Whit wrote:Hello all, I'm a long time reader but i finally decided to register and ask a question.
This fall I will be in a position to teach a personal finance class. As I was reading through the curriculum I started wondering if a boglehead would look back on their financial history what big idea's/concepts would they wish they had learned much earlier in life?
There are only three things in investing that you can reliably control.
1) How much you save or spend each year.
2) Keeping investing cost low.
3) You asset allocation.
These can easily be done with regular contributions to low cost index funds. You cannot reliably do things like pick superior stock or time the market.
Once you have your essential needs meet then when you spend money on yourself you get a lot more "bang for the buck" by spending it on getting experiences instead of "stuff". The comparison I like to bring up that you likely got a number of holiday or birthday presents two years ago. Compare how many of those you can even remember now verses your memories of trips, concerts, plays, parties, fun classes or other events that you did two or even ten years ago.
If you are living paycheck to paycheck and think you are living within your budget then you are mistaken since you will occasionally have things like car repairs, doctor or dentist costs, etc. These are expected expenses, it is just that you don't know when they will happen.
If anyone knows how to reliably beat the market then they would be guarding that secret like the gold in Fort Knox. Anyone who claims to know this and posts it on the internet, offers to manage your money, sell you a book, etc does not know this secret.
There could conceivably be superior money managers in the world but they would be working at the top of Wall Street or for billionaires. The less good ones would be working for multi-millionaires and large companies. And so on down several levels, until the lowest quality ones would be working for people with you and me.