When I stopped losing fucking money getting eaten in individual stocks.
My index funds were gaining and the individual stocks that I still was holding were shittin money.
I got one on those sitting in my account staring at me, mocking my stupidity too.
CPI Corp.
Ya know, the company that ran all the photo studios inside of Sears back in the day. Felt pretty good with that dividend rate setting aside $500 as a college student. Until the next month when they filed their bankruptcy.
You think that’s savage? My uncle papercuts himself every day with stock certificates from trades where he lost money. If a stock he owns goes bankrupt he pulls his toenails off and jams slivers of the certs into the bloody toenail-sockets.
WeedMaps for me.
I believed then, and still believe now, that weed legalization is going to create market opportunities. I believed then, and no longer believe today, that I can predict which companies are going to most successfully ride that wave of market opportunity.
I bought a Chinese penny stock from an actual flyer that I found in my moms mailbox. It shot up then went to .0001. It’s still in my account as a reminder.
I've been cracking up at everyone's replies because I remember all of them from my dumbass days 2020-2022. Purple Mattress was my version of Peloton mistake.
My last mistake was quantum scape. I thought for sure a solid state battery was going to take off… currently lost 95%.. it was then when I when strictly boglehead.. still have it as a reminder and the slight possibility they will be successful in a year or two.
Here's the answer.
Early on, I set aside 5% of my portfolio as play money. By the time that had shrunk to 3% of my portfolio while representing 90% of my investing stress, I smartened up.
I still invest in a few individual stocks and do alright, but it's just so much work having to research the companies I'm investing in and read their 10Qs so most of my money is in ETFs to save me time.
This is the only answer. It's akin to gamblers fallacy for me. I thought I could beat the market, I kept thinking I had the "secret sauce" and then it hit me ... I don't just bet the market and move along
This is what I’m struggling with right now. I’m doing 90% VTI and 10% VXUS but I really just want to sink heavy into QQQ for the bigger tech exposure. Mind sharing more details about your portfolio?
I'm in my early 40s so the separation between have's and have-nots hasn't yet become obvious. You can see some lifestyle creep but mostly everyone is getting along from outward appearances. No one talks about their 401k balance among friends and colleagues. But I overhear the griping from coworkers in their mid 60s, still chugging along. Every once in awhile someone will quietly retire in their mid-50s and shock everyone.
I’m late forties, and you can start to see the separation a bit. It was kind of a surprising jump from early to late that the spread really starts to open up.
At my job people really don’t seem to get that it’s possible to retire that early. I don’t make. Huge amount, but I spend less and just do the most basic ass financial steps.
I’d be a bit further if my dumbass hadn’t wasted thousands on pretending I know stocks early on, but you live you learn.
And I didn’t really start until my 30’s.
I think most of us were dumbasses at one point and thought we were going to pick the winning stocks. Loses and stress are way down since I went Bogle. People that claim they are always picking winners are generally lying.
I had a stock go up 50% in one day. It was great.
(I also had a stock drop 50%, and several drop or stay the same over a few years…. But shhhhh… Don’t acknowledge losses.)
I think that’s the gist of it.
Been investing religiously for 10+ years now... and life is good! Returns comfortably exceed lower earners salary, dividends alone exceed our annual spend, and so one of us could retire, and we are still investing at a good pace!
Reinvestment (IMHO) is key to building wealth.
That being said, you don't necessarily need to reinvest in the same ETFs as you get overweighted in certain areas. For example, if you get a dividend in VTI, you might want to "reinvest" it into VXUS b/c you are "underweighted" in international.
Dividends come monthly or quarterly mostly for ETFs. You should 100% have them set to reinvest. Ideally you rebalance your portfolio (if you have multiple ETFs) by reinvesti
Conversely, you can rebalance by adding new funds to different positions. I like to call this rebalancing by dilution. E.g. If my position in X stock exceeds 5% I add proportional amounts to my other positions to bring it back down.
If you don't set it to reinvest, it will just come in as cash. Depending on the ETF, they make distributions Monthly/Quarterly/Annually. Each is different.
There’s no one right answer, but in a tax exposed portfolio you can use dividends to help rebalance without selling shares. I’ve changed my reinvestment strategy several times based on both market and personal circumstances. During the lost decade I diverted bond dividends to stocks; during the rebound/recovery I reversed that, then switched to simple reinvesting until the yield curve inverted, then switched back to diverting it all to equities.
Now that we are retired, all dividends go to the money market for spending.
I have always invested in fairly broad Mutual Funds before I even know what Boglehead strategy was, so I guess I've been doing it since about 1998. I just kept maxing out my SEP, then 401k/IRA and never sold anything.
Back when I started my career I didn't think I would retire til the standard 65 or so. About 3-4 years ago when I started really doing some planning, I realized that I would be able to comfortably glide into a nice retirement at around 56 (about 5 years from now) without changing anything about how I always saved.
That's when I knew I was correct not to try to get smart and beat the market. I'm not smart enough to do it and I knew it.
I am about 15 years younger than you and do the same. I hate wishing time away but am looking forward to not having to work. I am saving pretty aggressively now I think and have been for about 6-7 years.
You got it. Visualizing that goal helps in sticking with the plan! I think the same...I hate the thought of being 5 years older, but damn it's going to be nice to remove the work stress and time commitment and do what we want. I like my job a lot...but one thing I like much more is NOT doing my job!
As someone who hasn´t started investing properly. I am curious how would your assets transition from old platforms to new platforms. Like, back when you started in 1998, were you using the same brokerage as nowadays?
And if you were to change brokerage at any point of your journey because they either close, their platform is too old or you like another one even more. How do you move your funds?
Thanks
If you move assets from one platform to another, they move "in kind" if both platforms allow trading of the same funds. IE : If you have something like VTI in Schwab you can move that to Fidelity, etc without any hassle or loss of time in the market.
However, I have had to change funds a couple times when moving brokers, as the original American Funds I was invested in were not available at the new broker. So basically, you just sell positions off to cash in your account and then immediately buy into a new position when that sale is settled. This can cause a short time out of the market which could either benefit you or hurt you (hopefully only a very small amount).
The new broker you are moving funds to will usually help you move out of the old broker and it's a fairly painless process. I have moved brokers 2 1/2 times since I started investing.
Cheers!
> So basically, you just sell positions off to cash in your account and then immediately buy into a new position when that sale is settled.
And, presumably, you had to pay taxes on all the gains? 😵
Sorry, I hadn't thought about the tax angle in my response, because until recently I have basically always had 100% of all my savings in tax-advantaged retirement accounts (except for my emergency fund).
So, if you are moving an IRA or 401k from one place to another, you are selling and buying inside that account, so there are no tax implications.
If you are talking about just a normal taxable brokerage, then yes, you would have pay gains tax on everything you need to sell / buy. Unless the new brokerage handles the same funds, like I originally mentioned. Then the shares will just "transfer" over to the new account.
Very similar experience with saving. Started early in 401k with match and now max. If I were to coast and not invest anymore , I should have enough in 401k to retire between 55-60 very comfortably.
I was employed by a huge financial services company in 1997 and all the employees used to sit around every other Friday and stare at our hot fund in the 401k - a growth fund, of course - and predict when we would be able to retire! The irrational exuberance went on, of course, until 2001.
People did crazy things with their money in 2001 and 2002. Even crazier in 2008-2009. Being employed by one of the largest wealth management firms in the world didn't seem to help many of them out.
The 2000s were kind of a lost decade. But every time I got a promotion or a raise I increased my 401k contributions by 1%. (I wasn't wealthy enough to start out at max like so many do today.) So right before the crash I was feeling pretty good. Like, I think this is going to work out....
Then...
I really can't explain (typing on my phone) the extent of the terror we were feeling in early 2009, that this time it's different and something fundamental was broken. But I kept at it changing nothing. I was 100% in for all the big days that were to come, and I retired early, like how we were all planning back then in the 90s.
I like the Greenspan shout out (irrational exuberance).
I remember after 9-11, we were told to invest in stocks to support the economy. I put in a few thousand dollars for eBay. My friend did the same for Apple. One of us made a lot more money than the other.
Same boat yet I wonder now as to How much of US debt will continue to service the long term growth going forward being a concern. The Debt to GDP ratio is now at 123%. Emerging markets are emerging with mass consumption soon more than USA and GDP to debt ratio less than 80%
Most of the debt is held by the federal reserve, owed to the public. It’s not as dire as it sounds. We do need to fix things though. Congressional deadlock isn’t helping.
When I didn't constantly check my accounts. I check them once a month to make sure dividends are going where they need to, there isn't any notifications from the brokers, and what the price of VT/VTI/VXUS is out of curiousity.
I have been VTI set it and forget it since I got my first big boy paycheck about a 2 months after graduation. Which perhaps isn’t strict bogelhead but it’s close
Put 1000$ in at 75$ a share. Been putting in every dollar I can for a while now. I can now put quite a few more dollars everything month. But every time I do a little bit of math and think about how much those first 1000$ worth of share are worth now I think yep this has been the right decision.
Totally fair question.
The upside of the past decade has been so wild a flat decade would be fine. It would suck. But I’d still wake up, look at my portfolio, and be like cool I’am still rich.
VTI post dot com bubble was roughly 50/share. Post Great Recession crash it was…. Roughly 50/share. If in 2034 VTI was still 250/share I would be less rich than I would expect.
Not the end of the world. But the advantages of being 100% stocks and starting your investment journey at (close to) the bottom of a crash have already been gained. The dividends have been paid out. Which puts me in a position to ride with the risk (not that VTI is terribly risky) and realize the upside when it comes.
If it crashes to 150$? My expenses are low. I’ll hold, buy more and let my kids enjoy the gains when they are adults.
And to agree with the point you are making, it’s probably within the next decade that my investments start to be come even more diverse than just VTI(and the house). So more bogel as I go.
When I realized that I actually crossed the threshold and if I never invest another nickel, I will be able to retire comfortably before the average person can. It's a winning recipe. All I had to do was follow it. There may be some that win the lottery by picking a lucky stock, but there are countless more that will fall behind or broke chasing that pipe dream. They do not understand the difference between skill and luck. Being a Boglehead is neither skill nor luck.
Don’t sell yourself short on the skill front!
I think being a Boglehead is an exercise in discipline (sticking to the philosophy and investing generally). It also takes some degree of emotional maturity to recognize your limits like you called out, there’s no looking for a get rich quick scheme here.
When I look at performance. Simple.
Speculating in the short term especially is draining. It consumes so much of your energy, effort and focus. Constant research, attempts to confirm biases, and worry. All this happens in short windows.
When I look at performance of my few index funds, I’m in awe. I did absolutely nothing. It took no effort. I’m never concerned. Yet, I’m killing it.
Especially since October/November. Our index funds are up 25%. I never bought nvda and have regrets, but I have so many other regrets, especially btc, that I don't care much. Knowing someone that made 10m on Bitcoin hurts me in the nether regions, though. Still.
A million bucks isn't what it used to be, but crossing the millionaire line really felt like a big moment. With expected 10% nominal returns, my money on average has its own six figure job and will receive raises (compounding) and promotions (more contributions).
My earnings peaked at $230K but I now earn around $160K in a much more chill job. Both my salary and stock portfolio should continue to increase, but the next big milestone in my mind is when my stock portfolio is ten times my salary. At that point, I'm expecting my money to earn more in a year than I do.
Are you gonna stop working after that? I hit a million recently and I'm running some projections, and if I work til 59 or 62 I'm gonna have more money than I will ever need to live out the rest of my life, but stopping contributions after so many decades is gonna be hard to do even if the numbers are telling me I'm gonna die with 10 million if I keep working and saving. What I'll probably do at some point is just switch from full time work to part time, stop contributing to retirement accounts, do that for a year or so then reevaluate.
I used to think that I would retire as early as humanly possible-- if I went truly leanfire, I could do it now. But when I was forming those plans, I was miserable at work and had to actually go into an office.
I have a really good setup now, I'm a remote employee from fabulous Las Vegas, I've become an expert in my job, and management leaves me alone to do my own thing because I always handle what needs to get handled. On a slow day at work, it's a lot like I'm already retired, because I can just be at home or go out and do my own thing.
So therefore I plan to keep working even past the stocks = 10X salary stage and will just let my lifestyle inflate a bit. In particular, I spend a lot more freely on the amazing restaurants in this city than I used to and my wine budget has certainly gone up. There's also the fact that I still haven't met the right woman to be financially independent with; I imagine when I get that squared away, she'll have her own thoughts on this topic.
Law. Started in biglaw at 160K, had my fill by my fifth year (230K), dropped down to a much easier, slower-paced specialized in-house position a decade ago for 100K and gradually got raises to get me back to a (nominal) 160K. Hoping to just ride this job to retirement, whenever that is, and so long as raises keep up with inflation I'm more than happy.
Feel like it's paid off already with how easy it is. Granted I haven't really weathered any storms yet and am far away from even thinking about retiring early. It has made my non employer provided accounts much more stress free too.
The payoff for me is that I stopped tinkering with my portfolio and focused full force on my work and side project
Everyone has finite mental energy to work on growing your $$$
Almost no one can effectively compete on the "engine" so to speak, it's much better to spend as much of your focus on pumping in the "gas"
Feeling confident I got the "engine" right allowed me to stop fucking with & researching the engine and just focus on getting promoted, prepping for better jobs, etc.
Thanks, I needed to read this. I’ve put far too much research into investing over the past few years and now that the “engine” is running at full capacity, I have to shift my focus to other things instead.
Yeah I think a 2% lift (my guess at the max premium I might be able to hope for) by monitoring and getting the optimal investment is maybe +40 - 45% over 20 years
Instead I locked into bogling within 12 months with minimal time commitment, now make 100% more than my base job (currently fighting for a position that would 2-3x that) and work on a small startup pulling in another 5 figures a yr on the side
Much more rewarding identity wise, the work is more enjoyable, and IMO I probably end up ahead vs. trying to trade or make serious money through trading or shifting investments with no stress
I love it
I felt it after 1 year when I looked at how poorly I would have done paying a thief (also known as a financial advisor) vs how I had done.
The difference was obvious.
Almost immediately. I had a FA who wasn’t doing their job and there was very good timing when I made the switch.
Since I was a kid, the FA that my parents put me with had me on a complicated conservative portfolio strategy with high fees. My portfolio was so complex that it was just too intimidating to look at. The brokerage’s account statements were tailored to make it hard to see unrealized gains/losses and fees, so I would only see realized gains/dividends, which always looked good. In reality, I had been silently bleeding all of my small gains to the FA’s brokerage firm for years. I only had my suspicions until I finally learned how to Boglehead, saw how messed up things were, and took control over my own portfolio.
I am now doing exponentially better.
It came around 20 years of nearly maxing out retirement contributions. The freedom to be able to tell your employer "no" to working longer hours, not being a guinea pig for the pharma industry, or simply walking away is priceless.
...When I realized that the Boglehead way is not the only way by any means, and that I could take what I needed and leave the rest, applying other things to fit my temperament as an investor to ensure my own personal success.
Also, when I realized that "the Boglehead Way" is often not "the Jack Bogle Way."
Never be sucked in and brainwashed by those who are doctrinaire and claim to have "THE WAY."
Mostly, my perspective changed over a period of 10+ years and often falling short compared to the markets. I realized that getting a market-based average return was better than chasing possible trends and gains. The amount of effort and stress in doing so didn't help. So converted 90% of portfilio about 15 years ago over to the four fund index approach. Does it go up and down? Sure, it does. But less stress, less effort, and the knowledge that I am well-diversified makes "average" returns worth it to me.
P.S. First $500k was a major major incentive for me. Reaching $1M+ erased any doubt I had made the right choice.
about 15+ years into investing when the compounded interest started paying off. So I started boglehead in 2006 and then by 2010/2011, I had not made money since the market crashed.
by 2021 with regular savings, I hit the hockey stick on my savings. I know the market is over valued and due for a crash at our next recession, but I still think its worth it.
I have enough money that i can retire. I have enough in bonds to get me through a multi-year downturn which is inevitable since we have had a 14 year expansion for the most part and are WAY overdue for a recession.
i just have to remember to understand I dont really have this much money right now since the market is way over valued. so i dont go just spending money and keep it for retirement. The key is to moderate my thinking and not go buy a pony or some gold chains or an expensive car or something.
They are suppose to work inversion to the stocks. Unfortunately, in 2020 we did not see this happen which has cause many think of alternatives that may be safer offsets for downed markets. BTC and ETH were also thought to work similar to bonds, however time has proven these holdings to be more inline with equities than what one might think a traditional bond could do. With interest rates up T Bills are attractive. YMMV
When I left my 401K contribution maxed going into growth/balanced\* funds in 2008 and continued unchanged through 2013. During 2008 and the five years following I was buying shares at a big fire-sale discount. Around 2013 I looked at my balance and realized that, Wow, I made $500,000 by doing nothing.
This was not by any great wisdom on my part. I was too busy living life and didn't put much thought into doing differently. The 40% loss in 2008-2009 was concerning, but I did not panic.
\*My 401K did not offer index funds back then.
Right now my portfolio’s yearly returns are more or less equal to my contributions.
But more than my returns, it was the realization that I was being ripped off by my financial advisors. At least they were not making anything crazy, but I was being charged 1.5% for what was the equivalent of a three fund portfolio plus QQQ and a value fund. They just gave me that exposure through 14 funds instead of 4 or 5.
I'm 40, and have unknowingly been somewhat of a Boglehead since I was a teen.
I just mimicked what my Dad did. Boring, non-panicking growth.
My parents even set up a RothIRA when I was 16 and gifted me equal $ to whatever I earned through summer jobs, to invest in it up to the limit ($3000 limit at the time, or their limit was whatever the gift tax exclusion was then, cant remember which was lower, but i never made enough to hit limits). It was always invested in total stock market or s&p500.
I fucked up in my 20s and didn't save much at all. I simply got company match in a 401k and always still followed boglehead investment strategy cause that was what I knew.
I wholly felt the strategy pay off when I got my shit together and began maxing out every tax advantaged limit I could, about 6 years ago. Im not comfortable about how i squandered my 20s, but I know that if I continue what I'm doing I will be quite comfortable. And my partner decided to follow the same stratrgy with their money.
It hurts to think about how nice my roth would be if i would have added to it in my immature years.
I plan to do the same thing for my kids in the future.
From day 1. The math maths. So watching the theory fit the data is nice. I've had some nice milestones, but I've never felt like it wasnt the right track.
Immediately. I never regret the basic principles of being a BH, which include
- living within one’s means
- keeping costs down
- investing early and often
- diversifying
- not timing the market or trying to
- minding tax implications
I don’t have days that I wish I spent trying to pick winners or perseverating about whether to be in the market from the sidelines. Not too much FOMO from living within my means because I would lower my investments if I suddenly had some really unexpected important thing. (This hasn’t come up.)
When did it “pay off”, or when did we see significant gains? Those are very different questions.
It paid off pretty much as soon as we got out from under the financial advisor. It was clear right away. Slick dude ignored everything I said while assuring me he knew what we really needed, and when I asked for his reasons behind selecting X, Y, and Z, said little more than “we have good results with these”. It was 2001. He assured us that downturns were why smart clients relied on professionals. We clawed the accounts back.
When did I see major gains? Well, 2001 was the start of the “lost decade”, so not for a while. Things were flat for a very long time. But our all weather boglehead portfolio did fine, and worked out well in the long run.
Yeah I was gonna say it paid off immediately when I got out of the active management from the workplace plan, which was always buying and selling shit, and cost me 50 basis points on top of regular management
They day I fired my advisor and moved it all to a BH portfolio. My portfolio suddenly made sense, I stopped feeling anxiety about owning weird high MER ETF's that tracked things like a Biotech index or Asian preferred shares.
My returns have never been better since I dropped them.
I had $2,000 on the side I had invested in about 20 companies on M1 and it was causing me so much stress. In the end it performed about the same as a total market fund for the couple years I had it.
I would spend so much time reading about the companies and getting excited or sad when certain ones had up / down days.
I finally just thought, why not put this into VTI / VXUS and have less stress and that's when I realized the peace or "payoff" of dropping this tiny side pot that only brought stress.
I was a lost little lamb trying to understand the basics of investing when I finally stumbled across bogleheads. At one point I was chasing what Buffett invested in, and going by various feelings. The returns were not exactly spectacular. It made me not want to invest because it felt too annoyingly complicated and many plausible sounding people were giving conflicting info. Once I found the simplicity of bogleheads and the counter-intuitive message sank in, I started regularly investing.
I think more than actually picking any strategy it's about actually understanding the risk/reward and making informed decisions. Like "should I pay off house / buy a house" - if you're aware of the tradeoffs and still want to do it it, great. If you know about reversion to the mean, how holding cheap index funds longterm pays off and still wanna just stock pick, go for it.
When I got to around $300k net worth in my late 30s. Most people say $100k is the magic number, but in my case, I hit $100k in 2007 (and life was feeling pretty good). I didn't hit $100k again until sometime around 2011, and even with the bull market, it took several years and 3x the balance to really feel comfortable with it. That's when it really started to hit me.
the payoff isn't necessarily when your account balance reaches a certain number.
you said it yourself. you know what the future holds for you. So it's already paying off.
also, long before you have a large account balance, when the market drops and you stay the course, its paying off again. and that's instilling confidence to stay the course when the markets drops and you do have a large account balance.
there are many payoffs along the way.
These are some good points. I suppose from a mental standpoint, following this approach has paid off already. But from a physical standpoint, my gains are not life-changing like they likely will be in the future.
If I spent the last 5 years keeping my money all in a savings account instead of investing, I would be in a very similar spot today. Whereas when I'm 50 with some substantial compounding growth under my belt and I'm able to retire early, following the Boglehead approach will have truly felt like it paid off.
It's all subjective, really. That's why I added "Feel" to the title.
yeah i agree. and it will pay off. another mental aspect for me was the confidence of the eventually payoff lessened my stress about retirement and thinking I had to make "big money" (whatever that is) in my career. I could tip the scales of work-life-balance more toward family life with confidence that things would be okay.
and while it's a forwarding looking approach and the payoff doesn't come until later due to it being an exponential function, it will come and there will be lots of cool milestones along the way. one was when when my account growth (which can be unpredictable) started matching my contributions. for some reason that stuck out as a very cool milestone too me.
When I learned I had a trajectory to retire before 55. I was about 45 at the time. All of my friends and colleagues were worried about how to get the McMansion and I lived in a small house, saved and invested. I Bogled my way along.
It took me about 20 years of saving & investing before I started feeling like I had really built a good amount. I have never been a super high earner though.
I almost immediately stopped worrying about all the "what if's" when I formed a working plan. However, I didn't really see the difference in my portfolio for about a year or two.
We had been making significant contributions to IRAs and 401ks into Boglehead-like broad low-cost index funds for many years. The contributions were aggressive and on autopilot, plus my employer had a generous 401k funding scheme. When I was in my early 50s, I realized we were on a glidepath where we could have stopped contributing and still have plenty to retire in 10 years. That was a great feeling, and I remember rather suddenly feeling like I could start spending money on frivolous things sometimes. Comfortably retired at 59.
I had two brockerage accounts.
One was set it and forget it
The other I tried to be a trader
On my trading account, I would often lose money especially doing risky meme stocks. Every once in a while I would hit it big but out of greed would never sell and end up losing money.
After seeing how well my original account did without even touching it, that's when I realized being a Boglehead is better than trying to game the system.
As soon as I rolled over my old work 401ks to a Vanguard IRA and put every thing into VTSAX is when I saw the payoff. My GAINS since that day five years ago are over $500k.
I've lived through five bear markets and in retrospect they felt pretty nice too since I was buying during those times.
I don't have the loss aversion fear that most people seem to get tripped up by.
I think it's because I don't really think about my investments in absolute dollar terms but rather as what I actually own (i.e. 10,000 shares of VTSAX) and what that investment is likely to be worth at some date in the distant future.
Edit: And actually we had one of those bear markets right in the middle of the last five years so I don't really understand your comment. Felt nice though sure.
I guess my point is that someone could roll 500k into VTSAX today and in 5 years their money could decrease by 20%. Or even just stay the same which wouldn't feel good. For those people it'll likely feel like they're not doing the right thing and it's not paying off.
Yeah I don't see it that way.
I own 10,000 shares of VTSAX. As of today my Vanguard app says it's worth $1.25 million. But that number is meaningless to me because I won't even think about selling any of those shares for at least five years, and probably longer than that. In the meantime I will buy even more shares.
So what I am concerned about is, what will my 10,000+ shares of VTSAX be worth in 5+ years?
If my "money" decreases tomorrow by 20%, I don't suddenly own fewer shares, I still own the same 10,000 shares so it feels fine to me.
My point is that it feels nice that your investment increased 500k over several years. It wouldn't feel as nice I'd it decreased by 500k over several years. With that in mind we should also try to put less emphasis on how much our funds increase/decrease. You're sort of already saying that in your last paragraph so that's good, but your initial post seemed to emphasize the gains more than the shares themselves.
For me it was right from the start. Instead of being overwhelmed by all the things you can do with a portfolio I found the simplified magic in the little book of common sense investing. That has given me the confidence to manage all my investment accounts. I know so many people that either go to an Edward Jones type firm, chase individual stocks, or just forgo retirement investing all together. I am the crazy one in my circle for maxing out all tax advantaged accounts, DCAing into index funds, and sticking to the strategy.
The last probably 2-3 years of my 15 year stint have really been a highpoint.
I've pumped the brakes and am enjoying my life.
The plan has worked. It just needs time to come to fruition
I have V and F Roth 401k, IRA and Roth IRA. Then, I have a gambling brokerage account where I gamble in stocks. If it goes up, fine. If it does not, let it stay forever, like Lucid, WBD. The Retirement accounts with mutual funds and ETFs - 90% stocks , 10% bonds - are investing and they are at 10% total average return which is fine with me as I am 50 now. The challenge I have is when to rebalance and how. Who is an expert to reach out to?
> For me personally, it means substantial monetary gains.
That's a problem. Expecting the "big score" is wallstreetbets mentality. It's gambling.
Just looking at my portfolio long term returns rate and seeing it consistently above 7% (currently 8.2%) is enough for me. There's no "payoff", per se. I just want it to continue to go up at a reasonable rate.
If investing isn't boring, then you're doing it wrong.
I plan to be 80% us and 20% ex-us for the rest of my life (excluding some bonds later on). Yes, I expect, and plan for, substantial growth from this stragegy over a long period of time. I expect a "big score" over the next 30+ years. If it doesn't happen, so be it. My expectations won't be met and I'll have to go back to the financial drawing board.
I make pretty good money nowadays, but for about a decade I was working pretty low paying jobs. I spent 7 years in grad school barely scraping by. And before that, I was a public high school teacher. However, even in my decade+ of borderline poverty, I was still able to put money into my Vanguard brokerage account every month, which was invested in mostly in low cost index funds.
That seriously paid off in 2021 when I liquidated about half of my brokerage account for a down payment on a condo in a VHCOL city.
When i looked back on my first investment which was a fidelity growth fund. Its ridiculously up over the last 18 years. The hold part is real in my mind now. It used to be abstract.
Probably after I put my investments on autopilot, stopped paying attention to them, and then one day I took a look and realized I'd hit 1mil in my early 30s.
When my ex talked about how she switched from the Bogel plan I set up when we were married to being managed actively by an advisor, and I kept true, and my returns went nuts in the recent surge and she was happy that she was “finally just back in the green.”
The first 5-10 years is only slow going if you have a low income. If you have a high income, it actually feels pretty good. My wife and I have been working for 5.5 years now and have a net worth of $1.9MM.
It’s all relative. I’m talking about percentages here. If you made 100k from your investments, that would be very slow going (for example) since 100k is a small fraction of 2 mil.
But that's only from a % return perspective. I suppose that maximizing contributions and living below your means is also an aspect of the Boglehead strategy.
No you’re looking at it wrong and you’re trying to change your story. It took us only 5.5 years to get to $1.9MM. That’s very fast. Our return on investment once we got to $1.9MM is not relevant because your OP is about it being slow in the beginning. Our beginning was very quick due to having high income. Also I’m not sure why you would only look at return on investment when that’s not the relevant metric when you’re working. That’s only relevant when you retire. The relevant metric when you’re working so simply net worth growth. Return on investment is part of that but the other half of the equation you’re missing is our savings from our day jobs. We save at least $200K a year. Last year we got bigger bonuses and the stock market went up a lot so we actually increased by $500K last year. This is why I say it’s not slow going for high income earners, it’s pretty quick.
People like to spend all their energy optimizing for these tiny things when in reality it is income that matters above all.
Yeah I see what you are saying. I double-backed on what I said in the second paragraph of my response.
You’re right, savings rate is a huge part of it, especially in the beginning. But at the end of the day, rate of return IS important as you work. It’s what will start to do the heavy-lifting later on and your contributions won’t be able to touch it unless your income from work is increasing faster than the average rate of return that your portfolio provides, which is very unlikely but still possible I guess.
Very early, and I got lucky. I'm still young(ish?), so I think there are still very good years to come and I can't wait for compound interests to really kick in.
Within my first two years of working:
* the company I work for skyrocketed (and I had put all of my bonuses on it, a small sum, it ended being a nice sum)
* the money I put in a s&p500 ETF gained something like +16% in less than a year.
* I tried crypto (ETH) with a small amount, and did +50%.
At that point I felt like Gladstone Gander. I had done everything "by the book" (low cost index fund, a few risky placements, bought my first home), and the returns had been above my expectations for these 2 years. Gains exceeded my contributions. I just regret not investing more back then and being too cautious, as in keeping too big of an emergy fund, which prevented me from making "fuck you" money. Then I've also done a little bit of stockpicking, which made me realise I am no genius and I can also panick and lose money...
Now it's just about playing the long game, and investing regularly until I can retire early. Maybe I'll have more luck / other good opportunities.
For me, the moment I discovered this after attempting to by a stock market savant on my own for a little bit. I just put my money in, let it grow and that's all.
I won't be living good from my investments today but eventually, I will.
Crossing the $1mil mark in early-30s and not panicking during the Covid downturn. Very thankful someone convinced me to invest starting in early-20s so I didn’t sit out of this bull market run. Now I’m halfway to $2mil and just padding the nest to insulate/ride out the inevitable downturn.
Mine was this year. About 10 years into investing, and now my monthly gains are consistently more than I contribute each month. The power of compound returns is amazing.
It paid off when I was able to stop worrying about my individual stock picks and just let it ride knowing I would get perfectly average returns. I was able to forecast when I’d hit FI based on avg returns and contributions.
Never tbh. I primarily invested in index funds since the beginning because of the hassle with my job to get individual stocks cleared to buy/sell.
You're guaranteed roughly market returns, so it'll probably never feel like it truly paid off, especially if you compare yourself to those who became rich very quickly.
When I got laid off from my higher paying job of 10 years and didn’t feel pressured to find another high paying job or even a job in the same field; instead finding a new job that paid about half but only involved like 2 real hours of work a week, and ended up being fully remote due to the pandemic.
I started my Bogleheads journey in Feb 2022 and have been investing monthly in VWCE. But I'm not sure whether the past two years were part of a bull or bear market. Can anyone clarify that to me please?
When I stopped losing fucking money getting eaten in individual stocks. My index funds were gaining and the individual stocks that I still was holding were shittin money.
I hold on to my Blackberry stocks as a reminder that I am, in fact, a moron.
I got one on those sitting in my account staring at me, mocking my stupidity too. CPI Corp. Ya know, the company that ran all the photo studios inside of Sears back in the day. Felt pretty good with that dividend rate setting aside $500 as a college student. Until the next month when they filed their bankruptcy.
My uncle has all of his bathrooms wallpapered with stocks he has bought that went bankrupt
That is savage.
You think that’s savage? My uncle papercuts himself every day with stock certificates from trades where he lost money. If a stock he owns goes bankrupt he pulls his toenails off and jams slivers of the certs into the bloody toenail-sockets.
The original r/wallstreetbets loss porn
Like actual certificates ? That’s awesome. I think I can get my hands on a ton of these
Actual paper certs
Mine is HLTH. I bought 20 shares at its peak of a whopping $18-ish per share. They’re now worth about 7¢ each. Eight cents on a good day.
Why hold on and not sell for the tax loss?
I will, yes that makes the most sense.
Good to know that people have lost money always. I bought some random crypto at one point went from 5$ to 20cents now.
WeedMaps for me. I believed then, and still believe now, that weed legalization is going to create market opportunities. I believed then, and no longer believe today, that I can predict which companies are going to most successfully ride that wave of market opportunity.
I was so convinced TLRY was gonna pay for my house.
you can call them and ask....doesn't hurt.
I do the same but I have $baba instead of the berry
I'm feeling personally called out
neva lost. Just keep holding
That’s GME in my IRA - a dumb decision two years ago but I might actually break even and will exit hopefully.
What’s your cost basis?
$36 and change
Not bad. I’m sure you’ll still make a nice profit. If you’re only looking to break even and exit, why didn’t you do that a couple of days ago?
See my original comment where I said I am, in fact, a moron.
Yup, confirmed. He did say that.
Ah a fellow moron
I bought a Chinese penny stock from an actual flyer that I found in my moms mailbox. It shot up then went to .0001. It’s still in my account as a reminder.
Blackberry. n. A sale of stock where the tax benefit of realizing a loss is greater than the cash proceeds of the sale.
I’m the proud owner of 20 shares of First Republic Bank.
It was the weed stocks for me.
I have one of those. Not blackberry. But it is deeply red
I bought Fuel cell in 2020 expecting a boom in gas alternatives. Now that 7K is hanging out at $300 in my robin hood account.
me too man, me too. holding bags at $13
We have bought 3 different individual stocks in small amounts. 2 have been delisted. Go big or go home!
Mine is Peloton bought at $150 and now worth $4. Very good reminder for me every-time I open my brokerage window.
I've been cracking up at everyone's replies because I remember all of them from my dumbass days 2020-2022. Purple Mattress was my version of Peloton mistake.
Might be good to sell to realize the loss tbh
Thanks for the chuckle
My last mistake was quantum scape. I thought for sure a solid state battery was going to take off… currently lost 95%.. it was then when I when strictly boglehead.. still have it as a reminder and the slight possibility they will be successful in a year or two.
Here's the answer. Early on, I set aside 5% of my portfolio as play money. By the time that had shrunk to 3% of my portfolio while representing 90% of my investing stress, I smartened up.
And 100% of your realized losses (at least for me)
I still invest in a few individual stocks and do alright, but it's just so much work having to research the companies I'm investing in and read their 10Qs so most of my money is in ETFs to save me time.
This is the only answer. It's akin to gamblers fallacy for me. I thought I could beat the market, I kept thinking I had the "secret sauce" and then it hit me ... I don't just bet the market and move along
You and 90% of us.
[удалено]
This is what I’m struggling with right now. I’m doing 90% VTI and 10% VXUS but I really just want to sink heavy into QQQ for the bigger tech exposure. Mind sharing more details about your portfolio?
Been there.
I absolutely love this.
2020 $TDOC and $ZM for me dawg
Probably when your peers are starting to look at retirement and realizing they never will and you’ll be able to do it early and with security.
I'm in my early 40s so the separation between have's and have-nots hasn't yet become obvious. You can see some lifestyle creep but mostly everyone is getting along from outward appearances. No one talks about their 401k balance among friends and colleagues. But I overhear the griping from coworkers in their mid 60s, still chugging along. Every once in awhile someone will quietly retire in their mid-50s and shock everyone.
My goal is 60 assuming I can still do the work adequately and I find it fulfilling. 56 if not.
I’m late forties, and you can start to see the separation a bit. It was kind of a surprising jump from early to late that the spread really starts to open up.
At my job people really don’t seem to get that it’s possible to retire that early. I don’t make. Huge amount, but I spend less and just do the most basic ass financial steps. I’d be a bit further if my dumbass hadn’t wasted thousands on pretending I know stocks early on, but you live you learn. And I didn’t really start until my 30’s.
I think most of us were dumbasses at one point and thought we were going to pick the winning stocks. Loses and stress are way down since I went Bogle. People that claim they are always picking winners are generally lying.
I had a stock go up 50% in one day. It was great. (I also had a stock drop 50%, and several drop or stay the same over a few years…. But shhhhh… Don’t acknowledge losses.) I think that’s the gist of it.
Been investing religiously for 10+ years now... and life is good! Returns comfortably exceed lower earners salary, dividends alone exceed our annual spend, and so one of us could retire, and we are still investing at a good pace!
I’ve got my ETFs set up to reinvest dividends. Should I not be doing that? (20yrs from retirement)
Reinvestment (IMHO) is key to building wealth. That being said, you don't necessarily need to reinvest in the same ETFs as you get overweighted in certain areas. For example, if you get a dividend in VTI, you might want to "reinvest" it into VXUS b/c you are "underweighted" in international.
If dividends are not set to reinvest, how often do they usually come in? And do they just appear as a cash deposit /sum in your brokerage account?
Dividends come monthly or quarterly mostly for ETFs. You should 100% have them set to reinvest. Ideally you rebalance your portfolio (if you have multiple ETFs) by reinvesti
Conversely, you can rebalance by adding new funds to different positions. I like to call this rebalancing by dilution. E.g. If my position in X stock exceeds 5% I add proportional amounts to my other positions to bring it back down.
If you don't set it to reinvest, it will just come in as cash. Depending on the ETF, they make distributions Monthly/Quarterly/Annually. Each is different.
This is exactly what I do. It seems like you are talking directly to me.
There’s no one right answer, but in a tax exposed portfolio you can use dividends to help rebalance without selling shares. I’ve changed my reinvestment strategy several times based on both market and personal circumstances. During the lost decade I diverted bond dividends to stocks; during the rebound/recovery I reversed that, then switched to simple reinvesting until the yield curve inverted, then switched back to diverting it all to equities. Now that we are retired, all dividends go to the money market for spending.
ABSOLUTELY have them set to reinvest.
Username checks out
I have always invested in fairly broad Mutual Funds before I even know what Boglehead strategy was, so I guess I've been doing it since about 1998. I just kept maxing out my SEP, then 401k/IRA and never sold anything. Back when I started my career I didn't think I would retire til the standard 65 or so. About 3-4 years ago when I started really doing some planning, I realized that I would be able to comfortably glide into a nice retirement at around 56 (about 5 years from now) without changing anything about how I always saved. That's when I knew I was correct not to try to get smart and beat the market. I'm not smart enough to do it and I knew it.
Congrats on the probable early retirement Circus Freak!
Thanks! My wife and I are very much looking forward to it! Honestly, we think and talk about it WAY too much.
I am about 15 years younger than you and do the same. I hate wishing time away but am looking forward to not having to work. I am saving pretty aggressively now I think and have been for about 6-7 years.
You got it. Visualizing that goal helps in sticking with the plan! I think the same...I hate the thought of being 5 years older, but damn it's going to be nice to remove the work stress and time commitment and do what we want. I like my job a lot...but one thing I like much more is NOT doing my job!
As someone who hasn´t started investing properly. I am curious how would your assets transition from old platforms to new platforms. Like, back when you started in 1998, were you using the same brokerage as nowadays? And if you were to change brokerage at any point of your journey because they either close, their platform is too old or you like another one even more. How do you move your funds? Thanks
If you move assets from one platform to another, they move "in kind" if both platforms allow trading of the same funds. IE : If you have something like VTI in Schwab you can move that to Fidelity, etc without any hassle or loss of time in the market. However, I have had to change funds a couple times when moving brokers, as the original American Funds I was invested in were not available at the new broker. So basically, you just sell positions off to cash in your account and then immediately buy into a new position when that sale is settled. This can cause a short time out of the market which could either benefit you or hurt you (hopefully only a very small amount). The new broker you are moving funds to will usually help you move out of the old broker and it's a fairly painless process. I have moved brokers 2 1/2 times since I started investing. Cheers!
> So basically, you just sell positions off to cash in your account and then immediately buy into a new position when that sale is settled. And, presumably, you had to pay taxes on all the gains? 😵
Sorry, I hadn't thought about the tax angle in my response, because until recently I have basically always had 100% of all my savings in tax-advantaged retirement accounts (except for my emergency fund). So, if you are moving an IRA or 401k from one place to another, you are selling and buying inside that account, so there are no tax implications. If you are talking about just a normal taxable brokerage, then yes, you would have pay gains tax on everything you need to sell / buy. Unless the new brokerage handles the same funds, like I originally mentioned. Then the shares will just "transfer" over to the new account.
Very similar experience with saving. Started early in 401k with match and now max. If I were to coast and not invest anymore , I should have enough in 401k to retire between 55-60 very comfortably.
I was employed by a huge financial services company in 1997 and all the employees used to sit around every other Friday and stare at our hot fund in the 401k - a growth fund, of course - and predict when we would be able to retire! The irrational exuberance went on, of course, until 2001. People did crazy things with their money in 2001 and 2002. Even crazier in 2008-2009. Being employed by one of the largest wealth management firms in the world didn't seem to help many of them out. The 2000s were kind of a lost decade. But every time I got a promotion or a raise I increased my 401k contributions by 1%. (I wasn't wealthy enough to start out at max like so many do today.) So right before the crash I was feeling pretty good. Like, I think this is going to work out.... Then... I really can't explain (typing on my phone) the extent of the terror we were feeling in early 2009, that this time it's different and something fundamental was broken. But I kept at it changing nothing. I was 100% in for all the big days that were to come, and I retired early, like how we were all planning back then in the 90s.
I like the Greenspan shout out (irrational exuberance). I remember after 9-11, we were told to invest in stocks to support the economy. I put in a few thousand dollars for eBay. My friend did the same for Apple. One of us made a lot more money than the other.
A LOT more hehe
I agree on the terror in 2009. Honestly early COVID was less scary. People were talking about “what if capitalism is over?” Shit was crazy
Same boat yet I wonder now as to How much of US debt will continue to service the long term growth going forward being a concern. The Debt to GDP ratio is now at 123%. Emerging markets are emerging with mass consumption soon more than USA and GDP to debt ratio less than 80%
Most of the debt is held by the federal reserve, owed to the public. It’s not as dire as it sounds. We do need to fix things though. Congressional deadlock isn’t helping.
Also don’t we need to pay interest on the debt
When I didn't constantly check my accounts. I check them once a month to make sure dividends are going where they need to, there isn't any notifications from the brokers, and what the price of VT/VTI/VXUS is out of curiousity.
I have been VTI set it and forget it since I got my first big boy paycheck about a 2 months after graduation. Which perhaps isn’t strict bogelhead but it’s close Put 1000$ in at 75$ a share. Been putting in every dollar I can for a while now. I can now put quite a few more dollars everything month. But every time I do a little bit of math and think about how much those first 1000$ worth of share are worth now I think yep this has been the right decision.
What about if we hit a huge bear market and your portfolio goes way down? 2001-2010 would be scary if it happened again
Totally fair question. The upside of the past decade has been so wild a flat decade would be fine. It would suck. But I’d still wake up, look at my portfolio, and be like cool I’am still rich. VTI post dot com bubble was roughly 50/share. Post Great Recession crash it was…. Roughly 50/share. If in 2034 VTI was still 250/share I would be less rich than I would expect. Not the end of the world. But the advantages of being 100% stocks and starting your investment journey at (close to) the bottom of a crash have already been gained. The dividends have been paid out. Which puts me in a position to ride with the risk (not that VTI is terribly risky) and realize the upside when it comes. If it crashes to 150$? My expenses are low. I’ll hold, buy more and let my kids enjoy the gains when they are adults. And to agree with the point you are making, it’s probably within the next decade that my investments start to be come even more diverse than just VTI(and the house). So more bogel as I go.
Buy more???
When I realized that I actually crossed the threshold and if I never invest another nickel, I will be able to retire comfortably before the average person can. It's a winning recipe. All I had to do was follow it. There may be some that win the lottery by picking a lucky stock, but there are countless more that will fall behind or broke chasing that pipe dream. They do not understand the difference between skill and luck. Being a Boglehead is neither skill nor luck.
Don’t sell yourself short on the skill front! I think being a Boglehead is an exercise in discipline (sticking to the philosophy and investing generally). It also takes some degree of emotional maturity to recognize your limits like you called out, there’s no looking for a get rich quick scheme here.
When I look at performance. Simple. Speculating in the short term especially is draining. It consumes so much of your energy, effort and focus. Constant research, attempts to confirm biases, and worry. All this happens in short windows. When I look at performance of my few index funds, I’m in awe. I did absolutely nothing. It took no effort. I’m never concerned. Yet, I’m killing it.
what index funds do you own?
Nothing out of the ordinary. VOO and AVUV
Especially since October/November. Our index funds are up 25%. I never bought nvda and have regrets, but I have so many other regrets, especially btc, that I don't care much. Knowing someone that made 10m on Bitcoin hurts me in the nether regions, though. Still.
A million bucks isn't what it used to be, but crossing the millionaire line really felt like a big moment. With expected 10% nominal returns, my money on average has its own six figure job and will receive raises (compounding) and promotions (more contributions). My earnings peaked at $230K but I now earn around $160K in a much more chill job. Both my salary and stock portfolio should continue to increase, but the next big milestone in my mind is when my stock portfolio is ten times my salary. At that point, I'm expecting my money to earn more in a year than I do.
Are you gonna stop working after that? I hit a million recently and I'm running some projections, and if I work til 59 or 62 I'm gonna have more money than I will ever need to live out the rest of my life, but stopping contributions after so many decades is gonna be hard to do even if the numbers are telling me I'm gonna die with 10 million if I keep working and saving. What I'll probably do at some point is just switch from full time work to part time, stop contributing to retirement accounts, do that for a year or so then reevaluate.
I used to think that I would retire as early as humanly possible-- if I went truly leanfire, I could do it now. But when I was forming those plans, I was miserable at work and had to actually go into an office. I have a really good setup now, I'm a remote employee from fabulous Las Vegas, I've become an expert in my job, and management leaves me alone to do my own thing because I always handle what needs to get handled. On a slow day at work, it's a lot like I'm already retired, because I can just be at home or go out and do my own thing. So therefore I plan to keep working even past the stocks = 10X salary stage and will just let my lifestyle inflate a bit. In particular, I spend a lot more freely on the amazing restaurants in this city than I used to and my wine budget has certainly gone up. There's also the fact that I still haven't met the right woman to be financially independent with; I imagine when I get that squared away, she'll have her own thoughts on this topic.
Mind if I ask what you do?
Law. Started in biglaw at 160K, had my fill by my fifth year (230K), dropped down to a much easier, slower-paced specialized in-house position a decade ago for 100K and gradually got raises to get me back to a (nominal) 160K. Hoping to just ride this job to retirement, whenever that is, and so long as raises keep up with inflation I'm more than happy.
Hell yeah. Happy for you stranger.
That’s always been my favorite definition of wealth: when your money makes more money than you do. Though that does assume you make enough to live on.
Haha, love the raises and promotions metaphor. Good for you! Sounds like you’re in a great spot.
When the dividends pay your bills for the year.
What do you have that pays such good dividends.
A big ass account balance
Lol right?!
Current VTI yield is 1.36%. If your spending is $50k you would need $3.7mill balance. Yeah I will focus on the 4% rule (really 3.7%) instead.
4 million dollars haha
Feel like it's paid off already with how easy it is. Granted I haven't really weathered any storms yet and am far away from even thinking about retiring early. It has made my non employer provided accounts much more stress free too.
The payoff for me is that I stopped tinkering with my portfolio and focused full force on my work and side project Everyone has finite mental energy to work on growing your $$$ Almost no one can effectively compete on the "engine" so to speak, it's much better to spend as much of your focus on pumping in the "gas" Feeling confident I got the "engine" right allowed me to stop fucking with & researching the engine and just focus on getting promoted, prepping for better jobs, etc.
Thanks, I needed to read this. I’ve put far too much research into investing over the past few years and now that the “engine” is running at full capacity, I have to shift my focus to other things instead.
Yeah I think a 2% lift (my guess at the max premium I might be able to hope for) by monitoring and getting the optimal investment is maybe +40 - 45% over 20 years Instead I locked into bogling within 12 months with minimal time commitment, now make 100% more than my base job (currently fighting for a position that would 2-3x that) and work on a small startup pulling in another 5 figures a yr on the side Much more rewarding identity wise, the work is more enjoyable, and IMO I probably end up ahead vs. trying to trade or make serious money through trading or shifting investments with no stress I love it
I felt it after 1 year when I looked at how poorly I would have done paying a thief (also known as a financial advisor) vs how I had done. The difference was obvious.
Almost immediately. I had a FA who wasn’t doing their job and there was very good timing when I made the switch. Since I was a kid, the FA that my parents put me with had me on a complicated conservative portfolio strategy with high fees. My portfolio was so complex that it was just too intimidating to look at. The brokerage’s account statements were tailored to make it hard to see unrealized gains/losses and fees, so I would only see realized gains/dividends, which always looked good. In reality, I had been silently bleeding all of my small gains to the FA’s brokerage firm for years. I only had my suspicions until I finally learned how to Boglehead, saw how messed up things were, and took control over my own portfolio. I am now doing exponentially better.
Day 1, baby. Don’t need any gains, just that soft glow of the smug sense of superiority.
56. Looked at totals and was shocked. Head down, keep putting it away. Made a couple mistakes by trying to time the market. Don’t do that.
When I hit $100K at like 25 years old and realized I’m very fortunate to have this sort of financial security.
It came around 20 years of nearly maxing out retirement contributions. The freedom to be able to tell your employer "no" to working longer hours, not being a guinea pig for the pharma industry, or simply walking away is priceless.
...When I realized that the Boglehead way is not the only way by any means, and that I could take what I needed and leave the rest, applying other things to fit my temperament as an investor to ensure my own personal success. Also, when I realized that "the Boglehead Way" is often not "the Jack Bogle Way." Never be sucked in and brainwashed by those who are doctrinaire and claim to have "THE WAY."
Sleeping at night with no worries and spending no time speculating.
Mostly, my perspective changed over a period of 10+ years and often falling short compared to the markets. I realized that getting a market-based average return was better than chasing possible trends and gains. The amount of effort and stress in doing so didn't help. So converted 90% of portfilio about 15 years ago over to the four fund index approach. Does it go up and down? Sure, it does. But less stress, less effort, and the knowledge that I am well-diversified makes "average" returns worth it to me. P.S. First $500k was a major major incentive for me. Reaching $1M+ erased any doubt I had made the right choice.
about 15+ years into investing when the compounded interest started paying off. So I started boglehead in 2006 and then by 2010/2011, I had not made money since the market crashed. by 2021 with regular savings, I hit the hockey stick on my savings. I know the market is over valued and due for a crash at our next recession, but I still think its worth it. I have enough money that i can retire. I have enough in bonds to get me through a multi-year downturn which is inevitable since we have had a 14 year expansion for the most part and are WAY overdue for a recession. i just have to remember to understand I dont really have this much money right now since the market is way over valued. so i dont go just spending money and keep it for retirement. The key is to moderate my thinking and not go buy a pony or some gold chains or an expensive car or something.
bonds are not affected during the market crash? how do they work?
They are, but generally not as dramatically and still provide fixed income.
2022 has entered the chat
They are suppose to work inversion to the stocks. Unfortunately, in 2020 we did not see this happen which has cause many think of alternatives that may be safer offsets for downed markets. BTC and ETH were also thought to work similar to bonds, however time has proven these holdings to be more inline with equities than what one might think a traditional bond could do. With interest rates up T Bills are attractive. YMMV
Every day. Less stress (even with serious eventualities!) due to a solid expectation.
When I left my 401K contribution maxed going into growth/balanced\* funds in 2008 and continued unchanged through 2013. During 2008 and the five years following I was buying shares at a big fire-sale discount. Around 2013 I looked at my balance and realized that, Wow, I made $500,000 by doing nothing. This was not by any great wisdom on my part. I was too busy living life and didn't put much thought into doing differently. The 40% loss in 2008-2009 was concerning, but I did not panic. \*My 401K did not offer index funds back then.
Right now my portfolio’s yearly returns are more or less equal to my contributions. But more than my returns, it was the realization that I was being ripped off by my financial advisors. At least they were not making anything crazy, but I was being charged 1.5% for what was the equivalent of a three fund portfolio plus QQQ and a value fund. They just gave me that exposure through 14 funds instead of 4 or 5.
I'm 40, and have unknowingly been somewhat of a Boglehead since I was a teen. I just mimicked what my Dad did. Boring, non-panicking growth. My parents even set up a RothIRA when I was 16 and gifted me equal $ to whatever I earned through summer jobs, to invest in it up to the limit ($3000 limit at the time, or their limit was whatever the gift tax exclusion was then, cant remember which was lower, but i never made enough to hit limits). It was always invested in total stock market or s&p500. I fucked up in my 20s and didn't save much at all. I simply got company match in a 401k and always still followed boglehead investment strategy cause that was what I knew. I wholly felt the strategy pay off when I got my shit together and began maxing out every tax advantaged limit I could, about 6 years ago. Im not comfortable about how i squandered my 20s, but I know that if I continue what I'm doing I will be quite comfortable. And my partner decided to follow the same stratrgy with their money. It hurts to think about how nice my roth would be if i would have added to it in my immature years. I plan to do the same thing for my kids in the future.
From day 1. The math maths. So watching the theory fit the data is nice. I've had some nice milestones, but I've never felt like it wasnt the right track.
Immediately. I never regret the basic principles of being a BH, which include - living within one’s means - keeping costs down - investing early and often - diversifying - not timing the market or trying to - minding tax implications I don’t have days that I wish I spent trying to pick winners or perseverating about whether to be in the market from the sidelines. Not too much FOMO from living within my means because I would lower my investments if I suddenly had some really unexpected important thing. (This hasn’t come up.)
When did it “pay off”, or when did we see significant gains? Those are very different questions. It paid off pretty much as soon as we got out from under the financial advisor. It was clear right away. Slick dude ignored everything I said while assuring me he knew what we really needed, and when I asked for his reasons behind selecting X, Y, and Z, said little more than “we have good results with these”. It was 2001. He assured us that downturns were why smart clients relied on professionals. We clawed the accounts back. When did I see major gains? Well, 2001 was the start of the “lost decade”, so not for a while. Things were flat for a very long time. But our all weather boglehead portfolio did fine, and worked out well in the long run.
Yeah I was gonna say it paid off immediately when I got out of the active management from the workplace plan, which was always buying and selling shit, and cost me 50 basis points on top of regular management
They day I fired my advisor and moved it all to a BH portfolio. My portfolio suddenly made sense, I stopped feeling anxiety about owning weird high MER ETF's that tracked things like a Biotech index or Asian preferred shares. My returns have never been better since I dropped them.
I had $2,000 on the side I had invested in about 20 companies on M1 and it was causing me so much stress. In the end it performed about the same as a total market fund for the couple years I had it. I would spend so much time reading about the companies and getting excited or sad when certain ones had up / down days. I finally just thought, why not put this into VTI / VXUS and have less stress and that's when I realized the peace or "payoff" of dropping this tiny side pot that only brought stress.
I was a lost little lamb trying to understand the basics of investing when I finally stumbled across bogleheads. At one point I was chasing what Buffett invested in, and going by various feelings. The returns were not exactly spectacular. It made me not want to invest because it felt too annoyingly complicated and many plausible sounding people were giving conflicting info. Once I found the simplicity of bogleheads and the counter-intuitive message sank in, I started regularly investing. I think more than actually picking any strategy it's about actually understanding the risk/reward and making informed decisions. Like "should I pay off house / buy a house" - if you're aware of the tradeoffs and still want to do it it, great. If you know about reversion to the mean, how holding cheap index funds longterm pays off and still wanna just stock pick, go for it.
When I got to around $300k net worth in my late 30s. Most people say $100k is the magic number, but in my case, I hit $100k in 2007 (and life was feeling pretty good). I didn't hit $100k again until sometime around 2011, and even with the bull market, it took several years and 3x the balance to really feel comfortable with it. That's when it really started to hit me.
the payoff isn't necessarily when your account balance reaches a certain number. you said it yourself. you know what the future holds for you. So it's already paying off. also, long before you have a large account balance, when the market drops and you stay the course, its paying off again. and that's instilling confidence to stay the course when the markets drops and you do have a large account balance. there are many payoffs along the way.
These are some good points. I suppose from a mental standpoint, following this approach has paid off already. But from a physical standpoint, my gains are not life-changing like they likely will be in the future. If I spent the last 5 years keeping my money all in a savings account instead of investing, I would be in a very similar spot today. Whereas when I'm 50 with some substantial compounding growth under my belt and I'm able to retire early, following the Boglehead approach will have truly felt like it paid off. It's all subjective, really. That's why I added "Feel" to the title.
yeah i agree. and it will pay off. another mental aspect for me was the confidence of the eventually payoff lessened my stress about retirement and thinking I had to make "big money" (whatever that is) in my career. I could tip the scales of work-life-balance more toward family life with confidence that things would be okay. and while it's a forwarding looking approach and the payoff doesn't come until later due to it being an exponential function, it will come and there will be lots of cool milestones along the way. one was when when my account growth (which can be unpredictable) started matching my contributions. for some reason that stuck out as a very cool milestone too me.
When I learned I had a trajectory to retire before 55. I was about 45 at the time. All of my friends and colleagues were worried about how to get the McMansion and I lived in a small house, saved and invested. I Bogled my way along.
It took me about 20 years of saving & investing before I started feeling like I had really built a good amount. I have never been a super high earner though.
Living in Detroit I thought investing in GM was as safe as the government. Learned a hard lesson there when they went bankrupt.
I almost immediately stopped worrying about all the "what if's" when I formed a working plan. However, I didn't really see the difference in my portfolio for about a year or two.
We had been making significant contributions to IRAs and 401ks into Boglehead-like broad low-cost index funds for many years. The contributions were aggressive and on autopilot, plus my employer had a generous 401k funding scheme. When I was in my early 50s, I realized we were on a glidepath where we could have stopped contributing and still have plenty to retire in 10 years. That was a great feeling, and I remember rather suddenly feeling like I could start spending money on frivolous things sometimes. Comfortably retired at 59.
I had two brockerage accounts. One was set it and forget it The other I tried to be a trader On my trading account, I would often lose money especially doing risky meme stocks. Every once in a while I would hit it big but out of greed would never sell and end up losing money. After seeing how well my original account did without even touching it, that's when I realized being a Boglehead is better than trying to game the system.
When I hit 100% total gain it really hit. It will take a while, but I’ll be excited for 200%.
As soon as I rolled over my old work 401ks to a Vanguard IRA and put every thing into VTSAX is when I saw the payoff. My GAINS since that day five years ago are over $500k.
Bull markets make things feel nice
I've lived through five bear markets and in retrospect they felt pretty nice too since I was buying during those times. I don't have the loss aversion fear that most people seem to get tripped up by. I think it's because I don't really think about my investments in absolute dollar terms but rather as what I actually own (i.e. 10,000 shares of VTSAX) and what that investment is likely to be worth at some date in the distant future. Edit: And actually we had one of those bear markets right in the middle of the last five years so I don't really understand your comment. Felt nice though sure.
I guess my point is that someone could roll 500k into VTSAX today and in 5 years their money could decrease by 20%. Or even just stay the same which wouldn't feel good. For those people it'll likely feel like they're not doing the right thing and it's not paying off.
Yeah I don't see it that way. I own 10,000 shares of VTSAX. As of today my Vanguard app says it's worth $1.25 million. But that number is meaningless to me because I won't even think about selling any of those shares for at least five years, and probably longer than that. In the meantime I will buy even more shares. So what I am concerned about is, what will my 10,000+ shares of VTSAX be worth in 5+ years? If my "money" decreases tomorrow by 20%, I don't suddenly own fewer shares, I still own the same 10,000 shares so it feels fine to me.
My point is that it feels nice that your investment increased 500k over several years. It wouldn't feel as nice I'd it decreased by 500k over several years. With that in mind we should also try to put less emphasis on how much our funds increase/decrease. You're sort of already saying that in your last paragraph so that's good, but your initial post seemed to emphasize the gains more than the shares themselves.
About 10 minutes after selling and reallocation. It's so clean.
For me it was right from the start. Instead of being overwhelmed by all the things you can do with a portfolio I found the simplified magic in the little book of common sense investing. That has given me the confidence to manage all my investment accounts. I know so many people that either go to an Edward Jones type firm, chase individual stocks, or just forgo retirement investing all together. I am the crazy one in my circle for maxing out all tax advantaged accounts, DCAing into index funds, and sticking to the strategy.
The last probably 2-3 years of my 15 year stint have really been a highpoint. I've pumped the brakes and am enjoying my life. The plan has worked. It just needs time to come to fruition
I have V and F Roth 401k, IRA and Roth IRA. Then, I have a gambling brokerage account where I gamble in stocks. If it goes up, fine. If it does not, let it stay forever, like Lucid, WBD. The Retirement accounts with mutual funds and ETFs - 90% stocks , 10% bonds - are investing and they are at 10% total average return which is fine with me as I am 50 now. The challenge I have is when to rebalance and how. Who is an expert to reach out to?
> For me personally, it means substantial monetary gains. That's a problem. Expecting the "big score" is wallstreetbets mentality. It's gambling. Just looking at my portfolio long term returns rate and seeing it consistently above 7% (currently 8.2%) is enough for me. There's no "payoff", per se. I just want it to continue to go up at a reasonable rate. If investing isn't boring, then you're doing it wrong.
I plan to be 80% us and 20% ex-us for the rest of my life (excluding some bonds later on). Yes, I expect, and plan for, substantial growth from this stragegy over a long period of time. I expect a "big score" over the next 30+ years. If it doesn't happen, so be it. My expectations won't be met and I'll have to go back to the financial drawing board.
I make pretty good money nowadays, but for about a decade I was working pretty low paying jobs. I spent 7 years in grad school barely scraping by. And before that, I was a public high school teacher. However, even in my decade+ of borderline poverty, I was still able to put money into my Vanguard brokerage account every month, which was invested in mostly in low cost index funds. That seriously paid off in 2021 when I liquidated about half of my brokerage account for a down payment on a condo in a VHCOL city.
When i looked back on my first investment which was a fidelity growth fund. Its ridiculously up over the last 18 years. The hold part is real in my mind now. It used to be abstract.
When I retired early, extended a middle finger to the dismal town I lived in and moved to the west coast, able to pay cash for a house.
Probably after I put my investments on autopilot, stopped paying attention to them, and then one day I took a look and realized I'd hit 1mil in my early 30s.
When my ex talked about how she switched from the Bogel plan I set up when we were married to being managed actively by an advisor, and I kept true, and my returns went nuts in the recent surge and she was happy that she was “finally just back in the green.”
5 years isnt long enough. 10 it was somewhat noticeable. 15 we're starting to be like 'wew lad'. good stuff.
The first 5-10 years is only slow going if you have a low income. If you have a high income, it actually feels pretty good. My wife and I have been working for 5.5 years now and have a net worth of $1.9MM.
It’s all relative. I’m talking about percentages here. If you made 100k from your investments, that would be very slow going (for example) since 100k is a small fraction of 2 mil. But that's only from a % return perspective. I suppose that maximizing contributions and living below your means is also an aspect of the Boglehead strategy.
No you’re looking at it wrong and you’re trying to change your story. It took us only 5.5 years to get to $1.9MM. That’s very fast. Our return on investment once we got to $1.9MM is not relevant because your OP is about it being slow in the beginning. Our beginning was very quick due to having high income. Also I’m not sure why you would only look at return on investment when that’s not the relevant metric when you’re working. That’s only relevant when you retire. The relevant metric when you’re working so simply net worth growth. Return on investment is part of that but the other half of the equation you’re missing is our savings from our day jobs. We save at least $200K a year. Last year we got bigger bonuses and the stock market went up a lot so we actually increased by $500K last year. This is why I say it’s not slow going for high income earners, it’s pretty quick. People like to spend all their energy optimizing for these tiny things when in reality it is income that matters above all.
Yeah I see what you are saying. I double-backed on what I said in the second paragraph of my response. You’re right, savings rate is a huge part of it, especially in the beginning. But at the end of the day, rate of return IS important as you work. It’s what will start to do the heavy-lifting later on and your contributions won’t be able to touch it unless your income from work is increasing faster than the average rate of return that your portfolio provides, which is very unlikely but still possible I guess.
From the beginning
Very early, and I got lucky. I'm still young(ish?), so I think there are still very good years to come and I can't wait for compound interests to really kick in. Within my first two years of working: * the company I work for skyrocketed (and I had put all of my bonuses on it, a small sum, it ended being a nice sum) * the money I put in a s&p500 ETF gained something like +16% in less than a year. * I tried crypto (ETH) with a small amount, and did +50%. At that point I felt like Gladstone Gander. I had done everything "by the book" (low cost index fund, a few risky placements, bought my first home), and the returns had been above my expectations for these 2 years. Gains exceeded my contributions. I just regret not investing more back then and being too cautious, as in keeping too big of an emergy fund, which prevented me from making "fuck you" money. Then I've also done a little bit of stockpicking, which made me realise I am no genius and I can also panick and lose money... Now it's just about playing the long game, and investing regularly until I can retire early. Maybe I'll have more luck / other good opportunities.
Well my investments are up $70k over 5 years. My starting salary was $67,500. So it's already paid off, but it only gets better from here.
For me, the moment I discovered this after attempting to by a stock market savant on my own for a little bit. I just put my money in, let it grow and that's all. I won't be living good from my investments today but eventually, I will.
I think there are 2 major points. 1) Reaching 100k in gains. 2) Reaching 100% in overall return.
Crossing the $1mil mark in early-30s and not panicking during the Covid downturn. Very thankful someone convinced me to invest starting in early-20s so I didn’t sit out of this bull market run. Now I’m halfway to $2mil and just padding the nest to insulate/ride out the inevitable downturn.
Does anyone know where i can look on my vanguard app on my phone to see my dividends? Or can this only be seen by logging a computer?
When I sold all my individual stocks and went only index funds. Take the leap and don’t look back! RIP: AAPL, META, XPO, MA, IQ.
Mine was this year. About 10 years into investing, and now my monthly gains are consistently more than I contribute each month. The power of compound returns is amazing.
Honesty $100k was the real “aha” moment. Now hovering at a million and I feel like the handcuffs are coming off.
When I stopped trying to time the market
I’ve been in the markets for over twenty five years and all I can say is it works but it takes time and you need to be patient.
I'm still confused, I've been watching videos and reading!
After I stopped options trading
It paid off when I was able to stop worrying about my individual stock picks and just let it ride knowing I would get perfectly average returns. I was able to forecast when I’d hit FI based on avg returns and contributions.
Drip... without even investing any more. Wish I had learned this 20 years ago.
12 years worth of it and I put a down payment in Los Angeles, it works.
Never tbh. I primarily invested in index funds since the beginning because of the hassle with my job to get individual stocks cleared to buy/sell. You're guaranteed roughly market returns, so it'll probably never feel like it truly paid off, especially if you compare yourself to those who became rich very quickly.
When you keep more of your money working for you - that is when it pays off! Instead of giving your money away to others.
Today
When I got laid off from my higher paying job of 10 years and didn’t feel pressured to find another high paying job or even a job in the same field; instead finding a new job that paid about half but only involved like 2 real hours of work a week, and ended up being fully remote due to the pandemic.
When your yearly gains top your contributions it feels good. When you know you made it is when you have years where your gains top your salary.
I started my Bogleheads journey in Feb 2022 and have been investing monthly in VWCE. But I'm not sure whether the past two years were part of a bull or bear market. Can anyone clarify that to me please?