Our Mistakes Benefit Future Generations
- Rick Ferri
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Our Mistakes Benefit Future Generations
Today’s young investors have a much greater chance to learn about index funds earlier in life. I hope this prevents many from making the dumb (and costly) mistakes I made when I was their age. With today’s on-line tools and greater information dissemination, young investors should be better positioned to benefit from the knowledge and a higher level of personalized service as their wealth builds. This should speed their journey even further. It’s a win-win for everyone.
I recently wrote about my journey to indexing and how I hope future generations learn from my mistakes: Our Mistakes Benefit Future Generations
Rick Ferri
I recently wrote about my journey to indexing and how I hope future generations learn from my mistakes: Our Mistakes Benefit Future Generations
Rick Ferri
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.
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Re: Our Mistakes Benefit Future Generations
Nice job, Rick.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Re: Our Mistakes Benefit Future Generations
Well written, and great job. I agree that WF, betterment and other robo advisers have created a lot of awareness among folks. I have had several people ask me that they are considering WF and wanted my advice on whether they should invest with them or not.
While most bogleheads will not opt for a robo-adviser, it is always welcome to have a low-cost robo-adviser, especially if it comes from someone like Portfolio Solutions.
While most bogleheads will not opt for a robo-adviser, it is always welcome to have a low-cost robo-adviser, especially if it comes from someone like Portfolio Solutions.
(AGE minus 23%) Bonds | 5% REITs | Balance 80% US (75/25 TSM/SCV) + 20% International (80/20 Developed/Emerging)
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Re: Our Mistakes Benefit Future Generations
Best of luck as you venture in to robo advising.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
Re: Our Mistakes Benefit Future Generations
Rick, just curious how many additional workers will be behind the 'robo' label, or if this is something you can manage with your current staff.
I imagine this type of undertaking requires significant IT expertise as well as marketing savvy, but will you have any actual advisors dedicated to it?
I imagine this type of undertaking requires significant IT expertise as well as marketing savvy, but will you have any actual advisors dedicated to it?
Re: Our Mistakes Benefit Future Generations
Others mistakes sure are great to learn from. I am 22 years old and I have read up on a lot of topics on this website. I have told some of my friends about index investing. About 4 months ago I knew nothing about the market or how to trade, now I have $6500 in a mutual fund. I really appreciate all the advice from people on this forum.
I have heard a saying something like smart people learn from their mistakes, but experts learn from others mistakes.
Matt
I have heard a saying something like smart people learn from their mistakes, but experts learn from others mistakes.
Matt
- Rick Ferri
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Re: Our Mistakes Benefit Future Generations
We're not adding any additional staff. This is a joint effort. We're providing the models, risk tolerance levels for portfolios, rebalancing bands and intellectual property.The actual account servicing will be done by another firm. Hourly-fee CFP level advice will also be available through a different outsource. Beta test is scheduled for July.neutics wrote:Rick, just curious how many additional workers will be behind the 'robo' label, or if this is something you can manage with your current staff. I imagine this type of undertaking requires significant IT expertise as well as marketing savvy, but will you have any actual advisors dedicated to it?
Rick Ferri
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.
Re: Our Mistakes Benefit Future Generations
Congrats so far and nice article. I am very curious to see how all these robo advisors with index funds do going forward. I'm too much of a do it your self type, but I know many who would be served well by that service.
Never underestimate the power of the force of low cost index funds.
Re: Our Mistakes Benefit Future Generations
To my knowledge, none of the robo advisers use index funds.. WF and betterment both use ETFs. Are any other robo-adviser using Index funds?ofcmetz wrote:... robo advisors with index funds ...
(AGE minus 23%) Bonds | 5% REITs | Balance 80% US (75/25 TSM/SCV) + 20% International (80/20 Developed/Emerging)
Re: Our Mistakes Benefit Future Generations
They use ETFs that are index funds. Exchange-traded funds tracking an index are index funds by most definitions I've seen, and I don't really see a good argument for restricting the term to only mutual funds or some other kind of structure. The point of an index fund, as opposed to a different type of fund, is the tracking of an index, which has nothing to do with the underlying structure of the fund type.walletless wrote:To my knowledge, none of the robo advisers use index funds.. WF and betterment both use ETFs. Are any other robo-adviser using Index funds?ofcmetz wrote:... robo advisors with index funds ...
And from the perspective of a robo adviser client, who is removed from the underlying trading, the distinction between mutual fund and ETF structure is virtually washed away anyway.
- jwillis77373
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Re: Our Mistakes Benefit Future Generations
Nice article, per usual. But I wouldn't dwell too much on your mistakes.
They were a function of the times in which the errors were comitted.
Based on experience and what you knew at that age, they were appropriate and understandable.
We have a blind spot where our future bias lies, we tend to conceive of fixing the worlds problems in terms of what we know today, as if the game were fixed and never changing. If there is a "Super" error, it would be to committ to teaching the children of the future how to solve their problems in terms of what we know of the past.
That would be like a Victorian Steam engineer teaching a course in Electronic Fuel Injection.. probably not gonna work.. though you could argue Thermodynamics never change till your blue in the face.
I was attracted to the ideas of both Bogle and Buffet/Munger because they seem to try and take the "human failures factor" into account, and our capacity for self-deception and self-denial.. we don't often admit to our mistakes and move on (as in correct them) we can be pretty inflexible and keep repeating our mistakes.. in a word we can be really stubborn, to ourselves in a really self-destructive manner.
"Waking up" to this simple fact.. and constantly questioning.. examining the facts.. and investing in myriad ways.. rather than "the one true way" forever more is what I liked about Bogles ideas.. on the surface they appear "simple" and "unerring".. but think about it for a while.. and its vastly more comprehensive.. Jack said.. "get over yourself" go with what "works" rather obviously.. "results matter"
A good number of people are worried if Mutual Funds will distract or loose tract of their original goals.. ETFs being the first real challenge.. well we don't know yet, but we're all suspcious.. that's good.. results count. Staying alert and not sleeping at the wheel have the best chance of succeeding.
They were a function of the times in which the errors were comitted.
Based on experience and what you knew at that age, they were appropriate and understandable.
We have a blind spot where our future bias lies, we tend to conceive of fixing the worlds problems in terms of what we know today, as if the game were fixed and never changing. If there is a "Super" error, it would be to committ to teaching the children of the future how to solve their problems in terms of what we know of the past.
That would be like a Victorian Steam engineer teaching a course in Electronic Fuel Injection.. probably not gonna work.. though you could argue Thermodynamics never change till your blue in the face.
I was attracted to the ideas of both Bogle and Buffet/Munger because they seem to try and take the "human failures factor" into account, and our capacity for self-deception and self-denial.. we don't often admit to our mistakes and move on (as in correct them) we can be pretty inflexible and keep repeating our mistakes.. in a word we can be really stubborn, to ourselves in a really self-destructive manner.
"Waking up" to this simple fact.. and constantly questioning.. examining the facts.. and investing in myriad ways.. rather than "the one true way" forever more is what I liked about Bogles ideas.. on the surface they appear "simple" and "unerring".. but think about it for a while.. and its vastly more comprehensive.. Jack said.. "get over yourself" go with what "works" rather obviously.. "results matter"
A good number of people are worried if Mutual Funds will distract or loose tract of their original goals.. ETFs being the first real challenge.. well we don't know yet, but we're all suspcious.. that's good.. results count. Staying alert and not sleeping at the wheel have the best chance of succeeding.
Re: Our Mistakes Benefit Future Generations
Don't think Rick is still dwelling on these mistakes, rather it appears he is trying to capitalize on them.jwillis77373 wrote:Nice article, per usual. But I wouldn't dwell too much on your mistakes.
- abuss368
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Re: Our Mistakes Benefit Future Generations
Good luck Rick!
I am glad to see you will be helping investors learn the Boglehead way!
I am glad to see you will be helping investors learn the Boglehead way!
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Our Mistakes Benefit Future Generations
This is a thoughtful post and I look forward to hearing more about the robo-advisor service.
- Taylor Larimore
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"Our Mistakes Benefit Future Generations"
[Thread merged into here, see below. --admin LadyGeek]
Bogleheads:
Rick Ferri, a Boglehead and adviser, tells us about the mistakes he made before reading Bogle on Mutual Funds (I can relate).
Our Mistakes Benefit Future Generations
Thank you, Rick
Best wishes
Taylor
Bogleheads:
Rick Ferri, a Boglehead and adviser, tells us about the mistakes he made before reading Bogle on Mutual Funds (I can relate).
Our Mistakes Benefit Future Generations
Thank you, Rick
Best wishes
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
Re: "Our Mistakes Benefit Future Generations"
He actually posted that here too viewtopic.php?t=165723
- Taylor Larimore
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Duplicate post.
ScarletKnight:TheScarletKnight wrote:He actually posted that here too viewtopic.php?t=165723
Thank you for alerting us to Rick's duplicate (first) post.
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
Re: Our Mistakes Benefit Future Generations
^^^ Not any more. The thread is now merged with Rick Ferri's thread. Post here instead.
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Re: Our Mistakes Benefit Future Generations
Based on the title, I expected a thread about the difficulty balancing desire for financial security and the difficulty projecting future expense, which will result in excess portfolio balances transferring to future generations. There should be large inter-generational transfers ahead. Good thing they will be better informed about passive investing.
Re: Our Mistakes Benefit Future Generations
Rick Ferri wrote:We're not adding any additional staff. This is a joint effort. We're providing the models, risk tolerance levels for portfolios, rebalancing bands and intellectual property.The actual account servicing will be done by another firm. Hourly-fee CFP level advice will also be available through a different outsource. Beta test is scheduled for July.neutics wrote:Rick, just curious how many additional workers will be behind the 'robo' label, or if this is something you can manage with your current staff. I imagine this type of undertaking requires significant IT expertise as well as marketing savvy, but will you have any actual advisors dedicated to it?
Rick Ferri
Any updates on this?
- Rick Ferri
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Re: Our Mistakes Benefit Future Generations
Very slow progress, but progress. Hoping by the end of the year.
Rick Ferri
Rick Ferri
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.
- abuss368
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Re: Our Mistakes Benefit Future Generations
This is one of the best articles Rick has ever penned!
John C. Bogle: “Simplicity is the master key to financial success."
Re: Our Mistakes Benefit Future Generations
Investing is not that complicated. You pick a number for your asset allocation, buy low-cost funds accordingly, keep saving, rebalance, stay the course. True, when markets crash, investing is simple but not easy (but no flesh-and-fee advisor will make it easy). So robo-advisors are shaking a market that DIY should have killed a while back (and did not).
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Re: Our Mistakes Benefit Future Generations
Will it be more of a Core Four approach or a slice and dice approach, or will there be the option to choose one or the other? Also, will the funds be Vanguard, DFA, or a mix?Rick Ferri wrote:Very slow progress, but progress. Hoping by the end of the year.
Rick Ferri
Re: Our Mistakes Benefit Future Generations
Rick,
I am finishing up my final semester of a MS Finance program this fall. Most students are in their late 20's or early 30's.
One of my final courses has your book "All about index funds: The easy way to get started" as a required text for the course.
Just wanted to let you know you are doing your part to educate the future generation of investors.
I am finishing up my final semester of a MS Finance program this fall. Most students are in their late 20's or early 30's.
One of my final courses has your book "All about index funds: The easy way to get started" as a required text for the course.
Just wanted to let you know you are doing your part to educate the future generation of investors.
Re: Our Mistakes Benefit Future Generations
Now, if they could just set about making it a required text also for everyone who does not take the course.bigred77 wrote:Rick,
I am finishing up my final semester of a MS Finance program this fall. Most students are in their late 20's or early 30's.
One of my final courses has your book "All about index funds: The easy way to get started" as a required text for the course.
Just wanted to let you know you are doing your part to educate the future generation of investors.
L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
- Rick Ferri
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Re: Our Mistakes Benefit Future Generations
Thanks!bigred77 wrote:Rick,
I am finishing up my final semester of a MS Finance program this fall. Most students are in their late 20's or early 30's.
One of my final courses has your book "All about index funds: The easy way to get started" as a required text for the course.
Just wanted to let you know you are doing your part to educate the future generation of investors.
Rick
The Education of an Index Investor: born in darkness, finds indexing enlightenment, overcomplicates everything, embraces simplicity.
- abuss368
- Posts: 27850
- Joined: Mon Aug 03, 2009 2:33 pm
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Re: Our Mistakes Benefit Future Generations
That is awesome!bigred77 wrote:Rick,
I am finishing up my final semester of a MS Finance program this fall. Most students are in their late 20's or early 30's.
One of my final courses has your book "All about index funds: The easy way to get started" as a required text for the course.
Just wanted to let you know you are doing your part to educate the future generation of investors.
John C. Bogle: “Simplicity is the master key to financial success."
Re: Our Mistakes Benefit Future Generations
Rick Ferri wrote:We're not adding any additional staff. This is a joint effort. We're providing the models, risk tolerance levels for portfolios, rebalancing bands and intellectual property.The actual account servicing will be done by another firm. Hourly-fee CFP level advice will also be available through a different outsource. Beta test is scheduled for July.neutics wrote:Rick, just curious how many additional workers will be behind the 'robo' label, or if this is something you can manage with your current staff. I imagine this type of undertaking requires significant IT expertise as well as marketing savvy, but will you have any actual advisors dedicated to it?
Rick Ferri
Still nothing new on this?