Can you be well off following an index?

[sv2007]

I didn't realize you were talking about Jim Cramer. Since you so subtly jab at indexing calling it penny wise and pound foolish, I will try to be equally subtle when I say Jim Cramer is a shill.

That's what my wife thinks; and I don't agree with everything he says. I've never heard of him until a few months ago (when I read his book), but wife has and she laughed at it. I do agree with his views on stock picks, I don't agree with his way of blending technical charting and fundamentals; I don't even agree with his fundamental outlook entirely. But wife also thinks I'm very arrogant (she's a good judge of character), so perhaps Cramer is right and I'm just too proud to change my ways. I only agree with books and parts of books that match what I did and believe in. I've changed so much since college.

Just to be clear, wife thinks Cramer is a tool. I don't think so. But I'm also a lot more open to accepting that other people can have different views and be just fine.

[sv2007]

I didn't realize you were talking about Jim Cramer. Since you so subtly jab at indexing calling it penny wise and pound foolish, I will try to be equally subtle when I say Jim Cramer is a shill.

BTW, I didn't call people who invest in index as penny wise pound foolish.
I call another group of people that, and I don't think I was subtle in any way.

[corn18]

Margin trading, options, property tax auctions, this just gets more and more interesting.

Listen, this is just like the conversations we have had with TexasHusker. He seemed hell bent on telling us how we were idiots for investing in the market. While you are more subtle than Mr. Husker, you are just as unhelpful.

So, please stop telling us how we do it wrong. That is not helpful. For the life of me, with all the posts that you and TexasHusker have made, I can't figure out how to do it your way. The only thing I can determine is that real estate is a good investment. Fine. Then I hear you talk of all this other stuff and I can't figure out if you got rich from that or real estate. Same with Texas. He owns real estate, derives income from it but he also has some businesses he owns and I can't figure out if that's where his wealth comes from or if it comes from real estate or both. For a guy trying to make better returns, I keep returning to the safety of my indexing because to be honest, your way is baffling and confusing to me.

So, here's my way: I invest all of my retirement money in a 60/40 portfolio made up of low cost index funds. That's it. I beat 80% of the mutual fund managers out there. I don't make big returns ever.

That's my plan in a nice, tidy nutshell.

Could you do the same with your current portfolio? I want to know so I can do better. I don't want specific stocks. Just list what your investments and income as a % of your total portfolio. And then walk me through your current income stream. Otherwise, I am going to stick with what I know because your way must require a phd to get it right.

[sv2007]

Margin trading, options, property tax auctions, this just gets more and more interesting.



Could you do the same with your current portfolio? I want to know so I can do better. I don't want specific stocks. Just list what your investments and income as a % of your total portfolio. And then walk me through your current income stream. Otherwise, I am going to stick with what I know because your way must require a phd to get it right.

We have never traded on margin; we have used margin to buy houses only because we can write a check on the spot. We do give cash offers. Only when the offer is accepted do we sell stocks or transfer money to cover the margin. It is a very flexible, quick access, low interest money. Very useful, but you must already have some money to do this.

Property tax auction, that, I'd say we got lucky, but the profit was so small in dollars that it has zero effect on our wealth. We bought 2 properties: one sold for $x and another for $x. At that time, these amounts weren't significant against our net worth.

I don't know, if you insist that i'm lucky, then that's fine. Starting a business is hard to duplicate, but stock market performance can because large caps volume is pretty big relative to what another individual can put into the market.

Perhaps you are similar to my wife, in that she'll never read something like Cramer's book. I'm different, I can read things and just take what I want from them. Maybe it is because of the arrogance. When I'm interested in something, I get very into it and I look at all sides of the argument.

I don't think TX hustler's method is easily duplicated because starting a business isn't as easy as clicking the mouse. You may have to meet people and talk to them : )

I think I've been saying that all along. My past portfolito performance has beaten the SP500. Now with now money and a different mentality, we shall see. The first mini-crash on brexit we weathered well; in fact, probably better than if there was less money and not retired(because I wouldn't be so concerned to hedge). Hedge isn't always good since you can decrease your return, so in a way, my investment strategy has changed a bit. So far, it's beat the SP500, losses are less and recovery is better. It is a bit of luck with this hedge though. Had brexit not happened, I'd lost some money, but maybe I'll gain it back since my picks has been better then SP500 in the past, who knows. See, another reason people should never blindly follow just any advice; they must understand why they want to do it and run some simulations on possible outcomes.

Let is be luck; write my experience up as luck. Then you don't have to attempt to measure up. Kind of like, I don't try to beat the lotto return; yeah, that's luck. Anyway, just my advice.

[corn18]

Not saying it was luck. I'm saying I have no clue how you made your money. And your last post cleared up nothing.

Therein lies my frustration. I laid out my plan in one sentence. You've posted 484 times on these fora and I still don't know how you made $5M. Why can't you make post 485 useful and lay it out for all to see?

[sv2007]

So, here's my way: I invest all of my retirement money in a 60/40 portfolio made up of low cost index funds. That's it. I beat 80% of the mutual fund managers out there. I don't make big returns ever.

That's my plan in a nice, tidy nutshell.

If you read my posts, you'll see that I don't discourage your type of investing. The only recommendation I make is to understand your funds, at least read it prospectus and know what's in it and how it will change in the future.

Currently, we have no fixed income. I've been debating about putting some there; which I've posted before. But right now, the interest is so low, I don't want to do it.

This thread is merely a thought that I had about how index couldn't have let me retire. I'm not on any mission to convert you into stock picking, just some thoughts I have that I want to hear what others think.

Somehow, many seems to miss the point entirely and don't think. Well, I'm not at any loss; and will continue. I'd prefer to have gotten something more than just how impossible it is to save $70k/yr out of this thread, but I guess that in itself is kind of interesting.

[corn18]

I grow weary...

[sv2007]

Not saying it was luck. I'm saying I have no clue how you made your money. And your last post cleared up nothing.

Therein lies my frustration. I laid out my plan in one sentence. You've posted 484 times on these fora and I still don't know how you made $5M. Why can't you make post 485 useful and lay it out for all to see?

I thought I made it pretty clear. I guess we'll just have to let it end here.

[sv2007]

One thing I learned early on was how fast Microsoft dropped its network and joined the Internet, a bold-ish move during the time. Since then, I've dropped any pretense/stubbornness and embraced flexibility.

Things may not be delivered in a step-by-step instruction; although the Idiot's guide book is almost that. Certainly, not any forum posts, go thru them and pick out anything of value to you.

At one forum, I asked a question then decided not to follow the advice I received. Boy, did that piss off some people especially when I mentioned the reasoning behind it. Why should it piss anybody off? If they replied for my benefit, then assuming that I'm also thinking about my own benefit, maybe even more so than they, shouldn't any decision I reach be acceptable?

Here's the thing, I'm not here to convince anybody to pick stock or to put down index followers (and you'll probably not find such posts from me). I'm not selling anything except a desire to help those that want to be helped. i'm like a missionary; doing God's work.

[disneysteve]

I'm not selling anything except a desire to help those that want to be helped. i'm like a missionary; doing God's work.

OMG, this conversation has gotten really bizarre now.

sv2007, you have clearly done well for yourself. Good for you. But you haven't posted a single thing to this site that could possibly help anyone else because the only shred of specificity you have given is the title of a couple of books that you like.

You've been asked multiple questions and have failed to answer a single one of them. If you would actually like to share your story, I'm sure many here would be interested in reading it, but if you are just going to continue to post vague thoughts completely lacking in details, I would urge you to please stop doing so.

[DaveInPgh]

So tell us, specifically, how you got these great returns. I want to retire early and would like better than average returns. I've told you specifically how I'm doing my index investing. I have read all your posts and don't have a clue how you made $5M. Until you share more details, you are not helping anyone.

Didn't you read? Through his terrible luck in life

[DaveInPgh]

I thought I made it pretty clear. I guess we'll just have to let it end here.

He posted again 30 minutes after this post

[DaveInPgh]

OMG, this conversation has gotten really bizarre now.

sv2007, you have clearly done well for yourself. Good for you. But you haven't posted a single thing to this site that could possibly help anyone else because the only shred of specificity you have given is the title of a couple of books that you like.

You've been asked multiple questions and have failed to answer a single one of them. If you would actually like to share your story, I'm sure many here would be interested in reading it, but if you are just going to continue to post vague thoughts completely lacking in details, I would urge you to please stop doing so.

But those are books he just read a few months ago so have nothing to do with how he built his wealth.

[LivingAlmostLarge]

I hate to point out but I know a Ton of people in software development and all will tell you they dont leave college at 22 making $150k. They also don't get married till later so this mysteries joint income of $300k usually doesnt start till 30. So it's sort of hard to save $72k a year when you are t making that much
Most software guys aren't making $150k until 30s.

Second to be a specialist Dr you will be pushing 30 or older with usually some student loans. And not all Dr marry each other mostly because landing residencies together is very difficult. But assuming you do most don't make $200k first year out. And those specialities usually ha e malpractice and loans to pay off. Not to mention usually Dr haven't been making any money on their 20s to buy a home or a save a penny.

So how in either scenario do these people suddenly have $5m by age 40? Unless you have rich parents to pay for medical school and residency free it's a bit hard. I say this as someone whose in my late 30s and I have a ton of well educated friends in many different fields and most dual income. One millions easy, two million sure. But your numbers are due to a lot of luck. Lots of speculation.

I've friends who retired with 5+million but they were in private equity and finance jobs making bank from the get go. And these three people all have said it's Not easy and most can't do it.

I must say at least I get Texas and his claim to money is business he started and real estate. Sv2007 I think your way of making money needs a lot of factors breaking correctly to succeed

[Nutria]

I grow weary...

Why do you think I added him to my Ignore list?