Harry Browne’s Rules of Financial Safety (1999) • Hacker News Board

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

#171

Post by sacado2 » Sun, Sep 03, 2023, 6:52 PM UTC

liquidpele wrote: post #130

DennisP wrote: post #93

Earlier quoted context omitted.

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

Rebalancing according to risk is recommended, not doing it because you think you know what the market is going to do. For instance, let's say right now, the market is headed up. When is the right time to "re-balance" to more cash? This is just assuming that the market is going to go lower than it currently is, which is just as much a gamble as thinking it'll go up for the next year. In short, don't try to guess the m…

> When is the right time to "re-balance" to more cash?

When you look at your balance at the end of the year and your cash proportion happens to be below 20% instead of 25%.

Rebalancing is pretty much standard practice nowadays, nothing magical there. Any financial advisor will tell you to rebalance your portfolio from time to time.

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

#172

Post by choeger » Sun, Sep 03, 2023, 6:53 PM UTC

But how does one even buy significant quantities of gold?

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

#173

Post by theshrike79 » Sun, Sep 03, 2023, 6:57 PM UTC

nottorp wrote: post #118

theshrike79 wrote: post #95

Earlier quoted context omitted.

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

"In November 2021, N26 announced that it would be pulling out of the United States in January 2022, leading to the closure of approximately 500,000 accounts. American customers were no longer be able to use its app after January 11, 2022." This is the bank you linked to?

I'm also not American, like most of the world =)

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

#174

Post by prepend » Sun, Sep 03, 2023, 7:01 PM UTC

capableweb wrote: post #82

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.

> 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. Maybe don't travel to Dubai (or similarly most-expensive-countries-in-the-world) then and establish accounts in a country that doesn't wildly out-rich you. Also, you don't have to stay longer than just a few days most likely. Besides, many places to allow internationals to…

> Besides, many places to allow internationals to signup for accounts also allow you to do a video call with account manager rather than going there in person.

I’m not so sure about that. No reputable banks where you’d want to have your other country account. And I don’t think the author considers “first cyber bank of Barbados” to fit this rule. And it’s certainly a horrible idea.

> Maybe don’t travel to Dubai

Please attempt to put together a travel budget from the US to some country that makes it cost reasonable for a “normal” person to travel and open an account.

I picked $5-10k because if you have enough cash to keep overseas, you probably don’t want to take a mega bus to Toronto or Mexico City and scrimp to open the account and visit it.

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

#175

Post by sacado2 » Sun, Sep 03, 2023, 7:03 PM UTC

oezi wrote: post #20

The asset split of 25% each of gold, stocks, bonds and cash would have fared relatively bad over the years since 2007-09.

6% or so per year, in fact. Not so bad.

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

#176

Post by JacobAldridge » Sun, Sep 03, 2023, 7:05 PM UTC

IAmGraydon wrote: post #154

Some of these are good, some are terrible. The rule about not using leverage is so bad that I can't take the rest of the article seriously. Anyone who really understands the purpose of debt and how to utilize it has to be laughing at this. The very best way to make money is with other people's money - this is a very basic tenet of wealth building. I challenge anyone to find an example of a business or wealth empire t…

I agree with you. Debt is a terrible master, but can be a wonderful servant and I wouldn’t be as financially successful as I am without leverage. And that’s not a wealth empire - just a regular family geared into real estate.

Of course, the “ZIRP” zero interest rate environment that predominated the 10 years since this article was written has been a historical anomaly. Though perhaps part of a longer trend, investors must be cautious not to view the benefits of recent leverage as evidence of easy future gains.

But if there was one thing that differentiates our financial position from our less-financially-free friends, it would be our comfort with debt as part of a well-developed investment strategy.

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

#177

Post by prepend » Sun, Sep 03, 2023, 7:07 PM UTC

theshrike79 wrote: post #95

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

What’s your home country?

For the US, this bank seems impractical/impossible.

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

#178

Post by dkga » Sun, Sep 03, 2023, 7:08 PM UTC

Leverage to finance something you have an edge on can be good. Leverage to finance something you have no edge, like stock picking, is a path to ruin.

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

#179

Post by ghaff » Sun, Sep 03, 2023, 7:13 PM UTC

tejohnso wrote: post #135

> You’re violating Rule #1 if you think your investments can be the sole source of your retirement wealth What? That's exactly what I'm investing for. What the hell else should I expect to fund my retirement?

In context, it's clearer.

Don't be banking on that elusive big investment win to save the day if you're not otherwise on the trajectory you want to be on. Of course, you hope your investments will preserve your savings and augment them. But outsized investment gains won't in general get you there by themselves.

(Also remember that the 10 years since this was written have been something of an outlier for the stock market.)

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

#180

Post by spacedcowboy » Sun, Sep 03, 2023, 7:26 PM UTC

spacedcowboy wrote: post #24

Alternatively: buy AAPL :)

For some reason, I can't edit the above, but it was supposed to be a joke, hence the smiley. Seems like some people lacking a sense of humour (or at least, their sense of humour is sufficiently different to mine to not correlate).