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DeepInThought 4 years, 6 months ago.
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It does this automatically for you…in the advanced options tab there is a post retirement investment return % you can type in. It assumes you are earning that % on your total net worth, its not assuming you just go 100% cash with a 0% return the day you retire. It has the default % set a little lower for post retirement vs pre-retirement under the assumption you are going to be more conservative post retirement. I don’t think there is any way to perfectly simulate dividends with this calculator but its pretty neat to see how increasing your savings a few %, decreasing your retirement spending, or working/retiring a few years later/sooner can ultimately effect your nest egg.
Awesome thank you. Yeah this is fun!
I literally mean in the middle of no where ? My plan is to buy some cheap land somewhere around 500-1000 acres, build a shack for staging, and start building a home with my own two hands. I will be growing my own food; i’ve already started developing some green housing techniques, and i’ve figured out how to make green housing in canada in the winter releatively cheap. Electricity will most likely be from geothermal, and i’ll trench some fibre optic lines to my property and gets some awesome internet for those rainy days. When all is setup, i will have no real dependencies on the rest of the world… so if feminists go on a crazed manhunt to exterminate the men of the world… it won’t really effect me. As a secondary goal, if all goes well, i will build extra houses; as when you exclude labour and already paid land costs from a house, the price drops to $50-100k for some very nice buildings. Maybe get some friends to volunteer to help subsides the growth. From there, start renting out to people and building a community; thus creating my own little society – someone brings up their mangina bulls~~~, “here you go, 1 month notice; bye bye!” I doubt i will have the energy to proceed with the secondary goal; but you never know ? “Why leave society?” So i don’t have to deal with their s~~~. No feminism, no manginas, nada. There are also no alternative countries that you can just move to; to avoid this s~~~. “I’m planning some awesome sex and travel escapades to Asia for when I retire” I have no need for sex; infact, if anything i want to avoid having my entire life revolve around it as i want my life to have some meaning.
Wow, that’s ambitious- good luck! I gotta say, it’s an impressive plan. Looks to be well-thought out. Finances will be under control. You will be busy doing something you like…best of luck! I sure hope I get a visa to visit your community 😛
Nice! Out of curiosity, how do you plan to spend your time once you retire since you plan on not having a wife (since you are a red pill MGTOW)
Every day I go to work, I have about 10 other things I’d rather be doing. Once I’m retired I’ll just have more days to chill at the beach, go fishing, go hiking, spend time with the dog(well probably my next dog 🙁 ), watch crap on Netflix, play video games, go biking, I’ll be able to plan trips and travel whenever I want, more time to go out with friends since I won’t have to worry about sleeping/getting up at a specific time, be more regular at the gym, join more leagues for fun s~~~ like darts, pool, bowling, softball…maybe some other active type things depending how I’m holding up physically in my 50s, maybe practice drinking and driving golf carts around…I mean learn how to play golf, more time to cuss at my computer screen while I dabble in stocks during the day, actually get a full nights sleep regularly…I have no problem occupying my time lol.
Pretty much I’d be doing all the things retired single I’d be doing if I was retired with a wife, just not with a nagging wife to ruin the experience.
Nice! Out of curiosity, how do you plan to spend your time once you retire since you plan on not having a wife (since you are a red pill MGTOW)
So far, only a few major ideas. Looking to find more.
1. Tour the world. I want to climb the pyramids in Egypt, go on an African Safari, trek in Patagonia, ride horses in Mongolia, eat in the finest restaurants in the Eiffel Tower, ride the train in the Chunnel, attend several World Cups, rent a villa for a month next to a private beach in the Caribbean, cross the Bering Strait, live in Alaska, ride the Mountaineer in Canada for the views, explore Amsterdam, visit St. Petersburg-Russia and marvel at the history there. There are also those multi-month round-the-world cruises that stop at many different countries. You get the “ocean voyage” experience. I’d totally do that.
2. Give Back. I want to become a mission trip doctor….basically, these groups go to underserved parts of the US and other countries and provide healthcare that the locals need. I think it would be an amazing experience. Or I could spend the time volunteering with the Peace Corps teaching English overseas.
3. Read. I used to be a voracious reader. I was the kid who always had the latest fiction book, military, historical fiction book in his hand till school picked up. Over time, my “A Series of Unfortunate Events” and “Greatest Escapes of World War II” were replaced by “Principles of Human Physiology” and “Medical Ethics.” I want to go back to those good old days when I’d lose myself in the library and unleash the power of the best graphics card I have: my brain.
4. Eat and have totally random days. I used to play World of Warcraft. Awesome game. I want to be able to just sit down, order a Pizza, and spend a night playing and enjoying this fantasy universe.
5. Become an Airsoft Champion. Europe has some amazing outdoor airsoft fields. I’d love to play all the time. Also makes you fit from all that running.
Just bought $3000 worth of mutual funds that have a pretty strong 10-year performance . Current Age: 24 Target Retirement Age: 45. (Ideally 40). I hope to own my own home and have $1.5M in assets by the target retirement age. Please feel free to share any advice, your own goals, and suggestions!
I don’t have any advice for you, but just wanted to congratulate you on such a great start.
Well done young sir.
I don’t have any advice for you, but just wanted to congratulate you on such a great start. Well done young sir.
Thank you sir!
I’m fairly new at MGTOW, and I am reading along in these financial forums, and I am noticing what seems to me to be a trend, not unlike reading girls’ singles profiles from online dating sites, which consolidate by decades, like so:
Teens: I’m looking for a perfect man with a perfect body, give me this, give me that, make me laugh, treat me, me, me, me, etc…
20s: Not looking for players. NO games! Are you a real man? Looking for a real man who can handle a real woman, etc…
30s: My mistakes make me who I am. Looking for a great lover who will be a great dad to my three children from two different men, etc…
40s: Looking for mature partner to share life with, who appreciates a working woman, gentlemanly, etc…So… I am seeing what I think is a similar trend in these financial forums, and, to be honest, it’s worrying me, for the younger folks.
20s: I am saving for retirement, want to buy property, have an 8% average return in the stock market, 401K plane, etc…
30s: Just don’t get married, alimony will suck you dry. Don’t buy stocks, they are not real, build a business or work from home, buy land, etc…
40s: The system is f~~~ed. It will collapse. National debt. Social Security won’t exist. Regardless of what you do, your accounts will be raided to pay for socialist feminist communist programs. Good luck.Personally, I believe the system is beyond repair and will either collapse (which I prefer), or we will continue a painful decline into third world living, in which case, your retirement will be worthless due to inflation, and you’ll have no semblance of real healthcare. I personally recommend store-of-value assets, but hiding and storing them is key.
I am curious to know if the younger men know how the systems works. I am curious to hear what the older men think about the situation / about what I am saying. Should we tell the younger folks to invest in all the traditional investment vehicles but be very careful, or should we just unload about the ugly reality of how our financial system really works? I don’t want to give bad advice, and I realize most folks are not entrepreneurs. I also don’t want to give what I think is good advice, but at the risk of sounding like a conspiracy nut.
Younger men, are you familiar with the foundational problems in our financial system?
Older gents – your thoughts?Younger men, are you familiar with the foundational problems in our financial system?
Yup, the main issue is that its all FAKE. Only thing that has real value is materials; ie, gold, silver, aluminium, copper; s~~~ that has actual uses will always have a value. The concept of currency makes perfect sense… until you introduce the government and corruption… and banks borrowing money from thin air.
The only thing that keeps currencies working and valued is our faith in it… and in society.
Mind you, i am extremely weird 😛
My Goal: To Leave Society.
I’m fairly new at MGTOW, and I am reading along in these financial forums, and I am noticing what seems to me to be a trend, not unlike reading girls’ singles profiles from online dating sites, which consolidate by decades, like so: Teens: I’m looking for a perfect man with a perfect body, give me this, give me that, make me laugh, treat me, me, me, me, etc… 20s: Not looking for players. NO games! Are you a real man? Looking for a real man who can handle a real woman, etc… 30s: My mistakes make me who I am. Looking for a great lover who will be a great dad to my three children from two different men, etc… 40s: Looking for mature partner to share life with, who appreciates a working woman, gentlemanly, etc… So… I am seeing what I think is a similar trend in these financial forums, and, to be honest, it’s worrying me, for the younger folks. 20s: I am saving for retirement, want to buy property, have an 8% average return in the stock market, 401K plane, etc… 30s: Just don’t get married, alimony will suck you dry. Don’t buy stocks, they are not real, build a business or work from home, buy land, etc… 40s: The system is f~~~ed. It will collapse. National debt. Social Security won’t exist. Regardless of what you do, your accounts will be raided to pay for socialist feminist communist programs. Good luck. Personally, I believe the system is beyond repair and will either collapse (which I prefer), or we will continue a painful decline into third world living, in which case, your retirement will be worthless due to inflation, and you’ll have no semblance of real healthcare. I personally recommend store-of-value assets, but hiding and storing them is key. I am curious to know if the younger men know how the systems works. I am curious to hear what the older men think about the situation / about what I am saying. Should we tell the younger folks to invest in all the traditional investment vehicles but be very careful, or should we just unload about the ugly reality of how our financial system really works? I don’t want to give bad advice, and I realize most folks are not entrepreneurs. I also don’t want to give what I think is good advice, but at the risk of sounding like a conspiracy nut. Younger men, are you familiar with the foundational problems in our financial system? Older gents – your thoughts?
Welcome.
No, I am not familiar with the foundational problems in our financial system- unfortunately, all of my financial education has come from me reading online blogs etc. Our education system doesn’t teach finances…perhaps thats why this country is 20 Trillion in debt.
Would you mind sharing a few resources/books that I can read to establish a foundation in what you are talking about?
I thought this guys article is very well thought out. But ultimately he is still trying to time the market. I agree with him that a downturn is inevitable, but its impossible to time so dont worry about it too much. I will keep buying shares even as the market crashes. I figure I am one more crash and recovery away from early retirement at this point.
Teens: I’m looking for a perfect man with a perfect body, give me this, give me that, make me laugh, treat me, me, me, me, etc… 20s: Not looking for players. NO games! Are you a real man? Looking for a real man who can handle a real woman, etc… 30s: My mistakes make me who I am. Looking for a great lover who will be a great dad to my three children from two different men, etc… 40s: Looking for mature partner to share life with, who appreciates a working woman, gentlemanly, etc…
Manslation: They spend their teens and 20s, their primes, whoring around and making baggage and drama for themselves. When they get into their 30s and 40s and become desperate to settle down, in other words, they hit the wall and realize if they don’t hook a guy and make babies real soon they never will.
When women are in their teens/20s they have a f~~~ it, I’m in it for me attitude, and are just out looking for fun and don’t care if they make drama and baggage for themselves. Does it really surprise you when men come back with the same attitude in their 30s when women want to settle down?
The way I see it…I spent my 20s working hard, getting educated, keeping myself out of debt, getting an actual career, and ultimately setting myself up financially so I can enjoy a good standard of living and an early retirement…if women want equality I’d like to find a woman who has done the same. When I meet a woman that works a 10 dollar an hour dead end job, has had a disgusting amount of c~~~s in her, and has 3 kids that aren’t mine…I don’t want anything to do with her.
Quite honestly if it means the decay of society, I don’t care, it isn’t my problem, and it isn’t my fault. If men shun such women in mass numbers, maybe the next generation will notice and their women won’t have such a high percentage of divorce happy feminist sluts making marriage a terrible, terrible choice for a financially well to due male. If men continue to marry single moms and post wall women when they are out of their primes and done with 10-15 of riding the c~~~ carousel, all we are doing is letting women know such behavior is acceptable, and they will continue to do it.
I just opened my first Vanguard brokerage IRA. I maxed it out. Now I am looking to invest more money with Vanguard but I’m a bit of a rookie with this stuff. I have about 30k to play with and want to make it work for me. What are my best options?
Congrats! What funds did you invest in, if you don’t mind me asking? I’m always on the look out for more choices. You can make an individual taxable account with Vanguard and contribute as much as you want to that, regardless of the amount in your IRA. You can buy the same funds that you bought with your IRA or different funds. I invested in Vanguard Wellington shares: https://personal.vanguard.com/us/funds/snapshot?FundId=0021&FundIntExt=INT The fund managers have done a great job of delivering excellent returns…8.28% since inception, 12.85% 5-year return, 7.8% 10-year. It is 65% stocks, 35% bonds. If you have 50K or more, you can buy Vanguard Wellington Admiral which has an even lower expense ratio.
Thanks! I did not invest in any funds yet because the account is technically not open yet. I gave them all the necessary info and it is being worked on as we speak, but not open yet. I contributed $5,500 to the IRA but as far as what to invest in they told me I would have to wait until the account is completed to begin investing. I do have 50k but I haven’t thought about whether or not I would want to invest all of that into a Wellington Admiral. Can you tell me more about it? I would rather hear the inside scoop from someone here rather than a Vanguard rep. Would you recommend that I do this? I don’t really need that money at this exact moment, and right now its just sitting in a savings account earning chump change interest. I would much rather make it work for me in a better way. What are some of the risks/benefits? I’m pretty new to all this investing stuff. MGTOW helped me decide that I want to retire early so I’m trying to get some accounts set up for dividend earnings and stuff like that.
I thought this guys article is very well thought out. But ultimately he is still trying to time the market. I agree with him that a downturn is inevitable, but its impossible to time so dont worry about it too much. I will keep buying shares even as the market crashes. I figure I am one more crash and recovery away from early retirement at this point. http://www.fifighter.com/finance/stock-investing-thoughts/2015/07/market-cycles-how-to-build-wealth-quickly/#more-17278%5B/quote%5D
Interesting article. Thank you for sharing- I agree with you. Buying shares when the market crashes/everyone is selling/they are dirt cheap is excellent. Then ride the next recovery to the top, sell, and enjoy!
[quote=100997]The way I see it…I spent my 20s working hard, getting educated, keeping myself out of debt, getting an actual career, and ultimately setting myself up financially so I can enjoy a good standard of living and an early retirement…if women want equality I’d like to find a woman who has done the same. When I meet a woman that works a 10 dollar an hour dead end job, has had a disgusting amount of c~~~s in her, and has 3 kids that aren’t mine…I don’t want anything to do with her.
Amen, man. Amen.
Thanks! I did not invest in any funds yet because the account is technically not open yet. I gave them all the necessary info and it is being worked on as we speak, but not open yet. I contributed $5,500 to the IRA but as far as what to invest in they told me I would have to wait until the account is completed to begin investing. I do have 50k but I haven’t thought about whether or not I would want to invest all of that into a Wellington Admiral. Can you tell me more about it? I would rather hear the inside scoop from someone here rather than a Vanguard rep. Would you recommend that I do this? I don’t really need that money at this exact moment, and right now its just sitting in a savings account earning chump change interest. I would much rather make it work for me in a better way. What are some of the risks/benefits? I’m pretty new to all this investing stuff. MGTOW helped me decide that I want to retire early so I’m trying to get some accounts set up for dividend earnings and stuff like that.
Interesting- I was able to open my account online and put money in it from my bank and order shares within 30 minutes. The next day, I woke up to a confirmation e-mail from Vanguard that $3000 worth of shares had been bought. Maybe your agent is taking a longer time since you’re doing it over the phone?
So here’s the thing about mutual funds- plan for long-term. I’m planning on leaving my fund untouched (will only contribute, won’t withdraw) for at least 10 years. If you have that horizon, go for it!
Also, one thing for Vanguard. The reason I invest with them is that they have the reputation of being the good, honest guys in the investment sector. They have the lowest expense ratios (by far), they are owned by their investors, etc. Now whether or not you want to invest all of your 50K into Wellington Admiral depends on your long-term goals. The description of the fund is: Founded in 1929, Wellington™ Fund is Vanguard’s oldest mutual fund and the nation’s oldest balanced fund. It offers exposure to stocks (about two-thirds of the portfolio) and bonds (one-third). Another key attribute is broad diversification—the fund invests in stocks and bonds across all economic sectors. This is important because one or two holdings should not have a sizeable impact on the fund. Investors with a long-term time horizon who want growth and are willing to accept stock market volatility may wish to consider this as a core holding in their portfolio.”
So the first thing I do when I look at a fund is determine what purpose I want to use it for. Is this my “safe” money (I say that in quotes because nothing is theoretically safe). Or is this my “YOLO” money. I’m trying to build up my core holdings right now and my “safe” money. So I do want a sizable amount of bonds, which Vanguard Wellington offers.
I look at the historical rate of return. Average Annual 1-year return for Admiral Wellington is 6.49%, 5-year is 11.37%, and 10-year is 7.93%. That seems pretty good to me.
Next, I want to make sure that the fund managers who have brought the fund this success are still there. In this case, they are (go to https://personal.vanguard.com/us/funds/snapshot?FundId=0521&FundIntExt=INT#tab=2 and click on “Portfolio and Management” and scroll to the bottom). This tells you who the managers are, how long they have advised the fund, etc.
Now, my preliminary research is done. This looks like it is an option. But again, in my case of $3000 and your case of $50000, this is a lot of money. So I did a lot of outside research as well. I went to various forums and just googled “Vanguard Wellington Fund Review.” I looked at what current investors said about it. Most seemed pretty content and described it as an excellent core holding.
So I took the plunge.
By the way, I made $7 in interest on my first day in my $3000 fund :D. This is a big deal for me since I spent a year with my money sitting in a bank savings account and I got $1 total in interest in the entire year. So already my mutual fund is outdoing the bank.
Also, make sure you ask them to reinvest capital gains and dividends so it isn’t realized income and you’re not taxed on it.
By the way, in investing especially, Knowledge is power. You’ve accomplished the hardest step in financial independence by getting started. Just keep that momentum going. Read online about funds. Explore as much as possible. Each bit of knowledge will ultimately help you do well!
Congrats!
P.S.- Go to this link: https://investor.vanguard.com/mutual-funds/vanguard-mutual-funds-list
That has every single mutual fund that Vanguard sells along with its performance/rate of return. That’s how I came across Wellington.
If I had to invest in an all-stock fund/YOLO, I would probably end up with this one: https://personal.vanguard.com/us/funds/snapshot?FundId=0093&FundIntExt=INT#tab=1
Awesome knowledge right there Oneforfreedom. Thank you so much!
I’m a little hesitant to contribute such a large portion of my savings to one of these accounts. However, I’m a little tired with these pathetic bank account interest rates and I want to actually get the ball rolling on my early retirement. I guess now I wait until my account is set up (can’t believe you did it in 30 minutes!?) and when it is, I’ll invest the 50k. Where would you personally recommend I go to read more on the risks/benefits of the Vanguard Wellington Account from actual people who have that account? I’m looking for people who are not already millionaires and just normal working class people like me. MMM?
Also, congrats on that $7! That’s like working an entire hour for free. Must be so cool and I cant wait to start seeing returns like that for myself. I hope you get more in there soon and keep reinvesting it. Now you have $3007 and it will only get higher from there ;).
Awesome knowledge right there Oneforfreedom. Thank you so much! I’m a little hesitant to contribute such a large portion of my savings to one of these accounts. However, I’m a little tired with these pathetic bank account interest rates and I want to actually get the ball rolling on my early retirement. I guess now I wait until my account is set up (can’t believe you did it in 30 minutes!?) and when it is, I’ll invest the 50k. Where would you personally recommend I go to read more on the risks/benefits of the Vanguard Wellington Account from actual people who have that account? I’m looking for people who are not already millionaires and just normal working class people like me. MMM? Also, congrats on that $7! That’s like working an entire hour for free. Must be so cool and I cant wait to start seeing returns like that for myself. I hope you get more in there soon and keep reinvesting it. Now you have $3007 and it will only get higher from there ;).
You’re welcome! Glad it could help. Yeah the $7 is a big deal. My friends were like “it’s just $7 relax” but they didn’t realize something. That $7 will now work for me as well. As Mr. Money Mustache says, each $1 is an employee working 24/7 for you. I just got 7 new employees that will help me recruit even more employees. I look forward to the magic of compounding over the next 10 years! I wish I had 50K. If I had invested that there, then I would have made $115 yesterday :P.
If you’re hesitant about buying only one fund, then don’t! Make investments that make you comfortable. Yes, there is risk in investing, but if you feel hesitant about it, then that’s a sign that you’ll be regretting it when the market performs poorly and you lose money.
If you have a library near you, order a copy of “The Wealthy Barber”- extremely easy to read book. It’s a funny, engaging, and informative start to the world of personal finance and retirement planning. Covers the basics of all you need to know about getting on a path to wealth. I read his chapter on Mutual Funds on Tuesday Night. Wednesday Morning I opened my account with Vanguard. He also has chapters on life insurance, home owning, etc. He’s incredibly motivational and tells you about plenty of resource you can use to further your knowledge. These include:
Money
Forbes
Worth
Kiplinger’s
SmartMoney
Online- MorningStar Rating Service
You mentioned MMM- I 100% agree. I think his website should be mandatory reading for all Americans. Maybe we wouldn’t be $20Trillion in debt and losing our prestige on the world stage if people paid attention to him.
Specific Links that mention Vanguard Wellington (just a quick google found these- you can find A TON more out there):
http://forum.mrmoneymustache.com/investor-alley/help-me-help-my-mom!/
http://forum.mrmoneymustache.com/investor-alley/vanguard-fund-recommendations/
http://money.usnews.com/funds/mutual-funds/moderate-allocation/vanguard-wellington™-fund/vwelx
http://www.morningstar.com/funds/XNAS/VWELX/quote.html
http://remonsy.com/daily/vanguard-etf-funds/vanguard-wellington-analyzed/
http://www.obliviousinvestor.com/vanguard-wellington/
https://www.bogleheads.org/forum/viewtopic.php?t=9229
Good luck!
I am glad to see your back into your Financial topic @oneforfreedom. I would like to add another thing about investing.
Most of the time when one gets involved with any brokerage/managed fund the discussion of RISK / REWARD comes up. Usually the client is presented with some sort of graph where they are asked pick a spot / ranking of ‘their’ risk/reward comfort zone. Very seldom do these people want to talk in terms of Quantitative risk reward values because most people consider the risk / reward to be a relative ‘feeling’ concept.
I am going to suggest that people try to measure Risk / Reward as a Quantitative Awareness. To do this requires that we find some measuring stick of risk\reward. This brings me back to using the SPX or SPY (S&P 500) as a baseline for the measuring stick. Selecting the S&P 500 as a baseline is a good choice because it is a large collection of well capitalized companies. If a company like Pfizer (a member of the S&P) a pharmaceutical company were to accidentally cook up of bad batch of medicine and find themselves in a legal quandary, it would not throw an S&P index out of wack because the other 499 companies would still be solid.
Assuming then that we use the S&P for our measuring stick we would assign it a value of ‘1’. So if the economy were to tank 10% our investments would drop 10% if the economy booms 10% our investment would go up 10%. Applying our S&P measuring stick to our investments would be a simple calculation of tracking the ratio in our investments. If the S&P drops 10% but our investments drop 12.5% we have risk value that is 25% higher than the baseline S&P. If the S&P goes up 10% but our investment only goes up 8% then we have a reward value that 20% lower than the baseline S&P. It is surprising how many people think they are in a safe low risk portfolio only to find they have higher risk and lower returns.
I am hoping that historically your risk/reward values out perform the S&P. But by tracking your investments against a standard is the only way I can think of to objectively evaluate investment choices.
cheers
felix
more throttle ..... less brakes.....
Good luck
Here are my 2 cents
(1.) NEVER get married
(2.) ALWAYS SAVE some money. ALWAYS live below your means. Drive a crappy car, live cheap, save and invest!
(3.) Buy Index Mutual Funds with the lowest fees you can find. Don’t try to beat the market (odds are it will beat you). Just follow the market.
(4.) The market is going to go up and down. Don’t panic when it’s going down, just keep buying more shares in your mutual funds. You will eventually dollar index your way out of any losses. Patience is the key, success comes little by little.
Hey what do you guys think of betterment.com? It is certainly a much easier website to use than Vanguard (especially for a rookie like me) but I also understand its a robo-advising website. Not sure how I feel about that, but at the same time I’m not an experienced investor either so maybe its best I let “someone” else handle it for me right now?
What is the general consensus of Betterment? Being that I’m a novice investor, should I give this a shot? I understand they have higher fees than Vanguard, but it seems MUCH easier to use and understand. Any thoughts?
I am glad to see your back into your Financial topic @oneforfreedom. I would like to add another thing about investing. Most of the time when one gets involved with any brokerage/managed fund the discussion of RISK / REWARD comes up. Usually the client is presented with some sort of graph where they are asked pick a spot / ranking of ‘their’ risk/reward comfort zone. Very seldom do these people want to talk in terms of Quantitative risk reward values because most people consider the risk / reward to be a relative ‘feeling’ concept. I am going to suggest that people try to measure Risk / Reward as a Quantitative Awareness. To do this requires that we find some measuring stick of risk\reward. This brings me back to using the SPX or SPY (S&P 500) as a baseline for the measuring stick. Selecting the S&P 500 as a baseline is a good choice because it is a large collection of well capitalized companies. If a company like Pfizer (a member of the S&P) a pharmaceutical company were to accidentally cook up of bad batch of medicine and find themselves in a legal quandary, it would not throw an S&P index out of wack because the other 499 companies would still be solid. Assuming then that we use the S&P for our measuring stick we would assign it a value of ‘1’. So if the economy were to tank 10% our investments would drop 10% if the economy booms 10% our investment would go up 10%. Applying our S&P measuring stick to our investments would be a simple calculation of tracking the ratio in our investments. If the S&P drops 10% but our investments drop 12.5% we have risk value that is 25% higher than the baseline S&P. If the S&P goes up 10% but our investment only goes up 8% then we have a reward value that 20% lower than the baseline S&P. It is surprising how many people think they are in a safe low risk portfolio only to find they have higher risk and lower returns. I am hoping that historically your risk/reward values out perform the S&P. But by tracking your investments against a standard is the only way I can think of to objectively evaluate investment choices. cheers felix
Nice! Thank you. This will help a lot.
Good luck Here are my 2 cents (1.) NEVER get married (2.) ALWAYS SAVE some money. ALWAYS live below your means. Drive a crappy car, live cheap, save and invest! (3.) Buy Index Mutual Funds with the lowest fees you can find. Don’t try to beat the market (odds are it will beat you). Just follow the market. (4.) The market is going to go up and down. Don’t panic when it’s going down, just keep buying more shares in your mutual funds. You will eventually dollar index your way out of any losses. Patience is the key, success comes little by little.
1. Agreed
2. Agreed
3. Agreed
4. Agreed.
Thank you for the great advice!
What is the general consensus of Betterment? Being that I’m a novice investor, should I give this a shot? I understand they have higher fees than Vanguard, but it seems MUCH easier to use and understand. Any thoughts?
I’ve heard good things about Betterment. Go for it if it interests you!
No, I am not familiar with the foundational problems in our financial system- unfortunately, all of my financial education has come from me reading online blogs etc. Our education system doesn’t teach finances…perhaps thats why this country is 20 Trillion in debt.
Would you mind sharing a few resources/books that I can read to establish a foundation in what you are talking about?
I just tried posting links but my posts are disappearing. Sorry.
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