How To Become A Billionaire… Even If It Takes 200 Years

How To Become A Billionaire… Even If It Takes 200 Years

Notes From The Field By Simon Black  October 6, 2021

It’s a simple question of arithmetic.  Imagine you could go back in time to 1871 and ask one of your long lost ancestors to invest $2,500 for the benefit of future generations.

That amount of money wasn’t insignificant… but certainly not a major fortune; it would be worth roughly $50,000 in today’s money.

When placed in the right structure, and benefiting from compounding returns over the next 150 years, that $2,500 initial investment would be worth an astounding $1.4 BILLION today.

Now, sadly none of us owns a time machine. But we do have the power to be that long lost ancestor to future generations.

In other words, there’s little stopping you from setting aside some savings in a long-term structure-- like a trust, or even a smart contract-- that could have an enormous impact on the future.

$50,000 invested in the right structure today at, say, a 10% compounding return, will be worth $73 billion in 150 years.

Granted we’ll all most likely be long gone by then. And inflation will definitely have eaten up a large chunk of that return.

But it’s still going to be an enormous amount of money. And with the right planning, you have the power to decide, today, how that money will be spent and allocated in the future.

If you wanted to, you could leave behind strict instructions (which are legally binding) to have the assets liquidated at a certain point in the future, and donated to your favorite charity.

Or you could provide future trustees the discretion to make certain donations based on causes that are important to you today.

The point is that it’s possible to continue growing your wealth long after you’re gone, and to still exercise significant control over how it can impact the world and future generations.

This is the topic for today’s Freedom Podcast, which you can listen to here.

To your freedom, Simon Black, Founder, SovereignMan.com

Signs You’re Wealthier Than You Think

Signs You’re Wealthier Than You Think

Cameron Huddleston  Last updated: Oct. 4, 2021

When most think of wealth, they think about money," said Tom Corley, author of "Rich Habits" and "Change Your Habits, Change Your Life." "The thinking goes, the more money you have, the wealthier you are. But wealth is about much more than money." You might want to become the next Warren Buffett, but there's a good chance you already have more wealth than you realize.

See how and some of the steps you can take to start building more wealth today.

Sign 1: Your Wealth Isn’t Defined by an Arbitrary Number

One of the main reasons many people don't realize how wealthy they are is because they compare themselves to others, said Michael Kay, author of "The Feel Rich Project" and president of Financial Life Focus. It's easy to assume someone is rich if you see him living in a big house, driving a nice car or belonging to a country club. But looks can be deceiving.

"You can't know what someone's true wealth is unless you're looking at their net worth statement," he said. For example, you might assume that, compared with an attorney and doctor, a mechanic isn't as well off, Kay said. But the mechanic might be the wealthiest because he's careful with his money and isn't trying to impress anyone with status symbols.

"At the end of the day, wealth is self-defined," he said. For example, if you say to yourself that you won't consider yourself wealthy until you have $5 million, ask why you've chosen that number.

Analysis

Instead of selecting an arbitrary measure of wealth, define what is important to you. Then, you can determine how much income and savings you need to have what you value. You might find that you're already on track to achieving what's important -- whether it's being able to retire at a certain age, work fewer hours, change jobs or take annual vacations.

"Wealth is all about finding what it truly is for you," Kay said. "Most people figure out it isn't about things."

Sign 2: You’re Not Weighed Down by Debt

To continue reading, please go to the original article here:

https://news.yahoo.com/signs-wealthier-think-160001850.html

Dangerous Feelings

Dangerous Feelings

Sep 30, 2021 by Morgan Housel

“I sat down at my fancy desk on the edge of my chair waiting for the market to open, ready to have another $50,000 day, and thinking life couldn’t get any better than this. This time, I was right. It didn’t.”

– Investor Jim Paul describing the moment he went from cocky and overconfident to broke and unemployed.

Success has a nasty tendency to increase confidence more than ability. The longer it lasts, and the more it was tied to some degree of serendipity, the truer that becomes.

It’s why getting rich and staying rich are different skills. And why most competitive advantages have a shelf life. Jason Zweig put it: “Being right is the enemy of staying right because it leads you to forget the way the world works.”

It is of course possible to indefinitely maintain whatever skills brought you initial success. Lots of people and a handful of businesses have done it.

But when success is maintained for a long period the greatest skill often isn’t technical, or even specific to your trade. It’s identifying and resisting a few dangerous feelings that can nuzzle their way in after you’ve achieved any level of success.

A few of the big ones:

1. The decline of paranoia that made you successful to begin with.

A common irony goes like this:

Paranoia leads to success because it keeps you on your toes.

But paranoia is stressful, so you abandon it quickly once you achieve success.

Now you’ve abandoned what made you successful and you begin to decline – which is even more stressful.

It happens in business, investing, careers, relationships – all over the place.

Michael Moritz of Sequoia was once asked how his investment firm has thrived for 40 years. “We’ve always been afraid of going out of business,” was his answer.

It’s a rare response in a world where most successful people step back, take stock of all they’ve achieved, and assume they can not only breathe a sigh of relief but that their skills will run on autopilot.

A dangerous situation is when your goals (achieving enough success to relax) counter your skills (focus, paranoia, persistence). It hits you when you feel like past hard work entitles you to a break without realizing the cost of that break, however much it might be necessary and deserved. It’s part of why people who quit while they’re ahead are so admirable – it’s often not so much that they gave up, but that they’re aware of what made them successful and when that trait begins to wane.

2. Finding other peoples’ flaws more than you look for your own improvements.

To continue reading, please go to the original article here:

https://www.collaborativefund.com/blog/dangerous-feelings/

Be Challenged. Not Overwhelmed.

Be Challenged. Not Overwhelmed.

By Lawrence Yeo                                                                   

There is a fine line between fulfillment and burnout.

Fulfillment is largely linked to purpose, which is driven by your sense of agency over a given result. If you believe that a marginal increase in effort will lead to an outcome you’re proud of, purpose ensures that you’ll put in that extra hour. This is especially true if there’s no one else but you that is responsible for what is created.

But at what point does this marginal effort actually harm the overall result? Or in economics-speak, at what point does the law of diminishing marginal utility kick in? And how do we know when we’ve arrived at that point?

To answer this, let’s explore the bottlenecks of human effort.

The utility of effort generally faces one of two constraints:

(1) Motivation, or

(2) Fatigue.

Let’s start with motivation.

You can have thousands of productive hours amassed in one space, but if those people find zero purpose in what they’re doing, you will have a sub-par result. Imagine an employer that boasts about how many employees he has, but no one believes in the vision. It won’t be long before that company loses ground to a small team of five people that are fanatical about what they do.

In this case, the bottleneck isn’t the lack of manpower. It’s the poverty of enthusiasm that is needed to make that manpower useful. After all, the quantity of workable hours is meaningless without the quality necessary to make it productive.

To solve this problem, employers often use money to bridge the gap. But as I’ve noted before, an increase in pay cannot increase motivation. The best thing it can do is to prevent a decrease in motivation, which is entirely different. Increasing motivation can only come through what psychologist Frederick Herzberg aptly referred to as “motivators,” which are things like challenging work, recognition, responsibility, and personal growth.

This is why people with high salaries doing difficult work can still feel that it’s pointless. If the nature of that work doesn’t align with their values or their curiosities, then it will feel like they’re watering a plant that looks fine on the outside, but its roots are quickly decaying. Being dead on the inside will eventually find its way to the outside, no matter how much you effort you put into taking care of appearances.

So that’s the first bottleneck. If a surge of effort hits a wall of indifference, nothing too great is going to come out of it.

But perhaps this bottleneck is one that doesn’t concern you. You find immense purpose in what you work on, and derive a ton of meaning from it. You regularly enter flow states and are happy to invest whatever time you have into your craft. First off, congratulations, that’s a wonderful spot to be in. But over time, you’ll realize that you’ll regularly hit the second bottleneck of effort:

To continue reading, please go to the original article here:

https://moretothat.com/be-challenged-not-overwhelmed/

What Does An Estate Executor Do?

What Does An Estate Executor Do?

By Bill Bischoff    Last Updated: Oct. 4, 2021

Here’s a checklist of the most important financial duties

There are plenty of tax questions when a loved one passes away, but what other financial issues could arise? Tax Guy walks you through them.  When a loved one who was financially comfortable passes away, there will most likely be tax issues. You may be the heir responsible for dealing with them, and major bucks could be in play. In three earlier columns, I explored the potential tax considerations. See here, here and here.

This column addresses some other important financial issues. Here goes.

What Is The Role Of The Executor?

When a loved one (the decedent) passes away, someone must take on the job of winding up the financial aspects of the estate. That person may be identified in the decedent’s will as the executor of the decedent’s estate.

If a family trust holds the decedent’s assets, the trust document will designate a trustee. If there’s no will or trust, the probate court will appoint an administrator. In any of these scenarios, we will call that person the executor to keep things simple. That person might be you. If so, please read this.   

The executor’s assignment is financial in nature: identify the estate’s assets, pay off the debts, and distribute the remainder to the rightful heirs and beneficiaries. The executor is also responsible for filing tax returns and paying tax liabilities. 

As the executor, you may feel morally obligated to do much more. We will talk about what “much more” can include.   

Do You Need A Professional Executor?

Maybe. If the decedent was wealthy with complicated financial affairs, hiring a professional executor might be a good idea for that reason alone. It takes some of the heat off you.

Another situation where a professional executor might be advisable is warring or just-plain-unreasonable heirs. This is not unusual in families of means. For instance, one heir who has basically been living off the grid in New Mexico for the last 20 years might think the family homestead that will soon be put on the market is worth $10 million. The other heirs, who are much closer to the action, know it’s not worth over $5 million. The off-the-grid guy thinks he’s getting shortchanged and is threatening to sue everybody and their brother. Literally. Or a financially challenged heir may be demanding his or her share “in cash right now” even though that’s impossible. A professional executor can quash such nonsense without you getting dragged into the muck. A good estate planning attorney can recommend a good professional executor. 

Whether you hire a professional executor or not, you may feel morally obligated to handle many things yourself.

To continue reading, please go to the original article here:
https://www.marketwatch.com/story/what-does-an-estate-executor-do-heres-a-checklist-of-the-most-important-financial-duties-11633121701?siteid=yhoof2

What Your Real Estate Agent Wishes You Knew

What Your Real Estate Agent Wishes You Knew

Laura Woods  Tue, September 28, 2021

Buying or selling a home is a very big deal. Most people only go through this process a handful of times in their life — if that — but real estate agents guide clients through it for a living.

Therefore, they’ve seen just about everything on both sides of the transaction and have plenty of wisdom to impart to their clients. No matter which side you’re on, it’s important to trust the agent you’ve enlisted to help and listen to their advice.  For example, when searching for a new home, buyers often rely on price estimates from real estate sites like Redfin and Zillow to understand what different properties are worth. However, Mary Fitzgerald, a real estate agent with The Oppenheim Group, based in West Hollywood, California, said this isn’t the best approach.

“[Buyers] cannot rely on Zillow ‘Zestimates’ as they don’t take in account remodel work that has been done since the last sale, and also can’t differentiate between types and values on view homes,” she said.

Like many other parts of the country, Fitzgerald, who also stars on the Netflix reality television series “Selling Sunset,” said Los Angeles is currently experiencing a sellers’ market in the $2 million-$3 million range and under.

“Sellers should price aggressively and get the most traction as possible for the initial property launch,” she said. “With low inventory, buyers are fighting over properties and nine times out of 10 the seller will land at a higher sale price in a multiple offer scenario than if they list high and sit on the market.”

Of course, presentation is also hugely important in real estate, so Fitzgerald advises sellers to make sure their home looks its best.

“Staging, even if minor, is extremely important,” she said. “Many sellers don’t want to absorb the cost for this, but it is essential in many homes and sellers will almost always get this money back plus some — while gaining more buyers’ attention to the property and higher offers.”

To continue reading, please go to the original article here:

https://news.yahoo.com/real-estate-agent-wishes-knew-200246328.html

7 Areas Where You Should Continue To Be Financially Conservative While the Economy Recovers

7 Areas Where You Should Continue To Be Financially Conservative While the Economy Recovers

Andrew Lisa   Wed, September 29, 2021

The pandemic forced people to regroup financially and reassess what they were doing right with their money and what they were doing wrong. In most cases, the answer was to be more conservative — to pare back spending, increase savings, be wiser with their investments and take fewer risks.

Now that places are reopening and things are changing, many people are letting their guards down — the problem is that “over” is an overstatement. Millions who could and should be vaccinated are not, the Delta variant is now raging across several states and new lockdown restrictions are being imposed.

In other words, don’t break the fast just yet. The next few months are hopeful but uncertain. These are the places in your financial life where it’s best to keep your guard up for now.

Keep Planning For the Worst

Don’t get lulled into free-and-clear post-pandemic complacency, particularly when it comes to saving for any new emergencies that might pop up in the back end of 2021. For now, stay on a financial war footing.“

If you’ve made it through the pandemic thus far unscathed financially, now is not the time to get lax in your resolve,” said Steffa Mantilla, a certified financial education instructor (CFEI) and founder of the personal finance website Money Tamer. “With the new Delta variant, areas could go back into lockdown, which will affect the job market and potentially your income. Make sure you have an emergency fund of six months’ worth of expenses built up.”

Keep Attacking Debt

Mantilla is so adamant about prioritizing emergency savings that she says you should build a financial cushion even if it means paying just the minimum balance on your debts — but only temporarily.“Then, once you have some money saved, you can go back to debt payoff,” Mantilla said.

Here, too, it’s all about preparing for late 2021 curveballs. “The more debt you can get rid of, the more income is freed up,” she said. “Should you lose your job and need to take a lesser-paying job, you’ll have an easier time paying all of your monthly bills.”

To continue reading, please go to the original article here:

https://news.yahoo.com/7-areas-where-continue-financially-214628031.html

Americans’ Biggest Financial Regrets of the Decade

Americans’ Biggest Financial Regrets of the Decade

Laura Woods   Mon, September 27, 2021,

The old saying often rings true — hindsight is 2020. Everyone makes mistakes, and many of these blunders involve money. Many financial decisions seem like a good idea in the moment, but a few weeks, months or even years later, you realize they weren’t the best choice.

A 2019 survey conducted by Policygenius highlights Americans’ biggest financial regrets of the decade. If you’ve ever made a major purchase you regret or opted to spend money when you should’ve been saving — admit it, you have — you’re not alone.

The good news is, financial mishaps can be corrected. If you’re willing to make meaningful changes, you can get yourself out of an uncomfortable financial situation. This might involve making tough sacrifices and/or working extra hours, but it’ll be worth it in the end.

Here’s a look at the top financial regrets, along with advice to help make the problem a thing of the past.

1. Credit Card Debt

Credit card debt can easily creep up on you. Whether you need to swipe the plastic to pay an unplanned expense or get tempted by something fun — i.e., an expensive pair of shoes or a big screen TV — racking up unpaid balances adds up fast.

One-quarter (25.1%) of people ages 35 and up cite incurring credit card debt as their biggest regret of the decade. Slightly lower, 21.5% of people ages 18 to 34 share this sentiment.

How To Tackle Credit Card Debt

If you have credit card debt, you’re in good company. Consumer credit card debt reached a record-high of $829 billion in 2019, according to Experian. Additionally, retail credit card debt totaled a record-breaking $90 billion.

Now is the time to stop being weighed down by credit card debt. If you’re ready to take action, total up all of your balances, so you know where you stand. Then decide if you’d like to take the avalanche approach — paying the highest interest cards first — or the snowball approach — paying the lowest balance first.

Look at your spending to find ways to tighten your budget, so you have extra cash to put toward paying off credit card debt. You might even consider going cash-only for a while to keep balances down.

2. Student Loan Debt

To continue reading, please go to the original article here:

https://news.yahoo.com/americans-biggest-financial-regrets-decade-220013856.html

What Is a Probate Sale? – Estate Planning

What Is a Probate Sale? – Estate Planning

Ashley Kilroy   Mon, September 27, 2021,

More often than not, people want to leave their assets and property behind to people they care about when they pass. But sometimes individuals don’t make a will or die with debts. In such cases (among others), their property has to pass through a probate court. It’s possible that you may have to act as an executor of an estate holding one of these properties. Or, there may be an option for future homeowners who want to buy lower-priced real estate. Either way, you’ll have to understand the process of a probate sale. Here’s a rundown on how it works.

Working with a financial advisor can help you execute your estate plans as efficiently and correctly as possible.

What Is a Probate Sale?

While many homeowners rely on estate planning to organize their assets, some pass without a will in place. This is also known as dying intestate. Or, they may die with debts in their name. In these cases, the decedent’s property enters a legal process called probate. A court oversees the sale of this property with the goal of selling it for the best price possible.

How Does a Probate Sale Work?

Just as how estate planning and foreclosure procedures vary by state, so does the probate process. Generally, though, the goal is to sell the property for the best price as is. Learning how the process works can help prepare you if you ever find yourself involved in one. It includes a number of steps:

Appointing an Executor of Estate

If the deceased didn’t leave a will, the court appoints an executor of estate. The executor, also called the estate representative, is typically the next of kin or another living relative of the decedent. They help get the decedent’s affairs in order and take care of the home’s sale.

Hire a Qualified Real Estate Agent

The executor of the estate doesn’t conduct the sale alone. He or she hires a real estate agent to support the process. While many real estate agents have enough knowledge for this, it’s recommended that the estate representative choose one with probate experience. That ensures everything moves along according to the proper procedure. A Certified Probate Real Estate Specialist (CPRES) agent would likely be the best choice.

Get an Appraisal

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/probate-sale-estate-planning-202256433.html

How Long Does Probate Take? – Estate Planning

How Long Does Probate Take? – Estate Planning

Ashley Kilroy    Mon, September 27, 2021

If you own any property at all, you probably know about estate planning. You can decide what happens to your assets after you die, of course. But sometimes, people don’t pen a will or trust before they pass. Or, if they do, it’s not clear in its directions. They might even have debts that conflict with their wishes.

These situations can lead to probate, well-known for dragging on, though the actual length depends on several factors. Considering that an estate may require probate even if the deceased wrote a will, acquainting yourself with these factors is vital. Here’s an overview of the main things you need to understand about the probate process so you can be ready

A financial advisor can provide valuable guidance as you prepare for probate.

What Is Probate?

Probate is a legal process wherein a court oversees the settlement of an estate after the owner passes. During it, the court figures out how to distribute assets to heirs. The court in this process will also authenticate your will, if you wrote one, and name an executor of estate to supervise the probate process. The executor of estate, or the estate representative, tends to be the decedent’s closest blood relation or another living relative.

How Does Probate Work?

Probate goes through a long list of procedures that depend on the state the decedent lived in and the type of estate he or she had.

The first thing the court does is authenticate the decedent’s last will and testament. Then it appoints an executor. Once again, this is likely someone related to the deceased individual who will ensure beneficiaries receive their inheritance and the sale of items. For example, if the deceased’s home needs to be sold through probate court, the executor works with the court and a real estate agent.

Next, the court locates and assesses all the property owned by the deceased. If there are any debts left behind, the court uses these assets to pay off the debts. Afterward, the court distributes the remaining estate to the heirs.

The court might need to go through this process if the deceased died intestate, with an unclear will or debts in their name.

The Duration of Probate

Probate takes time to ensure everything is dealt with and according to the law. As a result, it can take from a few months up to over a year. The long list of variables all contribute to the overall length. Probate changes based on the situation and where the estate is located. Here are some factors that influence how long it takes:

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/long-does-probate-estate-planning-172400295.html

A Number From Today and A Story About Tomorrow

A Number From Today and A Story About Tomorrow 

Sep 8, 2021 by Morgan Housel

Every forecast takes a number from today and multiplies it by a story about tomorrow.

Investment valuations, economic outlooks, political forecasts – they all follow that formula. Something we know multiplied by a story we like.

The trick when forecasting is realizing that’s what you’re doing.  A few weeks before he died a reporter asked Franklin Roosevelt if the Yalta Conference negotiations near the end of World War II set the stage for permanent peace in Europe.  “I can answer that question if you can tell me who your descendants will be in the year 2057,” Roosevelt said. “We can look as far ahead as humanity believes in this sort of thing.”

The deals hammered out in Yalta were the things we knew. How long they’d hold, how much they’d be adhered to, and what else could get in their way is just a story people told and believed in varying degrees.  Anything that tries to forecast what people will do next work like that.

The hard thing is that while the number we know today can be something real and verified, the story we multiply it by is driven by what you want to believe will happen or what makes the most sense. Forecasters get into trouble when the number we know from today gives an impression that you’re being objective and data-driven when the story about tomorrow is so subject to opinion.

When valuing a company, revenue/cash flow/profits is the number we know. The earnings multiple you attach to that figure is just a story about future growth.

Same with economic trends. We have lots of data, but none of it means much until you attach a story to it about what you think it means and what you think people will do with it next.

That seems obvious to me. But ask forecasters if they think the majority of what they do is storytelling and you’ll get blank stares. At best. It never seems like storytelling when you’re basing a forecast in data.

And while data-driven storytelling doesn’t mean guessing, it doesn’t mean prophecy.

We can use historical data to assume a trend will continue, but that’s just a story we want to believe in a world where things change all the time.

We can use data to assume a crazy event will revert to the norm, but that’s also just a story in a world where unsustainable trends last longer than people think.

Few things escape that reality. B.H. Liddell Hart writes in the book Why Don’t We Learn From History?:

To continue reading, please go to the original article here:

https://www.collaborativefund.com/blog/numbersandstories/