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Old 06-28-2016, 03:48 PM   #61
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still won't get you 10% for 10 years, not at least according to consensus means and standard deviations for any asset class
did you read the link? FWIW: I tripled from 2008 - 2016 but only experienced a 15% drop in 2008 - 2009. The link I posted was 1920s - now and cites 10% annual if reinvesting dividends in S&P Index. Even if you only got 7%, you only need to invest 1/2 as much to outstrip savings in 18 yrs. How many of us only worked for 18 yrs? And we're willing to sacrifice everything to live well in our old age? Not me
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Old 06-28-2016, 03:52 PM   #62
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did you read the link? FWIW: I tripled from 2008 - 2016 but only experienced a 15% drop in 2008 - 2009. The link I posted was 1920s - now and cites 10% annual if reinvesting dividends in S&P Index. Even if you only got 7%, you only need to invest 1/2 as much to outstrip savings in 18 yrs. How many of us only worked for 18 yrs? And we're willing to sacrifice everything to live well in our old age? Not me
understood, but the forward-looking consensus doesn't support historic returns, at least not for the next 10 years


for example, how many pension funds that are 100% passive in the S&P index assume a 10% rate of return - none
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Old 06-28-2016, 03:54 PM   #63
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Whatever works for you. I still think the sky isn't falling and want my money to work harder for me than I work for it
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Old 06-28-2016, 03:58 PM   #64
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Whatever works for you. I still think the sky isn't falling and want my money to work harder for me than I work for it
I agree, I'm pretty aggressive with my investments. I like the 55/25/20 portfolio myself....
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Old 06-28-2016, 04:05 PM   #65
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Here is an expert opinion


John Bogle says you won’t make much money from stocks - MarketWatch
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Old 06-28-2016, 04:07 PM   #66
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A little reallocation this week:
65% Large Cap
10% Small Cap
10% Bonds
14% Cash
1% Options

but limit orders in on individual stocks & options. Comfort zone = 10% cash. I make $$s in stocks / index ETFs (3 accounts (IRA, ROTH, KIDS INHERITANCE) indexed = SCHA, SCHB, SCHD, SPY)

Who's "John Bogle?" Is he like Jim Cramer and the other TV personalities? Yeah, I don't follow them either

I read a book once (I think by Little) UNDERSTANDING WALL ST. Plus OPTIONS put out by OPTIONS INDUSTRY COUNCIL
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Old 06-28-2016, 04:18 PM   #67
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Who's "John Bogle?" Is he like Jim Cramer and the other TV personalities?
no, he's actually a rational human being

I'll let the others chime in...
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Old 06-28-2016, 04:20 PM   #68
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Yeah Cramer is quite the entertainer. As long as I'm beating SPY I'll use my own perspective (combo of fundamental, technical, and emotional analysis)
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Old 06-28-2016, 09:05 PM   #69
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however a saver typically saves in a bank rather than investing and achieving a 7% return.

A: saves 20% + .25% interest x 10 yrs = 223k

I'm fairly certain most/all of the respondents here understood savings to mean the money set aside for the future, not a literal savings account. I am not advocating using a bank savings account to grow wealth.
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being frugal/saving vs investments
Old 06-28-2016, 09:17 PM   #70
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being frugal/saving vs investments

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Are you sure? After a second year of saving, person B has $60k, person A has $44k.

Again...assuming person A continues to get realistic returns while person B gets completely unrealistic 100% returns. In the real world, a higher savings rate outweighs better investing as shown by PP. If person A consistently got 7% while person B consistently got 10%, it would take 31 years (and a LOT of luck) for person B to catch up.
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Old 06-28-2016, 09:45 PM   #71
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Again...assuming person A continues to get realistic returns while person B gets completely unrealistic 100% returns.
That was your own example. It only proved the opposite of what you wanted to prove.
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Old 06-28-2016, 11:20 PM   #72
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I'm fairly certain most/all of the respondents here understood savings to mean the money set aside for the future, not a literal savings account. I am not advocating using a bank savings account to grow wealth.
Using that premise, it's an entirely different question:

Is an investor better off investing 20% of their income with 7% return or 10% of their income at 10% return?

Obviously 20% at 7% return as they equal out in 33 yrs
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Old 06-29-2016, 07:07 AM   #73
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..........Who's "John Bogle?" Is he like Jim Cramer and the other TV personalities? ................
Bogle is that crackpot that thinks people would be foolish enough to put money into mutual funds that just invest in all stocks as opposed to just investing in the good stocks. Crazy idea.
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being frugal/saving vs investments
Old 06-29-2016, 07:20 AM   #74
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being frugal/saving vs investments

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That was your own example. It only proved the opposite of what you wanted to prove.

Not really. The point I was trying to make is that a higher savings rate can result in achieving your goals while relying merely on investment returns with a lower savings rate requires unrealistic returns. If you are able to save more, that's a better way to build wealth than chasing unrealistic returns, IMO. Nobody can consistently achieve returns 10x the historical average.

ETA: apparently I need to up my hyperbole game to be clear. I'll try that next time.
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Old 06-29-2016, 07:30 AM   #75
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What had a bigger impact-saving/being frugal or investments - on reaching FIRE? Can you quantify or give one suggestion?
for us being frugal. It also has the advantage of needing less to live on.
the closer you are to being to live on SSN (and maybe Pension) the less
money you'll need from your investments
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Old 06-29-2016, 08:55 AM   #76
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Interestingly enough I know folks who pretty much use this rationale to NOT invest at all. I have pHd Chemist (so pretty smart cookies) that will only do the bare minimum in the 401K because they don't trust the stock market.

Bogle then asserted that fund fees of, say, 1%, will destroy much of that balanced portfolio’s real return. Combined with advisor fees of 0.50% (a conservative number), investors may be left with nothing after adjusting for inflation.

Moreover, taxes and well-documented investor bad behavior (buying funds at high points and selling them lower) will likely erode investor returns further.

Benz raised the question of whether investors should invest at all given this forecast, and Bogle said, “Invest we must.” The reason for that is cash is yielding virtually nothing, which means it’s producing a negative return in real or inflation-adjusted returns.

[B]Given Bogle’s grim view, however, it isn’t clear why investing really is better since it can also produce negative real returns[.
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Old 06-29-2016, 08:57 AM   #77
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[B]Given Bogle’s grim view, however, it isn’t clear why investing really is better since it can also produce negative real returns[/B].
that's why it's called a risk premium
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Old 06-29-2016, 11:04 AM   #78
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for us being frugal. It also has the advantage of needing less to live on.
the closer you are to being to live on SSN (and maybe Pension) the less
money you'll need from your investments
I think that is also a good point. It has been one of our goals (or at least come close) in lowering our annual run rate. We're not big risk takers, so it means we can invest the portfolio just for inflation adjusted capital preservation or maybe a bit better, since it isn't funding our basic lifestyle, just a few splurges now and then and taxes on RMDs.
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Old 06-29-2016, 11:11 AM   #79
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Bogle is that crackpot that thinks people would be foolish enough to put money into mutual funds that just invest in all stocks as opposed to just investing in the good stocks. Crazy idea.
Reading farther down thread, he apparently misses the point of ETFs < 0.05% fees over mutual funds
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Bogle then asserted that fund fees of, say, 1%, will destroy much of that balanced portfolio’s real return. Combined with advisor fees of 0.50% (a conservative number), investors may be left with nothing after adjusting for inflation.
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Old 06-29-2016, 01:03 PM   #80
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Reading farther down thread, he apparently misses the point of ETFs < 0.05% fees over mutual funds
Yeah, old Bogle is a real dunderhead. It's beyond me he somehow managed to revolutionize individual investing and create a multi-billion dollar mutual fund industry.
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