What do you wish you had learned sooner?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
User avatar
VictoriaF
Posts: 20122
Joined: Tue Feb 27, 2007 6:27 am
Location: Black Swan Lake

Re: What do you wish you had learned sooner?

Post by VictoriaF »

(Many of) the best things in life are free.

"You get what you are paying for" is a maxim of those who have something to sell.

Victoria
Inventor of the Bogleheads Secret Handshake | Winner of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
MoonOrb
Posts: 1506
Joined: Thu Jan 24, 2013 5:58 pm

Re: What do you wish you had learned sooner?

Post by MoonOrb »

I wish I had sooner learned:

1. The importance of asset allocation (beyond the importance of merely "diversifying");

2. How compelling the case for indexing is (the low probability of being able to pick funds that best an index's return).
MP173
Posts: 2609
Joined: Fri Dec 07, 2007 5:03 pm

Re: What do you wish you had learned sooner?

Post by MP173 »

Two things which would have been dandy to have realized earlier:

1. Roth IRA...should have taken advantage of this vehicle years ago.
2. I am not cut out to be a landlord.

My 27 year old son laments financial mistakes he made in his life, while my 18year old has a net worth many adults would like to have...why didn't I hammer home with the 27 year old what I did with the 18 year old? But then again, would it have mattered? You can lead a horse to water...

Ed
mullery
Posts: 63
Joined: Wed Nov 28, 2012 12:39 pm

Re: What do you wish you had learned sooner?

Post by mullery »

In order of importance:

1. The true impact of compound interest and the impact it has on the savings rate throughout your working career.

2. The impact of compounding expenses how you "get what you don't pay for".

3. The importance of asset allocation and rebalancing in determining the risk/return of a portfolio.

4. The benefit of contributing to a Roth IRA early in one's career when at a relatively low tax bracket.

As a young, naive investor I was "aware" of some of these topics, but didn't really understand their importance. I remember learning about compound interest in high school and college finance classes. Maybe I was just tuned-out, but I don't remember it making much of an impression on me back then. Maybe it was the way it was presented?

I think this thread helps prove that we really need a better way to educate young people on the principles of personal finance. I think it should be required at the high school level. Maybe reduce the cooking and cleaning in "home economics" and replace it with more personal finance. Parents need to do a better job of teaching this to their kids. Of course if the parent is ignorant, then that will never happen. I'm sure most of you reading this either have or will be sure to educate your kids on personal finance.
User avatar
Topic Author
Whit
Posts: 54
Joined: Thu Jun 27, 2013 10:25 pm
Location: North

Re: What do you wish you had learned sooner?

Post by Whit »

Thanks all! I really enjoyed reading your responses. I have learned a lot, and have even more to think about. One take away... I am going to have my students interview a variety of people in their lives from different generations, and ask this same type of question.
Post Reply