Saving for the future

[sugarwood]

It's funny that no one here is taking Tabs' bait.

Everyone is inured to the broken clock guy calling for meltdown each the last 30 years.

Telling this kid to go be a Bretton Woods gold bug is just bad advice.
He has a day job, and is not looking to start writing a tin foil bear market guns and ammo blog.

Stick with index funds and control your spending.

Tabs, just curious, when was the last time you were fully allocated in the market?
How badly have you been burned shorting the markets over the last 10 years?

[RKDinOKC]

Saw a documentary about Arnold Swartzenager some years ago. Probably about half way thru his movie carrier. Most of Arnold's fortune was made from his investments not the movies he was in. Arnold commented that he invested in high risk investments. Not total risks but the kind where only one in ten had to be a profit. Joe Weider whom Arnold help start his gym equipment by investing in him said that Arnold invested what he made from body building and always had a 5 and 10 year plan. Even before he won his first contest.

He invested in property, products, and people not the "market."

To me the market (when invested conservatively) is just a way of keeping your money's purchasing power. It will earn basically the increase in the cost of living. So what you can buy for $100 saved today will most likely cost the $400 that $100 has grown to at retirement.

[tabs]

Originally Posted by RKDinOKC

Saw a documentary about Arnold Swartzenager some years ago. Probably about half way thru his movie carrier. Most of Arnold's fortune was made from his investments not the movies he was in. Arnold commented that he invested in high risk investments. Not total risks but the kind where only one in ten had to be a profit. Joe Weider whom Arnold help start his gym equipment by investing in him said that Arnold invested what he made from body building and always had a 5 and 10 year plan. Even before he won his first contest.

He invested in property, products, and people not the "market."

To me the market (when invested conservatively) is just a way of keeping your money's purchasing power. It will earn basically the increase in the cost of living. So what you can buy for $100 saved today will most likely cost the $400 that $100 has grown to at retirement.

Not true...

[tabs]

Originally Posted by sugarwood

It's funny that no one here is taking Tabs' bait.

Everyone is inured to the broken clock guy calling for meltdown each the last 30 years.

Telling this kid to go be a Bretton Woods gold bug is just bad advice.
He has a day job, and is not looking to start writing a tin foil bear market guns and ammo blog.

Stick with index funds and control your spending.

Tabs, just curious, when was the last time you were fully allocated in the market?
How badly have you been burned shorting the markets over the last 10 years?

You can not argue with REALITY.

Fully allocated since 1996.

I do not short...covered options is about as daring as I have been.

Just because the ship has not sunk yet, does not mean that it isn't headed under the waves. It is a process...a progression of events. A Chinese Petro Yuan would just be another shoe falling..in America's decline.

If the Chinese are successful in creating a Petro Yuan BACKED BY GOLD....the USD will not be worth a warm bucket of spit. As there will no longer be a need to hold USD's in reserve. You will then see a flood of USD's coming out of the mattresses and hitting the street. When that happens the US economy tanks..

I am thinking that there MIGHT be a reverse split, turn in $7 and get one new one...However the debt will not be re-calibrated? That will then make the debt unmanageable? Credit will dry up in America... The debt will then mean something in the USA.

[john70t]

Germany wanted its gold back from below the towers but we said 'no'.
So where is it? In the cough middle east? Held by cough allies? And that's cough ok?
Why is the fed allowed to be unregulated?

The 60's was half a decade ago when we were supposed to get started on energy self-sufficiency.
But our automobiles are doubling in size and weight along with our diabetic bellies.
Everyone expects to live like a rock star. It's cultural.
Medical, tort, min wage, slothfulness, housing costs from prop taxes all contribute to high business overhead costs which drive jobs outside the border.
The 2-4% charged to merchants by credit card companies add instant inflation.
When all the components of a business are more expensive, the final product will be more expensive.

Meanwhile China has invested in hydroelectric, solar, and other efficiency by necessity.
Long game.

[masraum]

Originally Posted by NoRush993/951

Nothing wrong with doing nothing at the moment. Build up your cash, you'll get your day to put it in play.

There is no substitute for compound interest. Waiting with a boat load of cash is not a good way to get compound interest.

[masraum]

Originally Posted by sugarwood

Stick to index funds.
Do not hire any FP.

Originally Posted by Por_sha911

Even though you have maxed out the 401k match, you can still put more into the 401k without the match. Costs will be low and investments are usually safer than going to an investment "counselor" who turns out to be the Wolf of Wall Street. Diversify with different levels of risk.

You can put more into 401k pre or post tax. There are some lines of thought that say that having some 401k or IRA post tax and some retirement savings pre-tax is a good hedge against the future.

Not all financial advisers are crooks, you just have to know how to find a good one.

If they are free, then you're likely to get screwed. Their pay has to be coming from somewhere, and if it's not you paying them, then it's someone else and that someone else's interests will be covered rather than the investor. Likely from incentives to have folks invest in stocks abc and xyz whether those are good performeners or maybe in managed funds whose high fees are paying their salary.

Find a financial advisor who has a fiduciary responsibility to the investor. You'll have to pay them. It's good to get to know them and find one that is a good fit to your personality and risk profile.

For more info on picking a financial advisor...
How to Choose a Great Financial Adviser | Paul Merriman
He has a free ebook. You do give him your email address. I have and I don't get spammed by anyone other than getting an email from him every 2 weeks. I'm not affiliated other than believing what I read. He has some books on Amazon that you can buy, but he donates all proceeds to educating folks about finances.

[masraum]

Originally Posted by RKDinOKC

Saw a documentary about Arnold Swartzenager some years ago. Probably about half way thru his movie carrier. Most of Arnold's fortune was made from his investments not the movies he was in. Arnold commented that he invested in high risk investments. Not total risks but the kind where only one in ten had to be a profit. Joe Weider whom Arnold help start his gym equipment by investing in him said that Arnold invested what he made from body building and always had a 5 and 10 year plan. Even before he won his first contest.

He invested in property, products, and people not the "market."

To me the market (when invested conservatively) is just a way of keeping your money's purchasing power. It will earn basically the increase in the cost of living. So what you can buy for $100 saved today will most likely cost the $400 that $100 has grown to at retirement.

For 95% of folks who invest, this is probably true. There's a reason for that. Most folks think they know what's going on or know company XYZ, so they pick particular companies to invest in. You can never know what a company will do in the future (Just ask the Enron folks). I read one of the dummies books year ago, investing for dummies or investing in the market for dummies or something like that. The guy in the book promoted really knowing a handful of companies (5 or 6, I think) and investing in those. The problem is that you can't REALLY know any company so you are speculating and not very diversified. But if you invest in an index fund (whether mutual fund or ETF that tracks an index) you are investing in potentially hundreds or over 1000 companies. So if one or 5 go tits up, you are covered by the others.

Besides being diversified (by owning large cap growth and value, small cap growth and value and all 4 of those split evenly between domestic and foreign, you are pretty thoroughly diversified. You can get all of those in low cost index funds. Not only that, but if you watch the trends, it's not unusual to see domestic go down and foreign go up or large cap go down but small cap go up, and so on. These trends balance out your risk and return. By owning the various value indexes, you make more than by owning the growth, but by owning both together, you actually don't increase your risk.

The number one issue that causes most folks to make substandard amounts of return however is by investing emotionally. Invest for the long term. THe market tanks and people wail and gnash their teeth because they "lost money". No, you haven't lost any money unless you sold your stocks. But that's exactly what a lot of folks do. They watch a market fall, and sell because they are afraid of losing money. They then wait for a while to make sure the market has fallen and watch the market go back up (waiting for another dip, no doubt) and then when they are sure that it's going up, they buy back in. The problem with what tactic is that we all know that you should buy low and sell high, but they just sold low and bought high. When the market tanks, leave your sheisse alone. The market will go back up in a month, or a year or 3 years, and 5-10 years later, you'll be up from where you were. Or, you could sell when it tanks and buy back in after it's been going up for a while and after the market has been going up for a few years, you will hopefully have made back the money you lost by selling low and buying high.

Don't be an emotional investor.

Pay off your debt (or don't get into it).
Have 3-6 months of your monthly expenses in "savings" just in case.
Invest in diverse assets and leave the emotions out of the investing.

[Charles Freeborn]

Originally Posted by tabs

That is the past dynamic...From the 70's through the 00's housing proved to be a piggy bank for home owners. A real gud investment. Prior to the 70's housing was an overhead expense a place to live. With modest appreciation. You have to understand we was in an INFLATIONARY ENVIRONMENT. Today it is quite the opposite, it is a deflationary environment even though they try as they might to resuscitate inflation with massive debasement of the currency. This alone shows how massive the forces of deflation are.

In 2012 RE was crumbling...in September the FED embarked upon QE3 a tenet of which was to BUY 45B a MONTH in Mortgage backed securities. By doing that it relieved the pressure on banks to liquidate their massive inventory of foreclosed homes. Thus shortening the supply of homes on the market which stabilized RE prices and allowed them to recover. The FED eventually bought around a Trillion USD of mortgage backed securities. Which they is still sitting on.

without the requisite inflationary forces in the market RE will return to being a overhead expense with modest appreciation.


Your take is a gud example of a mindset that is based upon past experiences which are no longer operable. You expect past experience to continue on as if nothing has happened in the meantime which has changed the dynamic. 2008 changed the dynamic.

Not in my town. Values are still climbing at an alarming rate. That said it's all about location and a quality house.

[Charles Freeborn]

Originally Posted by wdfifteen

Read this first.

The joys of being a landlord, Part927

As a landlord of commercial property I can tell you it is not all roses. We were called out at 1 AM January 1st because someone broke down the building's front door. The building is in a great neighborhood - right across from a church.
Last month our tenant noticed wet carpet in an office room adjacent to the HVAC room. Found a small leak in the AC evaporator tray that had been going on for who knows how many months. Had to replace drywall and carpet and treat wall studs for mold. RE is not a hands-off investment. Be prepared to be involved 24/7/365 if you really want to make money at it. Stuff happens at the most inconvenient times.

I'm not talking about rentals - that's a different dynamic. I'm talking about buying a house in a good neighborhood, improving it, living in it, taking all the tax benefits and when market conditions favor, sell for profit and repeat the process. Working your way up the food chain in a methodical and realistic way.

[sugarwood]

Originally Posted by tabs

Fully allocated since 1996.
.

So, you're a tin foil hat gold bug who is waiting for the fiat currency to be devalued into Weimar kindling, yet are fully invested in the market?

So what's your actual point in this thread? The kid wants investment advice. Spare us the mouthful of hackneyed internet hyperbole, and just tell him to be "fully allocated", just like you.

[Por_sha911]

Originally Posted by 944 S2

1) I would not invest if you still have debt
2) mutual funds are a great choice like a Roth
3) don't take advise from broke people

+1 on all three! (especially #s 1 + 3)

[Gogar]

I suggest you listen to TABS and just convert all your money to cash since it's useless anyway soon enough, and then burn it in your fireplace. It's what all the smart people are doing.

[Bob Kontak]

Double your money by taking out the bills in your wallet and fold them in half.

Don't buy shiet.

You need a couple of pots, some paper plates and a mattress. Get out of debt. Don't buy a damned thing on time.

Edit: One motivational speaker said get a house where if you push the key in the front lock too hard it busts out a back window.

[aigel]

Maxing out as in putting 18.5k or whatever the limit is per year? Or maxing out as in putting enough to get the maximum match from your company?

I would not buy yet more stock. As others have mentioned, I'd focus on real estate aka your own place. Save for a good down payment and then buy something that is a good starter home in a nice area for you to live in and eventually rent out (in case you have to move or want to upgrade later). Pay that house off ASAP, once you have no rent or mortgage, you will really have some options ...

G

[Por_sha911]

Originally Posted by aigel

maxing out as in putting 18.5k or whatever the limit is per year? Or maxing out as in putting enough to get the maximum match from your company?

I asked the same question earlier with no response.

[tabs]

If ya wana be invested in Equities buy Big Cap dividend paying stocks in a cross section of sectors that are off their highs in their trading ranges. I would look to being defensive or recession proof. Consumer staples, energy..big oil etc...then start to $$ cost average...

Anyway you wana cut it you have an income stream from the Dividends and over the long haul capital appreciation.

That is about as safe as you can get..if they fall then nothing will be left standing anyway.

[tabs]

Originally Posted by sugarwood

So, you're a tin foil hat gold bug who is waiting for the fiat currency to be devalued into Weimar kindling, yet are fully invested in the market?

So what's your actual point in this thread? The kid wants investment advice. Spare us the mouthful of hackneyed internet hyperbole, and just tell him to be "fully allocated", just like you.

I do not own any Gold...

The point is that you had better be very clear as to what the state of the Global economy is before you do anything. You had better understand the RISKS involved. You can not afford to be in denial or delusional.

[masraum]

Originally Posted by tabs

I do not own any Gold...

The point is that you had better be very clear as to what the state of the Global economy is before you do anything. You had better understand the RISKS involved. You can not afford to be in denial or delusional.

No gold, folks, it's all in shoes, suits, ties and dragon azz jeans. That's how crazy uncle tabby invests.

[Crowbob]

Bottom line is this: you wanna get rich.

How do you get rich?

1) Earn more

2) Spend less