How to Generate Income (older, mortgage, return, annuity)
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This is confusing to me. I had heard index funds were good, so what changed? And I don't know what VWINX is.
I started looking at Bogleheads but maybe it is over my head, having no investing experience whatsoever.
That's why I suggest reading Jack Bogle's primer that I linked earlier. I am even more convinced now knowing your educational background and your PHD in psychology. They are perfect for the task at hand. You have skills with numbers and math and are very capable at writing code and problem solving by linking pieces together. Also your background in psychology lends itself to understanding market and investor psychology. Have a go and you may have found an interesting study of yourself and market behavior. Read the book first it is a great primer and will probably be your first of 4-6 Bogle related books.
Someone said index funds are no good. But I don't know why they think that.
You need to make your mind up yourself there is a very active effort by the active investing professionals to scare folks away from index funds. However the data is showing index funds outperforming active funds this year. Remember Index funds will not put you in the top 10 percent of fund returns but year in and year out in the 80th percentile or so. Which for many including me beating 79% of other funds is good enough for the brunt of my portfolio. You understand psychology and many want to be number one and if you are interested in bragging rights go active. If you are interested in stability consider index. Once you start to read you will be exposed to market efficiency and the various thoughts on that. It will possibly be your guide.
That's why I suggest reading Jack Bogle's primer that I linked earlier. I am even more convinced now knowing your educational background and your PHD in psychology. They are perfect for the task at hand. You have skills with numbers and math and are very capable at writing code and problem solving by linking pieces together. Also your background in psychology lends itself to understanding market and investor psychology. Have a go and you may have found an interesting study of yourself and market behavior. Read the book first it is a great primer and will probably be your first of 4-6 Bogle related books.
Ok, you're getting me inspired ... maybe. I have been scared of stocks my whole life. But it can't hurt to try and learn about it. It is true that I like working with numbers, and I really like managing money. So maybe I can do it myself, certainly don't want to pay that 1% fee, especially for something I have time for and might actually like doing.
That's a real asset. Have you contacted a headhunter, or searched Indeed.com for some type of part-time contract position; maybe even by telecommuting?
A potential advantage of having an advanced degree, is the real possibility that one may be able to pickup a few extra bucks as a consultant while retired. You could get far more that way than by being an adjunct. Of course, some people go the adjunct route just because they like to teach.
Well I have no actual experience being a psychologist. The degree was in experimental psychology (not counseling), so no consulting for that. But maybe I can do software consulting -- I am already registered with an agency for contract programming jobs.
I would like teaching psychology though, if I can get hired as an adjunct. I taught college a little in graduate school, and I did like having that captive audience!
Well I have no actual experience being a psychologist. The degree was in experimental psychology (not counseling), so no consulting for that. But maybe I can do software consulting -- I am already registered with an agency for contract programming jobs.
I would like teaching psychology though, if I can get hired as an adjunct. I taught college a little in graduate school, and I did like having that captive audience!
Go for it, Dr. Good. Do the adjunct gig if you like, because even though it pays next to nothing, you stay very much involved. Maybe also supplement your income by a few hours of consulting work. Try more headhunters, possibly some with ties to big defense contractors, AND Indeed.com.
This is confusing to me. I had heard index funds were good, so what changed? And I don't know what VWINX is.
Index funds aren't good for you because you cannot buy just one or two, as I said, here:
Quote:
Originally Posted by Ariadne22
Please don't do an index fund, unless you are buying two or more (or market ETFs) and rebalancing. In which case, just buy VWINX. Back in the day, an index fund was a no-brainer. No more. Please don't do that.
You would need to buy several index funds and then rebalance - which is not appropriate for you at this point in your investing life.
VWINX is a a conservative mix of bonds/stocks (read the Morningstar link)
Which is why I mentioned VWINX - because it is about 60% bonds, 40% stocks and one compensates for the other - very low volatility - performance year-to-date over 9% - exceptional for that fund.
and here:
Quote:
Originally Posted by Ariadne22
Since you are willing to consider letting $350k languish at 1%, I would, instead, invest remaining $250,000 in VWINX (no management fee) - and forget about it.
Look at that chart. Low-risk fund, begun in 1970, which generally returns about 7% year. Worst case, depths of recession, fund only dropped about 18% and recovered in two years. The $100k money market fund will make any similar market downdrafts a nonevent. When money market balance falls below $50-$75k or fund has had a really good year, sell some VWINX to replenish.
I own VWINX. Market gyrates, and the fund holds steady. It's a good feeling - and, interestingly enough, for the past year has outperformed the "high-flier" funds I own as well as a large cap fund. Old adage slow and steady wins the race seems to apply.
Done. You won't be running out of money anytime soon unless you end up with substantial medical or long-term care expenses - nor will you have sleepless nights.
jm2c
VWINX, to start, would be the equivalent to buying several index funds - and it automatically rebalances.
Quote:
Originally Posted by FREE866
Index funds are perfect, especially if you don't consider yourself an expert. Nothing has changed.
SPY is great for large capitalization stocks ( big companies) and IWM is great for small capitalization stocks ( small companies).
It's as simple as that. No need to complicate it any further...
You are suggesting 100% equities. Where are the bonds? OP wants minimum risk/low volatility. And, he would need to rebalance if he buys a mix of index funds or ETFs. He is not sufficiently educated on investments to do that at this point.
Quote:
Originally Posted by Good4Nothin
Someone said index funds are no good. But I don't know why they think that.
They're not good for you at this time because you would more than one fund - i.e., a mix of asset classes - as I said above - and you would need to rebalance.
VWINX is a good place to park your money until you know enough to branch out - some people never do branch out, just leave all their money in VWINX - and meanwhile you will be getting a really decent return with low volatility and super low expenses of 0.23%.
Again, look at the link. There's a reason Morningstar puts the fund in its "gold" category with a five-star rating.
Last edited by Ariadne22; 07-17-2016 at 02:35 PM..
No I didn't overlook your posts, just didn't understand a lot of it and didn't even know what to ask. But I think you did clarify it here, so thanks.
Wellesley is a very good income fund that I own and most of my new money will be going there and Wellington which is the opposited stock/bond mix. It is from Vanguard and after you do your research might be a good landing spot for you. You need to find a comfortable balance which is good for you. You will find folks in the Bogle forum who are income focused, retired and invested in index funds. Others not so much. Read on and evaluate and good luck.
Probably a good idea, except I have absolutely no experience in owning a home and dread the thought of dealing with repairs, tenants, etc.
I did the rental thing when I moved from AZ to CA which was a big hassle, but when I sold it after twenty years, at the height of the market, it was sweet. However, since you have no homeowner experience and don't want to deal the tenants I would suggest a REIT as someone else has the headaches of the day to day stuff.
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