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Harry Browne’s Rules of Financial Safety (1999)

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Re: Harry Browne’s Rules of Financial Safety (1999)

#91

Post by k2xl »

ttul wrote: post #81

Rule #0: Be born into a privileged family. Your parents will raise you in a wealthier suburb where the schools are good and you network with other similarly privileged kids. The crime rate is low, so you’re less likely to end up injured or killed by violence. Air pollution is also likely lower, so less odds of death by asthma. Privilege gets you into college, where you study with other even more privileged kids, obta…

This is an awful, overly-simplistic, unproductive, and arguably inaccurate mindset to have in life.

Re: Harry Browne’s Rules of Financial Safety (1999)

#92

Post by ghaff »

throwaway290 wrote: post #80
ghaff wrote: post #74

Earlier quoted context omitted.

So you don't consider it cash unless it's US Treasury notes stuffed in a mattress?

Uhm, mattress is optional, but the form of notes (or equivalent) is not. Words have meaning. Cash you have physically and it shelters you from incompetent/rogue financial companies and governments. If you use "cash" to mean something else then what is the word for cash?

Like everyone else, a liquid and very low risk (modulo inflation) financial instrument. (The definition is often a bit broader in financial statements.) I'd posit that, in this day and age, $100K (or whatever) in bank notes is going to do you very little good if you lose access to all your accounts.

Re: Harry Browne’s Rules of Financial Safety (1999)

#93

Post by DennisP »

liquidpele wrote: post #90
brilee wrote: post #50

Earlier quoted context omitted.

The advice says keep 25%, but it also says to rebalance every year. In a year when stocks are down, cash becomes a larger fraction of your portfolio and you would use it to buy stocks precisely when they are at their lows! On the flip side, when stocks are great, then cash becomes a smaller part of the portfolio and rebalancing implies selling stock when it is high. I do agree overall that these transitions happen in…

“When stocks are great”… ie buy low sell high, easy to say but damn near impossible to do.

Timing the market is hard but periodically rebalancing your portfolio is easy, and generally recommended.

Re: Harry Browne’s Rules of Financial Safety (1999)

#94

Post by nemo »

darkclouds wrote: post #38
roenxi wrote: post #14

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…

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…

>just look at the sanctions done to Russians when the West decides to stoke a war!

Worth noting that the sanctions on Russia were due to Russia invasions of neighbors like Ukraine (and Georgia), not "the West" deciding to stoke a war. "The West" was using sanctions to _avoid_ stoking a war in responding to Russia's various military offensives against neighbors.

Re: Harry Browne’s Rules of Financial Safety (1999)

#95

Post by theshrike79 »

prepend wrote: post #76

What’s the minimum wealth level where these are applicable? > Rule 13: Keep some assets outside the country in which you live. This is very impractical unless you have even money where 5% of your wealth international makes up for the cost to maintain. It could easily cost$5-10k in travel expenses to travel somewhere and establish accounts, plus the costs to account for and audit and maintain.

I have bank account in a German bank[0] and I opened it during a coffee break at the office. I don’t live in Germany and have never visited there.

[0] https://en.wikipedia.org/wiki/N26

Re: Harry Browne’s Rules of Financial Safety (1999)

#96

Post by andruby »

jonhohle wrote: post #59
tqi wrote: post #25

> GOLD not only does well during times of intense inflation, it does very well. In the 1970s, gold rose twenty times over as the inflation rate soared to its peak of 15% in 1980 Is this still true? As a layperson looking at the chart, it seems like gold has moved up and down a lot, but is more or less in the same place as it was 2 years ago.

Many people believe the price of gold is being artificially suppressed or is artificially lagging since it is not behaving the way it typically does. If it can no longer be kept low, it will probably move quickly to a true market price. Is that true? JP Morgan and Deutche Bank have been caught manipulating the price, but it would probably need to be the Fed to keep it suppressed for as long as it has been. They certa…

Or: past performance is not a guarantee for future performance.

Maybe gold and inflation are no longer as correlated as they used to be.

Re: Harry Browne’s Rules of Financial Safety (1999)

#97

Post by pjfin123 »

> Rule 1: Your career provides your wealth

> Build your wealth upon your career.You most likely will make far more money from your business or profession than from your investments. Only very rarely does someone make a large fortune from investments.

This is good advice. If you're getting 2% dividend payments from stocks you need 5 million dollars to make 100k $/yr.

Re: Harry Browne’s Rules of Financial Safety (1999)

#99

Post by DennisP »

marcrosoft wrote: post #70
xhkkffbf wrote: post #40

Earlier quoted context omitted.

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.)

Harry Browne didn’t like TIPs and didn’t think they would protect when things got bad. He preferred holding gold coins in a country outside the one you live in.

Gold, and t-bills for the cash portion. They do well at different times than gold. Over the past century, t-bill rates on average have pretty closely matched inflation.

Browne didn't advocate holding all your gold as physical coins in another country, because he wanted people to rebalance annually, which would be pretty difficult if the gold were held that way.

Re: Harry Browne’s Rules of Financial Safety (1999)

#100

Post by andruby »

dennis_jeeves1 wrote: post #67

16. Have relationships with functional/reliable people who will help you in a crisis. ( easier said than done)

This seems to have been easier in the past than it is now. Family traditionally played that role and I hope for a lot of us still does.

We do seem to be living in a society more disconnected than before.

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