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Thursday, November 27, 2014

Lessons Learned

Interacting with others I have learned quite a lot here in NYC as well as in other parts of the world.  I had lost my faith in others somewhat as a young man but as I started to get out of the city I have seen first hand how people will for the most part want to help you.  Even if you doubt others look around you the bridges, parks and houses are all the result of people working together with a common goal.

Appearance can't really tell you much about a person I met a young man a while back who would share books and magazines with me a guy who most people dismiss and judge as uneducated.  It was through him that I came across some good legal advice.  You can work your whole life and try to do things right but just one mistake can destroy it all.  In certain states if you die and don't leave a will and specify who should get your assets your father and mother will automatically get it all.  This is fine if you get along well with them and want them to get it all.  But what if you also have siblings that you want to give assets to?

You also have to make sure you name beneficiaries on your accounts such as a 403b but if you're married your spouse will get 50% of your 403b assets even if you don't include them unless they sign a waiver.

Years ago I heard a financial advisor who worked with wealthy individuals say something that really made an impact in my life.  He spoke about a father and son who bought a stock in the 1990 dotcom era.  The stock took off like a rocket they went to see him to tell him about their stock that went from $50k to $700k they had no interest in selling despite his advice to take some profits.  Their reason was that they wanted to get to a million they visited him again when it reached $800k with no desire to sell.  They visited him again when the stock started to drop to $600,000 and again he told them to sell at least some of it to retain some of their gains.  They refused and told him they would wait for it to come back up and recover.  As we all know the end of the 90's marked the end of the dotcom bubble which ended with a crash very few Internet companies survived.

The advisor went on to say that the father and son did not sell any of the shares they owned they lost it all.  The advisor told us that what bothered him was that they could have taken some of that money and used it.  He didn't state the obvious which is to buy a nice car, house and fancy clothes.  What really stood out to me is that he stated "imagine all the education they could have bought with that money."  That is why I spend my hard earned money buying more education.  I would really regret losing $10k in the market and to not have used at least some of that money to buy more education something that a market crash can't take away from me.

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