Reddit reviews The Bogleheads' Guide to Investing
We found 26 Reddit comments about The Bogleheads' Guide to Investing. Here are the top ones, ranked by their Reddit score.
Reddit reviews The Bogleheads' Guide to InvestingWe found 26 Reddit comments about The Bogleheads' Guide to Investing. Here are the top ones, ranked by their Reddit score.
The Bogleheads' Guide To Investing. First book I read about investing, does a great job explaining concepts and actually teaching IMO, especially for someone not familiar with investing. Can read it from front to back cover and learn a lot.
https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore-ebook/dp/B00JUV01RW
Disclaimer: I'm mid20s guy with less invested in shares than I have in my super. The following is what I did to get started in investing which sounds like you're about where I was a year or two ago.
First of all; depending on your circumstances be aware that ING Direct's or ME Bank's savings accounts are currently giving 3.00% interest which might be better than your term deposit if you don't want to go whole hog into shares right away. (ING Direct also does $50 bonus referral codes so expect a flood of PMs now that I've mentioned this)
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As for books:
/r/FI's wiki makes some good recommendations from what I've read of them
>Investing
>* The Bogleheads Guide to Investing
The lowest barrier to entry would be that "acorns" app but I strongly recommend taking the couple days to make a CMC account or some other online brokerage with low fees and buy ETFS through that instead so that you're actually learning how it all works and not just pressing buttons on an app. Link it up with free Sharesight account for pretty graphs and easy tax reporting and that should teach you more about "having a share portfolio" than the majority of the population.
Obviously this subreddit and /r/fiaustralia in the sidebar are worth keeping an eye on for insight from people with more skin in the game than me.
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Now, the other option is you want to ACTIVELY trade that $1k. If you've read some of Bogle's explanations on why that's a bad idea, realised you'll be competing against people with much bigger budgets and a full time job anaysing these things and understand that even at CMC's low $13 flat fee you're losing 1.3% of your $1k packet with every trade then you'll need advice from someone other than me.
Personally the best investment I think I have made so far was my $1k of "beer money" that I threw into bitcoin. Not because it made a good return, but because after months of careful analysis, frequent trading and keeping an ear to the ground on new alt coins I turned my 3.5 bitcoin into 1.05. I didn't end up losing a cent thanks to other factors but seeing how badly my "high risk, high gain, actively managed portfolio" went I'm ecstatic that I learned my lesson with $1k and not with my self-managed super fund at 57 y/o like several people I know.
TL;DR: Anything by John Bogle
Boglehead's Guide to Investing
You, sir, need to read The Bogleheads' Guide to Investing. That or just read around the Bogleheads wiki. This page is a good place to start.
I recommend reading here: https://www.bogleheads.org/forum/index.php
TLDR: https://www.bogleheads.org/wiki/Three-fund_portfolio
Detailed version: https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore-ebook/dp/B00JUV01RW
edit: read the book, its worth it and its not a difficult read. Dave says you need to understand the investment, and the book does a great no-nonsense job with facts and statistics to back it up.
Growth = Midcap
Growth & Income = Large cap
Aggressive Growth = Small cap
International = international total market
>i am ready to open a Roth IRA and Brokerage, so i did with Fidelity.
>...
>i feel like just dumping all my money into Vanguard Target Retirement 2060 isn't the best idea
It's perfectly OK to have your investments in a target date fund while you learn more. Given your Roth IRA & brokerage are with Fidelity, the Freedom Index target date funds will be just fine (the Freedom funds without "Index" in the name are more expensive).
>i do want to actually learn a little more than "just dump your money in this target date fund"
The Bogleheads Wiki is a great place to start. There are links to a high-level page on lazy portfolios and specific pages for the Three-fund Portfolio, etc. The page on tax-efficient fund placement will likely be useful as your brokerage account increases.
Personally, I recognized there is value in simplicity. To that end, I work toward a version of a Three-fund portfolio myself. While I do not tilt toward small caps or specific sectors (like REIT), I do have a portion of my bond holdings in an intermediate tax-exempt fund.
Take your time. Consider developing an Investment Policy Statement. Read a book or two. Of course, posting here and/or the Bogleheads forum are great for providing context & examples or clarifying concepts along the way. Let some of the concepts sink in and ruminate before actually changing your portfolio.
Get enough sleep. Caffeine doesn't replace it. If you already have a healthy sleeping pattern, great! Sleeping helps you retain information. Here's some information to retain.
Okay, different beast.
You work in a niche industry and plan to invest in that. While I do believe you might have insights others have not consider the following: IT is hype based and your now profitable niche from which you draw your livelyhood goes bust.
Not only is your company in trouble, other companies that might value your know-how with good pay are in trouble as well ant it's hard to get a foot in the door.
Since you invested your money in the same place your earning potential is impacted as well as your net worth. This is called a concentration risk.
For me personally it would be too risky to invest my savings into something in which I am already heavily invested (with my human capital).
Another perspective: Everything public you know about the companies you want to invest in is already priced in, the stock price reflects the potential and risks adequately. Everything non-public that might move the needle is considered illegal insider information. It does not matter if your friend or your friends friend gave you that information.
I would advise reading up on the reasoning behind passive investing. There are numerous books. If you want to keep a small part of your money in company / industry stock feel free, but you should at least know the tradeoffs.
I strongly recommend this book. Its an easy read and it has solid, evidence backed advice. https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore-ebook/dp/B00JUV01RW
>Do you have any recommendation as to where I can start (e.g. reading, websites to compare, etc.)?
the usual suspects:
justETF is a good resource to find ETFs. morningstar is also good.
>Is there also some more "direct" ways of investing into stocks without picking them yourself?
Easiest when living in Germany would be to get a depot account in a cheap broker. justETF has a comparison of some.
You may also consider DeGiro or InteractiveBrokers.
i enjoyed bogleheads guide to investing
The Bogleheads' Guide to Investing https://www.amazon.com/dp/B00JUV01RW/ref=cm\_sw\_r\_cp\_apa\_i\_ZWO9Ab96NZHK9
There's lots of useful information at The Boglehead's Website, especially The Getting Started Guide.
I've also found the following books incredibly helpful as well:
https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore-ebook/dp/B00JUV01RW
The bogleheads guide to investing is the most science based, matter of fact primer I've found on personal finance. Can be dry at times, feel free to skip the extensive chapter on tax law. I really feel it's a book everyone should read.
I honestly don't know much about insurance in the US, but term life insurance is almost always the way to go. I'd recommend searching /r/PersonalFinance for the name of the company to see if anything pops up.
As for the last part... that's why I recommend reading a simple book on investing. I'm assuming a modest cash buffer of about 6x your monthly expenses and then investing the rest.
Most people here will recommend investing in cheap, broad index funds, usually by instances like Vanguard. Popular funds as far as I know are VTSAX for stocks and BND for bonds.
Just to reiterate: Just pick up The Bogleheads Guide to Investing. Your future self will thank you.
But you're most likely better off with growth stocks than reinvesting dividends. High-dividend stocks, in general, are established companies with steady earnings. Their stock prices don't move all that much, or at least don't match/beat the market. Of course there are exceptions, but for the most part you're choosing between huge growth potential and huge dividends. Imagine if you'd bought Google (no dividend) 5 years ago versus AT&T (huge dividend). You'd be way better off with Google, regardless of reinvesting that almost 6% dividend.
You really, really should look at index funds/ETFs. You'll get a nice mix of high-dividend stocks and stocks with high growth potential.
Think about it this way: You're young and just starting. This is the best time to be making good investment decisions, because right now is when your money has the most time to grow. If you make dumb decisions now then get smart when you're 35, you've lost 10 years of time. So you want to make the best possible decision now. Don't let youthful confidence make you think you know better than the tried-and-true advise. If investing in high-dividend stocks when you were young was the smartest strategy, that would be the tried-and-true advice... but it isn't. A three-fund portfolio of indexes is.
You're clearly doing the right thing starting young and seeking out advice. I'd suggest spending $15 and a day of time reading Bogelhead's Guide to Investing. It covers all the basics about what to look for, and explains why a three-fund portfolio is smart... so you can know for yourself instead of taking random internet advice. Pretty small investment of time/money to set yourself out on the right foot when it matters the most.
Those are definitely competitive rates. He's probably hiding some additional fees though, like the expense ratios of the funds themselves, and any load fees.
However, the best thing to do is absolutely to continue to manage things yourselves. There is very little value that a CFP can add over just doing some research, after all, who cares most about your financial future, you or some guy who is just after $0.7% of it?
The wiki of this sub has a lot of great information, you may also want to check out some books like The Bogglehead's Guide to Investing. I can guarantee you that the $14 you spend on that book will give you a better return on your money than the 0.7% you pay an advisor....
Listen to the Freakonomics podcast episode The Stupidest Thing You Can Do With Your Money and/or check out this book from your local library: The Bogleheads' Guide to Investing.
Long story short: buy and hold diversified, low-cost index funds. There are many examples including $IVV, $SPY, $VTI.
Devil Take the Hindmost - fun, readable book about the history of investment https://www.amazon.com/dp/0452281806/ref=cm_sw_r_cp_awdb_t1_xIpbBbSMEKR7X
The Boglehead's Guide to Investing https://www.amazon.com/dp/B00JUV01RW/ref=cm_sw_r_cp_awdb_t1_gKpbBbSYVVXS7 has a lot of practical info on wealth maximization through minimizing taxes, long term consistent debt such as frequent new car purchases, and general buy and hold investment strategies
https://www.amazon.com/dp/B0041842TW/ref=cm_sw_r_cp_awdb_t1_6LpbBb1PVZEMX solid, classic book about foundations for building wealth
Money invested early has a profound effect on how much you will have in retirement.
You are in a really unique point in your life where you have income that greatly exceeds your current needs. Your best course of action is to pile on the investments as much as you can. Take advantage of a Roth IRA, 401k or Roth 401k, and HSA if you are eligible for one. A 3 fund portfolio of low cost index funds is a good place to invest taxed income.
Your biggest problem will be lifestyle inflation. Now that you have extra money, you will be tempted to spend more and let your expenses creep up. Try to hold this off as much as possible since it's easy to get used to spending more, but hard to get used to spending less. A good way of doing this is to only have the same amount of money hit your main account(s). Have the rest put into retirement accounts or investment accounts automatically. Out of sight, out of mind really helps here.
I would highly recommend reading The Bogleheads' Guide to Investing.
The Bogleheads' Guide to Investing
I can understand the short time horizon, however I'm also comparing the services I'm being offered, especially on my second bank where I have most of my money and since 2007 they had a 41% increase, while S&P in the same time period had almost 100%.
Even with a more conservative approach in their investments, which I like because in 2008 there was no negative returns and they actually ended up the year at +0.32%, while S&P 500 ended at almost -40%. However, even with that -40% S&P was able to return more in the same amount of years, even with -40% years.
I pay 1%-1.50% commission to the bank AFAIK.
Do you think in the MSCI BRIC ETF that a 3% annualized for the past 10 years is good? That's what I'm getting mostly with the investments I'm getting at the moment.
From what I can understand $BKF had 45% increase in 2017, while MSCI BRIC ETF had 30%. In 2016 it was 23% to 31%. Either I'm reading this wrong, but it wasn't nearly identically performances, it was a 10% difference each year.
I will read Boggleheads, is it this? https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore-ebook/dp/B00JUV01RW
You don't really have any control over your ROI, there are much bigger factors at play. You want to control the things that you can - which is why keeping fees reduced is a strategy stressed around here.
Overall, I think you are in good place, though. Keep doing research, and most importantly, keep on saving.
If you are looking for some "light" reading, check out this book (think there are free PDFs available, too).
I started with The Bogleheads' Guide to Investing
https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore-ebook/dp/B00JUV01RW/
Edit: updated link