61–70 of 245 posts
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. 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…
Earlier quoted context omitted.
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 w…
If you look at the chart for the GLD it doesn’t resemble and inflation proof investment imo. Maybe in the extremely long term it is but on a 1 decade time scale for example it certainly is not.
Earlier quoted context omitted.
The "cash" in the article does not mean physical cash. It means money in a bank account. Edit: or more accurately, > The cash portion should be kept in a money market fund investing only in short-term U.S. Treasury securities
That's kind of the opposite of cash...
Earlier quoted context omitted.
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 intimidat…
Bank accounts being frozen has absolutely nothing to do with holding cash. Also, anyone saying "holding cash" almost certainly does not mean in a safe/under your mattress. It means in a bank account somewhere. Hopefully a high yield savings account. And, the strategy to dealing with bank accounts being frozen is multiple bank accounts at different, unrelated banks. Same with credit cards.
As to having multiple bank accounts, have you heard of data sharing?
If you have multiple bank accounts in your name, across multiple banks, they can all be frozen, just look at how sanctions work of foreign entities.
You obviously dont know how credit reference agencies work. So in the UK, the electoral register (open and closed) is used by credit reference agencies to see if you are linked to an address. The credit reference agencies then pass on information to would be lenders and banks, and banks also update the credit reference agencies with your monthly bank account totals and your direct debit payments so they can see your monthly outgoings and see if you are paying your overheads reguarly, so other banks and lenders can see if you are worth lending money to.
Now even if you dont need to borrow money, pay your bills as soo as they come through the letter box if they are not handled by direct debit, that information is still passed on by your bank to multiple credit reference agencies who then disseminate the data around the world to different countries because programming teams can exist in multiple countries, different laws and then you get stuffed if you value your privacy, and thats before hackers get involved hacking the likes of Experian.
Earlier quoted context omitted.
But a rule to hold 25% of your wealth in (physical) cash doesn’t seem well balanced. Imagine stashing $250,000 in notes somewhere. Do you put it in a safe in your house and hope your house doesn’t burn down or get burglarized? Or do you spread the cash across your multiple properties (that you don’t rent out)?
I commented already for the parent, but the article most definitely does not mean physical cash. Nobody will advice you to hold physical cash.
The 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.
Rule #1 (your career creates your wealth) is a gem. Rule #8 (make your own decisions) lacks self-awareness, especially after you read Rule #11 (bulletproof portfolio). I have been on a quest for a truly bulletproof portfolio for years. It's not easy. TANSTAAFL. Rule #11 also contradicts Rules #6 (no trading system works forever) and #9 (only do things you understand). That criticism aside, the author did a service to…
Where I've ended up is keeping some money aside to scratch whatever (mostly pretty conservative) investing itch I have and leaving the rest to a financial advisor. He's done stuff for my family for years and my feeling is that especially if I'm not going to actively manage my full portfolio, I'm better off with someone else doing it than just throwing the money into some index funds and calling it a day. (Though ther…
Alternatively: buy AAPL :)
Anyhow, at one of those customers, the designers, photoshop artists, and I got lunch and started talking. Prime topic was the 'outspoken IT guy' who had all sorts of 'theories' and 'rules' he lived by, often to the amusement of his coworkers.
They goaded me into asking about his rules,
"Ask him why he only uses chopsticks!".
A: "Because they've never been able to train monkeys to use chopsticks"
"Ask him his retirement strategy! He only invests in one thing, he's a true believer!"
A: "I am a believer, I'm a believer in Steve Jobs, I put all of my money in whatever he does. I had money in Pixar, now I'm putting all my money in APPL".
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. 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.)