5 ms·

Principles: 1) Asset allocation: Basically, how much you want in stocks, how much in bonds. Those are the two major asset classes. Go way heavier on stocks ear

by dxs 2y ago

Principles: 1) Asset allocation: Basically, how much you want in stocks, how much in bonds. Those are the two major asset classes. Go way heavier on stocks early in life and maybe trend toward 50-50 later in life when you have less time to ride out dips. 2) Diversification: What specific entities you invest in. Suggestion: Total US stock market index, total world non-US stock market index, total US bond market index. This way you don't have to pick winners. You just buy everything. Let the bad stuff drop off along the way, and let the good stuff do its thing. 3) Rebalancing: Like once a year, or every time your chosen asset allocation gets at least 5% off. Whatever feels good, but keep your asset allocation under your own conscious control. As a note, Ric Edelman, when he had a radio show, went over the IRA to Roth conversion. Several times. According to him, it's a wash. Pay tax before you invest or when you withdraw, but either way the net effect is almost identical. I like silexia's comment. There is a lot of information not included in the story, and, if you think about it, this whole story is one data point. One guy did some things/had some things happen at a particular time in history. Don't expect to cut and paste into your own life and get rich by next week. Important points: 1) Start as early as you can. 2) Be religious about regular investing without fail. 3) Never break into the piggy bank to buy a house or a fancy car, or for any other reason short of a dire medical emergency. 4) Take advantage of every break you can find, and any employer matches. 5) Wait. There is a huge amount of information at Bogleheads Investing Advice and Info ( https://www.bogleheads.org/ https://www.bogleheads.org/ )

BizarroLand 2y ago
Also, get as many 20,000/1 profit ratio private insider secret deals as you possibly can under your belt and let other people work their lives away to enrich you.
toast0 2y ago
> As a note, Ric Edelman, when he had a radio show, went over the IRA to Roth conversion. Several times. According to him, it's a wash. Pay tax before you invest or when you withdraw, but either way the net effect is almost identical. It depends on where the tax rates are when you deposit and when you withdrawal. Some of that is politics, and some of that is where you fit in the tax brackets. There's some amount of unknown and unknowable there, but if you're early in your career and not making a lot of money, Roth contributions might make a lot of sense --- might as well pay taxes upfront while they're low. Once you start making more money, traditional contributions start making more sense, as you're likely to have lower income as a retiree than while employed. If you have some years later in life where you aren't earning much (by choice or not), roth conversions can make sense then, although that gets real complex if the reported income will interfere with benefit programs you would otherwise qualify for.

by dxs 2y ago

BizarroLand 2y ago

Also, get as many 20,000/1 profit ratio private insider secret deals as you possibly can under your belt and let other people work their lives away to enrich you.

toast0 2y ago

> As a note, Ric Edelman, when he had a radio show, went over the IRA to Roth conversion. Several times. According to him, it's a wash. Pay tax before you invest or when you withdraw, but either way the net effect is almost identical. It depends on where the tax rates are when you deposit and when you withdrawal. Some of that is politics, and some of that is where you fit in the tax brackets. There's some amount of unknown and unknowable there, but if you're early in your career and not making a lot of money, Roth contributions might make a lot of sense --- might as well pay taxes upfront while they're low. Once you start making more money, traditional contributions start making more sense, as you're likely to have lower income as a retiree than while employed. If you have some years later in life where you aren't earning much (by choice or not), roth conversions can make sense then, although that gets real complex if the reported income will interfere with benefit programs you would otherwise qualify for.