Let's talk about investments

[SomethingNew]

I tried to find a thread about personal financing and investment strategy. But I don't see that many, if this is duplicated, will gladly let admin know to delete.

Anyhow, interested to hear your view on personal investment strategies. Do guys have any preference when setting up financial goals or how to invest discretionary funds, outside of fulfilling monthly mortgage and household payments? What works for you and what doesn't?

Investment to me is anything extra and outside of your everyday needs, mortgage, 401K, education funds, etc. When I was younger, I loved playing with the stock market and did a little bit of day trading (while at work ). It was just so exciting and all my friends were doing, but then I got burnt pretty badly as I didn't know better and never had any luck picking the right stocks. So the money I saved pretty much all flushed down the toilet... think Webvan (someone still remember that company?).

Fast forward to now, my husband and I have been pretty frugal. We have been saving and investing in real estate. We bought our first home a little over 12 years ago, then sold that one in two years, and bought the house where we are living now. Since then, we have saved small pots of down payments and bought two small condos for rental. It definitely hasn't been easy, which means no lavish vacation, dine outs, date nights, etc. We don't have much in the stock market anymore, other than the 401K that we each have. Sometimes I do worry that we have all together three mortgages, that is A LOT OF debt, plus our kids are young so just the thought of college tuition makes me cry. However, sometimes it is nice to see our equity (though unrealized) is growing slow and steady. At the rate this housing market is going now, we are hoping eventually the two condos will be paid off and will be our gifts to each kid when they start their own family. We feel like that's one thing we can do for them is to get into the real estate market earlier than later. We are trying to save up another small pot of cash, as we'd like to buy a third property in two or three years.

What about you guys? Any interesting investment experience to share? I have a friend who invested in Hermes bags and actually made money. I love the idea, something you get to wear but also make money. But it is not a small amount of money for each purchase, plus finding the right buyer who would want it.

 

[missy]

We are very diversified in our investments. Real Estate, Stocks, Bonds, etc and we have maximized/maximize our retirement funds (401K, SEP IRA) etc. As time goes on we take funds from more risky investments and put them into less risky investments and we have what we feel to be a healthy ratio of risk in our portfolio for our age. That is, we balance risk and returns in a way that provides a combination of safety and portfolio growth.

We have fully paid off both our homes.

We have our living wills, powers of attorney (DPA, MPA) trusts all set up in the best way possible to maximize the benefits for our beneficiaries (including the surviving spouse). We keep it all current and keep up with the federal and state tax laws which are always changing.

We have also planned for our future long term health care should we need it and we have long term care insurance. Which gives us much flexibility. We can have care at home should we need and want it vs going to an institution for long term care.


The key, IMO, is to start investing as early as possible because the younger you are when you start (the more years of investing power) the better off you will be. It pays off exponentially the earlier you start. And it is never too early so get your kids involved too.

 

[SomethingNew]

Congrats on paying off the home! That's a big deal and can't imagine the big relief and the financial freedom. We are currently maxing out on our 401K, but don't have a separate IRA, something I need to look further into. But in terms of retirement funds, I think we are doing okay. We have separate 529 for the kids, with the rate with tuition is going, I don't think the 529 will cover, but hopefully a big chunk to help.
We also just finished with our living trusts, it was a lot of work initially but definitely our best decision to do it because it helped us to keep organized with our assets and a starting point on how we want to allocate the assets.

You made a very good point about long term care, we haven't thought about it. I actually don't know what it entails, but it is never too early to start thinking about that.

When I was a kid, my parents didn't really talk about personal finances. They didn't even have much of a concept because we didn't have a lot to begin with. But that's a good point, we need to start teaching our kids early about financial management.

 

[Mrs_Strizzle]

I remember as a young adult I was told to strive to have multiple sources of income, and that's what we have done. Hubby has military and VA pension, we have money in our old retirement stock accounts, but the mass majority of our investment is in real estate. A large amount of our real estate investments are paid off, so it is straight cash flow. Luckily hubby started buying a house at every city he was stationed at 20 years old and kept them. As we grew we now have a significant part of our portfolio in multifamily where one unit pays the mortgage (if there is one)and the rest is cash flow. I feel like grace smiled on us as we live in an affordable part of the country and bought at the right time.
It wasn't always easy, and sometimes I too got spooked when contemplating the debt that real estate brings, but the fruit it bears is amazing. Other people paying it off can't be beat.

@SomethingNew you are doing great, Mama. Live below your means and keep growing. You are being the example for your littles and also taking the burden off them by providing enough to take care of yourself in your golden years. We have 5 kids from 22 to 12. We talk to them constantly about starting young and investing in themselves. There's nothing really special about us. We never made a ton of money working for the military and for someone else. It was just laser focus and sometimes holding my nose and jumping right in! My 19 year old now has decided her aim is to retire (from working for someone else)even younger than we did, in our early 40s lol. Have at it, girl. It can be done! (maybe harder with 5 kids tho )

 

[Mreader]

We are very diversified in our investments. Real Estate, Stocks, Bonds, etc and we have maximized/maximize our retirement funds (401K, SEP IRA) etc. As time goes on we take funds from more risky investments and put them into less risky investments and we have what we feel to be a healthy ratio of risk in our portfolio for our age. That is, we balance risk and returns in a way that provides a combination of safety and portfolio growth.

We have fully paid off both our homes.

We have our living wills, powers of attorney (DPA, MPA) trusts all set up in the best way possible to maximize the benefits for our beneficiaries (including the surviving spouse). We keep it all current and keep up with the federal and state tax laws which are always changing.

We have also planned for our future long term health care should we need it and we have long term care insurance. Which gives us much flexibility. We can have care at home should we need and want it vs going to an institution for long term care.


The key, IMO, is to start investing as early as possible because the younger you are when you start (the more years of investing power) the better off you will be. It pays off exponentially the earlier you start. And it is never too early so get your kids involved too.

I’m curious about your LTC policies. When I’ve looked into it they seem really expensive and plans aren’t great. I read you can be denied of you have family history of certain illness or depression. Did you find good plans? Get help in finding them? I realize it’s a Segway off the original topic but I’m curious.
Most of our $$ is in the stock market. It seems the fastest way to grow your funds. We have an advisor who does the work of picking and choosing stock though.

 

[Mreader]

@Mrs_Strizzle so smart to buy houses when young!! Wow! I wish I would have done that. I didn’t have a clue when I was 20 lol.

 

[kenny]

IMO the best investment is buying your first house at the youngest age possible.
If you don't have the down payment then pay PMI, private mortgage insurance just to get the process started with the most expensive house you can swing.
When value rises refinance to take out equity to buy your next property.
Lather Rinse Repeat.

Always buy the crappiest fixer-upper house in the best neighborhood you can afford.
The only thing you can't upgrade on a house is its location.
Live in it while you fix it up.
Do as much of the work as possible yourself.

Lather, Rinse, Repeat for 50 years.

Sure, real estate prices can fall too, but over the long term you'll do very well.
Why?
Because you are using OPM, other people's money.
Example, you buy a $100,000 house with $20,000 down.
You put in $20,000 but you are getting growth on not $100,000, but $20,000.

When the house's value rises to, say, $150,000 refinance for the maximum you can, or 80% of it's current value, or $120,000.
Use that $120,000 to buy your next house.
20% down payment on $600,000 is $120K.
Or buy two $300,000 houses.
Rent out all the houses that you formerly lived in while you enjoy living in your ocean-front Malibu estate.

Did I do this?
No.

My point is paying off a house is the worst thing you can do investment-wise.

Variations: sell the houses instead of refinancing and renting them out - or do the same with rental buildings like apartments.
You'll make even more money but have the hassle of being a landlady/lord.

 

[musicloveranthony]

I'm really fortunate that when I started working my dad pushed me to invest at least enough in my 401K to get employer match. Now, at 36, I have a healthy 401k to which I contribute the max. I also have a home with over 50% equity.

About 6 years ago, I set up a personal investment account. I put two paychecks in it and forgot all about it until this January. Fortunately, it did pretty well over those years; with an 80% return. I wish I'd done more with it, though.

This January I started investing more actively. Started out with a passively managed account (Acorns app - set to aggressive) in which I'm up 28% since January.

On October 1 I decided to take the plunge and try to actively manage an account. No day trading or anything fancy; just a handful of stocks and a handful of ETFs. That account is up 11.5% just since October 1 and I think it should continue on a rapid trend (at least I hope so).

All in all, I really wish I'd started sooner. I think I could be pretty close to retirement (I'm 36) if I had started doing this when I started working (age 14). As is, I would like to retire by age 52. Of course, I could get there a lot sooner if I didn't have a $1250-$1500 a month restaurant budget and a pricey (to me) gem and jewelry budget.

 

[kenny]

Stoopid me ...

Correction to the above post (too late to edit).

Wrong: "You put in $20,000 but you are getting growth on not $100,000, but $20,000."
Right: "You put in $20,000 but you are getting growth on not $20,000, but $100,000. "

 

[AprilBaby]

I invested in Apple stock 11 years ago and I’ve made a killing.

 

[Mreader]

@kenny my head is spinning when I read your post; and saying it doesn't make sense to pay the house off. But why not bc you pay so much interest that if you buy a home for 200k if you pay it off slowly isn't it like paying 343k if you have say 4% interest?

 

[LilAlex]

Sometimes I do worry that we have all together three mortgages, that is A LOT OF debt, plus our kids are young so just the thought of college tuition makes me cry

I think this is the highest priority. Would make a lot more sense, imo, to put this into 529 plans for your kids than save a condo for them.

One can "make a lot of money" in real estate but most do not. It is undiversified (a few properties in your country and your local market), expensive to maintain (add up the typical expense for property tax, utilities, maintenance, hours devoted, vacant/unoccupied time). Unlike, say, in the US stock market, in real estate it is very hard to replicate others' past success. (Emphasis on "past")

There is very good guidance out there about what one "should" invest in. There will be a lot of responses about what others have done. Hitting a home run on Apple or crypto is not a strategy; do not confuse a good outcome with a good strategy.

Here goes (and this is what we have done for decades): for most people, the best bet is low-cost index stock mutual funds/ETFs and index bond mutual funds/ETFs, in the ratio that allows you to sleep at night. (100% stock can lose 50% of its value in the blink of an eye vs. bonds are paying very little now -- which, ironically, has contributed to the run up in the stock market.) Most people are in the 70:30 to 50:50 ratio, except the very young earners (my kids), who may be 100% stock.

The total US stock market has more than doubled over the last year and a half so you do not necessarily need anything exotic to make a killing. Mostly you need "time in the market." This is why the rich are feeling no pain right now. Six percent inflation? When your portfolio is up > 20% in 2021 alone?

The other most important thing is to not pay someone 1% or 1.5% annually for "managing your money" -- either in the form of a fee you pay your "advisor" or in the form of a high "expense ratio" for investing in some product. (Often it's both -- like for awful Edward Jones and other "full service" brokers.) On sites like this (https://www.dinkytown.net/java/compare-investment-fees.html), it is very easy to demonstrate that over the course of your investing life (30 - 40 years), your advisor will earn more from your investments than you do. Yes, you read that correctly. Little has changed since "Where are the Customer's Yachts?" was published over a half-century ago.

(In contrast, it's fine to pay a CFP/fiduciary advisor a one-time $1,000 fee to look at everything and give you advice.)

Do not buy hot stocks or hot funds; there are ample objective data that typical investors fare way worse than the market as a whole because they buy high ("I'm giddy!") and sell low ("I'm scared!") -- and that is the exact opposite of a winning strategy. The only way to guarantee that you are buying more inexpensive shares and fewer expensive shares is to invest the same dollar amount every week, month, or paycheck. Look up "dollar-cost averaging." This is one of the many reasons that workplace pre-tax investing for retirement is so successful. And if you have a "match" at work, this your highest priority for investing: max your match.

Spouse and I know that we have made every mistake in the book, but we had the good fortune to make them all when we were very young and had no money .

I could write for days on this (maybe I have ) but with just this information, you will probably be in the 90th percentile of retail investors, knowledge-wise.

EDIT: this is not my field but many in my field ask for my advice about this

 

[kenny]

@kenny my head is spinning when I read your post; and saying it doesn't make sense to pay the house off. But why not bc you pay so much interest that if you buy a home for 200k if you pay it off slowly isn't it like paying 343k if you have say 4% interest?

Sure, living in a paid off house feels good.
Paying interest doesn't feel good - though it IS tax deductible.

But paying off house your is not using your wealth (equity) to build much greater wealth, which is what my post describes.
Some feel that unused equity is a huge wasted financial opportunity.
Sure when you sell your paid off house you get all that appreciation, but it's for only on one house, not 10 or 20.

Another way to look at it ...
If you buy a $100K house with 20% ($20K) down you have an investment of $100K that can grow.
But the magic is OPM, other people's money.
$80K of that $100K is OPM.

For $20K you enjoy the growth of a $100K investment.

 

[LilAlex]

^ This is called using leverage. It is not unique to real estate. It is using borrowed money to invest so that when things go well, your return appears to be multiplied. When things go poorly, you get clobbered. In a market that marches relentlessly upward with no major crashes, we would all do this -- you could triple your gains and triple your (tiny) losses and still come out way ahead. Many people do the exact same thing in the stock market by buying "on margin" or by investing in leveraged "3X" and even "4X" funds that triple/quadruple your "exposure" to stock market risks and rewards. (I would not do this.)

In real estate, this is also a super-popular way to go bankrupt. It will not necessarily keep you from being President, even if it happens over and over. All the "flippers" you read about? This is what they are doing. In a hot market, you just need to find "some greater fool" to sell to. But if you own multiple properties when the music stops (the music always stops), then you go bankrupt. This is extremely common.

The real reason that most of our parents and grandparents benefited from owning their own home (farm, etc.) and investing in it from a young age is that it was a piggybank; it was forced savings, and the ensuing living-below-you-means enabled them to sock away a lot of untouchable money in the form of home equity. In contrast, if you choose to "buy" your own home early but have a huge mortgage with low payments and credit card debt and auto loans, that is the exact opposite.

Even if things go well, real estate can be a "winner" in absolute terms ("I made a lot of money!") but not in relative terms (I made way less than I would have had I invested some other obvious way!"). For example, my home in a MCOL area that is turning into a HCOL area, has -- over 25 years of ownership -- been one of our most lackluster investments. (I mean it has nearly tripled in value but if this money were invested in the total US stock market, it would have increased 12-fold in that timeframe.) But it has kept us warm and dry (mostly ).

 

[kenny]

LilAlex, thanks for mentioning the risk of this strategy.

All investments have risk though some more risky than others.

I've heard of aggressive RE investors constantly pulling out equity and keeping every property as highly mortgaged as possible, IOW 80% loan to value.
That's more risky than the exact same investment strategy executed in a more conservative (lower-risk) way.
Example would be refinancing to pull out only 60% of the value instead of 80%.
60% is safer than 80% during RE values decline, but still much more profitable than paying off your house.

Some people pay off only the house they live in, but do all this investing stuff with other money.
This "other" money may have come from refinancing the house they live in.

 

[Matata]

@SomethingNew you should take a look at Fidelity.com. It's what we use for our investments.

Fidelity is a full-service brokerage offering commission-free, online stock, mutual fund, and ETF trades with no account setup fees and no minimum balance requirement. ... Fidelity also supplies free advice to all clients, affordable robo-advisor services, and dedicated investment advisors for high-net-worth clients.

Fidelity Financial Advisor Services Review 2024

This review of Fidelity Investments financial advisor services includes pros and cons of investing with Fidelity so you can decide how it suits your investing needs.

www.moneyrates.com

Also check out Jim Cramer to learn about investment opportunities https://www.cnbc.com/2021/10/01/jim...ith-a-focus-on-building-long-term-wealth.html

 

[LilAlex]

@SomethingNew you should take a look at Fidelity.com. It's what we use for our investments.

Fidelity is fine for a brokerage account. So is Vanguard or Schwab.

The new "robo-advising" models (kinda "one size fits most") like the one at Fidelity will steer you toward Fidelity's higher-fee actively-managed funds or their target retirement date funds; both have fees that are 10X higher than the competition. Not terrible but not ideal; certainly a reasonable place to start. (I know they do this in their workplace retirement plans, too, since my daughter was just "escorted" into their 0.5% fee target-date fund instead of a much cheaper version from someone else -- even tho' she specifically signed up for the cheaper flavor.) But certainly worlds better than an Edward Jones, etc.

Active management ("trying to beat the market") almost never beats passive index investing over the long term. Google the SPIVA Active vs Passive Scorecard (source of this screenshot, reflecting a 20-year lookback comparison of index funds -- which track a benchmark -- and actively-managed funds that try, remarkably unsuccessfully, to "beat" that benchmark). You really only need to look at the one pie chart in the upper left.

Yes, I know I am an arrogant, mansplaining, preachy know-it-all but, unlike sapphire colors, this stuff is not subjective and I have a shot at actually helping someone.

 

[Matata]

Yes, I know I am an arrogant, mansplaining, preachy know-it-all but, unlike sapphire colors, this stuff is not subjective and I have a shot at actually helping someone.

Not arrogant, but perhaps talking about the level of understanding of noobs. I have no talent and interest in the subject except for what I've dabbled in the past 2 wks with my DH trying to teach me but I keep nodding off He knows what he's doing. Due to his investments and management thereof, we are one percenters according to this chart.

 

[canuk-gal]

Fidelity is fine for a brokerage account. So is Vanguard or Schwab.

The new "robo-advising" models (kinda "one size fits most") like the one at Fidelity will steer you toward Fidelity's higher-fee actively-managed funds or their target retirement date funds; both have fees that are 10X higher than the competition. Not terrible but not ideal; certainly a reasonable place to start. (I know they do this in their workplace retirement plans, too, since my daughter was just "escorted" into their 0.5% fee target-date fund instead of a much cheaper version from someone else -- even tho' she specifically signed up for the cheaper flavor.) But certainly worlds better than an Edward Jones, etc.

Active management ("trying to beat the market") almost never beats passive index investing over the long term. Google the SPIVA Active vs Passive Scorecard (source of this screenshot, reflecting a 20-year lookback comparison of index funds -- which track a benchmark -- and actively-managed funds that try, remarkably unsuccessfully, to "beat" that benchmark). You really only need to look at the one pie chart in the upper left.

Yes, I know I am an arrogant, mansplaining, preachy know-it-all but, unlike sapphire colors, this stuff is not subjective and I have a shot at actually helping someone.

So much Corundum. I'll never view it the same way again.

 

[LilAlex]

Due to his investments and management thereof, we are one percenters according to this chart.

Oh, that's Kashmir sapphire territory for sure! Maybe the avatars help us stratify!

This stuff is like "wellness" (which, in a way, is my field); although there are like a trillion words about each on the internet, the things you need to know could be written on a 3x5 card (remember those?) -- and probably just on the front!

Even among our friends and family, the amount of money that gets wasted courtesy of the "financial services" industry is just staggering.

 

[whitewave]

1) no mortgages/debt
2) pay a professional
3) stock market, stock market, stock market


YMMV

 

[Mreader]

1) no mortgages/debt
2) pay a professional
3) stock market, stock market, stock market


YMMV

That’s our strategy

 

[Matata]

@LilAlex, there was a typo in my post above. I mean to say you were perhaps talking ABOVE the level of understanding of noobs not ABOUT their understanding. Huge difference in meaning there and I'm sorry for the miscommunication. My proofreading skills are crap lately.

 

[LilAlex]

I mean to say you were perhaps talking ABOVE the level of understanding of noobs not ABOUT their understanding

Oh no worries -- I think I figured that's what you were saying!

 

[diamondseeker2006]

We also use Fidelity and put money in low fee mutual funds over many years and just watched the money grow. Over time, putting money into a diversified fund such as a S&P 500 index fund (I like NASDAQ better since it is more weighted with tech stocks) will do better than almost any financial advisor/stock broker and definitely has lower fees. The key is to not panic in a bear market. You have to keep putting the money in and take advantage of buying at lower prices when the market is low.

We were offered a portfolio manager/investment advisor through Fidelity, but fortunately I had read that we were already doing the right thing. Warren Buffet's instructions for his remaining fortune that would to go to his wife if she outlives him is to put 90% in an S&P 500 index fund (low fee) and the other 10% in government bonds.

Nice brief article for beginning investors:

Warren Buffett: Stock market investing tips for 'the average person'

Even when the stock market is bumpy, as it has been this December, "the average person" would be wise to stick to this investing strategy, says Warren Buffett.

grow.acorns.com

I think the big key to long term wealth is not only smart investing but to live within ones means and be as debt-free as possible (not talking about real estate investing). We were able to retire early with these strategies and with no reduction in income.

 

[diamondseeker2006]

I think this is the highest priority. Would make a lot more sense, imo, to put this into 529 plans for your kids than save a condo for them.

One can "make a lot of money" in real estate but most do not. It is undiversified (a few properties in your country and your local market), expensive to maintain (add up the typical expense for property tax, utilities, maintenance, hours devoted, vacant/unoccupied time). Unlike, say, in the US stock market, in real estate it is very hard to replicate others' past success. (Emphasis on "past")

There is very good guidance out there about what one "should" invest in. There will be a lot of responses about what others have done. Hitting a home run on Apple or crypto is not a strategy; do not confuse a good outcome with a good strategy.

Here goes (and this is what we have done for decades): for most people, the best bet is low-cost index stock mutual funds/ETFs and index bond mutual funds/ETFs, in the ratio that allows you to sleep at night. (100% stock can lose 50% of its value in the blink of an eye vs. bonds are paying very little now -- which, ironically, has contributed to the run up in the stock market.) Most people are in the 70:30 to 50:50 ratio, except the very young earners (my kids), who may be 100% stock.

The total US stock market has more than doubled over the last year and a half so you do not necessarily need anything exotic to make a killing. Mostly you need "time in the market." This is why the rich are feeling no pain right now. Six percent inflation? When your portfolio is up > 20% in 2021 alone?

The other most important thing is to not pay someone 1% or 1.5% annually for "managing your money" -- either in the form of a fee you pay your "advisor" or in the form of a high "expense ratio" for investing in some product. (Often it's both -- like for awful Edward Jones and other "full service" brokers.) On sites like this (https://www.dinkytown.net/java/compare-investment-fees.html), it is very easy to demonstrate that over the course of your investing life (30 - 40 years), your advisor will earn more from your investments than you do. Yes, you read that correctly. Little has changed since "Where are the Customer's Yachts?" was published over a half-century ago.

(In contrast, it's fine to pay a CFP/fiduciary advisor a one-time $1,000 fee to look at everything and give you advice.)

Do not buy hot stocks or hot funds; there are ample objective data that typical investors fare way worse than the market as a whole because they buy high ("I'm giddy!") and sell low ("I'm scared!") -- and that is the exact opposite of a winning strategy. The only way to guarantee that you are buying more inexpensive shares and fewer expensive shares is to invest the same dollar amount every week, month, or paycheck. Look up "dollar-cost averaging." This is one of the many reasons that workplace pre-tax investing for retirement is so successful. And if you have a "match" at work, this your highest priority for investing: max your match.

Spouse and I know that we have made every mistake in the book, but we had the good fortune to make them all when we were very young and had no money .

I could write for days on this (maybe I have ) but with just this information, you will probably be in the 90th percentile of retail investors, knowledge-wise.

EDIT: this is not my field but many in my field ask for my advice about this

Yes!!! You have given so much good advice, and we have the same view and strategies!!!! (...unlike my in-laws who thought Edward Jones was a good idea. Then that person changed to another firm and moved their money there. Makes me sick. But the moment my husband inherits his portion, that money will be moved to Fidelity!)

 

[sarahb]

My brother, who was not even 20, was recruited by a company called Microsoft back in the mid 1980's. So he dropped out of college, moved to Seattle & went to work. What a family uproar this was when it occurred. I had already left home when this occurred.

He called us at some point & said 'you must buy this company when it goes public'. So in my mid 20's, we bought Microsoft the week it IPO'd, and never looked back.

I added to the position at different points & basically just left it alone.

As time went on, we added other stocks & diversified. We are quite conservative with our lifestyle, and our portfolio is a combination of stocks, funds, 401k's & Sep Plan's, all enclosed in a trust via Fidelity & Vanguard. My brother went on to an incredible career & later on graciously paid the college educations for all 4 of his nieces & nephews. What a guy.

 

[LilAlex]

He called us at some point & said 'you must buy this company when it goes public'. So in my mid 20's, we bought Microsoft the week it IPO'd, and never looked back.

Congratulations!

And: this is the perfect example of a good outcome that is not a good strategy (with apologies to @sarahb) -- meaning one can not learn good habits from this example or reliably replicate this success. The best investors in the world with their armies of "quants" and billions in invested assets can't even beat their benchmarks, let alone find the next Microsoft.

(It reminds me of the frequent poster here who acquired a chest full of fine gems at a yard sale for a few dollars; it is completely amazing -- but not actionable.)

It also fosters the notion that if I can just find that next Microsoft (Apple, Netflix, Tesla, bitcoin...), there will be easy money. Way(yyyyyy) more money is lost trying to find the next Microsoft than is made in Microsoft. (EDIT: I made that up, but I am sure it is true!)

For example, many of us have followed the "meme stocks" with amusement. Or the IPO last week of Rivian, the maker of electric trucks. I say "maker" because they are not yet a "seller" of said vehicles; they have zero sales (although they did make 150 or so to test-drive around the neighborhood). But their highly successful IPO gave the company a valuation of $100 billion, give or take -- way more than Ford. Ford actually sells cars (!) -- over 4 million of them last year alone. So obviously there are a lotta folks treating this IPO like Megabucks tickets.

Unless you are trading based on inside information (which is not legal in the US -- like if you are an employee), you will never know more about a company than the market already does. (This was not necessarily the case pre-internet, but it sure is now.)

We are over a decade into an incredible -- and maybe unprecedented -- run-up in the US stock market, during which almost any kooky combination of stock picks will have produced a nice return. This has led to overconfidence in amateurs' ability to pick winners. Many of these amateurs are young and have never known a world -- apart from a very brief hiccup early in the pandemic -- where the stock market has not gone straight up with 10% annual returns.

The most successful investors recognize that it is discipline and not luck that is rewarded. That can be learned and put into practice, usually with good results.

 

[SomethingNew]

@SomethingNew you should take a look at Fidelity.com. It's what we use for our investments.

Fidelity is a full-service brokerage offering commission-free, online stock, mutual fund, and ETF trades with no account setup fees and no minimum balance requirement. ... Fidelity also supplies free advice to all clients, affordable robo-advisor services, and dedicated investment advisors for high-net-worth clients.

Fidelity Financial Advisor Services Review 2024

This review of Fidelity Investments financial advisor services includes pros and cons of investing with Fidelity so you can decide how it suits your investing needs.

www.moneyrates.com

Also check out Jim Cramer to learn about investment opportunities https://www.cnbc.com/2021/10/01/jim...ith-a-focus-on-building-long-term-wealth.html

Thanks, my 401K is with Fidelity (thru my company), but I have not clue about what services they can extend to the individual 401K account holder, I will definitely take a look..... great tips!

 

[SomethingNew]

I remember as a young adult I was told to strive to have multiple sources of income, and that's what we have done. Hubby has military and VA pension, we have money in our old retirement stock accounts, but the mass majority of our investment is in real estate. A large amount of our real estate investments are paid off, so it is straight cash flow. Luckily hubby started buying a house at every city he was stationed at 20 years old and kept them. As we grew we now have a significant part of our portfolio in multifamily where one unit pays the mortgage (if there is one)and the rest is cash flow. I feel like grace smiled on us as we live in an affordable part of the country and bought at the right time.
It wasn't always easy, and sometimes I too got spooked when contemplating the debt that real estate brings, but the fruit it bears is amazing. Other people paying it off can't be beat.

@SomethingNew you are doing great, Mama. Live below your means and keep growing. You are being the example for your littles and also taking the burden off them by providing enough to take care of yourself in your golden years. We have 5 kids from 22 to 12. We talk to them constantly about starting young and investing in themselves. There's nothing really special about us. We never made a ton of money working for the military and for someone else. It was just laser focus and sometimes holding my nose and jumping right in! My 19 year old now has decided her aim is to retire (from working for someone else)even younger than we did, in our early 40s lol. Have at it, girl. It can be done! (maybe harder with 5 kids tho )

This is very inspirationally, really, I mean, it definitely is not easy for us, we have a humble income, living in an expensive city and a relatively young family to feed. So it's not like we have a lot of disposable income to invest, just been trying to scrape up whatever we can. After mortgages, 401ks, and monthly expenses, there really is nothing left from my husband's paycheck. our condos are barely break even now, sometimes have to cough up funds for repairs and turnovers. Fortunately, I have in-laws to help pick up kids from school, so I can work and my paychecks go to 529, vacation once a year, emergency funds and the rest, if any, can go investment. We didn't really have an investment plan at all, and we still don't, it just so happen that way when we bought our first home, than later the condos. We are in the middle of setting up our living trust and realized most of our net worth are now in real estate. Sometimes, I feel like we could be making a fortune had we buy more stocks and not the condos, but I probably would have done the same anyway.

I love hearing you guys' various investment strategies and how you handle risks, especially with many high net worth individuals here, definitely a lot for all of us to learn from.