Single most important investing advice?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
TX_Man
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Re: Single most important investing advice?

Postby TX_Man » Sat Apr 22, 2017 8:14 am

Savings rate is the core foundation of building wealth. Rate of return, fees, taxes, pre-tax vs Roth contributions, and asset allocation are all important to understand in order to maximize the effectiveness of what has been saved. The savings has to come first.

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Bulldawg
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Re: Single most important investing advice?

Postby Bulldawg » Sat Apr 22, 2017 8:57 am

What you keep is more important than what you earn. Focus on increasing net worth .
" IN GOD WE TRUST " ( official motto of the United States )

Rainmaker41
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Re: Single most important investing advice?

Postby Rainmaker41 » Sat Apr 22, 2017 9:14 am

"Hurdle Number One: Even if you can invest like Warren Buffet, if you can't save, you'll die poor."

https://www.etf.com/docs/IfYouCan.pdf
My username is not about money, but is my old online gaming username. I can't say that I make a great deal of money; I just hate spending it. Marrying the most loving woman in the world October 2017.

Johnnie
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Re: Single most important investing advice?

Postby Johnnie » Sat Apr 22, 2017 9:39 am

jamrock06 wrote:Lot's of good ones but mine would have to be:

"Nobody know's nothing".


Ah, we had the same master, Sergeant "I know nothing" Schultz."

Which is part of why the line of advice that sticks in my head - after you've got the saving part down of course - is "Time in the market, not market timing."

Thinking you know something gets in the way of that.
Last edited by Johnnie on Sat Apr 22, 2017 6:44 pm, edited 1 time in total.

Johnnie
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Re: Single most important investing advice?

Postby Johnnie » Sat Apr 22, 2017 9:39 am

dupe delete
Last edited by Johnnie on Sat Apr 22, 2017 9:41 am, edited 1 time in total.

Johnnie
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Re: Single most important investing advice?

Postby Johnnie » Sat Apr 22, 2017 9:40 am

dupe delete

Johnnie
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Re: Single most important investing advice?

Postby Johnnie » Sat Apr 22, 2017 9:40 am

dupe delete

Johnnie
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Re: Single most important investing advice?

Postby Johnnie » Sat Apr 22, 2017 9:40 am

dupe delete

Johnnie
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Re: Single most important investing advice?

Postby Johnnie » Sat Apr 22, 2017 9:41 am

dupe delete - D'OH. Sorry.

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Tycoon
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Re: Single most important investing advice?

Postby Tycoon » Sat Apr 22, 2017 9:44 am

Be patient.
...I might be just beginning | I might be near the end. Enya | | C'est la vie

RVosen
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Re: Single most important investing advice?

Postby RVosen » Sun Apr 23, 2017 7:18 am

It's never to early to start saving. I've been putting money away from the beginning of my first full time job. Currently almost 30 and it's rather troubling how many of my friends and coworkers do almost nothing or the bare minimum for saving.

Jimmie
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Re: Single most important investing advice?

Postby Jimmie » Sun Apr 23, 2017 8:00 am

RVosen wrote:Currently almost 30 and it's rather troubling how many of my friends and coworkers do almost nothing or the bare minimum for saving.

IMHO, young people think there is always enough time later to start investing. Then, marriage, children, houses, college, elderly parents all get in the way.

If it wasn't for employer 401k with matches, which offer the extra incentive of "free money", realistically, I believe even less young people would start to invest early enough.

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Top99%
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Re: Single most important investing advice?

Postby Top99% » Sun Apr 23, 2017 8:40 am

Invest early in index funds. Maybe this doesn't qualify as "single" :wink:
I work with mostly engineers many of whom are well into their forties and it is pretty shocking how few have heard of the 4% rule (most have no clue how big of a nest egg they would need for retirement) or understand the importance/benefits of starting saving early. When I back of envelope out the arithmetic of saving X / month in your 20s Vs 30s Vs later most of them are pretty shocked. A few of them have actually dropped their expenses and started investing which makes me happy. Usually I can help them find a minimum of $200 / month they can drop expenses easily (keep cars longer, no cable TV, Republic Wireless). I wish someone had given me this advice when I was in my 20s or Bogleheads had existed back then.
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trueson1
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Re: Single most important investing advice?

Postby trueson1 » Sun Apr 23, 2017 9:44 am

1. Save more than you spend.

2. Put saving on auto pilot and don't touch it.

3. Take control of your finances. Educate yourself. Don't let someone else invest your money.

bayview
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Re: Single most important investing advice?

Postby bayview » Sun Apr 23, 2017 3:59 pm

Save what you need to save. Spend what's left.

Not the reverse.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

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meowcat
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Re: Single most important investing advice?

Postby meowcat » Mon Apr 24, 2017 6:43 am

I've been saving in a 401(k) since I was 24 years old. Of course, at that age I really didn't know what it truly meant for my future. That all changed when we moved to Florida in 2000. I couldn't get a job because I had lost my SS card and I had to go down the the nearest SS office to apply for a new one. If you've never been to a SS office, and you really want to get a picture of what getting old without money looks like, I highly recommend it. It is an invaluable, real life, learning experience. I remember one older gentleman, there, that was hungry but couldn't buy food because he hadn't received his SS check. (that's why he was there). I also remember being terrified of what my future could become. I decided that I didn't want to be part of that statistic. My one, single piece of advice would be; start as early as you can and never stop.
More people should learn to tell their dollars where to go instead of asking them where they went. | -Roger Babson

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BeerMoney
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Re: Single most important investing advice?

Postby BeerMoney » Mon Apr 24, 2017 11:12 am

Max out all tax-advantaged space every year (preferably pre-tax).

The benefits are huge especially considering the Roth conversion ladder option.

If you miss out on the tax-advantaged account contributions you don't get a do-over, the opportunity is gone forever. And the amount of money saved on taxes turns into a pretty huge number over the years if instead of being lost to taxes that money was compounding/working for you (or in the case of a Roth the amount of taxes you save on withdrawals may be huge).

In the early few years for young people investing ignoring this might be an even bigger mistake than being in a somewhat high fee funds but being sure to max out all available pre-tax space/roth ira every year. You can swap to low cost index funds once you figure that part out in a few years, you can't go back and fix the issue of not investing all that money you paid in taxes.

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Hub
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Re: Single most important investing advice?

Postby Hub » Mon Apr 24, 2017 12:23 pm

MEA wrote:30 years ago my father advised me to buy and hold low cost index funds. Don't waste money, invest it for the long run. Go 100% stocks when you're young. Pay yourself first. When stocks go down you get more shares for your money. Don't stop buying when the market sells off. Take advantage of a IRA. Every guest on CNBC has a financial position to promote, don't listen to them.

I got good advice. I don't know which one would be the most important. They all go together. I don't see how anyone could pick just one.

That's some remarkably good advice from 30 years ago. You were very fortunate.

Day9
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Re: Single most important investing advice?

Postby Day9 » Mon Apr 24, 2017 1:18 pm

It is arbitrary to distill advice to a single point. Here are the 10 points that make up the Bogleheads' investment philosophy:

1 Develop a workable plan
2 Invest early and often
3 Never bear too much or too little risk
4 Diversify
5 Never try to time the market
6 Use index funds when possible
7 Keep costs low
8 Minimize taxes
9 Invest with simplicity
10 Stay the course

https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_philosophy
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Trebor
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Re: Single most important investing advice?

Postby Trebor » Mon Apr 24, 2017 1:26 pm

Don't think of it as saving. Think of it as buying freedom. Not much more important to buy.

Use a low cost diversified investing strategy (total market index) and be stubbornly patient. (Stay the course.)
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willthrill81
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Re: Single most important investing advice?

Postby willthrill81 » Wed Apr 26, 2017 12:32 am

Trebor wrote:Don't think of it as saving. Think of it as buying freedom. Not much more important to buy.


+1

"The best thing money can buy is financial freedom."
-Rob Berger, "The Dough Roller Money Podcast"
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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stemikger
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Re: Single most important investing advice?

Postby stemikger » Wed Apr 26, 2017 12:56 am

Press on Regardless!

Even the best laid plans can get derailed by life, so it is important to know, things might not go smoothly (i.e. medical, divorce, etc.) So IMHO Press on Regardless of set backs is an important rule with life and investments.
Stay the Course!! ~ Press on Regardless!!!

zuma
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Re: Single most important investing advice?

Postby zuma » Wed Apr 26, 2017 4:36 am

The most important realization for me was that investing doesn't have to be complicated in order to be effective.

That means you can do it yourself.

Having a simple portfolio that you understand clearly and can maintain easily will help you achieve your investing goals.

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willthrill81
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Re: Single most important investing advice?

Postby willthrill81 » Wed Apr 26, 2017 10:10 am

zuma wrote:The most important realization for me was that investing doesn't have to be complicated in order to be effective.

That means you can do it yourself.

Having a simple portfolio that you understand clearly and can maintain easily will help you achieve your investing goals.


Many seem to think that investing is a totally different process for a $10 or $100 million portfolio than a $1 million portfolio. While it's true that it some tweaking may be needed for tax purposes and one's AA may need some adjustment, over 90% of it is exactly the same. I think this is the realization that many college endowment managers have come to.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

Doubleeagle4me
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Re: Single most important investing advice?

Postby Doubleeagle4me » Wed Apr 26, 2017 10:03 pm

Best investing advice? When things look the worst is the time to buy. Fortunes are made on panics. You have the luxury of time when you are young.

itstoomuch
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Re: Single most important investing advice?

Postby itstoomuch » Thu Apr 27, 2017 12:06 am

YMMV :oops: :mrgreen: :greedy
4 buckets: SS+pension;dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rental. Do OK any 2 bkts. LTCi. Own, not asset. Tax 25%. Early SS. FundingRatio (FR) >1.1 Age 67/70

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HomerJ
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Re: Single most important investing advice?

Postby HomerJ » Thu Apr 27, 2017 1:13 am

Save half your raises.

Increase your lifestyle a little with each raise, but also raise your savings rate.

If you're lucky, at some point you may discover you have "enough", and you can stop raising your lifestyle and save 90% of your raises.

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Top99%
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Re: Single most important investing advice?

Postby Top99% » Thu Apr 27, 2017 6:21 am

Doubleeagle4me wrote:Best investing advice? When things look the worst is the time to buy. Fortunes are made on panics. You have the luxury of time when you are young.

Good advice indeed provided one keeps their job and a cool head. The Tech Bubble and GFC crashes certainly provided a nice tail wind for us.
Adapt or perish

tesuzuki2002
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Re: Single most important investing advice?

Postby tesuzuki2002 » Thu Apr 27, 2017 1:56 pm

Buy now... Buy more later...

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corwin
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Re: Single most important investing advice?

Postby corwin » Thu Apr 27, 2017 2:38 pm

The advice I heard after I was ready to hear advice, that was the most important. I heard many good pieces of advice when I was young but I acted on very few of them.

My 16 yo daughter caught part of an interview with Money Mustache I was listening to. She was very interested in the retiring early part but her eyes glazed over when I stopped the video to talk about index investing. But, to be fair, her eyes glaze over most of the time when I am talking. :wink:

asif408
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Re: Single most important investing advice?

Postby asif408 » Thu Apr 27, 2017 3:27 pm

I agree with the others that savings rate is probably most important, but it wasn't for me because I've never had an issue saving money. I found choosing exactly how to invest my money was the most difficult part when I started out. So I chose the following quote that has been fundamental to my asset allocation decisions:

“Identify the era’s conventional wisdom and assume that it is wrong. More often than not, it is.” - William Bernstein

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parsi1
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Re: Single most important investing advice?

Postby parsi1 » Thu Apr 27, 2017 3:34 pm

the advice that I sometimes forget to follow:

Do not try to time the market

Case59
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Re: Single most important investing advice?

Postby Case59 » Thu Apr 27, 2017 3:44 pm

If I could get into a time machine and tell my younger self one thing, it would be "Read Bernstein's Four Pillars of Investment." (even if it hadn't been written yet, wait for it.)

For a single piece of advice particularly applicable to me, it would have been: "Don't buy last year's winner."
Last edited by Case59 on Thu Apr 27, 2017 9:46 pm, edited 1 time in total.
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torius71
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Re: Single most important investing advice?

Postby torius71 » Thu Apr 27, 2017 3:57 pm

Find trustworthy sources of financial information. You're already following this advice. The value of saving is severely hampered by unwittingly donating your money to vested interests.
"A new truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it."-MP

jmk
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Re: Single most important investing advice?

Postby jmk » Thu May 11, 2017 10:42 am

If you're poor, do what it takes to get a government job with a pension. The security (floor) of social security + pension allows you to invest savings like other boggleheads.

hoops777
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Re: Single most important investing advice?

Postby hoops777 » Thu May 11, 2017 11:12 am

When you have won the game quit playing and NOBODY knows what the market will do going forward.

I see a lot of people so caught up in this very long bull market who seem oblivious to how quickly things can go the other way,and for how long they could go the other way.Not a big deal if you are 30,but definitely a big deal if very close to or just started retirement.
K.I.S.S........so easy to say so difficult to do.

jegp
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Re: Single most important investing advice?

Postby jegp » Thu May 11, 2017 4:49 pm

I am pretty sure, the SINGLE most important investing advice, timeless, ever, is: "DIVERSIFY".

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whodidntante
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Re: Single most important investing advice?

Postby whodidntante » Thu May 11, 2017 9:02 pm

For me, it was "don't listen to Dave Ramsey."

Tom1320
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Re: Single most important investing advice?

Postby Tom1320 » Fri May 12, 2017 7:57 pm

While I never received this advice directly, I believe it is sound and agree with it.

stemikger wrote:Press on Regardless!

Even the best laid plans can get derailed by life, so it is important to know, things might not go smoothly (i.e. medical, divorce, etc.) So IMHO Press on Regardless of set backs is an important rule with life and investments.
"And this, too, shall pass away." How much it expresses! How chastening in the hour of pride! How consoling in the depths of affliction! - Our 16th President

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Hawaiishrimp
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Re: Single most important investing advice?

Postby Hawaiishrimp » Sat May 13, 2017 2:31 am

Read "Millionaires next door"
I save and invest my money, so money can make money for me, so I don't have to make money eventually.

gilgamesh
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Re: Single most important investing advice?

Postby gilgamesh » Sat May 13, 2017 5:46 am

Investing - low cost and diversification
Saving - pay yourself first
Transition to retirement - utility of wealth

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tennisplyr
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Re: Single most important investing advice?

Postby tennisplyr » Sat May 13, 2017 6:13 am

Stay the course....all things come to an end both bad and good.
Those who move forward with a happy spirit will find that things always work out.

Dandy
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Re: Single most important investing advice?

Postby Dandy » Sat May 13, 2017 8:20 am

It is hard to come up with one that is nearly fool proof.

The best advice I got was when I started work an "old timer" said every time you get a raise save some of it - you will never miss it if you don't get it. Almost without exception I followed that. I'd increase my allocation to 401k or have money deducted from pay to buy Series EE bonds, etc. After 30 years it left me with a very comfortable nest egg/retirement.

Raises might not be as common now but the idea of automating savings and increasing it, even slightly, was excellent. If money gets into your paycheck there will be many legitimate "needs" to get you to spend it.

The other quote I remember is that there are people living in your neighborhood that are earning 10% less than you so you can afford to save/invest some.

Robconoclast
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Re: Single most important investing advice?

Postby Robconoclast » Thu May 18, 2017 11:32 pm

Not advice, but I was a cook making $ 9.50 an hour 11-12 years ago when a manager asked me if I had ever thought about retirement. Second best piece of advice was to leave Edward Jones a year ago yesterday after discovering this board 2 years ago.
Smoke me a kipper, I'll be back for breakfast

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Nearing_Destination
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Re: Single most important investing advice?

Postby Nearing_Destination » Fri May 19, 2017 7:41 pm

Grt2bOutdoors wrote:To invest, one first must save.



Yep
You can't invest what you don't save.

As others have said: start early , even small amounts add up and perhaps the discipline will be established to more fully save/invest; and along the way learn about personal finance and retirement investment

Bfwolf
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Re: Single most important investing advice?

Postby Bfwolf » Sat May 20, 2017 1:06 am

Lots of good advice here, and the focus on savings is probably most important.

I think most people naturally get that savings rate is extremely important though. One thing I find myself saying over and over to people out in the real world, because it isn't intuitive, is "all publicly available information is already priced in."

"Trump wants to lower taxes--that's going to send stocks up in the future." Response: "All publicly available information is already priced in."

"Apple announced their next product and it looks awful. The stock is going to crash when it comes out." Response: "All publicly available information is already priced in."

"The Fed is planning on a bunch of interest rate hikes over the next year. That's going to send bond prices down." Response: "All publicly available information is already priced in."

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1stWorldproblems
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Re: Single most important investing advice?

Postby 1stWorldproblems » Sun May 21, 2017 3:40 pm

My earliest memory of investing advice came from a piggy bank my mom gave me, it read:
"He who will not save a penny shall never have many"


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