151–160 of 172 posts
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Top money manager at major Wall Street firm != random people. It doesn't necessarily mean stocks are about to go down either (Wall Street has certainly been wrong too, eg. 2000 or 2007), but it's a far cry from having a shoe-shine boy tell you to buy stocks.
Wall St was right in 2000 and 2007. It was 1995-1999 and 1998-2006 when Wall St (and everyone else) was wrong (on tech stocks and housing, respectively).
Does the rule that you should get out of the stock market when random people tell you stocks are sure to go up apply in reverse? If so, this is a pretty encouraging sign.
I won't lie, I've been funding my IRA early lately.
Does the rule that you should get out of the stock market when random people tell you stocks are sure to go up apply in reverse? If so, this is a pretty encouraging sign.
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In theory, shouldn't all stocks be dividend paying? If your stock doesn't pay dividends, what makes it any different from baseball cards as an investment?
It's different from baseball cards because a given baseball card can't start paying dividends if all the people who own the card have a vote and decide it should. I used to spend a lot of time playing Railroad Tycoon 2, and in that game a good way to get rich is 1. Put all your money in to a railroad you control. 2. Grow your railroad. As your railroad grows, the value of your stock in it grows. This causes your purc…
There's a good argument that a company like Microsoft doesn't anymore, which is why they were pretty much forced to pay out a big dividend a few years back. Just to give an example at the opposite end of the corporate life cycle.
Just found this article suggesting it's still an issue:
http://www.bloomberg.com/news/2010-07-22/microsoft-may-use-c...
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No, it's not, but the current situation smacks of systemic job loss rather than cyclical job loss. It's a problem. What happens when people absolutely can't find new jobs? Self-feeding demand destruction?
"No, it's not, but the current situation smacks of systemic job loss rather than cyclical job loss." Sounds like we're back in the 80's - 'the Japanese are taking our jobs! The robots did it!' and then we went into the 20 most prosperous years humankind has ever known. I hear people cry left and right that today's job loss is systemic, but I hardly see any factual arguments to support that position. Jobs were cut ove…
"10 times better than the kings of 500 years ago." Yes, but both you and jacquesm are confusing technology advancement with an economic phenomenon, which is defined by high structural unemployment rate and many business failures
"pack cans of beans and ammo and head for the mountains." Nobody says you have to do that. 75% of the people that lived through the great depression lived a normal but frugal life. However, if/when the dollar suffers from hyperinflation, that's another story.
am I the only one who sees a flaw in the math here? I mean I wasn't a math major in college, but i did take financial math, and think he's forgetting a key thing called compound interest.
Market returns are based on the amount investors need to take the inherent risks. Unless stock market investing gets considerably less risky (seems quite unlikely) investors will leave the market for less risky vehicles until rates return to the amounts needed to justify taking the risk, which have historically been around 7-10%.
Stocks, real estate, bonds, and all other market-based investment vehicles will always have returns in-line with risks in the long run.
Nobody should ever retire hoping to get a steady income from the stock market or real estate or other volatile investments. By the time you're ready to retire, you should be entirely in FDIC-insured CDs and the like. If your retirement plan is contingent on 6% annually you're asking for trouble, and you're probably going to get it if you live long enough.
1. Low return on money. That's because money itself worth more now; the Fed has destroyed whole bunch money via credit tightening. We have gone through an asset deflation phrase and the money you have can buy more assets now. It's ok to have low return on money for now.
2. Asset allocation. Should not just put your FU money in stocks or Treasury. Read up on asset allocation. Have better downfall protection and better return.
3. 4% withdrawal rate. Studies and simulations have found that annual 4% withdrawal rate of a portfolio can make it last for very long time adjusted for inflation. 4% of 2M is 80K, which can provide a nice living.
4. Count net worth, not just cash. That 80K makes a big difference with a paid-for house.
5. Don't discount Social Security/Medicare/IRA/401K/Pension. The discussion of couple millions of PRESENT day often ignores the age restricted retirement funds. Those can be substantial.
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If you can build a $100K/year product, why not do that, and then use that money as your runway while you build your five million dollar product? building a company is /much/ easier if you don't have to worry about where rent is coming from three months from now.
because at that point it's very easy to get complacent...and building up to $100K for a niche business still takes time and money.