All Forum Posts by: James Park

John. The answer depends where u think we are in the economic market cycle. If your opinion is that we are in the midst of major deleveraging taking place like 1929,1937,2000-2002,2007-2009,or 2015-?, I would do absolutely nothing and continue to collect just 1% on your million in the short term as cash is scarce and becomes more valuable during deflationary times. u would then look to pick up distressed assets when the dust settles.

Although I don't know much about the NYC real estate market, when I was deciding where to move to from Chicago to build my rental portfolio in my backyard and start my real estate career, these where demographic data I was looking at. 

Although I am not a big fan of Chicago due to a slowing population growth and high property taxes, I think Naperville is the exception. I moved to Altanta as the HI ratio was low  and I wanted to live and invest in city where I can gain both long term captial appreciation growth as well as cash flow. Just as a every product as its own product life cycle : Innovation stage / Growth stage / Maturity stage / Decline, every city below is at different stages in its life cycle. In the early 1990s, I would have moved to either Irvine or Cupertino where these cities were both entering into its growth stage. 

Naperville, IL

median income $105,585 
median home price - $367,700
HI ratio: 3.48

Irvine, CA  - Southern California

median income: $98,923
median home price: $733,100
HI ratio: 7.41

Cupertino, CA - Northern California
median income: $145,367
median home price : $1,768,700
HI ratio: 12.16

Johns Creek, GA - N. Atlanta Suburb
median income: $109,576
median home price: $344,300
HI ratio : 3.14

Just finished reading the book Lifeonaire and what a great inspiration book!

@Bryan Hancock

I am not sure if you heard of the financial samurai website. The author of this financial blog is Sam Dogen who lives in the bay area, which I don't think is his real name. He is an MBA from UC Berkeley, Asian American who worked with Goldman Sachs in Wall Street until he left the banking industry and started his own financial blog. I believe he is 38 years old and is definitely on the path of reaching the top 1% net worth level. His passive income portfolio really resonates with me as he you can see that he does not put all his eggs in one basket in terms of passive income. He hold three rental properties in San Francisco that generates $100,322 in annual passive income which is only 57% of this entire annual passive income. One thing that make Sam Dogen very unique is that he has a holistic view of investments from real estate, financial markets, and small businesses. 95% of the financials advisors out there do not have a strong understanding of real estate and 95% of real estate brokers including commercial brokers, do not have strong understanding of the financial markets and economics. This is what makes Sam Dogen exceptional, as I can see from his writing that he is very bright in both the financial and real estate investments, and understands economics.

Source:

http://www.financialsamurai.com/earn-passive-income-for-financial-freedom-today/

I have never heard the term "FU" money before so I was thinking to my myself, does it mean "Foreign Uncle" money?

So I decided to look it up on urban dictionary and here is what it says:

Definition of "FU Money"

When the marginal value of the next $ = 0. The point at which an individual, after acquiring absurd wealth, ceases to care about his/her reputation, and ceases to concerned with the economic repercussions of his/her future actions. Otherwise know as "f*** you money".

f*** you money is officially and scientifically10 million dollars(after taxes, in the bank).

Source: http://www.urbandictionary.com/define.php?term=F.U...

How long ago did irs change this rule?

does irs still allow 1031 exchange for residential investment to commercial property for your personal business use?

I think I have pretty good grasp of 1031 exchange but what is the pros and cons of going the private annuity trust with the sale of your real estate asset?

Another book I enjoyed reading a while back is "The New Elite" by Taylor & Harrison.

Jim Taylor and Doug Harrison define this "Elite" group as “people in the top 1 percent of half of 1 percent of the American economic spectrum: These people typically have at least $5 million in liquid assets (i.e., not including their primary residence) or have at least $500,000 in annual discretionary income.”

General Facts About The New Elite
For every 100 new elite members in the United States:

• The average age is 47 years old
• 90 to 95 made the money themselves; only 5 to 10 inherited it
• 90 are college graduates; 10 are not
• For those who are college graduates, 3 out of 4 did not attend an Ivy League school
• 8 are Asian (defined including those from Indian subcontinent); nearly 3x the rate found in the population
• 96 do not own a yacht; 4 do
• 50 haven’t furnished their homes in any way that would reflect their economic status

Family Background: For every 100 new elite in the United States:

• 8 grew up in poverty
• 28 grew up in lower middle class
• 36 grew up in middle class
• 25 grew up in upper middle class
• 8 grew up in a wealthy or affluent class

Notice how only 8% of the "The New Elite" millionaires in this group grew up in a wealthy or affluent class family. Most of these self-made millionaires grew up in a solid middle class family. I think this ties in well with Tom Stanley's Out Patient care theory, that the more money / cash gifts that the adult child receives from his / her wealthy parents, the less likely he or she will be economically productive and financially independent as an adult.

How many of you believe this to be true? How many of you in the Bigger Pockets community believe that you are financially independent today and grew up in a middle class household?