Posted on 03/29/2015 8:27:28 AM PDT by TurboZamboni
That’s the only lesson you really need.
If it were only that simple. It would help to learn how they took your money. A bum leaves within his means.
At age 20, you could start with 100% S&P index. Then, each year, subtract 2% from the S&P index, and move it to a (mixed) bond index fund. For example:
20: 100% 0%
21: 98% 2%
22: 96% 4%
etc, until you reach age 70, it will be 0% stock and 100% bond. However, this is may actually be too conservative: if you switch everything to bonds before or soon after you retire, you reduce your return too much -- lowering your sustainable withdrawal rate.
You have to find your comfort level at both the beginning (when you start saving) and the end (your life expectancy), and then implement a transition strategy. You can use a life-cycle fund for guidance: look at the ones that match your expected retirement date, and read the prospectus: they will tell you their transition strategy.
This is an easy strategy to manage: every year, re-balance the funds to your desired target for that year. In good years, you'll move stocks to bonds and in bad years, you'll move bonds to stock. If you prefer, you can do it more often, like every 3 or 6 months. My 401(k) administrator will do it automatically, although they won't change the allocation each year.
If you are using an S&P index fund and a mixed bond index fund, you would already be well diversified. If you want more, use a "Total Market Index" fund, which is usually based on something like the Russell 2000 or Russell 3000. The important part is to look closely at the management fees -- they should be very low, as it's not much more than a computer program that closely matches the index. Vanguard is famous for low-cost index funds, and you will usually find them (or one's like it) offered by your 401(k).
I reckon if you are paying interest on credit cards, you are a debtor and living beyond your means.
Imho of course.
5.56mm
From the classic “The Richest Man in Babylon”:
A portion of all you earn is yours to keep.
Wealth consists of unspent money wisely invested.
Put 10% aside every month even if this means adjusting your lifestyle.
I recall the Volkswagen ads of the 1960’s: One billboard showed a 1965 Beetle with the caption, “Live below your means”
Invest 1000 bucks in Cattle Futures.....
The most basic money lesson is understanding math. Numbers do not lie, but sometimes you do have to look at the numbers inside of the numbers. This has served me well over the years.
Sounds like you had a very wise father.
I did indeed.I don't know how old you are but I'm old enough to have had parents who lived through the Great Depression.If you do some research you'll find that many such people rose above their humble beginnings to enjoy financial comfort...as did my Dad.You'll also find that that generation,tempered by hard times,tended to live more simply than might be expected.I'm inclined to think that my Dad's entire generation...or a good portion of it...were "wise" in the same way my Dad was.
That post of mine was a joke about Hillary’s turning $1000 into 100 grand in a dubious cattle futures investment. But yeah, Ted is gonna get my dough!!! Cruz or Lose!
Thank you very much for the extra detail. Sounds like a sensible approach to me.
My dad worked hard his entire life. Some years were good, some were really bad. But he persevered and survived the bad years and made out okay. He died too young.
My mom survived him by 26 years. She still had two nice homes and all sorts of nice stuff, took vacations, etc.
In cleaning out her VERY clean and orderly home (never had a maid), we found a pile of smoothed-out used tin foil stored in the oven!
Those old Depression era habits never died. But she was also very generous to all of us kids, grand kids and charities.
I got some of that handed down to me, but she would be sick to see how I waste money. Of course, not washing out a bread bag and using it over and over again was a waste. (I’m pretty sure she never bought a zip-lock bag in her life.)
My Dad always said “pay yourself first!” And my mom would correct him “No - pay God first - then yourself!”
Yeah, the probability of her pulling that off was less likely than winning Powerball or MegaMillions.
What I think happened: the brokerage looked at price changes over that period, and back-dated trades to take maximum advantage of them. Then, they booked matching trades that LOST money on someone else's account.
If that did indeed happen, then the real question is who owned that other account? That's who would have actually "paid off" Hillary -- the brokerage firm just laundered the bribe.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.