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  1. #71
    Senior Member ptgatsby's Avatar
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    Quote Originally Posted by DiscoBiscuit View Post
    The longer your money stays invested the more likely you are to participate in long term growth trends.

    (...)

    The dumb money gets frightened by losses and pulls out. Turning their losses on paper to losses in their wallet. They then wait to reinvest until the market turns around.
    (and)
    Quote Originally Posted by FDG View Post
    Of course. I'm operating under the presumption that someone whose aim is "becoming wealthy" will be as careful and as knowledgeable as possible with his (her) money, so as to ride the booms and avoid the busts, or at the very least, avoid selling depreciating assets during a bust.
    I'm referring to system collapses, not market variation. Stuff like currency collapse, nationalization, war, serious unrest and the like... where the system itself is threatened. There is a presumption of normalcy when we talk about long run even though history doesn't really bear that out. Most of the world's population lives with these risks that approach certainty over any reasonable "long period".

    The normal rejection is that it is "unlikely" and "irrelevant". Getting rich over the long haul (ie: passively) implicitly trusts the system. Compare that with spending money on yourself and being able to command a higher income (eg: education, experience) or social capital (eg: golf course, sports clubs). That way you can move, or recover, or adapt to new situations, drawing upon other sources of capital. It's not talked about a lot in individualist countries, like the US, but there are alternatives to building capital. This is the normal MO of any ultra-wealthy, even in the US.

    It's only the to-be new rich that consider passive/active investing as a viable strategy for being wealthy. Anyone investing in this way is still seeking security rather than legacy. Legacy builders don't think that way, and legacy builders are defined by surviving the system collapses.

    ---

    Time is just about reaching average returns, it doesn't benefit from anything else. If it is a positive EV investment, time just manages variation to compound that positive EV over many iterations.

    That is the tea leaves I'm talking when you say "riding ups" and "not selling when down". It is exactly what people should not (cannot) do, on both sides of the coin. Even though, ultimately, the market depends on it for efficient capital allocation.

    Quote Originally Posted by DiscoBiscuit View Post
    This is one of the reasons why day traders frequently lose their shirts. A well managed buy and hold strategy with some dollar cost averaging makes much more sense for most investors (depending on their financial goals).
    FWIW, DCA is a bad bet... it's net-negative strategy compared to upfront investing (IIRC, ~70% of the time). "Effective DCA" is about investing the income stream as fast as possible.

    While it is true that as assets grow the tax implications of ones financial standing also grow (in both complexity and impact), most investors above the poverty line can benefit from taking into consideration the tax implications of their financial decisions.
    If you are talking about trying to use capital gains and special vehicles (like TFSA, RRSP in Canada) and the like, I agree. And certainly pay as little tax as you are legally allowed to. I was referring to structuring everything around taxation; incorporating oneself/estate planning that was being indirectly recommended.

  2. #72
    Senior Member pinkgraffiti's Avatar
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    Quote Originally Posted by FDG View Post
    I mean a year. I said "good salary", implying that you do have some savings. And 2200 net a month summed up over a year makes a salary of roughly 42k euros in Germany (I think taxes are lower in France): I said that's a good salary for TWO people to live on, doesn't mean that they BOTH have to earn 45k a year.
    It's not a joke, really, if you want to live comfortably (meaning: not a student life) you need to have this kind of money coming in. In a fairly expensive city, you may have to spend 700 euros a month to rent an apartment, 300 euros a month for groceries, and another 200 on everything else. Consider then a vacation per year, around 1000 thousand, so 80 euros per month, and you're up to 1300 euros per month fairly quickly.
    1000 euro-month is an extremely low number for Paris, considering that rents are fairly expensive. Kudos to you.
    ok ok, i had a slight suspicion you meant per month!

  3. #73
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    Quote Originally Posted by ptgatsby View Post
    FWIW, DCA is a bad bet... it's net-negative strategy compared to upfront investing (IIRC, ~70% of the time). "Effective DCA" is about investing the income stream as fast as possible.
    I was operating on the assumption that all liquid capital capable of being invested initially was. (no one uses DCA except to, like you said, quickly and efficiently invest and ongoing stream of income)

    I was using DCA as an example of an aspect of a buy and hold strategy going back to the fact that I thought you were talking about market variations.

    The dollar is sound. If it goes the whole system goes.

    And to be honest, I feel like I would be able to see the writing on the wall fairly early in the exceedingly unlikely event that it does go.

  4. #74
    Sugar Hiccup OrangeAppled's Avatar
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    Quote Originally Posted by FDG View Post
    Well technically this is fraud, lol (especially if you write off your own income as a "business expense" - which I don't think can be done either, tbh).
    I don't think you interpreted what I was saying correctly at all.
    I didn't say anything about writing off income as business expense.
    But in regards to what I was saying....look into being self-employed and what that means tax-wise and it may benefit you.
    Often a star was waiting for you to notice it. A wave rolled toward you out of the distant past, or as you walked under an open window, a violin yielded itself to your hearing. All this was mission. But could you accomplish it? (Rilke)

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  5. #75
    Sugar Hiccup OrangeAppled's Avatar
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    Quote Originally Posted by FDG View Post
    Setting up a business just as a way to deduct taxes from your primary income can indeed be a fraud, especially if you're making your business run at loss while you're pillaging its cash flow to finance your own living expense and the business ends up being bankrupt. Of course you can be good at if you're careful, if everything looks legal you may get away with it (until bankruptcy). I would still not recommend this strategy unless you have a real reason to start a business.



    If you have a real business then I think it's cool to set everything up so that you can pay the lowest possible amount of taxes. Starting a business as a way to pay lower income taxes is a bit different and riskier.
    Yeah I'm not talking about a fake business. I mean real work you can't support yourself doing, but if it gets to the point where you can, cool. In the meantime it can still benefit you.
    I'm at the point where I'm 100% freelance. It was not and is not a fake business.
    Often a star was waiting for you to notice it. A wave rolled toward you out of the distant past, or as you walked under an open window, a violin yielded itself to your hearing. All this was mission. But could you accomplish it? (Rilke)

    INFP | 4w5 sp/sx | RLUEI - Primary Inquisitive | Tritype is tripe

  6. #76
    pathwise dependent FDG's Avatar
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    Quote Originally Posted by pinkgraffiti View Post
    ok ok, i had a slight suspicion you meant per month!
    ahaha no way those would be rock star kinds of earnings
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  7. #77
    Certified Sausage Smoker Elfboy's Avatar
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    I can live like a cheap mofo if I need to, but a comfortable living? I'd say around $70,000 (and I want a lot more than that, cuz I want luxury bitch!)
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  8. #78
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    $70k is when I started living comfortably. No worry of bills, did what I wanted for the most part, saved for retirement, etc. This was with 2 incomes and a kid.

    Single making $70k a and a kid I lived even more comfortable.
    Im out, its been fun

  9. #79
    Senior Member ceecee's Avatar
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    In all honesty when I was still in school and my husband was making about $72k, we were fine. Anything beyond that is good too, don't get me wrong but we weren't struggling and I think I read 75K is the happy amount. Then I went to work and he was offered a big promotion at another company. This put us in a different tax bracket and it just sucks balls. I never thought I'd say this but I hope he doesn't get a promotion or a raise or me for that matter. I don't want to go from 28% to 33%.
    I like to rock n' roll all night and *part* of every day. I usually have errands... I can only rock from like 1-3.

  10. #80
    null Jonny's Avatar
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    Location location location. I live in San Francisco, and currently drop $1,700 per month on a 300sqft studio. Homes here, as DiscoBiscuit's chart illustrates, are outrageous, thanks to the internet millionaires that fill the area. I don't think I'll be comfortable until I'm making maybe $150k per year in today's dollars.

    However, were I to live somewhere with reasonably priced real estate, I'd say $70k would be comfortable.
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