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Show HN: StockNerd – A community for index fund investors

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Re: Show HN: StockNerd – A community for index fund investors

#91

Post by kcorbitt »

jjeaff wrote: post #79
toephu2 wrote: post #75

Earlier quoted context omitted.

What if Schwab raises the .03% fee for their S&P 500 mutual fund to .06% in a few years? They can change their rates anytime right? In that case it would have better to stick with VOO? Of course Vanguard could raise their rates too.

The one advantage of Vanguard is that the company itself is owned by its funds. So the very people who pay the admin fees are the ones who vote the leadership in or out. So raising fees would be unlikely unless necessary and they are known to be very frugal as a company as well so I feel like they are unlikely to need more fees. Especially with almost $3 Trillion under management. Of course, there isn't any real cost…

There isn't a large cost to switching brokerages and keeping the same funds (although it's a pain and some places do claw back $50 or so on the way out the door), but there could be a major cost to switching funds within your brokerage, eg. switching from SCHB to VTI. If you're not in a tax-deferred account, that switch will cause you to realize capital gains and pay a 15% tax at the moment of sale.

That's why I prefer to stick with Vanguard: like you explained, fund holders are their corporate owners and they're supremely unincentivized to perform a bait and switch. Schwab, on the other hand, could decide to raise admin fees 10 basis points tomorrow if they decided the revenue justified the increased churn.

Re: Show HN: StockNerd – A community for index fund investors

#92

Post by kcorbitt »

ryandrake wrote: post #72
pc86 wrote: post #49

Earlier quoted context omitted.

The FI crowd is 90% expense management and 10% investment. It seems like most folks there have a goal to stop working but are willing to do that and live like a pauper the rest of their lives. If that works for them, great, but I'd much rather work at a job I love, make very good money, and enjoy my life, rather than "retire" at 35 and live on $24k/yr in interest for the rest of my life. I'd love to see a Financial I…

I've read some of those web sites and they're insufferable. Buy a house in cash so you have no payments, shop only at Goodwill, collect rain water for drinking, and never, ever get sick, and you, too can retire at 40!!

Sure, there are people in the FI crowd trying get by on $15k a year. Not my cup of tea, but if they're happy that way I say more power to them. But the community is a spectrum -- there's also a fairly large contingent (composed mainly of doctors, engineers and other high-income workers) whose savings at early-retirement time seem to cluster around ~$3M, allowing for retirement spending of $90-100k. That buys a solid lifestyle by almost anyone's standards. Obviously, that's predicated on having a high-earning career and taking saving seriously, but it's totally doable in 10-20 years.

Re: Show HN: StockNerd – A community for index fund investors

#93

Post by oneshot908 »

rsync wrote: post #85
lukewrites wrote: post #73

Earlier quoted context omitted.

Yeah, I think "a community for index fund investors" already exists, and it's the boglehead forums and wiki. Index fund investing is (relatively) simple and (relatively) boring. Honest questions: What does an app with leader boards, individual portfolios, and stock picking add to that or how does this app fit in with that philosophy? (edit for grammar)

"Yeah, I think "a community for index fund investors" already exists, and it's the boglehead forums and wiki." A community for index fund investors sounds oxy-moronish to me ... What's to talk about ?

How to schedule saving for retirement, annual fees, ETFs vs index Funds, index allocations, optimal portfolios based on personal temperament, and when to (very seldomly) change allocations (if ever)?

Re: Show HN: StockNerd – A community for index fund investors

#95

Post by ryandrake »

kcorbitt wrote: post #92
ryandrake wrote: post #72

Earlier quoted context omitted.

I've read some of those web sites and they're insufferable. Buy a house in cash so you have no payments, shop only at Goodwill, collect rain water for drinking, and never, ever get sick, and you, too can retire at 40!!

Sure, there are people in the FI crowd trying get by on $15k a year. Not my cup of tea, but if they're happy that way I say more power to them. But the community is a spectrum -- there's also a fairly large contingent (composed mainly of doctors, engineers and other high-income workers) whose savings at early-retirement time seem to cluster around ~$3M, allowing for retirement spending of $90-100k. That buys a solid…

Do-able? Maybe. High-earning is an understatement though. If you want to reach $3M in 20 years, you'd need to save about $100K per year, assuming, say, an annually compounding 4% interest rate across your savings and investments. A lot of people who might consider themselves high-earners don't even make that much in a year, let alone are able to save it.

Even assuming you're a gambler and put all your savings into stocks and get that mythical "steady 7%" return, you need to set aside $75K every year to reach $3M in 20 years.

I'm not claiming to be the world's best saver, but I think I live frugally enough, and after 20 years into a fairly good tech career, my savings is an order of magnitude+ less than that.

Re: Show HN: StockNerd – A community for index fund investors

#96

Post by ryandrake »

fpgaminer wrote: post #87
jjeaff wrote: post #81

Earlier quoted context omitted.

Borrowing on your home to invest is just a terrible idea. You may see higher returns on the aggregate in the market but doing so is a good way to lose your home. Too much risk and like you, I think the small spread (and it is very small) between your mortgage and market returns doesn't even cover the risk premium of the potential to lose your home.

The idea isn't to borrowing against your home to invest. Rather, the idea is that after you have your mortgage, you put your extra money towards your stock/bond investments rather than putting extra money into the mortgage to pay it off early. This is because the interest on your mortgage is quite low compared to the long-term stock market returns (7-8% after taxes/inflation). So your dollars are more valuable there…

That 7-8% return is not risk-free, whereas if you have a fixed rate of, say, 4%, any extra mortgage payments represent a risk-free 4% to yourself.

So the person who poured their money into the stock market may have a higher net worth, or they may not.

Re: Show HN: StockNerd – A community for index fund investors

#97

Post by shakestheclown »

Uroboric wrote: post #66
tdb7893 wrote: post #61

Earlier quoted context omitted.

The issue is that even after dramatic crashes my impression is that stocks generally beat bonds long term. That means that if one person put all theirs in stocks and the other in bonds the one in stocks is likely going to have more money later, even if the market crashed a few times in between.

I agree with your point entirely, but my point is that most people don't just sock money away for decades if it isn't specifically retirement money. Usually it is saved for some medium-term goal, which stocks could potentially spoil. Aside from that risk, why even deal with the psychological effect of that uncertainty for a paltry gain?

Most people can't come up with $2k in case of an emergency. Most people are living paycheck to paycheck. Don't be most people.

There is a compromise between living for the moment and living for the future. If you are saving for a house then you can move those investments to a less risky investment option but still a better return than bonds or interest. Keep your medium-term investments separate from your retirement account. I have short term, long-term non retirement, and long-term retirement accounts.

The gain isn't paltry. The difference between a 2% rate of return and a 5% rate of return for $5k initial + $50/month over 30 years is around $22k. If you do $200/month it's $59k.

Re: Show HN: StockNerd – A community for index fund investors

#98

Post by fpgaminer »

ryandrake wrote: post #96
fpgaminer wrote: post #87

Earlier quoted context omitted.

The idea isn't to borrowing against your home to invest. Rather, the idea is that after you have your mortgage, you put your extra money towards your stock/bond investments rather than putting extra money into the mortgage to pay it off early. This is because the interest on your mortgage is quite low compared to the long-term stock market returns (7-8% after taxes/inflation). So your dollars are more valuable there…

That 7-8% return is not risk-free, whereas if you have a fixed rate of, say, 4%, any extra mortgage payments represent a risk-free 4% to yourself. So the person who poured their money into the stock market may have a higher net worth, or they may not.

I don't think real estate/paying into your mortgage is risk-free. I'd say it's about as risky as long term investments into the stock market.

Over all of recorded history, the stock market has gone up 10%/year on average (not accounting for taxes/inflation).

The common rebuttal to that is that past performance is not an indicator of future performance.

Sure, but then you have to apply the same logic to the supposedly "risk-free" real estate. I think it's just as likely that your house becomes worthless as the stock market no longer giving 10% returns.

My more general argument is that for all intents and purposes the stock market is a gauge of the overall economy. If suddenly the stock market stopped returning 10%/yr the economy as a whole would be in serious trouble. No investments, real estate or otherwise, would be safe. Your stocks would be as worthless as money stashed under a mattress.

That's my logic, at least. Of course, as I said, I don't follow that logic personally. Not that I don't agree with it, just that I'm willing to sacrifice financially in exchange for the satisfaction of owning our home.

Re: Show HN: StockNerd – A community for index fund investors

#99

Post by acpk »

baccredited wrote: post #25

Warren Buffet tells his heirs to go 90% SP500 and 10% Bonds. So just buy VOO and BND, rebalance yearly and you are done. OR do a 3 fund portfolio like: https://www.bogleheads.org/wiki/Three-fund_portfolio OR buy a target retirement fund from Vanguard: https://investor.vanguard.com/search/?query=Vanguard%20targe... OR fill out a risk profile on Wealthfront/Betterment and invest there. Bottom line is pick an approach a…

To automatically see your returns rather than manually input your holdings, check out https://www.keel.io. Keel allows you to compare your returns to successful investors, and subscribe to their portfolios.

Re: Show HN: StockNerd – A community for index fund investors

#100

Post by bfang »

acpk wrote: post #99
baccredited wrote: post #25

Warren Buffet tells his heirs to go 90% SP500 and 10% Bonds. So just buy VOO and BND, rebalance yearly and you are done. OR do a 3 fund portfolio like: https://www.bogleheads.org/wiki/Three-fund_portfolio OR buy a target retirement fund from Vanguard: https://investor.vanguard.com/search/?query=Vanguard%20targe... OR fill out a risk profile on Wealthfront/Betterment and invest there. Bottom line is pick an approach a…

To automatically see your returns rather than manually input your holdings, check out https://www.keel.io . Keel allows you to compare your returns to successful investors, and subscribe to their portfolios.

It's cool to be able to follow the real stock purchase from other investors' brokerages!
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