What do you wish you had learned sooner?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
2comma
Posts: 1241
Joined: Thu Jul 15, 2010 11:37 pm

Re: What do you wish you had learned sooner?

Post by 2comma »

"Those who understand compound interest are destined to collect it. Those who don't are doomed to pay it."
If I am stupid I will pay.
YDNAL
Posts: 13774
Joined: Tue Apr 10, 2007 4:04 pm
Location: Biscayne Bay

Re: What do you wish you had learned sooner?

Post by YDNAL »

HenryPorter wrote:One thing I'll comment is that I work with many college age co-workers and based upon daily interaction with most of them, I think many of them would scoff at the idea of investing simply because it takes money away from them that they could spend NOW.....
From the point we embark on our work lives, we should learn and should not underestimate the time value of money and compounding.
Yesterday, YDNAL wrote:Whit, welcome to the Forum!

For ME, it is not so much "learning" but "underestimating" the power of compounding.
A $10 bill today saved at 3% interest is worth in nominal terms a $20 bill in 2037. Don't spend all the $10 bills you make.

There are a lot of things to know, some of which are made much more complicated than it should (read the Forum :D ), but nothing is more basic and more powerful than compounding.
Landy | Be yourself, everyone else is already taken -- Oscar Wilde
snyder66
Posts: 1055
Joined: Tue Feb 02, 2010 11:46 am

Re: What do you wish you had learned sooner?

Post by snyder66 »

Yes to all. But, Learning thee things along the way make you a better person/investor. There is time to catch up and learn from your mistakes. The greatest lesson I have learned is the the importance is not how much you make, but how much you save.
YDNAL
Posts: 13774
Joined: Tue Apr 10, 2007 4:04 pm
Location: Biscayne Bay

Re: What do you wish you had learned sooner?

Post by YDNAL »

snyder66 wrote:Yes to all. But, Learning thee things along the way make you a better person/investor. There is time to catch up and learn from your mistakes. The greatest lesson I have learned is the the importance is not how much you make, but how much you save.
One last thing I just remembered (it's been a while). When my kids were in HS I told them - in VERY simplistic fashion - something like this.
  • 1. If you spend $100/year for 40 years = $4000
    2. Without a regular paycheck, to continue spending $100/year for another 30 years you must have $3000 put away.
    3. Don't spend everything you make.
Everyone in this Forum knows that's far from 100% correct, but that's because we are all very financially savvy here. :D But, guess what, that's what they will tell their kids.
Landy | Be yourself, everyone else is already taken -- Oscar Wilde
User avatar
burt
Posts: 852
Joined: Sun Feb 17, 2008 6:47 am

Re: What do you wish you had learned sooner?

Post by burt »

First 4 years working. Didn't save a dime. Spent every penny. Missed 36 years of compounding.

First 4 years working. Put Christmas on a credit card. Had it paid off, just in time for the next Christmas. Rinse and Repeat.

Car payments suck. Didn't realize the joy of no car payments till much later.


burt
User avatar
Cautious Optimist
Posts: 69
Joined: Mon Jun 03, 2013 4:32 pm

Re: What do you wish you had learned sooner?

Post by Cautious Optimist »

I wish I'd learned to be born into wealth...
DieselEngineer
Posts: 40
Joined: Sat Mar 09, 2013 12:48 am
Location: NH

Re: What do you wish you had learned sooner?

Post by DieselEngineer »

1210sda wrote:1. Passive investing in general and the three fund portfolio specifically
2. The majesty of simplicity

1210
Hammer. Nail.

Diversification is NOT the number of different funds we own.
Went from 14 funds to 4 Funds - TSM, TISM, F, and G!
reggiesimpson
Posts: 1697
Joined: Mon Dec 19, 2011 11:47 am

Re: What do you wish you had learned sooner?

Post by reggiesimpson »

All of the above is sage advice. I would add something a little different. While you are young set up and run your own business. Its a wonderful learning experience.
User avatar
topper1296
Posts: 836
Joined: Fri Apr 03, 2009 10:50 pm
Location: Nashville TN

Re: What do you wish you had learned sooner?

Post by topper1296 »

A lot of the advice listed is good, however most of it involves investing which is just one piece of personal finance.

My $0.02 is that one book can give a broad lesson in personal finance and that book is the Richest Man in Babylon written by George Clason in 1926. Below is a summary of 7 lessons.
- Start thy purse to fattening (lesson in paying yourself first)
- Control thy expenditures (lesson in living below your means)
- Make thy gold multiply (lesson in compound interest)
- Guard thy treasures from loss (lesson in diversifying/not having all yours eggs in one basket & estate planning)
- Make of thy dwelling a profitable investment (lesson in buying a home)
- Insure a future income (lesson in buying insurance/saving for retirement)
- Increase thy ability to earn (lesson in continuing education/investing in yourself)
Last edited by topper1296 on Sun Jun 30, 2013 10:27 am, edited 1 time in total.
User avatar
steve roy
Posts: 1855
Joined: Thu May 13, 2010 5:16 pm

Re: What do you wish you had learned sooner?

Post by steve roy »

Even though they take you out for dandy lunches, stock brokers are not your friends.
gwrvmd
Posts: 820
Joined: Wed Dec 02, 2009 7:34 pm
Location: Calabash NC

Re: What do you wish you had learned sooner?

Post by gwrvmd »

"Do it yourself. No one cares more about your retirement than you do"...Gordon
Disciple of John Neff
User avatar
Abe
Posts: 2572
Joined: Fri Sep 18, 2009 5:24 pm
Location: Earth in the Milky Way Galaxy

Re: What do you wish you had learned sooner?

Post by Abe »

Time value of money concepts and how to use a financial calculator.
Slow and steady wins the race.
SP-diceman
Posts: 3968
Joined: Sun Oct 05, 2008 9:17 am

Re: What do you wish you had learned sooner?

Post by SP-diceman »

How easy it was.

I’ve told many who know zero about investing.
1) Pick a low cost Index
2) Pick an allocation
3) Rebalance

They still cant believe its not more manageable, more complex.
The investment world is a lot of noise and many believe it.



Thanks
SP-diceman
Paul78
Posts: 436
Joined: Sat Dec 12, 2009 10:17 am

Re: What do you wish you had learned sooner?

Post by Paul78 »

my would be

"there is this thing called a work and you get paid for it"

-I did not work at all in high school. That work out ok because I got a full ride academic scholarship (ie that was my part time job) which was work 40k+.

But a part time as a jr and sr just making enough to max out a roth ira. Getting 10k in a roth before you turn 18 would be nice.

-I did not work at all in college, I preferred more fund time. But I still had plenty of free time and with cali's min wage it would have only taken 12 hours a week to reach 5k in a year. That potential 20k in a roth ira would have been nice.

-I took too long of a break after school before I started working. I could have easily started 2-3 months earlier but I did not (lost wages).

-I only worked part time (.6 but because of various differentials got paid 75% of what a mon-fri day shift employee made) for my first 13 months. Again that adds up to lost wages.

I know work is not everything and I am ok with some of my choices. I am fine with not having a high school job (if I worked I would not have gotten the 40k scholarship) Fine with taking a break after college-it was just a bit too long-. Fine with starting out part time (easier to find part time work and my first job was 100000x times more stressful then my current one. Not sure if I could have handled working full time at that place).

Really the only one I would truly call a mistake is not working (or at least attempting to find a job) in college. That extra 20k in roth principle would be huge. Plus the investments would have occurred between Sept 2007- Dec 2010. The early cash would basically be breaking even but the middle/late cash would have earn a decent %.
User avatar
ofcmetz
Posts: 2465
Joined: Tue Feb 08, 2011 7:09 pm
Location: Louisiana

Re: What do you wish you had learned sooner?

Post by ofcmetz »

I wish I had learned consumer debt was not my friend. Coming out of my teen years with credit card debt was not a fun way to stat my financial life.

The second thing is the one that is probably mentioned most on here, that is to start saving early and often because wealth gives one independence in life.
Never underestimate the power of the force of low cost index funds.
umfundi
Posts: 3361
Joined: Tue Jun 07, 2011 5:26 pm

Re: What do you wish you had learned sooner?

Post by umfundi »

Investing and taxes.

When I started investing in 1980 there was none of the landscape we have today, no 401k, Roth, IRA, 259, ... Also, much more emphasis on individual stocks rather than mutual funds. The rules and options for tax-advantaged savings today are absolutely daunting.

Keith
Déjà Vu is not a prediction
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 »

In investing, you are not getting what you are paying for.

The simplicity and low cost of the self-managed index-fund investing seems counter intuitive, and there is a persistent temptation to improve on it. The truth is that a Bogleheads-like investing strategy is at the global maximum of building one's prosperity, and all other strategies bring it down. (This is a probabilistic statement, and of course, fluctuations and temporary exceptions are abound.)

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)
sadie wess
Posts: 320
Joined: Wed Jan 19, 2011 8:42 am

Re: What do you wish you had learned sooner?

Post by sadie wess »

Dadarkar wrote:1 Inflation slowly erodes your wealth
2. Brokerage and financial advisers sell expensive products
3. Have IPS and review it regularly
5 stars!

...and...

+1 8-)
digit8
Posts: 721
Joined: Mon Jul 14, 2008 5:26 pm

Re: What do you wish you had learned sooner?

Post by digit8 »

That actually saving for retirement is far, far more important then specifically how you do so.
I frittered about two years away between realizing I needed to invest for retirement, and when I actually felt I had a good enough plan to do so.
Looking back, it's clear that I could have invested in literally any option available to me over those years and been better off.
"You can't latte yourself to bankruptcy. The bladder won't allow it." | -Katherine Porter
maxim81
Posts: 82
Joined: Sat Apr 19, 2008 7:03 pm

Re: What do you wish you had learned sooner?

Post by maxim81 »

Not taking out student loans at all. :(
While I did not read any of the classic investing/finance books, I was lucky enough to read lot of finance sections in the news papers
User avatar
Kulak
Posts: 225
Joined: Wed Feb 02, 2011 11:46 am
Location: Weimar America

Re: What do you wish you had learned sooner?

Post by Kulak »

Here is what I wish I'd learned sooner:

wbern's "Retirement Calculator From Hell" Part 1 Part 2 Part 3 Part 4 Part 5
Depriving ourselves to boost our 40-year success probability much beyond 80% is a fool’s errand, since all you are doing is increasing the probability of failure for [non-financial] reasons. --wbern
User avatar
TimesAWastin
Posts: 142
Joined: Fri Mar 15, 2013 10:45 am
Location: Costa Mesa, CA

Re: What do you wish you had learned sooner?

Post by TimesAWastin »

Just to save. Even if I had gone off and bought into expensive active funds, it would've been better than what I did do and that was to spend on toys and entertainment. A new computer every year I really didn't need. A new guitar every year, one of which I actually play. A brand new car (the odometer ticked into double digits on the drive home). Subscriptions out the wazoo for services I rarely used. Shopping at Macy's and BB&B rather than Nordstrom Rack and Ross. Tipping 20% on every meal, no matter how poor the service. Paying for valet parking. Renting a luxury apartment with amenities I never used. $2,000 in a single year on virtual goods for an online game I don't even remember my login info for now.

Such waste. Hopefully the wait-staff at my local restaurants had the common sense to save my money themselves. ;-)

Oh well, I'm on the right path now. A sizable emergency fund set aside, bills streamlined, preparing to move into a more modest apartment, 20% of gross going into the 401(k), maxing out Roth every March.. I might even be able to begin building up investments in a taxable account in a few years.
Stock goes up, stock goes down. Stock goes up, stock goes down. -- Homer J. Simpson (paraphrased)
RNJ
Posts: 863
Joined: Mon Apr 08, 2013 9:06 am

Re: What do you wish you had learned sooner?

Post by RNJ »

Time, health and love are most precious commodities. Learn this early enough and the rest will follow.
User avatar
shmidds
Posts: 284
Joined: Fri Jun 12, 2009 6:25 pm

Re: What do you wish you had learned sooner?

Post by shmidds »

Patience
Fallible
Posts: 8798
Joined: Fri Nov 27, 2009 3:44 pm

Re: What do you wish you had learned sooner?

Post by Fallible »

shmidds wrote:Patience
:thumbsup
Last edited by Fallible on Wed Jul 03, 2013 11:33 am, edited 2 times in total.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
supertreat
Posts: 333
Joined: Sat Nov 03, 2007 11:57 pm

Re: What do you wish you had learned sooner?

Post by supertreat »

Health is indeed your greatest wealth. Get into healthy habits younger in life- it most likely will vastly improve your quality of life in retirement. The best things in life are free: Family, Friends, Nature - TAKE ADVANTAGE OF THEM. If you're a good student - take full advantage. Research which careers pay the highest and go for them.
Assets - Liabilities = Equity + (Income - Expenses)
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 »

Transhumanism
Wikipedia on Transhumanism wrote:Transhumanism, an international cultural and intellectual movement with an eventual goal at fundamentally transforming the human condition by developing and making widely available technologies to greatly enhance human intellectual, physical, and psychological capacities.
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)
Van
Posts: 1007
Joined: Wed Oct 27, 2010 9:24 am

Re: What do you wish you had learned sooner?

Post by Van »

"Greed is good."
User avatar
ipod_keith
Posts: 147
Joined: Tue Mar 06, 2007 11:42 pm

Re: What do you wish you had learned sooner?

Post by ipod_keith »

Not to underestimate cost of owning a house - maintenance, repairs, etc.
User avatar
Abe
Posts: 2572
Joined: Fri Sep 18, 2009 5:24 pm
Location: Earth in the Milky Way Galaxy

Re: What do you wish you had learned sooner?

Post by Abe »

I have already posted on this thread, but upon further thought, I think the number one thing I wish I had learned sooner was this: Not to deal with commissioned brokers (salesmen).
Mr. Bogle said this:
Now, when the market’s going up, as it did in the ’80s and ’90s, at 17 percent a year, 2 percent doesn’t seem like much. But it’s an awful lot. And if you compound a 7 percent and the 5 percent return over, say, 50 years, let’s call that an investment lifetime — well, in fact the investment lifetime is longer than that — something like 70 percent of the market return goes to the purveyors of the services, Wall Street if you will, and 30 percent goes to the fund owners. …
I had to stop and think about that. The investor only gets 30%. Wall Street gets 70%.
Slow and steady wins the race.
User avatar
vectorizer
Posts: 512
Joined: Sat Mar 03, 2007 2:52 pm

investing is a different skill

Post by vectorizer »

Using the same type of analysis skills that makes one a good engineer or a good physician or a good sports team bettor does not work well when investing as an individual. Books have been written about the phenomenon of very smart, very successful people being terrible at investing. It takes some time to accept the Bogleheads way because it is counter to successful behavior in so many other endeavors.
schwarm
Posts: 710
Joined: Sun Oct 28, 2007 1:17 pm
Location: Lower Alabama

Re: What do you wish you had learned sooner?

Post by schwarm »

Fallible wrote:
shmidds wrote:Patience
:thumbsup
I agree with this also. Perspective also helps.
These are things that are often in short supply with the young in inexperienced.
User avatar
baw703916
Posts: 6681
Joined: Sun Apr 01, 2007 1:10 pm
Location: Seattle

Re: investing is a different skill

Post by baw703916 »

vectorizer wrote:Using the same type of analysis skills that makes one a good engineer or a good physician or a good sports team bettor does not work well when investing as an individual. Books have been written about the phenomenon of very smart, very successful people being terrible at investing. It takes some time to accept the Bogleheads way because it is counter to successful behavior in so many other endeavors.
I'm not sure if I agree with you...let me explain. The first thing that a good technical practitioner should do is turn off their emotions. Investor behavior is the one advantage that can't be arbitraged away.
Most of my posts assume no behavioral errors.
User avatar
BHCadet
Posts: 391
Joined: Sat Jan 14, 2012 11:47 pm
Location: SoCal

Re: What do you wish you had learned sooner?

Post by BHCadet »

I wish I had learned index funds,
asset allocation,
and tax loss harvesting sooner...
User avatar
frugaltype
Posts: 1952
Joined: Wed Apr 24, 2013 9:07 am

Re: What do you wish you had learned sooner?

Post by frugaltype »

Start saving early, and project how you are doing in terms of a goal.

One thing I did learn was manage your own finances. No "financial advisers."
User avatar
frugaltype
Posts: 1952
Joined: Wed Apr 24, 2013 9:07 am

Re: What do you wish you had learned sooner?

Post by frugaltype »

supertreat wrote:If you're a good student - take full advantage. Research which careers pay the highest and go for them.
No, go for the career that you find most fulfilling. I've had great jobs that did not pay well, comparatively, and I would do that again in a nanosecond.
User avatar
zaboomafoozarg
Posts: 2431
Joined: Sun Jun 12, 2011 12:34 pm

Re: What do you wish you had learned sooner?

Post by zaboomafoozarg »

frugaltype wrote:No, go for the career that you find most fulfilling. I've had great jobs that did not pay well, comparatively, and I would do that again in a nanosecond.
The problem is once you get into a job that pays well, it's very hard to leave, even if you don't like it.
User avatar
ruralavalon
Posts: 26351
Joined: Sat Feb 02, 2008 9:29 am
Location: Illinois

Re: What do you wish you had learned sooner?

Post by ruralavalon »

Here is a compilation for you: How much did you lose in your worst investing mistake?

For me the worst mistake was not being aware of the costs I was paying at a full service brokerage (Smith Barney), actually the costs were in the quarterly statements but not plainly stated, and not being aware of how much those costs mattered over time. They did have me in individual stocks, but I think the cost factor was more harmful than the concentrated risk from using individual stocks.

The second worst mistake was not starting serious saving and investing sooner.

And advice for today's students: avoid student debt by all means possible.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
goldendad
Posts: 399
Joined: Tue Apr 10, 2012 10:29 pm

Re: What do you wish you had learned sooner?

Post by goldendad »

Live on a budget and invest in broad-based low cost index funds.
User avatar
Kulak
Posts: 225
Joined: Wed Feb 02, 2011 11:46 am
Location: Weimar America

Re: What do you wish you had learned sooner?

Post by Kulak »

That the equity premium will be substantially lower in my lifetime.

I spent quite a few of my prime years (before and during the Great Recession) working myself half to death on the assumption that I could then "coast" the rest of my life on equity funds returning 6-7% real. ("[tap tap tap] Wow, at 7% I just need a couple hundred grand by my early 30s and I'm set! And I'm getting these stocks at half price compared to 2007! This can't miss!") The dream was that I could then do "meaningful" work in my 30s/40s/50s/60s that didn't necessarily pay well, saving almost nothing, and still retire. If stocks return only 2-3% real, this front-loading strategy doesn't work. There were some false non-financial assumptions that went into it, too.
Depriving ourselves to boost our 40-year success probability much beyond 80% is a fool’s errand, since all you are doing is increasing the probability of failure for [non-financial] reasons. --wbern
User avatar
frugaltype
Posts: 1952
Joined: Wed Apr 24, 2013 9:07 am

Re: What do you wish you had learned sooner?

Post by frugaltype »

zaboomafoozarg wrote:
frugaltype wrote:No, go for the career that you find most fulfilling. I've had great jobs that did not pay well, comparatively, and I would do that again in a nanosecond.
The problem is once you get into a job that pays well, it's very hard to leave, even if you don't like it.
It depends on how bad it is :-) Here's looking at you, Adobe :-) That's the one time I picked money over interesting, and it was my worst professional mistake.
User avatar
zaboomafoozarg
Posts: 2431
Joined: Sun Jun 12, 2011 12:34 pm

Re: What do you wish you had learned sooner?

Post by zaboomafoozarg »

Kulak wrote:That the equity premium will be substantially lower in my lifetime.
Wait, you found a crystal ball or time machine? Can I borrow it?!
User avatar
M_to_the_G
Posts: 549
Joined: Mon Jan 21, 2013 8:57 am

Re: What do you wish you had learned sooner?

Post by M_to_the_G »

I wish I had fully grasped the concept of investment time horizons and compounding interest when I was a teenager. Granted, no on in my life at that time was any more financially literate than I was, and so nobody could have taught me these things, but still...

If someone had opened an investment account for me and shown me how it works, I would have benefited tremendously. If I had started saving and investing the money I made during summers and during college, I would be far ahead of where I am now. If I had immediately started a Roth the day I joined the Foreign Service in 2008 and put $10K in it, I'd be ahead of where I am now. That said, I am still young (34), and have been doing things the "Boglehead" way for the past 5 years, with tremendous results so far. Still... one can't help but think about the "what if's?" Oh, well. Guess I'm lucky that I eventually got on board relatively early on in my career as opposed to when I was my 50's or something.
User avatar
Kulak
Posts: 225
Joined: Wed Feb 02, 2011 11:46 am
Location: Weimar America

Re: What do you wish you had learned sooner?

Post by Kulak »

zaboomafoozarg wrote:Wait, you found a crystal ball or time machine? Can I borrow it?!
Based on wbern's discussion of the Gordon equation in Four Pillars and similar stuff. There was one paper in particular that convinced me, but I can't find it. Basically it argued that there was a large P/E expansion in the last half of the 20th century and then argued why it was unlikely to recur in the next few decades. So either there will be unprecedented earnings growth worldwide, or my returns will be several percent lower than my dad's and grandpa's. Or the paper is wrong and in 2050 TSM will be "fairly valued" at 25xE.

It'll be awesome if I'm wrong and we have another lifetime of 7%+!
Depriving ourselves to boost our 40-year success probability much beyond 80% is a fool’s errand, since all you are doing is increasing the probability of failure for [non-financial] reasons. --wbern
renata
Posts: 61
Joined: Tue Aug 28, 2012 1:53 pm

Re: What do you wish you had learned sooner?

Post by renata »

I wish I had learned about Bogleheads way sooner! :happy
User avatar
Meg77
Posts: 2835
Joined: Fri May 22, 2009 1:09 pm
Location: Dallas, TX

Re: What do you wish you had learned sooner?

Post by Meg77 »

I'd spend a class focused on spending and how doing that wisely can actually increase happiness/well-being. It's where the majority of our income goes (as opposed to savings), so it's arguably even more important. And as others have pointed out, that's what everybody (especially kids) wants to do and feels they need to do with money. No matter how much you repeat the "spend less, save more!" mantra, some will invariably tune out - and many may truly not have much to invest or save. Hold their interest with some focus on spending too.

I read the other day in the NYT about how when buying (or renting) a house people focus on size and how pretty the floors/walls are, when really what will make a difference to your satisfaction is day to day stuff like how much time you have to spend doing maintenance and how long your commute is. That kind of decision making takes years or even decades to figure out - often the hard way. Teaching how to spend well, not just invest well, can go a long way.

Some ideas:
1. Guidelines of how a budget should be broken out (i.e. a car payment should not be 30% of your take home pay).
2. Identifying Values, setting priorities, and making trade-offs: fun money can be spent on regular manicures, yoga classes, house-cleaning services or restaurant meals. What would make you happier or help you reach your goals? There's no right or wrong answer; it depends on your values and priorities.
3. Experiences versus possessions. Research shows that spending money on the former can deepen relationships and increase happiness much more than the latter.
4. Other people's expectations. This can be a big one especially for kids from low income areas. Talk about why/how our spending choices affect others and how their expectations affect us - siblings, romantic partners, parents, colleagues. Does our income or spending habits make people expect gifts or handouts? Does it make them like you more or less? Why?
"An investment in knowledge pays the best interest." - Benjamin Franklin
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 »

I disagree with the idea of a class as the key to learning. Class learning depends on the skill and ulterior motives of the instructor and on the influence of the other students. Just as public schools supplement their budgets by letting advertisers in, public financial courses will be ridden by financial advertisers. Note how many public pension funds are decimated by the speculations forced on them by the financial industry. Something like that is certain to pollute any attempts at the public financial education. Also, people appreciate information they seek (pull) much more so than the information that is imposed on them (pushed).

Introspection enables people to identify their mistakes. Strong logical and mathematical background enables people to seek and analyze information. That's how we all came to the Bogleheads web site, and how we appreciate it not because it's pushed on us but because we pull information that enhances our wealth.

Relating this to Taleb's concept of antifragility, when we are making mistakes, learning from them, and becoming better planners of our own personal finance, we are becoming antifragile to future financial perils. In contrast, a centralized control of information fragilizes the learning.

Victoria
Last edited by VictoriaF on Tue Jul 16, 2013 2:04 pm, edited 1 time in total.
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)
User avatar
Hub
Posts: 480
Joined: Fri Jul 13, 2012 8:56 am

Re: What do you wish you had learned sooner?

Post by Hub »

M_to_the_G wrote:I wish I had fully grasped the concept of investment time horizons and compounding interest when I was a teenager. Granted, no on in my life at that time was any more financially literate than I was, and so nobody could have taught me these things, but still...

If someone had opened an investment account for me and shown me how it works, I would have benefited tremendously. If I had started saving and investing the money I made during summers and during college, I would be far ahead of where I am now. If I had immediately started a Roth the day I joined the Foreign Service in 2008 and put $10K in it, I'd be ahead of where I am now. That said, I am still young (34), and have been doing things the "Boglehead" way for the past 5 years, with tremendous results so far. Still... one can't help but think about the "what if's?" Oh, well. Guess I'm lucky that I eventually got on board relatively early on in my career as opposed to when I was my 50's or something.
I'm pretty much your age and am in the same boat with all of this. I intend to set up some sort of matching system with my children for their early in life Roth contributions. Hopefully I'll have room in the budget to really help them out, but at a minimum they'll have accounts open and at least some compounding will begin before they're old enough to comprendo it.
User avatar
wshang
Posts: 1239
Joined: Sun Feb 03, 2008 10:40 am

Re: What do you wish you had learned sooner?

Post by wshang »

In addition to stuff above:
Buying and selling generates capital gains, which decrease your investible capital. Low cost is important but low turnover is key.

By owning index funds, selectively sell and create $3,000 in losses every year.

Otherwise, plan and control your taxes.
The cure shouldn't be worse than the disease.
Spirit Rider
Posts: 13977
Joined: Fri Mar 02, 2007 1:39 pm

Re: What do you wish you had learned sooner?

Post by Spirit Rider »

The difference between savings and investments. Being risk adverse at a young age takes away the TRUE value of compounding.
Post Reply