The Iceman's 4 step plan to create wealth (I need help with 1 and opinions)

[SSI]

i am trading the grains, meats and emini sp, almost exclusively now........

i do all mine by charts and pricing....... i know nothing about cattle or soybeans and i wont ever own any but i can read a chart and get in,,,, at a good price......

i think that ive got a good thing going now.............. as long as i dont screw my entry up......... i should make money on over 90% of my trades..

 

[Journeyman]

there's much more leverage in the commodity market...the difference is you don't have a line service holding your hand for you.

 

[oldmanTED]

Having read through this entire thread, it didn't surprise me that no one mentioned sheltering income from taxes. One of the most important aspects to securing wealth is protecting income from taxation. This can be accomplished through tax deferral, tax shelter investments, foundations, etc.. Making money is one thing. Protecting it and having it grow is another. Continue on boys!

 

[Iceman]

Having read through this entire thread, it didn't surprise me that no one mentioned sheltering income from taxes. One of the most important aspects to securing wealth is protecting income from taxation. This can be accomplished through tax deferral, tax shelter investments, foundations, etc.. Making money is one thing. Protecting it and having it grow is another. Continue on boys!

in alot of the books I am reading this 1 major factor involved as a positive in starting a business. It is a little over my head right now but something I will begin to investigate in the future.

 

[Phaedrus]

Some great comments in the thread so far, aside from the real estate ones and the praise for Kiyoshyster

Iceman, if you've got a $100k a year job, make $5k a month off of gambling and still have other streams of income and savings, you're actually doing better than probably 98% of the people out there. Get your expenditures down and you'll be stinking shitty rich within a couple of years without doing anything else.

Regarding your points, these are all good ones and ones that others should consider. My added feedback on them, from the standpoint of having made a little in my life:

1) Increase income at work while spending less in your life- pretty simple.

The #1 point for getting wealthy is living below one's means, of course. Many people who do not have high incomes balk at this because of everything they "need" in life that costs so much (cable, Tivo, more than one car, 1,000sf of house for every person and pet in the family, etc.)

A couple of corollaries to this are debt elimination and cash savings. If you have debt you are a slave to the debt, no matter how much you earn, because you have no choice but to work until the debt is paid off. I am personally opposed to even having a mortgage, which some people consider on the extreme side but it's nice to be in control of every little thing and having the mindset that whenever I decide to not work, it's no big deal. Cash savings -- i.e. CDs, money markets, savings accounts, or anything else where you have more or less immediate access to cash but are not losing out to inflation -- are extremely important. Anyone who doesn't have a minimum of two months' living expenses in ready cash is one broken leg or corporate downsizing away from being in homeless shelter. Two months is the bare minimum -- really not any maximum although more than a year borders on overkill because of the opportunity cost (since those funds are just barely keeping pace with inflation, they could be out making you much more.)

2) Real Estate

Should be your bottom priority. Real estate is a grossly overrated commodity, mainly by people who either have never owned any or who have plenty to sell you. If you leverage it out you're committed for life. If you are a speculator you're chained to your dealbook. If you're a part-timer trying to mix up flipping, renting and other strategies you will, statistically speaking, go broke within a few years (like day traders, the majority of all "part time real estate investors" lose money, some drastically.)

The only use for real estate, unless you're going to go all in and be a speculative develper/rehabber (which can be fun and profitable but is an enormous amount of work) is when you have so much money you just don't know what to do with it all. You've got tons and tons of ready cash, no debt, decent income and as much risk portfolio as your stomach can handle, and you still have some money left over, then by all means put it in passive income-earning real estate.

3) Invest in agressive markets- sportsbetting market is something I have beat for a year and am VERY CONFIDENT in beating in the future.

Yes yes yes. Just remember why the word "risk" is in the phrase "risk capital" and you'll do fine. Options, futures, Forex and other derivatives are also fun and profitable and high-risk.

4) Start a side business- this is the tough one but all these books I have read talk about this. I would like to spend 25k or less getting a business going that you can eventually hire someone to work at so you can stay at your own job. This is where I would love to hear opinions from others. I have an idea and may go with it and will share later. Thank god for the internet as it helps educate yourself in anything you are interested in.

I'd say pour it into online semi-passive businesses. You can buy quality income-producing sites that require relatively little work for as little as 6-12 months' cash flow at places like Sitepoint.com and Digitalpoint.com I have a significant portfolio of these myself; net revenues are running in the 8-9% a month range with a couple of hours work a day or less that I could easily outsource, except that I like the work.

This is also a great starting point for people with no money, since price points at those two marketplaces are available all over the board -- as little as $100-150 and well into the five and low six figures.

Like I said this is what I have gathered from reading a ton of matieral from others on how to create wealth.

Well, whatever you do, smoke enough meth to forget the name Robert Kiyosaki. The best books you'll find on real estate (once you have all the money you could conceivably ever spend) are by John Reed. He doesn't have any Exclusive Nine DVD Real Estate Millions Home Study Course type of stuff; just a couple of really good books written from the standpoint of a guy who made all his money before he went writing about it, unlike most other would-be gurus such as RK. I also recommend Jack Luna's stuff; although it's more geared towards privacy than making it, his book Work from Home at Any Age is great if you are literally at square one on self-employment.


Phaedrus

 

[Iceman]

Some great comments in the thread so far, aside from the real estate ones and the praise for Kiyoshyster

Iceman, if you've got a $100k a year job, make $5k a month off of gambling and still have other streams of income and savings, you're actually doing better than probably 98% of the people out there. Get your expenditures down and you'll be stinking shitty rich within a couple of years without doing anything else.

Regarding your points, these are all good ones and ones that others should consider. My added feedback on them, from the standpoint of having made a little in my life:



The #1 point for getting wealthy is living below one's means, of course. Many people who do not have high incomes balk at this because of everything they "need" in life that costs so much (cable, Tivo, more than one car, 1,000sf of house for every person and pet in the family, etc.)

A couple of corollaries to this are debt elimination and cash savings. If you have debt you are a slave to the debt, no matter how much you earn, because you have no choice but to work until the debt is paid off. I am personally opposed to even having a mortgage, which some people consider on the extreme side but it's nice to be in control of every little thing and having the mindset that whenever I decide to not work, it's no big deal. Cash savings -- i.e. CDs, money markets, savings accounts, or anything else where you have more or less immediate access to cash but are not losing out to inflation -- are extremely important. Anyone who doesn't have a minimum of two months' living expenses in ready cash is one broken leg or corporate downsizing away from being in homeless shelter. Two months is the bare minimum -- really not any maximum although more than a year borders on overkill because of the opportunity cost (since those funds are just barely keeping pace with inflation, they could be out making you much more.)



Should be your bottom priority. Real estate is a grossly overrated commodity, mainly by people who either have never owned any or who have plenty to sell you. If you leverage it out you're committed for life. If you are a speculator you're chained to your dealbook. If you're a part-timer trying to mix up flipping, renting and other strategies you will, statistically speaking, go broke within a few years (like day traders, the majority of all "part time real estate investors" lose money, some drastically.)

The only use for real estate, unless you're going to go all in and be a speculative develper/rehabber (which can be fun and profitable but is an enormous amount of work) is when you have so much money you just don't know what to do with it all. You've got tons and tons of ready cash, no debt, decent income and as much risk portfolio as your stomach can handle, and you still have some money left over, then by all means put it in passive income-earning real estate.



Yes yes yes. Just remember why the word "risk" is in the phrase "risk capital" and you'll do fine. Options, futures, Forex and other derivatives are also fun and profitable and high-risk.



I'd say pour it into online semi-passive businesses. You can buy quality income-producing sites that require relatively little work for as little as 6-12 months' cash flow at places like Sitepoint.com and Digitalpoint.com I have a significant portfolio of these myself; net revenues are running in the 8-9% a month range with a couple of hours work a day or less that I could easily outsource, except that I like the work.

This is also a great starting point for people with no money, since price points at those two marketplaces are available all over the board -- as little as $100-150 and well into the five and low six figures.



Well, whatever you do, smoke enough meth to forget the name Robert Kiyosaki. The best books you'll find on real estate (once you have all the money you could conceivably ever spend) are by John Reed. He doesn't have any Exclusive Nine DVD Real Estate Millions Home Study Course type of stuff; just a couple of really good books written from the standpoint of a guy who made all his money before he went writing about it, unlike most other would-be gurus such as RK. I also recommend Jack Luna's stuff; although it's more geared towards privacy than making it, his book Work from Home at Any Age is great if you are literally at square one on self-employment.


Phaedrus

awesome stuff and thanks as I very happy that you had input. Will re read this again and again. MUCH APPRECIATIED!!!!!!!!!

This what I looking for, MENTORS. They mean alot more than most know.

 

[SSI]

sounds alot like Dave Ramsey here.............

Dave is a great read and has a really good call in show daily,,,,,,, 3 hrs per day, from 1pm to 4pm cst..........

please forget Carlton Sheets, RK and all the other infomercial gurus......

Phaderus is spot on..........

reminded me so much of Ramsey, especially the quote, the borrower is slave to the lender.......

Here is Daves motto:

1. $1000 cash in the bank asap

2. pay off every debt that you have, from smallest to largest, with the exclusion of your home..... although he is against mortgages as well..

3. have 3 to 6 months of living expenses put away in a money market account.

4. max out all 401k and kids college funds.

5. pay off house and become a great giver...

your greatest money making asset is your income......... all great "Daveisims".....

he is however a little too conservative for me but for 95% of everyone else, he is spot on.............

 

[SSI]

please remind me of your age and if your married with any kids.....

if your single, do you plan to marry and have kids............. if the answer is yes, the game will change then........ for some it will change drastically.....

 

[SSI]

also never ever, finance a vehicle.......... if you cant buy it on the "One payment plan", you cannot afford it......

another of Daves thoughts........

also never fleece a vehicle....... thats high on his list........

 

[Moneyneversleeps]

I'd say pour it into online semi-passive businesses. You can buy quality income-producing sites that require relatively little work for as little as 6-12 months' cash flow at places like Sitepoint.com and Digitalpoint.com I have a significant portfolio of these myself; net revenues are running in the 8-9% a month range with a couple of hours work a day or less that I could easily outsource, except that I like the work.

This is also a great starting point for people with no money, since price points at those two marketplaces are available all over the board -- as little as $100-150 and well into the five and low six figures.


Phaedrus-Can you explain in detail how this works? It sounds interesting. Thanks.

 

[Phaedrus]

Ice & SSI

Thanks for the comments.

I'd never heard of Ramsey before now ... most of my original good financial advice (which I ignored for the most part) came from a guy who wrote a book on stocks -- I actually can't remember it offhand but his motto was "get rich slowly." This was a big slap in the face of the 1980s where everyone was turning a fast and dirty dollar, but he made a lot of sense in his discussions about investing and stocks. It was he who got me into the idea of Proctor & Gamble, which I first bought in 1990 and have never regretted.

I also benefited from Charles Givens' Wealth Without Risk books. Although Givens has a bad rep (even in death) the WWR books were suprisingly good and offered a lot of specific and doable steps you could take to improve your situation. I'm not sure how relevant they'd be now unfortunately, but they helped me along the way.

My big problem over the years has been that I have almost always been able to crank out money -- but I could never keep it. I made small fortunes in stocks, invested in cell phone companies years before they hit it big, my first house was paid off and producing rental income the day I moved in (I built a quadplex condo unit, sold two and paid off the construction loan, lived in the third, rented out the fourth) I was on the front end of the Internet bubble and out six months before it popped -- yet as recently as summer of 2001 I couldn't plan more than a couple of weeks ahead because I never had any frickin money.

Even when I had money rolling in from all directions I was broke because of not keeping track of things, overweighting high-risk and low-risk portfolios (so my whole investment scheme consisted of stuff producing basically zero income, and stuff that produced losses) Constant extravagances (usually for others, not myself, but still just as wasteful) etc. It was crazy. Most of what I wrote above is condensed from hard lessons I learned from making hundreds of thousands of dollars before I was 25, yet moving back in with my parents a couple of years later when I got divorced because I couldn't buy a house -- not enough $ for a down payment, shitty credit and spotty income history. So the strategy has been, let's say, extensively field tested. Your mileage may vary but it's worked well for me since I finally pulled my head out of my ass and started paying attention to what I was making, what I was spending, how well I was planning for the future etc.

JAYBIRD0711

Most of the sites you'll see at SP and DP make small amounts of money off of affiliate programs, usually Google Adsense or other majors. There's a lot of crap for sale, mind you, but it is not uncommon to find sites with <$100 a month in revenue going for less than a year's cash flow -- so say it's pulling down a $50 a month net and you'd be likely to get it for less than $500. $50 a month is not very sexy but 10% a month gives me a boner.

For the most part such sites require very little maintainance, and the real work has already been done. Just check on traffic/revenue stats a couple of times a month, maybe freshen up the content from time to time, absorb other similar sites that are performing as they come available, etc.

I own over 200 of these and the workload on them averages around 60 hours a month all total. Of these, the vast majority -- like 80% or so -- are very non-sexy, basic info/article sites that make under $50 a month.

I'd say spend some time at the two sites sitepoint.com and digitalpoint.com ... you'll get a good feel for it with some regular reading. Have a look at the marketplace sections of each -- you'd be amazed how much is available for how cheap.

That to me is just a seriously under-exploited investment vehicle. It takes a small amount of work and a small learning curve, but the income relative to investment is staggeringly high and it's extremely easy to duplicate once you know what you're doing -- and even when you have a dud, what did it cost you? Couple hundred dollars and you might still sell the site, the domain, use the design for another project etc. Good stuff.


Phaedrus

 

[GreenDoberman]

Phaedrus,
Some excellent posts there.

 

[8ate]

nice work..> i cannot over-emphasize living within your budget..!!!..>> with a family income of over 200K; i am having to sell some stock to get credit cards down to reasonable..>> yes; they do jack the rates up to 20-30% if you miss a payment..!!

lol

gl

:smoker2: :nopityA:

 

[NorthernStar]

Good idea. Get out of debt, esp variable rate situations. We could get into a hyper-inflation situation with the coming currency crisis.



Still a bad time for real estate in USA and will be untill the currency collapses. Perferably pay cash. If you must buy pick a remote area in Canada or maybe in the mountains in Argentina with land so you can fish hunt and be away from USA. Another terrorist attack(manufactured or real) and we very well could see MARSHALL LAW. Fema has built or refurbished several hundred internment or concentration style camps for this type of scenario. You want to live as independent and out of system as possible but within a small community that you help each other.



Reduce your exposure in sportsbetting. Invest in physical gold, silver and related stocks. They are doing very well right now but nothing compared to what we will see in the years ahead. Try to buy on the dips or corrections. These happen through every cycle and is where the inexperienced often panic and sell. These are the buying opportunities. You will see these as you fallow the markets and get more experienced.

gl!

Is the sky falling and I missed it. Your glass must never have looked half full.

You can't live your life in fear. Your prediction may turn out to be true but if you use history as your guide. The number two way in history to become a millionaire is real estate. The number one way you can't control. It is inheiritance.

 

[NorthernStar]

Some great comments in the thread so far, aside from the real estate ones and the praise for Kiyoshyster

Iceman, if you've got a $100k a year job, make $5k a month off of gambling and still have other streams of income and savings, you're actually doing better than probably 98% of the people out there. Get your expenditures down and you'll be stinking shitty rich within a couple of years without doing anything else.

Regarding your points, these are all good ones and ones that others should consider. My added feedback on them, from the standpoint of having made a little in my life:



The #1 point for getting wealthy is living below one's means, of course. Many people who do not have high incomes balk at this because of everything they "need" in life that costs so much (cable, Tivo, more than one car, 1,000sf of house for every person and pet in the family, etc.)

A couple of corollaries to this are debt elimination and cash savings. If you have debt you are a slave to the debt, no matter how much you earn, because you have no choice but to work until the debt is paid off. I am personally opposed to even having a mortgage, which some people consider on the extreme side but it's nice to be in control of every little thing and having the mindset that whenever I decide to not work, it's no big deal. Cash savings -- i.e. CDs, money markets, savings accounts, or anything else where you have more or less immediate access to cash but are not losing out to inflation -- are extremely important. Anyone who doesn't have a minimum of two months' living expenses in ready cash is one broken leg or corporate downsizing away from being in homeless shelter. Two months is the bare minimum -- really not any maximum although more than a year borders on overkill because of the opportunity cost (since those funds are just barely keeping pace with inflation, they could be out making you much more.)



Should be your bottom priority. Real estate is a grossly overrated commodity, mainly by people who either have never owned any or who have plenty to sell you. If you leverage it out you're committed for life. If you are a speculator you're chained to your dealbook. If you're a part-timer trying to mix up flipping, renting and other strategies you will, statistically speaking, go broke within a few years (like day traders, the majority of all "part time real estate investors" lose money, some drastically.)

The only use for real estate, unless you're going to go all in and be a speculative develper/rehabber (which can be fun and profitable but is an enormous amount of work) is when you have so much money you just don't know what to do with it all. You've got tons and tons of ready cash, no debt, decent income and as much risk portfolio as your stomach can handle, and you still have some money left over, then by all means put it in passive income-earning real estate.



Yes yes yes. Just remember why the word "risk" is in the phrase "risk capital" and you'll do fine. Options, futures, Forex and other derivatives are also fun and profitable and high-risk.



I'd say pour it into online semi-passive businesses. You can buy quality income-producing sites that require relatively little work for as little as 6-12 months' cash flow at places like Sitepoint.com and Digitalpoint.com I have a significant portfolio of these myself; net revenues are running in the 8-9% a month range with a couple of hours work a day or less that I could easily outsource, except that I like the work.

This is also a great starting point for people with no money, since price points at those two marketplaces are available all over the board -- as little as $100-150 and well into the five and low six figures.



Well, whatever you do, smoke enough meth to forget the name Robert Kiyosaki. The best books you'll find on real estate (once you have all the money you could conceivably ever spend) are by John Reed. He doesn't have any Exclusive Nine DVD Real Estate Millions Home Study Course type of stuff; just a couple of really good books written from the standpoint of a guy who made all his money before he went writing about it, unlike most other would-be gurus such as RK. I also recommend Jack Luna's stuff; although it's more geared towards privacy than making it, his book Work from Home at Any Age is great if you are literally at square one on self-employment.


Phaedrus

Phaedrus:

I hate to tell you but I am in almost total disagreement with almost everything you have to say.

Start with mortgage debt. I have clients who have a goal to pay their mortgage off in ten or 15 years? Why. Makes no sense. Follow oldman teds advice and put in a tax defferred account like a 401k. Example, it takes an extra $300 a month and you can have your mortgage paid off in 15 years. Then take the mortgage money and save for 15 years. The end you have no mortgage and a pile of dough.

Take the same $300 and increase your 401k or retirement account. The mortgage is at 6% and the stock market historically makes 10%. The 6% is subsidized by the government in the form of a tax deduction.

The interest deduction is the biggest form of welfare in the united states.

The other thing on real estate is there are ways to differ or avoid taxes legally on gains. This is an advantage no other investment I know of allows.

A good plan in real estate will put you on the road to wealth very fast. I wish I the current mortgage products that are available now were available 30 years ago, I would be a much wealthier person.

 

[joeyfitzclick]

Ice - you've got mail.

 

[Phaedrus]

posted by Northern Star:

Phaedrus:

I hate to tell you but I am in almost total disagreement with almost everything you have to say.

OK, but you only mentioned the mortgage and real estate related comments. I did say above that my anti-mortgage bias is fairly extreme, and that it isn't "anti-mortgage" per se but merely anti-debt, and most people think of their mortgages as "special debt" and I personally think debt is debt except in circumstances where it's being borrowed at x rate to achieve x+y return.

Start with mortgage debt. I have clients who have a goal to pay their mortgage off in ten or 15 years? Why. Makes no sense. Follow oldman teds advice and put in a tax defferred account like a 401k. Example, it takes an extra $300 a month and you can have your mortgage paid off in 15 years. Then take the mortgage money and save for 15 years. The end you have no mortgage and a pile of dough.

Most early mortgage repayment plans do nto involve spending significant extra money like that -- the most common of which I am aware is making 1/2 the payment every two weeks, which amounts to an extra payment per year that the spender would just otherwise waste on crap anyway, but which shaves off years from the backend of the mortgage. This is not a bad plan, and if any of the cheerleading about the value of owning real estate is to be taken seriously, then surely low-stress measures which increase the rate at which one builds equity shouldn't simply be poo-pooed.

Take the same $300 and increase your 401k or retirement account. The mortgage is at 6% and the stock market historically makes 10%. The 6% is subsidized by the government in the form of a tax deduction.

The interest deduction is the biggest form of welfare in the united states.

Right, and you're saying this like it's a good thing ... would you recommend food stamps as a way to build wealth?

The other thing on real estate is there are ways to differ or avoid taxes legally on gains. This is an advantage no other investment I know of allows.

Am I misunderstanding you here? You're saying that there are no tax-deffered or tax-exempt investments aside from real estate?

A good plan in real estate will put you on the road to wealth very fast. I wish I the current mortgage products that are available now were available 30 years ago, I would be a much wealthier person.

I did not say you can't make money in real estate -- I said the exact opposite, that there are ways in which you can make lots of it. I simply made a few factual observations that old farts and broke people and real estate salesmen tend to gloss over, for example that the majority of "part time real estate speculators" lose their money, just like the majority of day traders (and sports bettors, and people trying to earn money selling shit on eBay etc. etc. etc.) The difference between real estate and other ways for the common man to lose his ass is that it tends to happen a lot more quickly, since the barrier to entry tends to be a lot higher.

Real estate is great passive income if you've got enough that you need something that pays better than CDs but offers less risk than stocks. It also is great if you've got gobs of liquidity, great credit, lots of spare time and drive -- you can almost always make a killing in speculative rehab/development if your/your bank's pockets are deep enough. But this is not how most people think of real estate as an investment, and it is against the more common mentality that I was cautioning.

I could make a massive list of all the crap that can go wrong with real estate, but I'm sure you know them if you've been involved with it for that long. But again, I said merely that real estate is overhyped and that lots of people lose money in it. Nothing controversial about either take.


Phaedrus

 

[SSI]

Risk is almost never factored in correctly........

 

[AngleBroom]

Invest in no-load mutual funds and be done with it.

 

[totalsquare]

phaedrus,
do you have to have any kind of programming knowledge to profit from buying those sites?