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General_Magician Special user United States 707 Posts |
I personally wouldn't feel comfortable with using leveraged debt to get rich slowly because of the risks associated with using leveraged debt from what I have been reading.
"Never fear shadows. They simply mean there is a light shining somewhere nearby." -unknown
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mastermindreader 1949 - 2017 Seattle, WA 12586 Posts |
Like I said, and to which you've agreed, don't do things you don't understand.
Who said anything about getting rich quickly? Leveraged debt, as S2000 has noted works slowly as well. But don't worry about it. Just continue what you're doing. |
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Dannydoyle Eternal Order 21214 Posts |
Quote:
On Jul 23, 2014, Bob1Dog wrote: HE is the one who won't stop.
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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mastermindreader 1949 - 2017 Seattle, WA 12586 Posts |
I specifically advised him NOT to do it. Not being harsh at all. He's already stated that he doesn't believe in investing in things he doesn't understand. And that's a GOOD policy.
The problem is that he keeps trying to tell everyone else that ALL debt is bad, contrary to fact. |
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LobowolfXXX Inner circle La Famiglia 1196 Posts |
Quote:
On Jul 23, 2014, Bob1Dog wrote: I don't think anyone's problem with GM's belief system is that being debt-free is bad; it's his tunnel vision that his way is the only way and that all debt is bad.
"Torture doesn't work" lol
Guess they forgot to tell Bill Buckley. "...as we reason and love, we are able to hope. And hope enables us to resist those things that would enslave us." |
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mastermindreader 1949 - 2017 Seattle, WA 12586 Posts |
Exactly, Lobo.
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Bob1Dog Inner circle Wife: It's me or this houseful of 1159 Posts |
I'm OK with y'alls comments on this, and we've all seemed to have used debt constructively. But GM has a system that seems to work for him, and he's entitled to his opinion, so I'm hoping for his success. That's all.
What if the Hokey Pokey really IS what it's all about?
My neighbor rang my doorbell at 2:30 a.m. this morning, can you believe that, 2:30 a.m.!? Lucky for him I was still up playing my drums. |
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General_Magician Special user United States 707 Posts |
I'm OK with everybody else's comments too, but I am pretty set in my ways when it comes to finances and believe through experience that the best policy is to pay your bills, stay out of debt, set goals and use the money you save to invest towards achieving those financial goals. When you are not in debt you are not taking un-necessary risks plus you are able to save more because you are not having to pay off debt plus the interest accumulating on that debt.
Yes, there is no such thing as risk free but I think it's smart to minimize risk and even with debt leveraging, it can be risky and it goes against my principles in investment to minimize risk. Some may make money by using debt leveraging. That doesn't mean it's a good policy though. Just as some who throw their money in the stock market might make money and then sell. That also doesn't mean it's a good policy or strategy either (rather I believe in index fund investing and using a buy and hold strategy and don't sell, but continue to buy over a period of time for example, like making monthly purchases with money saved or if you buy individual stock, buy a good quality company that is selling at a bargain on the stock market and provides a significant Margin of Safety for the principle of your investment, one can see I have a very conservative philosophy when it comes to money and finances). Now when I said all debt is BAD, yes I truly believe that and view the whole debt and credit system as rigged towards making the banks money and punishing those who refuse to play ball (for example, somebody like me who stays debt free and doesn't take out a loan, if he were to ever need a loan, he would have no credit and thus unable to secure as favorable an interest rate as possible, though he might not have bad credit for example). I could just take out a loan from the bank and use the money that was lent to me to pay back the loan over a period of time plus some of my own money to pay the interest, but why should I have to do that when I really don't need the loan? I think that's ridiculous when I work hard for my money, that I have to be forced to take a loan that I don't really want or need just so that I can have good credit. I don't see the sense in that especially when I feel the credit system is rigged to try and get you to take a loan and you end up paying for loan with the money originally lent, plus some of your own money to pay the interest. I kinda resent that honestly speaking as again, I work hard for my money and the money I do have didn't come easy. Why should the banks get it and not have to work hard for it like I did, even if it is just so that I can have good credit, though I don't need or really want the loan? I value my money and had to make sacrifices and work hard to earn it and I certainly don't like to give it away to the banks in a rigged credit system. They are not working hard for the interest on that money that I had to work hard to pay JUST so that I can have good credit. Personally, I think the credit rating system should be based on how responsible you are when it comes to paying your bills, as a person and your ability to pay back the loans depending on your income level and not just only on what loans you have taken in the past and paid back. Somebody might want to take out a loan and are responsible and have the ability to pay back a loan but can't get favorable loan terms, JUST because he never took out a loan in the past, which indicates to me the banks have rigged the credit system to punish people who refuse to play ball with them. I think I will just take the punishment. I'm not going to play ball with the banks with my hard earned money just so that I can be deemed to have good credit. I'm not going to just give away what I worked hard to earn.
"Never fear shadows. They simply mean there is a light shining somewhere nearby." -unknown
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MobilityBundle Regular user Las Vegas/Boston 120 Posts |
Quote:
On Jul 22, 2014, General_Magician wrote: Nobody's arguing that the *only* way to get ahead is to take on debt at some point. Debt is like any other tool... it can work well for the right job, and will work poorly for the wrong job. But taking it completely out of the toolbox seems stupid. Compare: "I'm not ever going to take on debt. No debt has been working for me. Besides, what if you default on the debt?" "I'm not ever going to buy a bicycle or a car. Walking has been working for me. Besides, what if you get in a bicycle or car crash?" "I'm not ever going to use a phone or write email. The postal system has been working for me. Besides, what if you electrocute yourself using your phone or computer?" "I'm not ever going to build a house. Living in a cave has been working for me. Besides, what if the house collapses on you" Just to say it out loud: each statement starts with a categorical rejection of some relatively modern* tool, in favor of the tool's predecessor, justified by an uninformed and overly-conservative assessment of risk associated with the modern tool. But I think Mastermindreader did say it best: don't use what you don't understand. In that sense, it appears you're doing things just right. (*) Is debt "modern"? I guess people can disagree about that, but it's RELATIVELY modern, compared to always-no-debt. |
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MobilityBundle Regular user Las Vegas/Boston 120 Posts |
This might be a fool's errand, but GM: your post two posts up makes me wonder whether you have the wrong impression about how debt works.
Start with an analogy: hearken way back to the 90's, to that long long ago time when people rented videos and DVDs. You go to Blockbuster, you pick up your copy of Titanic or Pulp Fiction, use it for a while, and bring it back. For the privilege of doing so, you pay Blockbuster $3.00. If you look at this transaction naively, it might seem like a loser: you come away with nothing tangible, and Blockbuster gets its DVD back PLUS your hard-earned $3.00. In fact, if you somehow didn't bring the DVD back on time, then you might have to pay $6.00 or more! Of course, that assessment misses something. You got something for your money -- namely, the privilege to USE the DVD. Now the transaction can go a lot of ways. If you watched the DVD once and vaguely liked it, then maybe you came out slightly ahead. If you never got around to watching the DVD, or if you watched it and didn't like it, then you came out behind. If you watched it 24/7 for the few days you had it and loved every minute of it, then you're REALLY coming out ahead. The points are: (a) you pay Blockbuster to use their stuff; (b) whether or not it's worth it depends on how you use their stuff; and (c) there's not a one-size-fits-all assessment, in the sense that you might have loved the movie but I might have hated it. That's exactly what debt is: you pay someone for the privilege of using their money, then you return their money. It's no less fair or scheming than Blockbuster's business. And like Blockbuster, it can be a good or a bad transaction, depending on what you do with the borrowed money. Maybe you invest the money to potentially make a greater return than the interest you pay, but with some amount of risk. Maybe you use it for something that's completely consumed, like a vacation. There's no OBJECTIVE way to say whether the debt is bad (just like my point (c) in the Blockbuster analogy). You and I might think it's stupid to go into debt to take an awesome vacation, but others might disagree. (Maybe it was a once-in-a-lifetime thing to go to such-and-such place before it was demolished, with a best friend who is not expected to live much longer, so the vacation had to happen at that moment if it were to happen at all.) The point is, maybe you think all debt is bad for you. (By analogy, you might not be much of a movie guy, and hate everything Blockbuster has on offer.) That's fine, nobody's going to try to talk you out of it. But when you state your opinions as if they're universal fact -- as if you're going to convince Gene Siskel that all movies are bad -- you look a little silly. |
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Ray Tupper. Special user NG16. 749 Posts |
What do we want?
A cure for tourettes! When do we want it? C*nt! |
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mastermindreader 1949 - 2017 Seattle, WA 12586 Posts |
Good article, Ray.
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tommy Eternal Order Devil's Island 16532 Posts |
If someone gave him a horse for Christmas he would probably have to borrow three grand to keep it.
If there is a single truth about Magic, it is that nothing on earth so efficiently evades it.
Tommy |
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General_Magician Special user United States 707 Posts |
I'm not narrow minded in my views about debt. Debt leverage is very risky to do and it's just unwise to take on such risky moves. Some might make money from it, but it doesn't mean it's wise to do so and it certainly doesn't mean I have tunnel vision or a narrow point of view on money. The assertion that I am somehow narrow minded or have tunnel vision is just simply wrong and false. The fact still remains that going into debt costs you money and harms your ability to save and invest. In addition, debt leverage as a tool to increase your returns is also very risky. Though, I understand nothing is risk free, investing with a policy of minimizing risk is wise and debt leveraging just doesn't fit into such a policy. You might not get rich quick, but it's better to simply have patience and discipline and not always trying to take shortcuts or the easy way out in an attempt to get rich quick or attempting to generate wealth to achieve your financial goals (if you even have any financial goals and many people simply don't set goals for themselves). So I object to any notion that somehow, I am being narrow minded or have tunnel. It's just simply false.
Those who tend to get rich quick also tend to get poor fast too. So, the notion, that somehow, I am narrow minded for seeing reality for the way it really is, is just plain false and a over-simplistic label in attempt to discredit my legitimate views on money and the credit and banking system. The banks have lobbyists in Washington to assure that the system is rigged in their favor. Politicians are bought and sold all the time by the highest bidder and elections are auctions. That's just the way it is right now. It's the reason why the banks, even in the after math of the financial collapse haven't been properly regulated yet (because bank lobbyists are preventing some of the regulation from being implemented). It's also the reason why we have this new sub-prime mortgage problem with auto loans now, because the banks were properly regulated after the first financial meltdown that harmed the US economy. Now somebody who is in that class of people might object to that notion because their interests are tied up in the banking system which relies on lobbying Washington for favorable treatment that rigs the credit and banking system in their favor to assure them profit and to encourage others to take out loans when it's not wise to do so. But that doesn't change the reality that the banking and credit system is largely rigged to encourage people to take out debt and make the banks more money, even if it comes at the cost of the US economy and people who either get greedy and want to get rich quick or people who just don't understand the perils of debt.
"Never fear shadows. They simply mean there is a light shining somewhere nearby." -unknown
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LobowolfXXX Inner circle La Famiglia 1196 Posts |
Quote:
On Jul 23, 2014, General_Magician wrote: I wouldn't say the system is "rigged" to "punish" people. People who have demonstrated in the past at they repay loans on time are more likely to repay loans in the future, and it's just good business sense to charge them less to borrow money. "Banks" don't work, of course; bankers do. Some would argue that they work harder than magicians. Certainly, in most cases, the hours are longer.
"Torture doesn't work" lol
Guess they forgot to tell Bill Buckley. "...as we reason and love, we are able to hope. And hope enables us to resist those things that would enslave us." |
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S2000magician Inner circle Yorba Linda, CA 3465 Posts |
Quote:
On Jul 23, 2014, General_Magician wrote: With respect, you are. Quote:
On Jul 23, 2014, General_Magician wrote: The problem is that you’re making general statements that aren’t true in general. Most people cannot afford to buy a house for cash, yet buying a house may well be the wisest move they could make. Getting a mortgage to buy the house is not (necessarily) unwise. Most start-up companies cannot purchase machinery, raw materials, tools, vehicles, and so on for cash, yet those assets are necessary for the company to make money. Debt financing is less expensive than equity financing, so the wise move is to borrow the money to buy the assets to start the company. Ongoing asset purchases are frequently handled in the same way, for the same (good) reason. I can go on, but you should see the point: debt is not inherently bad, nor is its use inherently unwise. It can be, but it isn’t necessarily. To assert (unconditionally) that it is is narrow-minded. |
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General_Magician Special user United States 707 Posts |
Quote:
I wouldn't say the system is "rigged" to "punish" people. People who have demonstrated in the past at they repay loans on time are more likely to repay loans in the future, and it's just good business sense to charge them less to borrow money. You would be surprised at how many hours you have to work as a magician. It's not as simple as some people think if you are serious about doing it. It takes hard work too. You have to have a good quality show, that means rehearsals in front of a video camera to see where you can improve our performance. Then, you have to pay for advertising and for lawyers (don't forget Lobo, you being a lawyer, before I can legally go into another state to expand my business operations you have to pay the state to register your company as a foreign entity, and then you have to pay any applicable taxes for that state as well and that costs money). That website that I have Lobo, guess who wrote the sales letter for the website? That's right me. And it didn't take 15 minutes to do it either. It wasn't easy. Not only that, but my wife and I had to take video footage so that I could hire somebody to properly edit the video because demo videos of a magician helps to sell the magician. Then, their is the logo and getting people together for the Operating Agreement for my company the yearly registration fees, the meeting minutes I have to keep up with (don't keep up with your meeting minutes and some slick lawyer who is suing you could say your company is an alter ego and you lose your liability protections and yes magicians can sued too), faxes that I have to keep up with, customer relations, following up on leads (customers for the most part aren't going to come to you, you have to get on the phone and call these people) learning new magic tricks. I think in many respects, I work harder now than I did when I was a computer programmer. Then, I got to come up with an email marketing strategy, and that means writing down a value proposition and figuring out a way to systematize it and targeting specific markets and building an email list, plus paying my company's operation expenses, business license fees, trying to find somebody or something that can effectively manage my company's Facebook page. It's a lot to running a business than being a banker who workds 9-5. I am responsible for quarterly taxes and paying off CPAs so that I stay in the good graces of the tax man. I know you see me here on the forum posting away, but I am also doing things in between to keep myself busy. Reviewing my company's Executive Summary, purchasing product for resale in my state which I have to charge sales tax on to pay to the state of GA. You get the idea Lobo, I am sure you had corporate clients before. Then their is hiring my lawyer again, for coming up with the proper legal paperwork to use other magicians off a commission basis to grow my business while still keeping me out of trouble with the IRS. There is always something to do to grow your business. It's all you. Plus, I think it's important to figure out what you really love to do and just go after it. I think people work best when they are working in a field they really enjoy, even if they don't make boatloads of money. Sometimes, though, because you love what you do, you are more likely to become good at it and their is a better chance the money will come. Being a banker and sitting behind a teller or a desk doesn't sound appealing to me. But make no mistake, being a magician who gets paid to do it is also work too. No such thing as easy money. I also forgot to mention the competition too Lobo. Know your competition. Every business has competition, even the magic business (I know magicians sometimes like to think we are not competing with each other, but we are, life is a competition). Competition and challenge is what makes the world go round. Granted, their are magicians who would blow me out of the water without breaking a sweat, but I still have competition and I still have to challenge myself to be the best I can be.
"Never fear shadows. They simply mean there is a light shining somewhere nearby." -unknown
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LobowolfXXX Inner circle La Famiglia 1196 Posts |
I've worked as a magician, and I've worked in a bank. I have friends who are full-time magicians, and I have friends who work in the banking industry. Perhaps it is you who would be surprised, at the work of a banker.
"Torture doesn't work" lol
Guess they forgot to tell Bill Buckley. "...as we reason and love, we are able to hope. And hope enables us to resist those things that would enslave us." |
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Dannydoyle Eternal Order 21214 Posts |
It seems as if you are making things pretty hard on yourself General.
Danny Doyle
<BR>Semper Occultus <BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell |
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MobilityBundle Regular user Las Vegas/Boston 120 Posts |
So GM is lecturing to folks on a magic board what goes into being a magician?
I'm out. Been fun. |
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