The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: Tonyahu on December 13, 2017, 04:36:25 PM
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Hey all,
My title is a bit misleading, I simply wanted to get you guys in here to help me get back on track.
I first learned about traditional personal finance about 2 years ago. I listened to hours of Radical Personal Finance, read many blogs, learned about Early Retirement Extreme, Mr. Money Mustache and Bogle Head investing. I was on my way to saving 60%+ and hunting for that early retirement goal!
I then found Crypto-Currencies and have dived head first into what I believe is a new Digital Asset Class. I have made money this past year that would have taken me nearly half a lifetime, and for that I am truly blessed (Praise Jesus).
I am not in here to discuss those, if you wish please go into my other thread.
My question is, I have been so far off track in terms of "traditional personal finance" that looking at the stock market charts is literally scary. From my amateur view (viewing charts, P&E ratio, macro economic view, debt to GDP), I feel that we are due for a correction.
I am thinking about moving my portfolio into 30% Equities, 20% Real Estate, 20% Cash, 20% Crypto and 10% Precious Metals.
Does anyone still hold 100% Equities?
Does anyone hold 100% Real Estate (for cash flow)?
I want to get a discussion going here and not a flat out "answer and exit" approach.
For the record I am a 26 year old college graduate with no debt. I grew up in a lower-middle-class family and have never traveled so I want to get my portfolio in order during 2018 so I can take off for a year or two in 2019 and feel safe.
I want to thank you all for reading this and hope I can find some more wise friends/mentors to steer me in the right direction.
Cheers!
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I don't believe in being in ANY asset class 100%.
Farm Rental
Home Rentals
Stocks
Bonds
Social Security
House Flipping for Fun and Profit
And, until May/August next year, salaries.
I thought stocks were horribly overpriced back in 2012 and held off ramping up on my investments for a year. Damn. I could have a bunch more money if I had just followed the maxim of invest early and often.
Haven't tried crypto-currencies. I'm not into speculation, I prefer investments. Plus, frankly, I've got my hands full with what we're already doing, so that's one I won't be trying for awhile.
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I don't believe in being in ANY asset class 100%.
Farm Rental
Home Rentals
Stocks
Bonds
Social Security
House Flipping for Fun and Profit
And, until May/August next year, salaries.
I thought stocks were horribly overpriced back in 2012 and held off ramping up on my investments for a year. Damn. I could have a bunch more money if I had just followed the maxim of invest early and often.
Haven't tried crypto-currencies. I'm not into speculation, I prefer investments. Plus, frankly, I've got my hands full with what we're already doing, so that's one I won't be trying for awhile.
Thanks, PMing you about farm rentals!
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Bears repeating: The stock market is *usually* making new highs. Also, once the great recession falls off the ten year charts, p/e10 starts looking better IIRC, ie things don't look as overvalued.
Now. You have to go and look at the US markets and see that a very very *very* few companies ("FAANG") have been making massive gains while the rest has mostly been plodding along. Look outside America; stuff is doing ok, but not outrageously overvalued.
Yes, of course some people are 100% in real estate, but you have to remember it is a lot more of a *job* than a passive portfolio. You have to deal with a lot more stuff going on. If you want that, there is no reason not to have a *diversified* real estate portfolio that throws off enough cash... assuming you have a reserve fund. You ideally won't have all your eggs in one basket (city... or state... or even country!).
There is nothing magic about the stock market except its scale. Scale leads to low transaction costs. Buying and selling houses costs a shit load of money. Buying stocks does not. A stock can go to zero but it cannot cost you more money than that.
Crypt as-is is a bubble plain and simple. It is a mania. People can make money from it, yes, no doubt, but they can lose it all. You should - IMHO - not have more into it than you can afford to lose *tomorrow*.
Why do you want so much cash? Cash is guaranteed to lose power over any significant amount of time.
Be globally diversified and you will own businesses that do *everything* in every country; businesses that will continue to operate no matter who the POTUS is, or whether there is an energy feast or famine, whether there are earthquakes and typhoons, and that will pay dividends. What is NOT to like about that?
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Bears repeating: The stock market is *usually* making new highs. Also, once the great recession falls off the ten year charts, p/e10 starts looking better IIRC, ie things don't look as overvalued.
Now. You have to go and look at the US markets and see that a very very *very* few companies ("FAANG") have been making massive gains while the rest has mostly been plodding along. Look outside America; stuff is doing ok, but not outrageously overvalued.
Yes, of course some people are 100% in real estate, but you have to remember it is a lot more of a *job* than a passive portfolio. You have to deal with a lot more stuff going on. If you want that, there is no reason not to have a *diversified* real estate portfolio that throws off enough cash... assuming you have a reserve fund. You ideally won't have all your eggs in one basket (city... or state... or even country!).
There is nothing magic about the stock market except its scale. Scale leads to low transaction costs. Buying and selling houses costs a shit load of money. Buying stocks does not. A stock can go to zero but it cannot cost you more money than that.
Crypt as-is is a bubble plain and simple. It is a mania. People can make money from it, yes, no doubt, but they can lose it all. You should - IMHO - not have more into it than you can afford to lose *tomorrow*.
Why do you want so much cash? Cash is guaranteed to lose power over any significant amount of time.
Be globally diversified and you will own businesses that do *everything* in every country; businesses that will continue to operate no matter who the POTUS is, or whether there is an energy feast or famine, whether there are earthquakes and typhoons, and that will pay dividends. What is NOT to like about that?
Thanks for the information!
My goal with the cash is to have opportunities for fire sales and starting businesses like you mentioned.
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I suggest you also put some percentage into get rich quick scams and Ponzi schemes. That way you have a more diversified portfolio in alternative assets.
Sent from my SAMSUNG-SM-G930A using Tapatalk
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I suggest you also put some percentage into get rich quick scams and Ponzi schemes. That way you have a more diversified portfolio in alternative assets.
Sent from my SAMSUNG-SM-G930A using Tapatalk
Who can spot the person with the poor mindset who is mad they missed the boat? I can!
Please see your way to the door and if you need a little bit of cash to fix a smile on your face, PM me your Paypal address.
Wait, you dove head first into cryptos, but are afraid of the stock market?
Until you cash out of cryptos and realize your gains, you don't have the money yet. You could still loose everything.
If you want some advice it would be to sell out anything you have in cryptos, pay whatever tax is due on your gains, and invest the proceeds in a balanced portfolio of stocks and bond index funds that is appropriate for your volatility and risk tolerance.
I am not "afraid" of the stock market per say, I just believe there can be a debate had about valuations. The reason why I made this post is because I understand that my view is a bit twisted and I am looking to be set back on track.
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Well, even MMM feels we are due for a stock market correction soonish, so your fears aren't based on nothing. However, corrections come in many forms and just because you may have the chance to stay out of the stock market at the top doesn't mean you will be able to time getting back in at the bottom. So I do encourage you avoid market timing and stick to whatever asset allocation you end up using. As one of the few people here who do hold both cryptos and precious metals, even I feel that 20% and 10% are quite high. My AA is crypto 2.5% and pm 4%. (Although both are slightly higher than that at the moment). Stocks at 75%, bonds 10% and the rest cash. There's always a better chance at becoming wealthy by being a better than average saver, than a better than average investor. Whenever I start to overthink my investment options or become worried about an asset, I step back and think "how much did I actually save this month?" and "how much better could I do?" and focus on those instead for a while. I hope that helps
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Well, even MMM feels we are due for a stock market correction soonish, so your fears aren't based on nothing. However, corrections come in many forms and just because you may have the chance to stay out of the stock market at the top doesn't mean you will be able to time getting back in at the bottom. So I do encourage you avoid market timing and stick to whatever asset allocation you end up using. As one of the few people here who do hold both cryptos and precious metals, even I feel that 20% and 10% are quite high. My AA is crypto 2.5% and pm 4%. (Although both are slightly higher than that at the moment). Stocks at 75%, bonds 10% and the rest cash. There's always a better chance at becoming wealthy by being a better than average saver, than a better than average investor. Whenever I start to overthink my investment options or become worried about an asset, I step back and think "how much did I actually save this month?" and "how much better could I do?" and focus on those instead for a while. I hope that helps
I have been so aggressive with the holdings because I saw this was a once in a life time (once in any lifetime ever?) opportunity so I took a jump. I plan to keep 20% at the moment but could go down to 10%, no lower than that because I truly believe this will one day be a solid asset class once tech is adopted.
In regards to equities valuations, that is how I am feeling. There is a reason why the sentiment is so down, I feel that we should see a 25-50% correction to be even remotely in a "healthy" market but that's just my amateur viewpoint. I was hoping to use the 30% equities for a Safe Withdrawal Rate (4%) but it would throw a huge wrench in the plan if it dipped 50%, since I am so young I wouldn't be able to responsibly pull out 4%.
Anyway, thanks for input!
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Scoff all you like OP but L.A.S. and Nate79 have solid advice. Untl you cash in your crypto currencies and have the cold hard cash in your hand then you haven't made a thing. And at this stage Bitcoin is nothing more than gambling - great if you get out before the shit hits the fan but not so good if you're one of the ones left holding the wreckage after the bubble bursts.
At your age I'd stick most of the money in the stock market and ride out the ups and down - time is on your side.
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Where does the 4% rule fit in? I saw it in the title, but it doesn't seem to relate to anything after.
I favor diversification and equity bias (but real estate can be a valuable equity substitute). For allocation I think that 40% equity, 20% real estate (held directly preferable, if REIT reduce in favor of equity), 10% cash, 10% long term bonds, 10% cryptos, 10% PM will still meet your general idiosyncratic idea but with probably safer withdrawals. Gives more of a "golden butterfly" feel. You can always sell other assets to gain cash if something good comes up and you don't have enough.
Cryptos are very volatile, and will eventually suffer a crash greater than 90% and probably even 99%, I just don't know how far they will go before that happens, there may very well be another 10X or more in them. For those reasons 10% seems more reasonable. Be sure you have a solid rebalancing strategy in advance, perhaps +500% / -90% (so you would not buy until your 10% crypto target fell under 1% of assets, nor sell until it rose over 50% of assets). Seriously, Amazon lost 95% at one point, and it had a solid business model and lots of real customers and inventory and eventually hit the super big time. Random internetcoin will have nothing to fall back on when people eventually start to leave.
Don't assume you know anything until you have personally experienced a 50%+ crash in stocks and a 90%+ crash in cryptos. I strongly suggest reading a paper book "The Four Pillars of Investing" which covers lots of history and investor behavior so that you are prepared for things that happen fairly often but which you have not personally experienced.
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OP sounds like me in 1998 when I margin purchased tons of tech IPOs and .com start ups LOL!
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I have been so aggressive with the holdings because I saw this was a once in a life time (once in any lifetime ever?) opportunity so I took a jump. I plan to keep 20% at the moment but could go down to 10%, no lower than that because I truly believe this will one day be a solid asset class once tech is adopted.
In regards to equities valuations, that is how I am feeling. There is a reason why the sentiment is so down, I feel that we should see a 25-50% correction to be even remotely in a "healthy" market but that's just my amateur viewpoint. I was hoping to use the 30% equities for a Safe Withdrawal Rate (4%) but it would throw a huge wrench in the plan if it dipped 50%, since I am so young I wouldn't be able to responsibly pull out 4%.
Anyway, thanks for input!
Wrong way to think about it. The current market valuation--or any market valuation--does not imply a crash. The market can crash at anytime for any reason, including no reason. Don't worry about trying to protect yourself from the crash. You'll just wind up screwing yourself. Instead, look at what the valuation is really telling you: predicted long term rate of return.
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If you want a conversation rather than people just answering and exiting, then you're going to have to accept that at least part of that conversation will be on cryptocurrency. You're talking about putting 20% into it: people are going to discuss the wisdom of that.
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I'm happy to engage in a conversation, please remember many of the people replying have 10-20 more years of life experience and have personally watched prior bubbles crush people. I know and saw concentrated positions in technology/telecom stocks ruin lives in the late 1990s and Florida Condo flipping do it in 2006 and a lot about cryto smells like those two swings I lived through.
If you cash out and realize your crypto gains, view it as a lottery ticket and protect the capital. The best leader I ever worked for fully admitted he hit a lottery ticket on a DC condo he bought in 2004 and sold in late 2006. Nearly no money down and cleared $200,000+ before the age of 30.
Now, for the answer to your question: I'm near 100% equities plus a small stake in my home. Equities include REITs for some diversification. I specifically have restrictions in my employment about outside business activities and the market I live in is just too pricey for me for cash flowing rentals. I intend on adding a couple cash flowing real estate investments near my hometown (probably a land investment with timber rights and 1-2 blue collar rentals) and expect I'll do some angel investing or co-investing on new deals/projects with clients I work as a vendor for today. I can buy town homes that get near the 1% rule and land is always reasonable because its tough to borrow money for it. I view this as an investment arbitrage to make a big city salary then go and invest in real estate in a market I'm very familiar with but is priced reasonably as a multiple of cash flow vs future appreciation.
There is a strong case for diversifying out of just stocks and bonds, but for me I want an inflation protected asset just in case we see 1970s style stagflation. Land that produces product or a rental purchased below the cost of replacement and around the 1% rule meets that criteria for me.
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I can't say that I understand being scared of losing 20-50% of your money, short-term in an asset class that is based on owning pieces of companies that provide goods and services in the largest economy in the world, some even internationally, but having no problem investing a fifth of your money in an asset that provides essentially no good or service and is backed by no one. The speculation for cryptocurrencies is so rampant right now that one can't even achieve fast transactions (with bitcoin), which was one of the main points of the concept, without paying high fees. This position is devoid of logic.
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Where does the 4% rule fit in? I saw it in the title, but it doesn't seem to relate to anything after.
I favor diversification and equity bias (but real estate can be a valuable equity substitute). For allocation I think that 40% equity, 20% real estate (held directly preferable, if REIT reduce in favor of equity), 10% cash, 10% long term bonds, 10% cryptos, 10% PM will still meet your general idiosyncratic idea but with probably safer withdrawals. Gives more of a "golden butterfly" feel. You can always sell other assets to gain cash if something good comes up and you don't have enough.
Cryptos are very volatile, and will eventually suffer a crash greater than 90% and probably even 99%, I just don't know how far they will go before that happens, there may very well be another 10X or more in them. For those reasons 10% seems more reasonable. Be sure you have a solid rebalancing strategy in advance, perhaps +500% / -90% (so you would not buy until your 10% crypto target fell under 1% of assets, nor sell until it rose over 50% of assets). Seriously, Amazon lost 95% at one point, and it had a solid business model and lots of real customers and inventory and eventually hit the super big time. Random internetcoin will have nothing to fall back on when people eventually start to leave.
Don't assume you know anything until you have personally experienced a 50%+ crash in stocks and a 90%+ crash in cryptos. I strongly suggest reading a paper book "The Four Pillars of Investing" which covers lots of history and investor behavior so that you are prepared for things that happen fairly often but which you have not personally experienced.
Awesome input, I like the allocation you pointed out. In regards to bubble burst and current speculative valuations, we are still a far cry from the 7T .com bubble so while I don't plan to ride it till then, I could see the potential to reach near that or even surpass it once the public is aware of the technology value.
I will check out that book now, thanks!
I have been so aggressive with the holdings because I saw this was a once in a life time (once in any lifetime ever?) opportunity so I took a jump. I plan to keep 20% at the moment but could go down to 10%, no lower than that because I truly believe this will one day be a solid asset class once tech is adopted.
In regards to equities valuations, that is how I am feeling. There is a reason why the sentiment is so down, I feel that we should see a 25-50% correction to be even remotely in a "healthy" market but that's just my amateur viewpoint. I was hoping to use the 30% equities for a Safe Withdrawal Rate (4%) but it would throw a huge wrench in the plan if it dipped 50%, since I am so young I wouldn't be able to responsibly pull out 4%.
Anyway, thanks for input!
Wrong way to think about it. The current market valuation--or any market valuation--does not imply a crash. The market can crash at anytime for any reason, including no reason. Don't worry about trying to protect yourself from the crash. You'll just wind up screwing yourself. Instead, look at what the valuation is really telling you: predicted long term rate of return.
ahh good point, thanks for that!
I'm happy to engage in a conversation, please remember many of the people replying have 10-20 more years of life experience and have personally watched prior bubbles crush people. I know and saw concentrated positions in technology/telecom stocks ruin lives in the late 1990s and Florida Condo flipping do it in 2006 and a lot about cryto smells like those two swings I lived through.
If you cash out and realize your crypto gains, view it as a lottery ticket and protect the capital. The best leader I ever worked for fully admitted he hit a lottery ticket on a DC condo he bought in 2004 and sold in late 2006. Nearly no money down and cleared $200,000+ before the age of 30.
Now, for the answer to your question: I'm near 100% equities plus a small stake in my home. Equities include REITs for some diversification. I specifically have restrictions in my employment about outside business activities and the market I live in is just too pricey for me for cash flowing rentals. I intend on adding a couple cash flowing real estate investments near my hometown (probably a land investment with timber rights and 1-2 blue collar rentals) and expect I'll do some angel investing or co-investing on new deals/projects with clients I work as a vendor for today. I can buy town homes that get near the 1% rule and land is always reasonable because its tough to borrow money for it. I view this as an investment arbitrage to make a big city salary then go and invest in real estate in a market I'm very familiar with but is priced reasonably as a multiple of cash flow vs future appreciation.
There is a strong case for diversifying out of just stocks and bonds, but for me I want an inflation protected asset just in case we see 1970s style stagflation. Land that produces product or a rental purchased below the cost of replacement and around the 1% rule meets that criteria for me.
Thanks for the input. I understand that many people have more experience and have had experience with bubbles (although all are usually based on different variables) it still must be understood that 99% are ignorant to this new asset class, the value proposition, the end goal...etc. I still consider the advice and welcome it, I take in everything I can, accept the good and weed out the bad!
If I want to start pulling from an equities portfolio right away (after 1 year for capital gains), you would suggest just doing a traditional account, correct?
Where does the 4% rule fit in? I saw it in the title, but it doesn't seem to relate to anything after.
I favor diversification and equity bias (but real estate can be a valuable equity substitute). For allocation I think that 40% equity, 20% real estate (held directly preferable, if REIT reduce in favor of equity), 10% cash, 10% long term bonds, 10% cryptos, 10% PM will still meet your general idiosyncratic idea but with probably safer withdrawals. Gives more of a "golden butterfly" feel. You can always sell other assets to gain cash if something good comes up and you don't have enough.
Cryptos are very volatile, and will eventually suffer a crash greater than 90% and probably even 99%, I just don't know how far they will go before that happens, there may very well be another 10X or more in them. For those reasons 10% seems more reasonable. Be sure you have a solid rebalancing strategy in advance, perhaps +500% / -90% (so you would not buy until your 10% crypto target fell under 1% of assets, nor sell until it rose over 50% of assets). Seriously, Amazon lost 95% at one point, and it had a solid business model and lots of real customers and inventory and eventually hit the super big time. Random internetcoin will have nothing to fall back on when people eventually start to leave.
Don't assume you know anything until you have personally experienced a 50%+ crash in stocks and a 90%+ crash in cryptos. I strongly suggest reading a paper book "The Four Pillars of Investing" which covers lots of history and investor behavior so that you are prepared for things that happen fairly often but which you have not personally experienced.
Thanks for the input, I was referencing the 4% rule because if we do suffer a 50%+ crash, then I would not want to pull out 4% due to it impacting future returns on the portfolio. I know there are calculations on how you adjust the SWR based on market movement, inflation...etc but need to look into that further. Do you know any good resources or rules of thumb?
OP sounds like me in 1998 when I margin purchased tons of tech IPOs and .com start ups LOL!
This is a very ignorant statement and a clear strawman.
I can't say that I understand being scared of losing 20-50% of your money, short-term in an asset class that is based on owning pieces of companies that provide goods and services in the largest economy in the world, some even internationally, but having no problem investing a fifth of your money in an asset that provides essentially no good or service and is backed by no one. The speculation for cryptocurrencies is so rampant right now that one can't even achieve fast transactions (with bitcoin), which was one of the main points of the concept, without paying high fees. This position is devoid of logic.
While I agree with your assessment of Bitcoin, it appears you don't understand that different cryptos have different value propositions, PM me if you are interested in learning.
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We have no guarantee that blockchain technology will manifest its value solely in the coins, or ultimately in any of the current coins. Right now it's just a roller coaster of fads from one coin to another. They can't all be the winners. Likely governments will create their own coins and most mainstream adopters will end up doing that instead of risking the anonymity and lack of safety and the big risk of fraud/theft we have now. Rather than debate that (I do own some Bitcoin so I'm not some absolutist, just admitting I don't know), I expect the value propositions of blockchain will show up in the world's other 9,000 or so public companies, just as tech from 2000 did, just perhaps not in the names that got the most hype and misplaced bets during 1998-2000.
So I still believe in stocks for the long run. I am fairly aggressive for my age at 85/15 stock mix, split US and international, with small and value tilts. If this was all I had for the rest of my life and was trying to live on it, I'd probably be 60/40 or 50/50. I also have some side stuff like a second home and a stake in a private company, but my Vanguard account is my rock. Not sure if you're trying to live off what you have now (the 4 percent rule is generally used for retirees to figure out how much they can take for the rest of their lives).
If you did or do make a fortune in Bitcoin or other crypto, I applaud you and see it as no less legitimate than any other legal way of making money, since you had to learn about it and take a risk as an early adopter. If I make a ton in Bitcoin, or even a decent profit, you can bet I'll be diversifying it away from Bitcoin as fast as I can, and that would mean a broad, cheap stock index fund. Good luck!
PS another good book is Your Money and Your brain by Jason Zweig, addressing our often-hidden biases and cognitive dissonance and emotions that affect our decisions about money.
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This is a very ignorant statement and a clear strawman.
Why? Because I'm trying to warn you not to speculate with your hard earned money? Get real bro ;)
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If you've not read it, this is a pretty badass summary:
http://jlcollinsnh.com/stock-series/
I am 80/20 equities/bonds. I actually have long-term corporate debt as it pays more and companies are more solvent than governments :)
I do not have the assets below for the listed reasons:
Land: non-liquid
Crypto: identical to FX speculation. Companies will eventually commercialize blockchain tech (cool stuff out there already for secure records etc) but the currencies themselves are pure 100% non-adulterated speculation.
REIT: same reasons as in the JL Collins series.
I did go through both the 03 and the 09 crunch. I was a professional full time employee through both of them and continued to shovel maximum contributions into 401k, through both and did not re-allocate. The balance took a hit both times but man, the chart sure looks nice on the recovery...
good luck!
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If you've not read it, this is a pretty badass summary:
http://jlcollinsnh.com/stock-series/
I am 80/20 equities/bonds. I actually have long-term corporate debt as it pays more and companies are more solvent than governments :)
I do not have the assets below for the listed reasons:
Land: non-liquid
Crypto: identical to FX speculation. Companies will eventually commercialize blockchain tech (cool stuff out there already for secure records etc) but the currencies themselves are pure 100% non-adulterated speculation.
REIT: same reasons as in the JL Collins series.
I did go through both the 03 and the 09 crunch. I was a professional full time employee through both of them and continued to shovel maximum contributions into 401k, through both and did not re-allocate. The balance took a hit both times but man, the chart sure looks nice on the recovery...
good luck!
I agree and identical to your investing plan. His book is required reading for every young investor
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If you've not read it, this is a pretty badass summary:
http://jlcollinsnh.com/stock-series/
I am 80/20 equities/bonds. I actually have long-term corporate debt as it pays more and companies are more solvent than governments :)
I do not have the assets below for the listed reasons:
Land: non-liquid
Crypto: identical to FX speculation. Companies will eventually commercialize blockchain tech (cool stuff out there already for secure records etc) but the currencies themselves are pure 100% non-adulterated speculation.
REIT: same reasons as in the JL Collins series.
I did go through both the 03 and the 09 crunch. I was a professional full time employee through both of them and continued to shovel maximum contributions into 401k, through both and did not re-allocate. The balance took a hit both times but man, the chart sure looks nice on the recovery...
good luck!
http://jlcollinsnh.com/2012/04/29/stocks-part-iv-the-big-ugly-event/
This section makes me feel like I am about to buy the peak during 1929 lol. I know tons of people who have just done margin longs in the S&P500 and making a killing due to this bull market. Seemingly the exact same situation.
The last thing I want to do is take liquid capital and put it into a fund that may dip and take 20+ years to recover.
Opinions?
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http://jlcollinsnh.com/2012/04/29/stocks-part-iv-the-big-ugly-event/
This section makes me feel like I am about to buy the peak during 1929 lol. I know tons of people who have just done margin longs in the S&P500 and making a killing due to this bull market. Seemingly the exact same situation.
The last thing I want to do is take liquid capital and put it into a fund that may dip and take 20+ years to recover.
Opinions?
I hear you but:
- History shows it takes a few years to recover from a fall, not a few decades
- it's 'felt this way' off and on since 2012. Look at the minor dips/panics just in the last 5yrs.
we could go a long way down the rabbit hole comparing 1929 to now, but 1929 had really severe market distortions, as did 2003 and 2009 though to a lesser extent. The only real distortion now is global central bank driven cheap debt, and they are locked into that path. If interest rates go up, inflation kicks in, etc, the best protection is equity ownership ;)
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http://jlcollinsnh.com/2012/04/29/stocks-part-iv-the-big-ugly-event/
This section makes me feel like I am about to buy the peak during 1929 lol. I know tons of people who have just done margin longs in the S&P500 and making a killing due to this bull market. Seemingly the exact same situation.
The last thing I want to do is take liquid capital and put it into a fund that may dip and take 20+ years to recover.
Opinions?
I hear you but:
- History shows it takes a few years to recover from a fall, not a few decades
- it's 'felt this way' off and on since 2012. Look at the minor dips/panics just in the last 5yrs.
we could go a long way down the rabbit hole comparing 1929 to now, but 1929 had really severe market distortions, as did 2003 and 2009 though to a lesser extent. The only real distortion now is global central bank driven cheap debt, and they are locked into that path. If interest rates go up, inflation kicks in, etc, the best protection is equity ownership ;)
I like the insight. That's why I wish I could pick the brains of high level economic guys who can see through the dynamics at play (not saying you aren't one of those guys). Most of what I hear from the "old guys" is "LOL crypto is a bubble, I don't know what it is, but definitely a tulip bubble, go all in on the stock market, it never fails".
I mean I get where people are coming from but the NYSE / stock market has only been around for 200 years. It's not too far removed to think the world may be radically different in 50 years (I am only 26 and need my money to last forever).
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So I still believe in stocks for the long run. I am fairly aggressive for my age at 85/15 stock mix, split US and international, with small and value tilts.
Okay, I've seen this terminology elsewhere, and I don't know what it means. Does "small" mean "small-cap investments"? And what does "value" mean in this context?
Thanks.
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http://jlcollinsnh.com/2012/04/29/stocks-part-iv-the-big-ugly-event/
This section makes me feel like I am about to buy the peak during 1929 lol. I know tons of people who have just done margin longs in the S&P500 and making a killing due to this bull market. Seemingly the exact same situation.
The last thing I want to do is take liquid capital and put it into a fund that may dip and take 20+ years to recover.
Opinions?
I hear you but:
- History shows it takes a few years to recover from a fall, not a few decades
- it's 'felt this way' off and on since 2012. Look at the minor dips/panics just in the last 5yrs.
we could go a long way down the rabbit hole comparing 1929 to now, but 1929 had really severe market distortions, as did 2003 and 2009 though to a lesser extent. The only real distortion now is global central bank driven cheap debt, and they are locked into that path. If interest rates go up, inflation kicks in, etc, the best protection is equity ownership ;)
I like the insight. That's why I wish I could pick the brains of high level economic guys who can see through the dynamics at play (not saying you aren't one of those guys). Most of what I hear from the "old guys" is "LOL crypto is a bubble, I don't know what it is, but definitely a tulip bubble, go all in on the stock market, it never fails".
I mean I get where people are coming from but the NYSE / stock market has only been around for 200 years. It's not too far removed to think the world may be radically different in 50 years (I am only 26 and need my money to last forever).
This is what I don't get: there are posts right here on this thread discussing the fact that blockchain technology doesn't necessarily have to be linked to any particular or currently extant cryptocurrency, and you're still talking dismissively about the idea that cryptocurrency might be in a bubble. There's zero shortage of frighteningly intelligent people willing to go on record as believing that's the case, and you're still talking about it as if those people just don't get it (and it should be noted that that assumption is identified by Robert Shiller as being a key aspect of the bubble). And yet, while you're convinced that the cryptocurrency market represents value for money despite it gaining about 2000% this year, you're worried that the stock market is at risk of a collapse that could wipe you out because VTSAX has doubled in a decade. That's not a rational or well-designed approach to portfolio management.
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http://jlcollinsnh.com/2012/04/29/stocks-part-iv-the-big-ugly-event/
This section makes me feel like I am about to buy the peak during 1929 lol. I know tons of people who have just done margin longs in the S&P500 and making a killing due to this bull market. Seemingly the exact same situation.
The last thing I want to do is take liquid capital and put it into a fund that may dip and take 20+ years to recover.
Opinions?
I hear you but:
- History shows it takes a few years to recover from a fall, not a few decades
- it's 'felt this way' off and on since 2012. Look at the minor dips/panics just in the last 5yrs.
we could go a long way down the rabbit hole comparing 1929 to now, but 1929 had really severe market distortions, as did 2003 and 2009 though to a lesser extent. The only real distortion now is global central bank driven cheap debt, and they are locked into that path. If interest rates go up, inflation kicks in, etc, the best protection is equity ownership ;)
I like the insight. That's why I wish I could pick the brains of high level economic guys who can see through the dynamics at play (not saying you aren't one of those guys). Most of what I hear from the "old guys" is "LOL crypto is a bubble, I don't know what it is, but definitely a tulip bubble, go all in on the stock market, it never fails".
I mean I get where people are coming from but the NYSE / stock market has only been around for 200 years. It's not too far removed to think the world may be radically different in 50 years (I am only 26 and need my money to last forever).
This is what I don't get: there are posts right here on this thread discussing the fact that blockchain technology doesn't necessarily have to be linked to any particular or currently extant cryptocurrency, and you're still talking dismissively about the idea that cryptocurrency might be in a bubble. There's zero shortage of frighteningly intelligent people willing to go on record as believing that's the case, and you're still talking about it as if those people just don't get it (and it should be noted that that assumption is identified by Robert Shiller as being a key aspect of the bubble). And yet, while you're convinced that the cryptocurrency market represents value for money despite it gaining about 2000% this year, you're worried that the stock market is at risk of a collapse that could wipe you out because VTSAX has doubled in a decade. That's not a rational or well-designed approach to portfolio management.
I completely disagree with their assumption on Crypto-Currencies, Tokens and/or Blockchain based assets, I am a full time analyst and would love to have a live Skype discussion for anyone that wants to debate such a topic but I am not in here for that. If you or anyone wishes to do that please PM me. If you feel they are a bubble that is completely fine! That's not what I am in here for. I have got my F-YOU money from it and now am looking to discuss exit strategies.
Yes, I don't know if I feel the trillions of dollars in gains over the short amount of time is healthy. I am in here to discuss that and have open ears!
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This is the danger of someone getting really lucky early in their investment lifetime, they assume it's due to all of the analysis and reasoning they did, and not just luck. The number of people smarter than you OP who have lost everything in speculations and complicated investments is massive, and I'm sure they had all sorts of complex analysis backing them. The number of people who've lost everything by investing long term in the entire stock market is non existent.
If we went into a black box where we never saw actual results, you could get a skilled debater to argue why any single investment in the world would be amazing. Rationalizing why something is great isn't hard, high paid analysts do it every day. It's actually predicting the things accurately long term that's tricky. I can go to Vegas tomorrow and put everything on red, just because it lands on red doesn't make me an expert, regardless of how I explain my overly complicated method based on the tilt of the table and the size of that particular ball versus the hand of the person who drops it.
Of course I'm sure you'll dismiss me as a hater, the same as many gamblers on a win streak, or people whose favorite penny stock went up 500% in the last three months would. I hope things work out for you, and it's possible you'll make a fortune with this approach, just be aware that it's also possible you'll lose everything.
Remember it's not just the product or the tech you have to evaluate, it's public sentiment, and public sentiment is a very volatile thing. One big news story or world event could completely turn the tides of any particular cryptocurrency.
edit:
And as for stocks being at the top, here's an interesting thread about why it is at a top, started in April: https://forum.mrmoneymustache.com/investor-alley/top-is-in/150/
And here's one from 2014: https://forum.mrmoneymustache.com/investor-alley/a-crash-is-coming/
I'm sure if you look back through the archives you can find them as far back as this forum goes. News articles by highly paid analysts with all sorts of metrics backing them up from every year are just a google search away.
Will there be a crash, correction, or period of lagging returns? Definitely. The question is, will you be better off waiting for that to happen? It's not something anyone can predict, but the odds favor getting in as early as possible.
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This is the danger of someone getting really lucky early in their investment lifetime, they assume it's due to all of the analysis and reasoning they did, and not just luck. The number of people smarter than you OP who have lost everything in speculations and complicated investments is massive, and I'm sure they had all sorts of complex analysis backing them. The number of people who've lost everything by investing long term in the entire stock market is non existent.
If we went into a black box where we never saw actual results, you could get a skilled debater to argue why any single investment in the world would be amazing. Rationalizing why something is great isn't hard, high paid analysts do it every day. It's actually predicting the things accurately long term that's tricky. I can go to Vegas tomorrow and put everything on red, just because it lands on red doesn't make me an expert, regardless of how I explain my overly complicated method based on the tilt of the table and the size of that particular ball versus the hand of the person who drops it.
Of course I'm sure you'll dismiss me as a hater, the same as many gamblers on a win streak, or people whose favorite penny stock went up 500% in the last three months would. I hope things work out for you, and it's possible you'll make a fortune with this approach, just be aware that it's also possible you'll lose everything.
Remember it's not just the product or the tech you have to evaluate, it's public sentiment, and public sentiment is a very volatile thing. One big news story or world event could completely turn the tides of any particular cryptocurrency.
edit:
And as for stocks being at the top, here's an interesting thread about why it is at a top, started in April: https://forum.mrmoneymustache.com/investor-alley/top-is-in/150/
And here's one from 2014: https://forum.mrmoneymustache.com/investor-alley/a-crash-is-coming/
I'm sure if you look back through the archives you can find them as far back as this forum goes. News articles by highly paid analysts with all sorts of metrics backing them up from every year are just a google search away.
Will there be a crash, correction, or period of lagging returns? Definitely. The question is, will you be better off waiting for that to happen? It's not something anyone can predict, but the odds favor getting in as early as possible.
https://www.youtube.com/watch?v=cO2UOhGEC_A&feature=youtu.be&t=1070
Thanks for the input bud!
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I completely disagree with their assumption on Crypto-Currencies, Tokens and/or Blockchain based assets, I am a full time analyst and would love to have a live Skype discussion for anyone that wants to debate such a topic but I am not in here for that. If you or anyone wishes to do that please PM me. If you feel they are a bubble that is completely fine! That's not what I am in here for. I have got my F-YOU money from it and now am looking to discuss exit strategies.
Yes, I don't know if I feel the trillions of dollars in gains over the short amount of time is healthy. I am in here to discuss that and have open ears!
You keep saying you are here for an open discussion. And yet when people weigh in and say things you don't want to hear, you say that that is not what you are here for, or that this isn't the place for such a discussion.
You can either have an open and honest discussion, or you can withdraw issues from consideration and say they are off limits to the point where people can only express your viewpoint. But you can't do both.
Which is it going to be?
I want this discussion to have nothing to do with crypto-currencies, I thought I clarified that in my original post but if not, my apologies.
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This is the danger of someone getting really lucky early in their investment lifetime, they assume it's due to all of the analysis and reasoning they did, and not just luck. The number of people smarter than you OP who have lost everything in speculations and complicated investments is massive, and I'm sure they had all sorts of complex analysis backing them. The number of people who've lost everything by investing long term in the entire stock market is non existent.
If we went into a black box where we never saw actual results, you could get a skilled debater to argue why any single investment in the world would be amazing. Rationalizing why something is great isn't hard, high paid analysts do it every day. It's actually predicting the things accurately long term that's tricky. I can go to Vegas tomorrow and put everything on red, just because it lands on red doesn't make me an expert, regardless of how I explain my overly complicated method based on the tilt of the table and the size of that particular ball versus the hand of the person who drops it.
Of course I'm sure you'll dismiss me as a hater, the same as many gamblers on a win streak, or people whose favorite penny stock went up 500% in the last three months would. I hope things work out for you, and it's possible you'll make a fortune with this approach, just be aware that it's also possible you'll lose everything.
Remember it's not just the product or the tech you have to evaluate, it's public sentiment, and public sentiment is a very volatile thing. One big news story or world event could completely turn the tides of any particular cryptocurrency.
edit:
And as for stocks being at the top, here's an interesting thread about why it is at a top, started in April: https://forum.mrmoneymustache.com/investor-alley/top-is-in/150/
And here's one from 2014: https://forum.mrmoneymustache.com/investor-alley/a-crash-is-coming/
I'm sure if you look back through the archives you can find them as far back as this forum goes. News articles by highly paid analysts with all sorts of metrics backing them up from every year are just a google search away.
Will there be a crash, correction, or period of lagging returns? Definitely. The question is, will you be better off waiting for that to happen? It's not something anyone can predict, but the odds favor getting in as early as possible.
This is great.
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Asking people what they think of your plan, but also asking them not to discuss the 20% you're allocating to the single most controversial asset class on the market, is futile. What on earth is the point of getting feedback from people who think that 20% represents more risk than the remaining 80% or that worrying about 7% annual returns on the stock market while celebrating 2000% returns on cryptocurrency is wrong?
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Asking people what they think of your plan, but also asking them not to discuss the 20% you're allocating to the single most controversial asset class on the market, is futile. What on earth is the point of getting feedback from people who think that 20% represents more risk than the remaining 80% or that worrying about 7% annual returns on the stock market while celebrating 2000% returns on cryptocurrency is wrong?
This actually is a pretty eye opening statement. For me the 20% is fair because up until this point I have had 90% in crypto which has worked out well and I bargain will continue to do so for some time. Regardless if I feel this way, I realize it's time to be smart and allocate for a longer term view.
I suppose there isn't much more to go in a discussion like this so I thank all for contributing so far and if you have anything new to contribute, I welcome it!
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Assuming you accumulated half a lifetime's pay in the last year or two with Bitcoin (for even a pretty low-paid blue collar job, that's a cool million bucks in ~20 years/half a working life), you should be fully FI if you just take that money and stick it in some sort of low cost index (mostly stocks) fund. Period.
It sounds like you are still stuck in the playing-the-game mindset, though, with the holding cash for investment opportunities and continuing with the crypto stuff.
That's an easy way to lose everything. You need to be thinking about boring, safe ways to put your money to work - and you need to *stop* thinking about how to keep "winning" with your investments. You're done. Finished. Go find a fun hobby, a volunteer opportunity, a significant other, whatever. You are both risking your money and wasting your own life by continuing to worry about this.
-W
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Asking people what they think of your plan, but also asking them not to discuss the 20% you're allocating to the single most controversial asset class on the market, is futile. What on earth is the point of getting feedback from people who think that 20% represents more risk than the remaining 80% or that worrying about 7% annual returns on the stock market while celebrating 2000% returns on cryptocurrency is wrong?
This actually is a pretty eye opening statement. For me the 20% is fair because up until this point I have had 90% in crypto which has worked out well and I bargain will continue to do so for some time. Regardless if I feel this way, I realize it's time to be smart and allocate for a longer term view.
I suppose there isn't much more to go in a discussion like this so I thank all for contributing so far and if you have anything new to contribute, I welcome it!
Well someone already suggested you read the J Collins site and book but you managed to shit on that too. Thread Closed?
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Assuming you accumulated half a lifetime's pay in the last year or two with Bitcoin (for even a pretty low-paid blue collar job, that's a cool million bucks in ~20 years/half a working life), you should be fully FI if you just take that money and stick it in some sort of low cost index (mostly stocks) fund. Period.
It sounds like you are still stuck in the playing-the-game mindset, though, with the holding cash for investment opportunities and continuing with the crypto stuff.
That's an easy way to lose everything. You need to be thinking about boring, safe ways to put your money to work - and you need to *stop* thinking about how to keep "winning" with your investments. You're done. Finished. Go find a fun hobby, a volunteer opportunity, a significant other, whatever. You are both risking your money and wasting your own life by continuing to worry about this.
-W
The crazy thing is, I hold no Bitcoin and didn't make any money from Bitcoin. That shows just how far removed many are from the Digital Asset sphere.
My plan is to shuffle things towards Index Funds. What is your opinion on income real estate while utilizing a PM?
Asking people what they think of your plan, but also asking them not to discuss the 20% you're allocating to the single most controversial asset class on the market, is futile. What on earth is the point of getting feedback from people who think that 20% represents more risk than the remaining 80% or that worrying about 7% annual returns on the stock market while celebrating 2000% returns on cryptocurrency is wrong?
This actually is a pretty eye opening statement. For me the 20% is fair because up until this point I have had 90% in crypto which has worked out well and I bargain will continue to do so for some time. Regardless if I feel this way, I realize it's time to be smart and allocate for a longer term view.
I suppose there isn't much more to go in a discussion like this so I thank all for contributing so far and if you have anything new to contribute, I welcome it!
Well someone already suggested you read the J Collins site and book but you managed to shit on that too. Thread Closed?
You are being incredibly inconsiderate and your posts are completely devoid of logic. Please leave this thread as you are not contributing. Thanks
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I'm getting a whiff of a t***l at work
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Please leave this thread as you are not contributing. Thanks
Nah
You are being incredibly inconsiderate and your posts are completely devoid of logic.
How so?
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Long term, only half of your portfolio is working for you: combined you have allocated 50% of your portfolio to non-productive assets (assets that are designed to store/exchange value, not create new value). Sure crypto currencies are doing crazy things and have made you a fortune this year, but they are still not productive assets (the coin still only represents a currently volitile value, it doesn't create value). I'd say you should have at least 70% of your portfolio in equities/real estate.
Since you made your fortune in crypto, leaving 20% there and rebalancing out frequently is probably OK - if it crashes, you've still retained the majority of your easily gained wealth. I would not rebalance back in to crytpo at 20%. That would leave 10% for your precious metal and cash allocation.
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....
I am thinking about moving my portfolio into 30% Equities, 20% Real Estate, 20% Cash, 20% Crypto and 10% Precious Metals.
Does anyone still hold 100% Equities?
Does anyone hold 100% Real Estate (for cash flow)?
...
For the record I am a 26 year old college graduate with no debt. I grew up in a lower-middle-class family and have never traveled so I want to get my portfolio in order during 2018 so I can take off for a year or two in 2019 and feel safe.
...
So where are your assets now? Roughly speaking. 100 Crypto? 50% Crypto and 50% cash? Might give some people here pause to see you trying to diversify.
As for any arguments about Crypto I think the fact you are diversifying is awesome. In fact that 20% in Crypto bet is fine by me, but I think what most people here are trying to say is 20% in an unproven asset, especially one in what looks like a bubble is dangerous.
That being said, even tulips aren't being given away for free today so.... Just don't go crazy!
I know there is a paper (or 20) out there where a study on "What If I Invested at the Top of the market" happened. And I believe the conclusion was, "I'd be a Millionaire" Now understand the underlying idea was investing at the tip top in the 1970 crash, and every top since. Hopefully you won't do that, but as the paper implies keep investing, don't pull out and you'll surpass that millionaire status or not, since this IS a FIRE community! :) That in it self should be a reason to invest right now. The fact that even the worst investor ever could retire a millionaire today as long as the stuck to it, is awesome.
One final note. I don't know how you are picking your asset percentages, but I hope that however you are, it is part of a plan. Knowing what you will do at the top of the Market, the Bottom and in between helps.
Good luck!
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Income producing real estate can be incredibly worthwhile if you find something where the numbers work. There are some general guidelines many real estate investors like to use like rent being 1% of purchase price. If you're seriously considering this I recommend checking out biggerpockets.com. It's probably the largest real estate investing forum on the internet, covering many different types of RE investing depending on what you want to consider.
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Long term, only half of your portfolio is working for you: combined you have allocated 50% of your portfolio to non-productive assets (assets that are designed to store/exchange value, not create new value). Sure crypto currencies are doing crazy things and have made you a fortune this year, but they are still not productive assets (the coin still only represents a currently volitile value, it doesn't create value). I'd say you should have at least 70% of your portfolio in equities/real estate.
Since you made your fortune in crypto, leaving 20% there and rebalancing out frequently is probably OK - if it crashes, you've still retained the majority of your easily gained wealth. I would not rebalance back in to crytpo at 20%. That would leave 10% for your precious metal and cash allocation.
Thanks! I wanted to hold the cash for opening businesses, not just leaving it sitting there. If I can successfully FIRE off my long term holdings, I would love to have 100-200K for startups.
....
I am thinking about moving my portfolio into 30% Equities, 20% Real Estate, 20% Cash, 20% Crypto and 10% Precious Metals.
Does anyone still hold 100% Equities?
Does anyone hold 100% Real Estate (for cash flow)?
...
For the record I am a 26 year old college graduate with no debt. I grew up in a lower-middle-class family and have never traveled so I want to get my portfolio in order during 2018 so I can take off for a year or two in 2019 and feel safe.
...
So where are your assets now? Roughly speaking. 100 Crypto? 50% Crypto and 50% cash? Might give some people here pause to see you trying to diversify.
As for any arguments about Crypto I think the fact you are diversifying is awesome. In fact that 20% in Crypto bet is fine by me, but I think what most people here are trying to say is 20% in an unproven asset, especially one in what looks like a bubble is dangerous.
That being said, even tulips aren't being given away for free today so.... Just don't go crazy!
I know there is a paper (or 20) out there where a study on "What If I Invested at the Top of the market" happened. And I believe the conclusion was, "I'd be a Millionaire" Now understand the underlying idea was investing at the tip top in the 1970 crash, and every top since. Hopefully you won't do that, but as the paper implies keep investing, don't pull out and you'll surpass that millionaire status or not, since this IS a FIRE community! :) That in it self should be a reason to invest right now. The fact that even the worst investor ever could retire a millionaire today as long as the stuck to it, is awesome.
One final note. I don't know how you are picking your asset percentages, but I hope that however you are, it is part of a plan. Knowing what you will do at the top of the Market, the Bottom and in between helps.
Good luck!
Thanks for the information, I will have to look through those "at the top of the market" posts / blogs / journals.
I feel like I have been brainwashed to think that the stock market could collapse within my lifetime (it's only 200 years old and I wonder how long can this debt driven, fiat currency, federal reserve driven style can survive). When I was younger I was fed so much "collapse" type stuff. I feel like that's why I gravitated towards crypto because I know I own the asset (learn about public - private key cryptography befor trying to argue this) and that it can't be aimlessly devalued through inflation (let's not argue this point, those are facts on mathematical levels). I know that this isn't "healthy" thoughts but that's why I want to discuss it openly.
Income producing real estate can be incredibly worthwhile if you find something where the numbers work. There are some general guidelines many real estate investors like to use like rent being 1% of purchase price. If you're seriously considering this I recommend checking out biggerpockets.com. It's probably the largest real estate investing forum on the internet, covering many different types of RE investing depending on what you want to consider.
BiggerPockets is an amazing resource. I have actually already read 3 books on Real Estate and read through numerous blogs. I know how to run Cash Flow calculations and make sure the numbers work...etc. I wanted to just get peoples opinions on here because what I always hear is "all in index funds"
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Thanks for the input, I was referencing the 4% rule because if we do suffer a 50%+ crash, then I would not want to pull out 4% due to it impacting future returns on the portfolio. I know there are calculations on how you adjust the SWR based on market movement, inflation...etc but need to look into that further. Do you know any good resources or rules of thumb?
This is the ultimate SWR guide: https://earlyretirementnow.com/2016/12/07/the-ultimate-guide-to-safe-withdrawal-rates-part-1-intro/
You are on the right track. Real estate is also a great investment. I own a duplex myself, and it would be nice to add to that in the future. Arebelspy had a great thread of real estate investing with property managers, but probably 3 years ago or more. Worth a read if you can find it. There are an infinite number of frameworks, but one good one might be the "Talmud Portfolio" if you plan to hold real estate directly. Basically it is an equal split between stocks, real estate, and currency (cash/bonds/crypto/gold/CDs, but not too much in the riskier ones).
I like the 10% allocation I suggested earlier, the wide bands should allow you to profit greatly if cryptos rise but not get caught flat if they burst. I would change the bands to 500%/99% (50%/0.1% of total portfolio) though. This is not a falling knife you want to catch.
After all that, do not get caught up in analysis paralysis. You should get a good plan and start to execute it soon, even if you don't understand all the intricacies of real estate. Just leave that bit for later.
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So I still believe in stocks for the long run. I am fairly aggressive for my age at 85/15 stock mix, split US and international, with small and value tilts.
Okay, I've seen this terminology elsewhere, and I don't know what it means. Does "small" mean "small-cap investments"? And what does "value" mean in this context?
Thanks.
Yes. Value means its price is low relative to its assets/earning/dividends/something, but usually that also means it has for prospects for growth. Beyond that, google.
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I'd cut the precious metals allocation to 0%. Cryptocurrency and precious metals serve the same purpose: A store of value that can't be debased, that produces zero value, with high transaction costs. You believe in crypto invest in crypto, don't bother with gold too.
You shouldn't be so afraid of stocks. You want to diversify because crypto is extremely volatile. Maybe it'll go up more, but the fact that you want to diversify shows your recognized that a) they might not go up indefinitely and b) there's a good chance they'll drop a whole lot. How would you handle a 90% drop? Assuming 0 correlation between crypto and stocks, and a 50/50 allocation, a 90% drop in crypto is "only" a 45% drop in your net worth. Still too much? Cut the allocation until you reach a number you can life with.
Personally, my target allocation includes 4% cryptocurrency, but due to the recent run up in ethereum and litecoin it's more like 8% right now. I own 0 bitcoin. I'm looking to cut my position in the new year. I believe the technology is valuable, but the recent run up is based on speculative fervor, not any fundamental value. Nobody is using it to conduct actual transactions except to buy drugs and cryptokitties, or to raise funds/scam people with the ICO of the week.
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I am thinking about moving my portfolio into 30% Equities, 20% Real Estate, 20% Cash, 20% Crypto and 10% Precious Metals.
Does anyone still hold 100% Equities?
Does anyone hold 100% Real Estate (for cash flow)?
For the record I am a 26 year old
If bitcoin isn't a bubble then there's no such thing as a bubble. Good move to get out.
That's crazy to have 50% in cash, metals and crypto currencies. That's a doom and gloom portfolio. And no bonds??? Bonds and stocks are the basic building block of modern portfolios.
https://www.blackrock.com/wte/core-builder/us?refType=fi
https://personal.vanguard.com/us/funds/tools/recommendation?reset=true
https://gps.ricedelman.com/
https://www.whitecoatinvestor.com/150-portfolios-better-than-yours/
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We're almost entirely rental real estate, because people always need somewhere to live, even if they're jobless. We're overdue for a price correction in Australia, but it's unlikely prices will crash entirely, since with manufacturing going overseas there's not a lot else for people to invest in. A general economic crisis will limit how much people can invest, but in times of economic crisis people do tend to go for lower-risk investments.
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We're almost entirely rental real estate, because people always need somewhere to live, even if they're jobless. We're overdue for a price correction in Australia, but it's unlikely prices will crash entirely, since with manufacturing going overseas there's not a lot else for people to invest in. A general economic crisis will limit how much people can invest, but in times of economic crisis people do tend to go for lower-risk investments.
In the country where I live, there was a recognition that a property price correction was overdue, but the expert opinion was that it would be a soft landing.
In reality, property prices in the capital fell 60%, and nine tenths of the new mortgage market ceased to exist.
My understanding of the Australian mortgage market is that at present, it's funded in large part through wholesale money market borrowing at rates kept artificially low by major Chinese players looking for foreign investment opportunities. If anything happens to that flow of money, panic will hit.
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I am thinking about moving my portfolio into 30% Equities, 20% Real Estate, 20% Cash, 20% Crypto and 10% Precious Metals.
Here's my 2 cents. I think you are smart to reduce your very high percentage-wise investment in crypto and move more into equities and real estate. I would recommend an even higher percentage in equities and reduce the percentage you have in cash/crypto/precious metals. Your current plan cited above is 50% of your investments in assets that store value not create value. But if you are at least moving in the right direction and becoming slightly more diversified out of crypto I give you kudos for that. I would also suggest you consider some small percentage in bonds too.
If you need further support to reduce crypto and move more into equities/real estate/bonds, I would give you MMM's recent tweet that's still up on the home page: "I think Bitcoin is a ridiculous speculative bubble and we need to debunk the idea that it's an investment."
Finally I want to say that I wish I was asking the questions you are at age 26. I wish I found MMM sooner in life. After reading the collins series others have linked here, come up with an investment plan that you feel comfortable with, hopefully at your age it's heavy with equities and I would wager you'll be fine in the long run. Sure the "top could be in" and there could be a correction, but over the long haul you'll be fine if you follow MMM principles, have a reasonable investment plan and stick to it. Interesting discussion here. Good luck!
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"If I want to start pulling from an equities portfolio right away (after 1 year for capital gains), you would suggest just doing a traditional account, correct?"
I'm probably outside the norm on here. I think most people should have $100,000 save in a good ol' regular account then max all of their tax deferred accounts. I missed on a lot of opportunities early in life due to lack of liquidity. There's just something comforting about a pot of FU money around.
BTW - I don't think Bitcoin is a "new asset class", I think its another currency. Except today, people are viewing this as an "investment" instead of a translation of value. That's interesting
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(learn about public - private key cryptography befor trying to argue this)[/size] and that it can't be aimlessly devalued through inflation (let's not argue this point, those are facts on mathematical levels).
Not here to debate Crypto with you. I personally find concept and code fascinating, and yes the math is solid. BUT, as far as a currency or just a valued asset, that is yet to be proven, thus unproven asset. Only time will tell if it becomes one.
And yes, I would have argued the same with stocks, back then they first appeared, in the 1300's?!
Anyway, as I said, jump in to the market, even if it falls the day after, you know it will eventually come back.
As for real estate, I'd say go for it, using the advice from bigger pockets, find your niche and do it!
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Seems like a troll thread but I'll make a few points anyway.
I completely disagree with their assumption on Crypto-Currencies, Tokens and/or Blockchain based assets, I am a full time analyst and would love to have a live Skype discussion for anyone that wants to debate such a topic but I am not in here for that. If you or anyone wishes to do that please PM me. If you feel they are a bubble that is completely fine! That's not what I am in here for. I have got my F-YOU money from it and now am looking to discuss exit strategies.
Yes, I don't know if I feel the trillions of dollars in gains over the short amount of time is healthy. I am in here to discuss that and have open ears!
You are a "full time analyst" so who am I to argue, but I don't think that there have been over two trillion dollars in gains from crypto currencies. I think that the entire crypto market is worth less than half a trillion.
I'll also echo other posters that you're thinking about this the wrong way. You are worried about a fifty percent correction in the stock market but not worried about a similar correction in crypto currency. In my opinion is you have that backward.
There has been a lot of terrific advice offered to you here. My advice is to re-read this thread and try to take it to heart instead of fighting against it.
Good luck!
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Worst threat title ever. The 4% rule hasn't come up in the discussion at all and I don't understand where in the thought process the 4% rule was for OP.
This seems more like a discussion on asset allocation than anything which is why you're going to get a massive number of different responses. Everyone has their own risk tolerances and those risk tolerances are on full display in each of our own portofolios.
Nobody here has asked you what your FIRE timeframe is or what your risk tolerance is like or any of those questions that must be asked when looking to help someone determine what their retirement portfolio should be. Therefore you should pretty much throw everyone's opinions out since they're just that, opinions. That doesn't mean that there aren't some good insights provided, its just that they haven't provided that insight with the goal of helping you in mind.
So, with that said, I think you should take some time to outline what your retirement goals and plans are. What age do you see yourself retiring at? Are you going to quit earning income altogether when you do retire? What's your risk tolerance like and what type of concerns do you have in various markets? If you're concerned about a market crash, then having an allocation set up that keeps you up at night isn't a good idea. So it is important to get the right mindset around what actual risks there are in each of your allocations. That means performing your own risk assessment as to how well you could handle any given market outcome. For example, if stocks crashed 50% the year you decided to retire, how would you react, how would you fair, and what would you do? What would your other allocations look like in such a scenario?
That being said, it seems like your portfolio is very "doomsday" oriented. So I think you need to answer some of the questions above and perform a legit risk assessment to determine whether that "doomsday" allocation is truly necessary or not.
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Perhaps the OP has amassed 25X his annual expenses worth of Crypto?
If that's the case, I'd recommend two things:
1. diversify into at least two crypto currencies, and
2. withdraw one year's living expenses in cash right away
Next, you have a lot of good suggestions for asset allocations here: when you've done the soul-searching that allows you to produce an investing policy statement, you can set your paycheck to go straight into an investment account in that allocation.
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+1 that addressing the 4% rule more directly still needs to be done.
@Tonayahu, the 4% rule includes quite a safety margin for down markets. It anticipates that with 50% in stock and 50% in bonds, annual rebalancing of the stock-bond proportion will enable withdrawals to be made at the rate of 4% of the original portfolio without running out of money for the next 30 years. For a fuller picture of how this works for a variety of portfolios, review the safe withdrawal rate charts at https://portfoliocharts.com/
https://portfoliocharts.com/portfolio/withdrawal-rates/
The key to the 4% withdrawal rate is whether 4% of the invested total is equal to or greater than your expenses. The 4% is based on historic performance of ordinary investments. If the non-crypto portion of your portfolio is sufficient to meet this standard, presumably you are safe for decades even if the stock markets crash comes the day after your new asset allocation is implemented, and the crypto naysayers turn out to be right. The only way you would fail in that case would be to reallocate non-crypto into crypto.
For what it's worth, I think that basing a portfolio on present analysis about the relative valuation of asset classes is inherently risky because valuation estimates are inherently difficult to make accurately. You stated a goal of taking a year or two off and feeling safe. I suggest that greater safety can be obtained by implementing strategies that succeed in the contingencies where our estimates are wrong as well as right. In other words, diversify across asset classes so that the diversification, not the valuation, is the primary guarantor of safety. In that light, your shift to a portfolio with several diverse asset classes is probably a good direction. I hope you do implement it, or something similar.
Personally, due to reviewing portfolio charts and pondering the behavior of different asset classes, I like several aspects of your proposed portfolio. Cash and precious metals are value stores that do well in plunges, though their long term value tends to be flat (metals) or declining (cash). Stocks tend to rise because they are shares of productive enterprises, I strongly support keeping anywhere from 30% to 50%. Real estate is somewhat uncorrelated with stocks, which is good, and somewhat productive, which is good, and gains from inflation where cash loses, so is a good asset to balance out the stock/cash axis. Bear in mind that what type of real estate and which specific real estate investments you make have a big effect, so educate yourself on that. If you directly own property, it can involve work, which contradicts your goal of taking time off, but yes a good property manager can keep the workload low in return for reduced income; at least you'd be storing some value while you take time off, though. Re precious metals, I'd consider exchanging half of that for commodities; see portfolio charts for sample results, and sample vehicles of investment. Re cash, I would suggest that some of that be in bonds.
Btw, I like the idea of having very high collars before the rebalancing between crypto and conventional.
So - do you have enough $ that your conventional (non-crypto) portfolio portion would by itself cover 25x of your current expenses? Do you expect to have different expenses when taking time off?
Good luck in any case.
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Thank you all for contributing so far, this has is truly helping me get back on track!
Cheers to all whom have chimed in with helpful knowledge except for (essentially) yelling "bubble", "tulips" or "ponzi" due to a lack of education and/or misinformation.
+1 that addressing the 4% rule more directly still needs to be done.
@Tonayahu, the 4% rule includes quite a safety margin for down markets. It anticipates that with 50% in stock and 50% in bonds, annual rebalancing of the stock-bond proportion will enable withdrawals to be made at the rate of 4% of the original portfolio without running out of money for the next 30 years. For a fuller picture of how this works for a variety of portfolios, review the safe withdrawal rate charts at https://portfoliocharts.com/
https://portfoliocharts.com/portfolio/withdrawal-rates/
The key to the 4% withdrawal rate is whether 4% of the invested total is equal to or greater than your expenses. The 4% is based on historic performance of ordinary investments. If the non-crypto portion of your portfolio is sufficient to meet this standard, presumably you are safe for decades even if the stock markets crash comes the day after your new asset allocation is implemented, and the crypto naysayers turn out to be right. The only way you would fail in that case would be to reallocate non-crypto into crypto.
For what it's worth, I think that basing a portfolio on present analysis about the relative valuation of asset classes is inherently risky because valuation estimates are inherently difficult to make accurately. You stated a goal of taking a year or two off and feeling safe. I suggest that greater safety can be obtained by implementing strategies that succeed in the contingencies where our estimates are wrong as well as right. In other words, diversify across asset classes so that the diversification, not the valuation, is the primary guarantor of safety. In that light, your shift to a portfolio with several diverse asset classes is probably a good direction. I hope you do implement it, or something similar.
Personally, due to reviewing portfolio charts and pondering the behavior of different asset classes, I like several aspects of your proposed portfolio. Cash and precious metals are value stores that do well in plunges, though their long term value tends to be flat (metals) or declining (cash). Stocks tend to rise because they are shares of productive enterprises, I strongly support keeping anywhere from 30% to 50%. Real estate is somewhat uncorrelated with stocks, which is good, and somewhat productive, which is good, and gains from inflation where cash loses, so is a good asset to balance out the stock/cash axis. Bear in mind that what type of real estate and which specific real estate investments you make have a big effect, so educate yourself on that. If you directly own property, it can involve work, which contradicts your goal of taking time off, but yes a good property manager can keep the workload low in return for reduced income; at least you'd be storing some value while you take time off, though. Re precious metals, I'd consider exchanging half of that for commodities; see portfolio charts for sample results, and sample vehicles of investment. Re cash, I would suggest that some of that be in bonds.
Btw, I like the idea of having very high collars before the rebalancing between crypto and conventional.
So - do you have enough $ that your conventional (non-crypto) portfolio portion would by itself cover 25x of your current expenses? Do you expect to have different expenses when taking time off?
Good luck in any case.
If I were to pull out 100% of cryptos right now, I would not be able to cover 25x my expenses. I would need to have another 2-3 weeks in a strong bull market like we have just seen the past few weeks.
In regards to the 4% rule, which was my main point of making this (but I guess I wasn't very good at clarifying what I was looking for), I wouldn't mind throwing a large portion into Equities but I didn't want to:
1) Miss out on liquidity. While I do want to travel for a year or so, I am 90% certain I will find places that I feel I could bring businesses and/or value to and would need liquid capital for start up operations.
2) Buy the top. I genuinely feel this is an actual concern. If I were to do this and have the market correct next year, I would be forced to not withdraw from my portfolio unless I wanted to jeopardize long term portfolio growth.
Has anyone ran any monte carlo simulations on portfolios surviving 70+ years and while buying near a top? I think I will try to go mess around a little bit and see what I can find.
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Have you looked at cFIRESIM?
http://www.cfiresim.com/
It and another calculator, FireCalc, allow calcuations somewhat similar to what you're looking for.
Here are some previous discussions these and their pitfalls:
https://forum.mrmoneymustache.com/ask-a-mustachian/firecalc-and-cfiresim-both-lie/
Fwiw, in your shoes I'd begin the reallocation ASAP, perhaps with a weekly pull of 25% from crypto to other assets until you get close to your chosen new portfolio (maybe end of January). The fact you'll be keeping some crypto might give you a chance to achieve full FI regardless, but shifting at least some to non-crypto right away guarantees that you'll have enough fiat to enjoy the next few years without touching the remaining crypto.
Overall, it sounds like you're not quite at FI, but you have plenty to take time off if you choose, assuming you convert enough to fiat-denominated investments and value stores to cover the upcoming few years of expenses. Let us know how it goes! Also, I enjoy your posts in the main crypto thread; thanks for sharing your knowledge.
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Hey all,
My title is a bit misleading, I simply wanted to get you guys in here to help me get back on track.
I first learned about traditional personal finance about 2 years ago. I listened to hours of Radical Personal Finance, read many blogs, learned about Early Retirement Extreme, Mr. Money Mustache and Bogle Head investing. I was on my way to saving 60%+ and hunting for that early retirement goal!
I then found Crypto-Currencies and have dived head first into what I believe is a new Digital Asset Class. I have made money this past year that would have taken me nearly half a lifetime, and for that I am truly blessed (Praise Jesus).
I am not in here to discuss those, if you wish please go into my other thread.
My question is, I have been so far off track in terms of "traditional personal finance" that looking at the stock market charts is literally scary. From my amateur view (viewing charts, P&E ratio, macro economic view, debt to GDP), I feel that we are due for a correction.
I am thinking about moving my portfolio into 30% Equities, 20% Real Estate, 20% Cash, 20% Crypto and 10% Precious Metals.
Does anyone still hold 100% Equities?
Does anyone hold 100% Real Estate (for cash flow)?
I want to get a discussion going here and not a flat out "answer and exit" approach.
For the record I am a 26 year old college graduate with no debt. I grew up in a lower-middle-class family and have never traveled so I want to get my portfolio in order during 2018 so I can take off for a year or two in 2019 and feel safe.
I want to thank you all for reading this and hope I can find some more wise friends/mentors to steer me in the right direction.
Cheers!
Lots of good advice already, so I wont repeat that.
My short answer is that the future will be very dynamic and I would advise some diversification of your investments (both financial and education/career moves using both aggressive and defensive strategies). The world is commoditizing and globalizing very quickly, so many markets and equity investment will trend toward behaving like a portfolio of lottery tickets.
I am not a big fan of asset classes that rely solely on consumer or industrial demand for appreciation (e.g. commodities). I worked with two top commodities market trader/manipulators in the area of strategy and ultimately the data suggests that these markets will all be either too efficient to exploit or too dominated by large players to rely on. Ultimately that area is not good for capitalists (providers of funds) but can be good for business (if you run a value added business service).
Regarding crypos, I invested there using the old supply the gold rush with tools and food strategy. I am holding some individual stocks that supply this market with key tech as fun money (and have insider friends as warning signals at those companies).
Good luck.
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2) Buy the top. I genuinely feel this is an actual concern. If I were to do this and have the market correct next year, I would be forced to not withdraw from my portfolio unless I wanted to jeopardize long term portfolio growth.
Has anyone ran any monte carlo simulations on portfolios surviving 70+ years and while buying near a top? I think I will try to go mess around a little bit and see what I can find.
I don't know of any Monte Carlo simulations. I do know there have been historical studies about the consequences of actually buying at the top. And the consequences are it lowers your returns by a little bit.
The thing that really kills your returns: The markets make most of their gains on a small number of days each year. Being in cash on those days will significantly reduce your final portfolio value.
A couple other things to keep in mind: Most corrections are pretty short in duration, the average is only 10 months. I realize you think you've got the top sussed out, but have you figured out a way to time the bottom? You might have to jump back in pretty quickly. And remember the part about being in cash.
Another thing is there might not be a correction. The market could easily trend sideways or maybe have positive but below average returns for a long period of time.
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You are worried about a stock market decline, but have you considered buying insurance against such a decline? Right now, you can purchase put options on SPY that will protect your investment from any decline (beyond the cost of the insurance) for just over 2 years at a cost of about 4% per year. If that seems pricey, consider a collar (buy a put, sell a call) for around 3.5% per year. Most years, your portfolio will outperform cash or treasuries and, most importantly, it will never crash. In the meantime you pocket the small dividend stream.
Not to mindlessly hate on your 20% crypto allocation, but given that stocks can be hedged and cryptos all look like this chart, I wonder if you're worrying about the right risks. If you have a "I would sell everything today" number on the cryptocurrencies, how did you arrive at that valuation?
(https://pbs.twimg.com/media/DOHka7iWsAAsU4Q.jpg)
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I feel like I have been brainwashed to think that the stock market could collapse within my lifetime (it's only 200 years old and I wonder how long can this debt driven, fiat currency, federal reserve driven style can survive). When I was younger I was fed so much "collapse" type stuff.
Take a look through American 19th Century economics and the number of times there was a "Panic of 18XX." That was their phrase for recession or depression. Our market was quite volatile before the Federal Reserve system came along. World markets had the same problems when everything was based on physical gold and silver coinage. The lack or excess of physical money caused a lot of inflation/deflation cycles that ruined nations. Our current system has its faults, but our currency has been pretty damn stable since.
Thank you all for contributing so far, this has is truly helping me get back on track!
Cheers to all whom have chimed in with helpful knowledge except for (essentially) yelling "bubble", "tulips" or "ponzi" due to a lack of education and/or misinformation.
Before you go calling out people yelling tulips and bubbles, the voices of concern are numerous and educated. The present cryptocurrency rise shares many aspects with the speculations of previous centuries and back then every one of them said "but it's different this time." You might be proven right over the long term, but only time will tell which is why some folks here are recommending you make it a manageable part of a larger portfolio. The fact that not everybody understands cryptocurrency is in itself a cause for concern - especially lawmakers who could find a way through ignorance or malice to put restrictions on the growing industry. There was a discussion here a few weeks ago debating whether someone could make their fortune in marijuana stocks because it had nowhere to go but up (the counter being it was controversial, illegal in some places, and could be made illegal again in others).
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Does anyone still hold 100% Equities?
Yup. I do. I hold zero crypto.
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Cheers to all whom have chimed in with helpful knowledge except for (essentially) yelling "bubble", "tulips" or "ponzi" due to a lack of education and/or misinformation.
I'm really not getting this comment. Did you know that there was a tulip bubble in the 1600's. I have no idea why everyone bought those tulips but they did. Did you know Sir Isaac Newton lost almost all his money on the South Sea Company ?
I love cryptocurrencies. I think they are a great idea. They are also basically a means of exchange. They are like money. Currently though they need to change a lot and who knows if any of these currencies will be a game changer when it comes to exchanging value.
I know for a fact that I work in IT and the topic of cryptocurrencies is coming up a lot and people are discussing their trading accounts. These people are just speculating. Crypto-currencies now have all the signs of a bubble. It's not a lack of education or misinformation. That is reality.
Anyway stocks and bonds should form the vast majority of your portfolio. Invest in those asset classes as per your risk profile. I would just go to Vanguard and get a couple of funds that meet your needs.
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If you're worried about equity valuations then it's logical to give a large allocation to bonds.
So you might prefer a 50% bond to 50% stock allocation.
If you made a lot of money in crypto, then pare that down to your 20% allocation asap, and then create the balanced portfolio as described above, which will greatly weather a stock correction.
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Does anyone still hold 100% Equities?
I do, or at least, my retirement account is 100% VTWSX. I have a couple ETH that I have mined, but no cryptocurrency that I have paid for as an investment.
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Well first off you are 26... When do you hope to retire.. or hope to be FI?
If it could be 20 years from now then I would go 100% stock ETFs.. The point being is economies always grow and large US companies are diversified internationally.
In 20 years time it is reasonable to assume you will have a lot more money than you do now, in fact the average rise in stocks is about 10% compound (including dividends)
I was 100% stocks up until a year before I retired.. probably a bit risky.. but say 5 years before retirement being 100% stocks is reasoable.
Cryptos?.. Sell them tomorrow. You have done well.. now sell them and celebrate your win.
Max out your 401k and Traditional IRAs if you can to reduce your tax bill.. Heck invest in an HSA too if you can.
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From Above:
Assuming you accumulated half a lifetime's pay in the last year or two with Bitcoin (for even a pretty low-paid blue collar job, that's a cool million bucks in ~20 years/half a working life), you should be fully FI if you just take that money and stick it in some sort of low cost index (mostly stocks) fund. Period.
Tonyahu may not have been worried about the 4 percent rule, but with our society being in somewhat of a state of flux, I was beginning to wonder. Most of the folks posting impress me as very intelligent in terms of investing and I thank you for the vote of confidence in the 4 percent rule. Whew!
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From Above:
Assuming you accumulated half a lifetime's pay in the last year or two with Bitcoin (for even a pretty low-paid blue collar job, that's a cool million bucks in ~20 years/half a working life), you should be fully FI if you just take that money and stick it in some sort of low cost index (mostly stocks) fund. Period.
Tonyahu may not have been worried about the 4 percent rule, but with our society being in somewhat of a state of flux, I was beginning to wonder. Most of the folks posting impress me as very intelligent in terms of investing and I thank you for the vote of confidence in the 4 percent rule. Whew!
It should be noted that the 4% SWR is based on US equities and bonds and that cryptocurrencies, for obvious reasons, aren't part of that historical analysis.
Cryptocurrency will change the world, according to the fanboys/girls, but, as previously mentioned, blockchain, which is pretty damn cool, is being used by companies without having a currency attached.
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We're almost entirely rental real estate, because people always need somewhere to live, even if they're jobless. We're overdue for a price correction in Australia, but it's unlikely prices will crash entirely, since with manufacturing going overseas there's not a lot else for people to invest in. A general economic crisis will limit how much people can invest, but in times of economic crisis people do tend to go for lower-risk investments.
There is no doubt that residential property values have increased massively in Australia over the past 30 years, and with favorable tax treatment has been the easiest way to build a stash in Australia. But I really think it is time to cash some of the profits and take a more balanced approach to investment.
Maybe you are right that property won’t crash (and maybe not) but I think there are very good arguments for property values to increase by less than inflation over the next 10 years. Also Net Rental yields in capital cities are low compared to dividend yields.
Diversification of a good portion of your stash into equities and fixed interest would be a prudent move.
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I don't expect housing cost to rise forever. If it did, at some point all the housing in the country would be owned by one person, and everyone else would rent. This is economically possible but politically untenable, so won't be allowed to happen.
Prices won't collapse US-style because we have different laws here; in the US people can essentially just leave the keys in the mailbox with a note for the bank and walk away. We also have more prudent banking regulations. Certainly prices will drop at some point, but they're not going to halve in less than a generation.
Essentially Aussie money has nowhere else to go except overseas. We've killed our manufacturing industry, and we're mining everything humanly possible, so people with spare cash to invest have nowhere else to stick it. Yeah, there's bank bonds - but ultimately the value of these is based on the bank's assets, which are in large part mortgage debt. So their value will track with real estate; if real estate collapses, the banks are in trouble, too.
As for the rest of the market, prices of company stocks and so on, these are even more volatile than housing.
Long-term, I'm more interested in building my business, living off the income of producing something of real value, rather than simply idly living off financial shenanigans.
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@Tonyahu, Happy New Year!
Your diversification plan sounded good. Have you started implementing it?
Best of luck.
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Prices won't collapse US-style because we have different laws here; in the US people can essentially just leave the keys in the mailbox with a note for the bank and walk away. We also have more prudent banking regulations. Certainly prices will drop at some point, but they're not going to halve in less than a generation.
The laws you're describing sound pretty much identical to Ireland - where prices halved in about two years.
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Hey guys, just need a quick check on my financial plan. I'm going to rob all of my neighbours and then sell their stuff on craigslist, then retiree filthy rich! I'd love some feedback on this plan, but I don't want to talk about the robbery part. Any advice for me?
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Hey guys, just need a quick check on my financial plan. I'm going to rob all of my neighbours and then sell their stuff on craigslist, then retiree filthy rich! I'd love some feedback on this plan, but I don't want to talk about the robbery part. Any advice for me?
Advertise on here as well. If you can get something cheap I'm in.
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Hey guys, just need a quick check on my financial plan. I'm going to rob all of my neighbours and then sell their stuff on craigslist, then retiree filthy rich! I'd love some feedback on this plan, but I don't want to talk about the robbery part. Any advice for me?
My advice is when selling the stuff only accept crypto as payment. I read on a forum that it was untraceable and it's a great investment. Better than tulips...not sure exactly what that means, but it sounds amazing.
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Hey guys, just need a quick check on my financial plan. I'm going to rob all of my neighbours and then sell their stuff on craigslist, then retiree filthy rich! I'd love some feedback on this plan, but I don't want to talk about the robbery part. Any advice for me?
Well there is a guy on MMM's crypto article in the comments section unashamedly waiting to snatch up his over-extended neighbor's assets at rock-bottom prices should that bubble burst. Give him a call?