- Buy several broad based ETFs (domestic, international and bond)
- Keep adding to them regularly
- Occasionally rebalance to keep your asset allocation in check
- Just ride it out for decades
Is this it? Is it really this easy to invest and achieve good results?
Don't forget dividend reinvestment and dollar-cost averaging. Otherwise, yeah, you got it buddy. Oh, and maybe buy the VIX
>>1103301
I was assuming both of those when I meant "keep adding to them regularly". This sounds too easy and good to be true. Is this really all there is to letting your wealth compound and grow?
>>1103301
Dollar cost averaging has been proven to be absolutely meaningless. Makes no difference. It's effectively the same thing as trying to time the market (ie you can't). However, dividend reinvestment is a yes.
>>1103305
Yep that's it. The hard part for your average retard is the "keep adding to it" part. The reason you don't see everyone around you with millions of dollars in net worth is because the common person wants to buy the new iPhone. Oh they can afford the latest BMW, better buy that too. A 4200 sq ft house for $850,000 when I only make $70k a year? Fuck yeah, I can afford those mortgage payments!
Spend less than you earn and invest the rest. That's how you become wealthy outside of inheritance, extreme luck (athlete, celebrity), or starting a successful business.
So let me get this straight.......
1. Spend less than what I earn.
2. Regularly save what I didn't spend.
3. Win?
>>1103297
>Occasionally rebalance to keep your asset allocation in check
What does this mean?
>>1103431
Yes. If you want to buy a house, you should buy a house that's below your means. Most people buy above their means.
>>1103443
Let's say you have a 100k to invest. You want to invest in stock and bond ETF. Asset allocation is how much of your money you want to have invested in each asset class.
Let's assume a 80/20 split between stocks and bonds and a slight overweight position in domestic stocks.
You'd invest 20k in a relevant bond ETF, 48k in a domestic index fund and 32k into an international index fund (assuming you want to be 60/40 on your domestic/international exposure)
As your assets change value, you rebalance them once or twice a year to keep the same allocation. So if your domestic stock position grows to have 70% of your equity position, you'd sell off 10% and reinvest those into the international position (or just add more money to the international ETF without selling anything.)
>>1103297
It's the simplest way, just keep in mind that it's a long term commitment and a recession will make you go under for a while
Yes, that's it.
Pic related:
>$6000 starting money.
>Add $500 per month (6k/year)
>20% bonds, 80% stock, rebalanced annually.
>Link: https://www.portfoliovisualizer.com/backtest-portfolio
>>1104077
and https://www.portfoliovisualizer.com/backtest-asset-class-allocation
>>1103297
You got it OP
>buy-and-hold balanced portfolio at market return
>wageslave until middle age
>get divorced lose everything
>wageslave until death
>>1103347
"Dollar cost averaging" also includes when you invest some of your pay every month.
>>1104129
You sound like some meme crypto "investor". Enjoy losing your money on coin flips.
>>1103445
What does it mean to buy a house below your means?
>>1103297
>decide i want to start investing
>late december put $1500, 50/50 into international and US equities
>down $100 in 8 weeks
>invest in the markets they said
>>1104357
>Down
>So it's cheaper and you should buy more now?
>>1104235
that's right so buy and hold, goy
>>1104272
It's the opposite of being Nigger rich my dark hued friend
>>1104272
Essentially never buy a house that costs more than 3x your salary, maybe 4x if it's a home you'd take pride in or 5x if you love the place and it's a damn good deal with a high chance of appreciation. Before you ask: Yes, most people can't afford a house.
OP, you got it right. As it has been already stated in the thread, it's easy and simple, but people usually don't do it.
There's several reasons for this:
1. Lack of financial education.
I discovered indexing in college. I wish somebody (teachers, parents) had told me much earlier.
2. Unnecessary spending.
When you don't know you can put your money to work for you the only option left is spending it. So all goes to consumption, feeding into a wasteful lifestyle.
3. People don't like simplicity.
Some people just can't accept an answer unless it's extremely complex. See conspiracy theorist, for instance. The people who play to pick stocks are doomed to fail in the long run, but they rather try and fail than succeed through an index, because they want to 'add value' to the investing process without realising they're only hurting their returns.
>>1104357
>8 weeks.
Let's have this conversation 8 months from now. Those $100 are only lost if you sell now, which you obviously shouldn't.
Since OPs thread cheered me up I'll share something that should be in the sticky if this pos board ever gets one.
https://www.bogleheads.org/wiki/Behavioral_pitfalls
https://en.wikipedia.org/wiki/List_of_cognitive_biases
>>1103450
Capped for goodposting
>>1104235
At least we have the guts to risk big and win big.
You will forever stick with your "modest returns" and "living below your means", get a fat wife, drive a fiat and get divorced.
LOL, fucking loser
>>1105526
m8, there's no shame in enjoying gambling, just be upfront about it. You take your money and gamble with crpytocurrencies, that has nothing to do with investing.
>>1105526
>At least we have the guts to risk big and win big.
Go to a casino then.
>You will forever stick with your "modest returns"
People who want the best return possible index. People who want to gamble, gamble.
>and "living below your means"
That's how you get money to invest, you dumbfuck. I bet you have credit card debt.
>LOL, fucking loser
The rest of your post already reeks of manchild. There's no need to make it any more obvious you are an immature faglord.
http://rationalwiki.org/wiki/List_of_cognitive_biases
Read this and tell me when you find why you're a failure as a rational being, and thus should be neutered.
>>1105526
You're free to invest in risks, everyone is. As long as you aren't putting all your money on it in some all-or-nothing situation, it's a perfectly safe thing to do.
>>1104496
Is that what they call nigger rich?
I'm an irl nigger so people don't generally use these terms around me in fear of being beat up or swagged on or something.
>>1105666
I guess it does. I'm not American, but I've heard of many black US pro basketball players that made great amounts of money but ended up broke.
I recall a former pro player made a course tailored to them to mitigate this.
A friend of mine loves splurging money into shit, and showed me that Floyd Mayweather had 3 identical expensive cars. I don't think financial irresponsibility is linked to race, but it might have to do with going from lower income levels to much higher income levels very fast. When that happens the numbers are so big that are hard to evaluate and they associate their fortune to infinity, thus ending up broke.
Oh, and nice trips, Satan.
>>1105686
Yeah, I think why they go broke is about going from low to high income really fast. It's like imagine if you made like 10,000 a year and then all of a sudden were making a million dollars a year. You would have no idea what living at your means would be like at that level. You would spend so much because it would feel like you just had an infinite amount of money compared to what you were used to.
But I think nigger rich refers to people who have very little money but spend well above their means on luxury goods with no value as assets, IE you're on food stamps but always get the new Jordans when they come out.
>>1105720
So it's basically the same thing but at different income levels, right?
There's many cases out there. Check Nicolas Cage, if you wish. It really breaks my heart to see how people who could be well off are so irresponsible and get themselves into unnecessary trouble.
>>1105738
Yeah, except the nigger rich are still at a really low income level and you would think they would learn at some point that they can't afford to spend 1000 dollars a year on shoes. Also just to clarify, I don't think that it's related to race, just income level. I only call it nigger rich because that's what Kanye calls it
>>1105745
I don't think that Mr.West is a good role model. We could get a better word so >>1105666's acquaintances don't get nervous to talk about that.
It happens also at another level. Recent graduates that get their first salary tend to waste it on bs, since they're still relying in mom and dad's checking account.
>>1105749
Lifestyle inflation.
You get an extra 500 a month from a taise and then just increase spending to match.
The term is "lifestyle inflation" , you dont have to pin yourself at college poorguy levels of spensing but if you have a strict busget and just allow yourself say half or one third of new income for spending then youll be far ahead of the herd.
>>1105756
I like the term. I'll adopt it.
>>1103297
>ETF
Lol peasant tier. Learn how to swing trade or buy the dips with low diversification. You diversify by not being a retard and buying wisely, not by spreading your bets on dogs.
>>1105817
>Lol
>peasant
>gambling analogy.
I wish the nazis didn't give eugenics a bad name. Retards like you should be drowned after spewing such retardation.
See you in a year if you haven't an heroed yet.
>>1105825
I make 700-1200 a day. You're a pleb. This nonsense they teach in school doesn't work very well. If it did your dipshit prof wouldn't be a prof. Also trading is gambling in a sense, except if you do your research and have a strong understanding of advanced statistics it will be relatively easy to make 3-5% a day.
>>1105832
If you make 700-1200 a day what are you doing in a Kazakh American civil war reenactment mailing list?
>>1105838
Shutup peasant. Stop buying into the ridiculous memes they teach in class. Get the degree as insurance, but don't take what they say about investing seriously.
>>1105840
You are the memer here.
I have a hard time believing someone who can't express himself properly has found a way of earning outrageous amounts of money consistently.
There's people much better prepared than you who can't, and you're not special. You're just a memer that got some luck for some time and has mistaken dumb luck with his own skill.
I didn't learn about indexing in college. I learned about it while I was in college. And of course I've done my research, and that's how I know that for telling apart luck from skill with a relevant degree of confidence you need to follow your track record for over 20 years.
But you will be dead or sucking cocks in the streets by then, so I won't ask you to start a spreadsheet by then.
Meanwhile, the people who decide to ride the total aggregated stock market will be enjoying their returns.
>>1105853
>much better prepared
Nope.
Index fags always say this, but I only risk 5% of my money at a time. Of course I do have loss days, but I also have a strict risk minimization strategy.
Actually I am special. Ever since I was a child I was always better than other kids at virtually everything. I can learn entire courses in a day or two. To put it quite simply my information retention allows me to problem solve for effectively than your average trader. In reality the actual process of trading is quite simple, and I don't use many indicators or statistical measures, that being said the preparation is immense, and it usually takes about a good 2 hours to pick a nice intraday volatile company to exploit.
The games we play are different sure, but I've played the long game before and won. No strategy is really superior to the other, but if you think it's as simple and easy as "buy index fund and hold" you're being shortsighted as to your financial needs during that period, not to mention potential hyperinflation when the fugaze debt economy crashes.
>>1105863
>that post.
I might be being baited, but inflation is already taken into account in the stocks, because you're investing in companies and real assets.
>To put it quite simply my information retention allows me to problem solve for effectively than your average trader.
What?
>I've played the long game before and won.
That's why wise people play the long game. Because it's impossible to lose unless the general market trend reverses. Which isn't as impossible as that gravity stops working suddenly, but there would be so many other problems derived from that that it would be a minor concern.
>if you think it's as simple and easy as "buy index fund and hold" you're being shortsighted as to your financial needs during that period
You know nothing about my financial 'needs'. I don't need to gamble to increase my self-image or get an adrenaline pump.
Investing is what I do, Mr. Snowflake.
>>1105869
Inflation is taken into account, but only up to a point. Think about it, if we experience massive hyperinflation diversifying your investments would be retarded. Every company would be affected, and we'd see a very long depression that would erase years of progress in your shitty index fund.
>To put it quite simply my information retention allows me to problem solve for effectively than your average trader
more*
Information retention is your ability to process new information and use it to your advantage. That's pretty much what trading is. If you have a high IQ you'll do well, even without traditional investing education (which I also have).
>investing is what I do
Sure, but you're doing it in a way that's not maximizing profits. The graham/dodd defensive strategy is all well and good, but if it was truly lucrative it would actually be creating thousands of new millionaires every 50 years. That simply isn't the case, as most people who invest long term or otherwise lose money.
It's not so much what you do it's how you react to what you do. Swing trading could be incredibly dangerous if you don't have the right temperament, as could investing long term. A mix of long term margin of safety combined with statistical analysis and intraday exploits is ideal imo.
>>1105885
>if we experience massive hyperinflation diversifying your investments would be retarded
Which alternative do you suggest? I've heard about inflation protected bonds, but you don't mention those.
More importantly, for how long have you been doing this and with which results?
>>1105891
with what* results
>>1105891
I suggest not diversifying too much, and shorting economic collapses when you see the signs. Bonds are a shit idea considering the fugaze debt market is bound to collapse hard. Maybe prime rate treasury bills? Even those can be risky in a modern depression, after all recent volatility is quite concerning. A few well placed leap put options during a collapse could do well to avoid a crash. Or invest in companies that have been tested by recession and depression and came out on top, and with sufficient margin of safety. The only real way you can avoid a near total economic collapse is utilizing bets against debt markets advancing. Your conservative version of this would probably be inverse etf's. Personally I'll be buying up currency that's least likely to be affected (least correlated with US advance/decline).
About 3 years. At first I was terrible at it, but I picked up on it quickly. I was never really a math/science person until I delved deeper into those subjects. Turns out both are actually a lot easier than convention suggests.
Where's a good place to broker etf trades when I can't afford the vanguard minimum starting amount? I want to start saving what I can now. Or should i just roth ira? Is just anywhere okay for that?
>>1105838
I make that much too but I'm still here. Where else would I go?
>>1105913
I use Scottrade, which I think is pretty good. $7 a trade, lots of tools.
A lot of people here are into Robinhood, which is free and works fine but there are some minor issues with the quality of service. Like taking a month to get your account approved and I've heard of some issues with getting tax info.
If you plan on saving long, long term an IRA or Roth IRA is a great idea.
>>1105913
The minimum initial investment for Vanguard Target Retirement Funds and Vanguard STAR Fund is $1,000. A $3,000 minimum applies to most other funds.
save up until you have the minimum.
>>1105832
>This nonsense they teach in school doesn't work very well.
They don't teach indexing in school. They don't really teach it anywhere. Its something that you learn as an adult when you take the time to understand how investing really works.
>I make 700-1200 a day.
No you don't.
I don't know why you feel the need to lie on an anonymous image board, but you're not smart enough to make anyone believe that you're some stock gambling prodigy.
You a loser. Perhaps you're a loser because you're from some third-world country with no prospects or functional economy. Perhaps you're a loser because God didn't favor you with a fully functioning brain. Perhaps your a loser because you lack the ability to hold down a real job. Most likely, its all of the above.
But rest assured .... no one here believes anything you're saying.
