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I *will* be a multi-millionare! @@@ Next Plan Details : May 15 @@@

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  • Jul 31st, 2009 8:45 am
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Jul 30, 2003
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I *will* be a multi-millionare! @@@ Next Plan Details : May 15 @@@

So I went in for financial planning - spent some time with the financial planner. Asked all sorts of questions. He emphasized a lot on that I have lot of time so if I start planning now - I can be a millionare when I retire (using the most conservative numbers). Which make sense since compounding works like that.

Here is the intresting part - I can put in (virtually) all my savings and start the investing plan. I can take my original investment out after ~4 years and will not have to pay monthly interest on the loan either at that point - I will still end up being a multi-millionare at retirement. This attracts me a lot.

I am just wondering:

- Why doesn't EVERYONE jumps on this plan?
- What should I check before signing all my life-saving into this? (Basically, why should I do this?)
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Aug 1, 2008
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I smell a segregated fund.....would your planner happen to be working for
an insurance company?

If it's too good to be true....it usually isn't. which should answer your question
as to why everybody isn't doing it.

The best person with your money is YOU. Read up and ask questions of people
that do not make money with your money.
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Dec 3, 2004
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PrinceMS wrote:
May 8th, 2009 2:08 pm
So I went in for financial planning - spent some time with the financial planner. Asked all sorts of questions. He emphasized a lot on that I have lot of time so if I start planning now - I can be a millionare when I retire (using the most conservative numbers). Which make sense since compounding works like that.

Here is the intresting part - I can put in (virtually) all my savings and start the investing plan. I can take my original investment out after ~4 years and will not have to pay monthly interest on the loan either at that point - I will still end up being a multi-millionare at retirement. This attracts me a lot.

I am just wondering:

- Why doesn't EVERYONE jumps on this plan?
- What should I check before signing all my life-saving into this? (Basically, why should I do this?)
Well retiring as a millionaire may sound nice, but quality of life is also important. "Retiring" is such a broad concept...

Will you retire at 65, with grandkids almost in college?
Will you retire at 65, single, never married, with no kids?
Will you retire at 50, divorced 4 times?

It really depends on the situations you go through. Money isn't everything. Being a millionaire and retiring at 55 sounds nice, but if you have no one to share your wealth with, will that be discouraging to you? Kids no doubt cost money, tons of money... so to answer your question, everyone tries to jump on it (I don't think there is anyone who doesn't want to be a millionaire when retiring), but some people spend a little too much during the ride. When you think about it, our way of thinking about money is backwards... we spend so much time trying to accumulate wealth, and then when we hit 60, we only have 20 years left to spend it, and most of the time, since we've spent all of our lives saving money, we don't know HOW to spend it, so we just keep accumulating, until we die... and when you die, who will you leave it all to?
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PrinceMS wrote:
May 8th, 2009 2:08 pm
So I went in for financial planning - spent some time with the financial planner. Asked all sorts of questions. He emphasized a lot on that I have lot of time so if I start planning now - I can be a millionare when I retire (using the most conservative numbers). Which make sense since compounding works like that.

Here is the intresting part - I can put in (virtually) all my savings and start the investing plan. I can take my original investment out after ~4 years and will not have to pay monthly interest on the loan either at that point - I will still end up being a multi-millionare at retirement. This attracts me a lot.

I am just wondering:

- Why doesn't EVERYONE jumps on this plan?
- What should I check before signing all my life-saving into this? (Basically, why should I do this?)
I don't think this is a really hard concept if you're living within your means and have a slightly higher than average income.

It should be really easy if you're in your 20's right now.

Get a good job..save money, invest in real estate = DON'T RENT. If you work long enough, it'll be easy to retire at a millionaire level..and remember the definition of milllionaire changes with time. It was huge 20 years ago, today, does it really mean anything?
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Jul 21, 2006
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If you have to ask these questions, then an investment loan isn't suitable for you.
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PrinceMS wrote:
May 8th, 2009 2:08 pm
So I went in for financial planning - spent some time with the financial planner. Asked all sorts of questions. He emphasized a lot on that I have lot of time so if I start planning now - I can be a millionare when I retire (using the most conservative numbers). Which make sense since compounding works like that.

Here is the intresting part - I can put in (virtually) all my savings and start the investing plan. I can take my original investment out after ~4 years and will not have to pay monthly interest on the loan either at that point - I will still end up being a multi-millionare at retirement. This attracts me a lot.

I am just wondering:

- Why doesn't EVERYONE jumps on this plan?
- What should I check before signing all my life-saving into this? (Basically, why should I do this?)
You need to give far more details before people can help you evaluate the hidden risks and benefits of the plan. I particular, it would be interested to see what are considered "very conservative" estimates, together with your expectations for yearly savings. For ex, I'm curious what type of plan is predicated on taking money out after 4 years. Conservative numbers mean barely 15-16% inflation adjusted growth in that time, with a large expected variance due to the short 4 year term. I'm fairly leveraged myself, but I'm not expecting the investment loan to be paid down for another 15-20 years, for example.
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PrinceMS wrote:
May 8th, 2009 2:08 pm
So I went in for financial planning - spent some time with the financial planner. Asked all sorts of questions. He emphasized a lot on that I have lot of time so if I start planning now - I can be a millionare when I retire (using the most conservative numbers). Which make sense since compounding works like that.

Here is the intresting part - I can put in (virtually) all my savings and start the investing plan. I can take my original investment out after ~4 years and will not have to pay monthly interest on the loan either at that point - I will still end up being a multi-millionare at retirement. This attracts me a lot.

I am just wondering:

- Why doesn't EVERYONE jumps on this plan?
- What should I check before signing all my life-saving into this? (Basically, why should I do this?)
You need to tell us more about this investment plan. In general, I would stay away from leverage and I hope he is not trying to sell you some segregated funds. These funds are very bad for you but great for your financial planner.
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Man, you always got pretty insightful post. I totally agree. Also what is with the pathetic idea lots of westerners have about life beginning at retirement... then companies calling it "freedom55"... i mean wtf... what are we... in jail until then you reach 55? Pathetic imho.

Of course money is quite important in this society, and there is a balance between saving and spending.

Personally I don't get too caught up in the retirement thing (i'm 30 btw). Of course I do use any incentives the gov't allows me to though and company matches. -sg
adamtheman wrote:
May 8th, 2009 2:26 pm
Well retiring as a millionaire may sound nice, but quality of life is also important. "Retiring" is such a broad concept...

Will you retire at 65, with grandkids almost in college?
Will you retire at 65, single, never married, with no kids?
Will you retire at 50, divorced 4 times?

It really depends on the situations you go through. Money isn't everything. Being a millionaire and retiring at 55 sounds nice, but if you have no one to share your wealth with, will that be discouraging to you? Kids no doubt cost money, tons of money... so to answer your question, everyone tries to jump on it (I don't think there is anyone who doesn't want to be a millionaire when retiring), but some people spend a little too much during the ride. When you think about it, our way of thinking about money is backwards... we spend so much time trying to accumulate wealth, and then when we hit 60, we only have 20 years left to spend it, and most of the time, since we've spent all of our lives saving money, we don't know HOW to spend it, so we just keep accumulating, until we die... and when you die, who will you leave it all to?
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[OP]
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Jul 30, 2003
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*darn it, wrote so much - it didn't save*

I am not keen on giving personal details in public. Anyway, here are some generic details:

- We didn't talk about specific funds, he said we can do that when / if I am ready to invest

- Plan A: Yes it is leverage investment. We take "investment loan" on top of my savings

- Plan B: We can also take 100 % Investment loan (meaning w/o my savings)

- He advised only Plan A but I want to do Plan A and B (both) because it doesn't effect your credit history, it is pretty secure, I can get out any point - In the long term ( 4-5 years, it has a lot of potential to grow with virtually no risk?). IF I do decide to end this before 4/5 years, I have gained nothing.

- For next ~4 years, I will not have any money in savings. I will have to pay $500 - $700/month in loan payments, but after 4 years we can take tens of thousands dollars out and re-invest it to pay these fees for me (more or less).

- The monthly payment I have to make is tax deductable, so I will get money back from it at the end of the year, so its not all a loss (touches tax planning - which I should do as well)

- I can also take out my original money to invest in business etc in 4-5 years time, but that will obviously hurt the funds full potential to grow

-----------------------------
As for real estate, I am still waiting for prices to come down. I don't have enf funds to invest in real-estate. I did get into that and lost money (my own stupidity).
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I will be too, but Id rather have it now when I can enjoy it more
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As soon as I read loan, it was already bad. Loan = leverage, and sounds fishy if that's the first thing a financial planner discusses with you. I have nothing against leverage but it has to be fully understood. Did they base the results on an assumed constant rate of return like 7 or 8%?

Factoring in inflation and retirement needs, being a millionaire isn't that a big deal later on but sounds great in a conversation.

Try asking the FP how he/she is compensated. A loan juices a commission by making the purchase larger. There are circumstances that warrant a loan.

Financial planning should encompass things beyond investments such as tax planning, budgeting, estate planning and financial goals. There are good financial planners out there, many in fact but the bad ones ruin it.
[OP]
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- Yes Million is not what it used to be - but I don't know any millionare personally, so even though with 2.x times inflation being a millionare at that age, will most likely be good enf for me.
Also, what is the alternative? I don't know what else I can do that is going to give me a good shot at being *mere* millionare?

- I didn't say I am giving up my lifestyle for this. I mentioned SAVINGS

- He used 12% rate of growth (10% at times). Although rate of growth from 1950 is 16% on average.

- so
CONS are: I have not access to money for 4 years?

PROS are: I will have financial freedom! Retirement will be comfortable. I can do what I want to do (business / travel) etc
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[OP]
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(sorry I am not writing everything in one post, because RFD times out and I have to re-write it all again)

@sleepy guy: Details on these incentives please?


EVERYONE ELSE:

- What is the alternative to accomplish the same goal?
- Why shouldn't I do it?
- What is seggergated fund and why are they bad?

(P.S: I think he mentioend mutual funds for this, not segregated funds)
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Another 'risk' is how steady is your employment? what if you lose cash flow for x amount of months. consider these things before commiting. -sg

edit; sorry I just worded it wrong. I didn't mean incentives... I meant RRSP, HBP and company matching (which EVERYONE SHOULD DO!!!... usually a 50% gain right off the bat). -sg
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