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Economists at investing giant Vanguard predict over the next 10 years annual U.S. stock market returns will likely average 3% to 5% : financialindependence
"Hey there, I am 22 years old almost going on 23, and am curious if you have any financial advice or anything along those lines, I understand if you don't feel like it as well. Thank you in advance and hope you have a great rest of your year."

"I'd tell you to read the free booklet "If You Can" by William Bernstein. It tells you the path to financial independence. It doesn't promise you will retire early, but it doesn't tell you to save 80% of your salary either.

This booklet has a reading list. If you read those you'll be more informed than most of the people around you and if you follow through with the advice of the booklet (and of the books if you bother to read them) you'll be fine.

This is not a short course in choosing the best stocks. It's about buying the whole market (through index funds) and following course consistently. It won't turn you into Jeff Bezos. But you'll have FU money and the liberty to choose a job you want and not any job because you need to pay the bills."
https://old.reddit.com/r/financialindependence/comments/dmnrf8/economists_at_investing_giant_vanguard_predict/f54ndot/
investing  books-to-buy  money  money-retirement 
22 days ago by daguti
The Zero Hour Portfolio — Tim Ferriss is Promoting Robo Advisors
Good to know:

"I agree that Robo-Advising is far more optimal than having human teams that pick stocks, rebalance portfolios, do tax-loss harvesting and all the tasks that Human Advisors are currently doing -but can perfectly be automatized.

Yet they are running on the wrong kind of programming.

Their credo is the following: Since nobody can’t predict what stocks are going to do, they spread the risk around by diversification, buy for the long term and hope for the best, when we all know that, in any business endeavor hope is not a rational strategy."

But even that last sentence is starting to give me a hint of what this guy's idea of "proper investing" is

I got further down the article and it sounds like this guy is saying you have to become an options master to have "peace of mind" when you invest:

"he describes several types of investment styles, value investing, index investing and that you should read about several types of investments. But all these types of investments he lists and talks about would give him significant stress and sleepless nights. His objective is to invest to improve quality of life."

and then we finally get to the sales pitch:

"You can have an edge too, with Tastytrade and Tastyworks. Because they present practical and proven methods to be a successful investor.
And you can have quality of life too, because with options trading it means you don’t have to be glued to the screen or constantly monitoring your positions.
You only check and adjust your portfolio once a day, no longer than 45 minutes or an hour -when you are really experienced. Much like a regular workout."
investing  anti-something  people-tim-ferriss  analysis 
5 weeks ago by daguti
Set it and forget it investing: Wealthfront and Betterment - The Gents Blog
Wealthfront is the robo advisor that Tim Ferriss backed and promoted on his podcast.
investing  investing-tools  people-tim-ferriss 
5 weeks ago by daguti
Vanguard Total Stock Market ETF, VTI Advanced Chart - (PSE) VTI, Vanguard Total Stock Market ETF Stock Price - BigCharts.com
This bigcharts.marketwatch.com is what I've been seeking for a while: A place to put in a bunch of tickers and compare them all on one chart.

The only downside I just learned about right now is when I went to Merrill Lynch to find out the dates that I bought VTI, VOO, VOOG and GDX at, I realized that the price on most charts shows the closing price for that day.

So I had been assuming my cost was $148 or so (assuming I had bought around May 9th), but in reality it was $152, because I bought at market price during the day, without setting a limit order.
investing  tools 
5 weeks ago by daguti
Is Your Retirement Fund Ruining Our Economy? : Planet Money : NPR
THIS IS THE ARTICLE I WANTED TO SEND TO STEVE AND ALEX.

I need to re-read this. Not really understanding where the problem is. If people just dump money into index funds and leave it alone, what is the bubble?

Maybe this is a paradigm shift for valuations, where the "new normal" is just everyone pouring money into index funds.

Also, I hate this idea that the status quo is any better:
"Actively buying and selling stocks and bonds provides a service to the market: It's called "price discovery.""

Fucking idiot financial advisers recommend stocks based on what they are getting commissioned off of, not the best value for their clients.

While I understand the concerns about having Vanguard, et al being the largest voting shareholders, I didn't see the part of the article that talks about *why* overvalued indexes will crash.

Like what will cause the panic that causes everyone to sell at the same time?

===========

I found this link in my work email, having sent it to myself on 2019-07-28:
https://www.cnbc.com/2019/07/27/passive-investing-boom-could-be-causing-a-market-bubble-but-not-in-the-stocks-you-would-expect.html

It talks about the passive investing boom causing a bubble.
investing  stock-exchange  warnings  large-systems-bubbles 
5 weeks ago by daguti
Trading In Penny Stocks By Pennypicks.net - pennystockalerts | Seeking Alpha
Interesting. Investing in penny stocks is completely different from long term investing or even short term trading. There are very specific things you are supposed to do, like:

- "If you are investing by using our premium penny stock subscription list, invest immediately when you receive the list - not a couple of days or couple of weeks later. Remember penny stocks appreciate and reach their short-term potential in a couple of days and sometimes, in less than a day's trade."

- "Remember, you have to be alert because the penny stock will rise quickly after the press release (when trading starts) and stabilize by day's end. If you haven't bought the penny stock within the first couple of hours of trading, you are already too late."

- "Alert investor's sense when the penny stock will appreciate. They do so because they have been tracking the activities of the target company. They know the penny stock will appreciate days before the company calls a press conference or issues a press release. The professional trader sells in the second half of trading on the day the press release is issued and books substantial profits."


But this is the same as my idea on investing:

- "Many small profits of between 10 and 25% are better than one massive lucky 500% profit that might occur two or three times a year."
investing  investing-ideas 
5 weeks ago by daguti
Schwab Going Commission Free : personalfinance
Also see:
https://www.fidelity.com/mutual-funds/investing-ideas/index-funds
A few hours later, I read that TD Ameritrade was doing the same for stock, ETF and options trades.

And all their shares tanked. More info and at least one more brokerage that went zero commission.
https://www.cnbc.com/2019/10/01/charles-schwab-is-eliminating-online-commissions-for-trading-in-us-stocks-and-etfs.html
investing  news  2019 
6 weeks ago by daguti
Making A Buck - Seven Figure Publishing
Wow, said this in the prediction that I sent to Aaron on May 6th.

see my prediction here:
https://docs.google.com/document/d/1-EvBYFhcgyzqaUXU0tDuzAlyqIeOMG6lBhxlNgdRnu4/edit

"A Corporation’s Purpose
Riffing on the theme above, this morning we read: “The Business Roundtable,” reports CNBC, “a group of chief executive officers from major U.S. corporations, issued a statement Monday with a new definition of the ‘purpose of a corporation.’”

(See reasons 1, 2 and 3 above for context. Reasonable enough?)

About 200 CEOs agree the “reimagined idea of a corporation drops the age-old notion that corporations function first and foremost to serve their shareholders and maximize profits.

“Rather, investing in employees, delivering value to customers, dealing ethically with suppliers and supporting outside communities are now at the forefront of American business goals, according to the statement.”"
investing  paradigm-shifts  paradigm-shifts-new-or-emerging-things 
12 weeks ago by daguti
Supersize Your Profits With Bargain Blue Chips! - Seven Figure Publishing
PDF in case I lose access: https://sevenfigurepublishing.com/2019/07/29/supersize-your-profits-with-bargain-blue-chips/?pdf=1

investing-ideas = Look at the 52 week low list.

investing-indicators = FOUR KEY QUESTIONS to ask if a stock is due for a rebound.

The reasons for the stock rebound were:

1. The problem was fixable.

2. JNJ’s stock price dropped enough to
compensate investors for the risk.

The scandal turned out to be nothing but a temporary speed bump that created an opportunity for investors to buy a great company at a bargain price.

There is a third key to uncovering turnaround bargains — government involvement.

Whenever politicians or regulators stick their noses into the situation, the problem gets exaggerated, the stock falls more than it should and the fix/solution takes longer than it should.

.
.

There are FOUR KEY QUESTIONS that I ask about every stock I find on the 52-week low list:

1) Temporary or Long-Term Problem?
The answer is subjective, but if the fall from grace is a result of a one-time mistake on the part of management, you may be looking at a bargain.

2) Stable or New Management?
Great management tends to produce great results. Johnson & Johnson’s handling of the Tylenol scandal is still taught in business school as a textbook example of crisis management.

3) Big Fish or Little Minnow?
Big companies can withstand short-term problems better than small companies. Walmart is more likely to get back on its feet sooner than a small specialty retailer like Payless ShoeSource Inc., Nine West or Claire’s — all of which recently filed for bankruptcy.

4) Is the Government out for Blood?
One of the most laughable phrases I’ve ever heard is:

“I’m from the government and I’m here to help.”

Ha!

Politicians and regulators are often more concerned about making themselves look good, and that means putting the squeeze on corporate America.

The latest example of a crisis, a hammered stock and government involvement is Boeing Co. (BA) and the fatal crashes of two 737 Max jets.

You’ve read the stories: two crashes killed 346 people and a software glitch in Boeing’s Maneuvering Characteristics Augmentation System (MCAS) was to blame.

Black box evidence shows that a malfunction in the software system pushed the nose of the two crashed planes downward and set the planes into an unrecoverable nose dive.

As a result, Boeing’s stock dropped by over $100 a share!

I’ve been around long enough to watch companies rally from what seemed like fatal public-relations nightmares, and I know when to stand aside and when to back up the truck and buy.

And this is a bargain buying opportunity!
investing-ideas  investing-indicators  frameworks  investing 
august 2019 by daguti
Mark Your Calendar for Monday - Seven Figure Publishing
"Action bias makes investors feel like they should be buying or selling something all the time.

Action bias doesn’t just affect traders. For example, it’s also the reason why soccer goalkeepers tend to jump to the right or left on penalty kicks, even though research has shown that they would have a statistical advantage if they just stayed in the middle of the goal.

It’s human nature to be biased toward doing something."

keywords:

bias towards action , soccer
investing  psychology 
august 2019 by daguti
My Mother's Love Affair With Dividends - Seven Figure Publishing
This one is chock full of info.

1) Stocks and bonds have a similar yield (2% for 10 yr bonds vs 1.9% for dividend)

2) Dividends usually go up over time, so a 2% now could be 4% in 8 years and 8% in 16 years, etc. (Look at Coke (KO) for a long term example of this.)

3) Taxes on dividends are lower than CDs and bonds

4) Dividend stocks historically have lower beta than the S&P500.
investing-ideas  investing  Reference 
july 2019 by daguti
The Formula for Calculating Beta
"It's important that investors distinguish between the short-term risks, where beta and price volatility are useful and the long-term risks, where fundamental (big picture) risk factors are more prevalent."
investing  Reference 
july 2019 by daguti
Is it Best to Buy A, B, or C Share Mutual Funds?
"The only good reason to buy A shares, B shares or C shares with mutual funds is because you have an advisor or broker that gets paid by commission."

"When A Shares Are Best: Long-term investors (more than 5 years and definitely more than 10) will do best with A share funds. Even though the front load may seem high, the ongoing, internal expenses of A share funds tend to be lower than B and C shares.
When B Shares Are Best: If you think you'll sell your shares in about 5 to 7 years, and the back load amount decreases every year, B shares can be a good idea because you won't pay any load up front and you'll pay little or nothing when you sell. Just be sure that the expense ratio is not too high (hopefully not much higher than 1.00%).
When C Shares Are Best: This share class is usually the best idea when you'll be holding your mutual fund shares for a short period of time (more than one year but less than three). You don't pay a front load but a back load is sometimes charged if you sell the fund within one year. The ongoing 1.00% level load gets expensive over time, which is why these are best for one to three years."
investing  Reference 
july 2019 by daguti
Why Indexers Are Toast | Seeking Alpha
This is a very philosophical article - and something I've thought about for a long time. You cannot have only the desired effect. Your action within a system changes that system.

I, however, need to learn the lesson that my small actions won't change the system enough to damage it - it's only when it becomes rampantly popular that you can change the system.

Also, note that this article is from May 2018, and the S&P500 Index has risen over 11% since then (and this includes the 20% drop from Oct-Dec 2018)

large-systems =
"The net effect of the ETF industry is to greatly enhance Wall Street’s take from its brokerage business, i.e., from YOU.

Every wonder why the shares of the big banks are REALLY trading at new multi-year highs?

I hate to say this, but I’ve seen this movie before.

Whenever a strategy becomes popular, it carries with it the seeds of its own destruction.

The most famous scare was the “Portfolio Insurance” of the 1980s, a proprietary formula sold to institutional investors who allegedly protected them by automatically selling in down markets.

Of course, once everyone was in the boat, the end result was the 1987 crash, which saw the Dow Average plunge 20% in one day.

The net effect was to maximize everyone’s short positions at absolute market bottoms.

A lot of former portfolio managers started driving Yellow Cabs after that one!

I’ll give you another example.

Until 2007, every computer model in the financial industry said that real estate prices only went up.

Trillions of dollars of derivative securities were sold based on this assumption.

However, all of these models relied on only 50 years’ worth of data dating back to the immediate postwar era.

Hello subprime crisis!

If their data had gone back 70 years, it would have included the Great Depression.

The superior models would have added one extra proviso - that real estate can collapse by 90% at any time, without warning, and then stay down for a decade.

The derivate securities based on THIS more accurate assumption would have been priced much, much more expensively.

And here's the basic problem.

As soon as money enters a strategy, it changes the behavior of that strategy.

The more money that enters, the more that strategy changes, to the point where it produces the opposite of the promised outcome.

Strategies that attract only $10 million market-wide can make 50% a year returns or better.

"
large-systems  investing  stock-exchange 
july 2019 by daguti
Treasury bills, bonds and notes: How are they different?
Treasury Bills - mature in less than 1 year, sold at a discount to face value

Treasury Notes - mature in 2-10 years, pay interest semi-annually (every 6 months)

Treasury Bills - mature in 10+ years, pay interest semi-annually (every 6 months)
investing  Reference  investing-marketing-material 
july 2019 by daguti
Index funds in your portfolio may be an investment bubble that could pop
===============
Originally saw it on https://amp.usatoday.com/amp/1789539001

but that is an AMP page, so I wanted to find the original source.
investing 
july 2019 by daguti
What regular investors can learn from Bridgewater’s stellar 2018 performance - MarketWatch
This spurred me to get working on that All-Weather Portfolio:

‘If you are worried when the stock market goes down and happy when it goes up, it probably indicates that your portfolio is unbalanced. If your income is also tied to how the economy does, you are doubly at risk because your portfolio can go down when your income is worst, which is scary.’
investing 
july 2019 by daguti
My Plan For The Next Great Market Crash | Seeking Alpha
me-stuff = This article was eye opening for me.

archived here: http://archive.is/pTfMN

This is what I sent to Sean McCloskey when I emailed him this article:

---------------------
This was the article I was telling you about in the elevator.

https://seekingalpha.com/article/4274779-plan-next-great-market-crash

I'm familiar with dividends from your writing in MWW, so when I saw this, I was really shocked at the example they give… even in a historic down market that took 25 years to recover, your portfolio went up more than 400% just from the power of dividends!



Some things they don’t mention, but I think help accentuate the point even more:

- By doing DRIPs instead of trying to chase stock prices, you eliminate your trading costs (not to mention losses from picking clunkers)

- In a down market, without adding a dime, your portfolio already increased over 4x in value – when the market actually goes up, your gains multiply again from owning so many more shares.

---- UPDATE: Basically, this means whether prices are up or down, you have reason to smile: when prices are down, your dividends have more buying power. When prices are up, your investment is worth more.

---- I was shocked to see that STWD with an 8% dividend only went up about 44% in stock value from 2009 - 2019, but when factoring in DRIP, it performed almost as well as VTI. (VTI = $257%, STWD = 216%)

------- ------- -------
(THIS IS A SECOND FOLLOWUP EMAIL I SENT HIM)

As someone who has only started paying attention to the market in the last year or so, I’ve had a pretty basic metric:



I compare every recommendation to putting the same money into VTSAX (Vanguard’s Total Stock Market Mutual Fund)



However, one thing I’ve failed to do is calculate each recommendation with its dividends, because until I read that article, I didn’t fully “get” the power of dividends.





I kept thinking dividends were just “pocket change” – a little bonus you get for owning a stock, but nothing that would make a big difference. (how wrong I was)





I don’t know why it didn’t hit me that a 2% dividend yield is just as much “cash in the bank” as if the stock rises 2% - and you get the choice of taking the cash or doing a DRIP.

(honestly, I feel dumb that it took me this long to get it)

Or in the case of your STWD recommendation from March: https://sevenfigurepublishing.com/2019/03/25/real-estate-riches-on-the-cheap/

I stupidly compared side by side charts of STWD vs VTI.

Since 2009, I saw that STWD went up in value 44% and VTI went up about 3x.

It seemed like a pretty simple math to me --- but when I finally did the math with dividends included, STWD is almost equal – and that is guaranteed income.

Or in other terms: with an 8%+ dividend, the stock could not go up a single penny and your money would still double in 9 years.

I think I finally “get it” and it’s incredibly powerful.
---------------------
investing  investing-ideas  me-stuff 
july 2019 by daguti
What are the downsides to a Fixed Indexed Annuity? : personalfinance
Annuities do not sound like a good idea.

Also see this, linked from the comments:
http://www.finra.org/investors/alerts/equity-indexed-annuities_a-complex-choice

Also see this:
https://old.reddit.com/r/personalfinance/comments/b6zzfw/my_mother_in_law_wants_an_annuity_how_do_i_find/

specifically the comment by purpletree37:
"Find a fiduciary RIA (not a broker, not an insurance company), and they can build a custom fixed income portfolio of bonds, treasuries, and dividend stock that pays out like an annuity, but at a lower cost. This is what my company does, and people pay a fraction of what they would lose to an insurance company."
investing  Reference  health-aging 
june 2019 by daguti
Is there a FIRE personal savings flowchart? : financialindependence
archived at: http://archive.is/KmnaX

This page links to:
https://www.reddit.com/r/personalfinance/comments/4gdlu9/how_to_prioritize_spending_your_money_a_flowchart/ (archived: http://archive.is/Q7lOo)

which links to:
https://i.imgur.com/u0ocDRI.png (archived: http://archive.is/MDYHg)

I saved the flowchart in \dave\media\pictures\money & finances\F.I.R.E. financial planning flow chart.png

There is another chart in there that is similar, but slightly different, I believe.

=============

UPDATE 2019-10-14:
Someone is trying to create one for FIRE principles:

https://old.reddit.com/r/financialindependence/comments/dhr5kp/an_attempt_at_the_fire_flow_chart/
investing  money  Reference  me-stuff 
june 2019 by daguti
7 Steps to Pick the Best Stocks - Seven Figure Publishing
A followup with more depth from the SFP article I bookmarked 2 days ago.
investing  investing-ideas  Reference 
may 2019 by daguti
Short Term Bullish : wallstreetbets
Delete this after you check how the market performed June 2019
investing 
may 2019 by daguti
How to Find Quality Stocks - Seven Figure Publishing
- Cash Flow (not "income")
- businesses that have not only survived, but thrived in good times and bad
- S&P Quality Rating of B or better
- consensus earnings estimates are rising
- profits expected to grow
investing  investing-ideas  Reference 
may 2019 by daguti
FAQ about my precious VTSAX • The Power of Thrift
archived at: http://archive.is/M3NPv

Below might be older info, as this site says VTSMX has been closed and VTSAX minimum is now $3000:
https://www.hisandherfi.com/vanguard-vtsax-vtsmx-vti/

===== Original article text below =====
"More of your questions answered! By me! Mostly about VTSAX.

VTSAX is, of course, my one true love and where I invest the majority of my money. It’s the total stock market index fund from Vanguard. Read the post I’ve linked above if you’re still confused.

Should I wait to buy VTSAX until it’s on sale?

Yes. You should absolutely 100% wait until the price of VTSAX is on sale to invest your money. That’s when it makes the most sense mathematically.

Except you will have no idea when that time will be. Maybe my faith in humanity is misplaced and maybe something absolutely catastrophic will happen in early November and maybe the market will crash and maybe there will be a prolonged sale.

Or, maybe Google will unveil a seriously world-changing new artificial intelligence product tomorrow and maybe *today* is the lowest point of the market for the next 140 years. I don’t expect the price of VTSAX to ever go back down to $20/share, but nobody knew when the last day of that $20 price was.

You can spend hours looking at 52 week highs and lows, studying charts and trying to find patterns, poring over financial disclosures and guessing on timing and prognosticating which companies will be desired and ground-breaking. And people do! They tout their investment knowledge and charge people money to use their guesses.

If you knew when to time the market, you’d be a fast billionaire. And psychic.

www.thepowerofthrift.com
I found my navel ring using a pair of my earrings.

My advice? Throw it in as soon as you can and practice the fine art of shrugging. Yes, maybe the market will drop, but you’ll still be getting dividends in the interim. And the point is that you’re still contributing to it as you build your early retirement sanity account. You’ll get the sale if it goes down and, if you don’t need the money in the short-term, you’re not really losing anything.

I know that’s easier said than done because, hey, it’s your money! You spent a lot of time earning that money! You could buy so much ice cream with that money! But that’s the difference between normal people and people like you and me. We think long term and big picture.

I don’t have $10,000 to invest in VTSAX.

VTSMX is the same as VTSAX and you can buy it if you have $3,000. It has a slightly higher expense ratio, but Vanguard automatically transfers you to the cheaper VTSAX when you have $10,000. Because Vanguard is a gentlemen like that.

What’s the difference between VTSAX and VTI?

The only difference between VTI and VTSAX is how you buy it. I found VTSAX simpler, so that’s what I went with. My money strategy was to set it up and forget about it. VTI doesn’t let you transfer money straight from your paycheck, but my darling VTSAX does. VTI also doesn’t let you buy fractional shares. I didn’t want to deal with cash sitting around in my account or doing math. No math with VTSAX!

www.thepowerofthrift.com
Luray caverns

VTSAX only contains U.S. companies. Don’t you want something international?

Many U.S. companies have international subsidiaries, customers, workers. It’s a global economy. Synergy. Other buzz words. Seriously though, I am happy with the amount of international exposure I have with my sweet VTSAX.

What about retirement accounts and tax implications? Do you recommend buying VTSAX in a Roth IRA?

Sigh. Taxes are boring and I’m too lazy to do research for things that don’t affect me. I’m sorry. Working as a lawyer, I didn’t qualify for a Roth because of my income.

My gut says yeah, use all the tax stuff you can. Roth sounds like a great deal. You pay taxes on it up front and your money then grows tax-free. And VTSAX is my favorite, so if it’s possible for you to use that, I have no objection.

I didn’t have a Roth, but I loaded up my 401(k) every year I worked to lower my taxable income. Not with my gorgeous VTSAX because it wasn’t an option through my employer, but with Vanguard Target 2045 Retirement Fund, which was. Good enough.

Broad, obvious advice: if your employer matches anything, take advantage of that. Free money, right? You are all probably sophisticated enough to know this already.

Are you a shill for Vanguard?

A shill? Ha! I wish! That would be so fun. But, no. No. We’re not even in the same league. If we were in high school, Vanguard wouldn’t even notice me, much less ask me to dance. I looked up the word shill to make sure I understood the question.

How do you track your expenses? What do you think about Mint?

I tried Mint years and years ago, but I found it didn’t categorize my expenses correctly and it couldn’t link to all my accounts. I use Google Docs Excel. Check out this post if you want to see the actual spreadsheet template.

Smoking a Cuban in Cayman. Spoiler: It was disgusting.
Smoking a Cuban in Cayman. Spoiler: It was disgusting.

It seems kind of risky to invest your money in just one place.

But my one place is one very special place. With VTSAX, I’m betting on everything. I’m betting that civilization prospers and that people will continue to invent and create and strive. That’s my optimism.

Everyone has different levels of risk assessment. Personally, I find alternative strategies risky. I’ve investigated and dismissed the alternatives. I’m not going to buy gold bars and a safe deposit box. Real Property doesn’t appeal to me even a tiny bit right now. Bonds might sound fun in a couple of decades. Cash will only dwindle.

The riskiest idea of all: paying someone else to guess the future. I may hand over a few dollars to a persuasive reader of palms at a carnival for laughs, but I’m not going to pay someone to guess which investments are going to perform well. Actually, I probably wouldn’t even do the carnival thing.

A rising tide lifts all boats and a tsunami destroys all ships. If VTSAX were to collapse, there is something seriously bad happening in the world and I’m guessing I’ll have bigger things to worry about.

I can’t tell you what to do, only tell you what I do. If it helps, cool beans. John Bogle came up with the idea, but I’ll accept your appreciation. If it doesn’t help and you disagree, the beans are still cool."
investing  investing-ideas  Reference 
may 2019 by daguti
Finstead - 19 Important Things You Should Know About Vanguard VTSAX Before You Buy It
Comparison of VTSAX to VTI.

Some things I just learned:

- VTSAX has a minimum (this site lists it as $10K, but Vanguard says $3k. My guess is it changed since this site was updated.)

- VTI is more tax efficient (why, though? Didn't Vanguard patent the tax-free mutual fund?)

- VFIAX is something to look at when you have enough for a 10K (or $3k? minimum)



Also see email from Alex around 2019-05-22
and email I sent to Steve and Alex around 2019-05-20 or 21
investing  Reference  difference-between-or-comparisons 
may 2019 by daguti
Remember the 'All-Weather' Portfolio?
This is the portfolio Ray Dalio talks about in "Money: Master The Game"
investing  people-ray-dalio  investing-ideas 
may 2019 by daguti
Mutual Fund vs. ETF: What's the Difference?
"ETFs can cost far less for an entry position—as little as the cost of one share, plus fees or commissions. An ETF is created or redeemed in large lots by institutional investors and the shares trade throughout the day between investors like a stock. Like a stock, ETFs can be sold short. Those provisions are important to traders and speculators, but of little interest to long-term investors. But because ETFs are priced continuously by the market, there is the potential for trading to take place at a price other than the true NAV, which may introduce the opportunity for arbitrage."

" ETFs are more tax efficient than mutual funds because of the way they are created and redeemed."
investing  Reference 
may 2019 by daguti
Use This Simple Math Trick to Book 80% Gains - Seven Figure Publishing
"The key is in that phrase I mentioned from the S&P: selling losers and buying winners. It’s ironic, but the most successful long-term strategy any fundamental investor can point out is a technical approach known as trend following."

"For trend followers, there are basically two steps to figuring out what to buy: identifying when a trend begins and identifying when a trend ends. To do that, we don’t rely on emotion or opinion. Instead, it’s critical to base any investment decisions on a set-in-stone system.

Today, Jonas is going to help us construct a quick one using a bit of simple math.

You’ve probably heard of a moving average. In short, it’s the average price of a stock over a set number of days.

“A moving average is a stellar indicator of trend,” Jonas notes. “If it’s moving steadily higher, then we know that a stock is generally moving higher over the period that we’ve set. More importantly, we can define moving averages mathematically, so, we’ll go ahead and use a moving average as our trend indicator.”

For simplicity’s sake, we’re going to apply it to just one investment: the SPDR S&P 500 ETF (NYSE:SPY).

So let’s create a quick rule. If SPY moves above the 300-day moving average (a long-term average that approximates a year’s worth of price data), we’ll buy, Jonas explains. If it falls below the 300-day, we’ll sell."
investing  investing-strategy 
may 2019 by daguti
Finally hit $100k on Robhinhood after 2.5 years of investing (87% total gain). Started out knowing nothing about the market. Here are my biggest lessons of pains and gains I learned : RobinHood
Archived on http://archive.is/6k5gM

"At the suggestion of some famous investors, I started reading voraciously about Charlie Munger, Buffett, and John Bogle. Three of the most influential books I’ve read are:

The Warren Buffett Portfolio: Mastering the Power of the Focus Investment Strategy

Common Sense Investor by John Bogle

The Psychology of Human Misjudgment (long talk transcript) by Charlie Munger"


The whole post in case it disappears:

"Here’s my story of going from $53k -> $100k in two years. I started out losing a ton of money in the first two years, then stopped trading and read a ton of books about focused investing. I use Robinhood for about half of my investments.

I started investing on Robinhood around August 2015. At the time I was a naive and stupid and knew nothing about the “stock market” or what a brokerage was. When Robinhood became available, I figured I’d give it a try.

Almost immediately, I started losing money. At first just few hundred, then thousands. By the end of one year, I was down about 50%, having lost $3k out of the $6k I had invested over the past year. I had invested in high risk stocks like Valeant (hit by scandal) and Atlas Resource Partners (went bankrupt) after reading articles that hyped them up. I learned about Valeant from reading about Bill Ackman (one of my first investing “heroes”) and learned about Atlas from a derivatives trader.

It was very painful, mostly because I had around $15k of student debt left I still needed to pay. Undeterred, I decided to get serious about investing and stop falling for “get rich quick” stocks. At the suggestion of some famous investors, I started reading voraciously about Charlie Munger, Buffett, and John Bogle. Three of the most influential books I’ve read are:

The Warren Buffett Portfolio: Mastering the Power of the Focus Investment Strategy

Common Sense Investor by John Bogle

The Psychology of Human Misjudgment (long talk transcript) by Charlie Munger

From Common Sense Investor, I learned that most funds underperform the S&P 500 index, and that small expense ratios and eat away at your gains over time. The best investing strategy for a normal investor is to just buy S&P 500 index and hold it for a long time. (FYI the book tries hard to sell Vanguard 500 index, which is probably the best in the market but do know that the author, John Bogle, is the founder of Vanguard). In the second, I put all my money into index funds and various ETFs and stopped trading in Robinhood. Sure enough, at the end of year 2, I not only gained everything I lost back, but I was up 10% from my original investment.

From Warren Buffett portfolio, I learned that even though Index funds are great for most people, it’s possible to beat the market through very focused and disciplined investing. (I realize this is a controversial topic, debating whether or not you can beat the market, so I won’t make a definitive opinion. I’ll just opine on what worked for me). As Bufett said in the book, paraphrased: “If you were building a star basketball team, would you sell your best players who’s winning all the points simply for the sake of diversification?” Most of what Buffett advocates to the general public is diversification, which works well for most people. But he’s also clear about one thing: “If you know what you’re doing, diversification makes no sense.” In fact, he also preaches and practices focused investing, which is spending a ton of time in select a few stocks that are high quality and holding them for a long time.

I started reading tons and tons of financial reports. I bought a printer and printed out statements of companies I wanted to buy every quarter, and started to build my “star team.” My biggest holdings have been:

Atlassian ($TEAM). This is my single biggest investment, with 40% of my money here. It’s a team productivity enterprise tech company. If you work in tech, you know this company is impossible to replace. They are to work today as Microsoft was to work 20 years ago. They’ve been profitable every single quarter since founding, and spend very little on marketing. All growth from word of mouth and very sticky.

Chegg ($CHGG). Second largest investment, with 30% of my portfolio. A near-monopoly in the education space. They provide students with online homework help, tutoring, textbooks, etc. They went through a painful reorganization few years ago. Stock went down to $4 due to the fact that revenue went “down”, but it’s just a change in recognition. In effect, they went from spending $90 to make $100, to spending $15 to make $30. It looks like revenue dropped from $100 to $30, but it’s a way better model. After the profits kept increasing, I started buying at $6 an soared to $17 today.

Square ($SQ). 15% of my portfolio. I don’t know much about them, this is a complete yolo

Amazon ($AMZN). I bought this after reading about Sam Walton and how he built Wal-Mart into an empire. It sounded exactly like what Bezos is doing. Sell things at a volume and sell things cheap. Preference may change, but there are 2 things that customers will always want: cheaper, faster

Other smaller ones: CTrip, Facebook, Wells Fargo (right after scandal), JD)

Some failures:

Valeant Pharmaceutical ($VRX). Bought at $73 and sold at $8. Thought they could turn around the company with a new CEO, but they didn’t. I think this may be worth revisiting in a year or so.

Atlas Resource Partners ($ARP). Complete fail. Bought at $3 and went to $0. In every earning cal up until bankruptcy, the CEO promised everything was going well land their turn around was solid. He even made a memorable quote: “Those who wait for lemons to grow, get to enjoy the quenching taste of lemonade” or some shit like that.

Other smaller fails: DTO, Valeant call options,

Some of my lessons:

7.) It’s unhelpful to think of your stock in dollar amount, because it changes so much. I imagine it as buying a % in a local restaurant. Once I find a restaurant that consistently attracts customers and is growing, I want to keep it and just let the owner do its thing. I don’t care what people are offering for my share on a day to day basis

6.) When the market goes down, you think you’re prepared, but you’re not. Few months ago during the mini crash, I lost $18k in one day, and could barely focus on anything at work. I ended up deleting the app to stop myself from freaking out. I didn’t end up selling anything, and bought more

5.) The more research you do, the more enduring you are when the market is down. Knowing that the company has a steady streaming of increasing revenue is one of the most comforting thing when the stock is going down

4.) it IS possible to beat the market by focusing your investment. But for most people, index investing is great.

3.) It’s easy to get emotional. Read Munger’s talk “The Psychology of Human Misjudgment”, and you’ll realize that most things we do are not rational. Don’t trust your own feelings. Once you make a decision, the most difficult thing becomes not acting again. It takes a ton of effort to do nothing, and that’s why most people lose money

2.) The reason index funds do well is because it gives larger and more successful companies more weight. It also periodically get rid of bad companies in the index by the virtue of the fact it can only contain 500. This simple natural selection beats stock picking most of the time

1.) Last and my biggest lesson: progress isn’t linear. After first year, I was down 50%. After two years of investing, I was basically even. The last 6 months contained 90% of all my gains. If you’re looking for steady progress, forget about stock. Just buy bonds and stick to your safe 3%. If you’re willing to hold for many years, buy stocks

Anyways, sorry for the long story. Hope some of it is helpful. And if you lost money, don’t be discouraged or emotional. Learn and read voraciously, and know that our brains measure progress by continuously improvement, even though progress are made by sudden leaps and bounds."
investing  books-to-buy  getting-started 
may 2019 by daguti
Dogs of the Dow
Good to know:
https://www.wallstreetphysician.com/dogs-of-the-dow-review/

"The average annualized return of the Dogs of the Dow strategy from 1996-2016 is approximately 9.1%, compared with 8.4% for the Total Stock Market Index."
investing  Reference  investing-strategy  investing-ideas 
april 2019 by daguti
Investors are still really scared, and that could drive stocks higher
"Paulsen looked at the ratio between the price of gold relative to the overall Commodity Price Index, which he divides by the price performance of small caps stocks relative to large caps — what he calls a behavioral-based “worry gauge.” Investors tend to flee to safe-haven gold when risk is off and turn to more aggressive investments like small caps when they are confident."

IMPORTANT:

The only time in the last four years the indicator has dipped below its highest quintile was when the stock market peaked in September 2018.
investing  investing-indicators 
april 2019 by daguti
The Strange Marriage Between Stock Prices and Recessions: Recessionomics, Pt. 3 | ThinkAdvisor
"To recap, in Part I we learned that the yield curve is an unreliable predictor of a recession. In Part II, we found unemployment is a better indicator that a recession is present rather than a predictive tool. In this article, we will look closely at how stock prices react prior to, and during a recession. We will also consider the role GDP plays in stock market performance."
investing  investing-yield-curve  Reference  investing-indicators 
march 2019 by daguti
Free Historical Stock Market Calculator | Noel Whittaker
I first found this when I wanted to see what Michael Bloomberg's 1973 severance package ($10M) would have been today compared to the $55 Billion he is worth in 2019.

Turns out $10M invested in 1980 (this calculator only goes back that far) with an average annual return of 10.xx% would have been $4.xx Billion, an almost 14x difference.
investing  tools 
march 2019 by daguti
inheritance problem : financialindependence
books-to-buy = "A Simple Path to Wealth" JL Collins

A lot of other great advice: "If you can" by William Bernstein, also "The Four Pillars of Investing" by the same author

Read all the comments, especially this one below:

Reference = A great set of tips for dealing with an investment advisor in the top comment by ExtraneousQuestion:

"Hi, licensed financial advisor here at a wealth management firm. I will give you no securities advice due to regulations on public forum.

But I will give you some tips at dealing with advisors, and what to look for.

1 ask how they are compensated.
You can do this on the phone even. Any advisor worth their salt will be comfortable explaining this, and a good one will bring up possible conflicts of interest ahead of time. I don’t personally think you need to limit yourself to fee only, but I understand the rationale behind that sentiment.

2 if an advisor tells you what to do or not do with your money, like it’s theirs - fire them on the spot.
A good advisor does not remove your agency in decision making. I started in the industry seeing a lot of these types of guys and I have no idea why anybody would do business with them. A good advisor should be able to challenge you without being aggressive or confrontational, for the purpose of understanding and strengthening your investment philosophy, not to belittle you. Beware the short tempered advisor, this guy is entitled and will be a pain in the ass.

3 if you tell the advisor what you need help with, and they start talking about products, just leave. Especially if they say bring up a “variable annuity” anytime at all within the first meeting.
A good advisor should have a process in place involving asking plentiful questions about your preferences, past experiences, concerns, objectives, risk tolerance, family, etc - it should feel like it’s not JUST about money but about YOU as a person., and what YOU want.

They should also create some personalized analysis based on this information, that they show you and interpret. And they should get through the themes, issues, opportunities in your plan at a high level BEFORE ever mentioning a specific product. Product early means product pusher. Don’t bother.

4 if the advisor gets annoyed when you ask questions, leave. As advisors it is our privilege to serve you, and present you insights to improve your situation. If you feel talked down upon, intimidated, shamed, or god forbid you are yelled at. Give them the finger. Mind you a good advisor may also have some hard questions for you, but a difficult question and a surly attitude are not the same thing.
5 it should feel like working with your estate planner. To solve a problem, and walk you through their rationale. Professional. Transparent. And they should advocate for you and recognize discomfort before you have to voice yourself - and pause to check in with you.
You should feel like a human interviewing someone for a partnership, not a piece of prey.

I know advisors are not popular on this sub, but I get upset listening to your story. You deserve better than what it seems you’ve received. I’m sorry."
money  investing  Reference  books-to-buy 
march 2019 by daguti
Airbnb and Slack are considering untraditional IPOs that box out bankers like Spotify did - Recode
Interesting, I didn't know this could be done:

"When Spotify decided to sell its shares in an IPO directly to regular people rather than to a pre-chosen group of its bankers’ friends — in a move known as a direct listing — it portended an inflection point in the relationship between Silicon Valley and Wall Street."

But it does seem to have a major downside:

"A company that directly lists doesn’t create or sell any new stock and therefore doesn’t raise any money — it’s just current shareholders selling their preexisting shares — which means it’s an option available only to the few who don’t need cash."
investing  world-records  interesting 
march 2019 by daguti
STOCK ALERT: Time to Slash-and-Burn - Seven Figure Publishing
"Stochastics are a time-tested technical indicator used by chartists since the 1950s to gauge how overbought or oversold stocks are. They are simply a measure of price momentum, comparing the current price with a range of prices in the recent past.

The indicator oscillates between zero and 100. When the indicator crosses up from below 20, it’s a buy signal, which was flashed at the bottom in late December. And when stochastics cross down from above 80, it’s a sell signal."
investing  Reference  stock-exchange 
february 2019 by daguti
2 Reasons To Love the Way the U.S. Economy Is Performing - Seven Figure Publishing
For me, the jobless claims are useless as an indicator. If you look closely at that chart, the jobless claims spike DURING the recession. I can't see any way this chart is useful for predicting a recession, rather, it only seems to be useful for retrospectively saying "Yep, there was just a recession."

HOWEVER, the other chart, "Real Gross Domestic Product", DOES seem to be useful as a predictor - albeit a predictor with a lot of false positives. Might have to use it in conjunction with some other things -- remember Ray Dalio's video "The Economic Machine" (https://www.facebook.com/raydalio/videos/608897499531929/)

I uploaded a high resolution version of this image to my Imgur: https://imgur.com/WevG6ig

and it is also available (without the red and green highlighting) here:
https://myf.red/g/mqrP

keywords:
fred , https://fred.stlouisfed.org/graph/?g=mqrP&utm_campaign=myfred_referrer&utm_medium=exported-chart&utm_source=direct
investing  stock-exchange  Reference  investing-indicators 
january 2019 by daguti
Sitting on $2 million and don't know what to do with it. I want to simplify everything. : financialindependence
frameworks-for-investing = See top comment:

"(Thank you for the gold, strangers! 😍)

To add to the conversation, I’d structure this in the following way:

Take a breath, definitely. This is an incredible lucky twist and you need time to think about what to do with your life. FIRE? Sure. Keep working as usual? Fine as well. Don’t change too many things at once. And feel confident: the fact that you are having this conversation puts you in the 1% of the US citizens with sane ideas about finance.
Make totally sure that you don’t have shitty investments with high fees or otherwise things that will hurt you if left on autopilot while you figure things out.
Make sure that your taxes for the windfall are paid. Really sure. I’d get a CPA to do your taxes this year, by the way.
If you have other family (children/wife/etc) think about creating a trust. It will help your heirs and prevent some legal headaches.
Figure out how much you need to live for year. Put half of it in a high-yield savings account (Ally or others) at 2% and make it your emergency fund.
Multiply your annual cost by ten and build a “cushion”. That’s a bonds portfolio with e.g. 1/3 short-term, 1/3 intermediate and 1/3 REIT bonds or international ones. You can get a more complex one (I have six in mine), PM if you want the details and symbols. You will live off that cushion when the markets are in chaos, so you don’t need to touch at all your stock. Every past market crash fully recovered in less than that, so you can live off a very stable, slow-growing fund while the bulk of your investments are in the stock market recovering.
Put the rest in something like 2/3 VTSAX and 1/3 non-US markets (I don’t have the symbol here). You can get WAY more sophisticated and get a more granular diversification but you don’t need to. Configure everything to avoid reinvestments, as you would otherwise be selling what you just bought.
Once a year evaluate your yearly expenses and verify where you have to withdraw from: if you are losing money in your stocks, keep getting money from your cushion. If otherwise they have fully recovered and the stock is rising, think about getting some of the cream on top for the year and start rebalancing to fill your cushion and your positions so you have the right percentages and still 10 years to live off your cushion.
You can make this way, way more complicated but here are my 2 cents to avoid overthinking it.

Congratulations on your Christmas present. I only hope that it was not because you lost someone close that you loved, and this is bittersweet.

Edit: CFP->CPA, it was very late and my brain didn’t work."
investing  frameworks-for-investing  money-retirement-early-fire 
january 2019 by daguti
How to Calculate a Holding Period
Very interesting how it's not as simple as counting 365 days. On the basic end, you start counting the day after you acquire a stock and you stop counting on the day you sell it.

On the more complicated end, you have DRIPs, in which you receive new shares of a stock that you already own. The new shares are considered to have been owned since the time you held the old shares... and other fun tricks, like stocks earned through inheritance: no matter how short the dead person held the stocks, you are considered to have held them more than a year once you inherit them.
investing  Reference  taxes-personal-how-to-do 
january 2019 by daguti
Share Class
Wow, I remember when Alex told me that Bob @ BOA/Merrill Lynch was not managing my money for free, I did not believe him. He said to look it up. I never got around to it - or maybe I did, but what I found was information on Stock Share Classes, which has nothing to do with fees charged by your broker.

He should have clarified that what he was talking about was Mutual Fund Share Classes, which means:

- Class A: Up front charge of 2- 5.75&

- Class C: Yearly charge of 1% for as long as you hold it, with most having a stipulation that you must hold it for a year or it triggers some other kind of charge. (in other words, no way of getting out of it by trying to exit before the year is up)
investing  Reference 
december 2018 by daguti
Dow Jones - 100 Year Historical Chart | MacroTrends
Interactive chart that lets you choose your date range and it shows you the DJIA for that time period. Amazing that it went from 7500+ in 1966 to ~700 in 1982. WTF happened during that period!?
investing  Reference 
october 2018 by daguti
Tesla short has a change of heart ahead of TSLA earnings... duh - Electrek
investing = "There seems to be no solid ground in the world of stocks. Unlike technology, where something works or doesn't, eventhing in investing seems to be conjecture and then the market does the opposite anyway. Everyone has a strong opinion and then is wrong. Where do you put your money when there seems to be no universal truth?"
companies-tesla-cars  investing 
october 2018 by daguti
Market Breadth
I first learned about this when I was copy editing Agora / SFP's website and saw an article titled "Stock Market Halitosis" with a bunch of (what ended up being) plays-on-words referring to "stock market's bad breadth" -- I thought it was a misspelling, but it ended up being a play on words.

UPDATE 2019-08-26: In reading this now, I see that breadth is actually an important thing to know, because:

"An index may be rising yet more than half the stocks in the index are falling because a small number of stocks have such large gains that they drag the whole index higher. Market breadth indicators can reveal this and warn traders that most stocks are not actually performing well, even though the rising index makes it look like most stocks are doing well."
definitions  investing  investing-indicators 
october 2018 by daguti
Investment Calculator
How much will $x be worth, given y% return, z years? (you can even add annual deposits along the way)

Alex shared this tool with me when I asked him what I should do with the offers I keep getting for 3113.com.
tools  investing  Reference 
september 2018 by daguti
Warren Buffett doesn't beat the market anymore — Quartz
It's not that his performance has slipped. It's that because he's been so successful in the past, he now has such tremendous resources invested that in order to earn some small % of return, he needs to make a massive amount of dollars.
people-warren-buffett  investing 
march 2018 by daguti
"A road map to million dollars worth by the age of 35" - Growth Hack World
"A road map to million dollars worth by the age of 35

Your mileage may vary, but this is how I recommend you to do (the earlier you start, the better):

A. First: drastically reduce your expenses

- Sell all the stuff you do not need (TV, Xbox, PlayStation, etc.).

- Quit shopping for the sake of shopping.

- Do not smoke, drink alcohol, do drugs, etc.

- Remove the Facebook, Instagram, Twitter, Pinterest apps from your iPhone so that you can only access them via your desktop computer (you will automatically reduce your wasted time by at least 90%).

- Sleep 8 hours a day, consistently.

- Meticulously decide whether you really need new stuff to buy.

- Learn how to do your own taxes. Once you understand how taxes work, you can get an accountant (and be able to check what is he/she doing with your tax filings).

- Ditch fake friends, high maintenance girlfriends/boyfriends, and all other people that actively undermine your efforts. A positive attitude from the people you surround yourself with is essential.

- Never shop for food when hungry. Buy in bulk. Learn how to cook your own meals (do not eat out often). Limit red meat if possible, and prefer beans and vegetables instead.

- If you can, use the public transport or a bike. Accordingly, consider ditching your car.

- Do not upgrade your smartphone every year.

- Always pay your credit card in full at end of every month. Avoid loans and credit (i.e. paying interest to fuel expenses) like the plague. If something is out of the budget, you must come to terms with the fact that you cannot afford it: move on. We do not need 90% of the things for sale out there, anyway.

- Get a good health insurance with above-average coverage[1]. Having a good health insurance will shield you (and your bank account) and allow you to avoid going bankrupt in case of medical emergencies (which occur very easily). Exercise (weight-lifting or anything else at least moderately stressful for your body) regularly: at least twice a week.

- Be curious about the world out there. Try to read many books (mostly non-fiction), especially in sectors out of your normal studies. Innovation comes from the ability to correlate information between different realms of knowledge.

B. Second: drastically increase your income

- Study Game Theory[2] before looking for a job. After the Wikipedia page on Game Theory, I recommend you to start from The Joy of Game Theory (I have no affiliation with the author and I do not profit from linking this book in any way): you will understand how in a market of naturally conflicting interests, game theory and strategic moves will allow you to think rationally and achieve oftentimes optimal results with much reduced effort. This will be a critical advantage for you down the road.

- Study and understand the business niches where — based on your skills — you can get a better paying job that does not send you to mental hospital. Acquire new, useful skills (you do not need a degree for many highly important skills relevant in today’s job market). Relocate abroad if necessary. Do not be scared. Be available to do risky jobs that your peers are not willing to do.

- Learn how to solve problems at work. While everybody at work just does barely “enough” (and limit themselves to complain when things don’t work), you will quickly become essential as one of the very few who solves problems. This works even if you are fat, ugly, inexperienced, old, young, whatever. Problem-solvers are golden nuggets in any business environment and rewarded accordingly.

- Once you become one of the few “essential” employees, you will employ Game Theory to force your employer to give you a better salary, better bonus, better exposure with clients, etc. Do it nicely but effectively. With a smile, you will be able to submit your employer into a so called “dominated game”[3] where the only possible outcome is for you to get a better salary, etc. If you are an effective problem solver and still do not climb the ladder, it means that the opportunities at your current workplace are hopelessly limited. Do not settle like most people around you will do, just find a better job.

- Immediately set up an emergency fund in cash of approximately 6 months of salary (3-months if you are particularly good at avoiding emergencies). This is cash that must be readily available for emergencies: not to buy you a BMW. Do not stupidly inflate your lifestyle and continue to be cautious with the way you manage and spend your money.

- Open a Stock Account with your bank and every month save 20%/30%/40%/50% of your income and invest it in a low commission S&P500 ETF by Vanguard[4] (like “VOO” or “VIG”: google them). Never touch this investment for at least the next decade. Save mercilessly and invest every month “no matter what”. Google: “dollar cost average” + “compound interest” in order to understand the benefits of this double-pronged strategy (in short: you will beat 90% of all the Fund Managers out there). Set up a bare minimum that you must invest every month and deposit it into your stock account at the beginning of each month so you will not be able to spend it to buy useless stuff. This will do marvel to your sleep and to your income as long as you will be consistent, patient and NOT touch your investments for a decade or so. As soon as your career will progress and you will earn more, this strategy will also prevent you to fall into the “increased lifestyle” trap (where you spend more money on useless items just to show your status to your peers or because you become lazy).

- Once you have 200k/300k USD invested in a Vanguard ETF like VOO or VIG and they are pumping approximately 30k USD a year as compound interest and dividends (which you are NOT touching at any cost), you are able to focus your attention in order to start a side business to corroborate your income.

- Work at night, on weekends and holiday to kickstart your side business.

- Focus on getting the first 3 customers for your new side business (friends and family do not count). Once you make 3 customers (amazing achievement!), focus on how to make 30. If in 3 months you are not able to reach the 1.000 USD / month threshold, you must focus on finding better cash-flow generating business ideas: don’t fight on price, the margin is essential. Learn from your mistakes (you will do many). Take low hanging opportunities that others don’t see. Study quirky, even awkward & neglected market niches, that oftentimes are a goldmine for those able to satisfy them.

- Once your side business starts making 10k USD / month you can start evaluating if your current salaried job is worth the effort / time / hassle. If not, make the jump to the self-employed world and focus on increasing the income from your side business to 30k USD / month.

- Sooner rather than later you will be a millionaire. The first million is by far the absolute hardest."
lifehacks  personal-development  investing  tips-n-tricks  life 
february 2018 by daguti
Why You Shouldn't Just Invest in the S&P 500
Diversification is 3 dimensional:
1) across assets (different stocks and bonds)
2) across markets (different asset classes)
3) across time (dollar cost averaging, not buying nor selling all at once)
investing  investing-diversifying 
september 2016 by daguti
Book Review: The Investment Answer | Marotta On Money
I got this audiobook from the library. Most of what they say in this review I already know, but #5 about rebalancing is something I need to look into.
investing  books-i-own-and-must-read 
september 2016 by daguti
Who can you really trust? | tonyrobbins.com
Take particular note of the questions below. My questions: Is having a fiduciary and investing in index funds mutually exclusive? Is having a fiduciary and using WealthFront mutually exclusive?
============
STEP 1: Visit the link here http://findanadvisor.napfa.org/home.aspx. This will allow you to search the country for any fee-only advisor you choose.

STEP 2: Ask better questions, get better answers.

Once you’ve found a fiduciary, ask these 6 clarifying questions to make sure you find someone who has your best interest at heart.

What percentage do you charge as a fee?
Are you affiliated with a broker dealer?
How are you paid?
Are you paid anything above the advisory fee for any investment?
What kinds of alternative assets do you bring that no one else can?
Can I lose money?

STEP 3: Align yourself with a highly skilled fiduciary.

Beware – not all fiduciaries are created equal. The below scale will help you differentiate.
============
people-tony-robbins  investing  tips-n-tricks 
august 2016 by daguti
Episode 688: Brilliant vs. Boring : Planet Money : NPR
"In 2006, Warren Buffett posed a challenge. He bet that the smartest hedge fund managers out there couldn't beat the world's simplest, most brainless investment. In this show, we tell you who's winning."
people-warren-buffett  investing  predictions  audio 
march 2016 by daguti
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