Giving a Talk on Personal Finance & Investing - Advice?

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topofthebellcurve
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Giving a Talk on Personal Finance & Investing - Advice?

Post by topofthebellcurve » Tue May 02, 2017 1:59 pm

Hello BH!

I'm giving a talk later this week on Personal Finance and Investing. The audience will 25-35 years old and about 1/2 grad students and 1/2 random people like me. It's part of an informal weekly event called "Journal Club" where the members take turns talking about whatever interests them, from nuclear energy to counting cards in blackjack. It was started by a bunch of Harvard biology students years ago to present technical topics; now it's all over the place both in attendees and content. They're a smart bunch but generally uninformed about the topic under discussion.

The goal of my talk is to give people I quick overview of managing their finances with a focus on investing and the Bogleheads philosophy. I've got about an hour and a half, and I'm expecting at least 30 minutes of that to be responding to questions.

Here are some key things I want people to take away from the talk:
  • High level "what to do with my money" https://i.imgur.com/fb7Dtmh.png
  • How to track your spending (Mint) and budget (YNAB)
  • Compound interest can move mountains (or put you in a mountain of debt). I'm sure they can do the math, but the results are still surprising. Why to save early/often and aggressively pay down debt
  • A basic sense of the three "buckets" (cash, bonds, and equities), and the average return/risk for each
  • How to determine your risk tolerance and asset allocation
  • Why you can't / don't want to time the market or pick individual stocks, and why you definitely don't want to be paying an asset manager 1% a year
  • The value of low-cost index funds & diversification
  • Basics of retirement savings, both estimating what you'll need and tax-advantaged structures (401k, IRAs, etc.)
  • Practical implementation such as choosing a brokerage service
  • Quick summary of FIRE and safe withdrawal rates
I know that many of you have given similar presentations in the past, and I'm wondering if you have any advice (e.g. which topics were most interesting to your audience, what resources or graphics you felt to be particularly helpful, etc.). I'll be drawing heavily from the BH Wiki as well as /r/personalfinance.

Thanks!

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by BogleMelon » Tue May 02, 2017 2:37 pm

Shouldn't you add a topic for taxes and tax brackets (marginal tax rate vs effective tax rate and why marginal tax rate matters...etc)?
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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by zzcooper123 » Tue May 02, 2017 2:46 pm

Here are the topics I cover in my talks to medical students:

Why should they listen? How are you different from a Financial Advisor?
Life insurance. Avoid Whole Life
Disability Insurance.
Tax brackets.
Employed vs. self employed
What not to invest in.
What to invest in...low ER stock and mutual funds.
Rule of 72. Compound interest.
Asset Protection.
Brief discussion of mortgages.
Roths. IRA's. 401k. 403b's.
Negotiating contracts.
Managing student debt.

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by Valdeselad » Tue May 02, 2017 3:00 pm

[*] Compound interest can move mountains (or put you in a mountain of debt). I'm sure they can do the math, but the results are still surprising. Why to save early/often and aggressively pay down debt
I might present some different perspectives on debt -- for instance CC debt that carries significant risk if not understood and managed properly (i.e. paid down aggressively or paid in full) versus something like mortgage debt which is more debatable. I'm not sure a blanket statement such as "all debt is bad, pay it off as fast as you can" is the right answer, especially for the age and critical thinking capacity of your audience.

Understanding the risks (which I agree are extremely important to highlight) and the opportunities (when used and managed properly) of leverage are both important.

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by topofthebellcurve » Tue May 02, 2017 3:17 pm

BogleMelon wrote:Shouldn't you add a topic for taxes and tax brackets (marginal tax rate vs effective tax rate and why marginal tax rate matters...etc)?
You're right -- I will need to cover taxes, at least marginal/effective rates and long term cap gains vs. ordinary income. Thanks!
Valdeselad wrote:
[*] Compound interest can move mountains (or put you in a mountain of debt). I'm sure they can do the math, but the results are still surprising. Why to save early/often and aggressively pay down debt
I might present some different perspectives on debt -- for instance CC debt that carries significant risk if not understood and managed properly (i.e. paid down aggressively or paid in full) versus something like mortgage debt which is more debatable. I'm not sure a blanket statement such as "all debt is bad, pay it off as fast as you can" is the right answer, especially for the age and critical thinking capacity of your audience.

Understanding the risks (which I agree are extremely important to highlight) and the opportunities (when used and managed properly) of leverage are both important.
Another good point. I was just thinking about high interest CC debt. Mortgage debt is an important (and incentivized) tool.

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by 123 » Tue May 02, 2017 5:09 pm

You might want to include a discussion of what kind of "Accounts" audience members have and what "Account" means to them.

Most people like to have a lot of accounts. For Bogelheads "Accounts" probably means assets in bank or investment accounts. For many others "Accounts" will mean how many credit cards they have. How you view "Accounts" says a lot about you. When I used to watch Suzie Orman on occasion I was always amused that her audience primarily had accounts of liabilities based on the questions she got.
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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by mega317 » Tue May 02, 2017 5:23 pm

I think it is great that you're doing this, and it will be more valuable than counting cards to most audiences. My question is how long is this talk? Your list is ambitious and you don't want to end up rushing or giving superficial treatment to any topics. A smart audience will be disappointed by that.

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by livesoft » Tue May 02, 2017 5:25 pm

Where to Find Good Advice on the Internet about Personal Finance, Taxes, and Investing?

Where Not to Find Good Advice on the Internet about Personal Finance, Taxes, and Investing?

One could just give a Tour of the Bogleheads Wiki and that would be sufficient I would think.
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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by mortfree » Tue May 02, 2017 5:36 pm

William Bernstein's "If You Can" would probably be a good handout for the group.

Amortization schedule to show how interest works and how extra payments help to reduce interest and payoff time.

Overview of what "things" cost. Homes, insurance, utilities, health insurance, etc.

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by Jack FFR1846 » Tue May 02, 2017 6:15 pm

I like the examples livesoft gave. When presenting to a group not expert in what you're talking about, I learned to convey 3 simple points. Repeat these points throughout your presentation. Give examples of each point and bring the point back in.

If you cover too many points, as one mentor told me...."bring good doughnuts".

I'd think some points might be:

Live below your means so you actually save.

Look at fees and pay as little as possible as nothing else really is predictable.

Diversify.
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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by TIAX » Tue May 02, 2017 6:25 pm

Put up some SPIVA data when discussing active vs. index.

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by RandomPointer » Tue May 02, 2017 6:47 pm

I did similar talk several times, a lot of people do not know how they are taxed.

At the end, I do not think anyone will remember 10% of what I shared. I made this point, that if they remember one thing, remember that fees matter. Focus on low cost broadly diversified index fund.

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by NightFall » Tue May 02, 2017 7:02 pm

A disclaimer that examples are not guarantees of returns and that your talk does not constitute advice to invest in any particular product.

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Simplicity

Post by Taylor Larimore » Tue May 02, 2017 7:13 pm

topofthebellcurve:

Don't forget the importance of "Simplicity."

Read the link below.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by celia » Tue May 02, 2017 7:42 pm

123 wrote:You might want to include a discussion of what kind of "Accounts" audience members have and what "Account" means to them.

Most people like to have a lot of accounts. For Bogelheads "Accounts" probably means assets in bank or investment accounts. For many others "Accounts" will mean how many credit cards they have. How you view "Accounts" says a lot about you. When I used to watch Suzie Orman on occasion I was always amused that her audience primarily had accounts of liabilities based on the questions she got.
The above is an excellent way to get the audience to participate in the discussion.

But I think you have too much planned for one hour. Why don't you focus on "accounts", those that are assets and those that are liabilities. Get everyone to go to home and make a list of their assets and calculate their net worth. This could be the goal for the day. Suggest they inventory their accounts at the end of each quarter (later on each year) to see if they are making "progress".

Under "assets", I would also break them up by taxable, tax-deferred, and post-Tax.
Under "liabilities", I would also break them up by "good debt" (student loans and mortgage) vs "bad debt" (credit cards that are not paid off at the end of the month, or mortgages with balloon payments). I guess other debt would fall in between.

If you are using a whiteboard, jot down the "accounts" as they say them by putting all the assets in one column, all the liabilities in another column, and all the "other" (phone bills, car insurance, rent, etc) in a third, but don't label the columns until the end. See if they can tell what all the things in each column have in common, then label the columns as ASSETS, LIABILITIES, and ON-GOING BILLS.

If there is time at the end, work in compounding examples, both for assets and liabilities. Make it eye-opening!
(All of my kids came to me in high school saying they talked about compounding in school that day. They saw a mind-blowing example that went something like this:
Ann and Bill are the same age.
Ann put $5,000 into her retirement account each year from age 18 to 27, then stopped, but left all the money there.
Bill put $5,000 into his retirement account each year from age 28 to when he retired at 65.
Both earned the same 6% annual growth.
Who had more money in their account when they were 65?

Play with the numbers so that Ann comes out ahead. You may need to change the rate of growth. Show the audience how this works. This would be a good finale!)
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by Dinosaur Dad » Tue May 02, 2017 7:48 pm

here's a link to a Connecticut state website, which itself has links to a variety of programs geared towards financial education (including some classroom materials, booklets, etc.). May not be exactly what you need (I just glanced over this as i came upon it the other day), but it might be helpful.

http://www.ott.ct.gov/financial_persona ... ement.html
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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by Fallible » Tue May 02, 2017 7:58 pm

How about centering it on the Bogleheads' philosophy? It covers the most important basics that they'll need to know.

https://www.bogleheads.org/wiki/Boglehe ... philosophy
Last edited by Fallible on Wed May 03, 2017 7:28 pm, edited 1 time in total.
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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by topofthebellcurve » Wed May 03, 2017 1:24 pm

mega317 wrote:I think it is great that you're doing this, and it will be more valuable than counting cards to most audiences. My question is how long is this talk? Your list is ambitious and you don't want to end up rushing or giving superficial treatment to any topics. A smart audience will be disappointed by that.
I have an hour and a half, though it could go long. They are a very smart audience, so I need to trim down the content as you recommend.

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by topofthebellcurve » Wed May 03, 2017 1:51 pm

mortfree wrote:William Bernstein's "If You Can" would probably be a good handout for the group.
This is excellent! I hadn't read it before, and just did. I will also be reading the "Your Money and Your Brain" book he recommended. Heck of an overview!

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by topofthebellcurve » Wed May 03, 2017 1:58 pm

livesoft wrote:Where to Find Good Advice on the Internet about Personal Finance, Taxes, and Investing?

Where Not to Find Good Advice on the Internet about Personal Finance, Taxes, and Investing?

One could just give a Tour of the Bogleheads Wiki and that would be sufficient I would think.
For good sources, what do you recommend aside from Bogleheads? I like Reddit's /r/personalfinance. For a lighter take, I thought John Oliver did a fine job: https://www.youtube.com/watch?v=gvZSpET11ZY

For bad sources, which are your favorite examples? Mad Money?

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by triceratop » Wed May 03, 2017 1:58 pm

topofthebellcurve wrote:
mega317 wrote:I think it is great that you're doing this, and it will be more valuable than counting cards to most audiences. My question is how long is this talk? Your list is ambitious and you don't want to end up rushing or giving superficial treatment to any topics. A smart audience will be disappointed by that.
I have an hour and a half, though it could go long. They are a very smart audience, so I need to trim down the content as you recommend.
Let me know how this goes over with the audience. I am interested in giving a similar talk at my school, and I suspect we have a very similar audience. It would be nice to hear back about what you covered, what worked, and what didn't. Good luck!
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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by livesoft » Wed May 03, 2017 2:11 pm

topofthebellcurve wrote:For good sources, what do you recommend aside from Bogleheads?
irs.gov/publications
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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by topofthebellcurve » Wed May 03, 2017 2:33 pm

Jack FFR1846 wrote:I like the examples livesoft gave. When presenting to a group not expert in what you're talking about, I learned to convey 3 simple points. Repeat these points throughout your presentation. Give examples of each point and bring the point back in.

If you cover too many points, as one mentor told me...."bring good doughnuts".

I'd think some points might be:

Live below your means so you actually save.

Look at fees and pay as little as possible as nothing else really is predictable.

Diversify.
That's an excellent point -- stay simple, and have a few clear takeaways. I think you could even combine the the 2nd and the 3rd: Control what you can control since you can't predict the market.

Restructuring the talk along these lines would look something like this:

#1: Save early and often (the power of compound interest).

#2: Know what you can / can't control. Can't = market performance, life in general. Can = fees, asset mix, diversification

#3: Putting #1 and #2 into practice. Tools for expense tracking and budgeting, flow of saved funds (emergency fund, 401k matching, high interest debt repayment, IRAs, non-match 401k, taxable), 3 fund portfolios, etc.

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Re: Simplicity

Post by topofthebellcurve » Wed May 03, 2017 2:35 pm

Taylor Larimore wrote:topofthebellcurve:

Don't forget the importance of "Simplicity."

Read the link below.

Best wishes.
Taylor
Thanks Taylor, both for the link and for all you've done for the BH community!

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by patrick013 » Wed May 03, 2017 2:38 pm

How about discussing the 2-3-4 and 5 fund portfolios and various
characteristics of each, and conservative, moderate, and aggressive
asset allocations and when is each most appropriate.
age in bonds, buy-and-hold, 10 year business cycle

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by SheReadsHere719 » Wed May 03, 2017 2:43 pm

Given the age bracket you're speaking to, this is one of my favorite graphs: https://blbarnitz4.files.wordpress.com/ ... impact.png

It drives home the points of: 1) investing early, 2) the compounding effect, and 3) the detrimental effect of high fees.

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by Watty » Wed May 03, 2017 3:02 pm

It would be challenging to fit all that into a semester long class much less a short talk.

A few topics like these would be fine;

1) The 4% safe withdrawal rate and setting a retirement "number" goal.
2) What "fiduciary responsibility" is and why it is dangerous to use a financial advisor who does not have it.
3) The importance of keeping cost low and how powerful compounding is.
4) Why investing is usually not all that complicated and how to learn more.

Realistically the goal would be to get them thinking about it instead of giving them a lot of the answers.

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by bloom2708 » Wed May 03, 2017 3:08 pm

How about using the 10 Boglehead principles as the major points.

Then work in some of the topics mentioned above on the appropriate slide/section.

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

I once had to give an impromptu 10 minute speech on a topic during a job interview. I pulled up the site and walked through the Bogleheads site, Jack Bogle and then gave a highlight of the 10 steps. I asked those in the room if they knew the expense ratios on their mutual funds and asked someone to give me the information. :wink:
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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by triceratop » Wed May 03, 2017 3:25 pm

livesoft wrote:
topofthebellcurve wrote:For good sources, what do you recommend aside from Bogleheads?
irs.gov/publications
This. It makes for good lazy summer afternoon reading, too. It's unfortunate that people think taxes are hard; the publications are written exceptionally well for all to learn.
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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by livesoft » Wed May 03, 2017 3:43 pm

Years ago, we had a former student come back and give a guest lecture in a course I help teach. The course is comprehensive and has too much information to summarize it in less than a book or two. When the Guest Lecturer was asked what was the most important thing they learned from the course, he promptly answered something like "1-800-LIVE-SOFT, that's all you need to remember because you can always make the phone call."

In the same vein, perhaps the most important thing that the OP's audience can learn is that going to www.bogleheads.org is all they really need to take away from the talk.
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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by topofthebellcurve » Wed May 03, 2017 4:00 pm

livesoft wrote:Years ago, we had a former student come back and give a guest lecture in a course I help teach. The course is comprehensive and has too much information to summarize it in less than a book or two. When the Guest Lecturer was asked what was the most important thing they learned from the course, he promptly answered something like "1-800-LIVE-SOFT, that's all you need to remember because you can always make the phone call."

In the same vein, perhaps the most important thing that the OP's audience can learn is that going to http://www.bogleheads.org is all they really need to take away from the talk.
That's probably true. In addition to knowing about this forum (among other resources), I'm hoping to impress upon them why this is critical information, and why some effort now is much more effective than X years from now.

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by triceratop » Wed May 03, 2017 4:02 pm

I called 1-800-LIVE-SOFT and all I got was an offer for entry into a Caribbean cruise contest. :confused

I thought it was a toll-free number but apparently I had to pay the troll toll, still.
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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by zzcooper123 » Wed May 03, 2017 5:58 pm

The average Boglehead has essentially a PhD in Personal Finance. Way too advanced and counter-intuitive for the average individual. I would be surprised if one out of a hundred audience members would bother to check the links suggested.

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by pkcrafter » Wed May 03, 2017 7:02 pm

Topofthebellcurve:
How to determine your risk tolerance and asset allocation
How DO you determine your risk tolerance? Not with the usual questionnaire.

There are two major areas that cause investors to lose potential returns: behavior and costs. You have to cover these, but you probably should avoid getting into too much detail on any topic because the audience will be overwhelmed. Stay with basics--and simplicity. :happy

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by livesoft » Wed May 03, 2017 7:18 pm

I had some more thoughts. Here's what I might do if I was tasked with something similar:

1. Hand out pencils and 3 x 5 cards as people entered the venue and ask them to write down one or two questions and tell them you will collect the cards before you start talking.

2. Have an accomplice collect the cards and sort them into the most common questions.

3. Give your talk for only part of the time, then

4. Start answering the questions by showing how bogleheads.org/wiki can answer them. You will need an internet connection, but these are always available in lecture hall.

However, we did something similar before a company all-hands 401(k) meeting. Quite a few people wanted to know the opinion of the speaker for the market outlook for the next quarter. I suspect they were going to use it to do some market timing with their 401(k) holdings.
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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by topofthebellcurve » Wed May 03, 2017 9:41 pm

livesoft wrote:I had some more thoughts. Here's what I might do if I was tasked with something similar:

1. Hand out pencils and 3 x 5 cards as people entered the venue and ask them to write down one or two questions and tell them you will collect the cards before you start talking.

2. Have an accomplice collect the cards and sort them into the most common questions.

3. Give your talk for only part of the time, then

4. Start answering the questions by showing how bogleheads.org/wiki can answer them. You will need an internet connection, but these are always available in lecture hall.

However, we did something similar before a company all-hands 401(k) meeting. Quite a few people wanted to know the opinion of the speaker for the market outlook for the next quarter. I suspect they were going to use it to do some market timing with their 401(k) holdings.
This is a great idea for a few reasons:
-I'll get questions from people who may otherwise be too shy to ask
-As many people get uncomfortable about money, this may help people to open up
-Saves time at the beginning
-Gives people something to do as they're settling in before the talk

I may not go directly to the Wiki during the talk, but I am definitely going to be highlighting it as a key resource for future study.

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by topofthebellcurve » Wed May 03, 2017 9:43 pm

pkcrafter wrote:Topofthebellcurve:
How to determine your risk tolerance and asset allocation
How DO you determine your risk tolerance? Not with the usual questionnaire.

Paul
Risk tolerance is best determined by spawning a statistically significant number of parallel universes, having your alternative selves go through several financial crises, and then somehow reporting back to you in the present as to how they behaved.

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by FEDFERS » Thu May 04, 2017 12:14 am

You may wish to record a practice presentation in front of someone familiar with the subject as well someone who is not. Ask for a critique of your delivery and how well you covered the subject. Find out what you covered well and which topics needed refinement.

Pass out a one page outline (with as much information that can fit on that one page) of all the topics in your talk.

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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by pkcrafter » Thu May 04, 2017 9:01 am

topofthebellcurve wrote:
pkcrafter wrote:Topofthebellcurve:
How to determine your risk tolerance and asset allocation
How DO you determine your risk tolerance? Not with the usual questionnaire.

Paul
Risk tolerance is best determined by spawning a statistically significant number of parallel universes, having your alternative selves go through several financial crises, and then somehow reporting back to you in the present as to how they behaved.
Of course, why didn't I think of that. :oops:


Paul
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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by Fallible » Thu May 04, 2017 9:41 am

pkcrafter wrote:
topofthebellcurve wrote:
pkcrafter wrote:Topofthebellcurve:
How to determine your risk tolerance and asset allocation
How DO you determine your risk tolerance? Not with the usual questionnaire.
Paul
Risk tolerance is best determined by spawning a statistically significant number of parallel universes, having your alternative selves go through several financial crises, and then somehow reporting back to you in the present as to how they behaved.
Of course, why didn't I think of that. :oops:
Paul
Topofthecurve: Intriguing thought, but maybe a lot of trouble for nothing? Past is not prologue, not for investment performance, financial crises, or human behavior. :(

Paul: maybe that's why you didn't think of it? :wink:
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itstoomuch
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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by itstoomuch » Thu May 04, 2017 10:18 am

"You only have between your ages of 25 to 60, earn enough income to save and invest to pay yourself a liveable income from 60 to 95."
Ymmv
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topofthebellcurve
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Re: Giving a Talk on Personal Finance & Investing - Advice?

Post by topofthebellcurve » Fri May 05, 2017 9:31 am

Thanks to everyone for their feedback!

The talk was last night, and it went very well. We went 1/2 hour over schedule, so 2 hours in total. I've pasted the outline below of what we covered -- we got through almost all of it. The crowd was, as expected, about 1/2 grad students with an average age around 27. This included a junior professor, a doctor in residence, a data scientist, a PhD chemist: they were a smart group.

Here's a list of the key learnings for me / interesting questions from the audience:

-They were very engaged and curious, though slightly depressed by my intro about the end of pensions for my generation, and the rising costs of housing, healthcare, and education
-About a 1/3rd of the audience knew, roughly, what their net worth was, and another 1/3rd were using Mint or other sorts of expense tracking. About 1/5th created and maintained a monthly budget.
-As mentioned by a RandomPointer, people really do not know how they are taxed. Most attendees didn't understand how marginal tax brackets work. Once I explained it, they were much more sold on the value of pre-tax investing through IRAs/401(k)s
-Almost no one understood what an IRA/401(k) was, except that it had something to do with retirement.
-One attendee was shopping for a new job and said they never paid attention to the 401(k) and whether there was any matching component, but "that could be a 6% raise!"
-My wife (who has heard me talk about this stuff ad nauseam), said she learned that we should probably increase her contributions to her non-matching 401(k). She's right!
-Everyone got why you don't want everything in stocks unless you're willing to be on the wrong side of the market at a point when you need money.
-Almost no one knew what a bond was. A couple of people knew that you could lend the govt money, but didn't know about lending it to individual companies.
-I didn't get any pushback on the idea of not timing the market, not picking stocks, and high diversity -- this made a lot of sense to everyone
-They did push back on the "don't use a financial adviser" part, for an interesting reason. They wondered if an adviser can help you in a severe downturn to NOT sell out of the market, and whether that would be worth the 1%/yr you're paying.
-The big "saving for the future" topic was buying a house (all but one were renters). They wanted to know how to decide whether it's better to rent or buy (I referred them to the NYT calculator), how your home equity should fit into your overall asset allocation (I didn't have a great answer to this), and how aggressive you should be about paying down mortgage debt (not very, assuming 4% mortgage).
-Someone asked if too many people using an index/passive strategy could "break" the market in some fundamental way. I said that this is an open topic of discussion, but most people think that it just magnifies the effect of the remaining active investors. I also mentioned the monopoly/antitrust side of the argument, where people are concerned as to the impact of (for instance) all of the airlines sharing the same major investors, and how that disincentives competitive behavior.
-People were wondering about robo-advisers like Bettermint. I said it's better than paying someone 1%/yr (they charge 0.3%), but you can do it yourself for nothing.
-No one had heard of a target date fund, but they really liked the idea of having one "automatic" fund.
-"Your Age in Bonds" stuck with people, though I pointed out that this is a very rough rule of thumb.
-Only one attendee had heard of Vanguard, though he went to Harvard Business School and worked at a hedge fund. He was the guy using Bettermint!
-They wanted to know, specifically, how you open an IRA or brokerage account and buy ETFs (which websites, where to click).
-Almost no one had renters insurance!!! This was a major takeaway for everyone: it's cheap and can save you a bundle.

The talk also revealed my own ignorance on a variety topics, which I was happy to admit and kept pointing people to BH for answers. For instance, why do people prefer Roth IRAs vs traditional if the cap gains tax is only 20% vs top marginal income rates of 2X that? What are the tax differences between a 401(k) and an IRA? What are all of the tax benefits from owning a home? How do dividends fit into the "average 7% growth rate / yr" of the stock market, and can you achieve that outside of a tax-advantaged account? Why the heck is there a tax bracket between $416,700 and $418,400???

Here's the talk outline:

-Minimum takeaway: links on board (BH, /r/personalfinance)
-We’re in new era (no pensions, historically high housing, education, and medical costs, flat wages)
-Early action is >> later action. Compound INTEREST!!!
-Better to mess up with small $ than big $$$

Step 1: Audit present situation. Net worth = asset – liabilities
-Where is my money going? Use CCs, Mint. Budgeting. YNAB. Cheap rent/car >> lattes. LIVE BELOW YOUR MEANS

Step 2: What to do with extra $$$? Expanded chart: https://i.imgur.com/CcEVQAV.png
-1 Month Emergency Fund -> medical, car, other
-Employer Match 401(k) - Free money!
-Pay Off High interest debt >10%
-Expand Emergency Fund to 3-6 months
-Max Roth / Traditional IRA. Sidebar into what IRAs are and how marginal vs effective tax brackets work
-Max 401(k) – Non Matching so that you're saving at least 15% of gross income
-Rest in taxable portfolio

Step 3: What to do with invested money?
-Sidebar into the power of compound interest with examples, rule of 72
-Goals with savings: have money when you need it while growing it as much as possible over the long term without too much exposure to market gyrations
-Draw risk/return spectrum for assets losing value within 1 yr (cash low risk, stocks high)
-Draw same spectrum for assets losing value over 20 yr period (cash high risk, stocks low)
-Sidebar into what's a bond
-Rule of thumb: short term money into cash and bonds, long term (10+ yr) money into stocks
-Understand the variables inside and outside of your control. Outside = market movements. Inside = asset allocation, diversity, fees
-How to determine asset allocation and ability/need to take risk. ~Age in bond.
-Which bonds/stocks to buy? ALL OF THEM. You’re average. Other side of an individual stock buy/sell is Goldman or an insider. Don't be a sucker.
-Best you can hope for is to ride the historical increases in the market
-Fees, passive vs. active, typical fees for advisers / mutual funds and what 1% lower growth rate looks like over 40 yr time horizon.
-Math proof = average active < average passive after fees
-VTI, VXUS, and BND as examples. How an index fund works. Why they're important.

Step 4: Putting everything into practice
-How to sign up for an account. Why I like Vanguard and Fidelity (but there are others).
-Final note: get insurance to protect your growing wealth. It's cheaper than you think.

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