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What I don't like about 401k/IRA and other tax-advantaged accounts (health, school) is that they encourage investing that borders on the speculative.  Traditional pension funds were usually forced by law to keep roughly 50% in government or high-grade corporate bonds.  The rest was a mix of real estate and blue chip stocks. 

 

I can buy 100% bonds in my 401k, IRA, and HSA.  Heck, I can leave it in a "money market" account where it earns nothing.  I can buy 100% REITs in at least my IRA.  I can by 100% international stocks in all of them.  I can buy 100% international bonds in all of them.  I can buy a few mixed funds as well.  I can buy target date funds in my IRA and 401k, which shift asset allocation the closer to the "retirement date" we get.

 

The only incentive people have for going 100% equities is to try and maximize their earnings over the long term.  If that's how they choose to invest, that's up to them.  But there are plenty of other options available.


Very Stable Genius

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A titan in the personal finance blogosphere, JD Roth, bought back his original site Get Rich Slowly and is now in the process of transferring it back to his ownership.

 

 

http://www.getrichslowly.org/blog/

 

 

I wasn't really reading about personal finance (or just blogs in general) when JD started his site, but I've heard from others that he's almost the godfather of personal finance blogs as he started a web journal in 1997 and then Get Rich Slowly in 2004, detailing his journey going from deep in consumer debt to financial independence.  Most recently, he's been writing over at Money Boss - http://moneyboss.com/.

 

 

Just as an FYI if any of you followed Get Rich Slowly or JD in the last 15+ years.


Very Stable Genius

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A titan in the personal finance blogosphere, JD Roth, bought back his original site Get Rich Slowly and is now in the process of transferring it back to his ownership.

 

http://www.getrichslowly.org/blog/

 

 

I wasn't really reading about personal finance (or just blogs in general) when JD started his site, but I've heard from others that he's almost the godfather of personal finance blogs as he started a web journal in 1997 and then Get Rich Slowly in 2004, detailing his journey going from deep in consumer debt to financial independence.  Most recently, he's been writing over at Money Boss - http://moneyboss.com/.

 

Just as an FYI if any of you followed Get Rich Slowly or JD in the last 15+ years.

 

Yay!  I used to love reading stuff on his/her site.  It really went down the toilet after it was bought, so I'm glad to hear it's coming back in its original format.


"Someone is sitting in the shade today because someone planted a tree a long time ago." - Warren Buffett 

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That site is new to me.  I discovered the Mr. Money Mustache blog awhile ago, maybe in 2011, but I pretty much knew everything he talked about already so I didn't keep up with it.  Then I got back on it about a year ago and saw that it has a forum.  It has the exact same color scheme as UrbanOhio.  There are some really, really smart people on that forum and it is well-moderated.  Virtually zero trolling.  It is dominated by people earning in the range of $75-200k.  So it's a lot easier for people with household incomes north of $150k to squirrel away large sums than it is for someone on the south side of that range.  They have thread titles like "race from $1 million to $2 million".  There are also threads like "trying to save $10,000".  So there is a range of ages and incomes.  Also, a fair number of people from Canada, England, and Australia post on there so it's interesting to see what is different in those places. 

 

I didn't like this post:

http://www.getrichslowly.org/blog/2017/10/19/side-hustles/

 

I'm a bit tired of the phrase "side-hustle".  Just go get a second job.  Temp second shift, work in a restaurant on the weekends, etc.  Don't do something that requires expensive equipment (i.e. photography), nice clothes (working in too nice of a restaurant), or requires a nicer car than the one you already own.  And do not drive for Uber or Lyft! 

 

For the last 2 years I have had the goal of living entirely off of income from a second job and rent collection and then banking my entire paycheck from my day job but haven't been able to do it.  I bring in about $2,200 on the side in a good month but that budget is blown almost every month by weddings or family events I can't get out of.  I have my day job salary direct deposited into a savings account at a different bank than the one I use for checking, so it's intentionally a bit of an ordeal to go get the money out. 

 

 

 

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^ You are not an immortal like Jmeck, who has likely sired hundreds, if not thousands of progeny, and their ensuing family. That's a lot of chafing dishes.

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I didn't like this post:

http://www.getrichslowly.org/blog/2017/10/19/side-hustles/

 

I'm a bit tired of the phrase "side-hustle".  Just go get a second job.  Temp second shift, work in a restaurant on the weekends, etc.  Don't do something that requires expensive equipment (i.e. photography), nice clothes (working in too nice of a restaurant), or requires a nicer car than the one you already own.  And do not drive for Uber or Lyft! 

 

I think the spirit of a "side hustle" is that it's not thought of as a "job."  It's something you have more of an interest in or a hobby you've been wanting to explore/monetize.  I guess you could be a "consultant" in whatever field you want to work in - is that a 2nd job or a side hustle?  Who cares.  I think it's more - can you bring in additional income and enjoy the manner in which you bring in that income (ideally more than your primary job).


Very Stable Genius

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Yesterday was a good day. Among all my stocks, index funds and crypto coins, I earned more in one day than I did in an entire year in the early 1990s (I was in my mid-20s then).


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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Yesterday was a good day. Among all my stocks, index funds and crypto coins, I earned more in one day than I did in an entire year in the early 1990s (I was in my mid-20s then).

 

MAGA

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I said this in one of the political threads, but I actually think we're a bit overdue for a correction and it wouldn't actually be the worst thing in the world at this point.  In 2009, we were well below the historical mean S&P 500 P/E and mean reversion meant some aggressive growth.  Now we're a good bit above it and mean reversion would mean a little bit of a correction, or at least a lull.

 

I've actually got more parked in cash than I have in a long time now (two of my holdings got bought out when Panera and Whole Foods were acquired, and I haven't reinvested it simply because everything looks ridiculously high).  I keep trickling money in just on dogged dollar-cost-averaging principles, but I haven't made any big buys in a long time now.

 

Short version: Times are good enough that I'm receptive to the argument that times are too good.

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I am expecting a correction soon but I have not changed my overall allocation since my time horizon is relatively long.  Although, we do keep a bit in cash and some corporate bonds as part of our normal allocation anyway.

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If you like P/E ratios as a predictor (they aren't great at it, but some people track them), Schiller's CAPE ratio is here - http://www.multpl.com/shiller-pe/

 

The only time in history it's been higher than its current level was 1999 - leading up to the dot com crash.

 

Of course, CAPE is a 10-year look back, so you're still getting the overpriced 2008 P/E in there.  It may drop down in the coming year - I only know the basics of CAPE so I'm speculating a bit on that.


Very Stable Genius

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Yesterday was a good day. Among all my stocks, index funds and crypto coins, I earned more in one day than I did in an entire year in the early 1990s (I was in my mid-20s then).

 

MAGA

 

It will help me buy my new condo in Kitchener, Ontario next year. MCGA


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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I said this in one of the political threads, but I actually think we're a bit overdue for a correction and it wouldn't actually be the worst thing in the world at this point.  In 2009, we were well below the historical mean S&P 500 P/E and mean reversion meant some aggressive growth.  Now we're a good bit above it and mean reversion would mean a little bit of a correction, or at least a lull.

 

I've actually got more parked in cash than I have in a long time now (two of my holdings got bought out when Panera and Whole Foods were acquired, and I haven't reinvested it simply because everything looks ridiculously high).  I keep trickling money in just on dogged dollar-cost-averaging principles, but I haven't made any big buys in a long time now.

 

Short version: Times are good enough that I'm receptive to the argument that times are too good.

 

I've been buying dips and corrections in otherwise high-valued stocks like Amazon and Sherwin Williams. I'm probably not going to stay in Amazon because I think it's oversold, but then again most of the finance media was reporting that AMZN was oversold last summer at $900. Now it's selling for $1,200. It corrected last week so I doubled my position and was rewarded yesterday and today by another jump. I'm not staying, though. I'm long in Sherwin Williams, however. I expect SW to come out of the Valspar acquisition a much stronger company with more pricing power. SW is a fundamentally strong, well-run company.


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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Sherwin-Williams was recommended by the Motley Fool on June 20, 2014 at $196.66/share.  I didn't buy any.  I should have done a lot more homework.  I was just like, "paint, seriously, where the heck is there any profit to be made in paint?  And maintaining retail stores just to sell paint?"

 

Turns out there is profit to be made in paint.  Opened today at $414.61.

 

Coulda shoulda woulda.

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People don't buy paint or painting supplies on the internet. The margin on it is also sky high. Plus, people paint their rooms way more often than they did even a few years gao.

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Like the dumb leading the damned. Or is it vice versa.

 

So when are Amazon and Google splitting 7-1? It seems like $1000 is that sweet spot.

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Netflix split 7-1 in 2015 after getting to right around $700, getting the share price back down to around $100.  (And that one, I *was* around for.  Some of my earliest purchases of NFLX have cost bases of less than $12/share.)  I'm not sure I'd look to see split news from AMZN or GOOG/GOOGL (it's much less relevant for any stock that doesn't pay a dividend, but that obviously didn't stop NFLX), but if they did, I wouldn't be surprised to see 10-1.

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jmeck: It is pretty tough to sell at the peak.  The one time I've done that (other than in acquisitions, which tend to involve getting bought out at a premium) was more luck than anything else.  Selling high is considerably easier.  Buy what you know when it's low.  Hold for long enough.

 

I know you have rental properties as your own form of investing.  I've looked at getting into that.  It scares me a lot more than the stock market.  Leveraged, illiquid assets.  (Granted, the leverage is also part of the temptation, at least in terms of potential ROE.)  Carrying costs--interest, property taxes, maintenance, insurance.  Far more potential legal risks.  But of course, if that's what you know, and you have a way of finding decent deals, then you're doing the same thing I try to: buy what you know when it's low.

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It is relatively easy to buy low.  It's pretty tough to sell high. 

 

It is hard to do either - if you're talking timing the market.  Plenty of "experts" in February '09 said we had a long ways down to go.


Very Stable Genius

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As long as the rich are prospering, the market has a very good chance of doing the same.

 

But when either starts bleeding like in 08, then all hell breaks loose with the other.

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I have a lot of friends caught up in the Bitcoin craze. Nothing you can do to convince them there are no fundamentals behind the rise.

 

Probably because you don't understand the technology or how it's being used and can be used. Blockchain...it's not just a currency replacement anymore.


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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All of these ordinary people chatting up the stock market is the sign of bad things to come. 

 

 

OK, I'll bite. What makes you so extraordinary??


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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I have a lot of friends caught up in the Bitcoin craze. Nothing you can do to convince them there are no fundamentals behind the rise.

 

Probably because you don't understand the technology or how it's being used and can be used. Blockchain...it's not just a currency replacement anymore.

 

I am not an expert on it which is why I don't invest in it. If you want to be successful in investing, invest in what you know, except foreign currencies because that is just gambling.

 

If you like crypto currencies, by all means invest if you know what you are doing. Many people who do invest know nothing of the matter though which is dangerous.

 

However, from a financial valuation standpoint, there is not a rational valuation for the value of Bitcoin, but that does not mean it cannot be a good investment if you know what you are doing.

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However, from a financial valuation standpoint, there is not a rational valuation for the value of Bitcoin, but that does not mean it cannot be a good investment if you know what you are doing.

 

I thought you were Mr. Free Market? The value is what the market says it is. The market is always a rational user of resources, right?

 

BTW, the total market cap of all of these bitcoins is nearly $1 trillion -- all for a technology that has barely scratched the surface of its potential utility. Go back and read articles from five years ago about Bitcoin nearing the bubble. They're as laughable as the articles about crypto bubble(s) today. I fully expect Bitcoin to hold steady pricewise as more alt coins challenge it -- unless new transaction technologies now in testing realize their promise and increase the utilization of crypto for more of its potential applications. Eventually, the transaction technology will catch up to blockchain technology. When it does, watch that market cap find a new bubble, er, ceiling.


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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However, from a financial valuation standpoint, there is not a rational valuation for the value of Bitcoin, but that does not mean it cannot be a good investment if you know what you are doing.

 

I thought you were Mr. Free Market? The value is what the market says it is. The market is always a rational user of resources, right?

 

BTW, the total market cap of all of these bitcoins is nearly $1 trillion -- all for a technology that has barely scratched the surface of its potential utility. Go back and read articles from five years ago about Bitcoin nearing the bubble. They're as laughable as the articles about crypto bubble(s) today. I fully expect Bitcoin to hold steady pricewise as more alt coins challenge it -- unless new transaction technologies now in testing realize their promise and increase the utilization of crypto for more of its potential applications. Eventually, the transaction technology will catch up to blockchain technology. When it does, watch that market cap find a new bubble, er, ceiling.

 

I am free market. And your right, the market is what it says it is, however, as an investor, I like more traditional models where I can understand the underlying asset value behind it. I don't see that with Crypto currencies and to be honest, they have not stoked my interest enough at this time to learn about it for investment purposes.

 

That being said, Ken, if you know what you are doing, then by all means, it is a good investment for you, because you have market knowledge that I do not possess at this point. For someone like me and millions of other Americans, buying Bitcoin is about the same is playing $1000 on Powerball. For someone like you, who is much more educated on the subject, it is investing.

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What scares me is that these exchanges are taking credit cards to purchase crytpo.  I can see lots of people ending up with piles of credit card debt in a gamble to get rich quick.

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Heh.  People misunderstand the free market principle of efficiency.  In the long term, the free market is efficient for the ruthless reason that it tends to crush inefficiencies and bad business models.  The process of crushing those is not instantaneous (nor pleasant to the crushee).  If it were, any business that lasted more than a day would by definition enjoy the market's blessing as successful, since it survived the instantaneous winnowing process.

 

As for blockchain (which is separate from bitcoin), I have confidence that blockchain will be a successful technology in the future, but that doesn't mean that bitcoin specifically will be or even that cryptocurrency will be.  It also doesn't mean that blockchain is a good investment today, unless you think that stories like this constitute no evidence whatsoever of a bubble inflating:

 

https://arstechnica.com/tech-policy/2018/01/blockchain-announcement-sends-hooters-parent-company-stock-soaring/

 

https://arstechnica.com/tech-policy/2017/12/iced-tea-company-stock-triples-after-adding-blockchain-to-name/

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