I dunno if I agree with the rest of this guy's blog or his off-hand remarks, but the investment advice in this page looks pretty solid overall.
Golden Rules of Financial Safety (1999)
41–50 of 118 posts
Re: Golden Rules of Financial Safety (1999)
#42> Rule #11: Create a bulletproof portfolio for protection. > The portfolio should assure that your wealth will survive any event — including an event that would be devastating to any individual element within the portfolio. In other words, this portfolio should protect you no matter what the future brings. > It isn't difficult or complicated to have such a portfolio this safe. You can achieve a great deal of diversif…
HB's Permanent Portfolio consists of 25% each cash/gold/stocks/long term bonds 25% stocks (index fund) Stocks – for profit during periods of general prosperity and/or declining inflation. 25% Gold – for profit during periods of bad inflation; during inflationary episodes gold bullion provides protection against a falling currency and other potential problems. 25% Long Term Bonds (30 year) – for profit during periods…
I would add that gold is an asset that does well when people lose faith in the dollar. It's insurance against the unthinkable.
Re: Golden Rules of Financial Safety (1999)
#43#13 - Keep some money overseas How exactly is this possible? I am a german citizen and resident, and after hours of reaearch a few months ago i couldn’t find ONE bank in the world I could open a bank account with. I always have to be at least a resident. Did anybody figure this out? My partner is from Canada and I would love to park some money there, but I couldn’t figure out a way to do so.
Why not store the money in Bitcoin instead? It's outside of government control and you should get a nice return on your investment.
See Rule #3: Recognize the difference between investing and speculating
Re: Golden Rules of Financial Safety (1999)
#44> Rule #1: Your career provides your wealth. I mainly disagree with the first rule. Your career should not provide your wealth. Your career should keep your bills paid, provide security for the future, and allow you to live a comfortable life. Investments in financial endeavors like real estate, businesses, stocks, etc, education, and family is what provides wealth. Update: Not sure why this post is getting downvoted…
And how, exactly, does one embark upon an endeavour such as owning real estate, starting a business, buying stocks, acquiring education, or starting a family?
For almost every single person, the main source of their wealth will be their career.
Unless you are planning on inheriting more money than you expect to make from your career from your extremely wealthy parents, you're going to have to accept Rule #1.
And if you borrow money to accomplish these things, you are in violation of Rule #7, don't use leverage.
Re: Golden Rules of Financial Safety (1999)
#45Advice: Just do dollar cost averaging in an index ETF. Question: Why? Answer: This article.
What advantages do index ETFs have over a comparable index mutual fund against the same benchmark? Or, to ask another way, is there any reason to prefer anything other than Vanguard's Index500 vs anything else attempting to replicate the SP 500? (I call out the Vanguard fund because the fees are very low, .14% iirc.)
The SPY ETF is 0.0945% per year, although you still pay the broker when you enter or leave the position.
Vanguard's prices are great, especially if you get into their top-tier $10,000+ accounts. But ETFs are competitive against Vanguard in my experience.
Of course, Vanguard also offers low-cost ETFs. As long as you go with a mainstream option, I don't think you can go wrong.
Re: Golden Rules of Financial Safety (1999)
#46> Rule #1: Your career provides your wealth. I mainly disagree with the first rule. Your career should not provide your wealth. Your career should keep your bills paid, provide security for the future, and allow you to live a comfortable life. Investments in financial endeavors like real estate, businesses, stocks, etc, education, and family is what provides wealth. Update: Not sure why this post is getting downvoted…
Where does the money for those things come from, if not your career?
> Where does the money for those things come from, if not your career?
The money to fund wealth building ventures comes from having a stable career. However, the act of having a career does not build wealth as the rule implies.
Re: Golden Rules of Financial Safety (1999)
#47He missed rule #0: Wealth is what you save, not what you earn or what you spend. There are many people with very high income but spending as high (or even higher!), so they have little or no wealth.
Actually, cash flow beats cash. Cash is also a liability but a large enough steady source of income is very hard to beat. That's one reason why so many people that have cash try their hardest to turn it into a stream of recurring revenue that they can then live of without hurting the principal.
...and that principal is your wealth.
So to summarize:
Use your career income to accumulate wealth that will provide your income without your career.
Re: Golden Rules of Financial Safety (1999)
#48Earlier quoted context omitted.
HB's Permanent Portfolio consists of 25% each cash/gold/stocks/long term bonds 25% stocks (index fund) Stocks – for profit during periods of general prosperity and/or declining inflation. 25% Gold – for profit during periods of bad inflation; during inflationary episodes gold bullion provides protection against a falling currency and other potential problems. 25% Long Term Bonds (30 year) – for profit during periods…
I would add that gold is an asset that does well when people lose faith in the dollar. It's insurance against the unthinkable.
yeah but there, other currencies make more sense.
Re: Golden Rules of Financial Safety (1999)
#49Earlier quoted context omitted.
I would add that gold is an asset that does well when people lose faith in the dollar. It's insurance against the unthinkable.
yeah but there, other currencies make more sense.
This is also intended to be a simple portfolio that your grandma can operate.
Re: Golden Rules of Financial Safety (1999)
#50> Rule #1: Your career provides your wealth. I mainly disagree with the first rule. Your career should not provide your wealth. Your career should keep your bills paid, provide security for the future, and allow you to live a comfortable life. Investments in financial endeavors like real estate, businesses, stocks, etc, education, and family is what provides wealth. Update: Not sure why this post is getting downvoted…
And how, exactly, does one embark upon an endeavour such as owning real estate, starting a business, buying stocks, acquiring education, or starting a family? For almost every single person, the main source of their wealth will be their career. Unless you are planning on inheriting more money than you expect to make from your career from your extremely wealthy parents, you're going to have to accept Rule #1. And if y…
> And how, exactly, does one embark upon an endeavor
By using the money earned from your career to fund ventures. A stable career should provide you with money to build wealth. However, simply working a 9-5 everyday will not provide wealth as the rules implies. It provides money, not wealth. There is a difference