UPDATE: Get yours FREE this Sunday, Feb 3

[sschullo]

Hi all,
My companion, Dan, and I wrote a book: Late Bloomer Millionaires: A Financial Story and Investment Guide for the Late Starter. The book is self-published and currently on Amazon as a paperback and Kindle: the kindle version is FREE for two days, Dec 22 and 23rd: http://www.amazon.com/Late-Bloomer-Mill ... llionaires

Press Release: http://www.prweb.com/releases/latebloom ... 239168.htm

Our book will be available FREE in its entirety in Kindle format, this coming weekend, Dec 22 and 23rd. Three more days of a free download will be announced within the next three months. If you don't have a Kindle, you can download the application for your iPad from Amazon and other devices: http://www.amazon.com/gp/feature.html/r ... 1000493771

We thank Taylor, Mel, Larry and Alex for your wonderful blurbs and also Scott Burns, Allan Roth and Kathy Kristof of Kiplinger's Personal Finance and CBS MoneyWatch.

Our book is a true story about how a couple of educators who like many Americans started with zero assets and little knowledge of investing, but unlike many Americans retired early with a comfortable nest egg, after experiencing head-on two of the most massive stock market crashes in history. We were forced to learn to invest in our 40s and 50s after realizing we had been taken-in by annuity products and then by our over-confidence in the tech bubble and crash when we lost a million. We regrouped by discovering the Boglehead way from this forum a decade ago which protected us from the 2008 crash when we were in our 50s and 60s and still managed to retire early. All of this is documented in an excruciating detail including our portfolio performance in dollars compared to what we would have earned had we used some of the lazy portfolios.

We thank all of you for your tireless, knowledgeable and persistent contributions to this forum for so many years. We think that our book reflects one case-study application of a wonderful investment philosophy from a couple of regular and "Late Bloomer" investors.

Have a great day,
Steve

[Johm221122]

Congratulations and it really seems interesting
John

[ofcmetz]

Thanks for the heads up. Ill be sure to get a copy on Saturday. That is if we are still here Saturday.

[chaz]

Thanks for the heads up. Ill be sure to get a copy on Saturday. That is if we are still here Saturday.

Me too. Thanks for making your book available to us at a very reasonable price.

[Taylor Larimore]

Steve:

Thank for alerting us to a free offer of your new co-authored book about how your portfolio became a disaster until you and Dan discovered the Boglehead Investing Philosophy of successful investing. I am pleased to include many of your valuable excerpts in my Collection of Investment Gems.

viewtopic.php?f=10&t=107205&newpost=1557543

Best wishes.
Taylor

[Barry Barnitz]

Hi Taylor & Steve:

Taylor, we have added your latest gem to our wiki page :Taylor Larimore's Investment Gems - Bogleheads

Steve: We have created a page for you in the wiki, along with other boglehead authors: Steve Schullo - Bogleheads

regards

[Cuzz35]

Thanks! I am going to send a copy to my parents and hope something sticks.

[bogleblitz]

I'm 35, should I still read this book? I already read john bogle's common sense investing and bogleheads guide to investing.

[chaz]

I'm 35, should I still read this book? I already read john bogle's common sense investing and bogleheads guide to investing.

Yes, might help guide you.

[Taylor Larimore]

I'm 35, should I still read this book? I already read john bogle's common sense investing and bogleheads guide to investing.

Bogleblitz:

I have read hundred's of investing books and learned something new about investing from each of them. However, I must admit that after reading a great book like Mr. Bogle's "Common Sense on Mutual Funds" the learning curve drops off rapidly.

Bottom line: In my opinion, reading one good book about mutual fund investing is all that's necessary to be a successful investor. If you want to learn more, and enjoy reading financial books, you will find a long list of carefully selected books to choose from here:

http://www.bogleheads.org/wiki/Taylor_L ... tment_Gems

Best wishes
Taylor

[sschullo]

I'm 35, should I still read this book? I already read john bogle's common sense investing and bogleheads guide to investing.

Bogleblitz:

I have read hundred's of investing books and learned something new about investing from each of them. However, I must admit that after reading a great book like Mr. Bogle's "Common Sense on Mutual Funds" the learning curve drops off rapidly.

Bottom line: In my opinion, reading one good book about mutual fund investing is all that's necessary to be a successful investor. If you want to learn more, and enjoy reading financial books, you will find a long list of carefully selected books to choose from here:

http://www.bogleheads.org/wiki/Taylor_L ... tment_Gems

Best wishes
Taylor

Hi Bogleblitz,
Of course, you don't have to read our book or any other of the boglehead books listed. At the risk of sounding like a commercial (but it's offered free this weekend with 3 more free days in the future), what we offer is a case-study implementation of what we learned from the books, articles and magazines we did read, specifically how we came around to the boglehead way of investing and the compromise as a couple (I am the Boglehead, Dan is more of an active management type) and how we confronted our thinking and our psychology when markets act up. There are people who can understand risk by reading a book, we didn't and we show why and how we turned it around. Setting up a plan is relatively easy, sticking to it when the market tanks is tough. I still find it difficult to rebalance.

Back in the day, this forum didn't exist, but one of the very first books I read 30 years ago when I was 35 was "The Richest Man in Babylon." I learned that you don't have to have money to have a comfortable nest egg, it may seem trivial, but for me it was monumental coming from a very modest background.

As the title says, our book primary audience is for those who think it's too late to both save and learn the DIY method, and have tried to read a book or two on investing but found them too intimidating or dry. We provide less science (although we have many graphs!) and more of a story narrative with the reader vicarously experiencing how to confront stock market crashes and recoveries. There are many folks, we believe, that are convinced that it's too late while still in their 30s! But you are clearly on your way.

What have you got to lose except some of your time. It's a fun, easy read. You can download it for free this weekend and let us know what you think.

Have a great day and thanks for the question,

Steve

[Johm221122]

I'm 35, should I still read this book? I already read john bogle's common sense investing and bogleheads guide to investing.

I'm looking forward to read it,real life stories are great.We don't see enough of this in finicial writing
John

[sschullo]

Hi Taylor & Steve:

Taylor, we have added your latest gem to our wiki page :Taylor Larimore's Investment Gems - Bogleheads

Steve: We have created a page for you in the wiki, along with other boglehead authors: Steve Schullo - Bogleheads

regards

Taylor,
Thanks again for all of your support and validation of our work, but the credit has to go back to you, Mel, Alex and all of the great talent here in this forum.
You folks saved our butt a decade ago.
Interesting that you recognized Richard Ney's quote. This man should be given more credit for helping investors realize that the stock market has a deceptive game. He wrote his book way back in 1970, Wall Street Jungle, a best seller.
Have a great day,
Steve

[Ducky911]

got the app on my ipad....joined prime on amazon only to find out i could not borow the book with out a kindle.

[sschullo]

got the app on my ipad....joined prime on amazon only to find out i could not borow the book with out a kindle.

It will be available free starting midnight tonight PST.

[Ducky911]

ok I see

thanks

[VictoriaF]

I'm 35, should I still read this book? I already read john bogle's common sense investing and bogleheads guide to investing.

Even Bogleheads who know everything have friends and family members who need some help. The book can make a nice holiday gift. You never know what would click with finance-phobic people.

Victoria

[vesalius]

Nice bait and switch ..... everyone knows the world ends on the 21st at midnight.

[pkcrafter]

Steve, thanks for providing your new book at a Boglehead's ideal LOWEST COST--free. Now that's an opportunity no real Boglehead could pass up.

regards,


Paul

[Dadarkar]

I have learnt something new from various books mentioned in the list. Looking forward to downloading and reading the book.

[sscritic]

Steve, thanks for providing your new book at a Boglehead's ideal LOWEST COST--free. Now that's an opportunity no real Boglehead could pass up.

I am not real; I only exist on the internet. Or maybe I am real but not a boglehead. It's your choice.

Time spent reading books is time away from Chinese soap operas and bogleheads. Seriously. I consider my time valuable; I only waste it on wasteful things that I enjoy.

[sschullo]

The free ebook window is now open.
Order away! http://www.amazon.com/Late-Bloomer-Mill ... llionaires
Happy holidays,
Steve and Dan

[Groundhog]

Thanks, I picked up my free ebook this morning.

[SpringMan]

Thanks, latest link worked. The link at the very top of this thread required Amazon Prime to get the e-book free.

[sschullo]

Thanks, latest link worked. The link at the very top of this thread required Amazon Prime to get the e-book free.

Thanks for the notice. I didn't know that. The above link has been corrected.

This is the link: http://www.amazon.com/Late-Bloomer-Mill ... llionaires
At the upper right hand corner, click on "Buy now with 1 Click" and a balance of $0.00 will show.

Thank you SpringMan.

Steve

[kd2008]

Thank you for the free copy, Steve and Dan! Wish you happy holidays!

[hsv_climber]

Thank You Steve.

I've just added the free copy to my Amazon Cloud and briefly looked through it. The most important thing that I saw is that you were brave enough to admit your mistakes and especially losses during the tech bubble. It takes a lot of courage to admit your mistakes. I applaud you for that.
Great book!!!

[ofcmetz]

Just downloaded a free copy. Thanks. Look forward to reading it and then giving it a rating on amazon.

[6miths]

Thank you very much. I downloaded a copy and am enjoying it now. A great Saturday read! Merry Christmas and have a great holiday season!

[chaz]

I posted this on Amazon:

This review is from: Late Bloomer Millionaires: A Financial Story and Investment Guide for Late Starters (Kindle Edition)
This terrific new book is a true story showing how an investor can make a mistake and yet come back to accumulate a nice retirement account using low cost index funds. This book should be read by all to get a handle on preparing for their own retirement down the road. I highly recommend it.

[LadyGeek]

Thank you. I posted this notice on our sister Canadian site, Financial Webring Forum.

[RenoJay]

Just downloaded it. Thanks!!

[JMacDonald]

Today is the last day before Xmas to get your free book written by Dan and Steve. Given that the price is right, you will probably find it to be an interesting book on how two guys managed to survive the land mines of the financial world to a successful retirement.

Here is a link for Taylor's post about the book: viewtopic.php?f=10&t=107205&newpost=1561304

[zvez]

after reading your post this morning I finally got off my butt, and went to best buy and bought a kindle HD, jsut so I could download the book (I did!). Had been planning on getting a kindle for some time

Chris

Hi all,
My companion, Dan, and I wrote a book: Late Bloomer Millionaires: A Financial Story and Investment Guide for the Late Starter. The book is self-published and currently on Amazon as a paperback and Kindle: the kindle version is FREE for two days, Dec 22 and 23rd: http://www.amazon.com/Late-Bloomer-Mill ... llionaires

Press Release: http://www.prweb.com/releases/latebloom ... 239168.htm

Our book will be available FREE in its entirety in Kindle format, this coming weekend, Dec 22 and 23rd. Three more days of a free download will be announced within the next three months. If you don't have a Kindle, you can download the application for your iPad from Amazon and other devices: http://www.amazon.com/gp/feature.html/r ... 1000493771

We thank Taylor, Mel, Larry and Alex for your wonderful blurbs and also Scott Burns, Allan Roth and Kathy Kristof of Kiplinger's Personal Finance and CBS MoneyWatch.

Our book is a true story about how a couple of educators who like many Americans started with zero assets and little knowledge of investing, but unlike many Americans retired early with a comfortable nest egg, after experiencing head-on two of the most massive stock market crashes in history. We were forced to learn to invest in our 40s and 50s after realizing we had been taken-in by annuity products and then by our over-confidence in the tech bubble and crash when we lost a million. We regrouped by discovering the Boglehead way from this forum a decade ago which protected us from the 2008 crash when we were in our 50s and 60s and still managed to retire early. All of this is documented in an excruciating detail including our portfolio performance in dollars compared to what we would have earned had we used some of the lazy portfolios.

We thank all of you for your tireless, knowledgeable and persistent contributions to this forum for so many years. We think that our book reflects one case-study application of a wonderful investment philosophy from a couple of regular and "Late Bloomer" investors.

Have a great day,
Steve

[Watty]

Thanks, I just got it.

[sschullo]

DEADLINE IS IN TWO HOURS.

Thanks to everybody who took advantage of the free offer and the kind comments.
FYI, 2500 potential readers downloaded the book with 2 hours left!
Thanks to those readers who posted their reviews on Amazon.

We ask that you post a review on Amazon when you get a chance. We want to know what you think.

Thanks again and happy holidays,
Steve and Dan

[arcticpineapplecorp.]

Thanks for the free copy. Good to hear about the ups and downs and back up again of your investing career. What a wild ride that was for you both. I am sure it will be helpful to new investors to hear the lessons you learned and hopefully not make the same types of mistakes (not being properly diversified, avoiding salespeople, etc). I will refer your book to those that I know. It was well done, easy to read but substantive. I think there's something that most people can learn since there are many different areas/topics covered (investing and personal finance).

A few corrections I would like to point out (in order of appearance), if I may. You did state you would like to know what we think. My page references are based on what my kindle for pc show at the bottom of each page I'm quoting from (perhaps this might be a different page on an actual kindle?)

I read a line at location 670 of 3060 that reads: "When more investors sell shares of a company than are bought, the price declines."
Robertson, Dan ; Schullo, Steve (2012-12-09). Late Bloomer Millionaires: A Financial Story and Investment Guide for Late Starters (Kindle Locations 677-678). . Kindle Edition.

I don't think that's true based on what I've read here on this blog. My understanding is there's always an equal number of sellers and buyers of shares provided the number of shares remains the same. So it's not that there's MORE sellers than buyers, but rather the buyers from people selling shares are offering LOWER prices at which they will buy them. If the sellers of those shares accept the lower prices, this leads the price of the shares to fall. The market prices are based on the movement of the agreed upon prices at which buyers and sellers agree to buy and sell those shares. In the inverse, when people offer higher prices to buy shares from sellers, if accepted, the price moves higher. Not because there are MORE buyers than sellers. There are an equal number of buyers and sellers. The only change is the price at which they are willing to buy and sell.

Second correction on location 753 you quote Larry Swedroe's book "The Guide to a Winning Bond Strategy". The book is actually titled "The Only Guide to a Winning Bond Strategy You'll Ever Need". Might seem to be picking at nits, but seems to be a lack of attention to detail like at location 701 quoting the 3M stock price as "$86.24 (April 2012)" instead of the more exact ("opening price on 4/9/12").

Third correction--on Location 1404 you provide a link to Simba's excel backtesting spreadsheet for 25 different lazy portfolios. The link appears to be a dead link. (Says "there's currently no text in this page"). Added comment (it appears to be a dead link when clicked on directly from the e-book, but the link below seems to work if you type it into a browser (or click on the link below...so I'm not sure why it isn't working when clicked in the e-book?) This is the link you provided in the e-book:

http://www.bogleheads.org/wiki/Simba’s_backtesting_spreadsheets.
Robertson, Dan ; Schullo, Steve (2012-12-09). Late Bloomer Millionaires: A Financial Story and Investment Guide for Late Starters (Kindle Locations 1410-1411). . Kindle Edition.

Fourth-- The professors names are "Kenneth French and Eugene Fama, not..." On Location 1419 you write: "Eugene French and Kenneth Fama examined 80-year historical data and found higher returns came from value stocks over growth stocks; small-cap outperformed large-cap stocks."
Robertson, Dan ; Schullo, Steve (2012-12-09). Late Bloomer Millionaires: A Financial Story and Investment Guide for Late Starters (Kindle Locations 1423-1424). . Kindle Edition.

Fifth -- on location 2186 (Additional notes from the advisor) after the second conversation between advisor and Samantha) you have a link to boglehead.org. This is a dead link, because it should be bogleheads.org, not boglehead.org.

Sixth - at location 2572 (in the acknowledgments section) you have the link as boogleheads.org, not bogleheads.org (resulting in a dead link). "John Bogle’s crusade has attracted a legion of indexing advocates whose contributions to Boogleheads.org..."
Robertson, Dan ; Schullo, Steve (2012-12-09). Late Bloomer Millionaires: A Financial Story and Investment Guide for Late Starters (Kindle Locations 2577-2578). . Kindle Edition.

You did get it right "bogleheads.org" as of section "financial websites" at location 2959.

Don't get me wrong. I appreciated reading your personal story and the struggles you endured (not just financially but with regards to health and deaths in the family). I liked the sections on annuities and sales pitches and how to interview a fee only planner. I just wanted to offer some constructive criticism. I believe in this post you asked for feedback from us. I'm providing some...for what it's worth.

And I would be remiss if I failed to mention that the best line in the book was "After we diversified out of the narrow NASDAQ into the broad market indexes and bonds the volatility dropped like a freshly-born Holstein calf from its standing mother."
Robertson, Dan ; Schullo, Steve (2012-12-09). Late Bloomer Millionaires: A Financial Story and Investment Guide for Late Starters (Kindle Locations 1339-1340). . Kindle Edition.

You can make the corrections when you release your second printing! If you ever want an editor for any future endeavors, let me know (I'm not too expensive!)

Congratulations on your book. I did enjoy it very much. I know others will as well.

[sschullo]

Thanks for the free copy. Good to hear about the ups and downs and back up again of your investing career. What a wild ride that was for you both. I am sure it will be helpful to new investors to hear the lessons you learned and hopefully not make the same types of mistakes (not being properly diversified, avoiding salespeople, etc). I will refer your book to those that I know. It was well done, easy to read but substantive. I think there's something that most people can learn since there are many different areas/topics covered (investing and personal finance).

A few corrections I would like to point out (in order of appearance), if I may. You did state you would like to know what we think. My page references are based on what my kindle for pc show at the bottom of each page I'm quoting from (perhaps this might be a different page on an actual kindle?)

I read a line at location 670 of 3060 that reads: "When more investors sell shares of a company than are bought, the price declines."
Robertson, Dan ; Schullo, Steve (2012-12-09). Late Bloomer Millionaires: A Financial Story and Investment Guide for Late Starters (Kindle Locations 677-678). . Kindle Edition.

I don't think that's true based on what I've read here on this blog. My understanding is there's always an equal number of sellers and buyers of shares provided the number of shares remains the same. So it's not that there's MORE sellers than buyers, but rather the buyers from people selling shares are offering LOWER prices at which they will buy them. If the sellers of those shares accept the lower prices, this leads the price of the shares to fall. The market prices are based on the movement of the agreed upon prices at which buyers and sellers agree to buy and sell those shares. In the inverse, when people offer higher prices to buy shares from sellers, if accepted, the price moves higher. Not because there are MORE buyers than sellers. There are an equal number of buyers and sellers. The only change is the price at which they are willing to buy and sell.

Second correction on location 753 you quote Larry Swedroe's book "The Guide to a Winning Bond Strategy". The book is actually titled "The Only Guide to a Winning Bond Strategy You'll Ever Need". Might seem to be picking at nits, but seems to be a lack of attention to detail like at location 701 quoting the 3M stock price as "$86.24 (April 2012)" instead of the more exact ("opening price on 4/9/12").

Third correction--on Location 1404 you provide a link to Simba's excel backtesting spreadsheet for 25 different lazy portfolios. The link appears to be a dead link. (Says "there's currently no text in this page"). Added comment (it appears to be a dead link when clicked on directly from the e-book, but the link below seems to work if you type it into a browser (or click on the link below...so I'm not sure why it isn't working when clicked in the e-book?) This is the link you provided in the e-book:

http://www.bogleheads.org/wiki/Simba’s_backtesting_spreadsheets.
Robertson, Dan ; Schullo, Steve (2012-12-09). Late Bloomer Millionaires: A Financial Story and Investment Guide for Late Starters (Kindle Locations 1410-1411). . Kindle Edition.

Fourth-- The professors names are "Kenneth French and Eugene Fama, not..." On Location 1419 you write: "Eugene French and Kenneth Fama examined 80-year historical data and found higher returns came from value stocks over growth stocks; small-cap outperformed large-cap stocks."
Robertson, Dan ; Schullo, Steve (2012-12-09). Late Bloomer Millionaires: A Financial Story and Investment Guide for Late Starters (Kindle Locations 1423-1424). . Kindle Edition.

Fifth -- on location 2186 (Additional notes from the advisor) after the second conversation between advisor and Samantha) you have a link to boglehead.org. This is a dead link, because it should be bogleheads.org, not boglehead.org.

Sixth - at location 2572 (in the acknowledgments section) you have the link as boogleheads.org, not bogleheads.org (resulting in a dead link). "John Bogle’s crusade has attracted a legion of indexing advocates whose contributions to Boogleheads.org..."
Robertson, Dan ; Schullo, Steve (2012-12-09). Late Bloomer Millionaires: A Financial Story and Investment Guide for Late Starters (Kindle Locations 2577-2578). . Kindle Edition.

You did get it right "bogleheads.org" as of section "financial websites" at location 2959.

Don't get me wrong. I appreciated reading your personal story and the struggles you endured (not just financially but with regards to health and deaths in the family). I liked the sections on annuities and sales pitches and how to interview a fee only planner. I just wanted to offer some constructive criticism. I believe in this post you asked for feedback from us. I'm providing some...for what it's worth.

And I would be remiss if I failed to mention that the best line in the book was "After we diversified out of the narrow NASDAQ into the broad market indexes and bonds the volatility dropped like a freshly-born Holstein calf from its standing mother."
Robertson, Dan ; Schullo, Steve (2012-12-09). Late Bloomer Millionaires: A Financial Story and Investment Guide for Late Starters (Kindle Locations 1339-1340). . Kindle Edition.

You can make the corrections when you release your second printing! If you ever want an editor for any future endeavors, let me know (I'm not too expensive!)

Congratulations on your book. I did enjoy it very much. I know others will as well.

Hi arcticpineapplecorp,

Thanks so much for your detailed critique. Your hired! for my 2nd book which is about 80% done which focuses on the corrupted 403b.
With two professional editors and a weekly writing critique group for 1.5 years, we welcome and learn from "constructive criticism."
We have an errata sheet ready with all of your comments.

With regard to how prices go up and down, you are right that there are equal number of buyers and sellers. What we meant is that when the demand is low prices drop for anything, stocks, cars, gasoline, services. I was picturing the same thing for stocks. When there are few or no buyers, the price drops until a sale is agreed by both seller and buyer. I noticed that if there is a bidding war on a house, for example, the price of that house is going up (more buyers for one house). If nobody offers a bid on your house and it has been on the market for a while, your price must drop. That was my thinking and what we have learned about free markets all of my life, supply and demand. Initially, there may be more buyers than sellers or more sellers than buyers, but at the end of the day IF a sale is completed, there are equal number of both.

I can't believe I got the first names of Fama and French turned around. At least I have the correct first names, that's a start.

Don't know if there will be a 2nd edition. I want to get the 403b book out first. You will be the first to know.
Finally, somebody noticed the Holstein calf metaphor for dropping volatility.

Thanks again for reading, critiquing and enjoying our book.

Happy holidays,
Steve

[pop77]

Hi Steve and Dan,
Thanks for making your book available for free. I downloaded it and enjoyed reading the book. I view this book more of a life lessons book rather than a investment guidance book as most of the information you outline in the book is advice from others. It was fascinating to observe how your portfolio grew from 2003 to 2011. I think your book highlights the importance of saving which is highly underrated. Most of the books and articles talk about investing but a few talk about saving. I think in spite of all the mistakes you have made, you have accumulated wealth by just consistently saving through and through. Your book gave me renewed confidence as to 'not to keep up with the Joneses" and live within the means.

I have been investing myself for the past 10 years and have learnt a lot in this forum and other places. I do not have a problem investing when the prices are down (like 2008). However the tougher times for me is times like now where all the asset classes are at or near their 52 week highs. I want get your perspective on the mechanics of how you invested when the prices were high and continued to rise. Did you still invest regularly even when prices were high or did you hold it in cash when prices were high to buy when there was panic.

Thanks again for writing your story. It is very inspirational and I patted myself in the back(on behalf of you) for saving and paying off your car loan and staying auto loan free rather than getting that brand new car.

[sschullo]

Hi Steve and Dan,
I view this book more of a life lessons book rather than a investment guidance book as most of the information you outline in the book is advice from others.

Exactly. Indexing strategy has already been written by a giant in the field and from the many authors in this forum. Our contribution is a case-study of what happens when a couple of ordinary investors impliment what has been said here for 15 years.
If we were to rename the book's subtitle, it might be: "A Financial Story and Consumer Guide for the Late Starter." I do think that the information we outline is what happened to our money over 18 years of data, not just a graph of hypothetical scenarios.

It was fascinating to observe how your portfolio grew from 2003 to 2011.

Part of investing knowhow is how to preserve and protect what you earned from downside risk. We only "lost" 11.9% in 2008 and used that time to rebalance into equities and we did it again in the August-Sept correction of 2011.
There is a "distortion" in which we explain for 2008. The graphs don't show our 11.9% loss because we invested our real estate proceeds in July, 2008. Even though our portfolio decreased about $250,000 for 2008, our $400,000 contribution looks like we gained in 2008. Bottom line, our portfolio grew because we saved a bundle in investing costs (estimated at $150,000 over ten years @ 3% hypotheical costs compared to our actual .35% cost), 70% in bonds, two bull markets (2003-2007) and (2009-2012 3rd Q returns). The key is that we didn't lose relatively speaking compared to many people in 2008.

I think your book highlights the importance of saving which is highly underrated. Most of the books and articles talk about investing but a few talk about saving. I think in spite of all the mistakes you have made, you have accumulated wealth by just consistently saving through and through. Your book gave me renewed confidence as to 'not to keep up with the Joneses" and live within the means.

Being a Boglehead, I totally agree. Thats why were talked a little about the formulation of our money values we learned from our parents and how they lived, modest housing, used cars, "save for a rainy day", and lived within their means because they had to. With that background, I expected as a young man that I would be poor all of my life because I had no talents, confidence and didn't know who I was really. But, I DID feel good about being independent, never borrowing money from anybody, despite earning crappy wages in deadend jobs, I STILL was able to save a little and I always had money for whatever. In a way I was forced to be frugal, because I didn't have any money to spend. What is surprising to me is that I carried these values as I got older and learned to do without. I could never afford those until later on. But by then, I didn't want them. As we say in the book, 'Investing in our 403bs was instinctive, the thought of getting a pair of new beamers (BMWs) instead was proposterous." Isn't it always the choices we make? The stock market doesn't provide much over the short time (and you could lose a lot), but over long periods of time that 7-8% annual return and constant savings builds up.

I have been investing myself for the past 10 years and have learnt a lot in this forum and other places. I do not have a problem investing when the prices are down (like 2008). However the tougher times for me is times like now where all the asset classes are at or near their 52 week highs. I want get your perspective on the mechanics of how you invested when the prices were high and continued to rise. Did you still invest regularly even when prices were high or did you hold it in cash when prices were high to buy when there was panic.

Yes. During the tech bubble we contributed all the way up. Dan retired in 2000, but I kept contributing until I retired in 2008. No, we didn't have money in cash to take advantage of downturns until a few years ago. We are very late bloomers to the strategy of rebalancing. We did some of what you said in 2009 and again in 2011, but thats all. In the tech bubble, we were over 95% sector technology sectors. [/quote]

[pop77]

Thanks for your reply. I wonder whether you would have had better results if you had about 5-10% in cash for buying at opportune times. This is a question I am always struggling with. Should I hold about 5% of portfolio in cash or short term bonds so that when there is a correction or a crash I can put it to good use. However if there is a prolonged bull market I will miss out (but 95% will still be working for me).

[nwffdiver]

Steve thank you and Dan for writing a book about your personal journey. It made me reflect on a couple of big mistakes I made earlier in my saving career. The whole Boglehead community is very special, and I feel lucky to be a part of it. I read the book in its entirety yesterday. A great read. I hope you two have a great retirement. Please post more if you guys decide to write another book.

Brad

[sschullo]

Thanks for your reply. I wonder whether you would have had better results if you had about 5-10% in cash for buying at opportune times. This is a question I am always struggling with. Should I hold about 5% of portfolio in cash or short term bonds so that when there is a correction or a crash I can put it to good use. However if there is a prolonged bull market I will miss out (but 95% will still be working for me).

Hi pop,
Look at Figure 14, if we had put our money in VG Wellington or Merriman's Ultimate Buy and Hold portfolios from 1994-2011, we would have had over $400,000 more in our portfolio. We would have a lot better results. But we didn't.
You know what the Bogleheads say: Create a plan that reflects tolerance for risk and goals, stick with it and rebalance when asset classes and the stock/bond split drift from your original plan.

When we rebalance, we are selling high and buying low at opportune times. We have done what you are suggesting and will continue to rebalance. In a sense, the portfolio is telling you of the opportune times when its out of balance. Its not easy to do, but thats a winning way. This is not our idea, its whats said around here for many years and the boglehead books that I have read.

The point is that to create a plan and stay the course.
With 95% in equities, are you 30 something?
Steve

[pop77]

Look at Figure 14, if we had put our money in VG Wellington or Merriman's Ultimate Buy and Hold portfolios from 1994-2011, we would have had over $400,000 more in our portfolio. We would have a lot better results. But we didn't.
You know what the Bogleheads say: Create a plan that reflects tolerance for risk and goals, stick with it and rebalance when asset classes and the stock/bond split drift from your original plan.

That is amazing. In percentage terms that is huge. I am 42. And here is how my assets are split.

Dividend Growth Portfolio--39% - This is a portfolio of stocks I have accumulated over last 5 years which are multinational corporations with consistent dividend growth record and strong balance sheets and a business that is not volatile (Food, Pharma, Retail,Utilities etc)

Opportunity Stocks -12% - Again a portfolio of stocks and mutual funds - I am trying to bring this down to 5% but I am in no hurry to do that. Contains what I consider undervalued securities (CSCO, BRK/B etc)

Small/Mid Cap Stocks- 9% - In Vanguard Index funds

Foreign Developed Stocks -6% In FSIIX (Index fund)

Emerging Market Bond - 4% (In PREMX and FNMIX)

NON -US Bond -2% (In GIM)

US BOND - 6% (Split between PTTRX and VBTIX)

TIPS (individual Tips )- 2%

US Real Estate - VNQ- 3%
International Real Estate -VNQI- 2%
Commodities - 3% (SPlit between PCRDX and HACMX)
Infrastructure -IGF 3%
Cash - 4%

As you can see I am in the conversion process but I am taking my time to switch to index based approach and I do not think I will completely switch. Here are my reasons.

1. I think investing in a dividend growth portfolio will pay off in long term (I mean after 20 years). Though in theory you could use a 'Total Return' approach by selling stocks/bonds when you need cash flow, I do not want to be at the mercy of the market multiples when I need cash. I have very strict rules as to what qualifies and I expect to ' live off' my dividends after 20 years for all the 'essential expenditure' like property tax, utilities, medical expenditure etc.
2. Opportunity stocks - I am going to bring this down to 5% and keep it there.
3. Emerging Market Bond- The two funds I own have reasonably low expense ratios and I cannot find a good index fund that is low fee . I also think active management will help in this volatile asset class.
4. Non US bond- I am rethinking whether I should have this asset class. Currently my allocation is very low to make or break. Either I should increase it or completely eliminate it. GIM has done reasonably well over long time horizons and I am still analyzing it.
5. Commodities- The two funds I own track the index but with active management. Because of the 'contango' effect, I want to have some active management. These funds also do a good job of buying the right bonds for collateral to boost returns.
6. US Bonds.- I am still debating whether I should move everying in PTTRX to VBTIX or give Bill Gross time. Here is the chart I am looking from Morning Star
http://quote.morningstar.com/fund/chart ... %2C0%22%7D

You may see that PTTRX has outperformed VBTIX most of the time if the holding period is 12 months.

My bond holding is low because of my trust in my DRIP portfolio.Considering how the stocks in my portfolio are in better financial shape the US government and are multinationals, I would think the dividends are safe.

Would love to hear your perspective.

[Humbled]

Congratulations on this book, which I reviewed yesterday. I went through a very similar and very expensive financial education, from the cast of characters in this industry, including a stockbroker that managed an account during the tech bubble, my CFP who recommended whole life policies, my CPA who recommended limited partnerships in gas wells, and a real estate developer (recommended by a real estate investor JD/CPA friend) who sold me limited partnerships in commercial real estate ventures. I was very trusting, because as a physician, I naively assumed that trained and certified financial professionals had the same degree of integrity that I have when dealing with patients. I lost a lot of money, and was very humbled by the experience (hence my logon id). Although I was able to recover financially, thanks to Boglehead philosophy, I still find myself checking my portfolio too much and reading financial information too often. Hopefully, I will recover from the disappointment in these financial professionals sometime soon.

[sschullo]

Congratulations on this book, which I reviewed yesterday. I went through a very similar and very expensive financial education, from the cast of characters in this industry, including a stockbroker that managed an account during the tech bubble, my CFP who recommended whole life policies, my CPA who recommended limited partnerships in gas wells, and a real estate developer (recommended by a real estate investor JD/CPA friend) who sold me limited partnerships in commercial real estate ventures. I was very trusting, because as a physician, I naively assumed that trained and certified financial professionals had the same degree of integrity that I have when dealing with patients. I lost a lot of money, and was very humbled by the experience (hence my logon id). Although I was able to recover financially, thanks to Boglehead philosophy, I still find myself checking my portfolio too much and reading financial information too often. Hopefully, I will recover from the disappointment in these financial professionals sometime soon.

Hi Humbled,
I know that feeling. You'll recover. Time does wonders to one's damaged physical, mental and emotional health as well as a portfolio. Despite the portfolio mistakes we committed, over the long term, our portfolio recovered from those massive losses. We learned that we did more things right than wrong by not buying stocks on the margine, or mortgaging our house to buy more stocks! and making course corrections along the way by reducing costs and volatility, and including international funds and a mix of fixed securities appx equal to our ages. Very simple stuff.

Thanks for the review on Amazon. Much appreciated.
Steve

[sschullo]

Look at Figure 14, if we had put our money in VG Wellington or Merriman's Ultimate Buy and Hold portfolios from 1994-2011, we would have had over $400,000 more in our portfolio. We would have a lot better results. But we didn't.
You know what the Bogleheads say: Create a plan that reflects tolerance for risk and goals, stick with it and rebalance when asset classes and the stock/bond split drift from your original plan.

That is amazing. In percentage terms that is huge. I am 42. And here is how my assets are split.

Dividend Growth Portfolio--39% - This is a portfolio of stocks I have accumulated over last 5 years which are multinational corporations with consistent dividend growth record and strong balance sheets and a business that is not volatile (Food, Pharma, Retail,Utilities etc)

Opportunity Stocks -12% - Again a portfolio of stocks and mutual funds - I am trying to bring this down to 5% but I am in no hurry to do that. Contains what I consider undervalued securities (CSCO, BRK/B etc)

Small/Mid Cap Stocks- 9% - In Vanguard Index funds

Foreign Developed Stocks -6% In FSIIX (Index fund)

Emerging Market Bond - 4% (In PREMX and FNMIX)

NON -US Bond -2% (In GIM)

US BOND - 6% (Split between PTTRX and VBTIX)

TIPS (individual Tips )- 2%

US Real Estate - VNQ- 3%
International Real Estate -VNQI- 2%
Commodities - 3% (SPlit between PCRDX and HACMX)
Infrastructure -IGF 3%
Cash - 4%

As you can see I am in the conversion process but I am taking my time to switch to index based approach and I do not think I will completely switch. Here are my reasons.

1. I think investing in a dividend growth portfolio will pay off in long term (I mean after 20 years). Though in theory you could use a 'Total Return' approach by selling stocks/bonds when you need cash flow, I do not want to be at the mercy of the market multiples when I need cash. I have very strict rules as to what qualifies and I expect to ' live off' my dividends after 20 years for all the 'essential expenditure' like property tax, utilities, medical expenditure etc.
2. Opportunity stocks - I am going to bring this down to 5% and keep it there.
3. Emerging Market Bond- The two funds I own have reasonably low expense ratios and I cannot find a good index fund that is low fee . I also think active management will help in this volatile asset class.
4. Non US bond- I am rethinking whether I should have this asset class. Currently my allocation is very low to make or break. Either I should increase it or completely eliminate it. GIM has done reasonably well over long time horizons and I am still analyzing it.
5. Commodities- The two funds I own track the index but with active management. Because of the 'contango' effect, I want to have some active management. These funds also do a good job of buying the right bonds for collateral to boost returns.
6. US Bonds.- I am still debating whether I should move everying in PTTRX to VBTIX or give Bill Gross time. Here is the chart I am looking from Morning Star
http://quote.morningstar.com/fund/chart ... %2C0%22%7D

You may see that PTTRX has outperformed VBTIX most of the time if the holding period is 12 months.

My bond holding is low because of my trust in my DRIP portfolio.Considering how the stocks in my portfolio are in better financial shape the US government and are multinationals, I would think the dividends are safe.

Would love to hear your perspective.

Hi pop,
I see you have about 83% in equities and about 17% in bonds and cash. So far so good for a 42 year old, who wants to take on a lot of risk.
You have 39% large cap value. What are "opportunity stocks?" Is your large cap value and opportunity stocks individual stocks?
Is your portfolio for retirement or something else?

I am not familiar with some of your holdings and your goals. Risk is fine for a 40 something. But even at 42, I wouldn't hold commodities, foreign bonds or individual stocks (assuming you own individual stocks). At age 65, I have "been there and done that" with individual stocks.

I would increase international stock allocation and reduce your large cap domestic holdings. Value has done fine for many decades. Still, there are no guarentees that it will continue.

I would dump Pimco even though it has outperformed the VG total bond market index according to Morningstar, but I don't know if expenses are factor in the returns. Pimco is twice as expensive.

We don't hold foreign bonds until their expenses decrease. Even then I would have to understand more about currency risk.

To better understand your management philosophy, how would you prioritize the following investing strategies:
reduce costs?
increase performance?
diversification?
stock bond split according to your age?
long-term wealth building?
reduce risk and volatility?
short-term get rich quick?
beat the market averages?
earn the market averages?
earn enough to keep pace with inflation?

Have you presented your portfolio on this forum? If so, what was the response?

Happy New Year,
Steve

[ScottW]

I finished reading the book yesterday and posted an Amazon review this morning. I thought it was well written and surprisingly candid. Many investment how-to books are a little too "dry" for my tastes, and present the perfect scenario that you should follow based on a bunch of research studies. While the advice provided may be solid, such books can seem a little too removed from reality (after all, who does everything right, particularly at first?), and may be harder for novice readers to take seriously. By spending a lot of time on the authors' own missteps and gradual process, the book felt a lot more "human" and easier to relate to, which I suspect some readers will appreciate.

[pop77]

HAPPY NEW YEAR AND SORRY FOR THE DELAY IN RESPONSE. I want to write a thorough reply so I waited till I got a good chunk of time.

I see you have about 83% in equities and about 17% in bonds and cash. So far so good for a 42 year old, who wants to take on a lot of risk.

I view my DRIP portfolio as a substitute to bonds. This may be against the 'academic text book' definition but the companies I choose are there for multiple decades, do not carry too much leverage, sell thousands of products across hundreds of countries and do not have very high payout ratios. These are what Morningstar calls as 'wide moat' companies. Examples are Walmart, McDonalds, Nestle, General Mills, Johnson and Johnson etc. If all these companies have to go belly up I would consider that would be too bad for the world and if that is the case I do not think government bond would be of much help. Again I am not looking to sell the stock themselves but only use their dividends. So I would not care much if the price of the stock falls temporarily even 50%.

You have 39% large cap value. What are "opportunity stocks?" Is your large cap value and opportunity stocks individual stocks?

My DRIP Portfolio is all individual stocks. Again I look them as their own countries. (Compare the Market cap of these companies to some countries GDP!). Opportunity Stocks are again individual stocks but those which do not pay dividends (like BRK/B). Again if you look at Berkshire's product portfolio it is well diversified and undervalued.

Is your portfolio for retirement or something else?

It is for retirement and for my daughter. She has special needs and I am saving for two generations!

I am not familiar with some of your holdings and your goals. Risk is fine for a 40 something. But even at 42, I wouldn't hold commodities, foreign bonds or individual stocks (assuming you own individual stocks). At age 65, I have "been there and done that" with individual stocks.

Regarding commodities, I read a couple of good articles in Vanguard's website and other research paper from Morningstar that highlights how Commodities if held in low percentages (less than 5%) can be a great diversifier in bringing down the volatility of the whole portfolio. Individually they may be very volatile but this brings the overall portfolio volatility down. The bookmark is not working now. I have downloaded the white paper but I do not know how to attach it to the post. I will try to email them to you separately.

Regarding individual stocks see my reply above. I was also chasing hot stocks before. But I am now picking up good companies at reasonable prices and view them as 'equity bonds'. I may buy just one or two stocks in the entire year. I tend to own them for long durations (I first bough JNJ in 2003 and added to it in 2008). Still hold them all.

I would increase international stock allocation and reduce your large cap domestic holdings. Value has done fine for many decades. Still, there are no guarentees that it will continue.

Agreed, I may have to increase the international stock allocation. However, the companies I own in my DRIP portfolio though domiciled in US, get most of their revenue outside US, I consider it my international allocation.

I would dump Pimco even though it has outperformed the VG total bond market index according to Morningstar, but I don't know if expenses are factor in the returns. Pimco is twice as expensive.

Agreed. I seriously considered dumping it twice but held on to it because over long term it has outperformed VBTIX.(May be this would be another Bill Miller story but Bill Gross has more room to play than VBTIX. For example now he owns lot of Canadian bonds as he sees value there) I have it in my 401k, as the institutional class so it is little bit cheaper!

We don't hold foreign bonds until their expenses decrease. Even then I would have to understand more about currency risk.

I hold Emerging Market Bond funds that are denominated primarily in dollars(FNMIX and PREMX). That is why I did not go for the local currency Emerging Market Bond funds.

To better understand your management philosophy, how would you prioritize the following investing strategies:
reduce costs?
increase performance?
diversification?
stock bond split according to your age?
long-term wealth building?
reduce risk and volatility?
short-term get rich quick?
beat the market averages?
earn the market averages?
earn enough to keep pace with inflation?

Here are my priorities
1. Long term wealth building
2. Diversification
3. Reduced Costs
I do not care about anything else. Bottom line is I want my money to grow consistently . Diversification helps stomach ups and downs along the way and I do not want to give away money to stupid money managers based on short term performance. Most of my portfolio is either individual stocks or index funds. I have a handful of active funds in asset classes where I think it is 'worth' paying a money manager (like Emerging Market Bonds, Commodities)

Have you presented your portfolio on this forum? If so, what was the response?

No I have not. I can probably guess the response. Again I am not trying to be stubborn, my goal is to learn from various resources including bogleheads but not get tied down by a dogmatic approach. If some one can prove to me that why multinational companies with good balance sheets that have increased dividends consecutively for more than 50 years is risky, I am ready to listen. People will often site Enron, AIG etc. I never understood how Enron and AIG made money , but I know how McDonalds makes their money. They sell low value products in high numbers across the globe, they may have temporary set backs and I wait for them. I look for good companies in bad times before I buy them.

[sschullo]

UPDATE:
In case you missed the last free offering, our book Late Bloomer Millionaires will be offered free on as an ebook on Amazon once again this Sunday, February 3rd, starting at midnight and ending 24 hours later.

http://www.amazon.com/Late-Bloomer-Mill ... llionaires

Thanks to all of you for your interest and who wrote a review on Amazon.