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post #11 of 13 Old 07-09-2006
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NCountry - I haven't left solid ground yet, although my horizon is only about 360 days away (not that I'm countinig). I have found a very simple way of getting a better than average return, primarily because I've been the borrower as well. Find a small, private mortgage company in your area. These lenders typically lend to builders (that's me), developers and some home owners. All deals are secured with property, and the "broker" will assure that there's at least 30% equity from the borrower so you're not stuck with a worthless property. Interest rates paid to lenders are currently in the 11% range, with the borrower paying around 13% (the difference goes to the broker). Find onr you can talk to, explain your needs, risk factors and timeframes and I guarantee he will have borrowers that will want to pay you 11% all day long
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post #12 of 13 Old 09-07-2006
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Bit of a late reply to Finances..

I liked this topic, so I thought I would reply even though it's a little old.

Originally Posted by NCountry
1. An investment acount centered around mutual funds concentrating most of those investments on Mid-cap funds that have had good returns in the past.
Remember that past returns aren't necessarily an indicator for future returns. Mid-cap funds may have done well in the past, but the next big hitter might be small caps, international funds, large caps, etc. A well diversified portfolio is always the best plan.

Originally Posted by NCountry
we're definately staying away from investing in companies such as Wal-Mart which probably won't be seeing large percentage increases in their value as they are considered more 'mature" corporations.
Their growth may be slower, but their valuation is also lower. So each dollar of income Walmart makes is cheaper for you to purchase than a dollar that a small fast growing company makes. When it comes down to it, the market has already priced size into the cost of the stock. Everything goes through cycles, big companies may be the next big thing.

Originally Posted by NCountry
Our goal is to try and realize a 10% yearly return on any investment which by the time we "take off" should be enough income to sustain us from year to year.
Here's the big one. First, 10% yearly return is most likely a bit too ambitious. While the market has returned that historically, we are also at a historically high level valuation wise. If the stocks returned to their average valuation over the next 10 years, the stock prices wouldn't move a muscle. So you really want to be careful with your estimates. A 7.5% total (4% real return after inflation) is a lot more likely for the long term (though many like to go lower)

Along with that, be careful with how much you believe your portfolio will return to sustain you year after year. From many calculations, the generally accepted maximum amount you can withdraw is 4% (increased with inflation each year). So you start with 4% of your portfolio, increase by inflation (like 3.5% more this year), and keep going at that rate. It has a decent chance to sustain you for 30 years or more. Less than 4% is a lot safer.

That rate will help you through the bad years (when the stocks fall for a few years in a row), and will remove inflation from your income concerns.

That's about all I have for now, but I noticed a few things here I really had wanted to comment on.
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post #13 of 13 Old 09-08-2006
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All of our investments are being made to accommodate no time limit with regards to how much time we will be away. If we are having a great time, I expect at least 2 to 3 years. If not, well, I don't think that will be the case. I’m hoping it will be 5 years but my son who will be 4 at the time we leave might have other ideas….

We have investments in several areas of real estate including vacation rentals and commercial all of which are being and will be managed completely. Direct deposit is great. The return would be higher if we were here to manage and move the money around but that’s the price for the experience. All are fairly conservative and pay in the 7% to 9% cash on cash.

Credit cards with a high limits (paid off monthly) and AMEX will most likely allow us to do the things we want to. We will have the ability to access these accounts and our business dealings via the net or phone from the boat or shore. We are going to hide a safe on the boat (any suggestions where we tell the boat builders to put it???) to place emergency cash, papers and such. Any thoughts on that?

Other investments will be more liquid as to access and move them if needed. Our intent is to make it as easy to manage as possible so our only returns are for family issues, deals too good to pass up and some holidays.

My wife thinks we will find a lot of things (rugs, furniture, art work etc.) on our trip that she will want to purchase and have shipped back. We are going to set up a storage unit near a family member to ship things back to. Anyone with experience doing this? Is it fairly easy in larger areas?
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