Why people paying fee for custody or wealth management , when you can buy low fee index fund etf by yourself ?

[jangpark]

The retail investors who buy high and panic︅ sell in times of crisis will be burned, true. But the ones who invest without︆ leverage and can keep their head cold and keep buying during crisis will come out︇ on top.

Does low interest rate inflate the price of zombie companies? Maybe. But who︈ said anything about retail investing in those companies? The main discussion here is to compare︉ performance of hedge funds vs index funds. The index funds I mentioned are blue chips︊ like S&P 500. There is very few, if any, zombie companies in S&P 500 because︋ the requirement is the companies have to make profits.

 

[Golden Fleece]

I was addressing another member who claimed that︁ stocks were properly priced and not overvalued because of the efficient market theory. I replied︂ that "efficient markets do not prop up zombie companies." Efficient markets also do not need︃ government intervention and artificially low interest rates to keep them from collapsing. It is best︄ to buy what is undervalued versus what is inflated, overvalued, and propped up by the︅ financial repression of government. While no zombie companies roam the S&P500, they do represent a︆ serious systemic risk.

https://www.marketwatch.com/story/b...unning-rampant-in-the-stock-market-2020-11-24
Regarding what is overpriced (real assets versus paper assets), a picture is worth a thousand words.︉

 

[troubled soul]

Sorry for my English In advance.
Please correct me If I︀ understand wrong,
So It is the best time to invest in real estate ?
Am i right ?

 

[Golden Fleece]

The best book that I have read on the topic is⁠ "The Secret Life of Real Estate and Banking" by Phillip Anderson, who is an Australian⁤ economist. He shows that in the United States over the past 200 years, with the⁣ exception of WWI and WWII, there is an economic cycle and crash that occurs every⁢ 18.6 years on average (no less than 17 years and no more than 21 years).︀

According to this time table, the next real estate peak and crash will occur between︁ 2026 and 2028. So, this is still a good time to buy real estate. Stock︂ market crashes are also part of this cycle, which is caused by low interest rates︃ that inflate the price of raw land. Most other countries now partake in this cycle.︄

The Secret Life of Real Estate and Banking: Anderson, Phillip J.: 9780856832635: Amazon.com: Books

 

[avalanche]

Note that US real estate has nothing to do with real estate in other︂ countries. For example crash in US real estate does not guarantee crash in some country︃ like Georgia

 

[Pembroke]

Yes very true. Also as an investment real estate⁠ is very different to other asset classes: you can enjoy it (i.e. live in it)⁤ whereas bonds and equities you can just look at, add value (renovations, create extra rooms,...)⁣ as well as receive inflation-linked income (rent) from it. It's also the only asset class⁢ that you can add leverage to (borrow) in a safe enough way if done conservatively︀ to improve your return. A big advantage compared to stocks is also that apartments or︁ houses are not listed on the stock exchange so you will not see a daily︂ price quoted for your house which allows you to sleep better and avoid panic sales︃ at the wrong moment.

 

[avalanche]

The problem with real estate is that it requires maintenance and mental︂ resources to protect your physical assets. Also it depreciates over time in some countries like︃ Japan. Nobody wants to buy a shithole house for the price of a new property.︄

If you hire a manager to sell your property for rent you will need to︅ watch the manager carefully, he/she may be stealing from you. The time you spend managing︆ the manager of your property may be well put into developing your own business

 

[Golden Fleece]

You are correct that a "crash in US real⁠ estate does not guarantee crash in some country like Georgia," but you are incorrect that⁤ "US real estate has nothing to do with real estate in other countries." That is⁣ why an Australian economist wrote a book about the U.S. banking and real estate cycle⁢ (because there is a distinct connection).

There is a great deal of overlap in the︀ economic cycles of Western nations because of the modern mirroring of worldwide interest rates. On︁ the other hand, the less likely that banks in certain countries offer mortgages for real︂ estate, the less likely that that country's housing market will mirror the U.S. banking and︃ real estate cycle.

 

[Pembroke]

It's not for everyone and you need to be willing to invest time. To⁢ be successful in real estate you need to manage it as a business. But it's︀ by far the asset class/business that has created the most millionaires in the world (see︁ also 90% of the World's Millionaires Do This to Create Wealth)

 

[Golden Fleece]

That is the general⁠ rule for real estate, but other options exist if you think outside the box. You⁤ can buy raw land in the path of development, have a farm professionally managed, or⁣ buy shares in an existing agricultural enterprise or office building.

This is just one of⁢ many such investment opportunities (I am not recommending this particular investment, just using it as︀ an example). As always, do you your own boots-on-the-ground due diligence.

https://farmtogether.com/

 

[avalanche]

Note that these millionaires became rich mostly at the older age. It took them⁣ generations or half lifetime to get to their level while modern internet business opportunities allow⁢ for that to happen in a lot shorter timespan.

Is your aim to get your︀ children rich (who possibly will take their wealth as given), or your aim to get︁ rich yourself and enjoy the world of opportunities before you got old?

 

[Pembroke]

In general building wealth in a safe way with property takes time indeed (20⁢ years of more). If you can get rich with an internet startup in a short︀ timespan that is a great. Not that many succeed but it's great to be ambitious︁ and reach for the stars.

 

[Verbatim]

sorry just saw this, wow that's insane if the sample size is so big︂ (200 years). what else did you learn from this book? and are stocks and gold︃ correlated or uncorrelated with this cycle?

 

[Jerry1911]

Is there any chance you could share a practical example of advice you got? i.e. they‍ told me to redomicile a trust from country X to country Y for reasons Z?⁠

 

[Martin Everson]

Yes when I told them I wanted to sell⁠ my business and money be held for my next of kin they actually worked with⁤ me to restructure the ownership before the sale ensuring everything was handled via my trust.⁣ They actually refinanced some of the loans I had outstanding also. The buyer also came⁢ via their network. Once they guided me how to move everything into the trust the︀ trustees basically handled the entire sale process. Thats all I can say.

 

[denniz07]

What do‌ you think, is it possible to sell this way a crypto trading business that currently‍ runs on a private basis?
My reasoning: would like to sell 50% to avoid CFC⁠ rules and be able to live where I want. Would create a company in a⁤ nice crypto and tax friendly place.

PS: Of course would still want to "run" the⁣ company or at least participate in major decisions..

 

[Martin Everson]

It depends⁠ on each specific countries CFC rules as to whether you can avoid them. But obtaining⁤ specialist advice if you plan on selling your business is important anyway.

 

[denniz07]

How about this strategy. Let's say you have a net worth of 10MM$
1. 2MM‌ to Swissquate
2. 2MM to SAXO
3. 2MM to INKB
4. 4MM to some private‍ bank

By the way, if you would have to choose ONE private bank, which would⁠ it be? I mean there is UBS, Julius Baer, Pictet, BNP Paribas, and so on.⁤

The reasoning behind it. On the private bank account, you would get some advice. But⁣ guess the advice wouldn't be any different if you had all the money in the⁢ private bank account. On the broker side, you would pay much fewer fees and if︀ something goes wrong, you would have still access to your money. Maybe I read too︁ much here, but it seems there are cases where bank accounts are blocked until you︂ prove your source of wealth, and that might take a lot of time and energy.︃

PS: I'm not trying to optimize everything. It is ok, to pay a bit more︄ for a good service. Actually just searching for a solution to sleep well.

 

[troubled soul]

INKB?
Is it Interactive Brokers?

 

[denniz07]

Yes, typo. Couldn't correct anymore.‌ I mean it seems there is no 100% safe thing. Like credit suisse got into‍ trouble. So split the wealth might be a good idea.