Reddit reviews The Four Pillars of Investing: Lessons for Building a Winning Portfolio
We found 10 Reddit comments about The Four Pillars of Investing: Lessons for Building a Winning Portfolio. Here are the top ones, ranked by their Reddit score.
I think you should start out doing this after you have eliminated your debt and built up an emergency fund. Do not forget to work out a budget for yourself. Get an idea of where you are spending your money and where you can eliminate nonessentials. However, you should also put money aside to further diversify your holdings - maybe real estate, REITs, something along these lines. You do not want everything tied to just the stock market.
Make a goal for yourself to read some money books, gather info on investing, minimizing risk and maximizing your returns.
If you do not know what to read then I recommend starting with any one of these 3 books:
Your Money or Your Life: http://www.amazon.com/Your-Money-Life-Transforming-Relationship-ebook/dp/B0052MD8VO/ref=tmm_kin_title_0?_encoding=UTF8&sr=8-1&qid=1420819430
The four pillars of Investing: http://www.amazon.com/Four-Pillars-Investing-Building-Portfolio-ebook/dp/B0041842TW/ref=sr_1_1?ie=UTF8&qid=1420819486&sr=8-1&keywords=The+Four+Pillars+of+Investing
MONEY Master the Game: 7 Simple Steps to Financial Freedom: http://www.amazon.com/MONEY-Master-Game-Financial-Freedom-ebook/dp/B00MZAIU4G/ref=pd_sim_kstore_9?ie=UTF8&refRID=12D5S57JYCVNH5C0FX99
Use the time you have now to start building your nest egg and save muuuch more then 10% a year - something like 50% or higher if you can and you can choose to stop working much sooner then the 67 they have us pegged for.
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
They are compatible.
It is basically a question of when you want access to the money.
You create a regular account, and IRA or a Roth IRA (assuming you make less than $193k)
The regular account you put you after tax money in, and you can take it out whenever you want. You pay taxes on the income and when you sell you will pay capital gains on any appreciation.
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The Iras are accounts meant for retirement so you can't take money out until retirement age. With the IRA you put Pre tax money in with the Roth after tax money in. IRA deferes the taxes on income and gains. Roth you can take out without tax. but again at retirement age. There is a lot more info on here about the differences but that is the TLDR version.
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Now that you have picked the TYPE of account (Regular/IRA/Roth) you have a choice of what to invest in. you can invest in many many things almost anything. but a solid simple and many would say best choice over the long term is the simple index fund with low fees. <.1 %
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In summary you would buy the index fund in your roth IRA account if that was your choice. There is a done of good summary info tagged in here so that is a good place to start learning more or can pick up a book or two at the library this is a good one.
https://www.amazon.com/Four-Pillars-Investing-Building-Portfolio-ebook/dp/B0041842TW
https://investor.vanguard.com/index-funds/?WT.srch=1&cmpgn=PS:RE (Vanguard was the industry leader in pushing down costs for their investors so a very reputable company, though others have caught up on the low fee idea. )
Hope it helps!
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:
Four Pillars of Investing is a great introduction to index investing and how to build consistent lifelong returns. If you start at your age with even the smallest consistent investments, you have the potential to build solid wealth. Once you understand compound interest (rule of 72, etc), you'll see that time is a critical variable that is often overlooked.
Book I generally recommend as a 1st book: https://www.amazon.com/Four-Pillars-Investing-Building-Portfolio-ebook/dp/B0041842TW
As far as more diversity. Foreign and value are the biggest holes. FNDA, FNDC, FNDE, FNDF would be good additions. SFREX I don't think you can get this one at M1 so 1/2 and 1/2 VNQI and VNQ would work as an OK replacement (check yield and consider where to put them generally non-taxable on these guys).
William Bernstein is fantastic for learning the basics of asset allocation. The Four Pillars of Investing is probably the best overview, with a lot of practical advice. If you want a little more underlying theory, with just a bit of arithmetic, get The Intelligent Asset Allocator.
>I just want to ask for any book recommendation (english o español). Or if you have any information source that you may want to share with us.
I'm afraid that you're going to have to be a bit more specific than this. Do you mean personal finance and investing?
If so, I would probably recommend:
http://www.amazon.com/gp/aw/d/0470918136?pc_redir=1409928287&amp;robot_redir=1
http://www.amazon.com/gp/aw/d/B0041842TW?pc_redir=1409887984&amp;robot_redir=1
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