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Debt Repayment Strategy

Home Personal Finance and Budgeting Debt Repayment Strategy

  • Avatar auggie1983 
    Participant
    Status: Physician
    Posts: 25
    Joined: 12/31/2018

    Do you think it would be better to make monthly 10K contributions into the S&P or accumulate 10K monthly in cash, wait until the market is 20% off its high, dump all that cash in and sell once it clears a new high and repeat?

    I think you’d come out ahead with option 1.

    #238421 Reply
    Liked by Lordosis
    Zaphod Zaphod 
    Participant
    Status: Physician, Small Business Owner
    Posts: 6339
    Joined: 01/12/2016

    Both of these guys were nearing retirement age. They lost money that neither could afford to lose as they didn’t have a decade to wait to get it back. Some of the stock one owned ended up completely worthless as companies went out of business (or has that eventuality never crossed your mind?).

    I’m not defending their investment strategies. I do think that people don’t intend to hold risky stocks that close to retirement but the constant drumbeat about market investing in the media and culture at large gets the better of some people’s greed and makes them do stupid things.

    Click to expand…

    Safe to say that the stocks I own are not likely to go to zero.

    Click to expand…

    That’s what all the Bear Stearns stockholders thought. Huge financial company founded in 1923 and survived the Great Depression to become a global financial behemoth. Stock reached $170 in 2007 and was sold for <$10 before it went away. I was reminded of this when reading about Jeffrey Epstein. Even financial wizard types like him lost a lot on that one stock alone.

    For your sake I hope you’re more astute than you are humble.

    Click to expand…

    Epstein was not a financial wizard, unless conning/blackmailing people for nefarious deeds is wizardly. Nobody on wall street knows him or anyone thats done business with him. They ‘know’ him, but if you’re at that size in those markets, you start to run into the same/few counterparties and he never did.

    That was marketing to cover up where his money came from, which now appears mostly from the limited CEO for what cannot be a good reason.

    On topic: lots of people with money use debt because they can, its a trick only available to those that dont need it.

    Also for EMD, he doesnt have a ton of money in stocks likely because the money was made the usual way, owning a practice, etc…which is an illiquid paper asset until sold. Kind of like say Zuckerberg being rich to 50B or whatever. Thats not in the bank its the ownership of facebook, and outside of loans against that stake, is essentially untappable without selling. whew.

    Just accidentally clicking these cliquey threads has been exhausting.

    #238428 Reply
    Liked by xraygoggles
    Avatar EntrepreneurMD 
    Participant
    Status: Physician
    Posts: 407
    Joined: 06/10/2019
    No, there’s going to be a bull market after the recession. I’ll buy then with no anxiety. 

    Click to expand…

    How come the current bull market can’t go on for another 5 years?

    Click to expand…

    Well, you do realize this bull quit (or at least paused) about 18 months ago, DOW was above 26K January 1, 2018, now below that. My 3% CD’s were up more over the past 18 months.

    Risk is all about statistical likelihood. Of course the market CAN rise for another 5 years, but given the reality of what’s happening (as I stated above) and historical norms, I think the statistical likelihood is horrible and that’s the foundation for my position. Even if it can go on for another 5 years, if I believe it will at one point be down below DOW 26,000 (and you may not but I do) I’m better off deleveraging my debt. In a true recession cycle, from peak to trough there is usually about a 50% drop, and it usually drops to the peak of the prior bull market. So I don’t think it would be unusual for the DOW to possibly hit around 30K then drop to about 15K (peak of 2007 bull). All speculation I know, and that is unlikely to be the magnitude of the cycle except for prior patterns. I also think a lost decade is also more likely than a market that charges on another 5 years. My transition from net inflows to outflows is just hedging my bets. Absolutely nothing wrong with investing elsewhere in times of (what one perceives) danger – happy as can be with my 3%, after all it beat the DOW.

    Remember how people felt in 2009?

    To be clear I have only done some selling into recent highs, most of my holdings are still intact but I am not adding to positions currently until there is better direction or a recession completes. If I do  get another 5 years benefit and am lucky enough to sell, I’ll be more than satisfied with just current holdings. If it crashes tomorrow I don’t care (not anxious, just logical) as my entire market holdings are currently only about 12 percent of my NW – so what if I lose half of it? I will ride it back up the next bull run. I think my cash reserves and income will buy me some time:) Not only will I ride it back up with the next bull run to expected new highs, but at the prolonged bottom of a major recession I will more than double my current holdings as it will be a safe time to shift back from debt repayment and business/real estate investing.

    Maybe where others see reward now I see sharks circling. I may be completely wrong – if I am what’s the worst that can happen? My current holdings rise and my other investments are deleveraged. If I’m right I I’ll still be fine and ready for a fantastic opportunity, ammunition in hand for a welcome fire sale. It’s not about anxiety over a top but excitement over a bottom. Is it worth the effort? I don’t know, is catching the bottom of a bull with funds that do a 30 fold 10 year return versus the market’s 3.5 fold worth it? The dream of $1M to $30M by age 60? Maybe nothing more than a lottery dream but it was doable over the past decade, I just want to be prepared for the next bull cycle. Others are fine with 3.5 fold, I see no reason not to aim for a more comfortable retirement.

    I’m not saying anyone else should do this. It’s why I’m now choosing debt repayment (in the order people are generally recommending), and the guarantees of boring CD’s.

    #238435 Reply
    Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 2465
    Joined: 03/01/2018

    MPMD, Wonka’s comment and the like are why I keep noting my numbers were verified by a moderator here, including the cash reserves and the exact funds owned and their returns. It’s up to each to decide if they want to disrespect the moderator’s authority, and thus the ability to see the possibilities for those who haven’t gotten to where they want to.

    I specifically mentioned this post was not even about market investment.

    Click to expand…

    This is the farthest thing from disrespecting any of the moderators. Any of us can say whatever we want and claim that it is “verified by a moderator.”

    If your moderator weighs in I will absolutely happily stand corrected.

    Click to expand…

    Did you catch this in the supercar “thread”?:

    “I hate to bump this thread after it’s died down but it seem appropriate to add here that based on some comments I reached out to EntrepreneurMD with an offer to / in hopes of verifying his identity and he provided photos (cars, houses, screencaps from accounts) that support the general veracity of his claims. I asked for and he provided a photo of the Ferrari with a current newspaper laying on the hood. I believe that he’s a real doc with a crazy giant house and a Ferrari and money in the bank and at least two mutual fund holdings with 10yr annualized returns exceeding 30%.”

    Click to expand…

    I stand corrected.

    What a strange way for both you and that mod to spend their time.

    We still don’t get to know the secret funds right?

    Click to expand…

    I was “that mod”

    strange why? Truth matters to me, folks around here calling each other liars, trolls, exchanging a few texts with a fellow doc to try to clear things up isn’t so much effort. I think it all happened on a Sunday evening while I was cleaning up my trashy basement utility room.

    Glad you appreciate the effort toward something real though.

    partly spurred on by your comment as a matter of fact

    I think when you add all of the assertions and questions together you arrive at a fairly clear conclusion of what is going on here. I hope the mods act accordingly

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #238477 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3380
    Joined: 09/18/2018

    “That’s why the physician business owners in our position have parallel strategy. It’s a safer, more solid formula.”

    What parallel strategy?
    Define your plan rather than debt.
    Puff the magic dragon.
    Who is “our”?
    What does 2007 have to do with a relatively small commercial property? Credit markets froze.
    Stanford Financial had some really great CD rates.
    How did that turn out?
    Define solid.
    Define safe.
    By the way, volatility is your friend in investing.
    All in/all out and waiting for the “big one” is a suckers bet.
    Your business model is extremely high risk. I hope you deleverage. That is not unless one is so undisciplined to think you can have a 20 year history of balance transfer financing to build a plan indefinitely.
    Nothing personal, it’s just business.

    #238496 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3380
    Joined: 09/18/2018

    “my own current research ” ?
    Please provide the data. Fear sells.

    #238498 Reply
    MPMD MPMD 
    Participant
    Status: Physician
    Posts: 2608
    Joined: 05/01/2017

    MPMD, Wonka’s comment and the like are why I keep noting my numbers were verified by a moderator here, including the cash reserves and the exact funds owned and their returns. It’s up to each to decide if they want to disrespect the moderator’s authority, and thus the ability to see the possibilities for those who haven’t gotten to where they want to.

    I specifically mentioned this post was not even about market investment.

    Click to expand…

    This is the farthest thing from disrespecting any of the moderators. Any of us can say whatever we want and claim that it is “verified by a moderator.”

    If your moderator weighs in I will absolutely happily stand corrected.

    Click to expand…

    Did you catch this in the supercar “thread”?:

    “I hate to bump this thread after it’s died down but it seem appropriate to add here that based on some comments I reached out to EntrepreneurMD with an offer to / in hopes of verifying his identity and he provided photos (cars, houses, screencaps from accounts) that support the general veracity of his claims. I asked for and he provided a photo of the Ferrari with a current newspaper laying on the hood. I believe that he’s a real doc with a crazy giant house and a Ferrari and money in the bank and at least two mutual fund holdings with 10yr annualized returns exceeding 30%.”

    Click to expand…

    I stand corrected.

    What a strange way for both you and that mod to spend their time.

    We still don’t get to know the secret funds right?

    Click to expand…

    I was “that mod”

    strange why? Truth matters to me, folks around here calling each other liars, trolls, exchanging a few texts with a fellow doc to try to clear things up isn’t so much effort. I think it all happened on a Sunday evening while I was cleaning up my trashy basement utility room.

    Glad you appreciate the effort toward something real though.

    partly spurred on by your comment as a matter of fact

    I think when you add all of the assertions and questions together you arrive at a fairly clear conclusion of what is going on here. I hope the mods act accordingly
    Click to expand…

    Still not sure the whole story is legit here but to the extent you have verified fair enough. I got this one wrong. Not my place to tell you how to spend your time. Apologies all around.

    #238504 Reply
    Avatar Ghetto 
    Participant
    Status: Physician
    Posts: 126
    Joined: 08/13/2017

    MPMD, Wonka’s comment and the like are why I keep noting my numbers were verified by a moderator here, including the cash reserves and the exact funds owned and their returns. It’s up to each to decide if they want to disrespect the moderator’s authority, and thus the ability to see the possibilities for those who haven’t gotten to where they want to.

    I specifically mentioned this post was not even about market investment.

    Click to expand…

    This is the farthest thing from disrespecting any of the moderators. Any of us can say whatever we want and claim that it is “verified by a moderator.”

    If your moderator weighs in I will absolutely happily stand corrected.

    Click to expand…

    Did you catch this in the supercar “thread”?:

    “I hate to bump this thread after it’s died down but it seem appropriate to add here that based on some comments I reached out to EntrepreneurMD with an offer to / in hopes of verifying his identity and he provided photos (cars, houses, screencaps from accounts) that support the general veracity of his claims. I asked for and he provided a photo of the Ferrari with a current newspaper laying on the hood. I believe that he’s a real doc with a crazy giant house and a Ferrari and money in the bank and at least two mutual fund holdings with 10yr annualized returns exceeding 30%.”

    Click to expand…

    I stand corrected.

    What a strange way for both you and that mod to spend their time.

    We still don’t get to know the secret funds right?

    Click to expand…

    I was “that mod”

    strange why? Truth matters to me, folks around here calling each other liars, trolls, exchanging a few texts with a fellow doc to try to clear things up isn’t so much effort. I think it all happened on a Sunday evening while I was cleaning up my trashy basement utility room.

    Glad you appreciate the effort toward something real though.

    partly spurred on by your comment as a matter of fact

    I think when you add all of the assertions and questions together you arrive at a fairly clear conclusion of what is going on here. I hope the mods act accordingly
    Click to expand…

    So EntrepreneurMD was called a liar and then the wish was expressed that a mod figure out the truth of the matter. When that actually happened it was “weird”. Does that about sum it up?

    #238510 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3380
    Joined: 09/18/2018

    Define “verified”. NWM agents tell a nice story, it’s just a few facts are omitted. The tale is carefully crafted and assumptions are made. Just like the “super funds”.
    Name, date of purchase, basis, date of sale, profit/loss.
    The “Oh I never said that” is most likely true.
    A picture is worth a thousand words, BUT is it worth a dime? Nice picture.
    I have pictures of my Rolls Royce golf cart at the Ocean Reef Club in Key Largo. That doesn’t “prove I own it.
    I personally would love to drive the car, use the big house, but not buying it. To each his own. The story has some holes. But it is still fun to read!

    #238511 Reply
    Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 2465
    Joined: 03/01/2018

    Define “verified”.

    I know @entrepreneurmd identity

    shared pictures of house, address, ownership of same verified at county appraiser website

    same for commercial building housing practice, practice website clearly shows the doc and his mid levels, building tenants

    Pics of cars with house, current possession verified with Ferrari pic with current newspaper on the hood

    screenshots of various accounts with balances including IRA, cash accounts, loan accounts as well

    screenshots from 1040 and 1120 showing personal and business income

    regarding the super funds I’m comfortable of current possession but not holding period and I clarified this in the other thread

    sure it’s not 100% but good enough for me

    of course I’ve no input as to the value of the practice or market value of building which is where majority of net worth figure is

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #238538 Reply
    Liked by xraygoggles
    fatlittlepig fatlittlepig 
    Participant
    Status: Physician
    Posts: 1313
    Joined: 01/26/2017

    Define “verified”.

    I know @entrepreneurmd identity

    shared pictures of house, address, ownership of same verified at county appraiser website

    same for commercial building housing practice, practice website clearly shows the doc and his mid levels, building tenants

    Pics of cars with house, current possession verified with Ferrari pic with current newspaper on the hood

    screenshots of various accounts with balances including IRA, cash accounts, loan accounts as well

    screenshots from 1040 and 1120 showing personal and business income

    regarding the super funds I’m comfortable of current possession but not holding period and I clarified this in the other thread

    sure it’s not 100% but good enough for me

    of course I’ve no input as to the value of the practice or market value of building which is where majority of net worth figure is

    Click to expand…

    Strange that someone would be so desperate to validate himself that he would share all of this with a stranger (it’s almost pathetic), I wouldn’t. If you don’t believe what Fatlittlepig writes that’s fine, no problem. I don’t feel the need to send all of this stuff to a stranger, but I guess some people do.

    #238547 Reply
    Liked by Zaphod, MPMD
    Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 2465
    Joined: 03/01/2018

    Define “verified”.

    I know @entrepreneurmd identity

    shared pictures of house, address, ownership of same verified at county appraiser website

    same for commercial building housing practice, practice website clearly shows the doc and his mid levels, building tenants

    Pics of cars with house, current possession verified with Ferrari pic with current newspaper on the hood

    screenshots of various accounts with balances including IRA, cash accounts, loan accounts as well

    screenshots from 1040 and 1120 showing personal and business income

    regarding the super funds I’m comfortable of current possession but not holding period and I clarified this in the other thread

    sure it’s not 100% but good enough for me

    of course I’ve no input as to the value of the practice or market value of building which is where majority of net worth figure is

    Click to expand…

    Strange that someone would be so desperate to validate himself that he would share all of this with a stranger (it’s almost pathetic), I wouldn’t. If you don’t believe what Fatlittlepig writes that’s fine, no problem. I don’t feel the need to send all of this stuff to a stranger, but I guess some people do.

    Click to expand…

    I reached out to him, not the other way around so I think the “desperate to validate” comment is really unfair.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #238550 Reply
    Liked by Peds
    Avatar EntrepreneurMD 
    Participant
    Status: Physician
    Posts: 407
    Joined: 06/10/2019

    “my own current research ” ?
    Please provide the data. Fear sells.

    Click to expand…

    “With world economic growth slowing and spreading contagion into the US markets, contraction in some sectors (ie. manufacturing), the escalating trade war and business uncertainty, treasury yield inversion and collapse, Brexit, Eurozone weakness, 18 months of essentially no real market returns, weakening oil demand, gold rising, other leading indicators, it’s an interesting time to be recommending the stock market.”

    Not sounding like Goldilocks to me personally right now. If you’re recommending market entry at this level, sell me on the hope argument.

    #238551 Reply
    Avatar Peds 
    Moderator
    Status: Physician
    Posts: 4715
    Joined: 01/08/2016

    Strange that someone would be so desperate to validate himself that he would share all of this with a stranger (it’s almost pathetic), I wouldn’t. If you don’t believe what Fatlittlepig writes that’s fine, no problem. I don’t feel the need to send all of this stuff to a stranger, but I guess some people do.

    Click to expand…

    maybe you need to take a break.

    i remind you of the rules as i am tired of your posts:

    “Pornography, profanity, belittling, ad hominem attacks, trolling, spamming, sock puppeting, excessive abrasiveness, publicly complaining about forum moderation policies, threatening legal action against forum owners/members, and other rude behavior is not permitted”

     

    the OP has not received any further useful advice from this thread. please close mods.

    #238552 Reply
    Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 2465
    Joined: 03/01/2018

    I’m actually curious where one finds so often 0% credit card balance transfer offers. I get lots of offers but they almost universally have a 2% or more often 3% transfer fee. I assume OP isn’t absorbing such a fee. I play the miles and points game a bit, never carry a balance but have taken advantage of rare true 0% offers

    I would certainly vote to pay off most of the debt and carry less cash.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #238556 Reply
    Liked by Peds

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