10 tricks to help you beat most investors

What if the best investing advice is actually the simplest? That's the bet being made by a group of rabid do-it-yourself investors called the Bogleheads.

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Nov 21, 2013 9:20AM
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 Pretty much followed the advice in the article, though I have had a couple of non-index accounts that have outperformed my index funds ... indeed they can be more of a roller coaster. Total current net in retirement and general accounts at approximately $2.4 million after ~ 34 years (includes my wife's accounts as she also has worked ~ 30 yrs). As we head into retirement we'll be combining several accounts and starting to actively manage withdrawals tax efficiently - Boogleheads site has a nice article describing options. We already have a spreadsheet built through age 90 for each of us to use as a guide/planning retirement income and tweak as we go along. 

 We have always paid ourselves first - the retirement funds, then savings accounts, then kids 529 plans then give ourselves a budget to spend freely from and an amount dedicated to charity (school, church, United Way, etc). When we got an annual raise in salary. at least half of the net went to the  retirement/savings/529 plans, then we added the left over to our free budget. So, after a few years of getting used to this (when we were young and in "scrimp" mode anyway) each year with a raise then all of the above increased so we felt like we were doing a little better each year. We used the accrued savings to pay cash for large expenses (like autos, which we drive 150k+ miles) so no interest to pay there/more money in our savings that resulted in the kids college paid for through grad school, and we will retire at ages 56 and 53 with plenty of money to do what we want - travel budget of about 30-40k/yr, but may not do that too many years since from what I have observed once you get past a certain age it is too rough on you/most people begin sticking closer to home. Another reason for us to go earlier/get some travel in before we have unexpected health issues.

 That was our plan and it worked well and is something most people could follow, if they were willing to live below their means and have a disciplined approach. The ones that have to have the new car and house every few years will generally not have this flexibility to retire early and do as they wish, but, if your family medical history suggests a short life then indeed you may want to spend more along the way. Just don't blame others if you do live longer and find you don't have retirement funds and need to work many years longer. My dad always said life was about balance. You may live a long life, you may get hit by a bus tomorrow on the way to work, so you need to plan for both and save long term while still stopping to smell the roses along the way and enjoy life, just in case. 

It isn't rocket science, but it doesn't "just happen;" make a plan, work the plan, adjust along the way if needed. Good luck to all on your journey through life.
Nov 21, 2013 8:42AM
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I've been trading and investing for nearly 50 years  and some of this information is common sense however some of these ideas were discounted years ago. Contrary to what was written you best know what the government is always doing. look how the coal industry has been hit by the EPA. They just changed the rules on ethanol which is great for refiners unless you hold Valerio which is the biggest ethanol refiner as well as oil refiner.

taxes are also very important not only by the account you use but it also effects the timing in trading.

it's not what you make but what you keep.  

Nov 21, 2013 9:50AM
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Most of this is great, but the advice to buy funds, rather than the underlying stocks, is, in my opinion, not particularly good. There are more funds than there are stocks, and picking a fund is harder than picking a stock. I pick stocks based on what I personally buy and use. If a product is great, or I see friends using a particular service, I look at the stock price and do a little research and if things look good, I buy it. That's how I have time to post because I don't have to work any more. We need more articles like this, and finance and investment need to be taught in schools. Most people have no idea how to manage money.
Nov 21, 2013 8:51AM
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all good advice and have been following it for years...that is after I tried doing all the exact things the author said not to do in the beginning of the investment plan..and went backwards till I started following that advice.  Wish I got it back in the day when I put the first buck in. 

now as seniors we all got to watch out for all of the predatory free dinner seminar invitations that show up in the mail box proclaiming to show up for a free dinner and listen to them that we should take our nest eggs and hand it over to these predators (fraudsters) masquerading as experts in the investment world who are quite cute when they stand up and tell you "they" got it all figured out.  

Only  thing wrong with having lots of money...always someone trying to take it from you.  Jeeze !  
 
Nov 21, 2013 7:13AM
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Duh ..... you mean using my dart  board has been wrong all these years??
Cannt believe someone actually gets paid for what is otherwwise common sense

Nov 21, 2013 12:27PM
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These aren't only right wingers, pal. The greediest people I see are the liberals who keep taxing and spending. How many dems in Washington are poor? It will be the end of America if this trend keeps up - no liberties, no good jobs, no hope for the young people. So let's keep raising taxes and sending money to foreign countries while our own citizens are hungry and homeless. What a hell we are creating for our soldiers, the poor, the vulnerable. How many constitutional rights do you have to lose before you wake up? Yet where is the hope to change these things? If I were president I would call all our troops back home and put them along our borders to stop the leaking of illegals. I would help illegals working here to become legal Americans. I would encourage the rich to help the poor by maybe no buying that extra fur coat, car, house, vacation, jewelry, whatever these folks buy to make themselves feel good. How should they help the poor? By taking some of their money and opening/rehabbing homes and shelters and food and education to help those who want to help themselves.  We judge a society on how they treat the very young and the very old and the vulnerable among us.  Love Americans first, then help the deserving of the world. Stop catering to terrorists and keep the rule of law, the constitution, the bill of rights. Do I think this will ever happen - it's a toss-up right now. Keep going the way we are and we will be a footnote in history. Take the moral high road and we may be able to remain the greatest country on earth and not become the greatest experiment of a free country in history. What do you say, citizens? I have a lot more I could say but enough said! God bless you and God bless America!
Nov 21, 2013 10:29AM
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Some points:   The average worker cannot save very much either in his 401k/403b, etc because he does not have that much income.

 

Wages have been   stagnant for decades for the average worker, few or small raises while inflation has been high (gas prices, health care) Forget the CPI garbage.

 

Pensions, defined benefit have been eliminated.  This means that one cannot get that extra money at retirement and is solely dependent on his and the company's 401k contributions and subsequent high risks like in 2008.  Can you imagine being 62 in 2008, planning on retirement?  Portfolio trashed, no pension and the boss says he has to let you go?  Now look for a job at age 62 making your previous salary.

 

Investing for the average worker means sacrificing, not spending which means  lower consumer spending which means fewer jobs and fewer business growth.  Oh, you thought if everyone keeps that car clunker 15 years that car dealers would get rich?  If everyone refused to eat out and eat cheaper at home, McDonalds would flourish?

 

The problem is wealth distribution.  Simple....if the CEO makes 50 million and the 10,000 workers make min wage or slightly above.....how does that spur jobs and income and investments?  It does not.

 

So, some of you thinking tyhat you have a good job  and a good salary but everyone else should be making $2 and hour...but you and you should get a pension ...and noone else and that will make the economy grow...fooling yourself.

Nov 21, 2013 10:28AM
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Unless you're a student of the subject, with privy information given to insiders, a purchase is a guess.

Nov 21, 2013 11:43AM
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Mostly good advice, BUT you can reasonably time the market!!! I got out before 1987, 200-1, AND 2007 to 12!!! Use common sense and your gut. Sure, I left some money on the table by getting out early, BUT I didn't spend the years following crashes trying to gain back what I'd lost! For the last 5 years I've been playing with some stocks and 1/2 my nut in safe compunding CD's paying 5%+. Unfortunately, they're all maturing (except for some still earning 3.5% for their remaining 5 years) so I'll have to start looking at the market again AFTER the next correction that's going to come in the near turn. Joseph Kennedy once said that he was more interested in the return of his money than the return on it. When you've retired, the important thing is to protect your nut from serious loss!

 

BTW, I retired 8 years ago @ 54 and I'm satisfied with how I've done. Remember, pigs get fat and hogs get slaughtered!  ;^)

Nov 21, 2013 10:35AM
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I recommend you bet the farm and party with Major Rob Ford!

Yuk yuk!
Nov 21, 2013 10:38AM
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Funny, how right wingers want every worker to make Bangladesh wages and then wonder why they ain't spending on presents for the holidays.  Where are the consumers Ralph?  I dunno...they make $40 a month, seems like they would be on a spending spree.  Hey they have to save in their 401ks/....that must be it...but they got 50 cents left over.
Nov 21, 2013 9:19AM
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In reference to dividends in #8, finally someone who is telling the truth about dividends. You're not getting extra money people! Whether you re-invest or take it as cash the stock price will decrease an equal amount so you end up with exactly the same amount of money. Most investors don't know that because no one tells you that.
Nov 21, 2013 12:13PM
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For you to make money, somebody has to lose money. Does that seem right to you?
Nov 21, 2013 10:36AM
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Then add the fact that many Enrons are ouit there, many ponzi schemes going, cooked books, insider trading.  Feds?  Regulations?  Oh, Republicans want to do away with any pesky regulations ...on your own.

 

So, tell me , when are you and your accountant going to personally inspect a company's books on site?  Even then you might not pick up the scam.  Was Maddoff a fluke?  Certainly not, he was just the headliner, followed my hundreds on [ponzi schemes in the 2000 era.

 

Saving is a great idea, so is bartering and using jack legs for construction and illegals too. 

 

My point is that frugality is great but don't expect if people become frugal that they will listen to your sales pitch from your company.  Remember , they are probably better off without that new car, house, new clothing, etc and that will make your job more lucrative?

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