Wealth and its acquisition

[burglar]

I'll make a start on this topic:

I had no intention to acquire wealth.
I was raised in a family of 8 with a single income.
We were poor, but there was love in the room.

I was content with my lot (still am)!

So what changed:

The Property Boom put a Principal Residence out of the reach of my children.
Renting is not an evil alternative.
But rents rise as rental properties become more expensive.

 

[YMI]

Thanks burglar, I would have been too scared to starting that since I keep getting :nono: whenever I post something. I have actually 7 siblings and know exactly where you’re coming from. Unfortunately I do not have a recipe on how to acquire wealth but I learned that poverty is incredible important and intentionally boosted (maybe) in order to keep the system running.

When it comes to finance there are reputable people - for example you and me and most of the others - and criminals. Criminals are divided in two sorts again; the ones who robbed a handful of people and stole a few thousands of dollars, they are fed by the government and live in jail. And the ones who robbed tens of thousands of people and stole billions of dollars, they are also fed by the government but live in a mansion.

A few months ago Gina Rinehart said something like if you want to get rich, stop being lazy and start working hard. And I thought this was more true ‘if you want to get rich, you need a lucky dad like she had’ – Gina you filthy ugly b**. Although I believe she’s pretty smart.

 

[burglar]

Question for Julia:

How much wealth is enough?

... stop being lazy and start working hard. ...

You don't get wealthy by working for an hourly rate.
That is income, not wealth!
To acquire wealth you need to make the money work harder.

 

[ROE]

Wealth is when your passive income greater than your expenses...

you can live on 40K a year and have 50K passive income to me that is wealthy...

 

[tech/a]

I'm with ROE.

But to ge t in a position where you have
Enough asset to generate passive income of
Any significance you need to understand that
Opportunity needs to be acted upon quickly
And decisively.
Many freeze and watch it slip straight by.

Eg gold boom $250 - $1750
Oil $25 to $140 a barrel
AUD $.50c to $1.04
The property boom 1996 - 2005
Business and opportunity 2000 to 2010
Bull Market 2001- 2008
Tech boom -- then bust.
Mining boom

 

[howmanyru]

I have heard that if you just do exactly what you love doing, and don't worry about the money, wealth will come to you. I think the assumption is that you will become so good at what you are passionate about others will pay you for your expertise. But I want to stay home and just potter around the garden so not sure how to build great wealth from that!

 

[tech/a]

I have heard that if you just do exactly what you love doing, and don't worry about the money, wealth will come to you. I think the assumption is that you will become so good at what you are passionate about others will pay you for your expertise. But I want to stay home and just potter around the garden so not sure how to build great wealth from that!

Jamie Durie
Don Burke

Maybe the saying is right!

 

[YMI]

...do exactly what you love doing, and don't worry about the money, wealth will come to you.

Well, if there is anything you really love doing then you don’t mind spending a lot of time on it, like 12h a day, 7 days a week and that’s half the battle.

But I want to stay home and just potter around the garden so not sure how to build great wealth from that!

I actually believe you can do whatever you want, if you’re exceptional good at it, it will eventually be possible to live on it even on gardening and pottery - great wealth?? I thought you wrote before the key is not to worry about the money

100 years ago a passionate musician was good-for-nothing and today they earn millions of dollars. So I think the globalization makes it a lot easier and opens doors of which you would have dreamed a few years ago. Two fellows managed to receive useful results when you search the net and built a multibillion dollar enterprise from that. What fascinates me most of this story is that their service is 100% free.

Joanne Rowling said she was basically homeless when she started writing a once in a 100 year success fantasy story. She also said that this is nothing that just pops up in your mind one day, it is actually hard work. She wrote books before that as far as I know, and neither was a success. Personally I think a combination of desperation and her passion for writing brought the success.

A student, not even finished school but also a passion for stories wrote the Eragon trilogy. Publishers refused printing the book so the family decided to publish on their own. Christopher and his mother arranged appointments in countless schools where he would do free readings and rise interest for the book. Suddenly hundreds of people wanted the book and then suddenly a publisher expressed interest and in the end they sold more than 30 million books – but to get there was hard work.

Btw, what I wrote earlier “stop being lazy and start working hard”, I hope nobody thinks that this is what I believe in. It’s more the way Miss Rinehart expresses the way she looks down on the poor.

 

[Julia]

Thanks burglar, I would have been too scared to starting that since I keep getting :nono:

You've only made a few posts. To one of them I responded positively, hence this thread, thanks to burglar.
It's a forum, YMI. It functions on challenging discussion. If someone does disagree with you, that should be seen as furthering the discussion, not a personal rejection.

Wealth is when your passive income greater than your expenses...

you can live on 40K a year and have 50K passive income to me that is wealthy...

+1.

I'm with ROE.

But to ge t in a position where you have
Enough asset to generate passive income of
Any significance you need to understand that
Opportunity needs to be acted upon quickly
And decisively.
Many freeze and watch it slip straight by.

So true. Imo this is where so many fail to take advantage of real opportunities.
Once a reasonable level of capital is achieved, relatively infrequent seizing of opportunity (such as when real estate doubled in less than a year) with decent amounts invested, can bring financial security in quite a short time.
Without decent basic capital, however, being limited to small wins on small stakes is imo often going to take a lifetime to amount to anything.

I have heard that if you just do exactly what you love doing, and don't worry about the money, wealth will come to you.

That sounds like some of the hocus pocus in "The Secret" or similar. Good luck with any positive expectation from that homespun warm and fuzzy stuff.

I have actually 7 siblings and know exactly where you’re coming from. Unfortunately I do not have a recipe on how to acquire wealth but I learned that poverty is incredible important and intentionally boosted (maybe) in order to keep the system running.

This is the bit I hoped you'd expand on. Can you describe for us exactly how poverty is "intentionally boosted (maybe) to keep the system running"?

Might perhaps be more likely that a philosophy of a family is ingrained in the growing up years. With eight children, unless at least one parent was a very high earner, it's unlikely that wealth acquisition was much of a focus in the family. That suggestion might not at all apply to your family YMI, but your comments suggest that you were less than well off growing up.

If, on the other hand, a child is inculcated with an understanding of money and how to make it work for you, that adult will likely be doing OK before many others.

A few months ago Gina Rinehart said something like if you want to get rich, stop being lazy and start working hard. And I thought this was more true ‘if you want to get rich, you need a lucky dad like she had’ – Gina you filthy ugly b**. Although I believe she’s pretty smart.

Well, this is where you lose me, YMI. If you have to resort to vicious personal insult in your resentment of someone who has been successful, it says a fair bit about you.

 

[So_Cynical]

Question for Julia:

How much wealth is enough?



You don't get wealthy by working for an hourly rate.
That is income, not wealth!
To acquire wealth you need to make the money work harder.

John Elliott the former Liberal party president is a good case study of starting the wealth processes with an hourly rate...ill quote the John Elliott wiki.

Career

Elliott joined the global consulting firm McKinsey & Co. From there, he and several partners acquired control of an Australian Stock Exchange listed jam manufacturer - IXL Ltd.

Elliott and his team built the company up through a string of acquisitions throughout the late 1970s and 1980s, including Australian corporate icons Elders Limited, an agricultural services concern, Carlton and United Breweries now part of the Foster's Brewing Group and Australia's largest beer manufacturer, and Henry Jones IXL food manufacturer.

The story as i heard it was that John basically saved all his dollars (pay) for a few years, and got some mates to throw in some money and then convinces some private financiers to put in the rest of the money to buy IXL.

Johns savings of the previous 4 or 5 years of working for a salary was the basis of his investment...the rest is history.

 

[burglar]

John Elliott the former Liberal party president is a good case study of starting the wealth processes with an hourly rate...ill quote the John Elliott wiki.



The story as i heard it was that John basically saved all his dollars (pay) for a few years, and got some mates to throw in some money and then convinces some private financiers to put in the rest of the money to buy IXL.

Johns savings of the previous 4 or 5 years of working for a salary was the basis of his investment...the rest is history.

You have gone out of your way to disprove what I said and what I meant.
But funnily enough you have proved what I meant.
He took his money and invested it!

 

[skc]

John Elliott the former Liberal party president is a good case study of starting the wealth processes with an hourly rate...ill quote the John Elliott wiki.



The story as i heard it was that John basically saved all his dollars (pay) for a few years, and got some mates to throw in some money and then convinces some private financiers to put in the rest of the money to buy IXL.

Johns savings of the previous 4 or 5 years of working for a salary was the basis of his investment...the rest is history.

But he worked for McKinsey! That's the top management consultant firm in the world and has probably one of the most powerful alumni network in the business world. If someone worked there for 5 years, they a) won't have any spare time to spend their money because they work 120hrs a week, and b) should have build enough connections to last several careers. Even Chelsea Clinton (daughter of Bill) worked there. It's definitely not your typical salary job.

 

[So_Cynical]

You have gone out of your way to disprove what I said and what I meant.
But funnily enough you have proved what I meant.
He took his money and invested it!

Not disprove so much as just point out that it has to start somewhere and that somewhere is with a job...Steve Jobs worked for Atari for a while..he didn't save anything but did meet some smart people and that experience helped him later on.

I started poor and im still poor, i used to read a lot of books about rich dudes when i was young and had some experiences, thus came to the conclusion that money makes money, 30 years later i have proved that to be right.

Steve Job had to sell his car to pay for the parts to build Apples first computer...Hugh Hefner borrowed $1000 dollars from his mum to help him publish the first edition of Playboy, the Marilyn pic cost him $600 from memory, imagine explaining to your mum (in 1953) that you just spent 600 of her dollars to buy a nude photo of a starlet so you can publish that photo in a magazine.

You have to have some money and that comes from working and borrowing and the people you know..and then you have to have a plan or an idea, a vision and be able to execute that (place time) even for something as simple as a real estate boom or mining boom.

 

[burglar]

... ...

Now that I know where you're coming from we can agree ... money makes money.

... If I find a 100 dollar bill on the ground and keep it, I am a thief. ...

If I find a 100 dollar bill on the ground, it's mine.
If I find a wallet containing ID, I return it!

 

[Bill M]

You have to have some money and that comes from working and borrowing and the people you know..and then you have to have a plan or an idea, a vision and be able to execute that (place time) even for something as simple as a real estate boom or mining boom.

I would agree with that. Most people start off with nothing, some have ideas and visions and others just blow their pay check each week. When I left my Mothers nest I was 16 years old and had nothing, I started a job as an apprentice. A 1st. year apprentice is still one of the lowest paid jobs in Australia but I just battled on for 4 years knowing that there will be light at end of the tunnel.

Then from that ordinary job I started making a full tradesman's salary + overtime. I saved my money and bought a property with 10% deposit down. Others at age 20 were still blowing their pay checks from week to week. Then I saw better job opportunities in other states so off I went to chase more money. I believed and invested in property and that ordinary job and tenants paid for them. Eventually I had 3 properties and I was working 2 jobs to pay for the loans, I didn't mind this because I knew there would be a pay off one day.

That pay off came years later, I sold and I made decent profits and then I invested in stocks. I rode the long run up to 2007 and then the crash came. I always believed in having cash on hand just in case of a crash and as markets started sliding I averaged down into the markets. I saw an opportunity to buy CBA at $26 and I took it, now they are $62. People said stupid things like I was crazy and the Banks could go under, I never believed this for a second. Anyhow CBA was a pay off too, I sold the lot at $58.50. I saw an opportunity and took it, I may not have picked an exact bottom or top but it was close enough for me.

So in summary it was all hard work in ordinary jobs, then investing in real estate and stocks. I am Looking for investment opportunities all the time, even now and there is plenty out there. It has all paid off and now I am retired and living off passive income from my investments. Some of my mates are still blowing their pay checks from week to week. Nothing is free, you alone have to make it happen. Good luck everyone.

 

[DocK]

I would agree with that. Most people start off with nothing, some have ideas and visions and others just blow their pay check each week. When I left my Mothers nest I was 16 years old and had nothing, I started a job as an apprentice. A 1st. year apprentice is still one of the lowest paid jobs in Australia but I just battled on for 4 years knowing that there will be light at end of the tunnel.

Then from that ordinary job I started making a full tradesman's salary + overtime. I saved my money and bought a property with 10% deposit down. Others at age 20 were still blowing their pay checks from week to week. Then I saw better job opportunities in other states so off I went to chase more money. I believed and invested in property and that ordinary job and tenants paid for them. Eventually I had 3 properties and I was working 2 jobs to pay for the loans, I didn't mind this because I knew there would be a pay off one day.

That pay off came years later, I sold and I made decent profits and then I invested in stocks. I rode the long run up to 2007 and then the crash came. I always believed in having cash on hand just in case of a crash and as markets started sliding I averaged down into the markets. I saw an opportunity to buy CBA at $26 and I took it, now they are $62. People said stupid things like I was crazy and the Banks could go under, I never believed this for a second. Anyhow CBA was a pay off too, I sold the lot at $58.50. I saw an opportunity and took it, I may not have picked an exact bottom or top but it was close enough for me.

So in summary it was all hard work in ordinary jobs, then investing in real estate and stocks. I am Looking for investment opportunities all the time, even now and there is plenty out there. It has all paid off and now I am retired and living off passive income from my investments. Some of my mates are still blowing their pay checks from week to week. Nothing is free, you alone have to make it happen. Good luck everyone.

Great post Bill I had a little chat to the spouse a little while ago and we agreed that unless one is lucky enough to have chosen wealthy parents, the old adage "your reap what you sow" generally runs true. We also put our heads down and bought the first home while quite young, while many of our friends were spending their money on travel, down the pub etc, and then concentrated on reducing the mortgage as quickly as possible.
We know many people like us - work hard, live within your means with an eye to the future. My story unfortunately is not as rosy as yours - due mainly to the different decisions we made on the investment side (although I hope to correct that by the time I'm retirement age).

To my mind, the decisions we make and the paths we take make the crucial difference. Those that either can't or won't build up any capital to invest will never achieve "wealth", but those that do but then make the wrong investment choices will also fail in their goals. Tech/A put it well when he said

But to get in a position where you have Enough asset to generate passive income of Any significance you need to understand that Opportunity needs to be acted upon quickly And decisively. Many freeze and watch it slip straight by

.
My husband and I were both raised in homes where risk was to be avoided at all costs - our parents worked hard, paid off their homes and then put their savings in term deposits. Investing in real estate or shares was seen as high risk. Both of our fathers had only one employer in their working lives. My husband and I often discussed the possibility of buying an investment property during those boom years, but couldn't quite get past the desire to have our own home paid off completely first. There's a perfect example of opportunity missed. When we did finally make the leap into the investment arena it was at completely the wrong time and the wrong strategy, which then resulted in us being in no position to take advantage of the bottom of the market in 2009.

So although I agree with the comments of yours that I've bolded, as in it all starts with hard work and there's usually no easy ride, I'd go one further and point out that it's also so very important to make the right decisions at the right times. Any investment is a risk - it's not surprising that some of the wealthiest people have gone broke a time or two along the way.

 

[Bill M]

So although I agree with the comments of yours that I've bolded, as in it all starts with hard work and there's usually no easy ride, I'd go one further and point out that it's also so very important to make the right decisions at the right times. Any investment is a risk - it's not surprising that some of the wealthiest people have gone broke a time or two along the way.

Thanks for your kind words. By the way, don't worry I've had quite a few investments blow up in my face along the way, but one does learn from that. The other point I've bolded is so true too, I will use my personal example of CBA. I would definitely not be a buyer at $62 but would definitely be at $26. Another is real estate. 3 years ago I moved out of the Northern Beaches of Sydney and bought a property up on the Central Coast. Now I am thinking about selling here and purchasing a property back there. I can tell you for sure and without doubt that prices have increased in the last 3 years on the Northern Beaches. So much for the silly predictions of crashes for the area. I have no hesitation of repurchasing in such a popular area with high demand at todays prices, some people would say that's risky, I would say it would be a good long term investment.

Wealth is when your passive income greater than your expenses...

you can live on 40K a year and have 50K passive income to me that is wealthy...

As always, spot on there ROE. Totally agree.

 

[tech/a]

To add to some of Bill and DocK
comments.

Mitigation of risk is one of the most important investment topics there is.
I could---but wont prattle on infinitum
While identification of opportunity can be honed as a skill set------ the mitigation rather than the avoidance of risk needs to follow right behind the decisive action upon finding an opportunity.

If that risk is NOT CLEAR (Ie a developer wants your money in a property deal) or the risk is or could expose you to ruin or something like it.

THEN---NEXT!!

 

[Calliope]

Wealth is when your passive income greater than your expenses...

you can live on 40K a year and have 50K passive income to me that is wealthy...

Mr Micawber said it first;

Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.
Charles Dickens, David Copperfield, 1849

 

[YMI]

If I find a 100 dollar bill on the ground, it's mine.

because you are the burglar

Acquiring wealth seems to involve hard work in the vast majority of all cases. And loving your work seems to help essentially in the process of success. Even betting on stocks or any other investment seems to require a good portion of work (research and learning about strategies) otherwise it's just a game of poker.