(10-10-2015 12:49 AM)Kronke Wrote:  

(10-09-2015 02:38 PM)Fitbud Wrote:  I took all my money out of the market in 2007 right before the crash. Never again.

That's sad.

Even if you bought at the absolute peak in 2008, you would still be up 28% today, or about 3.6% annually -- and again, that would have been the absolute worst case scenario.

Only if you had the right stocks.

How is this possible? I have low expenses but I still pay a couple thousand+ in bills every month. So I have to have a couple thousand in my savings account, to move to my checking account when required, to cover it.

I would answer the question with a lot less money than I really have set aside, depending on how they asked it, since I have money in different accounts. Although I wouldn't be surprised if people don't bother saving money. They're just like the government, they can't stop themselves from buying everything.

(10-10-2015 03:04 AM)NIU007 Wrote:  

(10-10-2015 12:49 AM)Kronke Wrote:  

(10-09-2015 02:38 PM)Fitbud Wrote:  I took all my money out of the market in 2007 right before the crash. Never again.

That's sad.

Even if you bought at the absolute peak in 2008, you would still be up 28% today, or about 3.6% annually -- and again, that would have been the absolute worst case scenario.

Only if you had the right stocks.

The fact that this is the edited version of your response is mind blowing.

I took those numbers straight from the ^DJI, i.e. the benchmark, and is perfectly indicative of the type of funds Fit was probably invested in.

I also forget to include dividends in those previous numbers. Most broad market index funds pay a ~2% dividend. So, edit my worst case scenario to ~6%/year, had you bought at the absolute peak in 2008 and held to today.

Given that he pulled out before the absolute peak (he said 2007), it's probably closer to 7-8%/year.

A couple of years ago I took the Certified Financial Planner (CFP) classes but didn't sit for the exam because I didn't have the requisite years of client experience. Nonetheless, I did it to better understand my finances. I'm 71 and retired.

My current portfolio is about 55% equities (mostly individual stocks, of which most are dividend payers), 35% bonds (again individual bonds and not funds) and 10% cash, which is currently in Vanguard Intermediate Term Bond fund.

As of September 30, with the S&P 500 down 7% YTD, my total portfolio is down only 2% YTD. So my well constructed defensive portfolio beat the market by 5%. Even in the up years, I do well but trail the market a smidge.

(10-10-2015 03:59 AM)Kronke Wrote:  

(10-10-2015 03:04 AM)NIU007 Wrote:  

(10-10-2015 12:49 AM)Kronke Wrote:  

(10-09-2015 02:38 PM)Fitbud Wrote:  I took all my money out of the market in 2007 right before the crash. Never again.

That's sad.

Even if you bought at the absolute peak in 2008, you would still be up 28% today, or about 3.6% annually -- and again, that would have been the absolute worst case scenario.

Only if you had the right stocks.

The fact that this is the edited version of your response is mind blowing.

I took those numbers straight from the ^DJI, i.e. the benchmark, and is perfectly indicative of the type of funds Fit was probably invested in.

Probably? You don't know what funds he was in? So you don't know how he would have done. But go ahead and be arrogant.

(10-10-2015 09:52 AM)NIU007 Wrote:  

(10-10-2015 03:59 AM)Kronke Wrote:  

(10-10-2015 03:04 AM)NIU007 Wrote:  

(10-10-2015 12:49 AM)Kronke Wrote:  

(10-09-2015 02:38 PM)Fitbud Wrote:  I took all my money out of the market in 2007 right before the crash. Never again.

That's sad.

Even if you bought at the absolute peak in 2008, you would still be up 28% today, or about 3.6% annually -- and again, that would have been the absolute worst case scenario.

Only if you had the right stocks.

The fact that this is the edited version of your response is mind blowing.

I took those numbers straight from the ^DJI, i.e. the benchmark, and is perfectly indicative of the type of funds Fit was probably invested in.

Probably? You don't know what funds he was in? So you don't know how he would have done. But go ahead and be arrogant.

It isn't relevant what funds he was *precisely* in, because I was explaining to him that even if he just set up his portfolio to simply track the market, again the BENCHMARK in which portfolios are measured (and something a monkey could do, it's not even something you have to construct, there are hundreds if not thousands of funds that accomplish this), he would have still been up 28% + dividends in the worst case scenario, i.e. buying at the very peak in 2008 and holding until today.

If I say benchmark, and you respond "Nope, depends on which stocks", you are either trolling or have approximately a 3rd grade understanding of portfolio management, either way I'm not interested in arguing with you.

Fit, if you would like, post exactly what you were invested in in 2007, and I'll figure where you would have been today.

(10-09-2015 02:38 PM)Fitbud Wrote:  I took all my money out of the market in 2007 right before the crash. Never again.

Hoping to win the lottery?

(10-09-2015 11:16 AM)Fitbud Wrote:  

(10-09-2015 11:12 AM)Bull_In_Exile Wrote:  

(10-09-2015 11:07 AM)Fitbud Wrote:  

(10-09-2015 11:04 AM)Bull_In_Exile Wrote:  

(10-09-2015 11:01 AM)HeartOfDixie Wrote:  The micro-loan thing is kind of cool idea.

But, it sounds more like fantasy football and fun than money making.

two points

1 - There is real money in FF thought I won't touch it with a 10 foot pole

2 - There is a lot of ways to filter who you invest on. You can filter on -

Interest Rate
....
Joint Applications

Given all the different ways that someone could get a loan these days, why would someone want a loan from a place like this?

The interest rates are generally less than you would get from a Bank or Credit Card company. many of the loans are debt consolidation. In my experience consolidation loans are the more reliable returners and "home improvement loans are the least but I've only done a few hundred notes.

Fair enough.

I'm a little surprised though that consolidation loans would be more reliable than home improvement loans.

Why is that?

It has some logic - in debt consolidation, the borrower may be serious about paying down debt. They may be consolidating high interest debt (like credit cards) and improving their cash flow with lower monthly payments and lower interest rate. Cash flow is what pays the bills.

Home improvement may offer a gain once the house is sold, but not in the short run, unless it Is making the home more energy efficient.

(10-09-2015 11:16 AM)QuestionSocratic Wrote:  I keep a fair amount of money in my checking/savings account. There really isn't anywhere where you can get any decent return on truly liquid moneys.

But there is a benefit to this as I get preferred customer status from my bank. That comes with all fee waivers, that could more than add up in a year. I also get a free safe deposit box, free American Express travelers checks, preferred rates on loans (which I don't use).

If you want to put your excess funds to work, pay down the 25% credit card balances and make a true 25% on your money.

I also use credit cards for virtually every purchase. I have an American Express Blue Cash that pays 6% back on the first $6,000 of groceries (1% after), 3% on gas, 2% on department stores, and 1% elsewhere. Just got back from Vegas where my entire bill was covered by my annual cash back.

I have used the Amex Blue cash card as my primary credit card for years. Still think it is the best.

(10-09-2015 11:52 AM)Bull_In_Exile Wrote:  

(10-09-2015 11:44 AM)South Carolina Duke Wrote:  

(10-09-2015 11:32 AM)Bull_In_Exile Wrote:  I'm interested in what HOD or South would do with the money in my account? Seriously, I'm open to suggestions.

BIE,

I'm not putting you down and you are a smart guy that is squared away.

But since you asked, first thing is get out of debt ! Period!

If you want to entertain yourself with this venture fine. However, I'd take your "ROI" and pay off the roof and medical not reinvest it in this scheme. Use it to your benefit and pay yourself first!

Problem is the money in there is not liquid, it's tied up and I get maybe 50 a month back out of it.

Also the roof repair debt is being paid back on 0% interest, should be paid off by this summer at which point I can begin investing again. I think the only thing I am paying back with interest at the moment is my mortgage.

I agree with BIE on this one.

His investment is currently self funding and even when paying down debt, it is good to have an investing/savings mindset.

(10-11-2015 07:18 AM)dcCid Wrote:  

(10-09-2015 11:16 AM)QuestionSocratic Wrote:  I keep a fair amount of money in my checking/savings account. There really isn't anywhere where you can get any decent return on truly liquid moneys.

But there is a benefit to this as I get preferred customer status from my bank. That comes with all fee waivers, that could more than add up in a year. I also get a free safe deposit box, free American Express travelers checks, preferred rates on loans (which I don't use).

If you want to put your excess funds to work, pay down the 25% credit card balances and make a true 25% on your money.

I also use credit cards for virtually every purchase. I have an American Express Blue Cash that pays 6% back on the first $6,000 of groceries (1% after), 3% on gas, 2% on department stores, and 1% elsewhere. Just got back from Vegas where my entire bill was covered by my annual cash back.

I have used the Amex Blue cash card as my primary credit card for years. Still think it is the best.

The chase sapphire is pretty good too. If you play the points game right, you can rack up travel points.

I went to Germany last year for 2 weeks. Total trip cost me like $1200. I have enough points now for rio, so that'll probably be a winter trip for me.

I didn't know anything about the stock market. I just used to send 100 a month to some group and they handled everything. I'd get a monthly statement but I had no idea what it meant. In 2007, they told me to take it out or I would lose money so that's what I did. It was something like 25k.

(10-11-2015 12:41 PM)Fitbud Wrote:  I didn't know anything about the stock market. I just used to send 100 a month to some group and they handled everything. I'd get a monthly statement but I had no idea what it meant. In 2007, they told me to take it out or I would lose money so that's what I did. It was something like 25k.

I really hope that was just an investment account and not a retirement account.

(10-11-2015 01:30 PM)dfarr Wrote:  

(10-11-2015 12:41 PM)Fitbud Wrote:  I didn't know anything about the stock market. I just used to send 100 a month to some group and they handled everything. I'd get a monthly statement but I had no idea what it meant. In 2007, they told me to take it out or I would lose money so that's what I did. It was something like 25k.

I really hope that was just an investment account and not a retirement account.

Yes, it was just an investment account. my retirement is taken care of through TRS.

(10-11-2015 02:11 PM)Fitbud Wrote:  

(10-11-2015 01:30 PM)dfarr Wrote:  

(10-11-2015 12:41 PM)Fitbud Wrote:  I didn't know anything about the stock market. I just used to send 100 a month to some group and they handled everything. I'd get a monthly statement but I had no idea what it meant. In 2007, they told me to take it out or I would lose money so that's what I did. It was something like 25k.

I really hope that was just an investment account and not a retirement account.

Yes, it was just an investment account. my retirement is taken care of through TRS.

The S&P's peak in 2007 was 1,526. It is 2,014 today. That is a 31.28% return, or 3.53% annually. The VFINX (Vanguard S&P 500 Fund) pays a 2.09% yield. It has a 0.17% expense ratio.

Had you *done nothing* (I put asterisks around *done nothing*, because I don't know precisely what you were invested in) and just left your money in a benchmark product like VFINX (doesn't have to be Vanguard's, every brokerage house has their own product that accomplishes the same thing) that merely tracks the market, your $25k would be ~$38.22k today. That includes a point in time where equities lost over 50% of their value.

Only you understand your risk tolerance, I'm just giving you something to think about when you say "Never again".

(10-11-2015 02:43 PM)Kronke Wrote:  

(10-11-2015 02:11 PM)Fitbud Wrote:  

(10-11-2015 01:30 PM)dfarr Wrote:  

(10-11-2015 12:41 PM)Fitbud Wrote:  I didn't know anything about the stock market. I just used to send 100 a month to some group and they handled everything. I'd get a monthly statement but I had no idea what it meant. In 2007, they told me to take it out or I would lose money so that's what I did. It was something like 25k.

I really hope that was just an investment account and not a retirement account.

Yes, it was just an investment account. my retirement is taken care of through TRS.

The S&P's peak in 2007 was 1,526. It is 2,014 today. That is a 31.28% return, or 3.53% annually. The VFINX (Vanguard S&P 500 Fund) pays a 2.09% yield. It has a 0.17% expense ratio.

Had you *done nothing* (I put asterisks around *done nothing*, because I don't know precisely what you were invested in) and just left your money in a benchmark product like VFINX (doesn't have to be Vanguard's, every brokerage house has their own product that accomplishes the same thing) that merely tracks the market, your $25k would be ~$38.22k today. That includes a point in time where equities lost over 50% of their value.

Only you understand your risk tolerance, I'm just giving you something to think about when you say "Never again".

I get what you are saying. I just didn't want my money in the stock market anymore. I am willing to sacrifice better returns for more secure stuff like bonds.

Saw this today:

Quote:An estimated 45% of Americans have (retirement) accounts with less than $25,000, according to the Employee Benefit Research Institute,

(10-10-2015 08:18 PM)VA49er Wrote:  

(10-09-2015 02:38 PM)Fitbud Wrote:  I took all my money out of the market in 2007 right before the crash. Never again.

Hoping to win the lottery?

That or he is independently wealthy. Nothing has created more wealth for more people than the market. Those that panic...miss the growth. It is all about the long haul.

(10-12-2015 08:06 AM)QuestionSocratic Wrote:  Saw this today:

Quote:An estimated 45% of Americans have (retirement) accounts with less than $25,000, according to the Employee Benefit Research Institute,

Not a surprise to me. All around me I see people spending money like it grows on trees. When I ask about what they are doing about retirement?...they look at me with a blank stare. When I discuss this stuff I can tell by their input that they have no clue what I am talking about.