On 2008-01-14 10:47:30 -0800, Douglas Johnson <post[at]classtech.com> said:

- quote -


Or they could turn the mansion into a bed and breakfast and get income
that way. Some European castles are open to tourists for a fee. But I
was assuming, perhaps naively, that there is a kind of upper limit
beyond which more wealth is meaningless and also a kind of lower limit
on the disappearance of family wealth no matter how bad things become.
But you are probably right--there may not be such limits. If one
becomes accustomed to the things billions can buy, it would be
devastating to have to make do on a few hundred million.

Don <dwzimm[at]telus.net> wrote:
- quote -

The original premise is that our rich friends owned a house and a lot of stock
in grandpa's company and nothing else. If the company goes bankrupt, the stock
is worthless, but you still have the operating costs on the house (call it 5% a
year) and no income to support it.

If the house is worth $10 million, they can sell it as quickly as possible
(there is usually a long time on market at that end of things). They can still
have a pretty nice life style, but the mansion is gone.

People in the original situation often are reluctant to sell the stock, that's
why they are not diversified. So when they want to buy something that cannot be
financed out of current dividends (like little Buffy's wedding), they borrow. So
our friends may well have quite a lot of debt. If they have borrowed against
the stock, they could end up with a negative net worth. This is what happened
to some acquaintances I mentioned earlier.

While they are not likely to end up eating dog food, they might. They
certainly lose the mansion.

-- Doug

On 2008-01-10 14:20:16 -0800, Douglas Johnson <post[at]classtech.com> said:

- quote -

Yes, true. And I would think avoiding risk and doing careful planning
would be especially prudent for the rich who want to become still
richer, leave more to their heirs than they started with, etc. But I
would guess that rich people whose eggs are all in the one basket of a
family owned company usually make out OK. Some do drive the company
into the ground and end up bankrupt for sure, but many just end up with
a lot less wealth, but still enough to keep the mansion in shape and
the cars and horses and the beach house in good condition.

- quote -

Lest someone claim that TIPS or T-Bills would eliminate the risk, keep
in mind, governments fail, hyperinflation destroys money. I'm not
suggesting I expect such a thing to occur, but I never expected to utter
the sentence "that's where the World Trade Center used to be." Black
Swan events do happen. To add to Doug's point, diversity means across
countries as well as asset classes.

JOE
www.blog.joetaxpayer.com

Don <dwzimm[at]telus.net> wrote:


- quote -

And if they or the management drive the company into the ground? I know a
people who were in that or similar situations who are now bankrupt. You can't
ignore risk. Diversity is the friend of the rich and poor alike.

-- Doug

On 2008-01-08 12:32:23 -0800, Rich Carreiro <rlc-news[at]rlcarr.com> said:

- quote -

There comes a point when even risk need not be considered. How many
people are there whose only assets are a big house and a whole lot of
stock in a company that Grandfather founded? I would suspect there are
many. That allocation would be considered risky and foolhardy for a
small investor, but for those fortunate people, even if the stock
declined to half or less its current value and the house lost value
too, there would still be plenty of dividends coming in for a
comfortable life style.

On 2008-01-08 12:32:23 -0800, Rich Carreiro <rlc-news[at]rlcarr.com> said:

Good thinking, but I would want to put some into foreign currencies
stashed away in Swiss banks, foreign stocks, etc., just in case the
good old USA goes out of business in the turbulent and unpredictable
21st century.

"dumbstruck" <dumbstruc[at]gmail.com> wrote
- quote -

For this to be believable, you would have to provide first
source citations.

- quote -

This would seem to be America of whom you are writing. I do
not call them freaks, since it's counterproductive. They
made mistakes.

Elle wrote on [Tue, 8 Jan 2008 17:47:16 -0600]:
- quote -

Or perhaps that she has enough money and is now only trying to keep
ahead of inflation, with no need to take as much risk as her risk
tolerance might be.

Cramer mostly likes to hear himself talk.

"kastnna" <kastnna[at]auburnalum.org> wrote in message
news:64b89fbb-4314-4bff-8cbc-7841b188572d[at]v29g2000hsf.googlegroups.com...
- quote -

On Jan 8, 2:05*pm, "M.Balarama" <mba...[at]sbcglobal.net> wrote:
- quote -

The follow on to Louis Reykeser program on CNBC may as well be "Kudlow
and Company", although as someone said the info density is low and
admittedly the yell-fests can be a distracting annoyance. Kudlow had
taken over the banner of against-the-grain optimism in the last 5
years of market growth, and following the sector advice, etc would
have lead you to a vortex of high returns. Now overly immersed
political commentary so maybe best handled by recording and later
skipping to the market highlights.

"Suze" is a mess re: investments - her editor must clean up her book
advice. She's made specific fund ticker recommendations on-air along
with rationale that didn't match the ticker. And the rationale itself
being a mistaken interpretation of old platitudes that then backfire
for her over time, which she eventually changes for another mistake!
Much of the rest is a freak show of people who've made reckless self
destructive decisions, so hard to get interested in despite some
useful tax and misc info.

"Cramer" sometimes has a good capsule of market trends in the first
couple minutes. Maybe once a week he adds some useful rules of thumb
on investing. His interaction with callers may be the most annoying
rituals on TV, possibly to make it unseemly for them to be frank and
say the reason they are calling is his recommended stock has gone way
underwater for that caller. Not that Cramer picks are mainly bad, but
if you pay attention the calls often seem to be about stocks he pumped
but went really down. He plays the tough guy, but has repeatedly been
a cry baby running for defensive stocks at countless little blips on
the long past uptrend.

"Fast Money" combines a quite unpromising format with a neer-do-well
host, and somehow comes up with entertainment and value! I'm a little
disoriented by this, but kudos to Dylan and the way it seems to give
quite useful sector calls and explanation/education even when
discussing stock details that I wouldn't ordinarily care about. Try
their free "word on the street" podcast by seaching for cnbc in Itunes
- isn't at least the beginning provocative and useful for close market
watchers?

There is also the Bloomberg channel, which is improving from a slow
start. Best of all is CNBC Europe from London, like Geoff Cutmore's
Euro Squawkbox program. The web mainly seems to list some novelty
stuff from him like http://www.cnbc.com/id/16266794/site/14081545/ but
it is a class act. His probes into US and world markets makes the US
side of CNBC seem in comparison like a tribe of jabbering monkeys
trying to make sense out of an Apollo moon launch. Geoff's show, on
the other hand, is more like watching the same launch in the
insightful company of the late Werner von Braun while sipping your
favorite beverage.

Elizabeth Richardson wrote:
- quote -

I call this entertainment, but my wife agrees with you...

-Will

william dot trice at ngc dot com

sandybeth wrote:
- quote -

My issue with them is that the "information density" is very low - same
problem TV news has. You can get less from watching the Weather Channel
or network news for 1/2 hour than from spending a few minutes on the
internet. I'll take the extra 26 minutes a day please!

For most people learning about mutual funds and insurance is not
entertainment, it's on par with figuring out how to file your taxes. You
want to do it as efficiently as possible, and get to more enjoyable
things. And you can get so much more information from reading, in much
less time.

And if Suze answering questions about variable annuities qualifies as
entertainment...well maybe it's time for some serious reflection, a new
hobby, a Netflix subscription, or all of the above!

I don't think it applies to Suze, but many of the money shows by nature
focus on investments du jour instead of the long-term strategies most
people will do better with. When someone on TV barks about a stock that
just popped or gold or whatever, it lends legitimacy to the idea that
you need to care, and react to it.

-Tad

"sandybeth" <sandyhb6[at]yahoo.com> wrote in message
news:120ed0cf-745f-44b2-b2be-0f71cc00ec70[at]d21g2000prf.googlegroups.com...
- quote -

I made some really big money from Wall street week with Louis Reykeser-and
made still -he told me 6 or so years ago to get into commodities-so I bought
oil-which is doing well -I have not found another show since then- but I
sometimes watch Cramer and mad money
but I am way overweighted in oil right now

"kastnna" <kastnna[at]auburnalum.org> wrote
- quote -

It seems to me your subsequent remarks recant the last
sentence above. Like others, I agree she is guilty of
nothing but investing per her own risk tolerance.

Per
http://www.nytimes.com/2007/02/25/ma...an&oref=slogin ,
Orman's portfolio breakdown is more like:

$24 million in AAA muni bonds
$1 million in stocks
$7 million in real estate

The link above quotes her as saying that has a million in
stocks, because, "if I lose a million dollars, I don't
personally care." This supports the contention that she is
invested per her risk tolerance.

- quote -

Her site on annuities does not seem to be as black-and-white
as you insist. See
http://www.suzeorman.com/igsbase/igs...xpertiseID=107

On Jan 8, 4:10*pm, "John A. Weeks III" <j...[at]johnweeks.com> wrote:
- quote -

Well put and agreed John. I look at it this way, far fewer people
would harmed by following Suze's advice than would be harmed if they
followed the opposite of her advice. For that reason she is decidedly
good for us.

But I believe the average poster on this group is above "J6P" level
simply by virtue proactively being here. Given that, they are more
likely to fall into an "exotic" position. Therefore I say "take with a
grain of salt".

In article
<32c05bc1-ce8f-462c-8923-77881285ebc6[at]m77g2000hsc.googlegroups.com> ,
kastnna <kastnna[at]auburnalum.org> wrote:

- quote -

I guess I take a somewhat pragmatic view of the issue. The few
people that really need a customized financial plan are most
likely going to know who they are. And if they don't know, then
they are not likely to be candidates for doing something exotic.

In the long run, I think just about everyone can benefit from
the core of what Suze advocates, and that is living within your
means and saving for retirement. I think far more people can
benefit by doing that than can benefit by paying big money to
perform financial gymnastics.

-john-

--
================================================== ====================
John A. Weeks III * * * * * 612-720-2854 * * * * * *john[at]johnweeks.com
Newave Communications * * * * * * * * * * * * http://www.johnweeks.com
================================================== ====================

On Jan 8, 2:32*pm, Rich Carreiro <rlc-n...[at]rlcarr.com> wrote:

- quote -

I would do the same Rich and I think Suze is also proper in doing so.
I did not intend to imply her investment was unsuitable for her just
that her advice is not universally applicable.

"kastnna" <kastnna[at]auburnalum.org> wrote in message
news:64b89fbb-4314-4bff-8cbc-7841b188572d[at]v29g2000hsf.googlegroups.com...
- quote -

My observation on Suze Orman. I stopped watching/listening to her back in
2000, when she observed that while the general investment advice is to buy
low and sell high, she recognized that prices were indeed high at the time.
Her advice? Buy high and sell higher! Yes, she, at least occasionally, gives
bad advice.

- quote -

No doubt about this. Above, Will observed he likes Cramer for the
entertainment value. I don't watch Cramer because I don't call it
entertainment to have some guy yelling at me. There is no reason to spend
any portion of my life having someone yell at me. I am astounded that he has
even one viewer.

Elizabeth Richardson

On Jan 8, 1:35*pm, "John A. Weeks III" <j...[at]johnweeks.com> wrote
- quote -

I see her investment decision as suitable also. That's my point. It's
prudent, yet it's contrary to her normal advice. Why? Because she's
not the typical investor. A small percentage of her viewers are also
not typical. THEY (but not the majority) need to take her advice with
a grain of salt.

I say again, Suze gives perfectly acceptable advice IN GENERAL
(afterall what more could we ask than that?). However, she is not a
substitute for individually tailored and unique professional advice
(or even learning all the ins and outs of your personal situation on
your own).