6 ms·

Save money and invest it.

by 33a 11y ago

nns 11y ago
Can you give examples of what kind of low-touch reasonable-return investments you've benefited from?
- jstanley 11y ago
  Any low-fees index fund.
  - mcshicks 11y ago
    Vanguard had very low fee reit index funds. If you want to generate income it is a good option (as opposed to stock index funds) because reits are required to pay 90% of their income as dividends. You can look at all the historical dividend data on the website
    - owyn 11y ago
      I parked some money in a vanguard reit a year ago as an experiment, and to create more of a balanced portfolio. Yes, it has paid quarterly dividends but it's also down -11% in total. So as usual, it all depends...
    - Spooky23 11y ago
      They tend to be very volatile though. The VIG (Vanguard Dividend ETF) pays 2.4%. Dollar-cost average in on bad market days.
    - stcredzero 11y ago
      Is there a Bay Area REIT index fund?
  - SilasX 11y ago
    In terms of throwing off a lot of passive income, they just aren't very good though. Looking mainly at income-generating investments, the best index one might be Vanguard LifeStrategy income (with provides income and moderate capital appreciation to protect against inflation). The yield? 2.1% Nothing to write home about. [1] Is there some high-yielding, regular-income fund I should know about? Even allowing for sorta-irregular funds, you probably can't do much better in this environment, though I'd like to be proven wrong. [1] https://personal.vanguard.com/us/funds/snapshot?FundId=0723&FundIntExt=INT#tab=4 https://personal.vanguard.com/us/funds/snapshot?FundId=0723&...
    - shoover 11y ago
      I found Choosing The Right Dividend ETF [1], which discusses several dividend funds and mechanisms they use to predict which companies will continue paying high dividends. A poster on another forum [2] warned that you should watch out for companies that prop up a dividend and then tank but don't roll out of the index right away. I guess that's where the more conservative filtering ETFs come into play (or you can screen stocks from the index yourself and monitor them). The chart in [3] shows a few funds against the S&P 500. Prices seem to largely track the S&P index. Maybe there's a way to chart the dividend yield over time, too. [1] http://www.forbes.com/sites/moneybuilder/2014/08/22/choosing-the-right-dividend-etf/#4460b9cd63a0 http://www.forbes.com/sites/moneybuilder/2014/08/22/choosing... [2] http://gyroscopicinvesting.com/forum/stocks/what-about-a-high-yield-dividend-stock-fund/msg10608/#msg10608 http://gyroscopicinvesting.com/forum/stocks/what-about-a-hig... [3] https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1454621711970&chddm=909075&chls=IntervalBasedLine&cmpto=NYSEARCA:DVY;INDEXSP:.INX;NYSEARCA:VIG;NYSEARCA:DIVI&cmptdms=0;0;0;0&q=NYSEARCA:VYM&&fct=big&ei=qMCzVuHBM4SOmAHm44HYBw https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...
- gt565k 11y ago
  https://www.wealthfront.com https://www.wealthfront.com Haven't tried this myself, but Tim Ferriss seems to advertise it a lot and I have a few coworkers that use it. Minimum is $500 with no management fees (up to 10k I think)
  - pitchups 11y ago
    Looks interesting. However, could not find any info on their past performance. Is that info available somewhere for review?
    - kingnothing 11y ago
      In the past 12 months, I've been up as much as 4% and am currently down 11%. The allocations in foreign stocks, emerging markets, and natural resources are killing me lately.
  - lfx 11y ago
    P.S. Only for USA citizens. This pretty sad.
  - shostack 11y ago
    How do you feel about their fees compared to low cost index funds?
- yanokwa 11y ago
  This is US centric, but the approach I've had good success with is outlined at: https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_philosophy https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_.... This is essentially what Personal Capital, Wealthfront, Betterment, etc., do for you. I don't use those services because I enjoy learning about personal finance and I think the work required on my part is pretty easy. Your mileage may vary.
- shoover 11y ago
  The Permanent Portfolio [1]. The plan is based on very simple economic theory, and historically it generates market-competitive returns in the long run with much lower volatility than stock indexes or 60/40 portfolios. As in the peer thread on stock funds, this plan is not a great income generator because it's designed more for capital preservation and long term capital gains. (Unless you have half a million dollars in there and interest rates are favorable for the bonds or cash holdings.) But for me it's a great way to carve out savings and get some real compounding going. The longest drawdown in the past 40 years is 2-3 years, so I'm comfortable using it with any savings I don't expect to need to use in the next five or more years. Implementation could hardly be simpler for the robustness that it offers. You put the money in and divide it into four parts. Once a year take a look at the balances and rebalance if any category is too far out of alignment. For resources, Harry Browne's book mentioned in [1] is awesome for general investment sense and lays out the basics of the plan. Another book by Roland and Lawson [2] goes into much more of the nuts and bolts of implementation using different account types, tax status, and many other factors in individual situations. [1] https://en.wikipedia.org/wiki/Fail-Safe_Investing https://en.wikipedia.org/wiki/Fail-Safe_Investing [2] http://www.amazon.com/The-Permanent-Portfolio-Long-Term-Investment/dp/1118288254 http://www.amazon.com/The-Permanent-Portfolio-Long-Term-Inve...
- billmalarky 11y ago
  I use betterment for automated investing. It's pretty straightforward, they provide a tech wrapper around vanguard index funds. I agree with their portfolio allocation, so it works great for me.
elcapitan 11y ago
But invested money is not really something that creates an income, unless it is really really much, right? Income in the sense of money that you can freely dispose.
- scardine 11y ago
  Depends on how much risk you are willing to accept. For example, the baseline interest rate of Brazilian Government Bonds are paying 14.25%/year.
  - benmanns 11y ago
    Often this means the market is expecting ~13-14% inflation against the USD.
    - scardine 11y ago
      It is more like 7% inflation in the local currency plus a 7% premium for the risk of default. The exchange rate is much more volatile than the inflation rate alone, but it is relatively easy to hedge.
- moistgorilla 11y ago
  Dividends but you are essentially right
- sledge 11y ago
  Google "dividend investing" or "annuity investing". Some investments do pay out, fairly passively.
SilasX 11y ago
The question is about passive income, and, given interest rates, there aren't really any good options. If you're able to generate significant passive income at the ~2-3% rates[1], well, you probably already have a lot of money already, and should just focus on whatever you were doing to get that much. Way too many comments in the thread branching off yours are answering the wrong question -- "how to grow your money in general" -- which is not the same as passive income. [1] See Vanguard's bond fund yield https://personal.vanguard.com/us/funds/snapshot?FundId=0084&FundIntExt=INT#tab=4 https://personal.vanguard.com/us/funds/snapshot?FundId=0084&...
- shoover 11y ago
  I'm party to this thread branching of which you speak, but yes, it's predicated on not answering the question and using a principle similar to what you're saying: save, invest passively, and get back to work doing what you do. It's probably as a good a strategy or better than chasing returns in other ways that may also end up requiring a lot of work, depending on skillset, demand, and financial conditions.
  - SilasX 11y ago
    I have no problem with people giving that advice, and agree with it myself. However, if you're going to dispute the premise of the question, you need to explicitly say so and connect it to the alternate point you're making rather than expect readers to see the connection; otherwise, it looks like you're just being non-responsive. And indeed, that's what the thread looks like now.
- legulere 11y ago
  > you probably already have a lot of money already, and should just focus on whatever you were doing to get that much. You can inherit only once from your rich parents.

Save money and invest it.

by 33a 11y ago

Save money and invest it.

nns 11y ago

Can you give examples of what kind of low-touch reasonable-return investments you've benefited from?

jstanley 11y ago
Any low-fees index fund.
- mcshicks 11y ago
  Vanguard had very low fee reit index funds. If you want to generate income it is a good option (as opposed to stock index funds) because reits are required to pay 90% of their income as dividends. You can look at all the historical dividend data on the website
  - owyn 11y ago
    I parked some money in a vanguard reit a year ago as an experiment, and to create more of a balanced portfolio. Yes, it has paid quarterly dividends but it's also down -11% in total. So as usual, it all depends...
  - Spooky23 11y ago
    They tend to be very volatile though. The VIG (Vanguard Dividend ETF) pays 2.4%. Dollar-cost average in on bad market days.
  - stcredzero 11y ago
    Is there a Bay Area REIT index fund?
- SilasX 11y ago
  In terms of throwing off a lot of passive income, they just aren't very good though. Looking mainly at income-generating investments, the best index one might be Vanguard LifeStrategy income (with provides income and moderate capital appreciation to protect against inflation). The yield? 2.1% Nothing to write home about. [1] Is there some high-yielding, regular-income fund I should know about? Even allowing for sorta-irregular funds, you probably can't do much better in this environment, though I'd like to be proven wrong. [1] https://personal.vanguard.com/us/funds/snapshot?FundId=0723&FundIntExt=INT#tab=4 https://personal.vanguard.com/us/funds/snapshot?FundId=0723&...
  - shoover 11y ago
    I found Choosing The Right Dividend ETF [1], which discusses several dividend funds and mechanisms they use to predict which companies will continue paying high dividends. A poster on another forum [2] warned that you should watch out for companies that prop up a dividend and then tank but don't roll out of the index right away. I guess that's where the more conservative filtering ETFs come into play (or you can screen stocks from the index yourself and monitor them). The chart in [3] shows a few funds against the S&P 500. Prices seem to largely track the S&P index. Maybe there's a way to chart the dividend yield over time, too. [1] http://www.forbes.com/sites/moneybuilder/2014/08/22/choosing-the-right-dividend-etf/#4460b9cd63a0 http://www.forbes.com/sites/moneybuilder/2014/08/22/choosing... [2] http://gyroscopicinvesting.com/forum/stocks/what-about-a-high-yield-dividend-stock-fund/msg10608/#msg10608 http://gyroscopicinvesting.com/forum/stocks/what-about-a-hig... [3] https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1454621711970&chddm=909075&chls=IntervalBasedLine&cmpto=NYSEARCA:DVY;INDEXSP:.INX;NYSEARCA:VIG;NYSEARCA:DIVI&cmptdms=0;0;0;0&q=NYSEARCA:VYM&&fct=big&ei=qMCzVuHBM4SOmAHm44HYBw https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...
gt565k 11y ago
https://www.wealthfront.com https://www.wealthfront.com Haven't tried this myself, but Tim Ferriss seems to advertise it a lot and I have a few coworkers that use it. Minimum is $500 with no management fees (up to 10k I think)
- pitchups 11y ago
  Looks interesting. However, could not find any info on their past performance. Is that info available somewhere for review?
  - kingnothing 11y ago
    In the past 12 months, I've been up as much as 4% and am currently down 11%. The allocations in foreign stocks, emerging markets, and natural resources are killing me lately.
- lfx 11y ago
  P.S. Only for USA citizens. This pretty sad.
- shostack 11y ago
  How do you feel about their fees compared to low cost index funds?
yanokwa 11y ago
This is US centric, but the approach I've had good success with is outlined at: https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_philosophy https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_.... This is essentially what Personal Capital, Wealthfront, Betterment, etc., do for you. I don't use those services because I enjoy learning about personal finance and I think the work required on my part is pretty easy. Your mileage may vary.
shoover 11y ago
The Permanent Portfolio [1]. The plan is based on very simple economic theory, and historically it generates market-competitive returns in the long run with much lower volatility than stock indexes or 60/40 portfolios. As in the peer thread on stock funds, this plan is not a great income generator because it's designed more for capital preservation and long term capital gains. (Unless you have half a million dollars in there and interest rates are favorable for the bonds or cash holdings.) But for me it's a great way to carve out savings and get some real compounding going. The longest drawdown in the past 40 years is 2-3 years, so I'm comfortable using it with any savings I don't expect to need to use in the next five or more years. Implementation could hardly be simpler for the robustness that it offers. You put the money in and divide it into four parts. Once a year take a look at the balances and rebalance if any category is too far out of alignment. For resources, Harry Browne's book mentioned in [1] is awesome for general investment sense and lays out the basics of the plan. Another book by Roland and Lawson [2] goes into much more of the nuts and bolts of implementation using different account types, tax status, and many other factors in individual situations. [1] https://en.wikipedia.org/wiki/Fail-Safe_Investing https://en.wikipedia.org/wiki/Fail-Safe_Investing [2] http://www.amazon.com/The-Permanent-Portfolio-Long-Term-Investment/dp/1118288254 http://www.amazon.com/The-Permanent-Portfolio-Long-Term-Inve...
billmalarky 11y ago
I use betterment for automated investing. It's pretty straightforward, they provide a tech wrapper around vanguard index funds. I agree with their portfolio allocation, so it works great for me.

elcapitan 11y ago

But invested money is not really something that creates an income, unless it is really really much, right? Income in the sense of money that you can freely dispose.

scardine 11y ago
Depends on how much risk you are willing to accept. For example, the baseline interest rate of Brazilian Government Bonds are paying 14.25%/year.
- benmanns 11y ago
  Often this means the market is expecting ~13-14% inflation against the USD.
  - scardine 11y ago
    It is more like 7% inflation in the local currency plus a 7% premium for the risk of default. The exchange rate is much more volatile than the inflation rate alone, but it is relatively easy to hedge.
moistgorilla 11y ago
Dividends but you are essentially right
sledge 11y ago
Google "dividend investing" or "annuity investing". Some investments do pay out, fairly passively.

SilasX 11y ago

The question is about passive income, and, given interest rates, there aren't really any good options. If you're able to generate significant passive income at the ~2-3% rates[1], well, you probably already have a lot of money already, and should just focus on whatever you were doing to get that much. Way too many comments in the thread branching off yours are answering the wrong question -- "how to grow your money in general" -- which is not the same as passive income. [1] See Vanguard's bond fund yield https://personal.vanguard.com/us/funds/snapshot?FundId=0084&FundIntExt=INT#tab=4 https://personal.vanguard.com/us/funds/snapshot?FundId=0084&...

shoover 11y ago
I'm party to this thread branching of which you speak, but yes, it's predicated on not answering the question and using a principle similar to what you're saying: save, invest passively, and get back to work doing what you do. It's probably as a good a strategy or better than chasing returns in other ways that may also end up requiring a lot of work, depending on skillset, demand, and financial conditions.
- SilasX 11y ago
  I have no problem with people giving that advice, and agree with it myself. However, if you're going to dispute the premise of the question, you need to explicitly say so and connect it to the alternate point you're making rather than expect readers to see the connection; otherwise, it looks like you're just being non-responsive. And indeed, that's what the thread looks like now.
legulere 11y ago
> you probably already have a lot of money already, and should just focus on whatever you were doing to get that much. You can inherit only once from your rich parents.