Author Topic: MMM Latest Tweet  (Read 10957 times)

EscapeVelocity2020

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MMM Latest Tweet
« on: July 05, 2015, 10:10:24 PM »
Quote
Can we please get a huge stock market crash one of these days? I was hoping that this Greek drama would bring the rain, but no luck yet.

Hope I copied it in full, correctly.  Is this how people (on the forum) feel?  Just curious.  And why?  Would be nice to know, if it's more than just following the news.  I certainly don't hope for a 'huge stock market crash', but maybe would understand if we had a long moderation.  And the Greek situation is their own issue, nothing to do with the US investing community.  If you are betting heavily on Greek collapse or survival, then feel free to state your case and what investable asset you have chosen.
« Last Edit: July 06, 2015, 01:51:37 AM by EscapeVelocity2020 »

johnny847

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Re: MMM Latest Tweet
« Reply #1 on: July 05, 2015, 10:15:38 PM »
As someone in the accumulating wealth phase, I feel this way. It would mean stocks would go on sale.

The world economy is increasingly more connected. It's not unimaginable that a Greek collapse would have effects rippling across the world including the US.

FIRE Artist

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Re: MMM Latest Tweet
« Reply #2 on: July 05, 2015, 10:16:18 PM »
Hmm, perhaps he is trying to time the market with the proceeds from the sale of his investment property. 

I got to take advantage of the slight dip last week, not due to timing the market, rather I had some funds available and I was waiting to get my quarterly dividends paid out, so just dumb luck.  I wouldn't stay out of the markets in an attempt to time anything.  If things do go south, I will dump my fixed income funds and buy stocks on sale. 
« Last Edit: July 05, 2015, 10:20:28 PM by Diverging Artist »

Kalergie

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Re: MMM Latest Tweet
« Reply #3 on: July 05, 2015, 11:53:38 PM »
I am glad the OP brought this up as I also had a question about it.

I get why a drop in the market benefits people during their accumulation phase. However, MMM is already in his withdrawal phase. Theoretically, he shouldn't have a chunk of cash laying around waiting to be invested, since this would be market timing.

More generally speaking, how does a market slide benefit a retired person?

milesdividendmd

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Re: MMM Latest Tweet
« Reply #4 on: July 06, 2015, 01:01:30 AM »
This just in:  MMM has more income than expenses.....

johnny847

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Re: MMM Latest Tweet
« Reply #5 on: July 06, 2015, 02:56:34 AM »
I am glad the OP brought this up as I also had a question about it.

I get why a drop in the market benefits people during their accumulation phase. However, MMM is already in his withdrawal phase. Theoretically, he shouldn't have a chunk of cash laying around waiting to be invested, since this would be market timing.

More generally speaking, how does a market slide benefit a retired person?

It generally doesn't. In MMM's case....
Hmm, perhaps he is trying to time the market with the proceeds from the sale of his investment property. 

Cycling Stache

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Re: MMM Latest Tweet
« Reply #6 on: July 06, 2015, 03:28:55 AM »
I am glad the OP brought this up as I also had a question about it.

I get why a drop in the market benefits people during their accumulation phase. However, MMM is already in his withdrawal phase. Theoretically, he shouldn't have a chunk of cash laying around waiting to be invested, since this would be market timing.

More generally speaking, how does a market slide benefit a retired person?

MMM is writing for his readers, and the vast, vast majority of them are not yet retired.  So a sharp market decline is good because it allows everyone to buy stocks on "sale."  Of course, the hard part is to internalize that and buy whenever you have money, even if the market seems to be in free fall.  It goes against most people's nature. 

And although MMM doesn't publish it too much, from various comments he's made, it seems like he's making hundreds of thousand of dollars a year from this website.  I would imagine he's investing those proceeds as well.

alsoknownasDean

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Re: MMM Latest Tweet
« Reply #7 on: July 06, 2015, 04:09:53 AM »
It's definitely a double edged sword. For those early in the accumulation phase, a slump may be beneficial as it'd enable one to acquire more for their buck, but for those who are near FIRE, a decent drop in the value of their portfolio may force them to extend their FIRE date.

Considering the other wider impacts I don't think it's a good thing overall.

I made the slightly silly decision of buying in two weeks ago. :)

marty998

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Re: MMM Latest Tweet
« Reply #8 on: July 06, 2015, 05:13:39 AM »
I certainly do not want to see a crash. Would prefer to see low volatility.

If it falls, it falls, so be it. But "crashes" do in fact do damage to the real economy by denting consumer sentiment and demand.

Yes we all want to buy when the market is low, but I think it is poor form to want to see wholesale wealth destruction across the population.

chasesfish

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Re: MMM Latest Tweet
« Reply #9 on: July 06, 2015, 05:40:39 AM »
I wouldn't mind an entire market sale.

Its already been amazing to see some one or two of my favorite stocks get hit by Greece when I can't figure out how they have any exposure.  (ie:  GPC, the parent company of NAPA Auto Parts).  I don't think Greece will effect driving habits in the US.

2Birds1Stone

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Re: MMM Latest Tweet
« Reply #10 on: July 06, 2015, 05:58:49 AM »
I would love a FIRE sale =)

I have been sitting on a big chunk of cash in my IRA/Roth IRA since April when the markets got frothy.

Yea yea, market timing.

Kalergie

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Re: MMM Latest Tweet
« Reply #11 on: July 06, 2015, 06:12:29 AM »
The only ways a retired person would IMHO benefit of or protect from a massive market downturn are:

  • positive savings rate
  • portfolio with non-correlating assets (rebalance after market slide of one asset)
  • market timing
  • portfolio size too big to fail

I think point 1 is a no brainer. Market timing, most of us would agree, is a no go. Thus, if you have a 100% equity portfolio (no bonds), which has been promoted recently by some bloggers, your portfolio better be too big to fail. But in this case, I don't see how one would benefit of a sale? One could use leverage but that would be market timing again...

Thoughts?

Cromacster

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Re: MMM Latest Tweet
« Reply #12 on: July 06, 2015, 06:20:56 AM »
I think it was said tongue in cheek probably to get a rise out of all of his naysayers.  Thats just my opinion.  He is a little more serious in some of his responses.

Quote from: @MrMoneyMustache
Well, I continually buy stocks with ongoing income, and never sell them. So I like when they are on sale.

Quote from: @MrMoneyMustache
I'm always right around 0% cash.. but after my rental house closing in August it'll be a much bigger number (no mortgage).

I'm a red panda

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Re: MMM Latest Tweet
« Reply #13 on: July 06, 2015, 06:40:17 AM »
If you are someone investing, not withdrawing- a crash would be a good thing.

People like to think MMM is retired and onto his withdraw phase, but he is still getting income, from his blog, from his properties, etc.  He isn't retired in the traditional sense of not working, he's retired in the "I can do whatever the eff I want" sense.

okits

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Re: MMM Latest Tweet
« Reply #14 on: July 06, 2015, 06:48:33 AM »
A crash lasting a couple of days or weeks?  Okay.  Would use up my cash allocation and biweekly surplus cash to invest.

Prolonged depressed values?  I get how that's good for those in the accumulation phase but would make my heart a little heavy (plus dent my efforts to show DH that he doesn't need to pay crazy MERs, self-directed investing is feasible.) I'd enjoy slow but steadily rising values over that.

In the end, the markets do not give a crap what I want and I get that.  :)

Insanity

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Re: MMM Latest Tweet
« Reply #15 on: July 06, 2015, 06:50:12 AM »
Since I am not relying on it, a good sale would be nice.

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Re: MMM Latest Tweet
« Reply #16 on: July 06, 2015, 07:07:12 AM »
I am glad the OP brought this up as I also had a question about it.

I get why a drop in the market benefits people during their accumulation phase. However, MMM is already in his withdrawal phase. Theoretically, he shouldn't have a chunk of cash laying around waiting to be invested, since this would be market timing.

More generally speaking, how does a market slide benefit a retired person?

MMM is writing for his readers, and the vast, vast majority of them are not yet retired.  So a sharp market decline is good because it allows everyone to buy stocks on "sale."  Of course, the hard part is to internalize that and buy whenever you have money, even if the market seems to be in free fall.  It goes against most people's nature. 

And although MMM doesn't publish it too much, from various comments he's made, it seems like he's making hundreds of thousand of dollars a year from this website.  I would imagine he's investing those proceeds as well.
How does MMM get hundreds of thousand of dollars a year from his website, I mean he isn't selling anything...who would be paying him that money?

kpd905

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Re: MMM Latest Tweet
« Reply #17 on: July 06, 2015, 07:09:01 AM »
I've only been investing for about 2 years, so it would be nice for all the share prices to drop a bit.  It would make the whole Invest vs. Pay off debt question a bit easier for me.

Ricky

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Re: MMM Latest Tweet
« Reply #18 on: July 06, 2015, 07:30:08 AM »
Just depends on where you are on your FI timeline. If you just now threw everything in the market, it crashed tomorrow, and you just quit today, then of course you're going to be going back to work pretty quickly. However, if you've been investing for the last 5 years, it wouldn't matter. MMM doesn't rely on stock market income and never has, which is why anyone should look closely at their situation before taking huge risks. He's always had real estate or other side businesses (now blog) as his main income. The man never retired, he just happens to have an online business that is very passive.

I don't see Greece causing as big of a mess as the media makes it out to be. NYC alone has 5x the gross GDP of Greece's. There's some much more troubling news in China (basically their market has been crashing for the past month).

johnny847

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Re: MMM Latest Tweet
« Reply #19 on: July 06, 2015, 07:30:49 AM »
I am glad the OP brought this up as I also had a question about it.

I get why a drop in the market benefits people during their accumulation phase. However, MMM is already in his withdrawal phase. Theoretically, he shouldn't have a chunk of cash laying around waiting to be invested, since this would be market timing.

More generally speaking, how does a market slide benefit a retired person?

MMM is writing for his readers, and the vast, vast majority of them are not yet retired.  So a sharp market decline is good because it allows everyone to buy stocks on "sale."  Of course, the hard part is to internalize that and buy whenever you have money, even if the market seems to be in free fall.  It goes against most people's nature. 

And although MMM doesn't publish it too much, from various comments he's made, it seems like he's making hundreds of thousand of dollars a year from this website.  I would imagine he's investing those proceeds as well.
How does MMM get hundreds of thousand of dollars a year from his website, I mean he isn't selling anything...who would be paying him that money?
Go over to go curry cracker and see his latest post on how a website that doesn't sell anything makes money.
Now that is on the order of tens of thousands. I don't think mmm makes hundreds of thousands from his website but who knows. His website is certainly bigger than Jeremy's.

Cromacster

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Re: MMM Latest Tweet
« Reply #20 on: July 06, 2015, 07:43:11 AM »
I am glad the OP brought this up as I also had a question about it.

I get why a drop in the market benefits people during their accumulation phase. However, MMM is already in his withdrawal phase. Theoretically, he shouldn't have a chunk of cash laying around waiting to be invested, since this would be market timing.

More generally speaking, how does a market slide benefit a retired person?

MMM is writing for his readers, and the vast, vast majority of them are not yet retired.  So a sharp market decline is good because it allows everyone to buy stocks on "sale."  Of course, the hard part is to internalize that and buy whenever you have money, even if the market seems to be in free fall.  It goes against most people's nature. 

And although MMM doesn't publish it too much, from various comments he's made, it seems like he's making hundreds of thousand of dollars a year from this website.  I would imagine he's investing those proceeds as well.
How does MMM get hundreds of thousand of dollars a year from his website, I mean he isn't selling anything...who would be paying him that money?

Credit card referrals I Just Gave Up $4000 Per Month to Keep My Freedom of Speech

And depending on how accurate you believe some of the website stats sites:
20,000 unique daily visitors
100,000 daily page views
estimated income of $248.00 per day (I assume this is ad revenue).

http://mrmoneymustache.com.webistat.com/

PARedbeard

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Re: MMM Latest Tweet
« Reply #21 on: July 06, 2015, 07:57:07 AM »
I am also just getting started (and I am a dividend investor rather than a pure index investor), so I'd love to perhaps see a few companies fail more than others. Overall, though, I'd be happy to see if drop a few hundred points and get a "sale".

waffle

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Re: MMM Latest Tweet
« Reply #22 on: July 06, 2015, 09:16:46 AM »
Unless you have a large pile of cash or other liquid assets lying around a short term crash wont do you much good. Without a large lump sum (just sold a rental house) you would need a longer term crash so you could feed a steady stream of smaller investments into that. That longer term crash could have other undesirable affects in your life. How many people here have stories of being underwater on their mortgage because of that crash. The housing market "went on sale" but a whole lot of people didn't see it that way...


ender

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Re: MMM Latest Tweet
« Reply #23 on: July 06, 2015, 09:21:44 AM »
The housing market "went on sale" but a whole lot of people didn't see it that way...

Meanwhile I keep hoping this happens so when we're looking to buy in about a year and a half we can get something cheap... :D

waffle

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Re: MMM Latest Tweet
« Reply #24 on: July 06, 2015, 09:26:01 AM »
The housing market "went on sale" but a whole lot of people didn't see it that way...

Meanwhile I keep hoping this happens so when we're looking to buy in about a year and a half we can get something cheap... :D

There's always winners and losers. Without a crystal ball or time machine you wont know yet which you will be. That's why its best to just stick with the basics. Don't over leverage yourself and you can ride out the bad timing and take advantage of the times you get lucky and get a good deal.

EscapeVelocity2020

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Re: MMM Latest Tweet
« Reply #25 on: July 06, 2015, 09:26:50 AM »
Interesting to see everyone's thoughts, I'm also catching up on RootOfGood's blog and 1500days, and they lost tens of thousands of dollars in June.  It's an interesting community, that people can lose all that money and encourage others to follow in their footsteps :)

I'm a red panda

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Re: MMM Latest Tweet
« Reply #26 on: July 06, 2015, 10:20:39 AM »
The housing market "went on sale" but a whole lot of people didn't see it that way...

We did :)

Now granted, it sucked a bit when we sold our $135k house for $125k; but sure made me happy to buy my new house for $300k; it could have easily cost 100-200k more a few years earlier.


Just depends if you are buying or selling.  If you stay put in a house, I don't see how it matters, except maybe you feel like you got screwed because you are locked in at a high price, but that happens anytime something you buy goes on sale later.

forummm

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Re: MMM Latest Tweet
« Reply #27 on: July 06, 2015, 10:41:42 AM »
The housing market "went on sale" but a whole lot of people didn't see it that way...

We did :)

Me too. Went from renting to buying a great foreclosure for 50% off.

James

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Re: MMM Latest Tweet
« Reply #28 on: July 06, 2015, 10:47:01 AM »
My guess is that by "crash", he meant a nice strong dip. I doubt he meant a panic crash of crushing proportions that hurts long term growth, just a sale on stocks that comes back in the short to mid term since he has money to invest and the market isn't seen as "cheap" right now.


I just took 50k out of the market myself to pay home remodel bill, and will replace it in a couple months. I would love to see a nice strong dip in that time so I can get back in on sale... :D

kendallf

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Re: MMM Latest Tweet
« Reply #29 on: July 06, 2015, 11:32:41 AM »
The housing market "went on sale" but a whole lot of people didn't see it that way...

We did :)

Me too. Went from renting to buying a great foreclosure for 50% off.

Yeah, I paid less for our current house than the list price on a new Lexus IS250, and I think that's the "economy" Lexus.  :-)

Proud Foot

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Re: MMM Latest Tweet
« Reply #30 on: July 06, 2015, 11:46:22 AM »
I too would love for the market to continue to drop over the next few weeks.  I sold everything in my 403b last week to roll it over to Vanguard. Hoping the prices continue to go down so it will buy more shares!

Erica/NWEdible

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Re: MMM Latest Tweet
« Reply #31 on: July 06, 2015, 11:56:50 AM »
Oh, probably the proceeds from his rental sale need to go somewhere, and it's always nice when you can buy low. I wouldn't overthink it.

MMM is not a good example of a FIRE'd individual living on accumulated stash because he just can't stop making money. :D (Not trying to ER Police here, just saying he isn't in a "drawdown" scenario as most of us would envision it.) As of right now, the site is the 3,908th largest website by traffic in the United States. So, yeah, it's really valuable.

Cycling Stache

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Re: MMM Latest Tweet
« Reply #32 on: February 23, 2016, 05:03:23 PM »
And although MMM doesn't publish it too much, from various comments he's made, it seems like he's making hundreds of thousand of dollars a year from this website.  I would imagine he's investing those proceeds as well.

Shameless plug for guessing correctly the income that MMM was pulling from the blog!  ($400,000 per year according to the New Yorker article.)

Okay, now that I've wasted everyone's time, carry on!  :)

workathomedad

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Re: MMM Latest Tweet
« Reply #33 on: February 23, 2016, 05:59:54 PM »
And although MMM doesn't publish it too much, from various comments he's made, it seems like he's making hundreds of thousand of dollars a year from this website.  I would imagine he's investing those proceeds as well.

Shameless plug for guessing correctly the income that MMM was pulling from the blog!  ($400,000 per year according to the New Yorker article.)

Okay, now that I've wasted everyone's time, carry on!  :)

But he donates most of it to buying up forest lands. He's building the world's biggest Mustachian hiking trail system in the US.

act0fgod

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Re: MMM Latest Tweet
« Reply #34 on: February 23, 2016, 06:28:44 PM »
And although MMM doesn't publish it too much, from various comments he's made, it seems like he's making hundreds of thousand of dollars a year from this website.  I would imagine he's investing those proceeds as well.

Shameless plug for guessing correctly the income that MMM was pulling from the blog!  ($400,000 per year according to the New Yorker article.)

Okay, now that I've wasted everyone's time, carry on!  :)

Could you link the New Yorker article.  The New Yorker article I quickly googled only mentions that he owns at $400k house.  $400k per year on a blog seems like a lot more than I would have expected from people signing up for crap off links.

http://www.newyorker.com/magazine/2016/02/29/mr-money-mustache-the-frugal-guru

LipFoliage303

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Re: MMM Latest Tweet
« Reply #35 on: February 23, 2016, 06:40:40 PM »
"He told me that his blog is now earning around four hundred thousand dollars a year."
This is found about 10 paragraphs from the bottom of that new yorker article.
« Last Edit: February 23, 2016, 06:42:29 PM by LipFoliage303 »

Bicycle_B

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Re: MMM Latest Tweet
« Reply #36 on: February 23, 2016, 06:56:09 PM »
I certainly do not want to see a crash. Would prefer to see low volatility.

If it falls, it falls, so be it. But "crashes" do in fact do damage to the real economy by denting consumer sentiment and demand.

Yes we all want to buy when the market is low, but I think it is poor form to want to see wholesale wealth destruction across the population.

I'm hoping that MMM's original comment was somewhat tongue in cheek, intended to jovially nudge people into not worrying too much about when to invest, and to remember that low stock prices are good for investors.  His other posts seem to indicate general goodwill.

Regarding wholesale wealth destruction, it seems to me that true wealth is physical capital (tools, natural resources) and human capital (people with skills), which do not disappear just because stock prices go lower.   

It also seems that both high and low prices have trade-offs.  High prices encourage investment and risk taking because people feel success is in the air, but if prices are too high, some people take foolish risks that should not be taken.  Of course, as the quoted poster implies, low prices discourage people who should take risks, leaving their ideas and talents unused.  Somewhere there might be a best equilibrium that maximizes good risks and minimizes bad ones, but in practice it's probably hard to find.

In any case, low stock prices and economic growth can occur together.  The 1970s had terrible stock prices in America, but living standards rose and wealth inequality was low. If rising US interest rates come about as planned, we could soon have falling bonds plus falling stocks plus a growing economy - disappointing for people living purely from their capital, but good for everyone else.

Personally, I think the curve of danger on each side is pretty shallow, meaning we can tolerate fairly low or high stock prices without undue impact. Think of it like winter and summer: the peak of summer can cause more wildfires, which are dangerous for a time, but you need a few fires to keep the brush in check and the forest balanced.  Similarly, freezes kill the damn mosquitoes - a good thing!  Learning the lessons from each season keeps us healthy year round. 

One poster's opinion, anyway.  Cheers.