Overheard conversation!!!!

[3Ts]

I have moved my wife's and my teacher daughter's 401K money into Fidelity Contra (50% of investment in each) which made 32.25% last year and Fidelity Growth Company which made 36.76% for the past twelve months. Both of those funds have averaged 12% earnings SINCE 1986 INCLUDING SEVERAL DOWNTURNS. That is over thirty years thru several severe downturns.

This is the key! Time and Dollar cost averaging. I have funds that have lost money 3 out of 10 years, including some significant losses, however, over those 10 years the average growth rate is 14% per year. You won't get that from any bank I've heard of.

I have tried to tell people on here and in person, DON'T give your money to a local yokel investor. They will take your money and put it in mutual funds and take a cut for themselves for "managing" your money. That money is your future and your retirement. Learn a little and take care of it yourself.

This is so important! There is NOBODY more interested in your success than you. I've had several Financial Advisors, they all have done well and are prosperous - for themselves. Each of them have turned more money into less money. Once I figured that out, I did my investing for myself, and have done significantly better than any of them.

Ultra aggressive funds that earn 25% a year can also lose 25% a year.

Yes, but the general trend is up and mutual funds (instead of stock) reduce the risk.

But one rule you must remember. If you don't have the cash to pay for a purchase, don't use a credit card as a short term loan. Pay it off each month. Or that purchase you got 5% back on will loose you 3% a month at the least. On some cards if you carry the balance for that purchase one month you will lose what you saved plus some more in fees and interest.

DO NOT CARRY DEBT ON A CREDIT CARD.

All the credit card incentives of 2% cash back, etc really only work if many people carry a large balance and pay interest, even though they are charging the merchants about 4% on every transaction for the convenience. The few that don't can take advantage of the system.

I know people who carry tens of thousands in credit card debt, at 20% and they have thousands of dollars in interest payments every year and are looking to make a few extra dollars by "investing" in CDs at the bank at about 2%. I've not been able to get them to understand what they are doing wrong. They absolutely will not reduce their CC debt because they need it to "keep their credit score up". (Which is only in the 600s) They are the ones subsidizing those of us who get the 5% back on transactions. - They also look at the 5% "cash back" as being better than the 2% they'd get with the Certificate of Deposit, so they go out and buy more. It's an endless spiral - for them and they do not realize it.

 

[Raspy]

Not missing a thing. I could have had the contractor buy all that stuff but I bought the stuff and got cash back. That and I I saved on his 18% markup on all materials supplied by him.

The point is that I used a credit card simply to get cash back without paying any interest.

It's all about what works for you. If getting 2% makes it worthwhile to go to the lumber yard, spend the time and haul materials, while not working at a regular job you might have, then it might make sense. But if you think you should not have to pay your contractor for doing the same thing, the problem arrises. Then, if you pick out the wrong thing, or there is a problem with something, it's your fault, not his. I paid my guy by the hour and gave him my credit card for materials. Then took care of concrete, cabinets, and rebar deliveries, myself.

However you break down the source of his pay, the contractor must make professional wages for professional work.

 

[zmountaineer]

It's all about what works for you. If getting 2% makes it worthwhile to go to the lumber yard, spend the time and haul materials, while not working at a regular job you might have, then it might make sense. But if you think you should not have to pay your contractor for doing the same thing, the problem arrises. Then, if you pick out the wrong thing, or there is a problem with something, it's your fault, not his. I paid my guy by the hour and gave him my credit card for materials. Then took care of concrete, cabinets, and rebar deliveries, myself.

However you break down the source of his pay, the contractor must make professional wages for professional work.

I spent a total of 3 minutes ordering $20000 worth of gravel. 10 minutes ordering concrete trucks. Those are just a couple examples. To pay 18% on top of those costs are asinine. He would have had to have those delivered as well. Only had 1 inconvenience that took an extra 30 minutes. The time it took me to get the stuff was no more than 3 hours total. Certainly worth $13500 that I saved. Not one thing required ME to be on site while he was there. Took 4 months from breaking ground until I moved in.

 

[MossRoad]

You got all that cash back, but you'll never get your time back trying to explain it! :laughing:

The old adage about leading a horse to water comes to mind.

My wife and I purchase pretty much everything on our card, yet carry no balance, so never pay interest on it, and reap the rewards.

Some of these folks seem to think you should have carried that $75K in your pocket to pay for that stuff. You lose cash, and its gone forever. There's protection with a credit card.

We just think of ours as a plastic check book. No different. If you can balance a checkbook, you can use a credit card responsibly. Save up the money to purchase things, pay with the credit card, get the perks of travel points or cash back, and pay it off before the bill comes due. It isn't rocket science.

 

[RSKY]

3Ts, I know I made a bunch of mistakes financially during my 20s, 30s, and somewhat in my 40s but some of these kids and older people are doing things that are so stupid I just cannot understand it. I worked long hours on the night shift in a job I basically disliked for years to get what little I have. I intend to keep it for as long as possible and to pass it on to my children and grandchildren when I am gone.

Best thing I ever did was take my daughters to a financial advisor when they were 14 and 10. I didn't know anything about the stock market or mutual funds but I wanted them to invest their birthday/Christmas/whatever money in something more than a Savings Account. When I approached the investment lady at our local bank she showed me the funds she thought I should invest them in but said she wouldn't do it until I brought the two girls in and let her talk to them. Boy, did she have it planned out. We walked into the bank at the appointed time and a young man was waiting for us. "Mr. Smith, Miss Smith, and Miss Smith, would you follow me". He took us to an office were the advisor lady stood and shook all three of our hands. We sat down and the lady pulled out a laptop computer which was rare and very expensive in those days. She spent thirty minutes going over mutual funds with graphs and PowerPoint in a way that two intelligent children could understand. Shoot, she taught me a lot of things I didn't know. She never looked at me or talked to me after the initial greeting. She talked to the two little girls. The daughters wrote checks for her to invest money in a mutual fund. And talked about the visit for months.

A few weeks later, in an ninth grade class, the teacher said something my daughter disagreed with. My daughter said, "Mr. xxxx, that is not what my broker says. She says it works like....... And she gave her explanation. The teacher sat there for a minute and said, "YOU have a stock broker?" He later called my wife and she said yes, the daughter has a stock broker.

Made my day.

Kids today are not getting the lessons I learned from my parents, aunts/uncles, grandparents, or other adults. I don't know why.

RSKY

 

[PJSprog]

We just think of ours as a plastic check book. No different. If you can balance a checkbook, you can use a credit card responsibly. Save up the money to purchase things, pay with the credit card, get the perks of travel points or cash back, and pay it off before the bill comes due. It isn't rocket science.

This is how we handle ours, too. One credit card is strictly for auto-related stuff (fuel, repairs, etc.), and the other is for general stuff. Both get paid off monthly. One is through Amazon, so we earn reward points there as well with it's use anywhere.

Yup, not rocket science at all. Just don't buy what you can't afford.

 

[4570Man]

I spent a total of 3 minutes ordering $20000 worth of gravel. 10 minutes ordering concrete trucks. Those are just a couple examples. To pay 18% on top of those costs are asinine. He would have had to have those delivered as well. Only had 1 inconvenience that took an extra 30 minutes. The time it took me to get the stuff was no more than 3 hours total. Certainly worth $13500 that I saved. Not one thing required ME to be on site while he was there. Took 4 months from breaking ground until I moved in.

Lumber yards deliver large quantities for free. Block yards deliver for free. You have little choice except having cement and gravel delivered. That’s all beside the point being your own contractor is very likely cheaper in the grand scheme.

 

[Raspy]

I spent a total of 3 minutes ordering $20000 worth of gravel. 10 minutes ordering concrete trucks. Those are just a couple examples. To pay 18% on top of those costs are asinine. He would have had to have those delivered as well. Only had 1 inconvenience that took an extra 30 minutes. The time it took me to get the stuff was no more than 3 hours total. Certainly worth $13500 that I saved. Not one thing required ME to be on site while he was there. Took 4 months from breaking ground until I moved in.

Sounds like you did as I described I did. I paid for the expensive stuff myself. The important part of the example was that if the contractor is spending a lot of time doing something, he should be paid for it. Your examples don't include the long time I suggested can be spent picking up materials. Anyone can make a quick phone call, and if it saves you 18%, that's great. Not hard to understand at all and who wouldn't do it?

I also spent a lot of time at the job site because it's my house and I expected it to be built the way I wanted it to be. It's too easy for guys to cut corners or not understand what the details are. Houses can be built strictly from a set of plans and some phone calls to the owner, but they always turn out better if the owner is there to make decisions, adjust the details and oversee the work. Of course, my house was built in a very unconventional way and it required solving a lot of problems on the fly. In the end, I saved many thousands of dollars, not just on rebates, but on money not spent in the first place. Which is even better. Further, with good tax strategies, material costs can drop to near zero.

 

[RSKY]

The average return of the stock market since 1921 has been 7%. This time includes the Great Depression.

Don't ask me sources. Just google it and look at several sources.

Some sound advice I got years ago. "When the news says the stock market has crashed and people are jumping out of buildings because they have lost everything, THAT is the right time to buy. The stock market always comes back. If it doesn't, your money is worthless anyway".

RSKY

 

[/pine]

The average return of the stock market since 1921 has been 7%. This time includes the Great Depression.

Don't ask me sources. Just google it and look at several sources.

Some sound advice I got years ago. "When the news says the stock market has crashed and people are jumping out of buildings because they have lost everything, THAT is the right time to buy. The stock market always comes back. If it doesn't, your money is worthless anyway".

RSKY

individual stocks are 99.9% news driven...good news raises the pps, bad news will lower the pps (based on supply and demand trades) regardless of the trend...without news stocks will follow the current (Bull/Bear) trends...