Cheddarblog

The Swiss_Mouse is a reader.  He like books, magazines, cheese wrappers….

In the September 2008 issue of Money Magazine he found an interesting article entitled “Millionaires in the Making”.

It was a profile of two young DINKs, both 27 who wanted to retire by age 40.  The magazine profiled them and said they “just might make it”.  Well the Swiss_Mouse takes issue with a few of the items in the article.  First off their combined income was $211k.  NICE!  Assets $1 million. Double NICE!!  Liabilities $516k.  HUH?  This is when the Swiss_Mouse dug into the article.

Right off the bat he noticed they had mortgages (plural) of $444,025.  Turns out they have rental property.  Ok, that might not be so bad but in the advice that Money Magazines advisors gave to them they said that they should sell “one or two” of their rental homes.  Why?  Because overall they were LOSING $750 a month on the properties.  Notice the Mouse said LOSING $750 a month.  You’d think that a smart person would look at that and say “I need to cut these loses”.  After all, they could always trim this and buy back in later.  In essence they needed to stop the negative flow.  But the man refused!  And this from man who considered himself extremely frugal and went to great lengths to save money.  His reason for not dumping “I think those properties are going to come back eventually. …our retirement plan is not based on any return from those properties anyway.”   GOOD damn thing since he’s losing money.

Apparently also 37% of thie investment portfolio was in his company stock. Granted it is Microsoft.  He refused because it would be “it’s dumb to sell low..”.  Is it smart to sell in the single digits?  Hello?  Has this guy ever hear of ENRON?!?   The advisor only said he should cut back to 5%.  Geez even 10% would be smart.  Apparently this Microsoft employee has never heard of Open Office, Firefox, Google….probably working to hard.  Or….

The final thing that killed the Mouse (not literally) about these “millionaires” was the do “splurge”.  Apparently they do eat out 1 or 2 times a month.  They went to a show.  He bought a $30,000 car for road  rally racing.  HE WHAT?!?!?  After reading all about how frugal he was, how they sacrificed, how they shared entrees at restaurants to find out he bought a $30,000 car just for road racing was a big too much.

Sometimes the Mouse wonders if Money Magazine is being intentionally humorous.