Stocks Are Great for the Very Young — and the Very Old (55, separate)
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Tyler , founder of portfolio charts website and the golden butterfly and pinwheel portfolio has been researching 80% wellsely and 20% gold and it did pretty well , better then wellsely alone ..
In fact it came in about the same as the golden butterfly in returns but it didn’t do as well as the butterfly in the ulcer index but still not bad at all
The rationale for such “conventional wisdom” is the assumption that either one seeks to withdraw and to spend annually a sizeable portion of one’s assets (often cited as 4%), or that one’s ratio of portfolio-size to pre-retirement income isn’t all that large. In either case, one’s investment strategy has to sustain one’s consumption, and that may mean foregoing potential gains in favor of avoiding some disaster that crimps said consumption.
I often wonder how many people invest in stocks based on their dividend rates? Based on a 4% annual withdrawal rate, what if that was offset by stocks bearing a 4% dividend?
These are 4 examples, there are likely others out there even higher, I just don't know of any offhand.
We had an 80 year old security guard at work had lost half of his life savings in the .dot bomb tech stock market crash. I would bet his advice would be to limit your stock exposure in old age.
I often wonder how many people invest in stocks based on their dividend rates? Based on a 4% annual withdrawal rate, what if that was offset by stocks bearing a 4% dividend?
These are 4 examples, there are likely others out there even higher, I just don't know of any offhand.
Irrelevant, only total return matters. ..how it is made up doesn’t matter …you can have a 7% dividend like AT&T or IBM And have had a crappy return for decades
Including all dividends IBM’S actual return was less than 1% a year the last 5 and ten years.
So dividends are fine for a source of cash flow but without appreciation you got a dog with little return on investment
We had an 80 year old security guard at work had lost half of his life savings in the .dot bomb tech stock market crash. I would bet his advice would be to limit your stock exposure in old age.
Nearly everyone who owned stock in 1928 [regardless of age, the young, the old, everyone] in 1930 would agree.
I was not trained to be an employee, but to be a certain type of skilled professional. I was self-employed for the major part of my career. I worked because I valued work more than I valued "creating wealth", and a good income was an adequate reward for my work. I stopped working because the work was very stressful, and I had worked for quite a long time, so nothing obliged me to work longer.
As everyone knows, I don't have a majorly favorable opinion about investing, but I do have Roth in a growth fund, sort of out of curiosity. I do not support myself with investment. If the stocks take a major beating this year, I think it would be a good time for Roth conversions (I don't have anything left to convert, since I did it all during the most recent crash in March 2020, and it worked out fabulously) - that is my only contribution to the discussion.
Many of us were not aspired to money when we were young. We aspired to help people, contribute to society, to contribute to the professional we are in, accepted & respected as professional, and to be proud of our accomplishments at the end of our careers. To a large extend, I can say I've achieved all that I wanted to do and take pride on what I've done. I am sure you're the same way.
But depite what you think of yourself as a "skilled professional", the reality was that you traded your skill and time for a wage, commonly classified it as $/hour, whether you were a self-employeed or employeed. For 99% of us, the differentiation was only the level of $/hour we negotiated and worked hard for. This goes for the doctors, lawyers, accountants, engineers, and the rest.
The fact that you managed your life time savings well is to be commended. I do believe most of posters on this forum did well financially toward at the end of their careers, judging by amount of bragging/ hints posts on various financial threads. My point was the majority of us were taught/trained to be a "skilled professional" focusing on contributing our skills/ time in exchange for a financial compensation. We then were careful with how we spend and save to build a nest eggs and carefully nuture this nest eggs into our retirement. We did not have the thinking, desire, or skills on how to grow this nest eggs differently other than putting them in the traditional 401K, stock market, and/or savings account.
I had a "poor dad" who taught me to go to school, major in something I could get a job in, then keep my head down, don't cause trouble, and stay employeed. Then save my money and build my little nest egg. That's what Mom & Dad did, along the way they bought real estate and did well into their retirement. But I could not help to think what if I was exposed to a better financial education such as learning how to create wealth, how would my life turn out differently. I always wonder what if I had taken a different path? How would my life changed?
Life is a one-way street, you don't get a "do-over". I am just grateful after all the said & done, I did well and we have no financial worries looking toward our retirement. Is it better to have more? Well, that depends on the price I have to pay for "more". At the end, I am thankful on what I have.
We had an 80 year old security guard at work had lost half of his life savings in the .dot bomb tech stock market crash. I would bet his advice would be to limit your stock exposure in old age.
Or the advice would be to diversify, namely to limit one's exposure to high P/E, high-hype large-cap tech stocks... which might be timeless advice, actually, given our current situation.
Quote:
Originally Posted by HB2HSV
I had a "poor dad" who taught me to go to school, major in something I could get a job in, then keep my head down, don't cause trouble, and stay employeed. Then save my money and build my little nest egg. That's what Mom & Dad did, along the way they bought real estate and did well into their retirement. But I could not help to think what if I was exposed to a better financial education such as learning how to create wealth, how would my life turn out differently. I always wonder what if I had taken a different path? How would my life changed?
Were you to have had such "better financial education", what would you have done differently?
We had an 80 year old security guard at work had lost half of his life savings in the .dot bomb tech stock market crash. I would bet his advice would be to limit your stock exposure in old age.
If he was 100% invested in a NASDAQ index fund and he did not panic and sell, he would have 3 times as much money today.
Were you to have had such "better financial education", what would you have done differently?
I can only give you a rhetorical answer because I would not know what I would've done differently.
My theory is a big part of our DNA really has to do with the family culture we grow up in. I noticed my entrepreneur friends who took a different paths, most if not all their parents were business people. They grew up with the attitude of taking risks, OK to fail and try again, and more importantly the know-how on building a business and networking. Whereas my "skilled professional" family culture taught me to minimize risks, rely on my skills that employers wanted and enjoy being an expert in my field.
It was not later in life something in me "clicked". It maybe my gardening hobby, but I associate the idea of "creating wealth" out of nothing. For example, take your empty balcony (some of you are condo dweller but the same analogy can be applied to a backyard), you may enjoy looking at that empty space but a different mindset says let me put a bucket there and fill it with soil, then I can plant a seedling of young lemon tree. Several years later, one may still have an empty balcony while another may enjoy the beauty of a lemon tree and the fruits of its labor. Sure, one can say it requires work but you may enjoy taking care of that tree as it gives you back more of pleasure than your effort.
To extrapolate this concept further, one can see a simple mom & pop restaurant starting with an empty lease of a business building, building up the kitchen and the sitting area and with your know-how on food preparation, you may have a viable business idea. To further this idea, to build an engineering company out of paper, later this young company may become another Rockwell, Lockheed, Honeywell, Jacobs, etc (notice the last name of founders)., alternatively to acquire real estate properties (all the way to commercial buildings), the possibilities are endless.
A lot of these depend on your know-how, desire, motivation, and hard work. But the "what-if" is intriguing if not life-changing.
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