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It's not timing, it's price. That's something every investor can manage.
Long term it's timing. Because you might invest money right before an unexpected crash, or you might experience the serendipity of investing at the start of a long stock market upswing. And many of life's more mundane happenings will dictate your timing.
But what is price? A penny stock is cheap and Berkshire expensive? It's all relative, and the drop or gain long term will be more dictated by the above. Sure you might find an unknown genuine bargain. I found 2 that I can remember in 35 years.
Long term it's timing. Because you might invest money right before an unexpected crash, or you might experience the serendipity of investing at the start of a long stock market upswing. And many of life's more mundane happenings will dictate your timing.
But what is price? A penny stock is cheap and Berkshire expensive? It's all relative, and the drop or gain long term will be more dictated by the above. Sure you might find an unknown genuine bargain. I found 2 that I can remember in 35 years.
if the largest companies in the world go to zero you got more to worry about then stock prices
They did almost go to zero... some of them like Washington Mutual and Lehman bros do not even exist anymore and companies like Ford were on the brink of extinction... were you asleep in 2008?
If you only speculate in a few individual companies and subject yourself to the rise and fall of just those companies then to me that is not investing that is speculating.
when you buy a diversified fund, index or enough individual companies to diversify away individual company risk you have very little individual company risk to deal with ,just market risk..
Since the stock market has now turned into a giant casino does that include several crashes along the way when your investment turns to zero?
This.
At least investing in real estate, I know exactly what it is that I own. I invest in all the monopoly-money, shell-game paper products as well. But I don't feel as comfortable about those as I do owning land.
Here is a cool story. A co-worker had been renting a home in a neighborhood for over 20 years. The home was owned by a man that owned 10 homes all on the same street. Back when the homes were being built he wanted to buy one of them. He had the income to support buying more than one of those homes. Somehow he found out that he could purchase three homes on his income. This was back in the late 1970's. This was also back when banks were not as connected to each other as they are today. What did this guy do? In one day he went to a bank and was able to finance the purchase of three homes. He then went to another bank and financed the purchase of three more homes. By the end of the day he had purchased 10 homes. He was able to rent nine of the homes out and he lived in one of them. I am not sure how he did it or if he used the first three homes as collateral to get the other homes. I have no idea how the process worked other than he was able to do this within a day or so.
Over the next 30 plus years those homes helped finance the purchase of other properties. Back in 2005 the owner of the homes decided to retire and he started selling off his properties. This co-worker that has rented the home out all these years and had acted as a manager of sorts, collecting rents, taking care of the homes, ended up buying the home he was in. While no one can time the market this man fell into a time frame of growth. He built a net worth and was able to liquidate his holdings at one of the best times in the history of real estate from a sellers perspective. Not wanting to deal with renters or management of real estate he cashed out and invested in other vehicles.
We don't live in that world and most of us may have never had the idea or the ability to chase that idea. Still I like the story and it has given me the idea to search out those areas that can add value to my life. Search out the ideas that i can chase.
Here is a cool story. A co-worker had been renting a home in a neighborhood for over 20 years. The home was owned by a man that owned 10 homes all on the same street. Back when the homes were being built he wanted to buy one of them. He had the income to support buying more than one of those homes. Somehow he found out that he could purchase three homes on his income. This was back in the late 1970's. This was also back when banks were not as connected to each other as they are today. What did this guy do? In one day he went to a bank and was able to finance the purchase of three homes. He then went to another bank and financed the purchase of three more homes. By the end of the day he had purchased 10 homes. He was able to rent nine of the homes out and he lived in one of them. I am not sure how he did it or if he used the first three homes as collateral to get the other homes. I have no idea how the process worked other than he was able to do this within a day or so.
Over the next 30 plus years those homes helped finance the purchase of other properties. Back in 2005 the owner of the homes decided to retire and he started selling off his properties. This co-worker that has rented the home out all these years and had acted as a manager of sorts, collecting rents, taking care of the homes, ended up buying the home he was in. While no one can time the market this man fell into a time frame of growth. He built a net worth and was able to liquidate his holdings at one of the best times in the history of real estate from a sellers perspective. Not wanting to deal with renters or management of real estate he cashed out and invested in other vehicles.
We don't live in that world and most of us may have never had the idea or the ability to chase that idea. Still I like the story and it has given me the idea to search out those areas that can add value to my life. Search out the ideas that i can chase.
There was w-a-a-a-a-a-a-a-a-a-a-y-y-y-y more opportunity in the 60's, 70's and into the eighties. Anyone that doesn't think so is either kidding themselves, clueless or simply flat out lying.
Most American's do not need to save a million at retirement even if you go by the numbers of these experts. The problem is they like to spin the data in a way where it creates the most dramatic effect/doom and gloom. If you do the math most Americans need less then a million at retirement. My calculations are done in TODAY'S dollar value to avoid confusion. Meaning what would each and every American need today if they retire. I'm using the standard formula suggested by a majority of retirement experts:
A. 4% withdrawal rate
B. Which is used to replace 75% of your income.
$1 million in the bank lets you withdraw $40K/year. $40K is 75% of $53K. Making $53K puts you at approximately the 77th percentile of Americans. So therefore, approximately 76% of American's can retire comfortably without a million in the bank. And this is before accounting for SS income.
My dad retired with a paid off house and $25K in a profit sharing fund (no pension). He died 12 years later and each of his six kids got $8500. Dad did not live lavishly but he did ok. He lived in a senior complex where rent was based on income so his was next to nothing. He usually ate dinner with one of us kids.
If at all possible, I would choose to live with one of my kids. I'd rather they inherit what I've saved than I spend it on a senior apartment.
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