with happiness.

In fact Seneca noticed that the wealthier people are, the shorter the temper.

Back to Epicurus; good friends, good food/sharing meals, conversation etc. 

I think he got fairly close to a formula


----------



## 2020hindsight (2 March 2008)

Wayne , found the origin - good ole google 


> "It's pretty hard to tell what does bring happiness; poverty and wealth have both failed." by Kin Hubbard




"money is of no consequence ... unless you have none."  (anon)

http://www.ivmdl.org/quotables.cfm?category=Wealth and Poverty

"A rich but miserly man who was unloved in his community went to a wise man to ask why. 
The wise man took him to a window. "Look", he said, "And tell me what you see." "People," said the rich man. 
Taking him to a mirror, the wise man asked, "What do you see now?" 
"Behold", said the wise man, "in the window there is glass and in the mirror there is glass. But the glass in the mirror is covered with a film of silver. As soon as the silver is added, you cease to see others and see only yourself.""  Source: Anonymous


----------



## Julia (2 March 2008)

2020hindsight said:


> I notice the new dental check govt assistance ( $150 towards $300 cost) will be effectively means-tested.
> 
> We are starting to talk "need" vs "greed" I suspect.



I'm not sure what your point is here?  
As I read the article in today's paper the $150 was to become available to parents for an annual check up, clean and scale (average cost $295) for their children.
There was no mention of it being means tested.  It appeared to only be available to parents for their children.
I've not seen anything which indicates any free dental treatment for adults.
So much for the great Rudd "free dental care"!
Even if the $150 were to be made available to everyone, it wouldn't cover the cost of a single filling.


----------



## nioka (2 March 2008)

tech/a said:


> The point I'm attempting to make on the Concept of Greed by SOME I have made here.
> 
> https://www.aussiestockforums.com/forums/showthread.php?p=266315#post266315
> 
> ...



Tech,  
   In coming to that figure are you still counting on having the $4m intact when you die?. You can't take it with you.


----------



## Julia (2 March 2008)

nioka said:


> Tech,
> In coming to that figure are you still counting on having the $4m intact when you die?. You can't take it with you.



Hey Nioka,
How about having the $4M to spend in paradise?
Or alternatively, to bribe Satan to keep you safe from the fires of Hell?
Whichever suits your philosophy.


----------



## 2020hindsight (2 March 2008)

Julia said:


> I'm not sure what your point is here?
> As I read the article in today's paper the $150 was to become available to parents for an annual check up, clean and scale (average cost $295) for their children...



Minister for Health and Ageing, Nicola Roxon said on Insiders this morning that it would be means tested, i.e. only available to children of those families that don't qualify for top tax rate (I think I heard her right - but this detail / cut off level may be incorrect).

yes - refund of $150 - towards total cost of (very roughly) $295 (varies).


----------



## nioka (2 March 2008)

Julia said:


> Hey Nioka,
> How about having the $4M to spend in paradise?
> Or alternatively, to bribe Satan to keep you safe from the fires of Hell?
> Whichever suits your philosophy.




$4m might be enough to do a lot of bribery in NSW the way things appear to be being done.Can't see it being a tradeable item otherwise. It would be better spent in the paradise we are in while alive and kicking than run the risk of it being any use later on. If only we knew how much time we had left it would solve the budgeting problems. The perfect result would be to leave enough behind for a decent funeral and that only needs to be a cardboard coffin and a deep hole. That assumes you leave your kids in a position where they can take care of themselves. If they haven't done that by the time you retire they aren't capable of properly using whatever you leave them.


----------



## theasxgorilla (2 March 2008)

2020hindsight said:


> I wonder what the key to happiness is?   Wealth and poverty have both been shown to have failed. (quote by .. forget .. let's say 'anon')




There is no KEY to happiness.  Learn to live with that reality or just live with it.  The choice is ours.


----------



## tech/a (2 March 2008)

Bill M said:


> I have been retired for 7 years now and I can assure you that you don't need 4 million $$, that is too high a figure.




Bill in 25 yrs thats when you'll be thinking perhaps differently.

The figures are based upon paying yourself 90% of your retirement earnings each week adjusted for inflation so for example if you were on $50k when you retired in 25 yrs at 3% inflation compounded youd need near enough to $120k to have the same buying power as you do now.

My father retired 30 yrs ago on $400k which was then looked at like a couple of million today---he only exists because of the pension.

If you have a passive income geared to inflation this will help.

Noika

Its not a figure I come up with its what the calculator posted says.
If you have a play with it youll notice that you can tweek the inputs and if you plan your investments well you can arrive at incredable sums when you pass on.You can also end up penniless well before.

I guess this is when you could do with a "Financial Adviser"!

Wayne----ASX.

You guys just cant stomach that someone can succeed through sound planning can you.

In 1995 Adelaides Southern Expressway came across my desk.I went home that Night and said to my better half that once this was built the South would open up best we start buying houses.Off we went.
True we didnt know things would boom but when in 1998 the 3 properties we had had doubled away we went again.
Business has doubled since then as well actually nearly tripled.
My trading well thats been discussed to death.
Theres luck in everything we do.The more we place ourselves in front of it (Luck) the more likely we are to benifit from it.



> 'The Concept of ARROGANCE' and 'The Concept of HUMILITY'?




Doesnt matter what I do if I mention my own business as examples its arrogance,and of course I'm showing no humility.



> Profound, that is.




My turn to chunder.

*Stop*

Hows your $50K going in that managed fund?


----------



## theasxgorilla (2 March 2008)

nioka said:


> Tech,
> In coming to that figure are you still counting on having the $4m intact when you die?. You can't take it with you.




No you can't, but it would be a shame not to leave a stronger capital base for the next generation, me thinks.  Yes I'm aware of the proverb about wealth not lasting more than 3 generations...but you can do something useful with it like invest in infrastructure.  How long will the tube tunnels in London continue to serve?  Or the autobarns in Germany?  Or the 'fjärr varme' heating pipe network in Sweden (built to last 100 years)?

ASX.G


----------



## theasxgorilla (2 March 2008)

tech/a said:


> Doesnt matter what I do if I mention my own business as examples its arrogance,and of course I'm showing no humility.




I've got no idea what you're talking about.  My post were general thoughts on my point of view regarding the topic of greed.  But since we're here...I agree, of course you are showing no humility.  That's yours to deal with.  My exposure is limited to the handful of minutes a day it takes to read your posts.


----------



## Bill M (2 March 2008)

tech/a said:


> Bill in 25 yrs thats when you'll be thinking perhaps differently.



That's just plain wrong. I do not follow the norms, I do not put it in on term deposits and further more I do not listen to nor trust Financial Advisers. This method has given me a path to success.

I invest my retirement money in stocks, property trusts, hybrid securities and convertible notes. Those stocks that I hold generally pay fully franked dividends so I pay NO TAX. The tax problems are already solved. The stocks I own also counter inflation, by that I mean year after year the dividends go up. 

Now don't forget I am living proof that this is happening, already retired 7 years. I do not draw on superannuation and I get nothing from the government. My portfolio during my 7 years has also increased (regardless of sub prime and the banks crashing and 9/11).

So in the end, if you cover inflation and tax and can still make a few bucks for your living expenses then you will not go broke. Whilst doing all that you might get lucky and your share price may go up too, no problems here, my system works.


----------



## tech/a (3 March 2008)

Bill.

Interested in the "mechanics" of your setup---retirement Income stream.

What sort of base do you believe you need?
What sort of return do you aim at each year and what have you achieved?
What do you believe for you is a comfortable weekly income that suits you?



> So in the end, if you cover inflation and tax and can still make a few bucks for your living expenses then you will not go broke.





With no passive income other than investments I'm interested in what nett return before tax your getting and the amount of funds your using to do that.


----------



## Bill M (3 March 2008)

Hello tech/a, I work on a system that the investment must pay me 6% after tax. To get that there are several good blue chip stocks paying this kind of dividend right now.

My hybrids and floating notes pay me 9 to 10%, I work on the basis that the first $6,000 income from them is tax free anyway, after that tax kicks in. Again tax after that (30%) brings me to a net income of 6 to 7%.

Then comes the property trusts, they pay around 8 to 9%, again about half of that is tax deferred. What's left that I must declare on my property trusts I simply apply a 30% tax on it and again I get about 6 to 7% on them.

You now only have to ask a person "how much do they need to live per week" and apply the above.

Some people need $500 p/w others need $1,000 p/w and then some need $2,000. My wife and I live in our own fully paid for unit, have no debts and no kids. We travel overseas at least once a year and go interstate probably twice a year. In think anybody in our position could live very easily on $40,000 to $50,000 (tax paid) per year. I hope that helps, cheers.


----------



## tech/a (3 March 2008)

Bill

Thank you yes it does help.

So if we say on average around 6% return on investment.
This means you must have $850k starting investment capital.

I'm interested in your comments regarding the following.
Lets say Inflation kicks in at 3.5% on average.

Your capital generating income must keep ahead of this so must increase at a rate of $29,750 a year.
Your buying power will also erode by the same amount so you'll need to generate a compounding income increment of 3.5% a year.
So your 50k needs to be 53k next year and so on from your capital base.

If this cannot be maintained in 10 yrs time you have quite a shortfall based upon 3.5% any higher and the situation compounds.
If rate of return cannot be maintained then this also compounds the situation.

To ignore this in my view is to see your nest egg eroded dramatically in a short time.Infact it is preferable to increase your base capital more than the inflation rate.
Interested in comments


----------



## Bill M (3 March 2008)

tech/a said:


> Bill
> To ignore this in my view is to see your nest egg eroded dramatically in a short time.Infact it is preferable to increase your base capital more than the inflation rate.
> Interested in comments




Yes it's a good debate. I expect that my stocks over time will at least increase in value by 3.5% a year and I also hope dividends keep pace that. That being said and done it just doesn't always work like that (look at all the red ink on the board today.) The other ace I have is that I just don't spend 50K a year, I reinvest back into the stockmarket my surplus income. This is where it is crucial to know how much a person needs to live on for a week. Honestly when I'm not overseas I can't spend $500 p/w, we have no rent, no debts and no kids to worry about. Anything surplus goes back into shares which again increases the capital base. I might add that if I do get to 90 yo and I am ready to fall off this planet earth I really don't care if I have no capital as I don't intend on funding anyone else's retirement except my wife's and mine, cheers.


----------



## nioka (3 March 2008)

tech/a said:


> Noika
> I guess this is when you could do with a "Financial Adviser"!




I have used them in the past. Never again. The last on cost me half my capital base and he still has a column in a major capital city newspaper. The previous ones cost too much and did not give me any better advice than this forum. I only started to get ahead when I decided to DO IT MYSELF. Some financial advisers may be OK but the advice they give is often outdated by a change in government regulation. 
I recently did a job for an elderly lady who wanted to pay for the job. When I told her I didn't want to be the richest man in the cemetary she replied "nor do I". I told her to leave something to the salvos and she said "a good idea". We were both happy.


----------



## Julia (3 March 2008)

Another factor to consider is that as we reach very old age our capacity to spend as much declines.  We no longer do overseas trips and frequently eke out our remaining days in some sort of assisted living environment where our greatest excitement is a bus trip to the local shopping centre.

As Bill says, when you have no mortgage and no rent, have organised your property so as to require minimal upkeep and maintenance, unless you must have new designer clothes and new car every year then you simply don't need a huge income.

There was an interesting article in yesterday's 'Sunday Mail' about retirement.
A few extracts:
Just 3% of people leaving the workforce have enough superannuation to support a comfortable retirement.
Most retirees depend on a full age pension which for a couple is $449 each fortnight.
Of new retirees, 75% will go straight on to at least a part age pension, while 45% will receive the full pension from their first day of retirement, the Association of Superannation Funds of Australia says.
People retiring now, particularly blue collar workers in the private sector, are retiring with $50,000 or $60,000 in super.  And a lot of people still have part of a mortgage to pay off.

The above statement that the full age pension for a couple is $449 is a bit misleading.  I'm fairly sure it's that much per person, so if the house is paid off a couple can manage on the age pension.  It's a whole different story for a single pensioner who only receives about $540 p/f with roughly similar overheads to meet.


----------



## ithatheekret (3 March 2008)

I understand what Tech is getting at here , but there are larger dynamics involved . We've been buying into the new northern end of the expressway developments . But it was the dual concept of the road that enticed the move .

Semi rural , like the south use to be . Dean Brown will be remember well by the southern areas , especially the Pen . down to Cape Jervis . Get twoways on your expressway Tech and you'll be a squillionaire . Hindmarsh island days of $1K an acre are gone , foundation stone for many families we know .

Ours averaged out around $420/sq.m on 1/4 acre blocks ( improved ) , but it's not an overnight investment . These were half that a decade ago and haven't really jumped on the housing rally and slump . Nice new road opening up the hamlets though .

When I look at the southern area development , it reminds me of the growth of Sunshine , just after the Comm Games . Look what nice big roads and shopping centres did there . Amazing build it and they will come stuff .


----------



## Happy (3 March 2008)

What upsets me is that not only millionaires make savings, but interest on savings is taxed to the point that money in bank account even with good interest go backward.

Nothing wrong with that, but at the same time even Keven 07 says that we do not save enough, I hope that he can click one day why.


----------



## tech/a (3 March 2008)

I'd like to bring 2 points to the table for Discussion/Comment related to* Bill and Julia's comments*.Both are synergistic I feel.

(1) Regarding returning 6-10% on investment,for most who are retiring the thought let alone the capability of returning a profit on 100% of their available capital no matter how small that return seems,is often not considered.Even those who have some knowledge dont place at Risk (Thats is most peoples perception of investment---risk money) more than a small % of their nett worth. Investing 50k to 800k + for most is like asking them to perform heart surgury. So they leave it in the hands of Experts which can lead to experiences like noika has had or far from acceptable returns.A year of loss or static growth can set a plan back many years.  
Please see below for other comments related to this----

(2) The idea of having to also grow your capital base by the rate of inflation has all of us counting on out core investments at least keeping pace with inflation. A non performing year or a loss let alone a disaster puts us way behind again. 

Pertinent to this is a *gem* put out by *Radge* this morning on his site.
So important is it and relevent to my answer to Bill and Julia I place it here in some Doctored form to hopefully avoid ramping issues).

Retirees dont have the luxury of re building capital bases---bearing this in mind!


*To: It's normal for humans to do nothing about a problem until it becomes a crisis.

Are we in a crisis? 

I guess if you asked shareholders of ABC Learning (-75%), Centro (-95%), Allco (-93%), MFS (-85%), Credit Corp (-94%), you may get an affirmative nod.

Here is a quote today from one of our esteemed financial journalists, Matthew Johnson of Business Spectator:

"The end of last week was so bad that it's tempting to play for a reversal..."

Humans want to give their genius ideas a chance to succeed. We naturally want to believe that if we let it go a bit longer, that things can turn around.

The mistake is not in guessing wrong.

The mistake is in staying wrong.

We also naturally believe that if we cut off everything the moment something goes wrong, that we're quitters. Giving up fast is not something that gains us a lot of respect, but it's exactly what can make a so-so trader into a great one: the ability to give up when it's necessary. And give up fast.


In the words of Warren Buffett:

"Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks"

Ben Bernanke, Chairman of the US Federal Reserve, used the term Stagflation last week. In the early 70's, the last time Oil went shooting to the moon, we suffered stagflation. The ASX dropped 66% and took 4-years to make a bottom. 

4-Years. Think about that.*

This applies to all asset classes.Not just share trading.

Interested in all comments

*Ithatheekret*

I have the plans from Dept Transport on my desk re the Northern Expressway (And its 2 way!!!!).We are looking at the Bridge abutments.
Anyway---there is one GOOD reason why the North is likely to be in more demand and pricing should remain buoyant.

Re the Southern Expressway when your on it next youll notice a corridor of lkand to the west.This is ear marked to take the opposite lanes.
All is not lost only common sence in the initial construction---which this time round will be even more expensive.


----------



## Julia (3 March 2008)

Yes, I saw that comment from Nick, Tech.
Do you remember Realist?
He would never have accepted Nick's philosophy and I'm embarrassed to say that a few years ago I too would have watched as my ship went down!

My earlier comments were in no way arguing about your super philosophy which you know I share, but think it's realistic to understand that you are not exactly Joe Average and many retiring Australians are going to be quite content with an income which you would regard as being in poverty.


----------



## IFocus (3 March 2008)

The concept of greed!

My concept is really simple its the thought that runs though my mind when I am $4K up seconds after open 

*"F### the plan why don't I close my positions now?"*


----------



## Bill M (3 March 2008)

tech/a, this will be the last post I make on this subject simply because it is exactly the same argument I heard 7 years ago. They said, it's not enough, you will go broke, you will be back at work in 2 years, you will jump off your balcony out of boredom, blah blah blah blah blah. They were all wrong.

I look back at the great depression where the sharemarket lost 85% off it's highs. Dividends went back wards 30%. That was the greatest depression in history, the question remains, if they lopped off 30% of my dividends could we survive? The answer is definitely yes, that is still more than the average security guard, checkout operator or council worker makes net after tax. I am not a greedy man and I love the way my life is right now, good luck with your investments.


----------



## ithatheekret (3 March 2008)

IFocus said:


> The concept of greed!
> 
> My concept is really simple its the thought that runs though my mind when I am $4K up seconds after open
> 
> *"F### the plan why don't I close my positions now?"*




 hehehe , never knock a profit hey , it's even better when your dregs end up free and keep rising ...........

And Tech , now I know who's to blame for the whopping great lumps of concrete they drag down that road .
We were at Inman Valley when they started the Southern end , shopped down Victor Harbour for years due to the road works and traffic build up .
But Reynella finally started to blossom after years of looking dowdry .......
Come on the second leg , might have to keep tapping Pat on the shoulder though , he lost down Mile End somewhere


----------



## krisbarry (3 March 2008)

2020hindsight said:


> I notice the new dental check govt assistance ( $150 towards $300 cost) will be effectively means-tested.
> 
> We are starting to talk "need" vs "greed" I suspect.




Why is dental excluded from medicare anyway?

Oral Hygiene is critical to human health, wellbeing and asthetics.

Bad oral hygeine has been linked to unemployment, low self esteem, poor eating habits, heart problems, speach problems, social exclusion, bulling etc.

As an ex dental assistant I am and have always been pi_ssed off at the government from excluding dental from the medicare system


----------



## tech/a (3 March 2008)

Bill.

My apologies for hitting a raw nerve.Even thinking about alternate scenarios can be daunting.Thanks for your participation.

7 yrs ago we began what is now seen as the strongest bull run in our time.The next 7 yrs is very likely to be very different.
In the last 7 yrs we have seen property rise faster than anytime in our lifetimes.
Gold is doing the same.
The AU$ has almost doubled.
Oil has doubled.

*On Greed*
I think the vast majority of people have to adjust their concept of greed to perhaps one of financial planning.Certainly those in their 30s will have to be thinking Multimillion dollar retirement starting capital or have the capacity of returning 20% or more in your investments.
Once you stop work generating excess wont be as easy as it has been. 

Generating 10-20% growth in a 500,000$ portfolio is vastly more difficult than in a $50,000 one----not suprisingly in the psychological department,particularly if your playing with your total lifes savings.
*Taking a loss becomes difficult if not impossible for most*.

Taking advantage of outlier situations when they present themselves like those above need to be exploited.There are very few who can guide you in these directions,and I doubt they can they be found in one place.

*Passive income is very important *and there are a number of ways to set this up.Business/Property/Trading,Dividend streams,Futures,Option writing,Spreads and I'm sure many more.All can be low risk and if in the position to take advantage of opportunity when it arises,its suprising how lucky we can become.
Just take a look at Don (Rosella's) excellent Dividend stripping methodology without the massive risk of hoping the underlying price doesnt drop 3 times the amount of the dividend over a year! 

https://www.aussiestockforums.com/forums/showthread.php?t=454

A 6% dividend isnt much chop if the underlying has fallen 20% during the period you have held it---not my idea of sound investment practice.


----------

