Tips From Older Bogleheads?

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BlackHat
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Tips From Older Bogleheads?

Post by BlackHat » Fri May 05, 2017 9:13 am

Hello Bogleheads!

For those of you that are older and more experienced. What are some things you have learned from investing over the years? What are some tips for young investors that have only experienced a bull market? Anything from the past that you wish you paid closer attention to?

Thank you to all!
“Life is really simple, but we insist on making it complicated.” -- Confucius

123
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Re: Tips From Older Bogleheads?

Post by 123 » Fri May 05, 2017 9:21 am

Slow and steady wins the race. Start early.
The closest helping hand is at the end of your own arm.

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Re: Tips From Older Bogleheads?

Post by BHUser27 » Fri May 05, 2017 9:26 am

Live below your means - aggressively
Beware of credit. Use it sparingly if at all.
I wish I had started saving earlier.
"Stay the course" gets a lot of lip-service around here, but it is truly the only way to deal with a slump - set up your portfolio correctly from the start so you do not have to sell equities in a down-turn.

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Re: Tips From Older Bogleheads?

Post by livesoft » Fri May 05, 2017 9:28 am

Don't listen to older people who got it all wrong.
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bertilak
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Re: Tips From Older Bogleheads?

Post by bertilak » Fri May 05, 2017 9:29 am

BlackHat wrote:Hello Bogleheads!

For those of you that are older and more experienced. What are some things you have learned from investing over the years? What are some tips for young investors that have only experienced a bull market? Anything from the past that you wish you paid closer attention to?

Thank you to all!
If I could go back to the past I'd pay attention to advice about saving and investing early. "Save as much as you can as soon as you can as often as you can. Invest it in index funds." Of course when I was young investing was a lot more expensive and harder to do. Perhaps I might have run across Vanguard, but there was no way for me to know they were better than (for example) Merrill Lynch. Also, Vanguard didn't exist when I started out pre-1975.

Luckily for me the MegaCorp I worked for knew how to run a great pension. it's paying (most of) my way right now. I stress, I was lucky. I guess that leads me to my next advice: Don't count on being lucky! Don't count on getting the brass ring. We only get ONE ride on this merry-go-round.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker, the Cowboy Poet

BlackHat
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Re: Tips From Older Bogleheads?

Post by BlackHat » Fri May 05, 2017 9:36 am

livesoft wrote:Don't listen to older people who got it all wrong.
That's a great point. I hope since they found the Bogleheads they have realized their past mistakes.
“Life is really simple, but we insist on making it complicated.” -- Confucius

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InvestorNewb
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Re: Tips From Older Bogleheads?

Post by InvestorNewb » Fri May 05, 2017 9:39 am

My guess is the tips will come down to the Boglehead principles in one form or another:

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

Source: https://www.bogleheads.org/wiki/Boglehe ... philosophy
My Portfolio: VTI [US], VXUS [Int'l], VNQ [REIT], VCN [Canada] (largest to smallest)

RadAudit
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Re: Tips From Older Bogleheads?

Post by RadAudit » Fri May 05, 2017 9:48 am

livesoft wrote:Don't listen to older people who got it all wrong.
Don't know if I got it right or wrong. The jury is still out about six or seven years in to retirement.

Yes, there was a lot of luck involved to be able to work at a place that provided a pension. On the other hand, you had to be employed there for 39 years so there was that trade off. And, if you don't have a pension or can't stay employed at the same place for 39 years, you may have to re-calculate.

Still, LBYM, save, invest in something like a three or four fund portfolio, and stay the course seems to be working so far. Standard BH principles. https://www.bogleheads.org/wiki/Boglehe ... philosophy Boring, really. But it frees up your time to do other things besides watching CNBC.
Last edited by RadAudit on Fri May 05, 2017 10:30 am, edited 1 time in total.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The Calvary isn't coming, kids. You are on your own.

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Re: Tips From Older Bogleheads?

Post by deltaneutral83 » Fri May 05, 2017 9:50 am

Get advice on topics from individuals who have demonstrated and can show you how they've been successful, practical time tested advice, not theoretical advice from one in academia. This website for investing and finance in general is terrific. Don't get health/dieting tips from visibly unhealthy people and don't get finance/investing advice from broke people. Don't mix investing with insurance, i.e. don't go to a steakhouse and order pasta and don't go to an Italian restaurant and order steak. Common sense tips I know, but it doesn't get executed nearly enough.

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Re: Tips From Older Bogleheads?

Post by DaleMaley » Fri May 05, 2017 10:02 am

The realization that there are very few principles involved with individual investing. I think that William Bernstein, in one of his writings, points out the field of medicine has quite a few guiding principles. He was surprised to find very few important principles involved with individual investing. My own field is engineering, and I am also surprised how few important principles are involved with investing compared to engineering.

About 2,000 years ago, the Talmud had a famous quote, “Let every man divide his money into three parts, and invest a third in land, a third in business, and a third let him keep in reserve". This is probably the earliest written advice to diversify your investments and keep a proper asset allocation.

In the 20th century, studies found that for pension portfolios, 90% of the annual return was explained simply by the ratio between stocks and bonds in the portfolio (or asset allocation). The remaining 10% was due to the selection of investments and market timing.

Costs matter. Jack Bogle points out that in the current 401K system, the worker/investor puts up all the money, yet the worker only gets 1/3 of the investment returns and Wall Street gets 2/3 of the return. This is due to high expense 401K investments in poor performing mutual funds.

This information leads one to conclude that individual investors should use low-cost index funds in the proper asset allocation.

Another age old concept is the power of compounded returns. The earlier one starts saving and investing, the more wealth will be accumulated.

The only other major finding in the last hundred years is the 4% safe withdrawal rate rule in retirement. It simply says that due to fluctuating stock market returns, one can not safely withdraw the stock market long-term average return of 10% per year. One should not exceed a maximum of 4% per year, inflation-adjusted, if they wish to not run out of money during retirement.
Most investors, both institutional and individual, will find that the best way to own common stocks is through an index fund that charges minimal fees. – Warren Buffett

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climber2020
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Re: Tips From Older Bogleheads?

Post by climber2020 » Fri May 05, 2017 10:09 am

livesoft wrote:Don't listen to older people who got it all wrong.
This is fantastic advice. I've learned so much about what not to do by simply observing my older co-workers for the last several years. Their examples have saved me at least a million dollars over the course of my life; probably more.

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Re: Tips From Older Bogleheads?

Post by cody69 » Fri May 05, 2017 10:13 am

My biggest learning had to do with owning single stocks. These came to me in the form of employee stock purchase plans at workplace, as well as company stock in 401K program. At the time, ESPP offered stock at XX% discount, so hey, how could this go wrong? But I was not disciplined, and those single stock investments turned out badly.

Although I've learned to never say never... but in this case I can say my IPS says invest only in broad market indexes... and avoid purchasing single stocks. I wish I would have known this ahead of time and avoided the very painful (costly) lesson.

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Re: Tips From Older Bogleheads?

Post by B. Wellington » Fri May 05, 2017 10:34 am

bertilak wrote:
BlackHat wrote:Hello Bogleheads!

For those of you that are older and more experienced. What are some things you have learned from investing over the years? What are some tips for young investors that have only experienced a bull market? Anything from the past that you wish you paid closer attention to?

Thank you to all!
If I could go back to the past I'd pay attention to advice about saving and investing early. "Save as much as you can as soon as you can as often as you can. Invest it in index funds." Of course when I was young investing was a lot more expensive and harder to do. Perhaps I might have run across Vanguard, but there was no way for me to know they were better than (for example) Merrill Lynch. Also, Vanguard didn't exist when I started out pre-1975.

Luckily for me the MegaCorp I worked for knew how to run a great pension. it's paying (most of) my way right now. I stress, I was lucky. I guess that leads me to my next advice: Don't count on being lucky! Don't count on getting the brass ring. We only get ONE ride on this merry-go-round.
+1 Great advice from berilak, save and invest as much as you can, as often as you can.

Before Vanguard may years ago, I was all over the map as far as investing goes. Individual stocks that didn't live up to the hype, some company stock, some C.D.'s, along with some very aggressive funds with high fees. Looking back, if I had put everything in a simple 2 or 3 fund portfolio, the final value would have been the same if not better with far less worry and stress. Keep your investing life Simple, then go and enjoy the other important things in life.

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Re: Tips From Older Bogleheads?

Post by White Coat Investor » Fri May 05, 2017 10:59 am

Try not to make all the mistakes yourself.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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nedsaid
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Re: Tips From Older Bogleheads?

Post by nedsaid » Fri May 05, 2017 11:07 am

You have to be a good saver. You really can't invest if you don't have savings to begin with. This means you have to understand the concept of delayed gratification. Another key concept is prioritizing your spending, that is putting your dollars into the things that are most important. A lot of times, money gets spent on small things that aren't important but that you don't think about, money that just slips through your fingers. The small stuff can really add up.
A fool and his money are good for business.

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Re: Tips From Older Bogleheads?

Post by TheJoker » Fri May 05, 2017 11:08 am

If you can not follow Bogle advice 100%, allow yourself to deviate from indexes or ? ? with 10% of your portfolio.

I could not resist timing the market. BUT, ........now I only do that with 10% of my portfolio.
[/u]
Low cost index and let it ride for a long time.

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Re: Tips From Older Bogleheads?

Post by TF Hutch » Fri May 05, 2017 11:09 am

KISS
Keep it simple stupid!
Total Stock Market and Total Bond Market. 2 mutual funds. All you need. Plenty of international in these two. Asset Allocaion is a breeze. :happy
Be happy with what the market gives you, cost matter. :sharebeer
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Re: Tips From Older Bogleheads?

Post by nisiprius » Fri May 05, 2017 11:24 am

Image
1) "Investing is not a science."--John C. Bogle.
In 'The Clash of the Cultures', John C. Bogle wrote:Investing is not a science. It is a human activity that involves both emotional as well as rational behavior. Financial markets are far too complex to isolate any single variable with ease, as if conducting a scientific experiment.
2) "Nobody... knows... nothin'."--Someone named "Raymond" whom Bogle knew.
Everything you need to know about investing in three words
I came into this business when I was in Princeton, and I worked for a brokerage firm in the summer. And one of the old runners said to me "Bogle! I'm going to tell you everything you need to know if you're going into the investment business." And I said "What's that, Raymond?" And he said "Nobody... knows... nothin'."
Experts make statements with confidence that's ten times higher than can be justified. They don't know. They're mostly winging it.

3) "When experts disagree, it is often because it doesn't matter."--Taylor Larimore

4) "Successful investing involves doing just a few things right and avoiding serious mistakes."--John C. Bogle

5) When all else fails, fall back on simplicity.
John C. Bogle wrote:Pillar 2. When All Else Fails, Fall Back on Simplicity.
There are an infinite number of strategies worse than this one: Commit, over a period of a few years, half of your assets to a stock index fund and half to a bond index fund. Ignore interim fluctuations in their net asset values. Hold your positions for as long as you live, subject only to infrequent and marginal adjustments as your circumstances change. When there are multiple solutions to a problem, choose the simplest one.
Once you are pretty sure you're not doing anything crazy, shrug and leave things alone. Don't start worrying about whether there's something better, because the quest for the optimum can do you harm, and even thirty years from now, you may know which strategy had the highest return but you still will not know whether it was the best strategy or just the luck of the draw during those thirty years.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

2015
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Re: Tips From Older Bogleheads?

Post by 2015 » Fri May 05, 2017 11:31 am

I should have developed and thoroughly thought through every aspect of an investment policy statement at long before I actually did so.

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FrugalInvestor
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Re: Tips From Older Bogleheads?

Post by FrugalInvestor » Fri May 05, 2017 11:37 am

Never believe it when someone tries to convince you that they know what the market will do in the future, and therefore where you should put your money "now." They may throw around impressive sounding terminology but they can't predict the market any better than you can - and neither of you can predict it very well.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

scooter
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Re: Tips From Older Bogleheads?

Post by scooter » Fri May 05, 2017 11:48 am

Save a minimum of 16% every paycheck and start as early as possible.

Pay yourself first then other bills.

Pay credit card bill off every month leaving zero balance.

If you invest only when you have money left over, then your priorities are wrong.

Index mutual funds instead of stocks.

Maximize any company matches

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Re: Tips From Older Bogleheads?

Post by tennisplyr » Fri May 05, 2017 11:48 am

Some thoughts from mid-sixties retiree for a youngster:

-Time is your friend, save/invest where possible no matter how small
-Debt is your enemy...try to spend within your means
-Have goals and work toward them
-Timing the market is fool's gold, it make work sometimes, usually not
-Be thankful for what you have, keeping up with the Jones is a waste
-Be hopeful for the future, things have a way of working out
-All things come to an end, both bad and good
Last edited by tennisplyr on Fri May 05, 2017 11:59 am, edited 1 time in total.
Those who move forward with a happy spirit will find that things always work out.

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Re: Tips From Older Bogleheads?

Post by noupdjm » Fri May 05, 2017 11:49 am

As Dr Bernstein said in The Four Pillars of Investing:

There are 2 kinds of people in the world:
1) Those who don't know where the market is heading
2) Those who don't know that they don't know where the market is heading.

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Re: Tips From Older Bogleheads?

Post by Fallible » Fri May 05, 2017 12:07 pm

InvestorNewb wrote:My guess is the tips will come down to the Boglehead principles in one form or another:

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
Source: https://www.bogleheads.org/wiki/Boglehe ... philosophy
That would be my guess. That philosophy, plus advice from the likes of Graham, Buffett, Bogle, Munger, etc., address mistakes investors have made. In other words, investors too often fail to have a plan, fail to invest early and often, take on too much or too little risk, fail to diversify, try to time the market, and on down the list.
Bogleheads® wiki | Investing Advice Inspired by Jack Bogle

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Re: Tips From Older Bogleheads?

Post by Morse Code » Fri May 05, 2017 12:08 pm

I will turn 48 this week. Don't know if that's old to the OP, but I will tell you that I didn't start making decent money until about ten years ago. Since then my net worth has increased dramatically. I just regret that it took so long for me to settle in to a career and increase my income. Boglehead principles don't matter a lick if you don't have a good income. Takes money to make money. Focus on your career.
Livin' the dream

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Re: Tips From Older Bogleheads?

Post by itstoomuch » Fri May 05, 2017 12:14 pm

YMMV :mrgreen:
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Re: Tips From Older Bogleheads?

Post by arthurdawg » Fri May 05, 2017 12:48 pm

The perfect is the enemy of the (very) good.

Keep it simple with a 2-6 fund portfolio... maximize tax-deferred accounts... and save like a banshee. You'll never be on the top of the returns for the year with this approach, but minimizing taxes and expenses, and averaging at 70% of the top returns each year... it really builds up over 35-40 years!
TSM / SCV / FTSE Big World / FTSE Small World / REIT / TBM / Int Term Tax Exempt

ANC
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Re: Tips From Older Bogleheads?

Post by ANC » Fri May 05, 2017 1:12 pm

climber2020 wrote:
livesoft wrote:Don't listen to older people who got it all wrong.
This is fantastic advice. I've learned so much about what not to do by simply observing my older co-workers for the last several years. Their examples have saved me at least a million dollars over the course of my life; probably more.
I would cite this advice as well. In my investing lifetime, two of my best decisions were to start investing heavily in stocks in the early- to mid-80s, when co-workers were against it and not piling into tech stocks 10-15 years later when they were.

Another piece of advice is not to fight against your investment manager. One of the most important developments in my lifetime is the rise in AUM under professional management such as target date funds. Some variation is OK--I see no problems with someone who invests 25% in international stocks while their manager says 40--but if you are at 0% or over 50% with a majority in EM and small, you need to ask yourself if it's such a good idea, why is my manager not doing it

This also relieves you from worrying excessively about your asset allocation.

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Re: Tips From Older Bogleheads?

Post by SGM » Fri May 05, 2017 1:50 pm

I have generally lived by "a penny earned is a penny saved" and "never a borrower or a lender be." Although I borrowed to buy a house and to buy one of my first cars (but it was two years old).

I agree with much of what others have said and won't write an exhaustive list.

Pay yourself first. This can be made automatic with 401k plans. I was fortunate to have some good ones. And early on I earned enough to save in taxable accounts and IRAs as well.

When your kids leave home and your house is paid for increase your investments.

Several Boglehead published authors confess to having made errors when they first started investing. You can still learn plenty from them.

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Re: Tips From Older Bogleheads?

Post by CABob » Fri May 05, 2017 2:45 pm

The 10 commandments by Jonathan Clements is pretty good.
viewtopic.php?f=10&t=218190&newpost=3356970
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Re: Tips From Older Bogleheads?

Post by FelixTheCat » Fri May 05, 2017 3:19 pm

Invest early and often. Pay yourself first.
Live within your means.
Stick with a couple of index funds.
Marry the right person.
Eat clean.
Exercise.
Vacation.
Get a dog.
Never buy cheap booze. The headaches are not worth it. :shock:
Give back to the world.
Always pass on what you have learned. – Yoda
Felix is a wonderful, wonderful cat.

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Re: Tips From Older Bogleheads?

Post by nodenuff2 » Fri May 05, 2017 3:56 pm

Save in 3 vehicles 1. Tira 2. Roth IRA 3. Taxable . We put all into a Tira as a Roth came late n our investing life. Should have saved more in taxable.
2014 No. 42 2015 No.342 2016 No. 6 2017 238 what do I know? "Good bless America land that I love..."

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Re: Tips From Older Bogleheads?

Post by Tycoon » Fri May 05, 2017 3:59 pm

Read - a lot.
Appeal to Pity:When pity is envoked to support a statement | Appeal to Popular Sentiment:Appealing to unrelated prejudices and attitudes | Hasty Generalization:Too little evidence to support the conclusion

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Taylor Larimore
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Re: Tips From Older Bogleheads?

Post by Taylor Larimore » Fri May 05, 2017 4:06 pm

BlackHat wrote:Hello Bogleheads!

For those of you that are older and more experienced. What are some things you have learned from investing over the years?
InvestorNewb got it right:
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
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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celia
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Re: Tips From Older Bogleheads?

Post by celia » Fri May 05, 2017 4:34 pm

Young people have it easy these days. When we started investing:
Vanguard didn't exist (until 1975)
mutual funds didn't exist (as we know them today)
Target Retirement funds didn't exist
personal computers didn't exist
personal tax software didn't exist
IRAs didn't exist

Somehow we made it through all these new-fangled contraptions and managed to save. What we did have was:
pensions
investment magazines and newspapers
local libraries
paid advisors
paid tax preparers
elders we could learn from (if we were lucky)
calculators
pencils

My biggest tip is to learn about compounding. That is when the interest (or dividends) your assets earn are re-invested to also earn extra interest (or dividends). If you start early and keep saving, eventually the interest (or dividends) become bigger than all the contributions you made to the account. For an exercise to see the power of compounding, use a spreadsheet to see if you can make an example that illustrates this situation:
----------------------------------------
Ann and Bill are the same age.
Ann saves $5,000 a year from ages 18 to 27, then never touches the account again until she is 60.
Bill doesn't contribute until he is 28, then saves $5,000 a year until he is 60.
When they are 60, Ann has more money than Bill.
----------------------------------------
What interest/growth rate is needed for this to be true? 1%, 3%?, 5%?, 8%?, 20%?

What else do you notice in the spreadsheet?
What if they both save only $3,000 a year? $12,000 a year?
Are you compounding once a year or quarterly or monthly? does it matter?
At what age do Ann's interest/dividends overtake her contributions?
At what age do Bill's interest/dividends overtake his contributions?

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Re: Tips From Older Bogleheads?

Post by Nowizard » Fri May 05, 2017 6:17 pm

Excellent comment about only being exposed to bull markets. We are all a product of our primary experiences. For example, we borrowed as much more as a bank would allow than needed in the late 1970's, early 1980's to "invest" since we "knew" we could "make more" by doing that since interest was "only" 8% or so at times. Though it worked, we would take everything we have and run as fast as we could if we could find non-callable bonds at 7% today. In short, unless you are far wiser than we were, you will quite likely take risks that are not identified as such until much later. Hopefully, they will turn out as positively as ours did.

Tim

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Re: Tips From Older Bogleheads?

Post by Mr.BB » Fri May 05, 2017 6:21 pm

Even if someone got it right in the past, doesn't mean they will get her right in the future.
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imbogled
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Re: Tips From Older Bogleheads?

Post by imbogled » Sat May 06, 2017 5:47 am

Don't panic when things get rough! Take a deep breath, stay the course!
Someone is sitting in the shade today because someone planted a tree a long time ago. | Warren Buffett

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Re: Tips From Older Bogleheads?

Post by fundseeker » Sat May 06, 2017 6:30 am

Invest early and often, and be more aggressive in your early decades, especially if you have a good pension ahead of you! The point there is that with the pension, you can take more risk because you are less likely to need the retirement account funds. I think I was too conservative, but then again, I was invested at my comfort level and stayed the course through serious downturns. Be aggressive early on, but not so much that you'll pull out when things get ugly.

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Re: Tips From Older Bogleheads?

Post by Archimedes » Sat May 06, 2017 6:47 am

Live below your means.
Material things don't bring happiness.
Eat healthy food and exercise often.
Nurture your emotional health through positive relationships.
Have a financial cushion. When life throws you a curveball and the going gets rough it helps you to avoid major stress.
Have a core philosophy of life that guides your decisions for your family, your community, and your career.

I am very wealthy after years of following these principles.
I have invested carefully and enjoyed many things.
I could retire fully, but I love being productive.
I live on 10% of my income.
I pay federal, state, and other taxes of around 45% of my current income.
I don't mind because I have way too much money.
The rest goes to investments and charity.
I am fortunate beyond the imaginable.

BlackHat
Posts: 85
Joined: Tue Feb 14, 2017 1:47 pm

Re: Tips From Older Bogleheads?

Post by BlackHat » Sat May 06, 2017 6:59 am

Thank you everybody for your responses! I'm so thankful that I've found the Bogleheads so early in my life. I now know where to come back to when a bear market swipes. Thank you again.
“Life is really simple, but we insist on making it complicated.” -- Confucius

carolinaman
Posts: 3293
Joined: Wed Dec 28, 2011 9:56 am
Location: North Carolina

Re: Tips From Older Bogleheads?

Post by carolinaman » Sat May 06, 2017 7:24 am

When you are young, your human capital is your greatest asset. Invest in that with appropriate education, skills and experience and it should pay great dividends over the long haul.

I only completed one year of college after high school. I then started working but realized my mistake at age 26 and went to school at night for 6 years to get a BS in Accounting. I spent a lot of time in my 20s and 30s investing in myself through education and job experience. I had a family and a decent salary but not enough to save a lot. However, this investment in my human capital enabled me to have a good 30+ year career in management after completing my degree that paid well and was very satisfying.

Early savings can make a huge difference in the long term and I highly encourage you to save when you are young. But do not forget to invest in yourself.

hudson
Posts: 1512
Joined: Fri Apr 06, 2007 9:15 am

Re: Tips From Older Bogleheads?

Post by hudson » Sat May 06, 2017 7:25 am

It's hard to add much to the previous contributions...just some thoughts.
Consider reading Bogleheads to see what others are experiencing and thinking in order to refine your plans.
Consider following Bogleheads to learn new things like tax loss harvesting, best reward credit cards, and 3% CDs.
Consider reading Boglehead authors especially Swedroe, Bernstein, Larimore, and Ferri.
Maybe question everything including Boglehead principles. Keep reading and studying until you find a plan that fits you.
Before I started following Bogleheads, I always took out car loans; I used home equity loans to pay for projects; I spent all extra money; I put a token amount of funds in my 401K; Roth IRAs weren't on my radar; I didn't understand bonds at all.
If you get tired of reading though all of the Boglehead discussions, bookmark your favorite contributors' "search all user's posts" pages; just read their contributions. Here are Nisiprius's contributions: search.php?author_id=2820&sr=posts
Last edited by hudson on Sat May 06, 2017 7:45 am, edited 3 times in total.

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Kenkat
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Location: Cincinnati, OH

Re: Tips From Older Bogleheads?

Post by Kenkat » Sat May 06, 2017 7:39 am

When you are young and just starting out, worry less about performance and returns and focus on saving as much as you can.

When I first started, if I lost 10% in a particular year, it felt like a fortune was lost but in reality, I'd make that back up in savings in less than a year. Now if I lose 10%, it takes a long time for new contributions to cover that.

Build that nest egg early and it will take on a life of its own eventually.

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midareff
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Location: Biscayne Bay, South Florida

Re: Tips From Older Bogleheads?

Post by midareff » Sat May 06, 2017 7:44 am

BlackHat wrote:Hello Bogleheads!

For those of you that are older and more experienced. What are some things you have learned from investing over the years? What are some tips for young investors that have only experienced a bull market? Anything from the past that you wish you paid closer attention to?

Thank you to all!

Start early, even if it is only $25 every other week. Increase savings as you can with every raise and cola. Take maximum advantage of any savings plans offered by your employer, be it deferred compensation (457b), matching, HSA, or whatever. Saving tax dollars and/or other people's money is easier than your own. Have a written plan which includes goals and follow it religiously. When you get to the point you are maxing your tax deferred accounts don't forget about your Roth. When you get to the point you are maxing your tax deferred accounts and your Roth don't forget about taxable savings and investments. Have a written plan which includes goals and follow it religiously (yeah, I know I said it before). When the black swan flies over and things look depressed and scary remember what Buffet says.. when other's get fearful is the time to get greedy (and buy). Don't let the last eight years cloud your judgement, it's a market and markets go up and they go down, sometimes grinding lower for more months than you think your constitution can stand. That too shall pass and stay the course, regardless, stay the course. No one is smarter than the market and that includes you. I know too many who couldn't stand it psychologically during the 99 and 07 drops and sold at or near the bottom ruining their future retirement. Laugh at Jim Cramer, nobody knows nothing includes him. Diversification is the only free lunch in investing. There is no such thing as too much money in retirement as there are more cruises than you can take and more countries (204) and states than you may be able to get to visit. Don't take more risk than your need, willingness and ability and your ability to sleep well at night. Don't forget to have some fun along the way.

Dottie57
Posts: 4666
Joined: Thu May 19, 2016 5:43 pm

Re: Tips From Older Bogleheads?

Post by Dottie57 » Sat May 06, 2017 7:50 am

1. Pay yourself first.
2. Automatic deductions from paychecks works really well.
3. Before taking ou debt remember you are spending your future paycheck. Doesn't sound as good does it.?

Harbormaster
Posts: 18
Joined: Thu Dec 25, 2014 9:34 am

Re: Tips From Older Bogleheads?

Post by Harbormaster » Sat May 06, 2017 8:13 am

Marry a prudent wife and stay married.

How to find a good wife? Find a good mother-in-law and marry one of her daughters. Which one doesn't greatly matter.

BlackStrat
Posts: 264
Joined: Wed Apr 29, 2015 9:20 am

Re: Tips From Older Bogleheads?

Post by BlackStrat » Sat May 06, 2017 8:34 am

2015 wrote:I should have developed and thoroughly thought through every aspect of an investment policy statement at long before I actually did so.
Exactly!

Have a logical plan based on what you learn from the Bogle philosophy and be ready for either a bull or bear market

radiowave
Posts: 1830
Joined: Thu Apr 30, 2015 5:01 pm

Re: Tips From Older Bogleheads?

Post by radiowave » Sat May 06, 2017 8:39 am

One of the best things I (we) did is get organized and build a good spreadsheet to track and analyze investments and cash flow. The second best thing was simplifying our portfolio (combine multiple accounts from past employers into a single Rollover IRA). And of course following and joining the Bogleheads Forum helped find our course.
Bogleheads Wiki: https://www.bogleheads.org/wiki/Main_Page

cherijoh
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Joined: Tue Feb 20, 2007 4:49 pm
Location: Charlotte NC

Re: Tips From Older Bogleheads?

Post by cherijoh » Sat May 06, 2017 9:07 am

BlackHat wrote:Hello Bogleheads!

For those of you that are older and more experienced. What are some things you have learned from investing over the years? What are some tips for young investors that have only experienced a bull market? Anything from the past that you wish you paid closer attention to?

Thank you to all!
I started out of college with a company that offered a DB pension AND a workplace savings plan that matched 1:1 up to a 5% employee contribution. The pension had an early retirement clause that allowed employees who were at least 55 and met the "Rule of 85" to retire at their full pension. Based on "water cooler" conversations, most of my coworkers seemed to be investing up to the match but that was about it. Between that and the pension and they figured they were set for life. I was the exception - I was a Boglehead well before I had ever heard the term "Boglehead". :wink:

Fast forward to when I was in my mid-forties. My employer decided to close our location and relocate out-of-state. Many of my older coworkers took early retirement, but almost everyone in my age cohort was between a rock and hard place. They couldn't afford to voluntarily become unemployed - but they really weren't keen on relocating. In addition, having a comfortable retirement was dependent on working another 10 or more years in order to keep building their pension - they hadn't been saving enough in the 401k to have a meaningful impact on their retirement. I was the exception here as well and took the separation package - much to the surprise of my coworkers since I am the antithesis of a risk taker.

This experience reinforced the idea that there are always circumstances beyond your control, so when making big financial decisions (e.g., can I afford this house, am I saving too much/too little, is this a good asset allocation, etc.) you can't base them on the status quo - you need to consider potential adverse events like job loss, serious illness, the need to take care of a family member, a significant stock market correction, etc. You may think the probability of an event is low, but if the consequences are big you can't ignore the possibility when determining your plan or making a decision.

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