The economy is like an opaque operating system that none of its users truly understand, and in 2008 it blue-screened and had to be crash-restarted using hacks that we don't really know the repercussions of yet.
Harry Browne’s Rules of Financial Safety (1999)
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Re: Harry Browne’s Rules of Financial Safety (1999)
#32This has some information but if you use all of them, this leads to a lot less or no oppurtunity in real world. It's like opposite of open mindset and being optimistic. Definitly works for average mind? and those who don't want to crate long term wealth.
And 0 mention of index funds? sp 500 history and returns? For me that defines the limited view and limited information of the author (whoever he/she is)
Gold has very little returns against real inflation in last 10 years. ok this has some mindless advices too, funny
Re: Harry Browne’s Rules of Financial Safety (1999)
#33Like 15 of these can be replaced by having a financial advisor that you fully trust. Finding one is obviously a huge challenge, but makes almost of all this knowledge you can offload onto an expert. IMO fidelity is probably the closest you’ll get, they’re call centers/etc are all fully certified us-based people who aren’t on commission/etc.
Rule #1 literally talks about why you don't. > Can you make big profits by relying on an expert who does have the proper qualifications? How do you find a true expert? That task is no easier than picking the right investments. If you don’t understand investing as well as the pros, you won’t know how to check those who seek to advise you. And you can’t rely on an advisor’s track record, even when it’s presented honest…
This is true historically where you needed to pick an individual advisor who managed your portfolio based on their experience/etc. That’s not really how the major companies like fidelity run it anymore - an advisor gets their certification and then fully plays by the playbook and isn’t allowed to even have their own track record. So you’re not getting some guys advise, you’re getting a company’s extremely researched strategy they built for individuals who match your needs.
But really calling up any company and asking for a rep isn’t going to be great - I think being friends with someone who you trust as a friend first and then as someone who converts the playbook to your investments is best.
Re: Harry Browne’s Rules of Financial Safety (1999)
#34> “Rule 9: Don’t ever do anything you don’t understand.” In 2021 I bought $500 of stock in a VR software company who was crowdfunding. Price per share was $4 on a valuation of $60M. Fast forward two years and they raise again…this time at a valuation of $170M. Naturally, I assumed my $500 was worth close to $1500 on paper. Wrong. By some magic, the common stock share price went from $4 to only $4.75 even as the compa…
There are other replies saying you were "scammed", but just examine your own statements to see how something had to give (in this case, the common stock valuation) for anything to make sense. That is, look at your statement (emphasis mine):
> Fast forward two years and they raise again…this time at a valuation of $170M. Naturally, I assumed my $500 was worth close to $1500 on paper.
If they raised again, it's completely nonsensical to think your stock would have tripled in value. The only way to assume that's even possible is if the company tripled in value without raising more money. After all, "raising" is just another word for selling part of the company to other, new shareholders. When you sell part of something, that means the existing shareholders own less (as a percentage) of it.
Yes, there are other bad tricks companies can play with different share classes and obscene preference rights for preferred shareholders (1x is pretty standard and totally fair in my opinion, anything more than that means to me that the company needed to raise under duress or has bad management).
In other words, the outcome you described seems perfectly reasonable just by the rules of math. It says to me that many people just don't understand that "raising money" means selling a part of your company.
Re: Harry Browne’s Rules of Financial Safety (1999)
#35Like 15 of these can be replaced by having a financial advisor that you fully trust. Finding one is obviously a huge challenge, but makes almost of all this knowledge you can offload onto an expert. IMO fidelity is probably the closest you’ll get, they’re call centers/etc are all fully certified us-based people who aren’t on commission/etc.
Fidelity is maybe ok. You really need to spend some time educating yourself and if you want help, need to get a fiduciary.
Agreed - doing some learning is a huge huge step that the list of rules kind of gets at but doesn’t make crystal clear.
Re: Harry Browne’s Rules of Financial Safety (1999)
#36The asset split of 25% each of gold, stocks, bonds and cash would have fared relatively bad over the years since 2007-09.
Investing in gold now seems real not smart, same with that much cash.
Re: Harry Browne’s Rules of Financial Safety (1999)
#37> “Rule 9: Don’t ever do anything you don’t understand.” In 2021 I bought $500 of stock in a VR software company who was crowdfunding. Price per share was $4 on a valuation of $60M. Fast forward two years and they raise again…this time at a valuation of $170M. Naturally, I assumed my $500 was worth close to $1500 on paper. Wrong. By some magic, the common stock share price went from $4 to only $4.75 even as the compa…
Everyone tries to get cute with financial strategies and investments, chasing those huge returns. You would be hard pressed to consistently beat the returns of a market fund over the life of your portfolio.
Re: Harry Browne’s Rules of Financial Safety (1999)
#38Rule 11 deserves a rethink. There is an official policy that cash will lose some % of its value each year! Holding 25% of your wealth in cash is planning to throwing away years of life. For this sort of dead-basic investment advice, there is no point being ready for situations where a cash position is advantageous. People are much more likely to panic, do something stupid or get ground down by inflation. It is better…
You obviously havent had your bank account frozen for no reason. I have!
Trying going without cash for 6 weeks, not knowing if transactions have gone through, direct debits have been paid etc etc. Going around in legal loopholes where the bank ombundsman wont talk to you until you have exhausted the banks complaints dept, but the banks complaints dept wont talk to you, so you get no where.
Its fucking legal intimidation and harassment and there is no legal recourse for it in the UK. Its why I have no bank accounts now.
The banks can and do freeze your accounts, just look at the sanctions done to Russians when the West decides to stoke a war!
Re: Harry Browne’s Rules of Financial Safety (1999)
#39Rule 11 deserves a rethink. There is an official policy that cash will lose some % of its value each year! Holding 25% of your wealth in cash is planning to throwing away years of life. For this sort of dead-basic investment advice, there is no point being ready for situations where a cash position is advantageous. People are much more likely to panic, do something stupid or get ground down by inflation. It is better…
>Rule 11 deserves a rethink. There is an official policy that cash will lose some % of its value each year! Holding 25% of your wealth in cash is planning to throwing away years of life. That depends on lots of things including how old you are and the current economic situation. For someone on the older side, getting a very low risk 5% on a chunk of their money doesn't seem like a half-bad strategy at the moment espe…
They could hold gold. Similar risk profile, much more likely to hold value long term and be better to hand on to the kids if there is some left over.
I'm not saying cash is so terrible that a nervous, confused and delicate grandma can't just eat the losses for security. I mean, sure. If you think you're probably going to lose money anyway then 10%!
But a 25% allocation by default is just giving money to wealthy men wearing suits. They already own suits, they don't need it. Keep the wealth. Donate it towards lobbying for Georgism instead of new wars, maybe, if you feel like burning a few % on a cause.
Re: Harry Browne’s Rules of Financial Safety (1999)
#40Rule 11 deserves a rethink. There is an official policy that cash will lose some % of its value each year! Holding 25% of your wealth in cash is planning to throwing away years of life. For this sort of dead-basic investment advice, there is no point being ready for situations where a cash position is advantageous. People are much more likely to panic, do something stupid or get ground down by inflation. It is better…
One compromise is to hold the cash in US TIPs, i.e. inflation indexed bonds. There's a limit of how much you can buy each year and the interface is quite clunky, but these bonds should protect against inflation.
(Note: inflation as measured by the US government. Many feel that the equations understate the real inflation.)