The Exceptional Wealth Accumulation Ideas and Thinking Thread

[tasmart]

the most important advice might be......only 10% of the population are very, very wealthy, 90% are not....
so if everyone you know is doing something the same...ie buying shares, props etc...then you should make a mental note to yourself...do not do that, or follow the crowd...they will not become wealthy.....

The figures are actually worse than that!

This was posted some time ago:

The average Australian will earn approximately 1.8 million dollars during an average working life. For every Australian working today 8% will become "Financially Independent" when they retire. Out of 100 people aged 15 today, by the age of 65

38 will be deceased
38 will be living in poverty
16 will still be working
7 will be retired on a livable income
and 1 will be wealthy.

ATM I am still working but would have a livable income if I needed to retire (just turned 55) but I really enjoy my job, lead a balanced lifestyle and have a lot of fun.

It is obvious that all the 'recipes' for becoming wealthy, in general, do not work. We have to find out own way, some will get there, unfortunately most won't.

However, I belived that forums such as this, with the sharing of ideas, experiences, failures and wins are all useful as part of our education. But we still individually have to make it work - for us.

Keep up the posts ..... starting to get interesting.

 

[awg]

the most important advice might be......only 10% of the population are very, very wealthy, 90% are not....
so if everyone you know is doing something the same...ie buying shares, props etc...then you should make a mental note to yourself...do not do that, or follow the crowd...they will not become wealthy.....

According to the figures below, approx 129,000 millionaires.

These days, anything under that does not cut the mustard.

so 129,000 / 21,000,000 = approx 0.62% of the total population are wealthy.


http://news.my.msn.com/business/article.aspx?cp-documentid=3410626


The global financial crisis has sent the number of millionaires in Australia plunging and forcing it out of the world's top 10, according to a new survey.

Despite escaping the worst of the downturn so far, Australia's number of high-flyers dropped 23.4 percent to 129,000 by the end of 2008, placing it 11th out of 71 countries, the Merrill Lynch-Capgemini study said.

Australia had been a member of the exclusive top-10 club since 2006, said Capgemini Financial Services senior manager Wayne Li.

"The decline in our high net worth population meant that Australia slipped in its global ranking from number 10 in 2006 and 2007 to number 11 in 2008," Mr Li said.

The total net worth of Australia's elite -- people with net assets of one million US dollars excluding their home -- also slipped 29.7 percent to 379.8 billion US last year, Li said.

 

[ThingyMajiggy]

so 129,000 / 21,000,000 = approx 0.62% of the total population are wealthy.

It wouldn't be quite that bad would it? 129,000 / the working population. Wouldn't be from EVERY single person in Australia, as not everyone is working or has an income, kids etc?

 

[MrBurns]

What's wealthy ?
Net worth of ?

 

[Mr J]

The average Australian will earn approximately 1.8 million dollars during an average working life. For every Australian working today 8% will become "Financially Independent" when they retire. Out of 100 people aged 15 today, by the age of 65

38 will be deceased
38 will be living in poverty
16 will still be working
7 will be retired on a livable income
and 1 will be wealthy.

Sounds like rubbish to me. Wealthy is typically described as higher income, and while the very, very wealthy make up far less than 10%, the plain old wealthy might make up about that.

38 deceased? The average life expectancy is over 80, and who knows how far that will rise with advances in medical science. Do you know how long the rest of us would have to live to balance out those 38 'premature' deaths?

38 living in poverty? Do 38% of 65 year olds nowdays live in poverty? Even if they do, current 15 year olds will have paid super their entire lives, and should be in a better position than current 65 year olds. Shouldn't be too bad if the parents don't spend the inheritance.

7 retired on a livable income? No wonder 38% are dead - their incomes weren't "livable" .

1% wealthy? Please x2. It's the 'wealthiest' group out there.

These figures seem like complete rubbish, unless I'm missing that this is in a post-WW3 scenario.

 

[Uncle Barry]

Good evening,
T/A.
Mate, this is without a doubt the most informed thread on ASF's I've read,
in fact I will have my son over here tomorrow and have him read the complete thread (because Dad knows nothing).
And I will direct two of his friends to also read the thread !
(I am trying to educate them .... very trying )

If someone tells him the very same as silly old Dad has been saying for years he just might change his ways. And if this can take place, I owe you deeply.

T/A, EVERYTHING you are saying is 100% correct, the only problem being 99.9% of the people of this country expect to spend more than they earn on a blo...y plastic card and then retire and THEN put their hand out, AGAIN !

Again, someone said something about retire,,,,,,, why, if you enjoy what your doing ?
I am so called retired, well over the age, but my good sweet wife now thinks, he will never retire.. (at long last.)
Why should I ?
Some people curl up and retire, some then go to bowls or something,
Myself, this is retire type of stuff,,,,, learning and maybe making some dollars more.

opps, sorry of the track, please forgive, as I an a old retire fa.t.......

Kindest regards,
UB

 

[MRC & Co]

Correct me if I'm wrong but most here have the opinion that inflation is set to take hold

Actually, I would say the mood of the market about inflation or deflation is very mixed at the moment. As seen by both movements in the yield curve and gold.

 

[tech/a]

You may never reach retirement.

At 55 I still think I'm 30.
Look at chicks and wish I was still 30 they still look the same to me as they did when I was 30!
Play just as hard as I did when I was 30!
But know I'm 55.

Ive lost 4 good mates to Accidents/Cancer/Drugs.
I have a really great Girlfriend currently accepting the challenge of cancer aged 57--She and her Husband "were" looking at retirement---in the next few years! God I hope they get it!

Ive watched others retire and turn into boring old farts.
I see even more who will never get off struggle street.

There is one thing a few of us want to achieve which in itself I believe to be exceptional.

We want to look back on life and honestly say with a huge grin and sense of satisfaction.

"Life--What a blast!"


BE EXCEPTIONAL---you have a choice.

Back on topic tommorow.--apologies.

 

[tasmart]

Sounds like rubbish to me. Wealthy is typically described as higher income, and while the very, very wealthy make up far less than 10%, the plain old wealthy might make up about that.

These figures seem like complete rubbish, unless I'm missing that this is in a post-WW3 scenario.

These figures were posted on this forum a few months ago and apparently are based on ABS figures and I think are relatively realistic:

The way that the ABS (Australian Bureau of Statistics) defines "Livable income"? - In retirement your income is 60% or greater of your last year's pay. "Wealthy" is defined as your retirement income is greater than 80% of your last years pay.

Looking at the ABS site the latest figures on Household Wealth are for 2005/06 before the bubble and burst and really show how low most peoples assets actually are - and this is mostly as their main house rather then income producing assets.

Wealth is a net concept and measures the extent to which the value of household assets exceeds the value of their liabilities. In 2005-06, the mean value of household assets was $655,000. The corresponding value of mean household liabilities was $92,000, resulting in mean household net worth of $563,000

Balances in superannuation funds were the largest financial asset held by households, averaging $85,000 per household across all households. 76% of households had some superannuation assets, but the distribution was very asymmetrical. While the average (mean) value of superannuation for those households was $111,000, half had superannuation assets under $44,000.

It is hard to find actual figures on the number of self-funded retirees in Australia but again from the ABS 2005 Year Book this was only 5.1% of households with 14.5% on age pensions and 13.5% on other government pensions or benefits. The definition of the self-funded group is:

Self-funded retiree households (i.e. those households whose principal source of income is superannuation or property income and where the Household Expenditure Survey (HES) defined reference person is 'retired' (not in the labour force and over 55 years of age)).

So I would not dismiss the figures in a hurry!

 

[Temjin]

Isn't that list of "exceptional" opportunities that you pointed out were in one way or the other (or rather directly!) connected to the global credit boom phenomenon that was started by Alan Greespan when he lowered the US rate to a low level for an extended period of time. This caused a worldwide credit boom followed by an unprecedented relaxation of lending criteria that boost up asset prices even further.

I've been reading alot of commentaries from those who are already rich and in a way, some of them DID NOT really take part in the global boom since they knew it was totally unsustainable. Do we call them "exceptional" them since they did not take the full advantages of it but still, from others point of view, they are already rich and successful?

Whereas, those who participated the phenomenon utilising full leverage and gain massive wealth at the expense of others, but refuses to acknowledge that this boom was sustainable, would be considered "exceptional"?

But yes, I agree that those who did take advantage of the boom and still came out intact after the bust (i.e. sold out) would surely be "exceptional" for various reasons.

I'm not going to speculate on the future because it is simply too cloudy at the moment. There are convincing evidences and arguments coming from the inflation-camp in which commodities such as energy/agriculture/precious metals would present huge amount of opportunities. On the other hand, the deflation camp also put up an equally convincing argument where the recovery may not be as "boom-like" as what most would be expecting. However, they too do not rule out the opportunities in the same commodities that the inflation"ists" are recommending.

So I'm taking the ideas on both side.

Has anyone read Timothy's book "4 Hours Work Week" and his concept of NEW RICH?

It's certainly a very enlightening book to read.

Ohh, and I forgot to mention this. I personally see there are SO MUCH opportunities for me to act on, but I can only afford to focus on just one particular one to make that "exceptional" wealth. I mean has anyone seen someone "exceptional" who has developed a really successful business and generate million of dollars of revenue but is also regarded as a legendary level full time future/option traders and at the same time, buy/speculate/renovate properties at the professional level? All these take considerable effort and time to get to that stage.

Is anyone facing the same kind of dilemma?

 

[tasmart]

I'm not going to speculate on the future because it is simply too cloudy at the moment. There are convincing evidences and arguments coming from the inflation-camp in which commodities such as energy/agriculture/precious metals would present huge amount of opportunities. On the other hand, the deflation camp also put up an equally convincing argument where the recovery may not be as "boom-like" as what most would be expecting. However, they too do not rule out the opportunities in the same commodities that the inflation"ists" are recommending.

I agree that the future is very murky - the quandry is how best to position yourself to take advantage of opportunities - but not be too exposed to much risk (I personally am very risk tolerant).

 

[Mr J]

So I would not dismiss the figures in a hurry!

Perhaps not dismiss them, but I'm extremely skeptical, if only because they are applying recent figures to the far future. Example, current retirees have not paid super for most of their lives, while 15 year olds will have done so. If they're willing to overlook this, then that throws the credibility out the window, as there are many reasons why recent stats cannot be applied to young and future generations.

Who knows how "livable" and "wealthy" are defined, and then what about the 38% that are dead? Life expectancy for that group is in the 80's. If one-third died at 65 and another third died at 80, the remainder would have to each 95. I can't imagine one-third of people dying before 65.

Looking at the ABS site the latest figures on Household Wealth are for 2005/06 before the bubble and burst and really show how low most peoples assets actually are - and this is mostly as their main house rather then income producing assets.

Which includes people that have not yet reached retirement. We assume that these people will add to their net worth by that stage.

Do we call them "exceptional" them since they did not take the full advantages of it but still, from others point of view, they are already rich and successful?

They can be exceptional in some ways, and not in others. For the purposes of the recent boom, no they were not exceptional. If they're rich and successful, then they have clearly been exceptional at other times, or in other ways.

 

[Trembling Hand]

Hindsight!! Bloody hell!

Guys if your comments are "it all looks easy in hindsight" but its too hard to look into the future. And that's it well,

What is that telling you about the tools you are using? About the information you seek? About the peers you keep? About what you learn from previous missed opportunities? About even your approach to the problem of positioning yourself?

So here is my "Exceptional Wealth Accumulation Ideas and Thinking"

Smarten the F up guys and do some work.

If you still cannot see how to do these things in hindsight thats your problem. Your tools are rubbish and need replacing.

Hindsight is, I think, used as an excuse more than as a real problem. Yes its hard but not impossible.

 

[tech/a]

I want to try and keep the thread on track.

Rather than discussing what/who is classified as exceptional---my focus of the discussion is this---

Conservative thinking and conservative investment at best will bring conservative results---nice smooth equity curves---wonderful diversification--that glowing homely feeling that everything is going to be OK--over the long run.

And thats FINE---for 90% of the population.

But there are 10% or so of us who recognise that EXCEPTIONAL wealth growth doesnt come from conservative investment---UNLESS in exceptional times*.

MOST equate the opposite to conservative as "Maverick" or Gung Ho with complete disregard to quantification of risk. No doubt MOST do not consider risk when rushing in where "Angels fear to tread"

Which brings me back full circle to the crux of this thread.

EXCEPTIONAL wealth creation ideas with the highest regard to risk. How we can place ourselves in the position to be sweapt along by those OUTLIER moves in all aspects of wealth creation.
Those SPIKES in out nett wealth that seem like we have won the lottery!

The ones that change the course of our lives and of those around us. Without taking risks that could send us to ruin.

To have truely exceptional wealth we must find these.
* There is always option (2).

 

[tech/a]

T/H

ASF'S GORDON RAMSEY!
love it!

 

[ojm]

Hindsight!! Bloody hell!

...

Hindsight is, I think, used as an excuse more than as a real problem. Yes its hard but not impossible.

I don't think any one person would have got all the items listed in the original post correct. Who could have predicted with 100% accuracy that gold would go from $250-1000. Or any of the others.

Hindsight gets it right every time.

That doesn't mean that we aren't trying to get these correct now, for the future. I think everyone on these forums is trying.

 

[Mr J]

Guys if your comments are "it all looks easy in hindsight" but its too hard to look into the future

It is for many people. Some will see these as clear opportunities, but most people would be bumbling about trying to find their way around a dark room. Most of the public has little to no experience with a business/trading/investing mindset, so the opportunities aren't going to be obvious to them. The solution would be to tell the public to pay more attention to their financial decisions, but that's unlikely to happen. There are too many excuses to use, but in the end it comes down to laziness and/or ignorance.

It does amaze me that people spend so much of their time working for money, a little to no time thinking about what they should do with it. It's like saving for tools to build a house, but then not building the house! Perhaps that is the problem; we see money as a tool to build wealth, while most see it as something to exchange for goods.

I want to try and keep the thread on track.

Sorry, this is hard for me but I will try.

 

[tech/a]

You dont need to get them all.
Just 1

I'm hoping that this discussion will bring to light HOW we can place ourselves in the position WITHOUT debilatating RISK --- to take advantage of these opportunities BOTH long and short term.
You may get 50 wrong and 1 right and that 1 could well alter your life perminently!

I'm with T/H

TOUGHEN UP!

Stop thinking like the 90%

Most of the public has little to no experience with a business/trading/investing mindset, so the opportunities aren't going to be obvious to them. The solution would be to tell the public to pay more attention to their financial decisions, but that's unlikely to happen. There are too many excuses to use, but in the end it comes down to laziness and/or ignorance.

It does amaze me that people spend so much of their time working for money, a little to no time thinking about what they should do with it.

I can absolutely equate with this.
I remember a BBQ after I had a handful of properties in 2000.
2 at the BBQ were F/A's ---good friends---the ones that suggested I put $70k a year into super--I'd declined.

They just couldnt fathom WHY I was buying Property like it was running out (their words). my response is that property which could self finance was indeed "running out". I had 6 properties with NO cost returning me a positive cash flow AND a capital gain.----Looks of bewilderment.

In 2002 The was another BBQ with the SOLE purpose of explaining IN DETAIL to the same 6 couples how "To Do it".-----One did it to an extent and---Looks of bewilderment---these people arent stupid!

 

[prawn_86]

I guess it depends on your definition of 'exceptional' but one of my ideas (and actions) recently has been to pick up stocks that meet my investment criteria and have a current (after the downturn) div yield of 10% or higher.

10% pa compounded is pretty awesome over the long term, and of the stocks i have picked up, one would hope there is very little downside left (like any investment it must still be monitored however)

EDIT - Due to my low capital base these investments are not going to be the ones that i can retire on, but you have to work with what you have got

 

[MrBurns]

You dont need to get them all.
Just 1

I'm hoping that this discussion will bring to light HOW we can place ourselves in the position WITHOUT debilatating RISK --- to take advantage of these opportunities BOTH long and short term.
You may get 50 wrong and 1 right and that 1 could well alter your life perminently!

I'm with T/H

TOUGHEN UP!

Stop thinking like the 90%



I can absolutely equate with this.
I remember a BBQ after I had a handful of properties in 2000.
2 at the BBQ were F/A's ---good friends---the ones that suggested I put $70k a year into super--I'd declined.

They just couldnt fathom WHY I was buying Property like it was running out (their words). my response is that property which could self finance was indeed "running out". I had 6 properties with NO cost returning me a positive cash flow AND a capital gain.----Looks of bewilderment.

In 2002 The was another BBQ with the SOLE purpose of explaining IN DETAIL to the same 6 couples how "To Do it".-----One did it to an extent and---Looks of bewilderment---these people arent stupid!

Sorry but to save me sifting through your previous posts, what your view on property now ?

Inflated, stay out ?