Financial Independence / Retire Early

Homepage Forums Advice Financial Independence / Retire Early

This topic contains 31 replies, has 5 voices, and was last updated by  _Robert_ 1 month ago.

Viewing 15 posts - 1 through 15 (of 32 total)
  • Author
    Posts
  • #28887

    _Robert_
    Participant

    An online community devoted to financial freedom and high net-worth early in life. Basically the deal is to simply invest in stock/bond index funds…..more than the usual consumerist schmucks who are in debt up to their ears.

    I once had a girlfriend that had $50K debt on a 8% card and $75K in a 0.2% bank account. Took me a year to get her to pay off the card. WTF?

    https://forum.mrmoneymustache.com/index.php

    #28890

    jakelafort
    Participant

    That is nonsense. It is all gambling. I distinctly recall the (experts…ha!) saying you had to be a stock picker, make a profit and get out. Before that it was buy blue chips and hold. Everyone is a genius in a bull market. Tough to make a bad move. Under not unlikely conditions you will see a crash and fortunes will be lost overnight.

    The characterization of those with cc debt and insufficient investment is also nonsense. It is mean-spirited and does not reflect the economic realities of life.

    #28892

    Davis
    Participant

    Jake hit the nail in the head. Stock pick advice makes sense only if you are invincible to crashes and bankruptcies. But no one is. Stocks are risky investments and it’s a matter of time until the next crash happens. And it will. And you’ll be a turkey.

    • This reply was modified 1 month ago by  Davis.
    • This reply was modified 1 month ago by  Davis.
    • This reply was modified 1 month ago by  Davis.
    #28899

    Jody Lee
    Participant

    I’d love to learn more about investing. I’ve considered investing in the legal cannabis market for a year or so but wouldn’t know the first step to take.

    #28900

    jakelafort
    Participant

    Jody, there are loads of books on investing for beginners. Brokerages also have information and brokers who can answer specific questions. Cannabis when it became apparent that legalization was going to become the rule was initially a big winner but has in general not done well recently. But that can change. It certainly is a compelling story. I think maybe the stories about vaping have hurt the stocks. Not really sure. But you can do research yourself online or seek help.

    If you invest you need to decide if it will be in a brokerage account where you will pay taxes on profit from purchase and sale or in IRA account. If it is in IRA you need to decide which type of IRA. Or you may if you are an employee have options through your employment. Anything in which the employer makes a partial contribution is probably a good deal for you.

    #28902

    I spent the 8 months organizing investment money for the cannabis market in California. I still am.

    #28903

    Jody Lee
    Participant

    Jake, there are a lot of books on my read list, but investment literature is not included. 😊 The vaping stories are ridiculous. Tobacco kills 8 million people a year, but does each death make the news? I’m pretty sure those kids were vaping synthetic marijuana anyway.

    Reg, nice! So you could give a girl some info?

    • This reply was modified 1 month ago by  Jody Lee.
    #28905

    Yes. I will setup a group tomorrow and we can discuss further.

    #28906

    _Robert_
    Participant

    An index in the opposite of picking stocks. I invested in total market funds. Crashes and sellouts are merely interruptions to a lifetime investor. Slowly over the decades I became a “millionaire plus” just on my 401k stock plan alone. Takes patience and you have to keep investing even when the value is dropping. This is a big part of why the rich get richer, they are heavily invested. This chart is adjusted for inflation so you are looking at real gains over time with the many disturbances that chase the short term investor. Look at that slope ! Now that I am an old guy I am almost out of the market. Every 100 dollars I invested in 1990 became 1,000 1990 dollars today. If I was young again I would be stashing 20% of my income in a low fee Vanguard Total Index like VTI.

    https://www.marketwatch.com/story/the-dows-tumultuous-120-year-history-in-one-chart-2017-03-23

    #28907

    jakelafort
    Participant

    Robert, buying ETF’s and the indices makes a lot of sense if you are investing. But it is fairly meaningless if an event occurs that shakes investors to the core and there is no respite in sight. It is also true that sell-offs and crashes are blips in the trajectory of a long-term investor. However what one ought to be cognizant of is that past performances are not assurances of the future. That is a very important concept.

    We know there are threats to the future that are fundamentally capable of delivering utter devastation. Terrorism is one of those threats. Global warming is another. Insurrection is a threat. Nuclear war is a threat. There is no guarantee of a recovery after an intractable issue.

    IT IS GAMBLING.

    #28908

    jakelafort
    Participant

    Jody, i agree. I have read a few on investing. BORING!

    Further, agreed your take on tobacco and vaping. But if you do become involved in investing you will learn that perception is often paramount.

    #28909

    _Robert_
    Participant

    IT IS GAMBLING.

    Jake I agree totally. Getting in you car in the morning is gambling too. NOT investing in index funds is gambling too. You are betting against the wealthy.

    Look at these numbers for Americans (boomers are such geniuses) nearing retirement age:

    Age         Tot NW       W/O home equity
    55 – 64:   $164,498    $66,547
    src: https://wallethacks.com/average-net-worth-by-age-americans/

    66 grand has like no earning power. This is not good. How many Walmart greeters do we need? Europeans/Canadians have a safety net. We do not. I’d rather bet that clever folks will eventually overcome all the political bullshit. There should be some sort of green revolution bubble soon. That could be a windfall. Pun intended.

     

    #28911

    jakelafort
    Participant

    Robert, you intended the pun. Did you also intend to alter the meaning of gambling i am conveying?

    I am equating investing with gambling (think roulette or poker) I will reiterate-the mantra about long-term investing was at one point abandoned. Pundits said you have to pick stocks. Stick and move. It is no longer safe to buy and hold is what they said. In the aftermath of volatility it was not apparent to most experts that the long term trajectory of the market was to the moon. Now that the market has gone to the moon it feels safe to extrapolate a market to mars. Think about that point.

    Buying the indices is not magic. It avoids the fees of managed funds. It provides automatic diversification. But it is zero safeguard against the risk of a crash. And the fact that prior crashes have ultimately reversed courses in not a guarantee that same pattern will emerge.

    Also consider that the market has appreciated as you have indicated to new heights. Our future is so damn uncertain. The market thrives on optimism and economic appreciation. Are we assured of those conditions? I think any of us could go on and on about the peculiar risks ahead. What if Trump is reelected? What if Pakistan and India? What if ISIS infiltrates… I will resist elaborating on some of the myriad doomsday scenarios. If any of those materialize all of the BS about investing long term will be shown for what it is.

    #28912

    _Robert_
    Participant

    It is a good strategy for people with decades of working life ahead of them. The matching of your 401k contributions and the compounding effect of reinvestment, plus the deferred tax benefit is hard to argue against. Unless you are expecting doomsday in your lifetime. In that case you should also be buying silver, ammo, and survival food. Call it plan B.  Plenty of mega billionaires have precious metals in steel vaults. I also invested in real estate when the market bottomed out, paid off the loans as soon as I could and now have rentals that bring income.

    The main point of that online community is to have a diversified plan and stay as debt free as possible, and shun wanton consumerism. The young folks in my family have no plan. They buy new crap they can’t give away a week later.  They just go to work and barely pay their bills. I am trying to get them to at least have a financial plan.

    PS, Starbucks

    I once asked a junior coworker to track her Starbuck expenditures. It was $180 a month. It was more than her car payment. She buys premium beans, grinds and brews at the office now. Everybody loved that glorious aroma.

     

    #28913

    jakelafort
    Participant

    If i had to bet on where the US market would be in 40 or 50 years i would sell it short. The USA is in serious decline. The challenges of civilization are probably too great to overcome.

    Were i to advise a youngster who has the disposable income i would tell em to allocate some of it to fun, some of it to cash, some of it to the market( tech, biotech, cannabis are areas that i would take shots) and some of it to real estate in an area in which those fleeing climate change are likely to go.

    It is easy to say what was sound advice. It is not as easy to say what is sound advice. On the other hand simply blowing all of it is not wise. Maintaining high interest debt when means are available to retire debt is not wise. etc.

Viewing 15 posts - 1 through 15 (of 32 total)

You must be logged in to reply to this topic.