Derek Foster

Asset allocation, risk, diversification and rebalancing. Pros/cons of hiring a financial advisor. Seeking advice on your portfolio?
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mikester
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Re: Derek Foster

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deaddog wrote: To the other authors on the board; how much money will he make with a self published book?
Here's an article I wrote which compares some different publishing costs using POD (print on demand).

http://www.blogthority.com/460/cheapest ... ing-press/

He probably uses one of those companies (or similar) and just orders in bulk.

He sells his books for $20 each. Printing costs and delivery should be $5 max, leaving $15 for him. Bulk orders and his package deal probably net him $10 or a bit more per book. If he sells any through Amazon - they will take 20-40% of the list depending on the company.

Self-publishing is very profitable per unit. It's just a question of how many units you can move. Derek is very good at moving. ;)
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Re: Derek Foster

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From what I gather reading limited reviews he admits to being an idiot for selling low and has now learned form his mistakes. That in itself puts him way ahead of those who don’t realize they are idiots and keep making the same mistakes.
I don't think this puts him ahead of anyone - we will have to see if he actually learns in the next downturn.
I had a longtime client who sold at the bottom, then buy back after it had recovered. She swore she would hold through any subsequent down turn and she had learned her lesson.
After two more downturn and recoveries where she did the same thing, I refused to sell her anymore equities and turned her over to another Financial Planner.

cheers
J
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Re: Derek Foster

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twa2w wrote: I had a longtime client who sold at the bottom, then buy back after it had recovered. She swore she would hold through any subsequent down turn and she had learned her lesson.
After two more downturn and recoveries where she did the same thing, I refused to sell her anymore equities and turned her over to another Financial Planner.
By that time, her portfolio was too small to generate you enough fees to make it worthwhile to keep her as a client? :wink:
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Re: Derek Foster

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twa2w wrote: I don't think this puts him ahead of anyone - we will have to see if he actually learns in the next downturn.
cheers
J
An excellent point. The self proclaimed idiot hasn’t shown that he has the discipline to stick with any one system through a full market cycle.
He has admitted through his actions that he can’t take the pain. It’s a tough thing to do when you depend on the market for your living. I find a trend following strategy much easier to implement.
Maybe we can look forward to a new book on trend following after the next downturn. I don’t think he has tried that yet.
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Re: Derek Foster

Post by Sensei »

Hi,

I've been following this for a couple of weeks now and getting an updated picture of our friend Derek Foster. Derek Foster: good guy or bad guy seems to be the gist of it. I remember discussing this a few years ago on CB when they had a viable forum. At that time Derek himself was posting and responding to criticisms, but I guess he got tired of that and he can now just call up Patricia Lovett-Reid and express/defend himself to a much wider audience.

Actually, I sort of admire Derek, but not as an investor. He did get a fair amount of cash together in his younger years, but, as he said in the interview, he made a stupid mistake, one that I almost made myself, by selling at the bottom of the market. What's worse, just by doing that, he may have influenced other people to do the same thing because of his media presence.

The thing I admire is that he tapped the inner desire of people to 'retire' and wrote the right book at the right time. There was nothing new in the book except that the sum he supposedly retired on was quite modest. Other than that, 'retiring' at 34 is no big deal. Almost every month MSN trots out profiles of 20-year old millionaires who could, technically, 'retire'.

Personally, I have no desire to retire and it is not part of my financial plan. In the case of younger retirees, I'm not even sure what the word means. Foster seems hardly to be retired. I'd describe him more as self-employed, perhaps happily. Still, with five kids he still has to make money somehow and that isn't retirement.

I have nothing against anyone who has managed to create the life they want, be it being self-employed, or doing nothing much of anything. But I have to ask, 'Why should anyone want to retire?' If there is an answer, it is that the wrong (self-serving?) image has been projected both by governments and financial institutions that retirement is a.) an entitlement b.) somehow desirable. Both of my parents were depression / war adults, and there was never any talk of retiring early either at home or anywhere else. Grow up, get a good job were the buzz words. Retiring at 65 with a pension was just beginning to take hold as an idea. I think in the next few years, this mood will re-evolve. Canada and other countries will have to face declining populations which means declining revenues for pensions and less people working. Inflation seems like another distinct if unrelated possibility. Under that scenario, I think the message will be different. People work until they can't anymore and do the best they can afterward.

The new book will be: 'Keep Working after 65: Here's How You Can'. :wink:
Cheers

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Re: Derek Foster

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Sensei wrote:
Personally, I have no desire to retire and it is not part of my financial plan. In the case of younger retirees, I'm not even sure what the word means. Foster seems hardly to be retired. I'd describe him more as self-employed, perhaps happily. Still, with five kids he still has to make money somehow and that isn't retirement.
I agree he's not really retired. He was shrewd enough to look at demographics and realize that a book on "early retirement" was more likely to sell than a book on "taking a gamble with your life savings, living frugally and gaming gov't programs to eke out a living".
I have nothing against anyone who has managed to create the life they want, be it being self-employed, or doing nothing much of anything. But I have to ask, 'Why should anyone want to retire?
Many people have jobs they don't like. Some have toxic work environments that make life so stressful, they have to get out. Those are some of the negative things that "push" people to retire early. Many are so busy at work that they feel they don't have time to enjoy their non-work life (whether or not they actually do have time), so they resolve to work full-out for a number of years, then retire and do the travel/hobby/bucket list type of activity. Some have a desire to work on a special project that takes more time than a typical hobby and can't be turned into a paying job. These are examples of "pull" factors as is, in the case of younger retirees, the desire to spend time with one's children. Many of these people ease back into employment or paid work eventually.
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Re: Derek Foster

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Problem is, the work "retirement" is subjective. For me, it means being financially independent. If my hobbie and desire is writing books, I don't consider that a job and dependance on income.
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Re: Derek Foster sold his house

Post by mikester »

Not sure why this was worth an article (or me posting about it for that matter), but apparently Derek Foster is going on the road for a year.

I admire his courage, but traveling and home schooling with 5 kids is not my idea of a good time.

http://www.moneyville.ca/blog/post/1232 ... -this-time
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Re: Derek Foster sold his house

Post by newguy »

mikester wrote:5 kids
Just checked at 40k in income 5 kids are worth 25k per year and a marginal rate > 100% for a Quebecer. I wonder what it's like in Ont.

http://www.budget.finances.gouv.qc.ca/B ... te_en.html

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Re: Derek Foster

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Interesting update. I could not do that, but good for him if that makes him happy with his family.
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Re: Derek Foster

Post by augustabound »

Well, book 7, 8, 9...............should be on the shelves soon. :roll:
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Re: Derek Foster

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The guy is crazy. He's still pumping out books at a rate of one per year, so I wouldn't call that retired. I'm not sure I believe what he says about his income and retirement, but he's clearly living frugal so I'll give him credit for not caring about what the Jones' have.

Spending the winter in the U.S. living in a trailer sounds risky. What about family health care? That could easily blow his savings if he doesn't have health insurance. If he does have insurance, that must cost a fair bit. Does he still get all the Canadian child-welfare benefits if he's living in the U.S.? I hope not!
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Re: Derek Foster

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johnfranks wrote:The guy is crazy. He's still pumping out books at a rate of one per year, so I wouldn't call that retired. I'm not sure I believe what he says about his income and retirement, but he's clearly living frugal so I'll give him credit for not caring about what the Jones' have.

Spending the winter in the U.S. living in a trailer sounds risky. What about family health care? That could easily blow his savings if he doesn't have health insurance. If he does have insurance, that must cost a fair bit. Does he still get all the Canadian child-welfare benefits if he's living in the U.S.? I hope not!
Derek Foster is definitely a 10%'er. A person can pump out dicky-do books such as his very easily when the subject matter is not exactly a well thought out, well reasoned idea with substantial intellectual breadth (say something like Fooled by Randomness or Common Stock Uncommon Profits) by simply doing a page or two a day. In fact, many 'professional self help' gurus like Zig Ziglar or Brian Tracy recommend exactly that approach.

Kudos to Foster. He knows his audience well and knows exactly how to to market to them and then serves up what they want, collecting big checks with what is likely a rather modest effort. He then repeats the process with a new catchy title all the while playing Gumby with his own behavior to maximize social transfers to his family. He probably shields the book selling cash flow in a corp then times cash payouts so social transfers are not affected. Again props to Foster. Running his life like a corporation, rationally and effectively at least in a financial sense.
Show me the incentive and I will show you the outcome

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Re: Derek Foster

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johnfranks wrote:The guy is crazy. He's still pumping out books at a rate of one per year, so I wouldn't call that retired.
:lol:
johnfranks wrote:...but he's clearly living frugal so I'll give him credit for not caring about what the Jones' have.
While he may be naturally inclined to live this way, you have to give him credit for this. The temptation of many would be to keep working to be able to live bigger. Similarly, Dave Chilton - someone who presumably could live pretty large - claims to live in a small house by most standards and it's not filled with lots of cool tech gadgets. Not everybody is wired this way but there is a lot of appeal to having less 'stuff' since it means there is less to take care of.
johnfranks wrote:Spending the winter in the U.S. living in a trailer sounds risky. What about family health care? That could easily blow his savings if he doesn't have health insurance. If he does have insurance, that must cost a fair bit. Does he still get all the Canadian child-welfare benefits if he's living in the U.S.? I hope not!
He had admitted to receiving many tax credits normally reserved for low income families but I suspect that his first book made him ineliglble to quality for such benefits. Book sales are seemingly the swing factor but I suspect he may requalify since the market for his books is - I'm guessing - much smaller than it used to be.

Another observation along the same line of thinking, however, pertains to emergency 911 service. Without a home, the family has no 'land line' telephone. Without that, he's taking a risk. Granted with a young family the the likelihood of needing 911 is very low but it's one of those risks that if it does materialize the outcome could be very bad. Generally speaking, I tend to avoid even small probability risks that have potentially disastrous (irreversible) outcomes.

I would bet real money, however, that he's not Canada's youngest retiree. He might be the youngest that has told the world about it. There must be a few 20-somethings that struck it rich in the late 1990s and kept that wealth and retired from the 9-to-5 work schedule. Similarly, I know of a hedge fund manager who hit the motherload, sold 'everything' and travelled the world on a yacht with wife and kids for a year. Now in his 40s, he's returning to work because he's bored. But he's staying pretty private about how much money he made and at what age.

And I'm amazed at how young some of our 'wealthy family' clients are given the amount of wealth they have amassed. Sorry for this but the one thing that strikes me as quite disingenuous is Derek's continued reference to himself as an idiot investor.

He clearly doesn't really believe this. If he did, he wouldn't want to even try to given advice to anybody, let alone profit handsomely from doing so. I think it's fair to say that I lean on the side of modesty. And while I'll never claim to have investment acumen to rival the likes of Buffett, Krembil, Watsa, etc. I think I can add value for a lot of people and have some nuggets of wisdom to share.

But to take money from people looking for advice and fall back on a claim that he's "just an idiot" rubs me the wrong way. I don't have an axe to grind with him. Any form of dishonesty I run into really irks me.
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Re: Derek Foster

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DanH wrote:While he may be naturally inclined to live this way, you have to give him credit for this. The temptation of many would be to keep working to be able to live bigger.
Frugality gave him the option to retire early. By contrast most people have the obligation to keep working (and working...) in order to maintain their not-so-frugal lifestyle.
Dave Chilton - someone who presumably could live pretty large - claims to live in a small house by most standards and it's not filled with lots of cool tech gadgets. Not everybody is wired this way but there is a lot of appeal to having less 'stuff' since it means there is less to take care of.
Chilton and I share at least one common trait. When we renovated our kitchens we put in laminate counters rather than the trendier but more expensive granite ;)
Another observation along the same line of thinking, however, pertains to emergency 911 service. Without a home, the family has no 'land line' telephone. Without that, he's taking a risk. Granted with a young family the the likelihood of needing 911 is very low but it's one of those risks that if it does materialize the outcome could be very bad. Generally speaking, I tend to avoid even small probability risks that have potentially disastrous (irreversible) outcomes.
Presumably he has a cellphone. Current models generally have E911 and/or GPS location. That's almost as good as a POTS landline and far more portable. (Or do you have a long extension cord for your commute to the office? ;) )
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Re: Derek Foster

Post by Shakespeare »

When we renovated our kitchens we put in laminate counters rather than the trendier but more expensive granite
I did it even more cheaply by not renovating. :mrgreen:
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Re: Derek Foster

Post by Bylo Selhi »

Shakespeare wrote:
When we renovated our kitchens we put in laminate counters rather than the trendier but more expensive granite
I did it even more cheaply by not renovating. :mrgreen:
Which, of course, isn't necessary when one resides at a homeless shelter :P :lol:
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Re: Derek Foster

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I assure you my shelter is quite homeful. :wink:
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Re: Derek Foster

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Bylo Selhi wrote:Presumably he has a cellphone. Current models generally have E911 and/or GPS location. That's almost as good as a POTS landline and far more portable.
I didn't realize it was that accurate. I thought it was still very approximate. Then that's a good thing.
Bylo Selhi wrote:(Or do you have a long extension cord for your commute to the office? ;) )
My commute isn't as long as you think ;)
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Re: Derek Foster

Post by Shakespeare »

My commute isn't as long as you think
I figure 20 ft is about right. :thumbsup:
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Re: Derek Foster

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Shakespeare wrote:I assure you my shelter is quite homeful. :wink:
I'm sure it is.
DanH wrote:I didn't realize it was that accurate. I thought it was still very approximate. Then that's a good thing.
On my smartphone the GPS and Google Maps have me within a couple of metres of my actual location. All EMS has to do is go to the right floor.

The more serious issue arises with something like VoIP where all they have to go on is either your address of record or your ISP. Both could be totally useless if you're travelling. For example Dell Voice knows my home address but that's kind of useless when I use it to call home from overseas. Even if EMS could contact my ISP to ask them to look up my IP address, (a) it would take minutes if not hours and (b) they'd know the cell tower to which my WWAN modem was connecting to.
My commute isn't as long as you think ;)
That's a good thing (and frugal too) :thumbsup:
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Re: Derek Foster

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Generally speaking, 9-1-1 service is available from all mobile and most VOIP service providers. From the CRTC:
To improve the safety and security of Canadians, the CRTC required wireless carriers to upgrade their 9-1-1 services to provide an enhanced capability to identify the location of wireless 9-1-1 callers. This is particularly important in emergency situations where the caller is unable to speak or cannot identify his or her location. This improved location capability is enabled by two technologies:

Global Positioning System (GPS) or Triangulation Capability

With Enhanced 9-1-1, wireless carriers use Global Positioning System (GPS) or Triangulation technology to identify a 9-1-1 caller’s location (generally within 50 to 300 meters of the cellphone). The emergency call and the caller’s location are automatically transmitted to a 9-1-1 call centre serving that area.

Not all new cellphones have GPS capability. To get more information on a cellphone’s
9-1-1 service, check your manual or ask your wireless service provider.
GPS capability uses signals from satellites to determine a cellphone’s location.

If your cellphone does not have GPS capability, wireless carriers can also use triangulation technology, which locates the caller by measuring the cellphone signal’s distance from nearby cellphone towers.

The location information, as determined by either GPS or triangulation, will be provided to the 9-1-1 operator if you are using either a cellphone with pre-paid minutes or a wireless service plan. If you have a cellphone but are not subscribed to any service, you can still dial 9-1-1 in an emergency and get basic wireless 9-1-1 service

<snip>

All Local VoIP service providers must provide either Basic or Enhanced 9-1-1 service. (Telecom Decision CRTC 2005-21)
Nomadic VoIP service providers must obtain express customer consent that the customer understands the limitations of their 9-1-1 service. (Telecom Decision CRTC 2005-21)
Nomadic VoIP service providers must notify subscribers about the availability, characteristics and limitations of their 9-1-1 service when the service starts and at least once a year thereafter. (Telecom Decision CRTC 2005-61)
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Re: Derek Foster

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Does CRTC have any enforcement "powers" over Nomadic VOIP providers?
Does a VOIP provider even have to be resident in Canada?
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Re: Derek Foster

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pmj wrote:Does CRTC have any enforcement "powers" over Nomadic VOIP providers?
Does a VOIP provider even have to be resident in Canada?
CRTC only has jurisdiction over Canadian carriers, i.e. incumbents (ILECs) and new competitors (i.e. CLECs). Anyone else can offer VOIP without direct CRTC oversight.

However the CRTC does have indirect control over most of these other VOIP providers. If one of these VOIP providers enters into any agreement or contract with an ILEC or CLEC under the CRTC's jurisdiction, the agreement must contain a clause providing that the VOIP provider must offer 911 service.

It follows that if a VOIP provider wants to interconnect with an ILEC or CLEC (incuding cable companies) so as to terminate calls on the standard telephony network, i.e. over ordinary telephones, it must offer 911 service. The only ones who don't have to do so are the so-called "pure" VOIP providers, i.e. who allow you to make computer-to-computer (or equivalent device) only. As I understand it, the market for those guys is very limited.

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Re: Derek Foster

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ghariton wrote:Generally speaking, 9-1-1 service is available from all mobile and most VOIP service providers. From the CRTC:
Yes, and that's what I said when I linked to that page upthread. But as I said the onus is on the subscriber to keep the VoIP carrier apprised of the subscriber's location. How else could it be?

In my example, I have Dell Voice. When I registered for it the carrier, Fongo, asked for my address. I gave it to them willingly. That's fine when I use DV to make/receive VoIP calls at home. But DV works from anywhere in the world. When I'm in Austria in a couple of weeks time I'll use it to call family and friends in Canada. If for some reason I were to dial 911 on DV the authorities will dispatch help to my address in Waterloo. When they discover I'm not there, they may trace my IP address. That will get them an ISP in Austria from whom I will have bought a SIM card and some airtime. I will have paid cash. I won't have been asked for ID. At best they'll be able to trace the call to a cell tower. Maybe they'll be able to triangulate but I wouldn't bet my life on it. A lot of good the CRTC has done me in this scenario.

P.S. DV/Fongo's (presumably) CRTC-approved 911 service disclaimer.
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