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> The real Robin Hood-esque company in this whole thing is Vanguard, who have almost certainly done more than most any other company in this space to return pr

> The real Robin Hood-esque company in this whole thing is Vanguard, who have almost certainly done more than most any other company in this space to return profits from the market to customers of all wealth ranges. This is true but unfortunately it's one of those situations where you need money to make money and even then it's a slow multi-decade long process. Culturally young people find themselves in something of a vice grip. We are a consumerism culture hell bent on producing and acquiring the next best thing. Patience and presence of mind over financials are diminishing skills, yet you need both of these if you intend on retiring through owning stocks.

stouset 6y ago
Absolutely. 4% inflation-adjusted returns aren’t going to turn a single contribution of $1,000 into $1,000,000 in anyone’s lifetime. We have a massive economic problem where the young and the economically disadvantaged face massive challenges achieving financial security. And without the spare funds to contribute non-trivial amounts regularly (and the financial education to buy-and-hold through thick and thin), even somewhere like Vanguard isn’t going to wildly change people’s fortunes. I don’t know what the answer is (although I have some educated guesses) but what I know doesn’t really help is glorifying a gambling regime where one in millions gets filthy rich, one in tens of thousands gets kind of rich, one in hundreds does maybe a little better than the market, and everyone else is effectively donating what little they do have to the Wall Street elite.
- throwaway2245 6y ago
  > the financial education to buy-and-hold through thick and thin I find this somewhat dubious. If you buy-and-hold for a lifetime, you'll face at least a once-in-a-lifetime level of shock at some point. The possibility that this shock will happen just when you need the funds occurs fairly regularly to generations of retirees: but always seems to be forgotten by gold-standard financial advice.
  - devlopr 6y ago
    That's why you move from a risky stock portfolio to a safer bold driven portfolio as your age increases.
    - throwaway2245 6y ago
      This helps, but not that much. (Assuming your risk assessment is correct) Suppose a shock happened right before I planned to shift into a safer portfolio. What do I do then? The only really correct answer is: "well, I didn't need that money anyway."
      - devlopr 6y ago
        The idea is you are always shifting rebalancing. If you are 45 you might be at 50/50 (safe/risky growth) by 55 25/75 by 60 90% is safe. If something happens at 60 where you lose 50% of the 10% in growth stocks stats show that a 5 year recovery to base levels is likely.
      - stouset 6y ago
        There shouldn't be an exact moment you switch to a conservative portfolio. As you get nearer to retirement, you gradually rebalance. Often this is as easy as simply placing new contributions in safer investments. Less often it just involves exchanging one set of funds for another, say once per year. Again, Target Retirement funds handle this completely transparently for you and require literally zero hands-on involvement. This is quite simply nowhere near as hard as you're making it out to be.
        throwaway2245 6y ago
        > This is quite simply nowhere near as hard as you're making it out to be. I'm going to quote a (sarcastic) reply to another of your comments: "This is easy. Just find a job that pays you $350,000 a year." If you have plenty of wealth and income, then it's easy. But then, if you have plenty of wealth and income, it doesn't really matter what you do.
  - 6y ago
- WalterBright 6y ago
  > the financial education to buy-and-hold through thick and thin Buy the S&P500 through an index fund or SPY ETF. Then hold it for decades. There you go. A two sentence financial education, and you'll do at least as well as the market, which has an upward bias over time.
  - stouset 6y ago
    Of course! A very large proportion of my net worth is VTSAX. Target retirement funds are potentially an even better option for the average retail investor. But the educational part comes with teaching people why this approach tends to have better outcomes than others and also to help instill the understanding of how panic-selling during a downturn is a losing strategy of "buy high, sell low". I didn't have significant assets during the 2008 crash, but I certainly did last March. And even though I've advised others to buy and hold for years, it took a lot of self-discipline and self-reassurance to not throw that all away and exit the market when it became clear what the extent of the pandemic was likely to be. Even today I don't think I fully understand why the market has done as well as it has. But I do know I'm glad that in the end I was able to stick with the game plan I've been preaching all this time.
- autoditype 6y ago
  > 4% inflation-adjusted returns aren’t going to turn a single contribution of $1,000 into $1,000,000 in anyone’s lifetime. Of course it isn't and no one suggested that. A more realistic scenario is investing 1,000/month for 35 years at 5% adjusted returns IS $1,000,000, and isn't even capping the maximum 401k limits. I agree with you that this isn't possible when you're not employed or otherwise disadvantaged though.

stouset 6y ago

Absolutely. 4% inflation-adjusted returns aren’t going to turn a single contribution of $1,000 into $1,000,000 in anyone’s lifetime. We have a massive economic problem where the young and the economically disadvantaged face massive challenges achieving financial security. And without the spare funds to contribute non-trivial amounts regularly (and the financial education to buy-and-hold through thick and thin), even somewhere like Vanguard isn’t going to wildly change people’s fortunes. I don’t know what the answer is (although I have some educated guesses) but what I know doesn’t really help is glorifying a gambling regime where one in millions gets filthy rich, one in tens of thousands gets kind of rich, one in hundreds does maybe a little better than the market, and everyone else is effectively donating what little they do have to the Wall Street elite.

throwaway2245 6y ago
> the financial education to buy-and-hold through thick and thin I find this somewhat dubious. If you buy-and-hold for a lifetime, you'll face at least a once-in-a-lifetime level of shock at some point. The possibility that this shock will happen just when you need the funds occurs fairly regularly to generations of retirees: but always seems to be forgotten by gold-standard financial advice.
- devlopr 6y ago
  That's why you move from a risky stock portfolio to a safer bold driven portfolio as your age increases.
  - throwaway2245 6y ago
    This helps, but not that much. (Assuming your risk assessment is correct) Suppose a shock happened right before I planned to shift into a safer portfolio. What do I do then? The only really correct answer is: "well, I didn't need that money anyway."
    - devlopr 6y ago
      The idea is you are always shifting rebalancing. If you are 45 you might be at 50/50 (safe/risky growth) by 55 25/75 by 60 90% is safe. If something happens at 60 where you lose 50% of the 10% in growth stocks stats show that a 5 year recovery to base levels is likely.
    - stouset 6y ago
      There shouldn't be an exact moment you switch to a conservative portfolio. As you get nearer to retirement, you gradually rebalance. Often this is as easy as simply placing new contributions in safer investments. Less often it just involves exchanging one set of funds for another, say once per year. Again, Target Retirement funds handle this completely transparently for you and require literally zero hands-on involvement. This is quite simply nowhere near as hard as you're making it out to be.
      - throwaway2245 6y ago
        > This is quite simply nowhere near as hard as you're making it out to be. I'm going to quote a (sarcastic) reply to another of your comments: "This is easy. Just find a job that pays you $350,000 a year." If you have plenty of wealth and income, then it's easy. But then, if you have plenty of wealth and income, it doesn't really matter what you do.
- 6y ago
WalterBright 6y ago
> the financial education to buy-and-hold through thick and thin Buy the S&P500 through an index fund or SPY ETF. Then hold it for decades. There you go. A two sentence financial education, and you'll do at least as well as the market, which has an upward bias over time.
- stouset 6y ago
  Of course! A very large proportion of my net worth is VTSAX. Target retirement funds are potentially an even better option for the average retail investor. But the educational part comes with teaching people why this approach tends to have better outcomes than others and also to help instill the understanding of how panic-selling during a downturn is a losing strategy of "buy high, sell low". I didn't have significant assets during the 2008 crash, but I certainly did last March. And even though I've advised others to buy and hold for years, it took a lot of self-discipline and self-reassurance to not throw that all away and exit the market when it became clear what the extent of the pandemic was likely to be. Even today I don't think I fully understand why the market has done as well as it has. But I do know I'm glad that in the end I was able to stick with the game plan I've been preaching all this time.
autoditype 6y ago
> 4% inflation-adjusted returns aren’t going to turn a single contribution of $1,000 into $1,000,000 in anyone’s lifetime. Of course it isn't and no one suggested that. A more realistic scenario is investing 1,000/month for 35 years at 5% adjusted returns IS $1,000,000, and isn't even capping the maximum 401k limits. I agree with you that this isn't possible when you're not employed or otherwise disadvantaged though.