S/O Can you clue me in on this $5m investments/trust funds??

amother

Seafoam

Wed, May 04 2022, 1:11 pm

amother [ Valerian ] wrote:

Anyone who says their husband only takes a minimal amount out of their business is kind of misrepresenting their business. Your husbands are running a business that is lucrative enough to live off of and have leftover profits that you are choosing to invest. Basically your husbands are earning more money than you need to live and that is how you are building your investments. By living off less than what you earn and investing the rest.

How many people do you think are earning $300k a year and living off half of that?
Yes BH it does well, but not so fabulously well that we obviously have extra money lying around to invest. We are very very careful about how much we take out. We can easily spend it all.

amother

Smokey

Wed, May 04 2022, 1:23 pm

amother [ Valerian ] wrote:

Isn't that how everyone saves - whether they receive ordinary salary or whether they make a "profit" from the business.

The higher one's salary the easier it is to have some money left over but there are plenty of spendthrifts who would spend every penny even if their salary were $500,000 or even a million and there are lots of middle income people who are frugal (and I say frugal rather than cheap) who make saving money a priority over the long term and manage to retire with enough to comfortably live on.

My parents were like that - they didn't redo their kitchen - they drove their used Hondas for many years until they were no longer reliable. They didn't go on expensive vacations. They lived in the same modest home they bought until they sold and downsized to a less expensive condo. My mother shopped at Loehmanns and at sales. There were things that were important to them - good food; medical and dental care; education and even clothing for the teenage girls in the family Smile

And they were the proverbial millionaires next door. My father was so modest in appearance his dentist once offered him a discount unasked LOL

He just didn't present himself as probably the richest man in the waiting room LOL

Obviously there are certain realities - if your income isn't a certain level no amount of scrimping and saving will enable one to save because one is essentially at a subsistence level. Sure there are certain economies one could do but you still are not going to have money left over however frugal you are.

Also beyond being frugal (but not cheap LOL

) my parents were both employed by New York City in Civil Service positions and so their salaries weren't super high but the benefits they got were really very valuable such as extremely good inexpensive health insurance (even in retirement) as well as a fixed pension which most people don't have. However they also made significant contributions to 401 and saving in general especially in that decade or so when they no longer had children to support

So discussing investing at any level is going to be somewhat of an elitist topic because you do need a certain level of income - from whatever source - before one actually can realistically save anything.

amother

Jasmine

Wed, May 04 2022, 8:15 pm

Living well below ones means and not allowing the income creep.
Obviously this doesn't work for people really living paycheck to paycheck, but even a few dollars saved adds up.

We did it very slowly at first, didn't replace stuff, didn't eat out, no take out, no heimish store shopping etc. We saved but hit some hard times where we had to use savings for basics.
Eventually, things started going better and we BH have some real estate and some other investments.

Being focused on savings is imperative, mind shift change is the first most important step

Be laser focused

My main motto: Live like no one else, so that you can live like no one else.

Read mindset books
Dave Ramsey to get out of debt and after that, can look for investments:
Rich dad, poor dad
The richest man in Babylon ( weird book, great point)
Who moved the Cheese
Think and grow rich
How to win friends and influence people
7 habits of highly successful people

amother

Yellow

Wed, May 04 2022, 9:07 pm

amother [ Jasmine ] wrote:

Yes!! This is us, including Dave Ramsey / your book list. We have very recently started spending money on vacations, and we feel uncomfortable because it’s not in line with our personas. We drive very old cars, old house, and so on, so we’re used to people thinking we’re poor but we’re really not. BH we’ve been able to live off 1 salary, the other salary gets saved / invested. We are trying to diversify now because the stock market isn’t stable these days. (Thanks to someone’s tip here a few days ago, we bought the government bonds posted on dans deals. Thanks to whoever mentioned that!!)
It’s a whole way of life and we find it liberating that we don’t rely on spending money to make us happy. The “pas besalo” factor makes it easy. We can buy anything we want, we choose not to.

amother

Snow

Wed, May 04 2022, 9:16 pm

amother [ Camellia ] wrote:

I’ve posted this a few times.

We started our real estate investing with a 30k loan on our house when we were very young. (Bought tiny starter home we still live in with my savings from working pre marriage). Outside of that amount we’ve only reinvested what we’ve earned specifically from investments.
That money has turned into 6 small real estate investments. And Investing with 3 large investment projects with steady returns.
Real estate investments let you constantly refinance and reinvest that money.
It’s maybe close to 1 million now. And generates a nice amount of income (40-50k per year approx) with little to no effort. Theoretically we could’ve had more but some things come up over the years that prevented us from doing so. If someone is more dedicated they can grow larger. Dh has friends that started with much less then us that have tremendous investment firms today.

Both dh and I work.
We also save money every month in each of our kids ‘wedding’ accounts and in our savings account in mutual funds and 401k. It is amazing how fast the money can grow. And if your employer matches your 401k it’s free money.
We live very simple. Small house. Old cars. Hand me downs. No vacations. It’s not like we are living big.

Over how many years did your initial 30k investment grow to almost 1 million?

amother

Bisque

Wed, May 04 2022, 9:36 pm

amother [ Aubergine ] wrote:

I understand the safety of an annuity but if one was to invest 40k a year into the S&P 500 from age 35 to 55 and wait 10 years to age 65 and withdraw 150k a year from 65 - 90 at age 90 there would still be 12.7M in the account. That calculation is assuming a 7.5% return in the market. If you want to be even more conservative and assume a 6% return the account value would be 3.3M at age 90. That would seem like a better investment and one can get a term life insurance policy for a few hundred dollars a year.

I'd like to comment on the post you are responding too, as well. This is why whole life insurance is considered a poor investment strategy and I never understand why it is pursued.

amother

Camellia

Wed, May 04 2022, 9:46 pm

amother [ Snow ] wrote:

Someone mentioned young guys doing deals with returns better than 8%. Is that 12%? 20%? Do some of them really go belly up? All I see in my young Lakewood neighborhood is range rovers teslas and bmws for these guys who do real estate syndication. I guess they aren’t risking Losing money themselves, just risk losing other People’s money?

Many ppl driving these luxury cars are penniless. Some are wealthy beyond anything. And some have just their cars.

I would never invest with someone for a multi-million dollar deal unless they are putting up a huge chunk. At least a million or more. It should be in the legal documents how much they are putting up and the percentage.

They also make money when refinancing. As payment for the deal they get a percentage of your portion (deals are structured diff but this is very common). That is how many of them make money.

amother

Smokey

Wed, May 04 2022, 9:57 pm

amother [ Bisque ] wrote:

I'd like to comment on the post you are responding too, as well. This is why whole life insurance is considered a poor investment strategy and I never understand why it is pursued.

Annuities are generally not recommended as an investment vehicle.

They are heavily pushed by the insurance industry because they are extremely profitable. Commissions to the agents are extremely high and there are a lot of hidden fees.

They make make sense if someone is close to retirement and wants to guarantee that they will not outlive their assets and so they purchase an annuity for a fixed payment with a portion of their retirement assets.

If one is doing financial planning one should always use a Certified Financial Planner who doesn't make any money on their recommendations.

amother

Snow

Thu, May 05 2022, 8:05 am

amother [ Camellia ] wrote:

I don’t have close to a million to invest, more like 30-100k, so I’m not in danger of that don’t worry Wink

We just put into a deal where we have no idea who else invested but the people running the deal were known in the field to be conservative and trustworthy. It was for 8% returns. Finding that deal wasn’t easy; dh asked a lot of his successful friends for help and they all refused. He finally found one tzaddik who while he wouldn’t take our money because he only does bigger deals, he was willing to review the options that came our way and give his opinion on it.
With small amounts of money under let’s say 100k, I don’t think anyone will give us the time of day to let us know if/how much they’re investing, who else is investing etc.

amother

Camellia

Thu, May 05 2022, 8:10 am

amother [ Snow ] wrote:

I don’t have close to a million to invest, more like 30-100k, so I’m not in danger of that don’t worry Wink

We’ve only invested 50-250 per deal and never put in money without seeing full paperwork and investigating. 100k is a lot of money to risk losing.
If someone isn’t going to show paperwork I would be concerned. It should be readily available and all they have to do is email it to you like everyone else.
I do find some ppl at under 200k want to take a higher finding fee or there is some penalty. But they should still allow you to do due diligence. It’s the ppl with less money that have more to lose.

amother

Babyblue

Thu, May 05 2022, 8:34 am

I haven't read the whole thread, but for us our investments come from family money. My parents invested money for us years ago that has literally payed us dividends. We just sold off 10% of our shares in a particular company last month for $1.2 million each. That's an unusually high return for us but this month I received a check for $20K from my uncle for a real estate deal that came to fruition. I don't get money like this every month but it comes in often enough that I consider it my income in terms of monetary contribution to the family and I'm able to not work and be a SAHM.

I know how lucky we are that my parents were able to invest like this. I did not grow up wealthy at all and my kids have no idea that we have these investments. Our home is a simple one but we don't have the stress of wondering how we're going to pay our bills.

amother

Snow

Thu, May 05 2022, 8:38 am

amother [ Camellia ] wrote:

Of course we see paperwork. But the paperwork doesn’t list who else is investing in this deal.

And I agree with your last sentence but sadly it seems that we’re just at a disadvantage. Until we have big money no one wants to give us the time of day.
(We invest half of what we save into mutual funds, which is hassle free, and trying to do half into real estate )

amother

Aubergine

Thu, May 05 2022, 10:26 am

I'd like to merge this thread with the tuition topic. If you have 50k or 100k to invest into a deal does that mean you are paying full tuition for all your children? Meaning let's say you make 250k and you decide that your going to live off of 200k and save/invest the other 50k. Assuming you have several children, you are going to have to be careful how you spend that 200k, probably no fancy cars or fancy vacations. Does one have the right to say to the schools I'm living on 200k and here is my budget (just spending on the basics nothing fancy) and this is what I am able to spend on tuition while keeping that other 50k out of the picture because you are saving/investing it? Or would you say that your obligation to pay full tuition comes first and saving/investing only comes after you have met that obligation. I'm curious what ppls perspective on this is.
(the numbers are just an example, it could be you make 175k and your saving 25k or you make 100k and your saving 10k)

amother

Bisque

Thu, May 05 2022, 10:30 am

amother [ Aubergine ] wrote:

Of course your first obligation is to pay full tuition.

amother

Forsythia

Thu, May 05 2022, 11:22 am

amother [ Aubergine ] wrote:

You know what, maybe we should have paid off tuition when we sold our property and not reinvested the money. But that money would have run out soon. We would be back paying a fraction of tuition. We would need to ask for tzedaka to help marry off our kids. We would never be able to buy a house. We didn't pay that money to tuition, we invested it, and now we bh are able to pay full tuition plus. The schools who gave us a break are the ones we give tzedaka to. (Not sure I will ever give money to the school who threw my kid out when we couldn't pay tuition)

In our case btw all our investments came from an initial sum we saved when our kids were small and we had no tuition bills. But we have been paying into (matched) retirement funds while paying reduced tuition.

Should people also not save to buy a house?

amother

Peony

Thu, May 05 2022, 11:36 am

amother [ Aubergine ] wrote:

My feeling is you should save for retirement, and schools usually allow for that in their formulas. Otherwise, be upfront with the tuition committee. It's not right to live big and ask for tzedakah but if it's your source of income to support your family then it should be okay. I'm not wild about the idea of paying high tuition to fund other people's higher lifestyles, but I'm a BT so I didn't grow up knowing how to "play the game."