- Joined
- Jun 21, 2018
- Messages
- 1,482
My three investing rules:
1. Money in motion costs money.
2. Money doesn't grow on fees.
3. Trust no-one.
1. Money in motion costs money.
2. Money doesn't grow on fees.
3. Trust no-one.
Absolutely it can. Key is: 1. proper asset allocation 2. Extremely low costs 3. Buy, hold-rebalance 4. Dont sell when the market crashes-thats a time to buy-equities on sale.Timely topic for me... my father passed away last month at 87. He was an Army officer and retired as O6 at 27 years. He never worked for money a day after he retired. He was always a very conservative investor (S&P type funds), but steady eddy with every paycheck. With just his "lowly" military pay he left a low 8 figure estate. It can be done on a military salary and simple, steady, compounding investment. You don't need to be on wall street to live well. Oh, and my Mom never worked for money ever. They were a 1 income family that raised 3 kids.
Heck, I'm 58 and have once owned a new car. Prefer the rambling wrecks.A new car is not an investment either. Better to buy a 2-3 year old car. I wish I had not purchased so many new cars when I was young.
The two happiest days....the day you buy that new car and then the day you get rid of it...(old saying typically used for Boats or Campers).Heck, I'm 58 and have once owned a new car. Prefer the rambling wrecks.
+1Dont sell when the market crashes-thats a time to buy-equities on sale.
And the best time to sell/short GameStop: when it is at $480 and an idiot appears on the front page of the Wall Street Journal saying he's holding until it hits $1,000, because fundamentals don't matter anymore.+1
It is the old "be greedy when others are fearful" adage.
I call it buying at the markdown table. I am always appalled when I hear of people stopping their monthly IRA or TSP allotments when they are “losing money.”+1
It is the old "be greedy when others are fearful" adage.
A car is the most heavily depreciating asset you'll ever own. We drilled that into our son from the time he was little along with "pay your future self first" out of every gift, windfall, and paycheck by fully funding all savings vehicles (piggy bank, TSP, Roth, etc.). Try to live on 50% of your income--a dollar for savings, a dollar for you. We also told him a car was a privilege, not a right, and we would never buy him one, so he started a car fund when he was around 8. At 21, he paid (very little) cash for his first car, a 2005 Mustang, that he rebuilt from the ground up. He LOVES that car, and we don't see him ever parting with it even if he's eventually forced to buy a grocery-getter when life catches up with him.Biggest surprise of a luxury car buyer - one year later when you check the trade-in value on Edmunds, Carfax, etc
I started teaching my kids about investing before they were in high school. They'd received small amounts of stock early on
from my parents and my ex and I invested some of the gift money that they received as well in addition to #1 son's modeling
money from when he was 6 and 7. They did not have big portfolios but I showed them what they had and how it worked. My
boys partnered together and bought some high tech company stocks with their allowance money but that did not turn out well and
I showed them why. Now they are in their 20's and 30's and all have money put away in a variety of investments that they manage
themselves. The biggest is probably the younger son who has been able to invest nuke bonuses and the like and seems to have
done well.
The most important things that I stressed to them were to start early - time value of money and to avoid single company stocks
as my view is that well managed mutual funds were a much safer and surer bet over the long term and further to diversify
further with other funds as opposed to individual stocks. I do hold a few individual stocks and one in particular did very very
good things for me but I believe that to be an outlier. I've also showed them rating/analysis tools like ValueLine and Morningstar
which I hold to be a much better guide than advertisements.
Same here. That car fund I mentioned upthread was started with all the birthday money, etc. that our son had squirreled away in his little savings account. After the 2008 crash, my brother bought him some Ford stock for his birthday, and he decided he wanted to start investing. We introduced him to our broker, allowed him to attend our meetings with her, and encouraged him to talk to her and ask questions on his own. By the time he entered high school, he had his own business relationship with her. By the time he graduated from West Point, he had a very healthy portfolio for someone his age. She's the one who helped him open the Roth and advised him to take the full Cow loan and how to benefit from it while not risking it.I started teaching my kids about investing before they were in high school.
My DS has especially enjoyed the Airport lounge benefits of having this card!Amex Platinum Card (Annual fee waived for military)
Some of the most important things to understand. Isn't it funny that sales-people don't show prospects how their fees help flatten out the TMV curve! I actually think many of the financial services sales people are not that competent regarding personal finance...a few are.... start early - time value of money and to avoid single company stocks...
YMMV but I am not a fan of index funds as they include ALL in that index with no ability to make alterations for obvious changes in the economic landscape. For instance Sears and JC Penney have long been on a downward trend with little conceivable way to halt the slide. An index fund would continue to hold and even buy more stock in them (as investors buy more of the index fund) as opposed to putting the money into more timely investments. To put it another way, compare the return on a Dow Index fund to the performance of "The Dogs of the Dow" investment strategy which I believe can also be found in fund form.I'm not dispensing advice here, but the last book I read advocated for index funds will little management, over mutual funds, because of management fees and transaction costs.
This was especially pronounced during the pandemic last year. Many firms continued to maintain their holdings, whereas others executed small tactical adjustments to increase holdings of stocks that stood to benefit (tech, e-commerce, etc.) from the lock-down. Those firms made significantly more money than those who stuck to "passive indexing."YMMV but I am not a fan of index funds as they include ALL in that index with no ability to make alterations for obvious changes in the economic landscape. For instance Sears and JC Penney have long been on a downward trend with little conceivable way to halt the slide. An index fund would continue to hold and even buy more stock in them (as investors buy more of the index fund) as opposed to putting the money into more timely investments. To put it another way, compare the return on a Dow Index fund to the performance of "The Dogs of the Dow" investment strategy which I believe can also be found in fund form.
BLAB: People can write books, even learned people that I don't agree with.