Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: TheStockFairy who wrote (93809)	11/5/2007 2:01:22 PM
From: Think4Yourself	Read Replies (1) \| Respond to of 306849

CFC is actually UP today.

To: TheStockFairy who wrote (93809)	11/5/2007 5:05:04 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 306849

it ended up being a book about the .00000001% of the population instead of explaining "this is how a guy with 5 mil typically lives the 5 mil guy can only afford a 200K lifestyle. 200K is a 4% drawdown, which is about the maximum sustainable drawdown once you factor in inflation and the variability of asset returns. if you want to know how the 200K person lives, just look around. there are a lot of households with 200K income which spend all their money, so they can "afford" the same lifestyle as the 5 mil guy. apart from the fact that they have to work for their 200K, the difference is, most of those households only have 50-500K net worth apart from their house (less once you subtract their mortgage). so the 5 mil guy has 10-100x the net worth of the people who are in his peer group, target-marketwise. of course, there are 5 mil guys with an 800K lifestyle, but 16% drawdown is not sustainable. they will either plow through their money over the course of time, or they will take outsized risks and either become much richer or much poorer. the people profiled in Richistania have another order of magnitude or more on the 5 mil guy. if you spend 5 mil a year, or 20 mil a year, or 50 mil a year, all of a sudden you are more like an institution than a retail household.