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Bill Bernstein- 1% of investors

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  • #46
    Originally posted by Kamban View Post

    Have you seen some of the posts here - buying land for timber, goats and cows, future developments, buying the hot stocks like Tesla and even the "why are you not holding bitcoin". These are supposed to be investment ideas that will bring about wealth!!!. Maybe one in a million but most will go bust. Many physicians have large shovels but many are also living paycheck to paycheck in Macmansions driving their leased Mercedes. If they make a mistake they might just be able to dig their way out.The average American cannot.

    That is why no load, no commission things like total market for 500 index funds are the best for 99.9% of Americans as their base retirement money. They can play with the rest of the money investing in whatever catches their fancy - like asteroid mining - and still be able to retire without any worries.
    Your post doesn’t address the point. Only 1% of people have the ability to invest in an index fund? The others need to pay a professional to invest in an index fund. I think not.

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    • #47
      Less than 1% of the US population has run a marathon either. What percentage of people *could* run a marathon, if they wanted to? IDK but a lot. It’s not that hard, discipline and consistency and delayed gratification are the main ingredients. But people don’t want to, so they don’t. I personally think a lot of doctors and other “high income professionals” like to wax on about their financial advisors because it makes them feel rich/important. John Bogle made diy easy and accessible but that’s only a small part of whether people do it.

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      • #48
        Hmm... “less than 1% of people should be handling their own investments” —spoken like someone who has a vested interest in keeping people financially illiterate and beholden to their financial advisors (or perhaps a reflection of elitism and a desire to sell more books.) Regardless not a good thesis for the white coat investor site to be promoting. BTW I’ve run a marathon, I would say physiologically there is probably a hard limit to the percentage of people who can train and run a marathon, I don’t see a hard limit to the percentage who can successfully manage their investments (if there is, it’s surely much greater than 1%)

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        • #49
          Originally posted by Anne View Post
          I personally think a lot of doctors and other “high income professionals” like to wax on about their financial advisors because it makes them feel rich/important.
          I think this is more true than we realize. Everyone always wants to have a 'guy'. It gives off an air of self-importance and success. A few other non-financial forums I follow will have no shortage of people chiming in about their 'guy' when something financial comes up. There will always be a few people who seem like their investing/personal finance mantra would fit in well here but the majority have awful ideas and always talk about their financial 'guy'. It's almost enough to make me want to register and comment but there's no use going against the herd mentality in that situation.

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          • #50
            Originally posted by Tangler View Post

            We are lucky to have people like you! I have a wonderful CPA (he has put up with me for over 10 years) and taxes are COMPLICATED! Tax planning is COMPLICATED!
            The world needs folks like you! Thanks for doing what you do!
            Unsolicited shout out to Joanna! Most may not remember. A busy decision resulted in "too much of a good thing". The capacity seemed overloaded for tax season. Rather than sweep it under the rug, a self critical review process was performed and the problems encountered and corrections were fully disclosed. Probably the most important was to "close new business" way in advance of the busy season.

            https://forum.whitecoatinvestor.com/...-s-about-taxes
            https://blog.foxwealthmgmt.com/2019/...ed-tax-season/

            The last link is the most impressive. Warts and all, her focus was providing the services promised. Her goal is value added, not price. Promises made, promises kept.
            Pretty good mission statement for any service business.

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            • #51
              Pulling numbers out of my butt, I'd say 50% of physicians are willing to live below their means and save extra for early retirement or least the option of it. Out of that 50%, all are capable of learning to do a simple 3 fund portfolio. Half or more of those will probably get their asset allocation wrong and jump in and out of the market according to what the experts/news media/friends say.

              The ones not interested in learning about finances or the ones that can't learn to sit on their hands are the ones that would benefit from someone managing their money.

              As for those that chose to dabble in alternative investments, there are people out there that can beat the market on a consistent basis. Physicians are people and can do the same. The odds aren't in any particular person's favor, but it's possible. It's important for physicians just learning that with a high paying job, index investing does work and is already a ticket to success. For those that think they are in the minority that can beat the market, it's worth learning about as long as they know the odds aren't in their favor. For taking that risk, they get the potential reward of speeding up retirement plans or a much higher net worth faster than what indexing could do.

              Comment


              • #52
                Originally posted by Kamban View Post

                Have you seen some of the posts here - buying land for timber, goats and cows, future developments, buying the hot stocks like Tesla and even the "why are you not holding bitcoin". These are supposed to be investment ideas that will bring about wealth!!!. Maybe one in a million but most will go bust. Many physicians have large shovels but many are also living paycheck to paycheck in Macmansions driving their leased Mercedes. If they make a mistake they might just be able to dig their way out.The average American cannot.

                That is why no load, no commission things like total market for 500 index funds are the best for 99.9% of Americans as their base retirement money. They can play with the rest of the money investing in whatever catches their fancy - like asteroid mining - and still be able to retire without any worries.
                If you do not have at least 5% of your portfolio in asteroid mining you are making a big mistake. You are not diversified at all and limiting yourself to the resources of earth. There is a big universe out there and you are going to miss the boat.

                Comment


                • #53
                  Originally posted by Lordosis View Post

                  If you do not have at least 5% of your portfolio in asteroid mining you are making a big mistake. You are not diversified at all and limiting yourself to the resources of earth. There is a big universe out there and you are going to miss the boat.
                  This is more true now than ever. I'm 100% Earth and 0% Universe. I'm hoping my lack of diversification doesn't come back to bite me but I know it will.

                  Comment


                  • #54
                    Originally posted by Lordosis View Post

                    If you do not have at least 5% of your portfolio in asteroid mining you are making a big mistake. You are not diversified at all and limiting yourself to the resources of earth. There is a big universe out there and you are going to miss the boat.
                    How do I buy this asteroid stuff? Sounds bigger than bitcoin! bigger than Tesla! Sign me up!

                    Comment


                    • #55
                      I think most people are not educated on financial literacy so they are too afraid to manage their finances. I was mostly the same until recently (although I did google things about finances here and there and was intent on paying off student loan naturally). I also know that some people feel others who are “educated” and are “professionals” in managing finances are better, and so they feel more comfortable having someone else do it. Either way, I do think more then 1% of the physician population and the population in general could do their own investments, but I think it’s all in the matter of financial education. It would be interesting to see if there are generational trends...I read the millennials (my generation) have much higher interest in FIRE and saving money. I also read an article somewhere that blamed millennials for not helping stimulate the economy as much because we spend less on things and more on experiences.

                      Comment


                      • #56
                        Originally posted by CordMcNally View Post

                        I'm 100% Earth and 0% Universe. I'm hoping my lack of diversification doesn't come back to bite me but I know it will.
                        In fairness, Earth is a component of total Universe, so you already own part of it. However, Earth is only a vanishing small fraction of a percent of total Universe, so you probably are taking on uncompensated risk with your single planet portfolio.

                        Comment


                        • #57
                          Originally posted by Hank View Post

                          In fairness, Earth is a component of total Universe, so you already own part of it. However, Earth is only a vanishing small fraction of a percent of total Universe, so you probably are taking on uncompensated risk with your single planet portfolio.
                          It rounds to 0% Give him a break!

                          Comment


                          • #58
                            Is there an asteroid mining index yet?

                            Comment


                            • #59
                              Originally posted by Tangler View Post

                              How do I buy this asteroid stuff? Sounds bigger than bitcoin! bigger than Tesla! Sign me up!
                              Just buy SPACEX; Elon has a plan.

                              Comment


                              • #60
                                Originally posted by Tim View Post

                                Unsolicited shout out to Joanna! Most may not remember. A busy decision resulted in "too much of a good thing". The capacity seemed overloaded for tax season. Rather than sweep it under the rug, a self critical review process was performed and the problems encountered and corrections were fully disclosed. Probably the most important was to "close new business" way in advance of the busy season.

                                https://forum.whitecoatinvestor.com/...-s-about-taxes
                                https://blog.foxwealthmgmt.com/2019/...ed-tax-season/

                                The last link is the most impressive. Warts and all, her focus was providing the services promised. Her goal is value added, not price. Promises made, promises kept.
                                Pretty good mission statement for any service business.
                                Unsolicited thank you toTim - that was a tough column to write. Sincerely appreciate your kind words (and amazing memory).
                                Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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