Thank you Dan and Steve.“We want you to enjoy the journey as we have, unraveling the maze of confusing and intricate financial obstacles to fine a less competitive approach to personal finance that leads to a sleep-easy secure retirement.”
“Our search began with a guiding philosophy—John Bogle’s work with the Vanguard Group.”
“Media pundits will use any economic certainty or uncertainty to convince investors to buy, sell or trade something.”
“In the financial industry objective information is our one best friend.”
“Heightened sensitivity to Wall Street tomfoolery, particularly leading to the 2008 crisis, is countered by the positive influence of Bogle and his followers as evidenced by Vanguard’s $1.7 trillion in assets.”
“When Bogle was CEO of Vanguard he never owned or flew in a private jet or first class. He flew coach.”
“That new car smell is the most expensive fragrance in the world.” Quote by Andrew Tobias
“As adults many of us succumb to the popular cultural pressure of consumerism: Bigger and better.”
“The relationship of long-term thinking and investing success is as interdependent as orchestral instruments resonating toward a symphonic crescendo.”
“It’s a cinch to stay put when the market goes up, but difficult or impossible to sustain long-term thinking when the market goes down.”
“Without experiencing real losses and a recovery, long-term thinking cannot be easily taught.”
“Vanguard’s employee bonuses are only approved for cost-saving ideas: those which benefit their clients.”
“Steve learned from reading the Bogleheads investment forum that earning the average return of the whole market provides a middle ground: less volatility, less risk, better sleep."
"The idea of average returns didn’t appeal to Dan until he learned market average gains are higher than managed funds 80% of the time.”
“Much of our investment nestegg was made possible by controlling three costs: autos, housing and investment expenses."
“If you (at age 50) invest the 2012 max $17,000 per year tax-deferred contributions, and make a conservative 3%, when age 65 rolls around you will have $325,667."
“To wish for certain and safe periods to invest is futile. Like expecting a broker to recommend Vanguard or TIAA CREF.”
“With the mutual funds’ built-in diversification of hundreds of stocks in a single investment we don’t need a professional selling us a mutual fund. Why give money to somebody who then puts it into a fund we could get ourselves.”
“We only trade to maintain balance in our portfolio, once or twice a year.”
“We discovered that most of the statistics available such as alpha, beta, correlation, r-squared and book-value were not useful for us.”
“We encouraged each other to make retirement saving a priority, cut investment costs and replace annuities with investments.”
“We never saw most of our investment dollars. They came from regular payroll deductions deposited in our mutual funds. Whenever we received a raise we would add half to the increase to our deductions for retirement.”
“The industry makes money whether the market goes up or down.”
“Crises and bubbles come and go but stock market uncertainty lives on.”
“We discovered that the broadest asset classes are de facto proper diversification and comprise an essential part of our new strategy. This was a huge development and turning point in our learning process."
“Enter the ticker symbol on a financial site and check out the charges: front-end loads, back-end loads, 12(b)1 fees, revenue sharing and broker fees which accrue with frequent turnover. Revenue sharing is hidden.”
“We have learned the higher the turnover rate the greater amount you are paying in trading costs.”
“Professional investors as a whole are responsible for about 90% of all stock market trading.”
“The financial industry loves volatility: making money when the market goes up or down. It doesn’t matter to them."
"Every time someone sells, another buys, both think they’re smart.”
“Media pundits will use any economic certainty or uncertainty to convince investors to buy, sell or trade something.”
“Underneath the doom and gloom, markets do what they have always done after a prolonged bear market. Suddenly, they become bull markets.”
“The advantage of a balance of equities and bonds which increase or decrease at different rates, is that over time there is steady growth.”
“Why are bonds essential to any portfolio? For these reasons: Diversification, safety from a crash, getting regular income in retirement, preservation of capital and to rebalance the portfolio.”
“A general rule is to allocate a percentage of bonds which match your age.”
“In March, 2008 Cramer defended Bear Stearns again, saying it would not go bankrupt: a bad call. The one thing we agreed on—never listen to Jim Cramer.”
“The 2008 meltdown was massive, affecting the entire stock market. All equity asset classes were ripped apart no matter how cleanly they were diversified. We protected ourselves by self-education and followed the wisdom, strategy and philosophy of John Bogle.”
“When it comes to the financial industry, trust is just a buzzworld. Wall Street reveals their morality in their actions that caused the crisis and their reaction to the bailouts.”
“To assure your portfolio lasts the rest of your life, the general rule of thumb limits annual distributions to 4% of principle or less.”
“If you already have a portfolio you can tidy it up. Streamline and refocus your clutter of individual stocks and sector funds.”
“Some investors jump around desperately trying to be right when it’s better to be still.”
“Investing should be dull. Investing should be more like watching paint dry or grass grow. If you want excitement, take $800 and go to Las Vegas.” – Quote by Nobel Economist Paul Samuelson
“Trust that the worldwide economies will grow over the long term.”
“Taylor Larimore’s Three-Fund Portfolio would have returned $48,776 more than we did.”
“Taylor Larimore, Mel Lindauer, Adrian Nenu and numerous other financially savvy Bogleheads and authors helped us change direction in our late 50s.”
“Still not sure you can start your own lazy portfolio? We know the feeling—it took us a while too.”
“Understanding your employer’s tax-deferred retirement plan can be one of life’s mysteries.”
“The first lesson we learned was to never pay commissions.”
“The Employment Retirement Income Security Act (ERISA) protects the retirement assets of millions of Americans.”
“Brightscope.com rates 401(k) plans from poor to excellent on costs, matching, investments, participation and total assets.”
“One of the best creations for newbie investors who don’t want to touch their investments or hire a fee only adviser is to use Lifestyle or Target Date Funds.”
“You just retired. Congratulations! One of the first things on your new list is to liberate your money by getting it out of your former employer’s plan and roll it over into a rollover IRA.”
“In the surreal 403(b) world, adviser’s accountability is rare and their actions are not just dripping with conflicts of interest, but pouring like a thunderstorm.”
“Insurance products do not qualify as securities under the securities act; thus, a person who sells them is not required to be a fiduciary.”
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“An investor with a 1.5 million dollar portfolio my easily pay $45,000 in costs to a brokerage firm and probably not know it.”
“Our adviser charges by the hour and assists us in setting up our plan with low-cost index funds.”
“Proper investment risk consists of finding a balanced middle ground between growth potential and protection from down markets.”
“Men are more likely to jump in and out of investments in the short-term whereas women think long-term and stick with the same investments. Guess what? Women’s investment returns are higher.”
“Dalbar reports that from 1991 through 2010 the S&P 500 20-year average return was 9.14%, while the average mutual fund investor earned 3.83%.”
“Simplicity, simplicity, simplicity! -- Keep your accounts on your thumb-nail.” Quote by H.D. Thoreau
“We didn’t use a budget, it took too much time and was unnecessary. We paid ourselves first and spent the rest. That worked perfectly.”
"Still not sure you can start your own lazy portfolio? We know the feeling—it took us a while too."
"Bogleheads.org is the best and most active investing website for the do-it-yourself investor found on the internet."
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Best wishes
Taylor