A lot of people think investing is like gambling is because they don't know about stock vs. index or ETF funds. That's how I was thinking before. Until I discovered index funds that's when I started investing.
What's the difference between an ETF & an index fund. The SPY ETF I contribute a little to every day w/a 25 dollar daily purchase is listed as an ETF but I also hear it referred to as a "low cost index fund". Are the terms interchangeable? Thx
If you're a long-term investor and only concerned about the differences of performance, they are essentially the same. The difference is ETFs can be traded throughout a market day like a stock, rather than a fund settling up once a day. @jgb_fan
An index fund is any kind of fund that follows an index. This can be the S&P 500, international total stock, or Dow 100. It is basically like a category. Then, these index funds can be set up as ETFs that are traded like stock on the market or they can be set up as mutual funds that let you buy in dollar amounts and "close" at the end of the day. Technically ETF and index fund aren't interchangeable but a lot of people do. This is overly simplified but hope it helps.
I had a coworker say that investing is the same as gambling. I explained it like this. Gambling is when you are playing against the house and the house always has the advantage no matter how slight. Investing is when your money is going to people where everyone involved is there to try to make upward movement in the company and make money.
Gambling is looking at the upside and never looking at the possible downside/risk. Seeing that NVDA has gone up 1000% and putting all your retirement money into it is gambling. It could be the top or it could drop significantly. Investing is understanding the risk and taking steps to decrease that risk. Buying into a large diversified fund, buying bonds, and having a 10+ year time horizon is Investing. That's how I learned it.
I participated in my employer's 401k for 35 years with a 5% match. At the end when I retired, that free match was a really significant portion of the return I got. It's dumb money. In other words, it's dumb if you don't take advantage of it.
Invest judiciously, keep a stop loss figure. Shuffle between debt and equity wherever the ratio goes too off your target. As for the target, I recommend a Ratio like this Debt % should be equal to your age in years. If you are 20, debt is 20%, reset in equity. If the market falls or rises drastically, your debt % will change, which you should rebalance to 20% and bring back equity to 80%. Thus you would have bought low or booked profit depending on if it was a crash or a bull run.
Effective personal finance management is more important than the amount of money saved, regardless of whether income is earned through job or investment. Individuals can seek counsel from a certified financial advisor to optimize financial outcomes, who can provide specialized advice and methods to decrease expenses and maximize income.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
I appreciate the implementation of ideas and strategies that result to unmeasurable progress. Being heavily liquid, I'd rather not reinvent the wheel, thus the search for a reputable advisor, mind sharing info of this person guiding you please?
‘’Marisa Michelle Litwinsky’’ is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Marisa has the appearance of being a great authority in her profession. I looked her up online and found her website, which I reviewed and went through to learn more about her credentials, academic background, and employment. She has a fiduciary duty to protect my best interests. I sent her an email outlining my objectives and also booked a session with her; thanks for sharing.
The first three investors story reallly explains well how it breaks down. I DCA, but lately I've been getting a bit anxious about all the people saying the market will crash. This made it "click" what I "knew" about why DCA is superior. Thank you for sharing it in that way
Exactly. You got it. Plus you don't need to be concerned about market crashes... ever. Every market crash while you're saving for retirement just means all the stocks and indexes are now for sale! Crashes while you're retired? You didn't care because you diversified and de-risked yourself so that your income isn't entirely dependent on market returns
Exactly right and you figured it out! I"m 75 and retired for 13 years now. I have been in the market for 50 years and have always been in the market, and always been buying, just like these guys preach. Trust me, if you do that it will work out for you if you simply stay the course!! In my 50 years in the market, I have seen and endured everything it threw at me and I'm in a very good place with my retirement. Congratulations and just keep your focus and moving forward.
Its best to not worry about a market crash if you aren't near retirement. If you are 10~20 years away, then you don't need to care. If you were within 5 years away, then I would recommend shifting your investments to more "safer" alternatives simply because you can handle less risk, and your mental won't recover if you see a 40% hit to your investments. But that was only if you had a non-diversified portfolio anyways.
During the really bad drops, Tech Bubble and 2008, I simply didn’t check my statements for several years. No need to dwell on the negative and I knew the market would recover. Because I had a pension to look forward to a few years of emergency funds and a small side gig, I stayed 100% in the S&P 500 after retirement. My portfolio has tripled since I retired 9;years ago.
This is by far the best financial channel on UA-cam! One point I want to add in terms of their example. DCA Diane of the 3 scenarios was the only one that was 100% realistic and achievable under real world conditions. The other 2 scenarios fall under the nobody can get that lucky or that unlucky, because that is what market timing is, pure luck predicting the direction of the market. One of my regrets, even though I have done well, was not taking more risk when I was young. An S&P or Total Market index stock fund is not that risky over time. In my investing lifetime, the big downturns are just blips and hardly even memorable.
I agree and the best way to put your money to work for you is to find a trusted financial advisor. I have worked with mine for half a decade now and things have worked wonderfully. Her name is ......... 😂😂😂😂😂 Not a bot; just trolling
@@honjokun0615 On point! I know you are not a bot because you dont have 30+ likes and 15+ comments. Google needs to deploy Gmail's excellent antispam software to UA-cam comments and cut down on scambots.
I'd love to see that DCA Diane study over 5 and 10 year periods. I always save for intermediate term expenses(needed in 3-10 years, expenses over $10k) in a brokerage account. Wondering what the risk/reward really looks like vs just keeping those funds in an HYSA.
@@burkles4456 most of these hypotheticals are assuming 100% invested in the s&p500. Much riskier than cash, but also much higher potential reward. The s&p500 is up 40% yoy, and cash is up about 4.5%.
You can't really do that, as you would just be cherry picking data with a time period that short. The point of DCA is that you do it consistently over a very long period of time, enough to recover from crashes or down markets. Like if its 5 years then Billy the Best may never have an opportunity to invest at all.... Well, regardless, if its just straight up studying DCA Diane, without comparing to the other 2, if you are using a five year period, the 80% of the possible scenarios will have her ending up with more net worth than her contributions. If its a 10 year period, 90% of the possible scenarios will end up with more net worth. If its 20 year, than it goes up to 95%, and if its 30 years, 99% of any date you choose as a starting date, will have her end up with her having more net worth than her contributions (that's because the worst crash in history was the great depression, and it took 26 years to recover from that, where the stock market returned to pre-crash levels, and that assumes the 30th year was when the market was at its lowest at that time period).
@@rebeltheharem7028 You don't do the analysis of a single period. You run the simulation for every starting year, and say how often it goes up and how often it goes down and by how much, to get an expected result.
One lesson I've learnt from billionaires is to always put your money to work, and diversifying your investments. I'm planning to invest about $200k of my savings in stocks this year, and I hope I make profits.
You are right. The best approach I feel is to diversify investments- by spreading investments across different asset classes like bonds, real estate, and international stocks, they can reduce the impact of a market meltdown.
That makes sense. I’ve been using a financial market expert for two years now and I own a six-figure diversified portfolio from investing in stocks. I want to diversify more this year, though.
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
i just want to say this... before i found this channel i was just saving and not knowing how to put my army of dollar bills to work.. since i found this channel.. every dollar has a job now. and it puts me at ease mentally. thank you. this channel has changed my life.
LOOK LOOK : Age 60, I have 2 million and have NEVER invested in stocks. I just invested in long term bonds/cd/myga paying 5% to 6%. I never missed a nights sleep wondering about my investments. Now that I have landed a retirement, NOW I will invest my excess cash into a low cost ETF to hedge inflation and for growth during the next 20 or 30 years of my retirement
27:00 "Twyla" - my experience in the '90s was firms had minimums to open but, did allow monthly contributions to be much lower. I opened a few Janus accounts. My first required a minimum (I think it was $3,000) the rest were no minimum to open but, I had to commit to a monthly draft of at least $25. Time + Automation is the key.
Because of these two, they made me confident in investing for the long term. Now that we’re 38/39 we have saved and invested so much it’s wild when I look at our networth statement. Hope to FATfire in the future!
Genuinely sensational video. Im australian and still i have learnt so much from you guys. Im not kidding when i say im going to use this video to get the people i appreciate into investing
Hey, love the show and watch every long form episode. The only reason I don't subscribe is because I get too many videos in my feed because of the highlight part. I still manually go to see what's new on Tuesday's and Fridays
The "best market timer ever" should have literally infinite money. Just short right before every downturn. If you had perfect timing there's no cap on what you could earn.
This is the information what a college professor Keith Broman PhD, from the University of Nebraska, shared in 1996. I followed the advice and it worked like a charm all these years later. Thank you for sharing the information in a manner that savors and investors today can easily digest.
i'm guessing these guys have mentioned in the past but something that doesn't get talked about enough - people often think I can't give up 5-10% of my income. What they don't realize is - especially starting out if you do 401k (pre tax) - 1) a good chunk of gross pay go to taxes, it's not that percentage overall you are giving up ie it's not as much money as you think out of your pay AND you don't miss that money like you think you would which then leads into what they did cover 2) the compounding when you kick in employer match on top with consistent saving - it's crazy that that money turns into.
When discussing saving X dollars a month, are you including 401k contributions, or just IRA contributions, or just personal post tax savings? Or all three?
I separate out my 401K contributions - which I max out as early in the year as possible b/c time in the market is best. So my "monthly" contributions vary widely, as I go from ~$3K a month to $0 when I hit the limit. I basically don't get a paycheck for the 1-2 quarters of the year. So I usually state that I max out my 401K contributions and do an additional $10K a month + $1K for my kids. I should also count that I max out my ESPP, the principle payments in my homes and maxing out my HSA, but I don't usually quote that. My investing is high, then lower later in the year as I hit statutory limits... if you can't max out items early, I would recommend a monthly $ amount, so you can just set it and forget it (don't forget to invest it, as many brokerages don't auto invest for you).
All of it, what you mentioned plus an employer match too (if your household income is less than $200k). When they mention saving 20-25% they mean compared to your gross income.
The answer is always “see the FOO”. That’s the order of where to put your next dollar. All saving & investing counts towards your 25%. Any annual addition can be averaged over the year, 6 in one half dozen the other.
this was the pep talk i just needed to add another $200 of etf shares. im investing on the high probability that i will still be here to reach my 60s and 70s
The investment life cycle of an dedicated motivated investor: When they get their first job they participate in the 401K. Money is tight so they can't invest any more. About age 35 - 40, they cross a financial line where they can come up with extra money. They choose to automatically have that withdrawn and sent to either a broker, IRA or Roth depending on their knowledge background and their current tax bracket. Afterward, for each raise they send either all or at least a portion to the accounts previously referenced (I calculated the taxes/deductions that the raise would cause and sent the rest to a broker). During this process they study how to invest better (what is a stock, a bond, REIT, etc), taxes, expenses. They decide if owning individual company stock, or owing rental property, or starting a business is for them. Around the age of 55 they can retire if they want too.
If i were you guys, i'd do an episode on drawdowns to inform people of risks with investing over time periods relative to our economic standing n history. And tag it in every video moving forward. If the market sees minuscule gains if not losses over the next few years, demand for this type of content will significantly drop from new investors on youtube.
They mentioned the casino "house" immediately after I posted this and it's exactly how I see it. The market is "the house". There will always be short-term periods where a gambler wins, but eventually the house makes it back up.
As someone who tried to start their career in the GFC and who watched a lot of PBS type documentaries I thought it was all too dangerous and I didn't want to lose my savings. I just did the minimum for my pension/401(k) because it's something you're supposed to do. You know what's even scarier? Doing the math how much money you'll need in retirement and realizing you won't get there with the amount you're saving (minimum). I've been trying to catch up last 4 years by saving 25% + 30% match (32.5% total). Recently I bought a house so I had to cut it back to 16% + match for the time being because we need more cash to fix the house than expected, but eventually I'll get back to 25% (+ match)
Retired since age 59. Currently have $2,000,000 in IRA 60%Toal Market ETF (VTI); 20% International ETF (IXUS); 20% Total Bond Market ETF (AGG). I receive about $53,000 per year in dividends and interest on these ETFs which are automatically reinvested into its ETF. Just started SS at 67.5 years (about $39,000 per year). Federal Taxes about 17% currently. At 73 years old I am looking at a first RMD of about $125,000. Can I do a series of Roth conversions to minimize the starting RMD amount?
This is a really fun case study and I was genuinely interested in the outcome (knowing it would be enlightening about what a dedicated investor can do), but there was a cheat here. DCA Diane gets 7 years of growth before anyone else invests? That's not starting on the same page at all. In fact, savings rates in the early 80s were near double-digit so I don't think any of these other investors would have just put the cash under their mattress for the 5 crashes that you listed. I think a much more fair case study would be an annual or semi-annual timeline (not just 5 investments) and the investment should start on Day 1, in this case 1987.
This is one of the best, most informative episodes I've ever seen. I love it! This is one to share with all those who are a little nervous about starting their investing journey.
I'd be super interested in a comparison with Systematic Sam, who buys when the price crosses above the 200 day simple moving average, sells when price crosses below the 200 day moving average, and dollar cost averages as long as the price is above the 200 day. I know this is going to have a better result, but by how much? Is it a few percent better, or is it significant?
My parents don't believe in the stock market. They think its all bad and you'll loose all your money. They are not wrong but it needs to be done the right way though.
Who said it first? Hahaha "Fear plays an interesting role in our lives. How dare we let it motivate us? How dare we let it into our decision-making, into our livelihoods, into our relationships? It's funny isn't it, we take a day a year to dress up in costume and celebrate fear?"
i have to get a will... and i did start too late -- really not until 42 (and have maxed my Roth IRA and do matching w my job now)... I had a few rollover IRAs from a few jobs that have grown some now (trad IRA).. I am 50 now
Love this encouraging content. I’m 19 and I’m exactly like DCA Diane, i’ve putting in AT MINIMUM $400 every week since January. And i feel like it’s done so much for me, I’ve managed to accumulate roughly 23k at the age of 19 and that’s something i’m really proud of especially for such a young age. People around all say “you started super early” or say “you have a huge head start.” I’ve been learning stocks on my own since the age of 16 and when i had the opportunity to work and make actual money, i religiously started investing
You two, and the team of individuals working behind the scenes with you, changed my life so significantly. I found your channel at the start of covid when I had $25k of credit card debt and a -$50k net worth. I work an hourly retail job, so I'm not making tons of money, and I just crossed $100k net worth this month. I'm deliberate with my money, I know which accounts to prioritize, and I feel confident with money now. Thank you so much for doing all that you do.
The lack of control over stock market gains/losses and timing of gains/losses prevents people from investing. For those who’ve already won the game, why continue to play when you have accumulated a critical mass that can be evaporated?
Don't wait for the bottom. Dollar cost average the money into the market over the next 6-24 months. If you want to invest $10k, just put in $1k/month for the next 10 months.
This was SO helpful! It put into perspective perfectly how to do it and the horizon of when you invest. I definitely understand now the importance of investing every month.
Maybe I’m crazy or maybe it’s just the UA-cam compression but something seems off about this video. I believe it looks like you filmed at 30fps with a 1/30 shutter speed rather than a 1/60 shutter speed. If that is the case I recommend looking up the 180 degree shutter rule. If it’s not the case then just ignore my comment 😂
Used to listen to these guys all the time while driving all over South tx doing home health. Now I'm retired age 42. Only took 18 years or so of cheap, miserly living and investing all the leftovers! These guys always made me feel inspired to keep going. Love the optimism and excitement of their show. Started doing an IRA match with my step kids too, an idea I got from this show.
Question: Say every month you invest a total amount of 100 dollars. Is it statistically better to divide that investment across everyday in the month, or drop it all on one day in the month? The fact that Billy Best only won 2nd place suggests to me that dividing the investments into micro daily investment might be better than doing monthly chunk investments. Currently I am doing it monthly automatic, but I could comfortable change it to daily if there is a statistically significant difference.
If you get $100 on Monday and invest $20 today, 20 tomorrow 20 the next day and so on each week then there is more time that you money is out of the market. Vs if you get 100 on Monday and invest 100 on Monday then your money is in the market the whole time. That is the lesson that I gather from Billy vs Diane, Its about your money being invested for longer.
You're going to get yours, the bank will get theirs, the companies and stock brokers are going to get theirs, and the government will mosey on in for a peice of the pie as well. Factoring all that in for long term investing is how I reckon you make money. The volatility things is real, had 200 dollars worth of a stock below a dollar, lost 30 bucks and pulled the plug, looked at it the next month and it jumped to over six dollars a pop. Parts of it lol
Thanks for this video. I got talked into doing more active management of my retirement funds by a coworker to use the brokerage link available. I ended up catching a series of economic doom podcasts and moved about half my funds to cash at age 33. None of their predictions materialized and now I feel silly after waiting 2 years. It wasn't so much risk aversion but more greed return seeking. Anyways I moved my money back out of the brokerage link and am promising myself not to gamble with my retirement again.
there were no Roth IRA's or much of anything except maybe profit sharing w my jobs from youth.... Roth started shortly before i was 30 - i opened 1 at 30 in 2004 w 3k but no one advised me to put it in aggressive so it just sat there until i finally called and figured out what the heck i was doing...
Brokerage accounts have been around over 100 years, and traditional IRAs started in 1975. It’s certainly true that investing as become much more accessible.
Technically, if you can time the market you are going to make the most money assuming that you can also sell. Additionally, if you just bought the lowest point of the market for the year with all the money, mathematically you would always make the most money. So I'm not really sure how their original data can make any sense for the results it got. If you bought the lowest point of the year with all the money to invest for the year, assuming you can't sell until retirement, you would always have marginally more money than someone who just DCA..
In classic money guy fashion they do not account for inflation. In the example of investing from 20-30 vs 30-60, the latter did not invest triple the amount. Money shrinks in value by about 4% every year, so they should increase the investment by that every year.
Just gain the growth in the market and inflation will not be a concern, you will not be in the middle class anymore and your thinking will change as you change.
@@mrjuvy49 I am investing and DCA but they still inflate numbers to make it look even more appealing than reality. These people act like they are in an infomercial. Same with the example of the guy that timed the market perfectly, not sure if he would have less than dca had they increased the savings every year, but since they didn't it matters even more to invest early, and he was 7 years late. DCA is obv best but still they inflate like this to make things look even better. They are overselling instead of being totally honest.
Well I love another proof of time in the market beats timing the market. Nonetheless I don’t think (or didnt noticed it) the handling from Olga and Billy was perfect. Since you described all of the 3 as financial mutants. So I expect them so save their money in a high-yeald-savings account till they invest it. So their invested money should be way higher than the amount they saved. Of course those examples are just fiction and its hard to calculate over the decades. Nonetheless the result would be interesting.
I have never invested in the stock market, therefore I am incredibly late at 33 and with only about 100 grand in savings. I want to make wise decisions for the future because I'm concerned about losing out on compound interest. Will I still have at least $1 million by the time I'm 65 if I make aggressive investments?
Yes, you can. Investing about 80% of that in the S&P 500 at an 8% annual return will grow to about $805k in 30 years. Financial advisors can achieve 10-15% returns, so do your research and consider consulting one.
Low cost index funds, and diversification is your friend. Don't let your retirement funds feel lonely and left out. Those two are givens.. Most people can be in better situations had they not incurred unnecessary debt. Even having $1k to your name without debt is better than having debt in the six-digit figure. Also, your lump should be put in cautiously , I personally wouldn't use most of it in the stock market. I don't think you're in a position to invest much* (keyword). I hope my advice helps, good luck!
@@Dollrnri You have a very valid point, There are tons of benefits to having a financial advisor, but here’s one example: My advisor based a small part of my portfolio on Nancy Pelosi’s portfolio, which is completely legal. That portion has gone up 41% in just six months-take that info as you will.
I'm intrigued by this. I've searched for financial advisors online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
Jennifer Leigh Hickman is the licensed CFA I use and i'm just putting this out here because you asked. You can Just search the name. You’d find necessary details to work with to set up an appointment.
I'm confused with the Theodore example because zero dollars for initial investment then $500 a month for 40 years 20-60 that's 1.5 million by age 60 where the 1.7 million coming from? Am I missing something?
Investor “dot” gov has a compound interest calculator. Starting with zero dollars, monthly contributing $500 for 40 years. Set interest to 8% interest rate and with zero rate variance. The compounding should be set to monthly. You’ll get $1,745,503.92 Sounds like you had the compounding set to annual.
I'm so grateful I was Alvin at 21. Ten years later, my number increase is accelerating and I barely contributed in my 20s. I took advantage 100% of the employer match. I had lower paying jobs at the beginning of my career and those measly dollars are working hard! Shout out to my coworker when I was 21 who advised me to be aggressive about retirement savings because she wished someone would have told her the same (she was approaching 40 at the time).
It is amazing that people are afraid of investing. I can totally understand the fear of not being able to cover your expenses - daily, weekly, monthly, etc. However, if you can cover your needs easily... what else would you do with your excess money? Are people really keeping $100K (legally clean cash) in the bank or under their mattress with zero stock or other investments? Just hard to fathom. Any data around how many people are just putting $10Ks & $100Ks into non-investment accounts/places?
Most people don’t see themselves as having “excess money”. It’s often misspent on debt payments and consumerism. I don’t think many have $100k in legal money under a mattress, I think they find something to spend it on.
@@Natalie_11188interesting. So afraid of investing to likely get a % return, but not afraid of spending and getting 0% return. Again, I can’t even fathom that mindset.
Index investing sounds interesting but its a few thousand$ per share isnt it? Seems like a high entry point. Never actually invested a penny before and only started researching. Are they talking just etfs?
Index investing sounds interesting but its a few thousand$ per share isnt it? Seems like a high entry point. Never actually invested a penny before and only started researching
One of the reasons investing nowadays is great is the LOW barrier of entry. You can finds things to buy for way less than 1000$. Plus, some platforms allow fractional shares. Meaning it's possible to start with 1 $.
My dad has become his own worst enemy. Hes retired with a good amnt but now he lives in fear of losing it, so now he does not have enough exposure in equities. I think this is when you should also hire a financial advisor, but how do you convince the more mature age folks to do this when they don’t think you know anything bc they will always think youre just an ignorant kid?
Try talking about when certain portions of his money will be needed, the "time horizon" for different portions of his money. The next three years of expenses should be in cash/HYSA/CDs. 3-8 years, should be bonds. 8+ years should be stocks. Here's an example to break it down. If he has $2M, spends $100k/year and expects to live 15 more years, then $300k (15%) should be in cash equivalents, $500k (25%) or so should be bonds, and $1.2M (60%) should be stocks. In this example, since he doesn't expect to live long enough to spend all his money, he has a cushion or a legacy to leave his kids (which would have a much longer time horizon and should be in stocks anyways).
Love the case study guys. I invest 25% of my income every single week I don't care if the market is at an all-time high or if it just crashed, I keep investing the same amount each week. I completely ignore it throughout the year so any kind of fluctuations don't mess with my emotions. I check it once a year to see how it performs and make any adjustments but I never stop investing that same 25% no matter what.
How do you do that? I max out my 401K - which auto-invests based on my allocations, but to get to 25% I have a monthly transfer set up to my brokerage, but it doesn't auto invest. I have to go into it every month and allocate the monthly transfer to whichever stocks/EFTs/index funds I would like to purchase. Does your brokerage allow an auto invest every month? If so, which brokerage do you have?
It's my biggest frustration when I talk about my investments and so many ppl say well it's "gambling" or "not really money" lol
The bowling strike soundbite is essential whenever Brian mentions bowling point
Time in the market > timing the market
A lot of people think investing is like gambling is because they don't know about stock vs. index or ETF funds. That's how I was thinking before. Until I discovered index funds that's when I started investing.
Absolutely agree
Same
What's the difference between an ETF & an index fund. The SPY ETF I contribute a little to every day w/a 25 dollar daily purchase is listed as an ETF but I also hear it referred to as a "low cost index fund".
Are the terms interchangeable? Thx
If you're a long-term investor and only concerned about the differences of performance, they are essentially the same. The difference is ETFs can be traded throughout a market day like a stock, rather than a fund settling up once a day. @jgb_fan
An index fund is any kind of fund that follows an index. This can be the S&P 500, international total stock, or Dow 100. It is basically like a category.
Then, these index funds can be set up as ETFs that are traded like stock on the market or they can be set up as mutual funds that let you buy in dollar amounts and "close" at the end of the day.
Technically ETF and index fund aren't interchangeable but a lot of people do.
This is overly simplified but hope it helps.
I like that Alvin, Simon, and Theodore have the right colors 🙂
Nice attention to detail
I read those 3 names in the theme song lol
DCA Diane didn’t make straight A’s, but I guess the perfect attendance award 🥇counted for more this time!
I like it.
I had a coworker say that investing is the same as gambling. I explained it like this. Gambling is when you are playing against the house and the house always has the advantage no matter how slight. Investing is when your money is going to people where everyone involved is there to try to make upward movement in the company and make money.
Unless you are playing poker
Gambling is looking at the upside and never looking at the possible downside/risk. Seeing that NVDA has gone up 1000% and putting all your retirement money into it is gambling. It could be the top or it could drop significantly.
Investing is understanding the risk and taking steps to decrease that risk. Buying into a large diversified fund, buying bonds, and having a 10+ year time horizon is Investing.
That's how I learned it.
I participated in my employer's 401k for 35 years with a 5% match. At the end when I retired, that free match was a really significant portion of the return I got. It's dumb money. In other words, it's dumb if you don't take advantage of it.
Invest judiciously, keep a stop loss figure. Shuffle between debt and equity wherever the ratio goes too off your target. As for the target, I recommend a Ratio like this Debt % should be equal to your age in years. If you are 20, debt is 20%, reset in equity. If the market falls or rises drastically, your debt % will change, which you should rebalance to 20% and bring back equity to 80%. Thus you would have bought low or booked profit depending on if it was a crash or a bull run.
Effective personal finance management is more important than the amount of money saved, regardless of whether income is earned through job or investment. Individuals can seek counsel from a certified financial advisor to optimize financial outcomes, who can provide specialized advice and methods to decrease expenses and maximize income.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
I appreciate the implementation of ideas and strategies that result to unmeasurable progress. Being heavily liquid, I'd rather not reinvent the wheel, thus the search for a reputable advisor, mind sharing info of this person guiding you please?
‘’Marisa Michelle Litwinsky’’ is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Marisa has the appearance of being a great authority in her profession. I looked her up online and found her website, which I reviewed and went through to learn more about her credentials, academic background, and employment. She has a fiduciary duty to protect my best interests. I sent her an email outlining my objectives and also booked a session with her; thanks for sharing.
You guys have changed my financial future. 3 rentals and 100k+ invested in the past 3 years. Keep talking us through our journeys
Huge!
The first three investors story reallly explains well how it breaks down. I DCA, but lately I've been getting a bit anxious about all the people saying the market will crash. This made it "click" what I "knew" about why DCA is superior. Thank you for sharing it in that way
Exactly. You got it. Plus you don't need to be concerned about market crashes... ever. Every market crash while you're saving for retirement just means all the stocks and indexes are now for sale! Crashes while you're retired? You didn't care because you diversified and de-risked yourself so that your income isn't entirely dependent on market returns
Exactly right and you figured it out! I"m 75 and retired for 13 years now. I have been in the market for 50 years and have always been in the market, and always been buying, just like these guys preach. Trust me, if you do that it will work out for you if you simply stay the course!! In my 50 years in the market, I have seen and endured everything it threw at me and I'm in a very good place with my retirement. Congratulations and just keep your focus and moving forward.
Its best to not worry about a market crash if you aren't near retirement. If you are 10~20 years away, then you don't need to care. If you were within 5 years away, then I would recommend shifting your investments to more "safer" alternatives simply because you can handle less risk, and your mental won't recover if you see a 40% hit to your investments. But that was only if you had a non-diversified portfolio anyways.
During the really bad drops, Tech Bubble and 2008, I simply didn’t check my statements for several years. No need to dwell on the negative and I knew the market would recover. Because I had a pension to look forward to a few years of emergency funds and a small side gig, I stayed 100% in the S&P 500 after retirement. My portfolio has tripled since I retired 9;years ago.
This is by far the best financial channel on UA-cam! One point I want to add in terms of their example. DCA Diane of the 3 scenarios was the only one that was 100% realistic and achievable under real world conditions. The other 2 scenarios fall under the nobody can get that lucky or that unlucky, because that is what market timing is, pure luck predicting the direction of the market. One of my regrets, even though I have done well, was not taking more risk when I was young. An S&P or Total Market index stock fund is not that risky over time. In my investing lifetime, the big downturns are just blips and hardly even memorable.
I started investing with 80$ a pay period 20 years ago. Only regret is not starting sooner
Ok, this nakes me feel better.
So many scam bot comments under this video, you guys need to monitor this comment section and delete those!
So many scam bots.
Facts, I just tried to warn people in a couple of them...
I agree and the best way to put your money to work for you is to find a trusted financial advisor. I have worked with mine for half a decade now and things have worked wonderfully. Her name is .........
😂😂😂😂😂
Not a bot; just trolling
@@honjokun0615 On point! I know you are not a bot because you dont have 30+ likes and 15+ comments. Google needs to deploy Gmail's excellent antispam software to UA-cam comments and cut down on scambots.
@@honjokun0615 Jeez you scared me for a sec
That closing statement was powerful! ❤
I feel more knowledgeable after watching this!
I'd love to see that DCA Diane study over 5 and 10 year periods. I always save for intermediate term expenses(needed in 3-10 years, expenses over $10k) in a brokerage account. Wondering what the risk/reward really looks like vs just keeping those funds in an HYSA.
It could be the same or much riskier. Depends on what you’re investing into with the brokerage.
@@burkles4456 most of these hypotheticals are assuming 100% invested in the s&p500. Much riskier than cash, but also much higher potential reward. The s&p500 is up 40% yoy, and cash is up about 4.5%.
You can't really do that, as you would just be cherry picking data with a time period that short. The point of DCA is that you do it consistently over a very long period of time, enough to recover from crashes or down markets.
Like if its 5 years then Billy the Best may never have an opportunity to invest at all....
Well, regardless, if its just straight up studying DCA Diane, without comparing to the other 2, if you are using a five year period, the 80% of the possible scenarios will have her ending up with more net worth than her contributions. If its a 10 year period, 90% of the possible scenarios will end up with more net worth. If its 20 year, than it goes up to 95%, and if its 30 years, 99% of any date you choose as a starting date, will have her end up with her having more net worth than her contributions (that's because the worst crash in history was the great depression, and it took 26 years to recover from that, where the stock market returned to pre-crash levels, and that assumes the 30th year was when the market was at its lowest at that time period).
@@rebeltheharem7028 You don't do the analysis of a single period. You run the simulation for every starting year, and say how often it goes up and how often it goes down and by how much, to get an expected result.
One lesson I've learnt from billionaires is to always put your money to work, and diversifying your investments. I'm planning to invest about $200k of my savings in stocks this year, and I hope I make profits.
You are right. The best approach I feel is to diversify investments- by spreading investments across different asset classes like bonds, real estate, and international stocks, they can reduce the impact of a market meltdown.
That makes sense. I’ve been using a financial market expert for two years now and I own a six-figure diversified portfolio from investing in stocks. I want to diversify more this year, though.
@@mariaguerrero08Impressive can you share more info?
Her name is. ‘IZELLA ANNETTE ANDERSON’. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
You're doing a great service to us guys...maybe I was born on the wrong side of the tracks but they never taught how to manage money in school.
Love the case studies!
Don’t you just love infinite growth ❤️
i just want to say this... before i found this channel i was just saving and not knowing how to put my army of dollar bills to work.. since i found this channel.. every dollar has a job now. and it puts me at ease mentally. thank you. this channel has changed my life.
LOOK LOOK : Age 60, I have 2 million and have NEVER invested in stocks. I just invested in long term bonds/cd/myga paying 5% to 6%. I never missed a nights sleep wondering about my investments. Now that I have landed a retirement, NOW I will invest my excess cash into a low cost ETF to hedge inflation and for growth during the next 20 or 30 years of my retirement
27:00 "Twyla" - my experience in the '90s was firms had minimums to open but, did allow monthly contributions to be much lower. I opened a few Janus accounts. My first required a minimum (I think it was $3,000) the rest were no minimum to open but, I had to commit to a monthly draft of at least $25.
Time + Automation is the key.
Because of these two, they made me confident in investing for the long term. Now that we’re 38/39 we have saved and invested so much it’s wild when I look at our networth statement. Hope to FATfire in the future!
I am so excited!
I just can’t hide it 😊
Recommended different approach - no one would wait years to invest. Compare low and high of each year to the monthly dollar cost average investor.
Genuinely sensational video. Im australian and still i have learnt so much from you guys. Im not kidding when i say im going to use this video to get the people i appreciate into investing
I listen to you guys all the time, but you earned my subscription today due to the boba fett coffee mug. Well played.
Superb presentation of this vital information! Well done!!!
He is always sooo excited 😂
Hey, love the show and watch every long form episode. The only reason I don't subscribe is because I get too many videos in my feed because of the highlight part. I still manually go to see what's new on Tuesday's and Fridays
Change your notification settings.
I'm about to hit the "bowling point". I've listened to you guys for years. Thanks for the consistently great advice!
What is your boiling point? I’ve heard TMG talk about it but it’s never a specific number.
@@MrRuben536 $1M
The "best market timer ever" should have literally infinite money. Just short right before every downturn. If you had perfect timing there's no cap on what you could earn.
This is the information what a college professor Keith Broman PhD, from the University of Nebraska, shared in 1996. I followed the advice and it worked like a charm all these years later.
Thank you for sharing the information in a manner that savors and investors today can easily digest.
i'm guessing these guys have mentioned in the past but something that doesn't get talked about enough - people often think I can't give up 5-10% of my income. What they don't realize is - especially starting out if you do 401k (pre tax) - 1) a good chunk of gross pay go to taxes, it's not that percentage overall you are giving up ie it's not as much money as you think out of your pay AND you don't miss that money like you think you would which then leads into what they did cover 2) the compounding when you kick in employer match on top with consistent saving - it's crazy that that money turns into.
My parents literally didn’t know how to setup an investment account. Some folks just never look into it but will do it when shown how
When discussing saving X dollars a month, are you including 401k contributions, or just IRA contributions, or just personal post tax savings? Or all three?
I separate out my 401K contributions - which I max out as early in the year as possible b/c time in the market is best. So my "monthly" contributions vary widely, as I go from ~$3K a month to $0 when I hit the limit. I basically don't get a paycheck for the 1-2 quarters of the year. So I usually state that I max out my 401K contributions and do an additional $10K a month + $1K for my kids. I should also count that I max out my ESPP, the principle payments in my homes and maxing out my HSA, but I don't usually quote that. My investing is high, then lower later in the year as I hit statutory limits... if you can't max out items early, I would recommend a monthly $ amount, so you can just set it and forget it (don't forget to invest it, as many brokerages don't auto invest for you).
All of it, what you mentioned plus an employer match too (if your household income is less than $200k). When they mention saving 20-25% they mean compared to your gross income.
@vaderwashere365 wow, that is a great idea. Never even considered that. 🤔
The answer is always “see the FOO”. That’s the order of where to put your next dollar. All saving & investing counts towards your 25%. Any annual addition can be averaged over the year, 6 in one half dozen the other.
@@vaderwashere365of course very few people can go months without take home pay
this was the pep talk i just needed to add another $200 of etf shares. im investing on the high probability that i will still be here to reach my 60s and 70s
The investment life cycle of an dedicated motivated investor: When they get their first job they participate in the 401K. Money is tight so they can't invest any more. About age 35 - 40, they cross a financial line where they can come up with extra money. They choose to automatically have that withdrawn and sent to either a broker, IRA or Roth depending on their knowledge background and their current tax bracket. Afterward, for each raise they send either all or at least a portion to the accounts previously referenced (I calculated the taxes/deductions that the raise would cause and sent the rest to a broker). During this process they study how to invest better (what is a stock, a bond, REIT, etc), taxes, expenses. They decide if owning individual company stock, or owing rental property, or starting a business is for them. Around the age of 55 they can retire if they want too.
I’m so excited… that this episode has CHAPTERS! 👍
If i were you guys, i'd do an episode on drawdowns to inform people of risks with investing over time periods relative to our economic standing n history. And tag it in every video moving forward. If the market sees minuscule gains if not losses over the next few years, demand for this type of content will significantly drop from new investors on youtube.
As Taskmaster said “Some people deserve to be poor”
I know exactly what you mean. My ex girlfriend is horrible with money.
Gambling is hoping luck carries you against the odds.
Investing is hoping luck *doesn't* carry you against the odds.
They mentioned the casino "house" immediately after I posted this and it's exactly how I see it. The market is "the house". There will always be short-term periods where a gambler wins, but eventually the house makes it back up.
As someone who tried to start their career in the GFC and who watched a lot of PBS type documentaries I thought it was all too dangerous and I didn't want to lose my savings.
I just did the minimum for my pension/401(k) because it's something you're supposed to do.
You know what's even scarier? Doing the math how much money you'll need in retirement and realizing you won't get there with the amount you're saving (minimum).
I've been trying to catch up last 4 years by saving 25% + 30% match (32.5% total). Recently I bought a house so I had to cut it back to 16% + match for the time being because we need more cash to fix the house than expected, but eventually I'll get back to 25% (+ match)
What is the appropriate amount of cash to hold though?
I am so thankful to the 20 y/o me, way back, in the early 1980s that saved/invested $20 a month. Given time, even a little grows into a lot!
Retired since age 59. Currently have $2,000,000 in IRA 60%Toal Market ETF (VTI); 20% International ETF (IXUS); 20% Total Bond Market ETF (AGG). I receive about $53,000 per year in dividends and interest on these ETFs which are automatically reinvested into its ETF. Just started SS at 67.5 years (about $39,000 per year). Federal Taxes about 17% currently. At 73 years old I am looking at a first RMD of about $125,000. Can I do a series of Roth conversions to minimize the starting RMD amount?
This is a really fun case study and I was genuinely interested in the outcome (knowing it would be enlightening about what a dedicated investor can do), but there was a cheat here. DCA Diane gets 7 years of growth before anyone else invests? That's not starting on the same page at all. In fact, savings rates in the early 80s were near double-digit so I don't think any of these other investors would have just put the cash under their mattress for the 5 crashes that you listed. I think a much more fair case study would be an annual or semi-annual timeline (not just 5 investments) and the investment should start on Day 1, in this case 1987.
This is one of the best, most informative episodes I've ever seen.
I love it!
This is one to share with all those who are a little nervous about starting their investing journey.
This is why I invest either every Monday or every paycheck (depending on vehicle)
Is Monday supposed to be the best day of the week or something lol
@@MeltingRubberZ28 it is more like dollar cost averaging period. I have my automatic investing outside of payroll deductions firing on Mondays
Best market investor would also sell at peaks but i guess thats clearly too much to ask for :)
I'd be super interested in a comparison with Systematic Sam, who buys when the price crosses above the 200 day simple moving average, sells when price crosses below the 200 day moving average, and dollar cost averages as long as the price is above the 200 day. I know this is going to have a better result, but by how much? Is it a few percent better, or is it significant?
My parents don't believe in the stock market. They think its all bad and you'll loose all your money. They are not wrong but it needs to be done the right way though.
Who said it first? Hahaha
"Fear plays an interesting role in our lives. How dare we let it motivate us? How dare we let it into our decision-making, into our livelihoods, into our relationships? It's funny isn't it, we take a day a year to dress up in costume and celebrate fear?"
oh hello Robert California
It's not said in the video, but being invested is one reason the saying "the rich get richer" is true.
Halloween Special Money Guy episode:
Money guys approach an old, haunted house...
P: "Brian, I'm soooo excited to talk about this"
B: 👀🏃🏻♂️💨
Moneyguy drinking game: every time Brian says "interesting" take a shot
i have to get a will... and i did start too late -- really not until 42 (and have maxed my Roth IRA and do matching w my job now)... I had a few rollover IRAs from a few jobs that have grown some now (trad IRA).. I am 50 now
Bo, I like the beard!
Ayo
Do you guys think Fidelity Fullview is a good way to gauge your retirement readiness?
Love this encouraging content. I’m 19 and I’m exactly like DCA Diane, i’ve putting in AT MINIMUM $400 every week since January. And i feel like it’s done so much for me, I’ve managed to accumulate roughly 23k at the age of 19 and that’s something i’m really proud of especially for such a young age. People around all say “you started super early” or say “you have a huge head start.” I’ve been learning stocks on my own since the age of 16 and when i had the opportunity to work and make actual money, i religiously started investing
You two, and the team of individuals working behind the scenes with you, changed my life so significantly. I found your channel at the start of covid when I had $25k of credit card debt and a -$50k net worth. I work an hourly retail job, so I'm not making tons of money, and I just crossed $100k net worth this month. I'm deliberate with my money, I know which accounts to prioritize, and I feel confident with money now. Thank you so much for doing all that you do.
Congratulations 🎉
The lack of control over stock market gains/losses and timing of gains/losses prevents people from investing.
For those who’ve already won the game, why continue to play when you have accumulated a critical mass that can be evaporated?
There are strategies for all profiles and wealth stages. And a larger nest egg improves your odds of beating financial obstacles.
the new thumbnails make Bo look increasingly like the album cover for Aphex Twin’s Richard D. James Album
I am in cash equivalents (CDs, hysa). How do I get back in if the bottom does not happen.
Don't wait for the bottom. Dollar cost average the money into the market over the next 6-24 months. If you want to invest $10k, just put in $1k/month for the next 10 months.
This was SO helpful! It put into perspective perfectly how to do it and the horizon of when you invest. I definitely understand now the importance of investing every month.
I do the DCA dianne way
Maybe I’m crazy or maybe it’s just the UA-cam compression but something seems off about this video. I believe it looks like you filmed at 30fps with a 1/30 shutter speed rather than a 1/60 shutter speed. If that is the case I recommend looking up the 180 degree shutter rule. If it’s not the case then just ignore my comment 😂
In my opinion, Bo looks better without the beard and mustache l.
Used to listen to these guys all the time while driving all over South tx doing home health.
Now I'm retired age 42. Only took 18 years or so of cheap, miserly living and investing all the leftovers! These guys always made me feel inspired to keep going. Love the optimism and excitement of their show. Started doing an IRA match with my step kids too, an idea I got from this show.
NEVER invest anything in the stock market that you cannot afford to lose.
Question: Say every month you invest a total amount of 100 dollars.
Is it statistically better to divide that investment across everyday in the month, or drop it all on one day in the month?
The fact that Billy Best only won 2nd place suggests to me that dividing the investments into micro daily investment might be better than doing monthly chunk investments.
Currently I am doing it monthly automatic, but I could comfortable change it to daily if there is a statistically significant difference.
Long term, if you have no crystal ball, it doesn't matter.
If you get $100 on Monday and invest $20 today, 20 tomorrow 20 the next day and so on each week then there is more time that you money is out of the market. Vs if you get 100 on Monday and invest 100 on Monday then your money is in the market the whole time. That is the lesson that I gather from Billy vs Diane, Its about your money being invested for longer.
You're going to get yours, the bank will get theirs, the companies and stock brokers are going to get theirs, and the government will mosey on in for a peice of the pie as well. Factoring all that in for long term investing is how I reckon you make money. The volatility things is real, had 200 dollars worth of a stock below a dollar, lost 30 bucks and pulled the plug, looked at it the next month and it jumped to over six dollars a pop. Parts of it lol
Thanks for this video. I got talked into doing more active management of my retirement funds by a coworker to use the brokerage link available. I ended up catching a series of economic doom podcasts and moved about half my funds to cash at age 33. None of their predictions materialized and now I feel silly after waiting 2 years. It wasn't so much risk aversion but more greed return seeking. Anyways I moved my money back out of the brokerage link and am promising myself not to gamble with my retirement again.
I think most people like myself are scared of taxes
Famous words of baseball star "Sammy Sosa", baseball being very good to him. "ME", investing has been very very good to me..
Basically comes down to... money in the market now is better than money in later using any kind of strategy
Yes. But expect anywhere from 4% up to 10% if do broad index fund outside of SP500
there were no Roth IRA's or much of anything except maybe profit sharing w my jobs from youth.... Roth started shortly before i was 30 - i opened 1 at 30 in 2004 w 3k but no one advised me to put it in aggressive so it just sat there until i finally called and figured out what the heck i was doing...
Brokerage accounts have been around over 100 years, and traditional IRAs started in 1975. It’s certainly true that investing as become much more accessible.
Sorry for your loss Brian.
Wait what happened??
Yeah did I miss something?
@@andrewwhitcomb4857 35:21
10% match for 5%?? Can I work for you guys?
Technically, if you can time the market you are going to make the most money assuming that you can also sell. Additionally, if you just bought the lowest point of the market for the year with all the money, mathematically you would always make the most money. So I'm not really sure how their original data can make any sense for the results it got.
If you bought the lowest point of the year with all the money to invest for the year, assuming you can't sell until retirement, you would always have marginally more money than someone who just DCA..
True. Now, where do I buy a crystal ball? Or better, a time machine so I can start investing decades earlier.
These guys are worth their weight in diamonds
Ba-CUZ! Ba-CUZ! Ba-CUZ! 🐓 🐓🐓🐓
In classic money guy fashion they do not account for inflation. In the example of investing from 20-30 vs 30-60, the latter did not invest triple the amount. Money shrinks in value by about 4% every year, so they should increase the investment by that every year.
Just gain the growth in the market and inflation will not be a concern, you will not be in the middle class anymore and your thinking will change as you change.
Where do you get that 4% lol
@@mrjuvy49 I am investing and DCA but they still inflate numbers to make it look even more appealing than reality. These people act like they are in an infomercial. Same with the example of the guy that timed the market perfectly, not sure if he would have less than dca had they increased the savings every year, but since they didn't it matters even more to invest early, and he was 7 years late. DCA is obv best but still they inflate like this to make things look even better. They are overselling instead of being totally honest.
Arr you talking GDP: growth?
Well I love another proof of time in the market beats timing the market.
Nonetheless I don’t think (or didnt noticed it) the handling from Olga and Billy was perfect. Since you described all of the 3 as financial mutants. So I expect them so save their money in a high-yeald-savings account till they invest it. So their invested money should be way higher than the amount they saved.
Of course those examples are just fiction and its hard to calculate over the decades. Nonetheless the result would be interesting.
I have never invested in the stock market, therefore I am incredibly late at 33 and with only about 100 grand in savings. I want to make wise decisions for the future because I'm concerned about losing out on compound interest. Will I still have at least $1 million by the time I'm 65 if I make aggressive investments?
Yes, you can. Investing about 80% of that in the S&P 500 at an 8% annual return will grow to about $805k in 30 years. Financial advisors can achieve 10-15% returns, so do your research and consider consulting one.
Low cost index funds, and diversification is your friend. Don't let your retirement funds feel lonely and left out. Those two are givens..
Most people can be in better situations had they not incurred unnecessary debt. Even having $1k to your name without debt is better than having debt in the six-digit figure.
Also, your lump should be put in cautiously , I personally wouldn't use most of it in the stock market. I don't think you're in a position to invest much* (keyword).
I hope my advice helps, good luck!
@@Dollrnri You have a very valid point, There are tons of benefits to having a financial advisor, but here’s one example: My advisor based a small part of my portfolio on Nancy Pelosi’s portfolio, which is completely legal. That portion has gone up 41% in just six months-take that info as you will.
I'm intrigued by this. I've searched for financial advisors online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
Jennifer Leigh Hickman is the licensed CFA I use and i'm just putting this out here because you asked. You can Just search the name. You’d find necessary details to work with to set up an appointment.
How can I get the koozie?
I'm confused with the Theodore example because zero dollars for initial investment then $500 a month for 40 years 20-60 that's 1.5 million by age 60 where the 1.7 million coming from? Am I missing something?
Investor “dot” gov has a compound interest calculator. Starting with zero dollars, monthly contributing $500 for 40 years. Set interest to 8% interest rate and with zero rate variance. The compounding should be set to monthly. You’ll get $1,745,503.92
Sounds like you had the compounding set to annual.
@@Detectken ooohhhhhh i got u yeah I had it set on annually that's makes more sense on how there getting those numbers, thanks alot
I got 1.745 million. To get 1.5 million I had to use a 7.5% return. Try a different calculator.
I'm so grateful I was Alvin at 21. Ten years later, my number increase is accelerating and I barely contributed in my 20s. I took advantage 100% of the employer match. I had lower paying jobs at the beginning of my career and those measly dollars are working hard!
Shout out to my coworker when I was 21 who advised me to be aggressive about retirement savings because she wished someone would have told her the same (she was approaching 40 at the time).
It is amazing that people are afraid of investing. I can totally understand the fear of not being able to cover your expenses - daily, weekly, monthly, etc. However, if you can cover your needs easily... what else would you do with your excess money? Are people really keeping $100K (legally clean cash) in the bank or under their mattress with zero stock or other investments? Just hard to fathom. Any data around how many people are just putting $10Ks & $100Ks into non-investment accounts/places?
Most people don’t see themselves as having “excess money”. It’s often misspent on debt payments and consumerism. I don’t think many have $100k in legal money under a mattress, I think they find something to spend it on.
@@Natalie_11188interesting. So afraid of investing to likely get a % return, but not afraid of spending and getting 0% return. Again, I can’t even fathom that mindset.
Index investing sounds interesting but its a few thousand$ per share isnt it? Seems like a high entry point. Never actually invested a penny before and only started researching. Are they talking just etfs?
See 27 minutes in. You can invest $1 at a time. Some platforms require a minimum total balance, but that’s not as common anymore.
I'm gonna send this video to people. Such a good overview why you should invest NOW.
I'm curious, let us know if they start investing.
And the S&P 500 has casino companies it 😆
23:18 ...editor/graphics is sleeping on the job lol
Why?
@SuperKamiNeko they throw up a graphic every/first time showing the FOO sheet lol
What if i make too much for the Roth IRA?
Index investing sounds interesting but its a few thousand$ per share isnt it? Seems like a high entry point. Never actually invested a penny before and only started researching
One of the reasons investing nowadays is great is the LOW barrier of entry. You can finds things to buy for way less than 1000$. Plus, some platforms allow fractional shares. Meaning it's possible to start with 1 $.
there's this thing called fractional shares. U can still invest even if you only have $1 to spare.
SCHX is one of the funds I invest in that is around $22. Its a total US stock market fund.
My dad has become his own worst enemy. Hes retired with a good amnt but now he lives in fear of losing it, so now he does not have enough exposure in equities. I think this is when you should also hire a financial advisor, but how do you convince the more mature age folks to do this when they don’t think you know anything bc they will always think youre just an ignorant kid?
Try talking about when certain portions of his money will be needed, the "time horizon" for different portions of his money. The next three years of expenses should be in cash/HYSA/CDs. 3-8 years, should be bonds. 8+ years should be stocks. Here's an example to break it down. If he has $2M, spends $100k/year and expects to live 15 more years, then $300k (15%) should be in cash equivalents, $500k (25%) or so should be bonds, and $1.2M (60%) should be stocks. In this example, since he doesn't expect to live long enough to spend all his money, he has a cushion or a legacy to leave his kids (which would have a much longer time horizon and should be in stocks anyways).
Love the case study guys. I invest 25% of my income every single week I don't care if the market is at an all-time high or if it just crashed, I keep investing the same amount each week. I completely ignore it throughout the year so any kind of fluctuations don't mess with my emotions. I check it once a year to see how it performs and make any adjustments but I never stop investing that same 25% no matter what.
How do you do that? I max out my 401K - which auto-invests based on my allocations, but to get to 25% I have a monthly transfer set up to my brokerage, but it doesn't auto invest. I have to go into it every month and allocate the monthly transfer to whichever stocks/EFTs/index funds I would like to purchase. Does your brokerage allow an auto invest every month? If so, which brokerage do you have?
So Theodore ends up with Alvin and Simons total to the exact dollar amount.