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Golden Rules of Financial Safety (1999)

harrybrowne.org

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Re: Golden Rules of Financial Safety (1999)

#61

Post by tanderson92 »

swendoog wrote: post #57
brndnmtthws wrote: post #52

25% cash is ludicrous and irresponsible. Cash has historically been a terrible 'investment', especially since most central banks have maintained a policy of creating annual inflation. Warren Buffett has some interesting things to say about this: https://20somethingfinance.com/warren-buffett-is-moving-100-... and http://www.barrons.com/articles/buffett-bonds-terrible-in-co... for example.

Possibly holding cash is useful for when you need to quickly capitalize on a drop in the market?

One can do that with treasuries or T-bills which historically have earned a real return. In a crisis one often finds that treasuries are negatively correlated with equities which can be a boon.

Re: Golden Rules of Financial Safety (1999)

#62

Post by komali2 »

shoover wrote: post #40
simplerufus wrote: post #9

#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.

Times were different when Browne was practicing and refining his system. His book Fail-safe Investing talks about using Swiss banks and holding gold there. My understanding is today the Swiss don't want to deal with the headaches that come with servicing customers from countries that demand so much reporting. One way is via the Perth Mint in Australia. They need a copy of your passport and take the money by wire to a…

Eesh, aren't wire fees super high?

Re: Golden Rules of Financial Safety (1999)

#63

Post by brndnmtthws »

swendoog wrote: post #57
brndnmtthws wrote: post #52

25% cash is ludicrous and irresponsible. Cash has historically been a terrible 'investment', especially since most central banks have maintained a policy of creating annual inflation. Warren Buffett has some interesting things to say about this: https://20somethingfinance.com/warren-buffett-is-moving-100-... and http://www.barrons.com/articles/buffett-bonds-terrible-in-co... for example.

Possibly holding cash is useful for when you need to quickly capitalize on a drop in the market?

Bonds are better suited for that purpose, however it's still preferred to just hold stocks over the long term. Holding bonds provides stability at the expense of drag.

Re: Golden Rules of Financial Safety (1999)

#65

Post by pdog »

brndnmtthws wrote: post #52

25% cash is ludicrous and irresponsible. Cash has historically been a terrible 'investment', especially since most central banks have maintained a policy of creating annual inflation. Warren Buffett has some interesting things to say about this: https://20somethingfinance.com/warren-buffett-is-moving-100-... and http://www.barrons.com/articles/buffett-bonds-terrible-in-co... for example.

Berkshire Hathaway currently has a $100 billion cash stockpile. There have been multiple times in Mr. Buffett's career when he waited for better investment opportunities by holding cash. Besides, cash isn't so bad. If you roll over short-term Treasury bills, you basically keep up with inflation.

Re: Golden Rules of Financial Safety (1999)

#66

Post by tome »

simplerufus wrote: post #9

#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.

https://www.bullionvault.com/ allows you to buy gold held in Switzerland, UK, USA, Canada and Singapore.

I don't know what conditions they place on the residence location of their subscribers.

Re: Golden Rules of Financial Safety (1999)

#67

Post by dpierce9 »

wiredfool wrote: post #14
metalliqaz wrote: post #5

Advice: 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.)

Aside from fees, the trade price is different. ETFs have intraday prices while index funds have a NAV that settles after close.

Re: Golden Rules of Financial Safety (1999)

#69

Post by SilasX »

snikeris wrote: post #59
brndnmtthws wrote: post #52

25% cash is ludicrous and irresponsible. Cash has historically been a terrible 'investment', especially since most central banks have maintained a policy of creating annual inflation. Warren Buffett has some interesting things to say about this: https://20somethingfinance.com/warren-buffett-is-moving-100-... and http://www.barrons.com/articles/buffett-bonds-terrible-in-co... for example.

I think this article may clear some things up for you: https://portfoliocharts.com/2017/05/12/understanding-cash-wi... Harry's 25% cash isn't dollar bills, it's treasury bills, which have held up to inflation.

Or you could apply the deep understanding you gained from the article to untangle the misconception you believe the parent was harboring, rather than ask everyone, on faith, to spend fifteen minutes figuring it out for themselves, when they might not even get the insight you want them to.

>Harry's 25% cash isn't dollar bills, it's treasury bills, which have held up to inflation.

Short-term ones haven't for last ~10 years, especially if it's a taxable account.

Re: Golden Rules of Financial Safety (1999)

#70

Post by lbotos »

SandersAK wrote: post #38

The first rule is to inherent the money. The second is to be born into a network that benefits you and doesn't punish you arbitrarily. The third rule is to profit from a strong public infrastructure, and then once you've achieved enough wealth, work tirelessly to defund it through tax cuts. This guy's a mug. And anyone who thinks financial security for one is something that can be done independent of a community is f…

>And anyone who thinks financial security for one is something that can be done independent of a community is full of it, or a hustler protecting previously accrued assets.

???

So you are saying the people who make money, and are frugal, would not be able to get to "financial security"? I'm a sample size of 1, but I seem to be doing just that "on my own".

You seem extra jaded here. What am I missing?

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