rkbabang

I couldn't disagree more. When I look at people I know with financial difficulties ( whether they be friends, acquaintances, family members, or extended family members), what I see is one stupid financial decision after the next over a period of years then decades without ever a thought to saving a penny. When advice is given (even after they bring up the subject with their complaints) it is met with hostility and is certainly not welcome. I hate to think that I'm becoming a curmudgeon, but the older I get the more I believe that most people are just stupid and irresponsible. They make bad decisions and don't want to be called on them, don't want to admit to them, and don't want to be held accountable for them. This explains in a nutshell why democracy can't work. I see that with the middle class people, but not so much with poor people with limited education and prospects. Anyway all I am saying is that the education system for poor people needs a lot of improvement because a lot of poor kids are coming out of high school miles behind the wealthier kids. I understand letting adults fend for themselves but I think kids should get more help to level the playing field. There are very few people in the US who can't add, subtract, and multiply by the time they are 10. That is all the education you need to understand that spending less than you earn will allow you to save money and that the savings will grow. And that spending more than you earn while taking on debt will not allow you to save money and the debt will grow. This isn't brain surgery. I hate when people say that we need more education for the poor. They can already do simply math and it is likely that in 99.9999999999% of the cases it is their own bad decisions which is the reason for their poverty to begin with. Also the middle class represents the majority of Americans, so even if your opinion of the poor was 100% correct it wouldn't move the needle anywhere near as much as getting the middle class to behave even slightly more intelligently with their money. You can cure ignorance fairly easily, but as the saying goes there is no cure for stupid. They live their whole lives like there is no tomorrow and are just shocked, shocked, when tomorrow finally comes.

I couldn't disagree more. When I look at people I know with financial difficulties ( whether they be friends, acquaintances, family members, or extended family members), what I see is one stupid financial decision after the next over a period of years then decades without ever a thought to saving a penny. When advice is given (even after they bring up the subject with their complaints) it is met with hostility and is certainly not welcome. I hate to think that I'm becoming a curmudgeon, but the older I get the more I believe that most people are just stupid and irresponsible. They make bad decisions and don't want to be called on them, don't want to admit to them, and don't want to be held accountable for them. This explains in a nutshell why democracy can't work.

Buying and renting in my area is similar as well if you look at it from the stand point of a first time home buyer, although I still think it is cheaper to own all else being equal (house quality, location, etc). But if you look at it from the standpoint of someone like myself that has built up equity in his 2 previous homes and put a large (about 50%) down payment on this current home. What you get is home ownership being much cheaper. Of course if I had spent those 18 years renting I'd be paying the higher rents now. And if renting is always about equal to buying for the first time, then I would never have gotten ahead, with the exception of the initial down payment. But my initial down payment on my first home when I was 24years old was 5% on a $135K home. Not a substantial sum of money even in back 1996 and I could have easily spent that money on a car or lost all of it in the tech crash (I wasn't into value investing back then) giving me no advantage to renting at all. Of all the crazy things I did with my money back then (things I bought and invested in), looking back on it now, buying a home at 24 years old when everyone around me from my friends to my parents told me I should wait is one of the few things I don't regret.

I love the godfather movies! Ideally I'd like no government at all. I'm not sure if humanity is ready for that yet though, any more than a pre-agricultural society is ready for a commodities market. We are getting there though, violence has been decreasing for centuries and the decrease is accelerating. When human beings are civilized enough government will not be necessary at all, but even now we shouldn't sugar coat things, wrap it in niceties, and pretend that it is something that it isn't. We are paying protection money to thugs.

Not everyone has had such a bad experience buying and selling homes. Your post inspired me to do my own back of the envelope calculations and I didn't do so bad. I've owned 3 homes over the last 18 years (not quite as long as you yet) and I calculate that if you total up everything I've spent (down-payment, P&I payments, taxes, insurance, and home improvements) I'm out about $608K out of my pocket and I have about $210K of equity in my current home. So call it $400K I'm out. $400K/18 years is $22.2K/year which is about $1850/month. I suppose I could have rented for $1850/month, but certainly not very nice places and 18 years ago I wouldn't have been able to afford $1800/month. I just looked up rentals in the town I live in and to rent a house with half the square footage of my current home it would cost $3500/month. That is with no utilities included. That is much higher than the cost of my mortgage + taxes and insurance for less than half the house. Buying a home can be a bad deal, but it doesn't have to be. Like anything else, you can't overpay. This is most important on your first home, because if you are selling a home in an inflated market and putting the proceeds into another home in an inflated market it is a wash (as long as you are not upgrading too much). But when buying your first home that doesn't apply, so you need to be careful. I worked with a guy who moved to my area in 2005, rented for years, and finally bought a home sometime after the crash in 2010 (IIRC). He did very well.

LOL, Me running for office? That is one thing I can promise you that I will never do. I have a personal policy against joining violent criminal gangs. And as enticing as you make it sound, I don't think I'll ever move to Michigan either. :)

That's like saying the ability of shop owners to protect income from being considered by the mafia for how much they owe in protection payments is "costing" the mafia money. When will people start thinking about the government appropriately like the organized crime organization that it is? I suppose that it is very difficult to do when that very same organization uses the money it steals to "educate" the children in society for 12+ years to instill in them notion that the organization is good and even necessary, and that there would be chaos without it. And even instill a feeling of pride for being lucky enough to live in the area controlled by their local crime syndicate and not another, so much so that many people are willing to sign up to fight, kill and die for the organization by the time they are 18.

Ugh, I don't know about this. There's just something goofy going on here. If I say I'm lucky to have been born doesn't that imply that the unborn weren't lucky? The unborn don't exist so that doesn't make sense. It's like we're starting at the wrong place in our contemplation of luck. I need to think about this more. :-[ I don't say that I am unlucky because I didn't win Powerball, because the odds were against me ever winning anyway. The person who wins is certainly lucky, but that doesn't mean everyone else is unlucky. So this means that you can be lucky without the potential people who never existed and never will being unlucky. :)

Hmmm, I was thinking more about this last night and now I'm pretty convinced that the genetic lottery argument doesn't make sense. The idea of 'luck' and 'probability' arise from the fact that there are contingent events in reality. So, for example it doesn't make sense to say, 'how unlucky it is that gravity exists' or to contemplate the probability that pine trees are green. These are simply facts of reality. They don't belong to the same category as a coin flip. That's what I meant by "metaphysically given". Probability doesn't pertain to them because they are just inherent to reality. Similarly, the body and time you're 'born into' is metaphysically given. A person (the consciousness and body) is the result of two specific parents. If you're white, there's no such thing as a probability of you being born black. There was no probability that Buffett was born in prehistoric times. He comes from Howard and Leila Buffett and they lived in the 20th century. He was necessarily a product of them. Does that make sense? Anyways, it doesn't say anything about luck after birth or how we should treat people in different circumstances. True, as far as it goes. Coming from Howard and Leila Buffett he wouldn't have been black or Asian and certainly couldn't have been born a caveman, but he still won the greatest lottery in the universe by being born at all (we all have). The amount of possible genetic variation that could have come from Howard and Leila Buffett is astronomical. To get Warren it *HAD* to be that particular sperm and that particular egg. If his mom had a headache that night he never would have been born. If they had delayed even 1min or maybe even 5sec it likely would have been a different sperm that fertilized that egg. A particular genome being born at all is much much less likely than picking a perfect bracket in the NCAA basketball contest. It isn't even close. The odds against you or me or Warren Buffett ever being born are so astronomical they aren't even calculable. If you were to hold a contest where you had to create an artificial genetic human code and predict when that particular person would be born naturally it would be impossible, because you could try a trillion combinations and none of those people will likely ever exist. I know this isn't what he means about "genetic lottery", he means that he was lucky not to be born someone else, in some other place, or in some other time, but as you said, none of those things are even possible.

Please don't think I am "cheap skate" who wants to skip out on taxes. Certainly all productive members of society need to pay taxes. No doubt. What I am railing against is that it needs to be in proportion to the value of the property. What is going on in Michigan, specifically the Detroit area, is that property values have fallen tremendously. Property taxes have not come down proportionally. Not even close. If you have a $50k asset that is being taxed at 8%, how do you realistically make a return on your investment? You are going to have other fees too, insurance, utilities, and so on. So now in order to make a 10%+ return, you are going to have to get 30% gross revenue from the asset? LOL at that happening. What about even making a positive return? That might not even be POSSIBLE if taxes & insurance are 14% of the value of the asset? This then becomes a death spiral. The local municipality wants $, is starved for cash. They look to the property owners to come up with it. A lot of them can't. They simply stop paying. This is an epidemic in Detroit. By some estimates, 55% of property in Detroit is at least 12 months behind (or more) on property taxes. Owners figure I'll stay in my house or run my business as long as I can hang on. If they foreclose, I'll shut down or move... I suspect that is what is happening in this suburb. That happened with this property already. The previous owner simply stopped paying taxes and walked away. Tenants are difficult to come by. If you can find them, they won't pay a lot of rent. There are many different places they can go... The only way this purchase makes sense is if I take the plunge and operate & expand the business and perhaps even put in a second business. I hope that government leaders can get some "economic sense" and realize what is happening to their economic base...Not too hopeful on that though... I wasn't calling you a cheap skate. I don't even agree that "all productive members of society need to pay taxes". From my point of view "power corrupts" and "taxation is theft", so no one should be given the power steal at will, because no one can handle that (a discussion for another time maybe). But what I was saying is that this deal might make a lot of sense if you do plan to operate and expand the business. 1) There is an existing business which you know about and know how to improve, with existing customers who already know were the location is. 2) You plan to expand on-line, and it doesn't matter where you are to your on-line customers, so this location is as good as any. 3) You have room to expand both this business and into others. 4) Some of your location's costs will be covered by rents. All of this depends on how confident you are that you can profitably run the operating business(s). For example (and this may be unrealistic, you need to run your own numbers) if you could bring in $500K in revenue that $4K in taxes wouldn't be a huge cost, even though it is a ridiculously high percentage of the building's market value. I agree with you that the town government sounds like a den of thieves and that this is a horrible deal from a strictly real estate point of view. If you plan to buy this property simply to be an absentee landlord and collect rents, don't do it.

The business is being provided for free, but not the inventory. All the fixtures are included, and goodwill is included. I have some of my own inventory, but would need to purchase more. I would actually probably buy a significant amount more, as I would try and sell lower end items and supplies & consumables. That is good for local sales I would think. There is also the possibility for another smaller retail business. I was thinking of first trying to rent it out. If I get a tenant, that is great...if not, I have plans for a second business that is totally unrelated. If I do buy the building/business, I would focus on the existing business, get that going strong and then open the second business. There is another building sitting vacant next door that is also intriguing. An absentee owner bought it, fixed it up, and then made material improvements for the business he wished to put in. He spent a lot of money on infrastructure and then ran out of capital. It has been sitting for some amount of time. I would love to buy it for a huge discount, and then finish it out. I actually think it would be an EXCELLENT business for that neighborhood. If I owned BOTH buildings and was running/owing 3 different businesses, that would be pretty wild. I could work 14 hour days every day. Take the cash flow and start really accumulating significant stakes in micro-cap companies... First things first though... Threads like this make this message board extremely valuable, I love reading this stuff. This sounds like a very compelling opportunity that you alone have the ability to take advantage of. You know the business you'd be taking over, so you can add value. You seem to know the area, and you have the capital to take on the next door building and expand that. I think to most readers of the board this sounds like a complicated mess. Why deal with all this 'stuff' when you can sit in a big comfy arm chair and click around SEC.gov and buy and sell online. To me this sounds like the type of opportunity you want to take advantage of. If I were presented with this it wouldn't be compelling because I don't have a complimentary business, and don't have the skills to maximize this. Heck, I'd go as far as saying you could post the address and nitty gritty relevant details and you still wouldn't be facing any competition. Others have posted the illiquidity issue. For those clicking their mouse to buy and sell this is an issue. For the 99% of small business owners in the US they've accepted that. You will deal with illiquidity, you have an illiquid building, and an illiquid business. But you also gain a lot, you control the outcome. You are running the show. You also get to keep 100% of the cash flow that this generates and do with it what you wish. Investors clicking around just get to rant on forums about what they want to happen with the cash flow, you get to decide. I would say that's a good trade off for the illiquidity. One more thought on this. I've been sticking my finger in the private business world for a little while and I've come to find that it's not as illiquid as one might think. If you have a business that's profitable and you can separate it from yourself (someone else can run it), you'll be able to sell it fairly quickly through a broker. Excellent post. This isn't just the property, as I thought from reading the initial post, but a business that you know about in a location that is acceptable and cheap. Don't forget that the perfect location wouldn't be cheap. I wouldn't think so much about the cash flow from the rentals covering all the costs of the building (although that would be nice), I'd think of (the total costs of your building - the cash flow from the rented portion ) as your operating business's cost for its location. No one likes to pay taxes, but sitting here far away from your area, $4K/year in real estate taxes for a business partially covered by rental income doesn't seem like such a big thing to overcome if your business is profitable. Hell, I pay 2.5X that in taxes for my house. There's a very small office building in my town for sale right now that a friend of mine was thinking about buying which pays 10X that amount in property taxes.

If you use Chrome on your mobile device (which you should ;) ), there's a check box in the menu to "request desktop site". That will request the desktop formatting for all sites by default. I do use Chrome and have that checked. Some sites still don't comply. In fact, often when a site won't give me the full site in Chrome even with the "request desktop site" checked and even if the site has a "view full site" link that doesn't work, I can sometimes get it by opening it up in Safari and clicking on the "view full site" link. I still prefer Chrome for all other sites though. I'm exaggerating when I said "half the sites" do this, but a few of the sites that I use regularly do this, including the small credit union where I do my checking/bill pay, so this is a constant annoyance.

Definitely cool to have the option! On my iPad, I prefer the regular site, though -- for those who do too, there's a button at the bottom of the page that allows you to see it on a mobile device. This is one thing that bugs me about my ipad. It basically has a laptop sized screen, not a smartphone sized screen. Yet half the websites out there serve it the mobile version rather than the full version. You have to constantly request the full version and some sites still refuse to give it to you. There is one real estate website (I forget if it is zillow or truela) that refuses to let you view their website altogether. They just give you a page that says go download our app. There is a continue to our website button, but it doesn't work. I'm glad COBAF lets you use the desktop version on a tablet.

It's both moral and commendable. Reducing the variance of the genetic lottery and other forms of luck is good for pretty well everyone in society, including the people who benefited from that luck. That said, I can understand why people are greedy about it. I'm pretty greedy about it myself. No violence is never moral. How do you decide who gets what and just how equal to make things. If we made everyone on the planet equal you wouldn't like the results very much as you are probably in the top 1 or 2% globally. I don't think you'd enjoy working as hard as you do now and living on $5-10K/year. The other problem isn't how to decide, but who decides. These things always work out where the "party" which "serves" the "people" lives well and the "people" who the "party" serves starve. So please don't talk to me about "income equality" that's just a load of crap. If violence could solve these problems they would have been solved a long time ago, because that is the only thing that has been tried.

I'm not sure how you evaluate this risk unless you have some reason to trust the management and/or any large shareholders. This falls under: don't allocate a significant portion of your portfolio to any one small/microcap stock.

I would love to know how to do this -- earn a total of $1 million over 10 years and then have a net worth of $10 million. Does this involve playing Powerball? :) No this is easy, they earned all of the $1M in cash and paid no taxes. They lived in their parents' basement and thus had no bills or expenses not even food as Mommy cooked dinner every night, so they were able to invest 100% of that money. And they earned excellent returns. Let's see $1M over 10 years is $8333.33/month to invest. In order to have $10M at the end they only have to earn an average of 37% per year for the 10 year period. No problem anyone can do all of those things.

Why is that disappointing? It suggests a belief that war will be avoided and that all of this will blow over and turn out okay.

I don't think it is a matter of defining terms. The word "equality" has a well established meaning. If there was "income equality" everyone on Earth would be forced to make the exact same income right down to the penny. No one seems to want that, so no one is really for "income equality" what they want is to take from the people who have more than them. Whenever I hear "income equality" or "fairness" I know that I'm either dealing with someone consumed by envy over what others have, or guilt over what they have obtained. The envy I understand, we all have this to one degree or another, but the guilt part I do not. If you are really guilty you can simply give what you have away. Not only is this moral, but commendable. But you do not need to use the violence of the state to take money from others as well, this is neither moral nor commendable.

Yes, whenever I hear the war hawks rattling their sabers, I think to myself that someone was smacked upside the head too many times as a child.

Putin is not Hitler. He doesn't want to exterminate whole races of people or take over the world (as far as I know). BTW WWI was the real cause of WWII and posturing, saving face, and refusing to break treaties was the cause of WWI, which aside from setting off the chain of events which caused WWII, WWI itself pretty much wiped out all the wealth created by the industrial revolution up to that point in Europe.. Not fun. While you can argue that the US had to intervene in Europe to stop Hitler, I'd argue that had the US not intervened in Europe in WWI, there would have been a stalemate with no clear winners, and thus no crazy German reparations, no Nazi Party, and no Adolf Hitler (he'd just be a bad painter). We had to go in and clean up a mess we created.

Speaking of powerful computers the worlds most powerful super computer might be built in Oregon in order to game the foreign exchange market. John Fitzpatrick is forming a company to make an Exaflop computer this year using 1000 megawatts of power, costing $50 billion and using Intel processors "He will use foreign currency trading as the main application. This is the Bitcoin mining of the Foreign Exchange market The machine will cost $50 billion. Financed with short term notes."

No it doesn't cost more in the long run than risking a war with Russia, which of course will pull in most of the world. The US has to start minding its own damn business and stop thinking of itself as a "superpower", because there is no such thing. Will other countries think developing nukes is a good idea? Yes, but why haven't they realized that already? North Korea and Iran realized that right after Bush put them on a three country kill list, which he called the "axis of evil" then proceeded to attack the first country on the list. Should the US (with its enormous stockpile of nukes and still the only country to have used them aggressively) have anything to say about other countries developing nukes as it has? No. It should shut up and mind its own business unless directly attacked or threatened.

Exactly. Nobody thinks that you should be able to buy one share in a company and be able to force it to do your bidding. But when a shareholder asks a question of management, regardless of how small the shareholder or how stupid the question, answering anything like "Because that's how I run the company. If you don't like it sell your shares" is never appropriate.

What exactly does management telling shareholder to sell the stock (for any reason) actually mean? My translation: "You are no longer welcome to own the company which you've hired me to run for you."

The Meyer fuel cell? The 200mpg carburetor? Really? I know a a guy who used to be a sewing machine repair man in Boston in the 1960-70's. He told me that he repaired a machine at this guy's house who had a working perpetual motion machine in the basement (why couldn't he fix his own sewing machine? I don't know). But he was threatened by the government and couldn't produce it or market it or they would kill him. 100% true!