Wizard as a 6 figure professional gamber (from Wizard of the Venetian)

I know the commissions are high... and that "front end" means its not a bargain.

I knew one legal secretary who put all her money into buying condos in resort areas and operating her own leasing company... she handled the renting, usually by the weekend, the cleaning, etc. all from the various law firms employees she met on her job. Just renting things out for the weekends and holidays covered her costs.

Alot of owners try to rent out their own condos at resort hotels or operate unofficial bed and breakfast deals.

So purchasing a timeshare has always seemed unnecessary and limiting, but I don't know if its a waste of money. Alot depends on upkeep and future desires. Some people start out thinking its a great vacation destination but after awhile it becomes a chore to go to the same place all the time.

Quote: LonesomeGambler

Calm down and put the thesaurus back on the shelf — no one is calling you a liar.

"I question whether you actually have seen the thing you claim to have seen."
"What you claim to have seen does not sound like a true statement."

Please explain how these sentiments can be anything but calling my honesty into question? I mean, really? "That thing you said you saw, I don't think you really saw it." What else could you possibly be implying on my part? Insanity? Senility?

Incidentally, no one reached for any thesaurus. If I use a word, it's because I understand the word innately and I feel it's the right word to use. Let me guess, I'm overreacting by parsing "put the thesaurus back on the shelf" as an implication that I'm a pseudo-intellectual?

Quote:

As I said in my post, the information as presented did not ring true. In almost any circumstance where a well-bankrolled player (who can afford to play 7x$500) has a 1% edge off the top, spreading serves little purpose; you provided the peculiar details of this unique scenario, which made it much more clear. I suppose I was too quick to question the scenario without knowing the details.

There was absolutely nothing wrong with questioning the scenario. It could easily have been done without questioning someone's personal integrity.

Quote:

Incidentally, was this the same 1x$25-7x$500 bettor that played Winnepeg or a completely different 1x$25-7x$500 bettor?

I did not recognize the former; I recognized the latter as already having burned down several games in Canada with equally outlandish behavior, including sitting at a table and wonging in and out several times a shoe without even getting out of his chair. I also have it on good authority (direct contact with employees in said local casino who dealt to [or dealt with!] this counter) that he engaged in similar behavior at $1000 and $2000 max double deck games, resulting in changing of house rules regarding mid-deck entry at these games.

Now, I'll bite. What are you implying by asking if it was a completely different counter? That such egregious cases are rare? Even if they are, does that in any way disprove my claim? I don't see how. If combining an outlandish spread with zero tipping isn't a case of greed on par with any casino, what would you call it?

Quote: MichaelBluejay

The Wizard's been telling me for years that I should write an article about timeshares. I started it and have several pages of notes, but I don't know if I'll ever find the time to finish.

I am one who would be interested in any information on timeshares. My knowledge of them is limited at best.

My mom owns a timeshare. The company(?) has several condo complexes throughout the United States at which she can stay, including Las Vegas. Obviously, different areas at different times of the year have a higher premium than others. Weekend and holiday stays are also at a premium compared to mid-week stays. As she likes to travel to Vegas, she goes there quite a bit, splitting her stays between the condo timeshare and the free room offers she gets at various casinos. She always utilizes her timeshare points in the most efficient way possible. For Vegas, she uses her timeshare points mid-week during the summer, as it uses the fewest points possible. I am unaware of what her yearly fees are for the timeshare.

She has always indicated to me that the timeshare would transfer to me upon her demise, and I have mixed feelings about this. On the one hand, I'm not sure that a timeshare would be of much use to me. On the other hand, I'm not sure if selling it is really the way to go.

I think it's best to not think of timeshares as assets, because they're not liquid. They're very hard to sell, even with deep discounts. When you inherit a timeshare, you basically inherit an *obligation* to pay the taxes and fees on it every year. Some gift.

Timeshares are a good deal only if you'll definitely use it consistently or can definitely rent it out consistently -- which are both usually not the case.

I gave my timeshare away as a gift. What else could
I do with it...

Quote: MichaelBluejay

I'm glad the Wizard mentioned that it was his wife who wanted the new house, because I didn't want him to have to take the heat for the fallout of the purchase, but I was biting my tongue because I knew the details but didn't think it was okay to say publicly, but he laid it out himself, so there you go.

Real estate math is kind of a specialty of mine, but I find that most people don't really understand it all that well. For example, most people seem to think that the big advantage of buying a home is that you stop "throwing your money away on rent".

Appreciate the loyalty to the Wizard, but it almost goes without saying that woman drive most of the consumer purchases. It's a sore point in millions of marriages right now as many people wish they were in their previous house with the smaller mortgage and much less depreciation.

The phrase "throwing your money away on rent" is easily one of the most abused phrases in English. Since you pay off so little principal in the first ten years, it is helpful to call them "mortgage payments" instead of "house payments". Unlike payments on the big screen TV or the automobile, the "mortgage payment" means that you reap the benefits of all the increase in value.

I remember 35 years ago and much younger when a colleague told me he worked all summer and took his entire pay and bought a stock option. It went south and was completely worthless. The experience didn't sour him, and he was going to do it again. At the time, I thought it was strange to put all your money into something that could so easily go to zero. Today, many people would be ecstatic if their investments ONLY lost the money they invested.

Quote: pacomartin

Today, many people would be ecstatic if their investments ONLY lost the money they invested.

How can an investment lose more than 100%?

Quote: Wizard

How can an investment lose more than 100%?

Buy a house for $50,000 down and a $300,000 mortgage. Three years later take out an debt consolidation equity loan for $100,000 on the appreciated value in a boom market. Market drops, and paper value of the house is now down to $200k. You are underwater, and now owe more than the 50k you "invested".

Quote: Ayecarumba

Buy a house for $50,000 down and a $300,000 mortgage.

I would argue that is a $350,000 investment.

Quote: Wizard

How can an investment lose more than 100%?

Most investments like stocks will never go to zero. In any case if the company goes bankrupt, you will not lose more than 100%. If you go into partnership with someone to build a small shopping center, more than like you will enter into a limited liability partnership and someone else will be the general partner with theoretically unlimited liability. If cash flow gets tight, than more than likely the general partner will send out letters to the limited partner pleading for more money so that they don't lose their initial investment. However, the limited partners can choose what to do.

But with real estate producing such high returns, many people began buying properties with unlimited liability. In the simplest case people upgrade their homes. Suppose they have $200K in equity in their old home, and it will cost $120K to sell the home. The decision to keep the old home and rent it out can be seen as an investment of $80K. But obviously your liability is not limited to just the $80K. If the home depreciates $400K then you will have lost 500% of your initial investment.

Quote: Wizard

I would argue that is a $350,000 investment.

Definition of 'Investment': An asset or item that is purchased with the hope that it will generate income or appreciate in the future.
I have always thought of the money that you put into the deal as the amount invested. I suppose it is possible to define it either way.

Quote: Wizard

How can an investment lose more than 100%?

On one level, like shares, you are correct. Suppose the costs of trading are .4% minimum £15 then if the value of the shares goes less than £15, they become effectively worthless. (I'm assuming you don't keep the shares in an account where there's an annual charge.)
However on things like houses, there is an ongoing cost which in the worst scenario you would continue to have to pay (rates etc.).
Obviously if you leverage your profits (or losses) through a loan method (mortgage) or share options etc., then you might owe more than the value of the assets. You could argue this is gambling rather than investing.

btw I used to think investing in shares was the best positive EV place to put one's money (in the long term). Not so sure now!

Short 100 shares of XYZ at $100. When the stock goes up to $300 you are now $20,000 in the hole (on an original investment of $10,000) and can be expecting a margin call from your broker.