What was your eureka! Boglehead moment?

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snowshoes
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Re: What was your eureka! Boglehead moment?

Post by snowshoes »

EmergDoc wrote:
wanderlust14 wrote:Just curious as to whether people had a particular moment/experience where they realized the importance of taking control of their personal finances and investment strategies or if it was a gradual transition over time. Please share.
I read Mutual Funds for Dummies by Eric Tyson over one of my first vacations in residency, then when I got home from vacation looked at my funds and realized I owned C shares, not no-loads. Not only did that change my investing approach, but it eventually led to my side gig which freed me from medicine. I now see patients only because I enjoy it. Eureka!
Hats off to you EDoc! Are you :wink: shorting medicine now?
chuckb84
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Re: What was your eureka! Boglehead moment?

Post by chuckb84 »

I got a job with the Federal government right of grad school and missed the old CSRS system by 4 months :(. At age 29 I at least had the sense to see that putting aside 5% of salary into TSP with a 5% Federal match was a 100% return no matter what else I did (and I dimly realized it was also tax advantaged). Then I put it all into the G fund and ignored it for 8 years. Finally I read Malkiel (Random Walk) and went about 80% stocks. Over 30 invested in TSP, I did "time the market" twice, once just as the .com bubble popped, and again just as the the real estate bubble burst. Those were based on Malkiel's advice of, roughly, "When everyone says "this time it's different", take your money and run. Aside from those two obvious cases, it's been 70-80% S, C and I funds the whole time.

Didn't find this forum until after I retired this past April and had more time to think about this stuff. Philosophically, I think I've been a boglehead since the early 90's without knowing it!
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White Coat Investor
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Re: What was your eureka! Boglehead moment?

Post by White Coat Investor »

snowshoes wrote: Hats off to you EDoc! Are you :wink: shorting medicine now?
Thank you.

No, just enjoying it more than ever. Far more fun when you don't have to do it.
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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ofcmetz
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Re: What was your eureka! Boglehead moment?

Post by ofcmetz »

It was very gradual for us. I starting listening to Dave Ramsey about 5 years into my police career right before the wife graduated from nursing school. I read the Millionaire Next Door around this time. We started investing as soon as she started her first nursing job. Learning about investing brought me here and the rest is history. Thank you bogleheads.
Never underestimate the power of the force of low cost index funds.
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jackpistachio
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Re: What was your eureka! Boglehead moment?

Post by jackpistachio »

When I lost oodles and oodles of money in real estate. Everything and then some. Though I've always saved and invested as much as possible, in the beginning of my working life I was putting nearly everything towards real estate, my own residence and rental properties, leveraged 5-6x. At the time it seemed like a sure win, based on how well it had worked for my parents (who themselves evangelized real estate investing), and also based on how well it worked over the time frame of my life, and thinking this was going to be a life-long growing position. Had no understanding of the concentrated risks I was taking. If someone told me I was taking a very large amount of risk, I would have stared at them blankly and thought "poor fellow... missing out on the best opportunity".

Now I understand the benefits of diversification, the dangers of leverage, the importance of assessing the risks in your investments, and am wholly converted to bogleheadish principles. Seems so fundamental and basic now. Didn't to my younger self before I really took it in the teeth. Lost all my hard-earned money acquired over years of work. Interestingly, my parents were also similarly taken to the cleaners. On a couple of occasions I have talked to them about the risks they are still taking and received a blank stare in return...

Thankful to have found the book "The Boglehead's Guide to Investing" which then lead me to this site. I have since more than recovered from that life experience, with invaluable lessons to carry forward and hopefully pass on.
We're all nuts, but Pistachios are my favorite.
selftalk
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Re: What was your eureka! Boglehead moment?

Post by selftalk »

It was finally realizing that Taylor`s suggested 3 fund portfolio as advocated here on this website is really terrific, sensible and productive if you want to invest in the financial markets as a way to achieve your money goals.
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celia
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Re: What was your eureka! Boglehead moment?

Post by celia »

I have yet to have the "moment"!

I'm here (luckily) because I followed the crowd at work. Well, maybe not the "crowd", but I was working at a small start-up in my 30s when they started a 401k. The company automatically put something in whether you did or not. So I had to pick something called a "fund" and I started getting statements. After a year or two, the older guys started complaining about the performance of the funds (and probably the fees) and that you could put in a trade between funds only once a quarter (if I recall correctly). I think they researched better choices and since the company was small (and 2 of the co-founders worked in our office) they listened and moved the plan to Vanguard.

Note that I am not generally a "follower". When I am onto something good, I share it with others. As I moved through my career, I have talked retirement planning with younger co-workers. I told my kids when they started a full-time job, they need to open an IRA at Vanguard. And when I manage assets for older family members, I move them to Vanguard.

Besides contributing a lot to Bogleheads, I've also learned a lot. Why not pass it on?

Edit: It was very easy for my kids to start saving since they each had a discussion in a h.s.math class about compounding. They each came to me amazed and showed me an example that if you invest $x for y years at rate r, look at what it would be worth! :sharebeer
Last edited by celia on Wed Nov 18, 2015 6:11 am, edited 1 time in total.
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obgyn65
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Re: What was your eureka! Boglehead moment?

Post by obgyn65 »

It was very gradual for me. Like 25 years or so.
wanderlust14 wrote:Just curious as to whether people had a particular moment/experience where they realized the importance of taking control of their personal finances and investment strategies or if it was a gradual transition over time. Please share.
"The two most important days in someone's life are the day that they are born and the day they discover why." -John Maxwell
zkzkzk
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Re: What was your eureka! Boglehead moment?

Post by zkzkzk »

My aha moment came when I exercised some stock options a few years back. I was an instant member of the 2 comma club and had no clue what to do. My company was nice enough to bring in a host of financial advisers to help us manage our new found wealth. Having always been a cautious person I had trouble when all of these advisers were trying to sway me their way. A simple google search of "how to handle a windfall" lead me the the BH website. I have been lurking here daily, sometimes visiting several times a day, reading and trying to absorb as much as I can.
I could never find the words to express the gratitude I have for all of the knowledge I have gained from all of you, especially when I hear all the horror stories from my coworkers about how things went very wrong for them with regards to how they handled their finances. I am hesitant to offer unsolicited advice, (especially since many have been duped) but if someone asks who handles my money, I tell them "I do" and offer them my copies of "Bogleheads Guide to Investing" and Boglehead's Guide to Retirement" and refer them to this site.
Thanks to everyone here.
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Dandy
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Re: What was your eureka! Boglehead moment?

Post by Dandy »

Bernstein's 4 Pillars of Investing was the tipping point. Frankly, I don't recall what the 4 Pillars were it has been so long ago. But, he covered the history of investments and gave some rationale for investing. Up to that point investing was a confusing blur of marketing hypes. I had read Bogle's book prior to Bernstein but it was 4 Pillars that sealed the deal. I could develop an investment plan using low cost index funds that I could understand and not be swayed by short term market swings or the latest investment hypes.
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Taylor Larimore
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The Three Fund Portfolio

Post by Taylor Larimore »

selftalk wrote:It was finally realizing that Taylor`s suggested 3 fund portfolio as advocated here on this website is really terrific, sensible and productive if you want to invest in the financial markets as a way to achieve your money goals.
selftalk:

Thank you for your post. It is very gratifying for me when I hear that The Three Fund Portfolio is helping another investor achieve their goals.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
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bertilak
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Re: The Three Fund Portfolio

Post by bertilak »

Taylor Larimore wrote:
selftalk wrote:It was finally realizing that Taylor`s suggested 3 fund portfolio as advocated here on this website is really terrific, sensible and productive if you want to invest in the financial markets as a way to achieve your money goals.
selftalk:

Thank you for your post. It is very gratifying for me when I hear that The Three Fund Portfolio is helping another investor achieve their goals.

Best wishes.
Taylor
Yes.

The three-fund portfolio, and all the back and forth discussion of it, made me realize that there was no need to go into a complex, sliced, diced, tilted, factored, etc. portfolio. All the claimed theoretical advantages of that complexity seemed to be within the range of uncertainty or based on long time-spans over which, for all I know, the assumptions may have to change radically, assuming they were reasonable in the first place.

Such complication without a more sure advantage didn't pass muster with me, especially since it would need to be understood and carefully managed by whoever might take over management of my investments. I couldn't even explain it well enough to make it understood to myself! Also, there is practically an infinite set of those complex portfolios. How can I justify any one over another?

I actually took it a step further and did a two-fund portfolio but recently added back 10% (overall) international position. This was based on Bernstein's "Deep Risk" booklet. I wasn't going to do it except ...
  • 1) even those who recommend against international generally say it can't hurt (much) and
    2) I sold off a big equity position to pay down my mortgage so had to make a big change anyway just to rebalance (buy back more equity in a different account).
One thing I did with international that may seem a bit unusual: I went with International Developed Markets instead of Total International. I figured I could get the international exposure (to address the major "Deep Risks" Bernstein talks about) without dragging along a bunch of emerging market risk.

So thanks, Taylor!
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
The Wizard
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Re: What was your eureka! Boglehead moment?

Post by The Wizard »

Like a few others, I can't say there was a single aha or eureka moment in my investing career.
I started off putting a decent percentage of my salary into my employer's retirement plan at TIAA-CREF starting at age 23 and continued for forty years.
During market downturns, I essentially Stayed The Course over those decades, although I don't recall having an explicit target Asset Allocation or rebalancing scheme.

I never suffered through a financial advisor Shark Attack, although I did chase performance in my taxable account with a few hot funds, but this was only a few percent of my financial assets.

After the 2008-09 financial debacle, I decided I needed to pay better attention to my investments if I wanted to retire in the near future.
I googled something related to investments and retirement and found this forum in 2010.
As I learned up on stuff here, I defined a better target AA with lower stock percentage and moved gradually toward it.
I also moved my small taxable accounts from three other companies to Vanguard.

Getting the knowledge to manage your own finances confidently through good times and less good times is important...
Attempted new signature...
natertots
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Re: What was your eureka! Boglehead moment?

Post by natertots »

I'd cashed out a small 401K in 2009, back when I'd been laid off, and some bills needed paid, and when it sure seemed like nobody I knew was ever going to be employed again, and had not been willing or able (in a cash-flow sense) or knowledgeable enough to invest since. I'm sure that that money was tied up in some criminally expensive target date fund.

4-5 years later, my a-ha moment was literally finding this forum and wiki at a time in my life when I was a couple of months from receiving a large settlement windfall from a bicycle accident, and wanting to make sure I didn't do anything dumb with it, so that with care and feeding, I could accomplish an early and/or awesome retirement. And thank goodness I found it, because I was also on the verge of trying some stock picking. I nearly made a big bet on Stratasys, of all things, at what we now know as its peak.

But, when I got here...everything I learned about expense ratios, broad diversity, staying the course, and the virtues of a low-maintenance portfolio of funds just instantly seemed intuitively true. Now I'm proud to acknowledge that I'm too dumb for individual stocks, and I don't ever plan to buy anything other than combinations of Total Stock, Total International, REIT Index, and Total Bond.
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Re: What was your eureka! Boglehead moment?

Post by Robconoclast »

EmergDoc wrote:
Robconoclast wrote:My job hired three new financial advisers that we can call anytime for free advice. The old adviser told us just to use target funds and seemed pretty condescending . When the new advisers introduced themselves at our quarterly meeting they gave a great lesson about the importance of starting saving immediately, compound interest, establishing an emergency fund, etc. When I sought their advice they recommended a target fund because investing isn't what I do for a living and "no offense, you don't know much about the industry". This motivated me to further educate myself about how 40lks work and take control of my account. I've read and reread some books listed on this site and have a couple more waiting to be opened. I may not know much compared to a financial adviser but being told that I do not know much has motivated me to learn more about what I can do to hopefully retire comfortably in 30 years
It was good advice even if you do know something about the industry.
I know that I could put my 401k on autopilot with a target fund (Vanguard 2045), but I think there is a better way to communicate that to us. He did a great job explaining compound interest, social security, IRAs etc to my coworkers though who hadn't started to save at all for retirement but were visiting the nearby casino after 2-3 times a week.
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midareff
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Re: What was your eureka! Boglehead moment?

Post by midareff »

A few pages into a book named Four Pillars of Investing by Dr. Bernstein.
carolinaman
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Re: What was your eureka! Boglehead moment?

Post by carolinaman »

I have been a DIY investor for more than 30 years but I made many mistakes along the way. Until I discovered the Boglehead Forum in 2011, I was most heavily influenced by Morningstar, Money magazine and Bob Brinker. I have always been a conservative investor but I was invested mostly in active funds when I joined the Boglehead Forum. My investment philosophy was largely compatible with the Boglehead philosophy and principles, although I did not and do not agree with everything. I gradually transitioned to a predominantly passive, low-cost approach. A major driver for this change is to simplify my investments. As I age, I no longer have the interest to regularly track my investments and believe a diversified, low cost, passive approach is very sound and will meet my needs just fine.
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Leif
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Re: What was your eureka! Boglehead moment?

Post by Leif »

JW-Retired wrote:I saw an ad in Aviation Week, or another such periodical, for an audio tape course in "How to Invest in No-load Mutual Funds" produced by a retired aerospace engineer. Wish I could remember his name and had not tossed all the course materials. :oops:
Henry “Bud” Hebeler? http://www.analyzenow.com.
Mr. Henry K. Hebeler is a graduate of the Massachusetts Institute of Technology (MIT) from which he has three degrees, won numerous honors and several fellowships. Most of his working career was at The Boeing Company where he began as an engineer, worked his way through financial analysis, procurement, sales, corporate long range planning, and ultimately became president of Boeing Aerospace Company in Seattle, WA. For six years he was Boeing’s chief forecaster and planner reporting to the chairman. He has taken courses from Nobel prize winners in economics. He has been on advisory committees to the U.S. Congress, Departments of Interior, Commerce, Energy, and Defense, an economic advisor to the Washington State governor and a member of Washington's Economic Development Council. He has served on the Board of Governors of MIT's Sloan School and other colleges. Mr. Hebeler has been working with retirees for many years, developed special material for their use, and given numerous seminars on retirement. His current focus is dissemination of sound financial planning information that applies to a wide range of personal investment, economic and income situations.
MrDrinkingWater
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Re: What was your eureka! Boglehead moment?

Post by MrDrinkingWater »

Similar to EmergDoc and alec: I read Personal Finance for Dummies, by Eric Tyson, in 1994. Eric's positive statements about index fund investing and Vanguard was the start. That book gently helped me start moving in the right direction toward index investing and using low-cost mutual funds.

I read Dr. Bernstein's Four Pillars of Investing a little later than a lot of you did, but it is among the best books I've read on investing.
asif408
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Re: What was your eureka! Boglehead moment?

Post by asif408 »

What motivated me was a cash gift from my parents a few years ago. They put it in a brokerage account at Wells Fargo Advisors and had me talk to the advisor to decide how to invest it. Because the gift was a decent chunk of money I was motivated to learn how to invest it and didn't necessarily trust the WFA broker. I didn't know almost anything about investing at the time, but the WFA broker seemed like a shyster and I didn't particularly trust him. Once he started sending me birthday and Christmas cards I figured it wasn't out of the kindness of his heart and thought to myself "This investment advisor business must be pretty profitable" and decided it was time to learn more. :idea:

Since I learn best from reading, I went to Amazon and did a word search for "beginning investing". One of the first books that popped up was called "A Beginner's Guide to Investing". It was highly rated and a short book so I bought it and read it. It is an excellent book for a novice who knows nothing about investing (which I was at the time). It mentioned this website at the end of one of the chapters, which I then proceeded to visit. Once I found this website things just snowballed; I read more books and the forums, then posted here to get help with my allocations.
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Re: What was your eureka! Boglehead moment?

Post by dratkinson »

In 2005, stumbled across Paul Farrell's MarketWatch report on the 10-year success of several lazy portfolios. "It can't be that simple!", says I. Went looking for information. Found William Sharpe's The Arithmetic of Active Management. "Yes it is." was the answer.

And a CPA that treated interest-paid as interest-earned taught me to do my own tax returns.
d.r.a., not dr.a. | I'm a novice investor; you are forewarned.
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Taylor Larimore
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The Boglehead Way

Post by Taylor Larimore »

Bertalik wrote:So thanks, Taylor!
You're welcome, Bertalik.

Nothing makes me happier than to know I helped an investor learn The Boglehead Way to financial success.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
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rkuklinski
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Re: What was your eureka! Boglehead moment?

Post by rkuklinski »

My education began by stumbling upon newspaper columns by Scott Burns that would discuss index investing. I was a teenager at the time and the lessons began to plant the seeds of index investing and couch potato portfolios. The wisdom of Scott was countered by a family investing education of gold, gold, gold, and don't trust the stock market bogeyman...

Fast forward about a decade and I began working in the investment industry with a well-known firm frequently mentioned on this board and began to sell actively managed funds. Seeing survivorship bias in action, using inappropriate benchmarks to explain away underperformance, and counting on behavioral errors to earn new business wore on me after 7 years in the industry. I finally had to leave and begin working in a new industry after becoming a believer in the Boglehead philosophy at night but selling the actively managed portfolio pipe dream by day.

I have learned significantly more about investing, finance, etc on this board than as a so-called investment professional that is for sure. I would even add this board has taught me more than my CFP coursework and continual education that I have maintained for posterity's sake. Thank you Bogleheads!
'Who controls the past' ran the Party slogan, 'controls the future: who controls the present controls the past.'"
sesq
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Re: What was your eureka! Boglehead moment?

Post by sesq »

No eureka for me, an evolution.

I grew up listening to Bob Brinker when I rode around in the car with my father, so along the way I learned some basics like compound interest and the difference between stocks and bonds. I was appalled at the time by funds that had a load or a 12b-1 fees, so I was a natural for a low fee approach. Coming out of college I actually interviewed with Primerica, and the guy was talking about selling load funds. I asked the guy whether he could put his clients into no-load funds. He thought about it a minute (as if it had never come up) and said "I could, but then how would I make any money".

My first job wound up being in Dallas and Scott Burn's column appeared in the local paper which I read and continued to read via the internet when I moved away. At that point I was a bit of a jumble. I knew not to pay super high ER rates and basic asset allocation but my collection of funds were a mix of growth and value and partially driven by Morninstar rankings, at least at selection. I had always used an S&P 500 fund to represent diversification, which probably came from Scott Burns. Overtime with job changes and IRA rollovers and other movements I wound up an index investor. I sold my last holdover, Artisan International a couple years ago around when I started reading here.

Along the way I got the joys and pains of stock picking out of my system with roughly matching lucky breaks (win=I put a market order in for Tyco just before it crashed deep in the overnight, wound up buying it at the market open, which was the low and made about a 50% return in a day when it rebounded from the low. Loss=tried to repeat this when Microstrategy had its dotcom crash only to see it continue to slide) which mostly cured me of that idea. I later got talked into buying microsoft, it dipped and came back. I sold it and other than RSU's I never bother with individual stocks.
Mitchell777
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Re: What was your eureka! Boglehead moment?

Post by Mitchell777 »

I knew I wanted control of my financial decisions as a child. It took longer to come along to believing in index funds etc. Decades ago I studied Money Magazine for mutual funds. I invested in active funds with 10 year great results and no management turnover. Two of the funds were Lindner and Heartland (can't recall the specific funds). Both went south quickly some time after I bought them. I moved mostly to index funds although I sometimes have invested in individual stocks over the years mostly for my own enjoyment with a relatively small amount of money.
Clumsum
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Re: What was your eureka! Boglehead moment?

Post by Clumsum »

I started investing when I was 29 with a Edward D Jones rep who had quit working in the same trade I did and become a rep (he has been very successful). This was in 1983 or 84. I was put in Putnam Funds with an 8.5% load. I did not even know there was an option. I was with him about 4 years. During this time I started reading Money, Kiplinger and investing books. I learned about know load funds. He left to go to AG Edwards and I took what I had and invested all in no load funds. I still fill grateful to him for getting me started. Of course I made all the basic mistakes (buying top ranked funds), wrong assists in taxable ectera, but I least I was investing and saving 8.5 cents for every dollar invested. I found Vanguard a few years later.
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Taylor Larimore
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A lovely Boglehead endorsement

Post by Taylor Larimore »

I have learned significantly more about investing, finance, etc on this board than as a so-called investment professional that is for sure. I would even add this board has taught me more than my CFP coursework and continual education that I have maintained for posterity's sake. Thank you Bogleheads!
rkuklinski:

Coming from an investment professional, this is one of the best endorsement of this forum that I have read.

Thank you for sharing.

Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
JW-Retired
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Re: What was your eureka! Boglehead moment?

Post by JW-Retired »

Leif wrote:
JW-Retired wrote:I saw an ad in Aviation Week, or another such periodical, for an audio tape course in "How to Invest in No-load Mutual Funds" produced by a retired aerospace engineer. Wish I could remember his name and had not tossed all the course materials. :oops:
Henry “Bud” Hebeler? http://www.analyzenow.com.
Mr. Henry K. Hebeler is a graduate of the Massachusetts Institute of Technology (MIT) from which he has three degrees, won numerous honors and several fellowships. Most of his working career was at The Boeing Company where he began as an engineer, worked his way through financial analysis, procurement, sales, corporate long range planning, and ultimately became president of Boeing Aerospace Company in Seattle, WA. For six years he was Boeing’s chief forecaster and planner reporting to the chairman.
Thanks for answering, but it can't have been "Henry (Bud) Hebeler retired from The Boeing Company in 1989 where he was vice-president for corporate strategic and operational planning", among other positions. Sadly, he is much too young.

The aerospace engineer who created that audio cassette tape course that was my eureka moment was already retired in 1975! I'm also fairly sure of my recollection that he had worked for Aerospace Corp.
JW
Retired at Last
Zeralonde
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Post by Zeralonde »

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Last edited by Zeralonde on Wed Apr 19, 2017 9:53 am, edited 1 time in total.
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Taylor Larimore
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Chart: Starting early vs. starting late

Post by Taylor Larimore »

Zeralonde:

Excellent chart.

Thank you and best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
ffstretch
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Re: What was your eureka! Boglehead moment?

Post by ffstretch »

As with many of the posters my moment was one that was a process not necessarily a single moment. If I had to pick the "biggest" catalyst it would realizing the extremely high costs I was paying using as advisor (see #1). I got mad enough to call my advisor and tell him I was transfering the Roths and 529's away to a different company. He asked who and I told him. I knew I had made the right choice after they charged ALOT of FEES to transfer the funds away. It was the ultimate confirmation.

1. Starting looking at all the costs of the funds my Waddell and Reed "advisor" had me in (my age: 32 years old)

2. Read Millionaire Next Door. It changed my life and how I look at money and people. (32 y/o). It also gave me another basis to inform how I teach my children about money.

There so many other books, many of which have been mentioned here, and of course this wonderful forum.

Cheers to our shipmates.
Regards
Norsky19
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Re: What was your eureka! Boglehead moment?

Post by Norsky19 »

I read "Personal Finance for Dummies" I think by Eric Tyson. He sold the Vanguard way....made perfect sense.
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burt
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Re: What was your eureka! Boglehead moment?

Post by burt »

Late 90's before the Dot.com crash, a coworker sent me a link to Scott Burns website and the Couch Potato portfolio.

At that time I watched others trade tech mutual funds on a weekly basis by looking at fund performance in the newspaper.
I was told "buy the winners, sell the losers". Luckily I did not participate in the Dot.com craze.

Proceeded to get my Mother out of Edward Jones and Putnam funds. Also got her out of Lutheran Brotherhood variable annuities.
Rolled over my 401k into Vanguard.

I feel fortunate. Some of my co-workers are still taking significant risks trading individual stocks.

burt
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Re: What was your eureka! Boglehead moment?

Post by ND Fan 1 »

Its been gradual, but I'm almost completely set for life

Joined the military after college, opened an USAA account. Opened an IRA and starting buying mutual funds, contributed to the TSP. Just bought funds like USAA recommended, no idea about asset allocation. Then a buddy said USAA funds have high ERs, checked out Vanguard. Bought the SP 500 fund in 2010. Still had some other USAA mutual funds. Then discovered Wealthfront in 2014. Though that was my Eureka moment. They could managed my accounts for .25%. And only used indexed ETFs. I was set for life. Sold my VG SP 500 Fund at a $15K capital gain, taxed of course. Though I could have avoided taxes if I did traditional TSP instead of Roth, and made it back down to the 15% bracket. But I messed up there.

Then about 6 months ago, found the Boglehead Guide to Retirement book and read it along with "Random Walk Down Wall Street" (written by Wealthfront's CFO). From those, decided I didn't need Wealthfront anymore. Now working on transferring my accounts back to Vanguard. Got the 2 IRAs there, working on the taxable account.

Have finally decided on a 85/15 stock bond split with my bond split in the TSP G Fund, which I never knew anything about until this forum. Also, am going with the 3 Fund Portfolio. Feel like I haven't done too bad at age 30, but still lament a few bad choices.

I'm now addicted to this site. I surf online reading about sports and fantasy football, not anymore, its this site. My wife used to give me grief about wasted time online, but now I'm helping the family, its okay :)
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dess1313
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Joined: Wed May 06, 2015 12:32 pm

Re: What was your eureka! Boglehead moment?

Post by dess1313 »

About 2010/11 i overheard people at work talking about their financial guy that they both used. 'Yeah he's great' blah blah blah
Put in a small amount and waited for the magic. Did not know much about things at the time. Seemed to always be going down slightly, nothing like what they made it out to be. The only time it went up was when i deposited money......seemed super shady to me. They're still invested and mostly in stocks that to this date have never recovered.

In 2012 i ended up being on a medical LOA and on minimal financial support. Burnt through my emergency savings and had to pull my investment (a whopping 2k.....i know not big but big to me) Basically swore off investing at that point after my entire experience. The LOA though opened my eyes at the lifestyle inflation that had been happening. I had always been semi frugal, but that made me not want to end up back in the same place again.....EVER

So i did what i could do that would massively affect my future outcome, namely paying down a few big chunks of my mortgage after recovering from my LOA. It was something i could directly affect and see the positive outcomes when interest rates are barely 1%. I know some don't like it but those were the choices i made back then. Continued to drive my older car. A little while later, i heard about MrMoneyMustache, and books recommended to me on their forum lead me to the bogleheads book and then this forum. Now i am even more dedicated to financial freedom than i was before. Long road ahead, but way ahead of a lot of people i know.
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quantAndHold
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Re: What was your eureka! Boglehead moment?

Post by quantAndHold »

I took a personal financial planning class in my late 20's, and learned about net worth, budgets, the magic of compounding, etc. Soon after that, I had money to invest and got interested in investing. I found a list on the Morningstar site that was called something like "10 books to a better investment mind." It was a mix of everything from Andrew Tobias to Peter Lynch to Malkiel to Graham and Dodd, to Warren Buffet's letters to shareholders. In retrospect, it was an awesome list. One of Jack Bogle's books was on the list. After I read that book, I never bought an actively managed fund again.

Through the 90's I invested in a mix of individual stocks and index funds. I did pretty well. Looking back at my records, I did about as well as the market, which, as we all know on this site, is pretty damn good. What got me to stop investing in individual stocks was that after 2000, it got much harder. The market wasn't cooperating, and my career was taking off and consuming most of the time and energy I had for investment research. So as I sold positions, I parked the money in Vanguard funds until "I have more time for research." Now 15 years have passed, and I've made good money by plowing money into my 401k and IRA, and continuing to leave it parked in the lowest cost funds that were available.

Do I believe that index funds are the end-all and be-all of the investing universe? Actually, no, I don't. I watched my Dad turn a lower middle class civil service salary into a 7 figure portfolio, mostly by taking concentrated positions in the low hanging fruit of the investing world when he saw it, and protecting himself from downside risk the rest of the time. He told me that he only ever had one investment that made him lose sleep (apparently my family's entire net worth was in levered long treasuries in 1981-2), but that was also the investment that made the most money. He's the one who taught me empirically that the markets are only "mostly" efficient.

Where I'm at now...is trying to reconcile "mostly efficient" with my own investing abilities. I'm still mostly in index funds.
ccieemeritus
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Re: What was your eureka! Boglehead moment?

Post by ccieemeritus »

May 1997. My wife and I walked into a Schwab office to open an account. We were moving soon and needed to replace our local Bidwell and Company broker (where I was buying individual stocks).

The office had a Schwab newspaper-like handout listing their preferred no-load mutual funds and prominently showing expense ratios. The paper had an article explaining how there was no reason to pay a load fee.

We walked out of there with $1k of SWPIX (the old investor class version of SWPPX). I just looked up the purchase price: $13.08

We still have those shares, although they've long since converted to SWPPX.

I will always be grateful to Schwab.
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