[quote=BankFC][quote=knucklehead][quote=BankFC]

It seems to me from my experience in this business that us brokers rarely get "rich."  We as a group may dress nice, have nice cars, but if in the end (retirement) if we have anywhere close to a million dollars to show for it we are lucky. 

However, we are in the unique position (along with lawyers, CPA's, and bankers) to get a "free look" if you will into how fortunes are made by many people. 

I have found that very few of them made ANY SIGNIFICANT MONEY by buying and selling stocks.  Some saved over the past 40 years, and the cumulative effect might be significant, but if you look at it over an annualized basis, it isn't that overwhelming.

Most made money in 1 of 2 ways.  Self employed business owner or real estate.

The clients that I have clients who are truly rich, and by rich I mean worth in excess of 10 million or 20 million dollars didn't make their money in mutual funds.  One of them grew up dirt poor, and had NEVER EVEN BOUGHT A STOCK until he met me.  Made all his money in real estate.

That my friends, real estate, is where I believe many fortunes are made.  Not by buying already overpriced houses during a bubble hoping it doesn't pop, but by developing and building residential and commercial real estate.

It astounds me to see the type of money being made.

Argue with me if you wish, but I see it happen every day.  It amazes me, and the whole time

Anyway, I just thought I'd put this out here as self expression.  Take it for what you will, and all snide comments are welcome.

[/quote]

You don't have experience in this business. YOu are a bank employee. YOu are not in any business. The bank is in this business.

[/quote]

You are an idiot.  This thread was about as civilized and smut free as I have seen in awhile, and then you come along and show your lack of a brain.

Not worth my keystrokes.

If anyone cares, I know plenty of people who have gone the insurance route and have become wealthy.

When it comes to 2nd generation wealth, I'd certainly rather be the kid of a successful insurance producer than one of a successful broker.

[quote=anonymous]

When it comes to 2nd generation wealth, I'd certainly rather be the kid of a successful insurance producer than one of a successful broker.

[/quote]

What does that mean?  To the extent that accumlated wealth is a measure of success, are there different standards, different totals, among the various professions?

If you inherit $1 million earned by your insurance agent father is it more than $1 million earned by your stock broker father?

Anon, do you mean that you would be taking over the book of business?  Otherwise, I think Newbie's right.  $1mm is $1mm in the bank account.

I think he's trying to imply that successful insurance brokers have/make more money than stock brokers? (I don't know whether this is true or not).

I will say that the successful insurance producer probably has more insurance inforce though , therefore making him/her the clear winner in 2nd generation wealth.

[quote=knucklehead][quote=vbrainy]

knucklehead is a good handle for you, but I like wasteofskin better.

A Financial Advisor can work in many channels, the bank is just one example.

Did you know you can be a LPL rep and work in a bank? dork

[/quote]

May I suggest you carefully read what I wrote so you don't have to prove to the world that you are a moron? By the way...your mom needs a bath. Sorry.

[/quote]

Great comeback.  I think you missed your calling.  You should be in showbiz--you would make a great clown.

"I will say that the successful insurance producer probably has more insurance inforce though , therefore making him/her the clear winner in 2nd generation wealth."

Dude, that is exactly what I meant.

[QUOTE]Note, by the way, that all this 'wealth creation in real estate'
talk is coming at the tail end-or just after the peak-of an incredible five-
year bull market in real estate. I would gladly bet those 10 million dollar
net worth clients were worth a lot less 5-6 years ago. Too, in 1999, we
were all talking about the 'new economy' and the true heart of wealth
creation was in Silicon Valley, venture funds, and the internet.The more
things change the more they stay the same, a wise man once said.[/
QUOTE]

That my friend is where you, and me until the past year, are missing
the boat. The bull market you speak of is the environment where any
idiot can buy an already overpriced house, hold it for six months, and
then it for a just about guaranteed profit. I agree, that is a residential bull
market.

HOWEVER...a couple things.

First of all, I live in the Southeast, and we never experienced the bull
market you speak of to the extent the Northeast, California, etc (with the
exception of FL, which is altogether it's own animal)...prices have steadily
inclined on existing construction (older, established neighborhoods), with
a lot of new construction coming up daily.

Secondly, EVEN IF PRICES STAYED CONSTANT, i.e didn't rise 6-8%
annually as they have in my area, what do you think it costs a BUILDER to
build a house versus it's true value (relative to comps in a given area)? [/
P]

I tell you. At most price points, whether were are talking about a
$250,000 house, or a $2,500,000, the avg builder will net 25-30% of
the selling price as profit.

30%, even if the market doesn't move an inch.

Of course their are some risks, and that is why the smart builders (IMO)
are staying where the highest demand is....1500 to 2500 sq ft, middle
income style houses that look good, are nice, and sell quick.

I see it every day...as I said, my bank caters to these folks ALOT.

I would agree with the statement that financial advisors are horrible investors or savers of their own money.  My experience is that way to many have a gambling nature and are making wild bets on micro-cap stocks.  Not all but I’ve seen a good number doing just that.

As for becoming wealthy via the stock market - it can happen but simply put, you need money to make money.  I could invest $300k now and be very well off in 50 years but how many 20 year olds have that kind of money without taking massive leverage?  That’s why real estate works.

I do have clients who became rather wealthy via the stock market.  We looked through our book of clients back in the late '90s and found every one of them did it via small bank stocks and consumer goods.  We’ve had multi million dollar accounts who were mostly invested in Ralston Purina, Anheuser Busch and Emerson Electric (yes I’m in St. Louis area).  I’ve also had them with BAC and C because they had significant investment dollars in small regional banks and very small insurance companies that were gobbled up a few times.

I disagree with this totally. More people "get rich" in the stock market than real estate and here is the way it is done.

1.Lets say you work at a private company that is now coming public. The private shareholders who  have a low cost basis suddenly are multi-millionaires. This is assuming that they are able to sell their stock when the lockup period ends. I remember I counted at least 20 people in the homstore.com secondary offering that sold more than a million dollars in stock  @110 a share. (now 4). This happens all the time

2. Venture capital people who are in these companies before they become public

3. You get lucky(as many did in Real estate) and you company does well and you work there for 20 years. ex MO

4. You get lucky and work at a company that goes up and you get stock options and sell. ex AOL or any tech stock during the bubble. Then of course talk to an investment professional, like ourselves, to explain to you that you need to diversify out of tech,real estate  or whatever you made your money in to preserve your wealth.

5. You get a client, and hopefully yourself, to follow a disciplined plan of savings and debt reduction to achieve a million + dollars.

What we do is preserve wealth. We are not going to find the stock that makes someone a million. Im sure it happens sometimes but if we did it is usually luck and not our pick that did it.

One last thought on real estate. If you bought a house for 500k, borrowed 500 and it went to one million in ten years. How much did you really gain. 500k X 6%=30k a year X 10=300k total cost 800k. Yes I know you get a deduction on the interest, but you also pay taxes and insurance. 2500 a month(30k a year) for the same 10 year period into New Perspective fund would be 503000 dollars. Granted you can live in the house but this is for illustration purposes. By the way what if the house did not double or WENT DOWN.

Lastly, simply save 10% of what you make and do it for 20 years and keep your debt levels normal and you will have a million + dollars.

It seems the common ingredient for both real estate and equity success is time. You know the old quote… it’s not timing the market, it’s time in the market.

[quote=aldo63]

I disagree with this totally. More people "get rich" in the stock market than real estate and here is the way it is done.

1.Lets say you work at a private company that is now coming public. The private shareholders who  have a low cost basis suddenly are multi-millionaires. This is assuming that they are able to sell their stock when the lockup period ends. I remember I counted at least 20 people in the homstore.com secondary offering that sold more than a million dollars in stock  @110 a share. (now 4). This happens all the time

What % of the population actually gets the opportunity the participate in something like this, and at that level?

2. Venture capital people who are in these companies before they become public

Again, an ULTRA SMALL portion of the overall population does not make for an accurate example.

3. You get lucky(as many did in Real estate) and you company does well and you work there for 20 years. ex MO

Sure you can sock away money for 20 years and (hopefully)build up a decent nest egg.  That's not the point.  The point is I have seen guys go from VERY AVG to net worths well over a million buck IN JUST A FEW YEARS through real estate building and development.

4. You get lucky and work at a company that goes up and you get stock options and sell. ex AOL or any tech stock during the bubble. Then of course talk to an investment professional, like ourselves, to explain to you that you need to diversify out of tech,real estate  or whatever you made your money in to preserve your wealth.

AGAIN, vast minority.

5. You get a client, and hopefully yourself, to follow a disciplined plan of savings and debt reduction to achieve a million + dollars.

What we do is preserve wealth. We are not going to find the stock that makes someone a million. Im sure it happens sometimes but if we did it is usually luck and not our pick that did it.

One last thought on real estate. If you bought a house for 500k, borrowed 500 and it went to one million in ten years. How much did you really gain. 500k X 6%=30k a year X 10=300k total cost 800k. Yes I know you get a deduction on the interest, but you also pay taxes and insurance. 2500 a month(30k a year) for the same 10 year period into New Perspective fund would be 503000 dollars. Granted you can live in the house but this is for illustration purposes. By the way what if the house did not double or WENT DOWN.

See my point?  Why is it that so many folks in THIS field cannot grasp the notion that something (a house) can be worth much more than the sum of its parts? 

Builders don't build houses for $500,000 and sell them for $500,000...why is that SO difficult for stock minded folks to understand?

Lastly, simply save 10% of what you make and do it for 20 years and keep your debt levels normal and you will have a million + dollars.

What if you only make 6.25/hr?  If I save 10% of that, will I have a million dollars at the end of twenty years? Try to refrain from silly blanket statements.

[quote=BankFC][quote=aldo63]

I disagree with this totally. More people "get rich" in the stock market than real estate and here is the way it is done.

1.Lets say you work at a private company that is now coming public. The private shareholders who  have a low cost basis suddenly are multi-millionaires. This is assuming that they are able to sell their stock when the lockup period ends. I remember I counted at least 20 people in the homstore.com secondary offering that sold more than a million dollars in stock  @110 a share. (now 4). This happens all the time

What % of the population actually gets the opportunity the participate in something like this, and at that level?

2. Venture capital people who are in these companies before they become public

Again, an ULTRA SMALL portion of the overall population does not make for an accurate example.

3. You get lucky(as many did in Real estate) and you company does well and you work there for 20 years. ex MO

Sure you can sock away money for 20 years and (hopefully)build up a decent nest egg.  That's not the point.  The point is I have seen guys go from VERY AVG to net worths well over a million buck IN JUST A FEW YEARS through real estate building and development.

4. You get lucky and work at a company that goes up and you get stock options and sell. ex AOL or any tech stock during the bubble. Then of course talk to an investment professional, like ourselves, to explain to you that you need to diversify out of tech,real estate  or whatever you made your money in to preserve your wealth.

AGAIN, vast minority.

5. You get a client, and hopefully yourself, to follow a disciplined plan of savings and debt reduction to achieve a million + dollars.

What we do is preserve wealth. We are not going to find the stock that makes someone a million. Im sure it happens sometimes but if we did it is usually luck and not our pick that did it.

One last thought on real estate. If you bought a house for 500k, borrowed 500 and it went to one million in ten years. How much did you really gain. 500k X 6%=30k a year X 10=300k total cost 800k. Yes I know you get a deduction on the interest, but you also pay taxes and insurance. 2500 a month(30k a year) for the same 10 year period into New Perspective fund would be 503000 dollars. Granted you can live in the house but this is for illustration purposes. By the way what if the house did not double or WENT DOWN.

See my point?  Why is it that so many folks in THIS field cannot grasp the notion that something (a house) can be worth much more than the sum of its parts? 

Builders don't build houses for $500,000 and sell them for $500,000...why is that SO difficult for stock minded folks to understand?

Lastly, simply save 10% of what you make and do it for 20 years and keep your debt levels normal and you will have a million + dollars.

What if you only make 6.25/hr?  If I save 10% of that, will I have a million dollars at the end of twenty years? Try to refrain from silly blanket statements.

Q How many people are builders.

A a vast minority. Do you really think they are all rich. Some are so highly leveraged they could lose it all very quickly

Q how many buiders are there when the real estate market goes down.

A smaller minority

Fact- if you only make 6.25 an hour, you will not make money in real estate or the stock market. Invest in yourself for education, By the way when I made 18000 a year when I started as a broker in 1989. i invested 300 a month in mutual funds(american funds). I still do that. It is now 130k from that alone. I have much more than that

Q Do you know how many builders lost everything in the late 1980 early 1990's. Do you realize the house they sell for 700 that they built for 500 is great. What about the spec house(s) they cannot sell. I was talking about personal residence in my example

A. many. leverage will kill these people when the market goes down

Lastly, propsect these builders, open accounts, show them the history of the market and real estate and explain divesification to them. Explain to them how the tech bubble blew up and how me, you and others in this business with net worths currently less than them can help them.

[quote=aldo63]

Q How many people are builders.

A a vast minority. Do you really think they are all rich. Some are so highly leveraged they could lose it all very quickly

No, I don't think the minority of people are builders.  That would make no sense logically.  Also why it's such a great business to be in.

Q how many buiders are there when the real estate market goes down.

A smaller minority

You need to turn off the TV (and the talking heads of doom and gloom) and look around you.  No real estate bubble here in Southeast overall (every thing has an exception SOMEWHERE).  Plus demand for the $150,000-$300,000 house is STRONG.

Fact- if you only make 6.25 an hour, you will not make money in real estate or the stock market. Invest in yourself for education, By the way when I made 18000 a year when I started as a broker in 1989. i invested 300 a month in mutual funds(american funds). I still do that. It is now 130k from that alone. I have much more than that

Congratulations.  I will make more on the three spec houses me and my partner (a GC w/20 years experience) are building over the next six months than you have investing since 1989.  And yes, this has been disclosed as an outside business activity thank you.

Q Do you know how many builders lost everything in the late 1980 early 1990's. Do you realize the house they sell for 700 that they built for 500 is great. What about the spec house(s) they cannot sell. I was talking about personal residence in my example

A house not selling quickly is OBVIOUSLY a risk.  You (actually, I) am mitigating the risk by

1)  Building houses at high demand price points

2)  Building in desirable locations

3)  Being EXTREMELY diligent regarding budget/bids, timetables, change orders, expenses in general, etc

A. many. leverage will kill these people when the market goes down

Lastly, propsect these builders, open accounts, show them the history of the market and real estate and explain divesification to them. Explain to them how the tech bubble blew up and how me, you and others in this business with net worths currently less than them can help them.

Honestly, I admire you seemingly genuine zest for the fundamentals of this business, and it sounds like you would work well with the folks who need assistance with fundamental investing.

My last response.

quit the investment business and go into real estate or maybe the mortgage business. 

you are smart, i am dumb

real estate is the only place to make money .

Debt is great

the inventory in houses is just a tv thing

the over leveraged nation will increase their net worth 20% next year from appreciation in real estate

lu was a steal when it dropped to 50, so was csco, emc, intc, homs, arba, bway,crfh,artd,clic,ect

live long and prosper

[quote=aldo63]

My last response.

quit the investment business and go into real estate or maybe the mortgage business. 

Why not do both financial advising and real estate?  Can't be both?

you are smart, i am dumb

I don't question your intelligence.  Just sometimes folks can't see the forest for the trees.

real estate is the only place to make money .

I never said that...I contend that for someone who has the inclination, opportunity, and funds, real estate building and development is a QUICKER way to build wealth versus plunking  $1000 a month into a mutual fund. 

Debt is great

As a tool, it can be.    Did you pay for your house in cash?  Ever meet a small business owner that used SBA/home equity/whatever to start a small business.

the inventory in houses is just a tv thing

Probably not everywhere, but not like they make it out to be.

the over leveraged nation will increase their net worth 20% next year from appreciation in real estate

No, not from your own house.  Obviously you are STILL missing the point, which shows you are either being close minded, or you simply cannot grasp what I am saying.

lu was a steal when it dropped to 50, so was csco, emc, intc, homs, arba, bway,crfh,artd,clic,ect

Don't get the relevance of this comment.  Care to elaborate?

live long and prosper

Are you a trekkie?    You do as well.

Do the wirehouses frown on brokers if they try and do some real estate development work on the side?  It almost seems like a natural progression for some, and if you have clients that are willing to invest in your projects…

[quote=futureadvisor]Do the wirehouses frown on brokers if they try and do some real estate development work on the side?  It almost seems like a natural progression for some, and if you have clients that are willing to invest in your projects…[/quote]

Yes they do.  They generally frown on brokers who make money on ANYTHING other than working for them.

As long as it doesn't take away from meeting production goals, and is not a conflict of interest in some way with the bank or the client, then it should be okay.

I am producing above my goal, and what time I spend on outside activities is in excess of the 8-5 I put in at the bank.

Yes, I work 8-5.  That's one of the reasons why I came to a bank, for better working conditions.  It has given me the opportunity to have a life again for one, and to do other things for two.