When dollars are created out of the air, they’re wasted. When dollars are too easy, there’s too much of them. And they’re misallocated. What could possibly go wrong? The virtue of making money year after year after year, and saving a little bit as you go, is that you don’t need to make monumental decisions about what to do with it. You create a plan. You save on a consistent basis and over time you look back and are pretty amazed at what you’ve amassed. (You can teach a grandchild how to do this here). The more government injects itself into the money equation, the more the natural law … [Read more...]
You Invest, They Win
The founder of the largest hedge fund in the universe, Ray Dalio, tweeted this from Burning Man:
Just back from Burning Man. Reminds me of Woodstock with better art (installations) and less good music. What a great vibe and what amazing creativity!
Photo is with my pal and coworker Jeff Taylor at his great music camp Root Society. If you go next year, 1-5am is best.
Are these the guys you want running your money? You invest, they win. But hey, it’s not about the money. It’s about saving the planet man.
Because if it’s about the money (Dalio has a personal net worth of $19 billion) then this hedge fund lost to a boring Vanguard fund that uses a conventional mix of 60% stocks and 40% bonds.
The article doesn’t come out and name the fund, but perhaps you, as a long-time reader of our websites, know the name: Vanguard Wellington.
You might also know what Vanguard founder, the late, great, Jack Bogle, meant when he said: “The grim irony of investing is that we investors as a group not only don’t get what we pay for, we get precisely what we don’t pay for.”
The captains of the investing universe are living their “best life” at whose expense?
Yours, of course. You invest, they win. Read more below.
For You, I Want Generational Wealth as Big as Yellowstone
Do you remember how much you paid for your first home? Pretty amazing how things have turned out, don't you think? If you bought back in the 70s, you probably spent some multiple of your annual salary that wasn't outrageous. Yes, you probably carried a mortgage with an interest rate many multiples higher than today's, but did you ever think you'd be where you are today? Did you think interest rates would be this low? Probably not. You were too busy. You were your own survival guy. You most likely didn't buy a home to sell it to some sucker at a higher price. You bought it because you needed … [Read more...]
Dividends Can Get You Through Times Like These
In times like these, dividends can get you through. My father-in-law, Dick Young, explains the power of dividends below. He writes: There are few histories as crucial to the course of my life as my awakening to the power of compound interest and the importance of dividends. Since my decision to climb on the dividend bandwagon, I have been an evangelist to hundreds of thousands of paid subscribers, and many more investors beyond. My message has been consistent and clear, and I don’t regret focusing on dividends a bit. Here’s how it all started. Back to Monterey and Woodstock I’ve been … [Read more...]
Robinhood’s Not Coming to Save You
OK, you don't need to look too far to see how low-interest rates are. Talk about a tax on savers. And the destruction of the dollar isn't far behind. That's why my favorite investment continues to be in yourself. If you have a job, try and keep it for as long as possible. If you're retired, invest your dollars like they're the last ones you'll make. I know you don't want to hear this. But there is no Robinhood coming to save us. On the contrary, the more this market melts up, the more it will melt down when the reckoning arrives. And arrive it will. Remember, "adventures make one late for … [Read more...]
Rand Paul: The Spending Bill Is Everything Republicans Say They Don’t Believe In
Sen. Rand Paul lambasted fellow Republicans signing on to the big-spending omnibus just passed by the Senate. Fox News quoted some of Paul's speech: "To so-called conservatives who are quick to identify the socialism of Democrats: If you vote for this spending monstrosity, you are no better," Paul said. "If free money was the answer... if money really did grow on trees, why not give more free money?" he said. "Why not give it out all the time? Why stop at $600 a person? Why not $1,000? Why not $2,000? Maybe these new Free-Money Republicans should join the … [Read more...]
January RAGE Gauge: “THE MOST Dangerous Investing Environment in My Lifetime”
Good morning from post-winter storm Gail. Your Survival Guy is safe and sound. Not much of a snowmaker here in Newport. But the snow is pretty, especially this time of year. Let me know how you're faring in your neck of the woods. In my conversations with you, you're telling me about your own island life you've created, and I thank you for that. You're telling me you're getting lost in your reading, doing a lot of thinking, and looking forward to when your band gets back together this Spring. In the meantime, your island life is alive and well. You understand you don’t need to spend a lot … [Read more...]
Stealing Your Dollars in the Dead of Night
Will you even know it when they come for your cash? When they the steal it in the dead of night? When the digitalization of the dollar makes paper obsolete? Think they can’t inflate your money away? Look at interest rates—flat as a gingerbread cookie and stoking the inflationary real estate fire. First-time buyers can barely afford a manger, never mind a three-bedroom, two and a half bath. Remember when you bought your first home when interest rates were closer to the Twelfth Day of Christmas than the first? Back then, at least you could make the numbers work based on your salary. Today, … [Read more...]
A FAST Way to Lose SLOW Money
You read in these pages (read here, here, here, here, and here for starters) how you can end up paying twice for investments. The first charge is the mutual fund or ETF expenses like the expense ratio (and god forbid 12b-1 fees and other loads). Then there is the fee investors pay to their advisers. All in all, it can add up to more than two percent a year. It’s like ordering a Happy Meal and paying the guy in front of you to place your order. You can do better than that. Now, many advisers are taking their clients' money to invest in "model portfolios." Dawn Lim reports for The Wall … [Read more...]
Why I Work for You, and Not the Other Way Around
If you’re a client, you know you matter. We have a relationship. We talk about our families. You matter. In an industry where mega-investment-firms are acquiring medium-sized firms, what tends to get lost in the churn is you, the client—the one making it all work. Integration of your needs into a bigger firm’s desires is like a chicken processing plant, where there’s not much to talk about afterward because the relationship died long ago, and you’re there for the pickin’. Bringing in a new client takes time. It shouldn’t happen with a takeover deal. It takes care. It takes several … [Read more...]
How to Hire Investment Counsel: This is the Way
Real quick. You’re interested in hiring a financial advisor—one who’s held to a fiduciary standard by law, not some silly suitability one. You know you need help, but you just can’t make it happen because there’s resistance: No time, no real interest in digging into it, or you don’t know enough to explain to a loved one why you need it. “We’re fine, aren’t we?” She might ask. OK, here are summaries of two calls I had yesterday with prospective clients that will help you gain some perspective. The first one was with a prospective client whom was referred to me by a client I’ve been … [Read more...]
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