Stupid Investment Advice

[ursus arctos]

Stupid Investment Advice

That Awl piece is really wonderful.

Cuffin’s listicle “15 Easy Steps To Managing Your Mistress” synthesizes Elite Daily’s class aspirationalism with its obscene misogyny so harmoniously as to seem parodic. To “manage” a mistress requires money—lots of it. And of course, if you have money—lots of it—a mistress is one of the “things” you will spend it on. Keeping a mistress is part-and-parcel of the kind of conspicuous consumerism articulated across this website. (Only this part, presumably, one hopes is not too conspicuous.)

“Eddie Cuffin is most likely not one person,” the former contributor wrote. “When I joined, it really seemed like a group of intelligent, diverse, young people trying to do something different,” he wrote. “Now it’s Playboy meets GQ. With no standards.”

They can be hit or miss, but when they hit it is almost always for extra bases.

[Sam]

Stupid Investment Advice

WOM wrote: This hypothetical South America person will have 'squandered' his twenties in a much better fashion - creating deeper experiences and life-long memories - than the young fashionista who squanders hers on taxis, overpriced artisanal mojitos and Coach bags.

Oh, absolutely. That won't help keep a roof over m- er, his head in forty years' time though. It's quite a dilemma (well, it isn't, because the decision was taken years ago).

ursus arctos wrote: Sam, you might want to add "hope for a change in government".

I'll be getting one of those soon enough, but unless the incomer decides to grant an amnesty to undocumente- ah hang on, you didn't mean here, did you?

[WOM]

Stupid Investment Advice

Sam wrote: Oh, absolutely. That won't help keep a roof over m- er, his head in forty years' time though. It's quite a dilemma (well, it isn't, because the decision was taken years ago).

You know what? It'll work out fine, and you'll have lived the life you wanted. Maybe in a smaller flat, but you'll reconcile that no problem.

[MsD]

Stupid Investment Advice

WOM wrote: This hypothetical South America person will have 'squandered' his twenties in a much better fashion - creating deeper experiences and life-long memories - than the young fashionista who squanders hers on taxis, overpriced artisanal mojitos and Coach bags.

Oi.

I've created some fabulous memories by spending money on taxis, mojitos and Westwood bags.

Coach bags - agree, waste of money.

[WOM]

Stupid Investment Advice

Yeah, but you own real estate and are planning for retirement and don't you deny it.

[MsD]

Stupid Investment Advice

Not quite ... but a lady doesn't ever know her bank balance. Haven't a fucking clue about pensions except that I should have cashed mine in when I could.

[Sam]

Stupid Investment Advice

I have to admit I've spent some money on mojitos since coming down here. Well, I've made friends with a couple of food writers so get invited to cocktail parties and stuff from time to time. It would be rude not to.

I've spent a lot more on fernet and wine.

[linus]

Stupid Investment Advice

Money well spent.

[Ginger Yellow]

Stupid Investment Advice

More on Neighborly's disruption of the muni market.

[Bored Of Education]

Stupid Investment Advice

I thought it was talking about my financial adviser who dealt with my house-buying last week. He managed to forget the amount of deposit many times - meaning delaying changes to the paperwork - and got us a mortgage with the company that we used to have one with. When our papers came through, it showed that he had been paid £500 by the company. I harrumphed and thought that he just about deserved this.

Anyway, this morning, we got a "Welcome to your new home" card with a note saying that his hitherto unmentioned £250 arrangement fee was now due. As far as I remember, financial directors get paid off the mortgage company solely.

Anyway, as I bought a flat at 21, I would say do that. Mind you, that was a flat in London - which no first-time buyer can do anymore - and the repayments then, on a 100% mortgage were crippling, about the same as we are paying now as this was in the 80s.

[Ginger Yellow]

Stupid Investment Advice

Anyway, this morning, we got a "Welcome to your new home" card with a note saying that his hitherto unmentioned £250 arrangement fee was now due. As far as I remember, financial directors get paid off the mortgage company solely.

I'm pretty sure there aren't actually any rules on what fees a mortgage advisor can charge, as long as they are disclosed in the required way. They're certainly able to charge customers directly rather than the lender.

[ursus arctos]

Stupid Investment Advice

The Lauren LaCapra piece that is linked in that post on Neighborly is wonderfully mean.

Have you ever looked at a broken stoplight and said to yourself, I wish I could just pay a startup to allow me to invest in a bond whose proceeds may or may not be used to fix that broken stoplight? I sure haven’t! But that doesn’t mean you shouldn’t have that opportunity—and Neighborly is it.

I'd genuinely love to know whether any real people are "investing" in these things.

[caja-dglh]

Stupid Investment Advice

Disrupting the bond market with crowdfunding is quite splendid.

Maybe we can leverage bitcoin to bring back bearer bonds?

[WOM]

Stupid Investment Advice

Ginger Yellow wrote:

Anyway, this morning, we got a "Welcome to your new home" card with a note saying that his hitherto unmentioned £250 arrangement fee was now due. As far as I remember, financial directors get paid off the mortgage company solely.

I'm pretty sure there aren't actually any rules on what fees a mortgage advisor can charge, as long as they are disclosed in the required way. They're certainly able to charge customers directly rather than the lender.

And therein lies a very important lesson, of course: any time you're getting a financial service - from mortgage brokering to insurance brokering to investment guidance/financial planning - ask yourself how this person is getting paid. If the money isn't coming directly out of your pocket, the person is in a conflict of interest situation and should disclose fully.

[Ginger Yellow]

Stupid Investment Advice

If the money isn't coming directly out of your pocket, the person is in a conflict of interest situation and should disclose fully.

And often if they are!

[anton pulisov]

Stupid Investment Advice

From the link in the first post:

the fact remains that middle-aged people who started saving early are “grateful for the few thousand you saved,” because those few thousand have since grown to several thousand or more.

That sounds like something Homer Simpson would say.

[WOM]

Stupid Investment Advice

On that original point, there used to be a great graphic ad you'd see on TTC subways. It showed how person A could start contributing to their retirement plan (RRSP) at age 21 and contribute until the age of 30 and then stop. Person B who started contributing at 30 would need to contribute until 65 and still wouldn't catch up to the total of person A. That's how powerful time and compounding is.

[anton pulisov]

Stupid Investment Advice

Although any 21 year old today would be contributing to funds that offer zero interest rates, and the compound of zero is zero.

[Ginger Yellow]

Stupid Investment Advice

Not if those funds were invested in equities, as most pension funds for young people are.

[anton pulisov]

Stupid Investment Advice

Possibly, if equities behave like they did between the 1950s and 2000.

But I was in my early 20s nearly 15 years ago. Since then we've had a volatile 15 years with an internet bubble, a real estate bubble and now a central bank QE bubble. Any money I would have invested at age 20 would have been worth the same or significantly less when I hit 30. It would have gone up in the last couple of years with the current bubble but (a) how sustainable is the current bubble and (b) I could have just invested it three years ago and not in 2000.

[WOM]

Stupid Investment Advice

None of which means much, of course. For example, the S&P 500 from Jan 1, 2000 to Jan 1, 2015 returned 42.27%, or 4.3% annually. Which also doesn't mean much, as you wouldn't have simply lumped 100,000 into it and done nothing for 15 years. Since then, you would have continued to contribute - maybe weekly, maybe monthly, maybe annually - which would yield all sorts of much better returns over different durations. And yes, a few worse ones.

Either way, investing is for the long term, which is where both odds and compounding play into your favour. But, yes, as GY points out, your zero number is virtually meaningless as that's not what you'd have done.

[Ginger Yellow]

Stupid Investment Advice

It would have gone up in the last couple of years with the current bubble but (a) how sustainable is the current bubble and (b) I could have just invested it three years ago and not in 2000.

It should be self-evident that hoarding cash and trying to time the market by throwing it all at the stock market at once is probably the worst possible investment advice, and doubly so for retirement, where you know you have a long term horizon.

[anton pulisov]

Stupid Investment Advice

This is the aforementioned S&P for the past 30 years:



Post deregulation we seem to have gone into cycles of massive volatility which aren't the long-term, gradual growth that you'd want for a pension investment.

The usual investment advice held true for the baby boomer generation who turned 30 between 1975 and 1985, but it doesn't hold true for people who turned 30 during the boom bust cycle of bubbles post-2000.

Another question is if the current (2010-2015) increase in equities has anything to with economic growth, or if it is simply a case of investors and pension funds piling into an equity bubble because interest rates are in the toilet. If that's the case, what happens to that equity bubble when the baby boomers need to get their pensions paid out?

[WOM]

Stupid Investment Advice

It's also important to note that your retirement horizon isn't 65. It's whatever age you will most likely die at, plus another 5 years or so for safety's sake. 90 is the new planning number, and isn't unrealistic.

So, to recap for the 32,592nd time. Invest regularly in low-cost index funds; do it automatically (each week); reinvest all tax refunds and dividends; leave it the fuck alone. Don't chase stocks. Don't try timing the market. Don't listen to alarmists or charlatans.

[WOM]

Stupid Investment Advice

Antonio Pulisao wrote: Post deregulation we seem to have gone into cycles of massive volatility which aren't the long-term, gradual growth that you'd want for a pension investment.

Volatility is neither here nor there. Individual stocks (ergo, funds) go up and down on an hourly, daily, weekly and annual basis. None of that is your concern. Time mitigates volatility, and you're investing for the next 35 to 45 years. And you're not investing for a pension. You're investing for a nest egg for a pension. As you get closer to retirement, you move slowly into less volatile instruments so that your payout (your pension) is more predictable.

The usual investment advice held true for the baby boomer generation who turned 30 between 1975 and 1985, but it doesn't hold true for people who turned 30 during the boom bust cycle of bubbles post-2000.

Again, this is neither here nor there. You're isolating a window that doesn't really exist. Who turned 30 when is irrelevant over a lifetime of investing. I started my retirement investing in '92 at age 25. Others will start it next week at age 57. Isolating a period of stock market activity and contrasting it to ages is pointless.

Another question is if the current (2010-2015) increase in equities has anything to with economic growth, or if it is simply a case of investors and pension funds piling into an equity bubble because interest rates are in the toilet. If that's the case, what happens to that equity bubble when the baby boomers need to get their pensions paid out?

A) who knows and who cares? Investors benefit in both scenarios. When was investing ever predicated on completely efficient markets and business returns? I don't know...do you? Bogle says that, at the end of the day, markets will swing wildly on a day to day or year to year basis, and still return roughy 4 to 6 percent, because that's what the standard profitability of a US company on the S&P 500 is. And that's why you're investing in them, and not trying to chase the next Google.

B) People join and leave the market on a daily basis. This fearful notion of baby boomers 'cashing out' en masse and crashing the market is a fallacy. Ignore and discount it completely.