Author Topic: I am investment stupid, seeking guru  (Read 3355 times)

sowantere

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I am investment stupid, seeking guru
« on: September 01, 2012, 05:57:24 PM »
Here is the deal.  I am 33 and everything is paid for.  I have a 401k.  I want to retire at 45.  I want to be FI before 42.  I make 75k a year and have a 50% plus savings rate.  I want to start investing in taxable accounts in november.  Ill have 20k to start.  My wife is getting a nursing degree in 20 months which will double our pay.  I want to learn before she starts nursing how to smartly invest our money as that will get us over the hump to early retirement.  So my question is.  What books did you read to learn to interpret graphs and trends?  What have been our victories and mistakes and why?  Was it luck or did you learn something repeatable?  What software or site do you use to search for high dividend stocks and percentage return trends? 

Thank you for your time.  I have learned a lot from this site regarding frugality.  My current spending is around 2000 a month.  I hope to push this down to 1500 for a family of 3.  That is the basic number the investments will have to cover. 

Sowantere.

James

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Re: I am investment stupid, seeking guru
« Reply #1 on: September 01, 2012, 07:45:54 PM »
You will probably get some good book ideas, and I'd definitely read Early Retirement Extreme and other good books, but more importantly I'd just start back at the beginning of MMM's blog and work your way through.  One word will take care of the taxable accounts - Vanguard.  Or to increase that to three - Vanguard index funds.  :)


But keep reading and studying, I've been reading and studying for over a year and am just starting to feel settled and comfortable with plans going forward.

arebelspy

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Re: I am investment stupid, seeking guru
« Reply #2 on: September 01, 2012, 07:59:51 PM »
Agree with James on Vanguard.  Read JLCollins' blog and follow all his investment advice.  Follow MMM's lifestyle advice.

You should easily be able to hit FI in a decade with your savings rate (50% which will go up to 75% when your income doubles).
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

FactorsOf2

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Re: I am investment stupid, seeking guru
« Reply #3 on: September 02, 2012, 06:27:40 AM »
I'm very excited for your family, your decision to educate yourself about investing is the exact right step after mastering the high savings rate as you have!

Was it luck or did you learn something repeatable?  What software or site do you use to search for high dividend stocks and percentage return trends? 

This sounds a lot like active investing, which I'd urge you to avoid.  All debates about the validity of EMH aside, only someone with a lot of extra time, interest and background should be considering anything other than a pretty standard buy-and-hold of index funds, IMHO.

For this 'passive' strategy I'd start over at bogleheads.org (Jack Bogle is the founder of Vanguard Group and the originator of the index fund concept). They have a great Wiki, here are some entries that might get you started:

http://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_philosophy
http://www.bogleheads.org/wiki/Investment_Policy_Statement
http://www.bogleheads.org/wiki/Asset_Allocation
http://www.bogleheads.org/wiki/Principles_of_Tax-Efficient_Fund_Placement

This last link regarding tax efficient fund placement is CRUCIAL and I think it's easy to overlook. In the long term tax drag can seriously damage your growth.

Petruchio

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Re: I am investment stupid, seeking guru
« Reply #4 on: September 03, 2012, 02:03:06 PM »
I largely concur with James above. Index funds are king as far as utility/time ratios go. I know many people investing in Berkshire Hathaway. But if you have enough time and money, I would suggest for you to find your investment strategy, be it growth, growth dividends, REITS or what have you, and learn it inside and out. I, personally, am studying growth dividends at dividendmonk.com.