Why? That one will never do any better than the market. Isn't the goal outperforming the market?Quote:
Originally Posted by Irving
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Why? That one will never do any better than the market. Isn't the goal outperforming the market?Quote:
Originally Posted by Irving
No, trying to outperform the market is almost guaranteed to fail.Quote:
Originally Posted by HoneyBadger
This documentary is next on my list of research. I think it's something you'd be interested in. I'm going to try and watch it tonight and I'll let you know. See if you can watch it as well. It's called The Retirement Gamble and is about the money we lose to fees.
http://www.pbs.org/wgbh/frontline/fi...rement-gamble/
Why would you think that? Millions of people do it every day. I've done it. You can do it to. It isn't some sort of magic.Quote:
Originally Posted by Irving
Dave Ramsey actually responded to this recently in one of his episodes. It's basically a big old crock of shit. And coming from PBS, we shouldn't really expect anything less.Quote:
Originally Posted by Irving
Quote:
Originally Posted by Irving
Found the show:Quote:
Originally Posted by HoneyBadger
https://www.mixcloud.com/thedaverams...-about-saving/
Scroll down and fast forward to 10:40 and his response to the question goes until about 19:55
I love it when hos quote themselves!
Sometimes, it is necessary for reasons.Quote:
Originally Posted by bogie
How are you doing lately, Bogie?
I haven't watched it yet. I just started it and the very first guy sounded like a whiner so I'll have to see if the rest is as dumb as the first guy.
Oh Jesus, the very first guy is making more than I've ever made in my life and is crying about trying to figure out a way to save only 10-15% of his salary.
With my old job I was able to contribute 13% of my wages. Not so much anymore. Things are a wee bit tighter.
My new goal is to try and save (and invest) 50% of my income. So far it's MUCH easier than I ever imagined it would be.
EDIT: The cutting back spending part is easier I mean.
Yeah, that happens sometimes. It's all about perspective.Quote:
Originally Posted by Irving
That's a gutsy goal. I'll be able to hit 15% in a few months.Quote:
Originally Posted by Irving
I don't see any reason why we can't live off of $3,000 a month (not including what I pay on the mortgage). No car payment and no debt. Shouldn't be a problem except for the mental obstacles, which is the main problem that EVERYONE has with finances.
ENOUGH OF THIS SHIT. Either talk about reloading or STFU
Yeah, that's pretty good. You're making good money and that helps a lot. Our biggest problem is our expenses. Cost of living is stupid expensive here. Utility bills on a house that is 50% as big as our CO Springs house are usually 250-350% higher here. Food is more expensive. Gas is more expensive. Taxes are stupid high. Mortgage on tiny house is high. I'm beginning to regret buying a house here. It was a pretty emotional decision, and probably not a wise one.Quote:
Originally Posted by Irving
Kazoo, eat a snickers.Quote:
Originally Posted by Great-Kazoo
Irv, next time you see Kazoo, steal his leg.
I'm listening to the Dave Ramsey thing right now. So far, just the fact that Ramsey has a product/fund of his own, colors his opinions in a way that make me less likely to take his advice.
He has a fund of his own?? News to me.Quote:
Originally Posted by Irving
Putting 16% of my pay away every month....hope to get that to 20% soon....
Quote:
Originally Posted by HoneyBadger
Yeah, I'm not at all convinced. Ramsey says that the three important points are 1) Actually investing money, 2) the rate of return, and 3) fees. He's putting fees last and saying they are least important with respect to the first two. He glosses right over the fact that fees directly affect the rate of return. In fact, there will be fees regardless of if there is any positive return at all. He goes on to try and vilify people that question high fees as being anti-capitalist (which is completely BS*), then goes on to try and convince the caller that a fund with a front-loaded commission fee of 5% can actually be cheaper than an average 2% maintenance fee. During that whole time, all I could think about is how whatever the performance of your fund, you'd lose 2-5% of the return. He never even really discounts the video because he admits that "a large amount of mutual funds under perform the market, but there are plenty that do better." Okay that's fine, but what are those percentages, and how would you know which funds will perform better than the market until it's too late? The video (and other sources I've been reading) says that 80% of actively managed funds under perform the market. Ramsey doesn't directly dispute that figure, but if those numbers are true, and you don't find out until the end of the year how your fund did, then what is the reason to attempt to beat the market when you have an 80% chance of losing? I believe it all has to do with human psychology where everyone thinks that if they hand the reins over to an "expert" that they'll be okay. On top of all that, the fund manager takes a commission out of YOUR investment every time the fund is "adjusted" (stocks bought/sold). This allows the fund manager to constantly pay themselves commissions out of your money under the guise of "adjusting" the fund for your best interest. But who's really making the guaranteed money here?
For what it's worth, the important part of the PBS video (which I just watched in its entirety) is from 20 minutes to about 40 minutes. The rest of the video is book-ended with the average sob stories of people who've spent their entire lives not saving any money, so when there are market crashes (which every one knows are coming), it completely wipes them out because they had no other savings.
I keep running into people talking about the Vanguard index funds and it really seems to be a fan favorite of the personal finance and early retirement bloggers. One guy even openly talks about how people who first come to his blog think he is just advertising for Vanguard. For others reading this discussion, the idea behind the Vanguard index fund is that the fund has all the stocks in the S&P 500 so the performance mirrors the market, which over the long run, has continued an upward trend since the beginning of its existence. The index fund has low fees because there is no buying and selling of stocks to try and beat the S&P500 because you already own all of those stocks. It's really a buy and hold method that counts investing for the long term, holding on during the ups and downs, and relying on the historical trend of market growth over time.
One interesting thing to note is that the argument for index funds, and against mutual funds is that EVERY mutual fund contains the small print warning of "past performance does not guaranty future performance." So the pro-index people will point out that data shows over the last 25 years (since index funds were created) that only 20% of mutual funds and active fund managers are able to out perform the market as a whole every year, and while a manager or fund may out perform the market one year, there is no guaranty that they will the next year. All while at the same time pointing to the historical graph of the market overall with a very strong upward trend over all of history. The answer is of course that mutual funds don't have all the companies, so just like trying to hand pick stocks, if you were to buy stock in Joe's Discount CFL Bulbs, and the company goes under, you stand to lose 100% of your investment. There is no bounce back because the company is done and the historical time line has ended. Whereas by owning all the stocks in the market, while at times the stock price value WILL drop with the market crashes, the market as a whole doesn't cease to exist and has shown time and time again that it will recover. In addition to that, if the market ever does crash to the point that it is no longer recoverable, then none of your choices will have mattered anyway. That of course is why people deal in precious metals as well. One could argue that if the stock market crashes, metals won't be worth much anymore either. I'm not going to take that position though, because I just don't know. It's no wonder that the early retirement bloggers are all suggesting that compound gains be married to learning to greatly reduce spending habits, because that insulates you from temporary market crashes. If you are only living off of 20% of your income and saving and investing the other 80% (this is actually possible and there are plenty of examples of people who do this and thrive), and then the market has a big crash (which it will) and you temporarily lose 60% of your investments, you don't have to panic as much because the reality is that you're still living off of only 20% of your total income. If you happen to lose your job at the same time, how difficult would it be to find a job at 80% lower income to keep you alive in the mean time? No need to walk away from a mortgage you can't afford or jump off a bridge because your nest egg took a hit.
*I don't like drinking in bars and restaurants. While I may not be able to recreate my favorite restaurant meal at home, and can stomach paying a premium for a meal prepared by someone else, the liquor store sells the EXACT same alcohol as the bar/restaurant for as little as 1/6th of the price. Since there is no benefit of me paying $6 for a bottle of beer at a bar, when I can get that exact same beer for less than $1, I just don't do it. I'm not against the price that bars/restaurants charge for alcohol, I've just made the personal decision to opt out of that. I personally think it's great how much of a profit margin bars make on alcohol. I think the person who invented "table service" is damn genius to get idiots to pay that much for alcohol. I just won't pay it. This is the same argument against fees in mutual fund packages. If fund managers set up a fee schedule and people are willing to pay those fees, then more power to them. It doesn't mean you're a liberal who hates America (as Dave Ramsey suggests) just because you seek to avoid fees.
Finally, I can't contribute much to the reloading discussion because I haven't been paid since the end of last month while waiting for this new job to start, and I still have a tiny amount of consumer debt. Once that all clears up, I'll allow myself to spend, as little as possible, on some projectiles to rebuild my stash for competition this year. In fact, a little bird told me that someone on here is sitting on 12k .223 projectiles they may be willing to let go. I think I'll look into that when the time comes.
Sorry, I read through this pretty quickly, and was thinking he had a fund of his own.Quote:
Originally Posted by HoneyBadger
Quote:
but if you use one of Dave Ramsey's ELPs (Endorsed Local Providers) for a small fee, they will get you set up with good funds that should average at least 3% better than any index.
I was confusing that with this JLCollinsNH article http://jlcollinsnh.com/2012/04/15/stocks-part-1-theres-a-major-market-crash-coming-and-dr-lo-cant-save-you/ where he talks about Dr. Andrew Lo that argues against the buy and hold strategy, all while suggesting the best way to insulate yourself from the market is to buy and hold. At the end of the article he has a follow-up where a commenter points out that Dr. Lo has his own mutual fund products, then in another update that Dr. Lo's fund actually folded after a few years of under performing the market. I've been doing a lot of reading and things are starting to bleed together.
I apologize for the long post that was not reloading related. Writing it all out helps me to process everything to solidify my plan of attack for the future.
Does this mean you guys are dating now?
We would, but I don't want Kazoo to feel like a third leg.
Hah. Excellent.
We were talking about naming chickens to be allowed to keep them as pets and my wife suggested we name one of them Barred Rock Obama. We laughed at that for about five minutes straight.
Yo Ho's!!!
Just a heads up Stickers are in!
https://www.ar-15.co/threads/154496-...47#post1959747
A lot of those costs are tough (but not impossible) to reduce. The tougher it is to reduce costs the better you know you're doing at least. I don't know how the market is out there, but would it be at all reasonable to rent the house you bought out there and just move into a rental yourself? Immediate concerns would beQuote:
Originally Posted by HoneyBadger
- if your mortgage won't allow you to rent for a certain amount of years.
- you'd have to pay capital gains taxes once you actually sold the house since you didn't live in it for at least two years.
- the renters could cause damages beyond the already thin benefit of having rented the property.
Since you will have to be out there for at least the years, you could consider renting the last year if it turns out the market is on the upswing again. Since property values and rent process tend to rise together, you'd have more of a chance at making money, and more protection from renter damage. That's of course if there is another real estate bubble building in such a short time from now.
WTF There's advertising pop-ups in PWT now!!Quote:
Originally Posted by Mazin
Name them for what they areQuote:
Originally Posted by Irving
Sunday dinner
robbie roaster
carmela casserole
bobby beer can
AND BAM 29,560Quote:
Originally Posted by fly boy
Damn Irving, I didn't budget myself enough time before work to respond to your novel. I think you are still making a few incorrect assumptions, but most of your concerns are valid. I'll respond when I can. It might be in a few hours (if work is slow) or it might be later tonight.
Thank you for this good discussion. It's always good to question your own premises and discuss new ideas.
It's nice to discuss stuff to see what works for who. As I've previously mentioned, and as Ramsey has said, the most important thing is that you've funded your accounts. As a result, your ahead of the game. I'm basically starting at zero and trying not to screw up any more.
This thread is starting to suck.
Don't worry, there are 8 hours left to make fun of Kazoo and make dick jokes before HB gets back to respond. Maybe he'll respond in the long term precious metals thread.
Oh Great Kazoo - I think you shorted yourself by about 4000 posts.