User:Nisiprius/Funny money

Funny Money is a term John C. Bogle used to describe how to handle "craving for excitement." It is laid out in detail in chapter 18 of the 2007 edition of The Little Book of Common Sense Investing. In involves creating a separate investment account for speculative investing and limiting it to 5 percent of your investment assets.

Two points about it are particularly worth noting, because they are sometimes omitted when his advice is referenced.


 * Bogle never recommended that anyone have a "funny money" account: "The rationale for a 100-percent-index-fund portfolio remains as solid as a rock." Bogle used the word if: "If you decide to have a Funny Money Account," "if you crave excitement." He said "[For retirement assets] use an index fund strategy. Even better, use it for 100 percent of your assets. The fact that few of you are likely to go that far doesn't mean it isn't the best strategy."


 * He referred to a "Funny Money Account" and a "Serious Money Account." In interviews, he made it clear that he literally means just that: separate accounts.