Author Topic: Questions from 37yr old that very recently became serious about FI  (Read 2647 times)

BlkSC

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A couple months ago, I was turned on to the book "The Simple Path to Wealth" by JL Collins. I was working 12+ hour shifts so I bought the MP3 CD so I could listen to it during my drive to and from work. I think the combination of this book and the fact I saw myself being able to easily max out my 401k this year flipped a switch in me.

Ok, a little background...
I'm 37, single, have a 30 year mortgage at 3.5% interest. I make a payment +$50 every other pay check (I get paid every two weeks). I have two years left on a 0% interest vehicle loan. Otherwise, debt free.
I currently have about $20k in on online savings account earning 2.07%. I keep about $3k between my credit union's checking and savings accounts.
I've worked at my current job for seven years. My base pay is currently around $92k but, with overtime, my lowest year was $103k and the highest so far is $160k.
The company matches up to 6% plus we get a percentage for years of service, currently that's an additional 4% going into my pre-tax 401k. Fees are a flat $55 per year.
Currently sitting around $240k in my 401k. This year I put 8% in the pre-tax 401k, 8% in the Roth 401k. It's already been maxed out for the year.
I started a Roth IRA late 2017. I had to take the majority of my 2018 contributions out because of my MAGI (I didn't even know there were contributions limits based on income when I started it).
I had a feeling this year was going to be another big year so I didn't put money into the Roth IRA. I highly doubt I'm going to be able to contribute this year.
I've maxed my HSA out the last six years and just recently became aware that I could invest that money as well. Going forward, I'm going invest all of my HSA and pay for qualified expenses out of pocket.
I'm considering opening a taxable Vanguard account and buy VTSAX. I'm a little hesitant to do this now with the market so high.

So, my questions...
What would you recommend I do next?
What would you recommend I do different?
Any advice?
Thanks!

Linea_Norway

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Re: Questions from 37yr old that very recently became serious about FI
« Reply #1 on: November 25, 2019, 02:24:11 AM »
The stock market is very often high and since the stock market has started to exist, it has always grown over time, excessively so. Therefore, the longer you wait buying stocks, the more your are missing out on profits. So for long term investing, buy cheap index funds. Don't be afraid that this is the wrong time. It might be in the short run (the market could get a dip next year), but in the long run, timing the market is not smart. Just put your money into it as soon as possible.

If you want more diversification and more hassle, you could invest in rental properties. But this is a lot of work and with your long working days, I would not recommend it immediately. In general, being a landlord is most profitable if you do stuff yourself, instead of paying someone else to manage your rental.
« Last Edit: November 25, 2019, 07:42:16 AM by Linea_Norway »

reeshau

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Re: Questions from 37yr old that very recently became serious about FI
« Reply #2 on: November 25, 2019, 02:40:08 AM »
One big thing, one small thing...

Your entire narrative is about your income.  Do you understand your expenses?  Do you understand how they both contribute to your financial independence?  Spend some of that great amount of energy that shows through on knowing how much you are spending purposefully, and how much you are pissing away (because you are busy, or you have done it for a long time, or your friends do it, etc.)  Lowering your expenses gives you more money to save and invest, and a lower bar for expenses you are saving for in order to reach financial independence.

You can make Roth IRA contributions if your MAGI is above the limit: it just takes an extra step.  Research "back door Roth."  Basically, you make a non-deductible, traditional IRA contribution, and immediately (i.e. next day) convert it to your Roth.  If you have no other assets in a traditional IRA, then you can do it tax free.  I have done so for many years.

nereo

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Re: Questions from 37yr old that very recently became serious about FI
« Reply #3 on: November 25, 2019, 07:29:38 AM »

What would you recommend I do next?

You started with JL Collins podcast.  Now read his (excellent) stock series found here.

Then, read, follow and understand the Investment Order.

Welcome to the club!

terran

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Re: Questions from 37yr old that very recently became serious about FI
« Reply #4 on: November 25, 2019, 08:01:20 AM »

What would you recommend I do next?

You started with JL Collins podcast.  Now read his (excellent) stock series found here.

The OP listened to Collins' book The Simple Path to Wealth as an audiobook (not a podcast), which is essentially a restatement of the stock series with the help of an editor. No need to also read the stock series.

Your entire narrative is about your income.  Do you understand your expenses?

+1

This year I put 8% in the pre-tax 401k, 8% in the Roth 401k. It's already been maxed out for the year.

At your income you should probably contribute everything to pre-tax. See https://www.bogleheads.org/wiki/Traditional_versus_Roth


I started a Roth IRA late 2017. I had to take the majority of my 2018 contributions out because of my MAGI (I didn't even know there were contributions limits based on income when I started it).
I had a feeling this year was going to be another big year so I didn't put money into the Roth IRA. I highly doubt I'm going to be able to contribute this year.

Do you currently have any money in a traditional IRA? If not, consider making a backdoor Roth contribution: https://www.bogleheads.org/wiki/Backdoor_Roth

I'm considering opening a taxable Vanguard account and buy VTSAX. I'm a little hesitant to do this now with the market so high.

You should do this. Investing in a taxable account is no different from investing in a retirement account in terms of where in the market cycle you are, so there's no reason to invest in retirement accounts, but not a taxable account. As @Linea_Norway said, the market spends much if its time at an all time high. See also https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/ -- Cliff notes: even if you ONLY invested at market peaks you'd still do pretty well as long as you don't also sell at the bottom.
« Last Edit: November 25, 2019, 08:03:32 AM by terran »

SwordGuy

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Re: Questions from 37yr old that very recently became serious about FI
« Reply #5 on: November 25, 2019, 09:25:54 AM »

I'm considering opening a taxable Vanguard account and buy VTSAX. I'm a little hesitant to do this now with the market so high.

First, congrats, you're on a great financial trajectory!

Second, re-read JL Collins book.   You apparently missed the point about the market always trending upwards.  It's common for the market to be at an all time high.  That's why we invest in it.  :)

Unless your FIRE date is in the next few years, or you will need buckets of cash for some planned expense (like a new home or purchasing a rental), put that money to work in the market.   If I had waited back in 2012 to pour money into the market (because I thought it would be bottoming out "real soon now"), I would still be waiting to invest!

RWD

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Re: Questions from 37yr old that very recently became serious about FI
« Reply #6 on: November 25, 2019, 09:58:48 AM »
I'm a little hesitant to do this now with the market so high.

That's my cue!


1/2013  [SP500 = 1462]
https://forum.mrmoneymustache.com/investor-alley/is-now-a-bad-time-to-invest-in-stock-index-funds/
5/2013  [1583]
https://forum.mrmoneymustache.com/investor-alley/starting-today!/
https://forum.mrmoneymustache.com/investor-alley/$80k-sitting-in-cash-bc-scared-of-high-flying-stock-mkt-punch-me/
10/2013  [1695]
https://forum.mrmoneymustache.com/investor-alley/stock-market-expensive-now-alternatives/
5/2014  [1884]
https://forum.mrmoneymustache.com/investor-alley/stock-market-is-high-am-i-too-late/
https://forum.mrmoneymustache.com/investor-alley/is-the-stock-market-too-expensive-to-get-back-in/
7/2014  [1973]
https://forum.mrmoneymustache.com/investor-alley/current-market-has-me-scared-to-invest/
9/2014  [2002]
https://forum.mrmoneymustache.com/investor-alley/is-it-a-good-time-to-invest-new-money/
10/2014  [1946]
https://forum.mrmoneymustache.com/ask-a-mustachian/stock-market-would-you-buy-now-or-wait/
1/2015  [2058]
https://forum.mrmoneymustache.com/investor-alley/stock-market-should-i-be-concerned/
3/2015  [2117]
https://forum.mrmoneymustache.com/investor-alley/talk-me-out-of-timing-the-australian-market/
12/2015  [2103]
https://forum.mrmoneymustache.com/ask-a-mustachian/where-to-put-a-large-windfall-with-stock-market-near-all-time-highs/
1/2016  [2013]
https://forum.mrmoneymustache.com/investor-alley/about-to-sell-everything-talk-me-off-the-ledge-(or-push-me-off)-please!/
4/2016 [2073]
https://forum.mrmoneymustache.com/investor-alley/here-it-comes-red-dow/
2/2017  [2280]
https://forum.mrmoneymustache.com/investor-alley/does-anyone-think-we-are-in-a-bubble/
4/2017  [2359]
https://forum.mrmoneymustache.com/investor-alley/top-is-in/
6/2017  [2430]
https://forum.mrmoneymustache.com/continue-the-blog-conversation/recession-coming/
8/2017  [2476]
https://forum.mrmoneymustache.com/investor-alley/getting-scared-of-stock-market/
1/2018  [2696]
https://forum.mrmoneymustache.com/investor-alley/nervous-about-the-market/
3/2018  [2678]
https://forum.mrmoneymustache.com/investor-alley/when-would-you-get-back-in/
5/2018  [2655]
https://forum.mrmoneymustache.com/investor-alley/investing-in-a-bull-market/
6/2018  [2735]
https://forum.mrmoneymustache.com/investor-alley/moving-to-cash-market-timing-can%27t-believe-it/
10/2018  [2925]
https://forum.mrmoneymustache.com/welcome-to-the-forum/sell-index-funds-now-for-down-payment-during-recession/
2/2019  [2707]
https://forum.mrmoneymustache.com/investor-alley/welp-i'm-going-to-take-a-stab-at-timing-the-market/
4/2019  [2867]
https://forum.mrmoneymustache.com/investor-alley/buy-vtsax-now-while-its-this-high-or-wait-till-a-drop/
https://forum.mrmoneymustache.com/investor-alley/how-concerned-are-you-about-the-everything-bubble/
5/2019  [2924]
https://forum.mrmoneymustache.com/ask-a-mustachian/scared-of-investing-in-the-stock-market-now/
6/2019  [2890]
https://forum.mrmoneymustache.com/uk-tax-discussion/global-index-tracker-is-so-high!-do-i-just-keep-putting-my-money-into-it-anyway/
7/2019 [3026]
https://forum.mrmoneymustache.com/investor-alley/would-you-106836/
8/2019 [2889]
https://forum.mrmoneymustache.com/investor-alley/vtsax-and-a-looming-recession/
9/2019 [2978]
https://forum.mrmoneymustache.com/investor-alley/recession-in-2-ish-years-scale-and-nature/
10/2019 [2986]
https://forum.mrmoneymustache.com/investor-alley/advice-needed-108726/
11/2019 [3110]
https://forum.mrmoneymustache.com/investor-alley/questions-from-37yr-old-that-very-recently-became-serious-about-fi/

Miscellaneous
https://forum.mrmoneymustache.com/investor-alley/%27but-right-now-the-market-is-at-an-all-time-high-%27/
https://forum.mrmoneymustache.com/investor-alley/the-great-market-crash-of-2016!/
https://forum.mrmoneymustache.com/investor-alley/how-to-deal-with-losing-$117k-in-stock-market/
https://forum.mrmoneymustache.com/investor-alley/anyone-else-feeling-depressed-about-global-equities-10-year-outlook/
https://forum.mrmoneymustache.com/investor-alley/stocks-will-only-return-4-annually-for-next-decade-john-bogle/
« Last Edit: November 25, 2019, 04:08:48 PM by RWD »

bwall

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Re: Questions from 37yr old that very recently became serious about FI
« Reply #7 on: November 25, 2019, 01:55:37 PM »
Your offense is great ($100k + annually)! But as all serious sports fans know, defense wins championships.

How's your defense?

Can you sell your car and buy a cheaper one and invest the difference? Additional savings are in the form of cheaper insurance and less depreciation.

How big are your monthly restaurant/entertainment expenses? Usually hundreds of dollars in savings per month can be found here. By learning to cook for yourself, you can eat healthier, cheaper and become more independent.

How much house are you consuming? How far is your drive to work? Most people consume too much housing and waste too time in traffic. MMM has some great posts on this.

Congrats on your new insight! You can do this--it's not rocket science.



JAYSLOL

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Re: Questions from 37yr old that very recently became serious about FI
« Reply #8 on: November 25, 2019, 02:03:44 PM »
Your offense is great ($100k + annually)! But as all serious sports fans know, defense wins championships.

How's your defense?

Can you sell your car and buy a cheaper one and invest the difference? Additional savings are in the form of cheaper insurance and less depreciation.

How big are your monthly restaurant/entertainment expenses? Usually hundreds of dollars in savings per month can be found here. By learning to cook for yourself, you can eat healthier, cheaper and become more independent.

How much house are you consuming? How far is your drive to work? Most people consume too much housing and waste too time in traffic. MMM has some great posts on this.

Congrats on your new insight! You can do this--it's not rocket science.




+1!

Getting excited about FIRE is a good first step, and having a solid income can be a huge advantage, but being serious about FIRE is all about discipline and optimization above all else.  I stated getting serious around 5 years ago and Iím still working on it.  Welcome to the forums and best of luck to you

BECABECA

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Re: Questions from 37yr old that very recently became serious about FI
« Reply #9 on: November 25, 2019, 02:12:19 PM »
Thereís lots of good advice here already. I just want to add my support to opening a taxable vanguard account and buying VTSAX. Ideally, youíd set it up so that it automatically buys the same amount every month so you can set it and forget it and youíll be saving automatically and not worrying about what the current stock price is. This was key for me when I was in the accumulation phase.

ChpBstrd

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Re: Questions from 37yr old that very recently became serious about FI
« Reply #10 on: November 25, 2019, 03:49:21 PM »
Do all the above, but donít forget to make a dream. What will your post-FI life be about? Try writing it down - take as many drafts as you need.

Some examples Iíve seen here:

-travel / leisure
-devotion to family
-charitable work or socializing
-fitness
-changing careers to something enjoyable
-learning new things (music, tech, arts, craftsmanship, writing, etc)
-leave a fat inheritance to a deserving charity

Why this is important:

A portfolio is only a tool to do something else with. Unless you deeply want something - and have a vision for a future life - you might not be able to resist the temptation of the hedonic treadmill without a dream in mind. If this dream involves doing nothing while consuming luxuries, well you might as well spend your money now. Similarly, if you just want to escape an unpleasant job, you could do that tomorrow. What goal will sustain you?

Many people emerging from the rat race mentality find this extremely difficult. Itís not unreasonable to have a few sessions with a counselor or life coach to sort out who you will be without work. Of course, for others, the why is their starting point.


aspiringnomad

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Re: Questions from 37yr old that very recently became serious about FI
« Reply #11 on: November 25, 2019, 03:55:49 PM »
I'm a little hesitant to do this now with the market so high.

That's my cue!


1/2013  [SP500 = 1462]
https://forum.mrmoneymustache.com/investor-alley/is-now-a-bad-time-to-invest-in-stock-index-funds/
5/2013  [1583]
https://forum.mrmoneymustache.com/investor-alley/starting-today!/
https://forum.mrmoneymustache.com/investor-alley/$80k-sitting-in-cash-bc-scared-of-high-flying-stock-mkt-punch-me/
10/2013  [1695]
https://forum.mrmoneymustache.com/investor-alley/stock-market-expensive-now-alternatives/
5/2014  [1884]
https://forum.mrmoneymustache.com/investor-alley/stock-market-is-high-am-i-too-late/
https://forum.mrmoneymustache.com/investor-alley/is-the-stock-market-too-expensive-to-get-back-in/
7/2014  [1973]
https://forum.mrmoneymustache.com/investor-alley/current-market-has-me-scared-to-invest/
9/2014  [2002]
https://forum.mrmoneymustache.com/investor-alley/is-it-a-good-time-to-invest-new-money/
10/2014  [1946]
https://forum.mrmoneymustache.com/ask-a-mustachian/stock-market-would-you-buy-now-or-wait/
1/2015  [2058]
https://forum.mrmoneymustache.com/investor-alley/stock-market-should-i-be-concerned/
3/2015  [2117]
https://forum.mrmoneymustache.com/investor-alley/talk-me-out-of-timing-the-australian-market/
12/2015  [2103]
https://forum.mrmoneymustache.com/ask-a-mustachian/where-to-put-a-large-windfall-with-stock-market-near-all-time-highs/
1/2016  [2013]
https://forum.mrmoneymustache.com/investor-alley/about-to-sell-everything-talk-me-off-the-ledge-(or-push-me-off)-please!/
2/2017  [2280]
https://forum.mrmoneymustache.com/investor-alley/does-anyone-think-we-are-in-a-bubble/
4/2017  [2359]
https://forum.mrmoneymustache.com/investor-alley/top-is-in/
6/2017  [2430]
https://forum.mrmoneymustache.com/continue-the-blog-conversation/recession-coming/
8/2017  [2476]
https://forum.mrmoneymustache.com/investor-alley/getting-scared-of-stock-market/
1/2018  [2696]
https://forum.mrmoneymustache.com/investor-alley/nervous-about-the-market/
3/2018  [2678]
https://forum.mrmoneymustache.com/investor-alley/when-would-you-get-back-in/
5/2018  [2655]
https://forum.mrmoneymustache.com/investor-alley/investing-in-a-bull-market/
6/2018  [2735]
https://forum.mrmoneymustache.com/investor-alley/moving-to-cash-market-timing-can%27t-believe-it/
10/2018  [2925]
https://forum.mrmoneymustache.com/welcome-to-the-forum/sell-index-funds-now-for-down-payment-during-recession/
2/2019  [2707]
https://forum.mrmoneymustache.com/investor-alley/welp-i'm-going-to-take-a-stab-at-timing-the-market/
4/2019  [2867]
https://forum.mrmoneymustache.com/investor-alley/buy-vtsax-now-while-its-this-high-or-wait-till-a-drop/
https://forum.mrmoneymustache.com/investor-alley/how-concerned-are-you-about-the-everything-bubble/
5/2019  [2924]
https://forum.mrmoneymustache.com/ask-a-mustachian/scared-of-investing-in-the-stock-market-now/
6/2019  [2890]
https://forum.mrmoneymustache.com/uk-tax-discussion/global-index-tracker-is-so-high!-do-i-just-keep-putting-my-money-into-it-anyway/
7/2019 [3026]
https://forum.mrmoneymustache.com/investor-alley/would-you-106836/
8/2019 [2889]
https://forum.mrmoneymustache.com/investor-alley/vtsax-and-a-looming-recession/
9/2019 [2978]
https://forum.mrmoneymustache.com/investor-alley/recession-in-2-ish-years-scale-and-nature/
10/2019 [2986]
https://forum.mrmoneymustache.com/investor-alley/advice-needed-108726/
11/2019 [3110]
https://forum.mrmoneymustache.com/investor-alley/questions-from-37yr-old-that-very-recently-became-serious-about-fi/

Miscellaneous
https://forum.mrmoneymustache.com/investor-alley/%27but-right-now-the-market-is-at-an-all-time-high-%27/
https://forum.mrmoneymustache.com/investor-alley/the-great-market-crash-of-2016!/
https://forum.mrmoneymustache.com/investor-alley/how-to-deal-with-losing-$117k-in-stock-market/
https://forum.mrmoneymustache.com/investor-alley/anyone-else-feeling-depressed-about-global-equities-10-year-outlook/
https://forum.mrmoneymustache.com/investor-alley/stocks-will-only-return-4-annually-for-next-decade-john-bogle/

This is a great list! Here's one more to add to it:

https://forum.mrmoneymustache.com/investor-alley/here-it-comes-red-dow/


RWD

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Re: Questions from 37yr old that very recently became serious about FI
« Reply #12 on: November 25, 2019, 04:05:11 PM »
This is a great list! Here's one more to add to it:

https://forum.mrmoneymustache.com/investor-alley/here-it-comes-red-dow/

Thanks! Yeah, that looks pretty silly now that the stock market is up 50% since then. mrpercentage went on my block list pretty fast so that might be why I missed that one.

nereo

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Re: Questions from 37yr old that very recently became serious about FI
« Reply #13 on: November 26, 2019, 06:03:25 PM »
I forgot all about Mr Percentage...

BlkSC

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Re: Questions from 37yr old that very recently became serious about FI
« Reply #14 on: November 27, 2019, 01:46:06 AM »
Wow, that's a lot of responses! Where to begin...

First, I had a pretty good idea what the responses were going to be in regards to not knowing if now is a good time to get into VTSAX because the market is so high. And I did pay attention to JL Collins and I even read his blog on this exact question. After doing more reading of forum posts, I'm glad I'm not the only one who questions it, lol. I'll be opening an account.

Second, maybe I should have added what my goals are. To start out with, I absolutely love my job (yeah, no joke). I'm not wanting to get serious about saving and investing money to escape...I would say, more accurately, it's so I have the option some day as we do not know what tomorrow will bring. At the very least, I'd like to retire early. Or, worst case scenario, things start happening at work that I don't like, I can quit without having to worry about how I'm going to get by. Although, I'm an electrician by trade so work is pretty easy to find...I wasn't looking for this job when it found me :)

As far as expenses go, a pretty big chunk will be freed up when my truck is payed off and I plan on driving it till it dies. I rarely go out to eat (maybe once every three months if even that), I've had the same phone for three years (because it still works, why would I buy a new phone?), etc. Any "splurge" money I spend goes toward hobbies that give me things to do when I'm not working or hanging out with friends or family. I think listening to JL Collins book made me start thinking about all the money I squandered before I bought my house three years ago. While I did save some money, I could have done so much better.
 
You have all given me a lot to think about. I'm going to look into the backdoor Roth and I'll open an after tax Vanguard account and start buying VTSAX. Thanks for all your replies/time!

bwall

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Re: Questions from 37yr old that very recently became serious about FI
« Reply #15 on: November 27, 2019, 05:59:03 AM »

Second, maybe I should have added what my goals are. To start out with, I absolutely love my job (yeah, no joke). I'm not wanting to get serious about saving and investing money to escape...I would say, more accurately, it's so I have the option some day as we do not know what tomorrow will bring. At the very least, I'd like to retire early. Or, worst case scenario, things start happening at work that I don't like, I can quit without having to worry about how I'm going to get by. Although, I'm an electrician by trade so work is pretty easy to find...I wasn't looking for this job when it found me :)


Bold mine.

For me, this is what it's all about. I love my job and I'm FI and I can't see how I'd ever retire.

Being FI gives me a lot of freedom of worry about 'what if...'  and if something does happen with work I can start a new chapter immediately, no stress.

Car Jack

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Re: Questions from 37yr old that very recently became serious about FI
« Reply #16 on: November 27, 2019, 06:47:03 AM »
I'd change the 401k contribution to 100% traditional.  Take the tax incentive now.  Wait until you file your taxes to see where your MAGI hits to see if you can add a Roth.  If you don't have any traditional pre-tax IRAs now, you can contribute to a non-deductible IRA and do a backdoor Roth if your MAGI excludes you.

If you're paying more than $35 all in for your phone plan, look into Cricket.  It's AT&T when you get right down to it but unlike the big guys, where a $30 plan costs you $60 with all the taxes and fees, they give you an all in price.  They use the AT&T system and there is literally no difference.  We switched 4 years ago and cut our family of 4 plan in half.

SeattleCPA

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Re: Questions from 37yr old that very recently became serious about FI
« Reply #17 on: November 27, 2019, 08:58:15 AM »
Second, re-read JL Collins book.   You apparently missed the point about the market always trending upwards.  It's common for the market to be at an all time high.  That's why we invest in it.  :)


With respect to Jim, who I know, this statement just isn't true. The recent rate of return of everything research paper proves the opposite:

Check out the line charts in this graphical summary of how stocks have done over roughly the last century in a bunch of countries where data is available:

https://evergreensmallbusiness.com/rate-of-return-of-everything-study-in-line-charts/

BTW, the actionable insights from the rate of return of everything data: (1) diversify internationally, (2) look at real estate, (3) consider what percentage bonds.

MustacheAndaHalf

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Re: Questions from 37yr old that very recently became serious about FI
« Reply #18 on: November 29, 2019, 02:16:34 AM »
Second, re-read JL Collins book.   You apparently missed the point about the market always trending upwards.  It's common for the market to be at an all time high.  That's why we invest in it.  :)
With respect to Jim, who I know, this statement just isn't true. The recent rate of return of everything research paper proves the opposite:
Are you claiming "the market always trending upwards" is false?  Or are you claiming house prices beat equities?
Those are very different claims.

SeattleCPA

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Re: Questions from 37yr old that very recently became serious about FI
« Reply #19 on: November 29, 2019, 06:19:53 PM »
Are you claiming "the market always trending upwards" is false?  Or are you claiming house prices beat equities?
Those are very different claims.

I think two or three things are problematic, potentially, with the idea that one ought to just load up on Vanguard's U.S. total stock market portfolio and use that as the "solution." (Though let me say that I'm fine if someone is starting out and that's the first fund they pick...)

1. This approach seems to be based on the strong performance of the US stock market, but who knows whether that strong performance of US market continues...  A focus on the domestic stock market hasn't worked for every developed market investor obviously. Look at France for example. Or, if you want to get really pessimistic, look at Japan, Germany or Portugal.

2. The math of modern portfolio theory, which "I believe in," says if you're okay with the variability of the US stock market, you can assemble a similarly risky portfolio that delivers a return that beats the return available on US stocks. OR if you're okay with the returns of the US stock market, you can assemble a less risky portfolio that delivers a return similar to that available from US stocks. (Longer discussion that steps someone through math using Portfolio Visualizer here: 100% Stocks Allocation Suffers from Two Flaws.)

BTW, I should say about point #2, I'm okay if someone doesn't want to think about constructing a portfolio of less than perfectly correlated investments. But I think one needs to say that simplified portfolio either asks investors to accept higher risks or lower returns.

3. The other thing is, and I've been investing in Vanguard's indexes since that first one became available, other good investments exist. Like housing. Who knows whether housing will beat equities for US-centric investors. But in most countries, it looks like that would have been the smarter bet. It would not be illogical to consider that possibility as a US investor.

One final comment: I'm not a real estate fanatic. I've been an index investor for decades. And US stocks, not surprisingly, were always my largest allocation.