How the wealthy allocate investment

The Dude said:
No one will ever advise you better than this
Start your 401k with spy 100 percent
Max your contributions as soon as possible
If you want to retire with a million before 55
It doesn't get simpler or safer
Click to expand...
Hell that's good advice if your 40 and just getting started as is the case with a lot of working class folks with grown kids. If both adults work till 67 they can expect around $3,000 in SS per month. With your house paid off if you have $500,000 in retirement investments and you draw down only 4%/year you shouldn't outlive your money. One thing you may want to consider....invest in long term care insurance. If your under 40 it's relatively cheap and you won't lose your retirement savings if one of you ends up in a nursing home.
 
As I have stated before, I believe that while well intentioned, The Dude and Frank Booth are doing ThreeDee and others a disservice by just saying "invest it and forget about it". Here is why. Time frames matter. Saying that the stock market averages X% over its lifetime is meaningless. None of us have that same timeline. Timelines matter.

Here are the annualized returns over various periods since 1950

1950 - 1959 = 13.65%
1960 - 1969 = 4.39%
1970 - 1979 = 2.44%
1980 - 1989 = 12.07%
1990 - 1999 = 16.29%
2000 - 2009 = -2.23% (yes negative)
2010 - Present = 12.06%

Now lets look at 30 year horizons

1950 - 1979 = 6.36%
1960 - 1989 = 6.38%
1970 - 1999 = 9.99%
1980 - 2009 = 7.92%

These are real returns and don't even factor in inflation. Let's say you have inflation at 2% a year, then you can reduce these returns by 2%. This is just simple math to illustrate a point that those that are trying to give Threedee advice aren't telling him the entire story.

Now do not take this post to mean I don't think anyone should invest in the stock market. I am not saying that. I am saying don't by into the "conventional wisdom". As I have shown you with data it isn't always what it appears. Your individual time lines and inflation matter in these discussions.
 
Listen all jokes aside, I admire ila a lot. Engineering is not easy neither is real estate. And I believe what he says about his returns. Threedorks is stupid young.
Here is the thing about buy and hold, it averages 10 but could be down 50 percent in year one.
Buy and hold means you need balls of steal everybody panics in crashes when shit crashes. What they should to is buy more. There are more thiefs on Wall Street posing as financial advisers than all the used car salesman that ever lived.
If you buy spy you don't have to be a stock picker and do a lot of homework

The reason I never bought bond is simple. I stated young and didn't see the logic of settling for lower returns.
There is no arguing the math
 
The Dude said:
Listen all jokes aside, I admire ila a lot. Engineering is not easy neither is real estate. And I believe what he says about his returns. Threedorks is stupid young.
Here is the thing about buy and hold, it averages 10 but could be down 50 percent in year one.
Buy and hold means you need balls of steal everybody panics in crashes when shit crashes. What they should to is buy more. There are more thiefs on Wall Street posing as financial advisers than all the used car salesman that ever lived.
If you buy spy you don't have to be a stock picker and do a lot of homework

The reason I never bought bond is simple. I stated young and didn't see the logic of settling for lower returns.
There is no arguing the math
Click to expand...

I am not an engineer. Not smart enough. I got lucky in real estate. It really started off with me trying to get someone else to pay my mortgage and over many, many years grew into a nice source of income.

I agree 100% on investing in SPY and if Threedee wants to put his dollars there, he isn't going to do badly. I invest in the SPY as well. My only difference is that I will pull out when I think the market is shitty, but I have spent lots of time trying to learn technical analysis because it fascinates me. I have only time it perfectly once and that was luck. More often than not, I get the top wrong and I get the bottom wrong, however I usually am able to follow the trend. I got 2013 more wrong than right.

I do think that timing and inflation matter more than many financial experts say. They always like to talk about the market's returns, but never factor in inflation.
 
I'm a stock market dork, use to play fantasy football 30 years ago. Now that time is reading financial statements and watching 6 hours a day of CNBC.
What I'm telling him is the no work, better than advisor assisted returns. Obviously if he knows a tract of land that will one day be a mall that is better like usc did.
Here is some more counterintuitive stuff. If you are young or have a horizon more than 5 years, pray for a crash. I use to tease old accountants with that. Your monthly investment buys you more share post crash. The market is going to be what it is in 20 years or whatever. When I was 35 a coworker supervisor asked why I read the Wall Street journal at lunch. She thought it was boring(most people do). She still needs to work.
 
I Love America said:
As I have stated before, I believe that while well intentioned, The Dude and Frank Booth are doing ThreeDee and others a disservice by just saying "invest it and forget about it". Here is why. Time frames matter. Saying that the stock market averages X% over its lifetime is meaningless. None of us have that same timeline. Timelines matter.

Here are the annualized returns over various periods since 1950

1950 - 1959 = 13.65%
1960 - 1969 = 4.39%
1970 - 1979 = 2.44%
1980 - 1989 = 12.07%
1990 - 1999 = 16.29%
2000 - 2009 = -2.23% (yes negative)
2010 - Present = 12.06%

Now lets look at 30 year horizons

1950 - 1979 = 6.36%
1960 - 1989 = 6.38%
1970 - 1999 = 9.99%
1980 - 2009 = 7.92%

These are real returns and don't even factor in inflation. Let's say you have inflation at 2% a year, then you can reduce these returns by 2%. This is just simple math to illustrate a point that those that are trying to give Threedee advice aren't telling him the entire story.

Now do not take this post to mean I don't think anyone should invest in the stock market. I am not saying that. I am saying don't by into the "conventional wisdom". As I have shown you with data it isn't always what it appears. Your individual time lines and inflation matter in these discussions.
Click to expand...
ILA....I'm impressed. You articulated a cogent and well reasoned post without once resorting to being an asshole. Are you feeling well? ;)
 
What he did in real estate is way tougher than what I did.
I thought his PE was petroleum engineer
Since I got my first degree, 1 of ever 5 years was down
Average up year 16
Average down year 15
I you read the efficient market theory it takes some fear out
Pray for a crash if you are a regular investor under 50
 
Ganja
No force
They paid me for 6 months to get right. Lol
I'll never spend my money, going to three sons.
I was 52 and said who's on their deathbed going I wish I worked more.
I'm a lucky bastard, l made more being retired
I'm fine with calling it stupid luck.
 
Rune said:
No
You claimed it pejoratively when it is actually a sign of braverey and nobility with a positive outcome.
Pwned again as usual.
Why do you even reply to me?
Now ask me about my degree like a broken record.
Click to expand...


Nothing noble about being a drug addict.

Nothing noble about lying about your degree either.
 
The Dude said:
What he did in real estate is way tougher than what I did.
I thought his PE was petroleum engineer
Since I got my first degree, 1 of ever 5 years was down
Average up year 16
Average down year 15
I you read the efficient market theory it takes some fear out
Pray for a crash if you are a regular investor under 50
Click to expand...

It means professional engineer. It's like passing the BAR or taking the CPA, in that most (if not all) engineers need the certification. Once they have it, though, they are more liable for their work, I'm told...
 
Any kind of engineering is tougher than most degrees.
I did accounting because my rich uncle was one and math and algebra were stupid easy for me In college.
I did mba cause it was easier than Cpa.
I talk about mba cause my boss kinda shit on it like he was threatened by it.
Best part of the MBA, I took a professional financial planning course. That's where I really learned investing
 
I am taking care of taxes up front by doing Roth IRA and Roth TSP (which is a plan for military and civil service people).
 
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