Investing 101

[Flingarrows]

The Total Money Makeover

Dave Ramsey's best-selling book, The Total Money Makeover, will give you a simple seven-step plan that gets to the heart of your money problems: You.

www.ramseysolutions.com

We did a Dave Ramsey course. I can’t explain to those who are not debt free, how unbelievable it is.

We do still carry a mortgage, but no car payments, credit card payments…

I recommend it. It is a Christ based program, but the principles would apply to anyone

 

[Nugget]

We did a Dave Ramsey course. I can’t explain to those who are not debt free, how unbelievable it is.

We do still carry a mortgage, but no car payments, credit card payments…

Long-term debt can be good if you can get it cheap enough. A 30-year mortgage at 3% would be looking great right now with savings accounts paying 3.5 - 4%. Wife and I used to stockpile cash when savings rates were higher than our mortgage rate, and pay extra on the mortgage when the rates flipped.

OP, if you want additional finance advice in a forum setting, you might check out MrMoneyMustache. It's centered around ideas of early retirement, frugal living, hyper-savings, smart investing, etc. Lots of great info on the blog, and more in the forum.

 

[xwing]

Lots of options. But the basics are "low fees" and "diversification".

If you want very simple:
Open investment account & savings account at Ally Bank:
put your "long term" money in VTI and / or VOO. Both are ETFs with very low fees and broad exposure (VTI is broader).
put your "medium term" / "emergency backup" money in a High Yield Savings account.

DONE

You can go much more complex, but this is a very basic and very cost-effective starting point. You can buy additional whenever you want, $100 here, $100 there, etc...

 

[Mij]

I love INGO………

 

[Nugget]

I love INGO………

??? Is the LMFAO emoji an indication that you disagree with the advice being handed out in this thread?

 

[Mij]

??? Is the LMFAO emoji an indication that you disagree with the advice being handed out in this thread?

Nope, guns and investment advice all in one stop. Kinda like gas and grocery.


edit: also didn’t know that emoji meant that acronym, thought it was meant to convey humor.

 

[blain]

The other day I saw a very old man pushing a mop bucket at Walmart. That scares me.

* He may be working because he wants to have something to keep him busy in his retirement.
* His wife may have recently passed and he finds working with other people helps him stay more engaged with the world around him.
* He might of had some hard breaks in life and needs some extra income.
* He might have frittered away any wealth he had accumulated in his prime working years and has to work to keep his apartment warm or put some gas in his car.

I'll be 61 in a couple of weeks.
I've always got an eye for value, some call me "cheap". I don't really care, because they aren't funding my lifestyle or retirement. I do have a strong drive for buying "quality" (not advertised quality). I want the dollars that I spend to count.
I'm not a hermit living in the dark counting my bits. I perform as many DIY repairs as I can and that make sense to do.
I tell as many younger workers as I can about saving and investing for their future. Some listen and some don't... it's their life.

One thing I tell them is that it's one thing to be poor. But it's another thing to be old and poor.
But one thing I would caution against is being "stingy". It may sound counter productive, but always have an eye open to lend a hand to someone around you in need. It goes without saying you should have some balance and not give away more than you can afford. And you should have your antenna up for those trying to take advantage.

 

[asevans]

I'm not sure, but I don't think so, he said, "If you have questions just call," so many times I lost count.

This guy looked like he could barely walk, he did not look like he was relaxed. There was another time where a landscaping crew was mulching our complex and there was an older man pushing a wheelbarrow full of mulch and another running a weedeater. They weren't as old as the Walmart guy, but I was like damn. I think about that stuff more than I should.

Umm. That’s called work. Lol

 

[sixGuns]

* He may be working because he wants to have something to keep him busy in his retirement.
* His wife may have recently passed and he finds working with other people helps him stay more engaged with the world around him.
* He might of had some hard breaks in life and needs some extra income.
* He might have frittered away any wealth he had accumulated in his prime working years and has to work to keep his apartment warm or put some gas in his car.

All of these could be true, but I had the experience of actually seeing this man. Some of your points could be true, but to me, in that moment, it looked like none of that.

Umm. That’s called work. Lol

It is, but I don't want that to be me. It's why I'm asking these questions. I work because I have to, not because I want to.

 

[smokingman]

Having grown up and experienced the world of investing and the rise of "user" based trading I have learned a few things.
Once you give over funds to any broker those funds are no longer yours. I do not care if it is Vanguard or Robinhood. That money is for all legal purposes theirs and their shareholders(class A).

It is not yours again until your sell order is finalized and your funds are deposited into your bank(still only kind of yours). If your brokerage goes bust and that has not happened you likely will get zero. Top 10 examples.

Throwback Thursday: 10 Brokerages Gone Bust

Here we look at 10 of the best-known old school brokerages and what remnants remain within the four major powerhouse firms that eventually took their place.

www.wealthmanagement.com

Mind you this is an ongoing issue for small investors. Some brokerages simply lose. Last year Robinhood came very close in January of 2021. It later raised of 3 billion of capitol through investors(front running day traders is after all their model,every bet you make like ALL firms like it is used for their benefit and profit and it is 100% legal.).

Is Robinhood Going Out of Business (Bankrupt) in 2024?

What happens to my stocks, money, account funds if Robinhood goes bankrupt, out of business?

topratedfirms.com

Robinhood, amid chaos, raises $3.4 billion in total

Investors in Robinhood are stepping up.

www.foxbusiness.com

My point. Sure I have invested in the stock market. Even made a nice sum. I know and understand the risk. I also got 100% out last year. Why? I no longer have any trust in the system.
Between front running with algorithms(70+% of all trading) and brokerages front running clients the market is built for mega corps like Blackrock and Vanguard. Add to that your funds on deposit with a brokerage are at risk(look at the brokerage managing the Pension fund we just bailed out with 35billion in January) by mostly people who have NEVER in their life seen a market in a real downturn. Sure a few were around for 2008,but is likely to be less than 10% of brokerages work force(or in cases like robinhood .01%) and none have seen a real recession or inflation like we are likely to go through.

I also started buying silver when it was $9 an OZ. That still feels like a good idea to me,even at current prices and with the US dollar going up and down over 10% in the last 3 months alone.
It has proven fairly liquid throughout my life,and was always there if I needed cash quickly(to avoid taking on debt). Has it made me loads of money? Some sure,but averaged out from when I started buying in 1997,it is has just managed to beat inflation(rare cases like 2011 spike to $37 aside),but it is mine with no other liabilities. I can hold it in my hand. It has value even if the power is out. It likely will always stay ahead of inflation when average out.

My

 

[Nugget]

Once you give over funds to any broker those funds are no longer yours. I do not care if it is Vanguard or Robinhood. That money is for all legal purposes theirs and their shareholders(class A).

I get the point you're trying to make by warning others to be careful where and with whom they invest their money, but a lot of what you said simply isn't true. Or at least, isn't the whole truth.

The money you give to a broker is yours. It's in your name. They buy shares on your behalf, as you direct them to, which they hold in their street name with you listed as owner. If they use it for a purpose other than what you direct, that's called fraud or theft. In those instances, a portion of those funds are typically protected by the Securities Investor Protection Corporation (up to $500k), similar to FDIC insurance on deposits.

And Vanguard is probably a bad example in the points you're trying to make about greedy corporations and their shareholders. Vanguard is owned by the funds they manage (i.e. your money), meaning Vanguard is owned by its investors. BlackRock on the other hand, well....

As to those in this thread who talk of owning precious metals. A small amount might not be a bad idea, but in the long run you'll get crushed by the market, inflation, and the lack of productivity of those assets. Interest and dividends compound over time. As Warren Buffet said, "My wealth has come from a combination of living in America, some lucky genes, and compound interest". Metals just sit there. In the event of SHTF, metals will be heavy to carry, tough to hide or trade, and can't be eaten or used to shoot food or marauders.

I'll keep my money working for me while the system is still working, and I'll stock up on food and ammo in case the system collapses.

 

[smokingman]

I get the point you're trying to make by warning others to be careful where and with whom they invest their money, but a lot of what you said simply isn't true. Or at least, isn't the whole truth.

The money you give to a broker is yours. It's in your name. They buy shares on your behalf, as you direct them to, which they hold in their street name with you listed as owner. If they use it for a purpose other than what you direct, that's called fraud or theft. In those instances, a portion of those funds are typically protected by the Securities Investor Protection Corporation (up to $500k), similar to FDIC insurance on deposits.

And Vanguard is probably a bad example in the points you're trying to make about greedy corporations and their shareholders. Vanguard is owned by the funds they manage (i.e. your money), meaning Vanguard is owned by its investors. BlackRock on the other hand, well....

As to those in this thread who talk of owning precious metals. A small amount might not be a bad idea, but in the long run you'll get crushed by the market, inflation, and the lack of productivity of those assets. Interest and dividends compound over time. As Warren Buffet said, "My wealth has come from a combination of living in America, some lucky genes, and compound interest". Metals just sit there. In the event of SHTF, metals will be heavy to carry, tough to hide or trade, and can't be eaten or used to shoot food or marauders.

I'll keep my money working for me while the system is still working, and I'll stock up on food and ammo in case the system collapses.

The metals to me are not for shtf. They do their best during a currency crisis. Which I think I will see in my lifetime. The article I post below says the debt is 22 trillion....yea we blew by that 31.5 trillion currently today.

By 2025, U.S. Interest Payments on the National Debt Will Pass the Defense Budget

With the gross national debt in excess of $22 trillion—nearly 105% of gross domestic product—and mandatory spending like interest on previous debt, Social Security, Medicare, and Medicaid consuming 72% of current tax revenue, it’s easy to think that America’s fiscal woes have reached their worst...

nationalinterest.org

The money is technically yours,but if the firm goes under you likely will see nothing for a very long time if ever. Take the open case of Bernard Madoff opened in 2008. Zero investors have been made whole as of December 8,2022(the last court case listed by SIPC). SIPC is barely more than a collection agency with the power to secure assets. If there are no assets or negative assets they can do nothing period. They do however decide who get what cut when. An example A class shares will always get paid before others(and most retail investors do not even have a clue what an A class share is,much less own any). It is a false sense of security.

SIPC - Bernard L. Madoff Investment Securities LLC - Case Details

Securities Investor Protection Corporation

www.sipc.org

Holding securities in “Street Name”​

SIPC coverage is limited to securities held in “street name” in a brokerage account. Securities held by clients in street name are kept securely with the Depository Trust Company (DTC), separate and distinct from the assets of the securities firms. Regulated by the SEC and the Federal Reserve, the DTC is a national clearinghouse for settling trades and a custodian of securities.

 

[spencer rifle]

Comparing Madoff to Vanguard is... unconventional. So far Vanguard has not tried to steer me to any particular investment, or touted it's "secret knowledge" of always-win investments. But we don't have all our funds with them. Some elsewhere, some in gov securities, some in cash, some in chickens, some in PMs, some in 3 Bs. Diversify.

 

[smokingman]

Comparing Madoff to Vanguard is... unconventional. So far Vanguard has not tried to steer me to any particular investment, or touted it's "secret knowledge" of always-win investments. But we don't have all our funds with them. Some elsewhere, some in gov securities, some in cash, some in chickens, some in PMs, some in 3 Bs. Diversify.

Really,not steering?
Vanguard has been managing ESG investment products for over 20 years, starting with our FTSE Social Index Fund, which launched in 2000. It's now the largest ESG-screened index fund in the United States.*
I agree with Diversify. I have treasuries,real estate,and metals.

ESG funds that reflect what matters most to you | Vanguard

ESG funds let you make investments in what matters most to you. Explore how ESG investing can play a role in your portfolio.

investor.vanguard.com

 

[snapping turtle]

Really,not steering?
Vanguard has been managing ESG investment products for over 20 years, starting with our FTSE Social Index Fund, which launched in 2000. It's now the largest ESG-screened index fund in the United States.*
I agree with Diversify. I have treasuries,real estate,and metals.

ESG funds that reflect what matters most to you | Vanguard

ESG funds let you make investments in what matters most to you. Explore how ESG investing can play a role in your portfolio.

investor.vanguard.com

ESG: Lots of people don't know what they are invested into. The know they have an account at Charles swab or Edward James but most don't know even if they are invested risky or moderate. Let alone what sub funds and the percentage invested in those funds. I think the basic ones from vanguard are ESG based but you can switch out of them easy enough to other vanguard investments.

I get lucky sometimes. Had a 401k where 10 precent of what I put in they would buy whatever stock I chose to buy. I did better than I thought I should and did take the advise he gave me as to when to get out and when to get back in on those.

Sin funds have at times been nice.

Mining funds have done well for me. Got in on some Canadian diamond mines very early which mine for industrial type diamonds and did real well.

Real estate investment trusts did well for a while. Until they did not anymore.

My main fund manager retired two years ago. He did a good job and more than earned his pay for my family when he was helping us out. I was all into some euro based fund that sounded to good to be true. He told me sure we can throw money into it but I would advise against it while heartedly because of the newly formed EU and regulations that might come from it. Had I invested into it I would just be seeing a return.

Throw some darts. If you have a good money investment manager he can at least keep most of the darts on the board so you don't have to dig them out of the wall.

 

[Mij]

Comparing Madoff to Vanguard is... unconventional. So far Vanguard has not tried to steer me to any particular investment, or touted it's "secret knowledge" of always-win investments. But we don't have all our funds with them. Some elsewhere, some in gov securities, some in cash, some in chickens, some in PMs, some in 3 Bs. Diversify.

Yep, up thread I said diversity, and live by that philosophy. Metals, land, paper vehicles, and the 3 b’s.

 

[spencer rifle]

Our oldest is invested in the vanguard ESG fund. We were never steered that way yet.

 

[bwillits]

Lots of comments here recently and differing views. Let me preface the following with “consult a professional that can look at your specific circumstances and make the best decisions for you.” What I’m about to say is generality and I don’t need my securities license at risk, haha.

For what it’s worth, I think having market exposure is very important, especially when building wealth. Diversification is important as well. Markets are cyclical and what works today more than likely won’t work tomorrow but may come back in the future (REITs, prop indices, etc). A lot of investing has to deal with time as it can be your best friend. People that bought TSLA in Jan of 21 would say it’s the worst decision at the end of the year when they were down ~65%. Those that bought in years ago or even beginning of this year would say returns are great. That’s why I feel like it’s important to have market exposure and not try to time the market. There’s been tons of studies (one I’ll screenshot and post) about how missing just the top few days of the DECADE can cause returns to be a fraction of what they could have been.

In a well diversified portfolio, metals can certainly play a role but I don’t think metals are the end all be all just like I don’t think any specific investment type would be.

With fee compression where it’s at today, creation of ETFs and Structured Products, shifts from brokerage to advisory, etc - I feel like it’s a great time to be a consumer/end client. You don’t see a bunch of front loaded funds being used anymore and arguably, annuities are where the big comp checks are coming from.

 

[Mij]

IMHO, land, real estate, metal, firearms, are generational. By that I mean to be passed from one to the next. Each building on the last. JMO

and I’m out.

 

[Nugget]

IMHO, land, metal, firearms, are generational. By that I mean to be passed from one to the next. Each building on the last. JMO

and I’m out.

I'd agree with that, with the caveat that you better have a really ironclad will, and your heirs have to be in agreement BEFORE you die as to what they're getting. Trying to split and share stuff between multiple individuals after you pass always seems to create tension, even (or especially) if they're family.