If I had been presented with a bill for the expenses instead of having them netted against the returns, how much do you want to bet I would have figured it out a lot sooner?
This.
Plus, our advisor had us changing the course every few years....we finally said, this isn't right, and I found Allan Roth's book "How a Second Grader Beats the Market." I figured, if the kid could do it, so could we.
A letter in Money Magazine circa 1999 made me realize what a doof I was for paying back-end loads and 12B-1 Fees on Putnam Funds through my Credit Union. The letter, written by a military officer, pointed me towards the USAA S&P 500 Fund. Then through Morningstar, I found you guys (Bogleheads).
1) My father explained to me, when I was a young adult, that the 1% annual fee a mutual fund charges is a percentage of assets, and if the fund makes 8% before the fee, the fee represents 12.5% of earnings. I didn't want to give anyone 12.5% of my gains.
2) Jane Bryant Quinn's 1991 book "Making the Most of Your Money". Taught me almost everything about finance that I should have been taught in school.
3) John Bogle's first mutual fund book in 1994 titled "Bogle on Mutual Funds". No going back to the dark side after reading this gem.
These three little things probably saved me hundreds of thousands of dollars over the years.
Back in the 1980s I fell for a direct mail advert from AAII and joined. Back then, their journal was very pro-index fund, and they aggressively promoted the idea that actively-managed funds didn't out-perform and that expenses mattered. That was the beginning for me.
A colleague lent me "Intelligent Asset Allocation"-- I read it and I was hooked.
I came across Bogle's "Little Book on Common Sense Investing" and away we went.
Oh, and the financial advisors working for our professional association (MD Management) weren't very bright and were turning over even faster than the stocks in their overpriced mutual funds. I started bailing from them in late 2007 and was free and clear by August 2008.
The simple and cheap investing life does it for me!
Don’t wear yourself out trying to get rich; be wise enough to control yourself. |
Wealth can vanish in the wink of an eye. It can seem to grow wings and fly away |
like an eagle. - King Solomon
i recently logged onto first command and saw that I do still have about 3K in a roth with them. Their online services seem to be nonexistant. How can I go about rolling that over into my Vanguard Roth?
Contact Vanguard. They will do most of the work for you.
Do it now.
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
For me it was a Forrest Gump episode. Back in about 1990 my 401k had three funds, one fixed income and two equity choices. Of the three, The S&P 500 index had the highest recent performance by a good bit so I put most of my money in it (for years at a time 100% of contributions). I didn't even really know what the S&P 500 was, nor even what a mutual fund was at the time, much less the distinction of an index fund. I was performance-chasing, plain and simple. In recent years as my life situation has changed substantially and I've started eying early/semi-retirement and taken the time to more thoroughly educate myself, I realized I'd been lucky. I went from a fan of indexing to a believer in indexing over the last 6 months.
An investment in Washington Mutual that was confiscated by Hank Paulson and turned over to JPM in 2008. I've steadily switched to (nearly) all index funds (and Wellington) where possible since then. In retrospect, the lesson from that relatively small loss will have a huge long-term benefit for the family's portfolio and financial health. I'm now fully convinced of the benefits of low costs, proper asset allocation, diversification, and staying the course. Thanks Bogleheads!
I tried playing a stock market game in college. The game was online and used fake money. It gave players $100k and let you invest in NYSE stocks. I found out very quickly that grabbing individual stocks was a great way to lose money. My best run was an 8% gain over three months, but I didn't expect it to last.
I admitted to myself that I had no idea what I was doing and investing, for me, would be stupid (or so I thought).
Eventually, I got job and had the opportunity to invest in a company sponsored IRA with a 3% match. I knew this was effectively free money, so I'd be dumb to pass it up. I remembered I had no idea what I was doing before and I still didn't, so I went on Amazon and grabbed four books, rated 4+ stars, by different authors, on investing.
The first one I read was a really basic personal finance book. It was mostly about debt reduction. The second books was Burton Malkiel's A Random Walk Down Wallstreet. It gave me a very real overview of how the equities and bond markets behaved. I learned that there are so many variables and information available that a single person, such as myself, had no chance of beating the market consistently. Plus, I knew attempting that would put me up against veteran, full-time investors, and trading supercomputers...basically I'd be totally outgunned.
If I couldn't beat 'em I'd have to join them. But, today I have the opportunity to join ALL of them by going into index funds and riding the wave, for better for for worse. Malkiel did mention that the stock market is like a casino, except that the long terms odds are in the favor of the investor. That gave me enough confidence to invest 15-20% for my retirement in index funds going forward.