Thanks for continuously sharing your expert knowledge and stories. I started investing at age 22 and was lucky to learn about index funds at age 25 (I'm 27 now). I didn't earn any money trading stocks during 2011-2013 (pathetic, right?). I would have been much better off passively investing. When I learned about index funds, I was a Statistics teaching assistant. The simple yet powerful statistics behind index funds and boglehead investing resonated with me -- I won't ever turn back to my old ways!
Don't only practice your art, but force your way into its secrets. For it and knowledge can raise men to the divine. |
L. Beethoven
Rick Ferri wrote:Thanks, Taylor! I'd have a lot more money today if I starting indexing at an earlier age. -- Rick Ferri
Rick:
I would "have a lot more money" too. Unfortunately, there were no index funds until Jack Bogle offered his 500 Index fund in 1976 when I was 52 years old.
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
Rick Ferri wrote:Thanks, Taylor! I'd have a lot more money today if I starting indexing at an earlier age. -- Rick Ferri
Rick:
I would "have a lot more money" too. Unfortunately, there were no index funds until Jack Bogle offered his 500 Index fund in 1976 when I was 52 years old.
Best wishes.
Taylor
Thank you Jack Bogle!
John C. Bogle: “Simplicity is the master key to financial success."
Started investing in 1984. From 1984-1996 (12 yr) we used low cost active Frank Russell equity mutual funds for which we paid a 1% "gatekeeper" fee. CAGR was 2% less than the SP500.
From 1985-2005 (11 yr) we used an 80/20 portfolio. The equity portion consisted of 16 SCV stocks with momentum and zero dividend yield. It was a mechanical strategy using a stock screener. At first we ran the screen quarterly. Then semi-annually. Then annually. CAGR = SP500 + 6%. Thought I was a stock picking genius.
Became a Boglehead in 2006 after reading several books and articles written mainly by Frank Armstrong, Bill Bernstein, and Jack Bogle. Came to the conclusion that my stock picking system was due to pure blind luck.
We still did not comprehend the power of simplicity. From 2006-2014 we used a 60/40 split and tilted our equity allocation to more non-USA and smaller cap vs USA Vanguard's VT. We used 5 different equity ETFs. Thought slice and dice was better than simplicity.
Beginning this year we switched brokers to gain access to Ireland domiciled ETFs. We are USA-NRAs and we were paying 30% taxes on all interest and dividend income on our USA-domiciled ETFs. Our TER = 0.72%. By switching to Ireland domiciled ETFs we were able to cut our TER in half. From 0.72% to 0.36%.
As of January 2015 we are the proud owners of a simple, cheap, and diversified 2-ETF portfolio: 60% VWRD + 35% IUAG + 5% CASH. It took us 30 years to get here.
Rick Ferri wrote:Thanks, Taylor! I'd have a lot more money today if I starting indexing at an earlier age.
Rick Ferri
Hi Rick & Taylor,
Please add me to that camp! I should have stayed at Vanguard years ago rather than opening a brokerage account to pick individual stocks! I am glad that we found our way back to Vanguard many years ago and have stayed the course.
Keep investing simple.
Best.
John C. Bogle: “Simplicity is the master key to financial success."
Rick Ferri wrote:Thanks, Taylor! I'd have a lot more money today if I starting indexing at an earlier age.
Rick Ferri
Yes, but ...
if you hadn't been investing in active funds and individual stocks you probably would not have joined the brokerage firm. And if you hadn't been with that firm you might not have discovered their evils. And then you might not have founded your firm etc. etc. etc.
I will know the transition to indexing will be complete in the financial world when I watch an episode of Mad Money and Jim Cramer announces he has sold all individual stocks and invested in Vanguard Index Funds and will "stay the course"!
Keep investing simple!
John C. Bogle: “Simplicity is the master key to financial success."
Many of us Bogleheads took that "Too-long journey" that Rick writes about. I didn't discover Jack Bogle and indexing until the late '80s, but at least I discovered them.
"Thanks to Rick for another good article and to Taylor for the link. I also liked the reference to the problem with market timing: "You need to get lucky twice."
"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