jollystomper
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Apr 16, 2012
- Messages
- 6,216
My reaction to the video was that, while the example may not have been the best one, the point is well taken that at some point you need to determine what you really need.
In addition, it also points towards the value of diversification and rebalancing. Being part of a tech company and understanding the IT industry, I was much more heavily invested in tech equities the latter half of the 90's. At one point probably 80% of my portfolio was weighed towards that. However, equity growth "scared" me in that when things grow to fast, its time to balance them into slower, safer things.
I have several stocks I still own that back then more than doubled in a short time frame, and my reaction was to take out my original investment and what I have expected to profit in those items and put them into investments with much less risk. I left the rest in as I figured even if I lost what I left, I had preserved my original investment plus an above average return.
I also was fortunate with my age and timing. I had just entered my 40s in 1999 and thought it was time to take a little less risk. In addition, when things were peaking, it was also 4 and 6 years before our 2 oldest kids were due to go to college. That caused us to balance more of our portfolio towards cash and bonds. Based on our research it seemed 4-6 years was too risky to keep what we planned to use for college expenses in the stock market.
Better than the proverb, I liked the comment at the end (which my old mind is likely misquoting now ): "The strategy for getting rich is not the same as the strategy for staying rich". Of course, one has to determine what one needs to be "rich" and at that point, focus less on making more and more on preservation. However, the siren call to make more and more and get higher returns than the market is tough for many to resist.
Finally, one item the video brought to my mind about having enough. I know my wife and I have enough for the things we can control. The doubt comes from the things we cannot control.
The number one item for us that we cannot control is health. While we do endeavor to eat healthy and keep active, and currently are getting good reports from our doctors, that can (and will change) in the future - we just don't know when. And the costs for health insurance and health care, in my view are the highest and most unpredictable items to plan for. Other than still liking a lot of my job, that is probably the main issue that keeps me working. I'm not the only one, I can count at least a dozen friends who also work for the same company and are eligible for retirement that say a huge reason they are still working is to keep health benefits for them and their families for as long as possible.
In addition, it also points towards the value of diversification and rebalancing. Being part of a tech company and understanding the IT industry, I was much more heavily invested in tech equities the latter half of the 90's. At one point probably 80% of my portfolio was weighed towards that. However, equity growth "scared" me in that when things grow to fast, its time to balance them into slower, safer things.
I have several stocks I still own that back then more than doubled in a short time frame, and my reaction was to take out my original investment and what I have expected to profit in those items and put them into investments with much less risk. I left the rest in as I figured even if I lost what I left, I had preserved my original investment plus an above average return.
I also was fortunate with my age and timing. I had just entered my 40s in 1999 and thought it was time to take a little less risk. In addition, when things were peaking, it was also 4 and 6 years before our 2 oldest kids were due to go to college. That caused us to balance more of our portfolio towards cash and bonds. Based on our research it seemed 4-6 years was too risky to keep what we planned to use for college expenses in the stock market.
Better than the proverb, I liked the comment at the end (which my old mind is likely misquoting now ): "The strategy for getting rich is not the same as the strategy for staying rich". Of course, one has to determine what one needs to be "rich" and at that point, focus less on making more and more on preservation. However, the siren call to make more and more and get higher returns than the market is tough for many to resist.
Finally, one item the video brought to my mind about having enough. I know my wife and I have enough for the things we can control. The doubt comes from the things we cannot control.
The number one item for us that we cannot control is health. While we do endeavor to eat healthy and keep active, and currently are getting good reports from our doctors, that can (and will change) in the future - we just don't know when. And the costs for health insurance and health care, in my view are the highest and most unpredictable items to plan for. Other than still liking a lot of my job, that is probably the main issue that keeps me working. I'm not the only one, I can count at least a dozen friends who also work for the same company and are eligible for retirement that say a huge reason they are still working is to keep health benefits for them and their families for as long as possible.