How are your investments doing?

[RSKY]

I think one thing to consider in retirement is what it costs you to live.

We won't have a mortgage. We have never had a car payment either. I don't imagine we will be making payments in retirement, since we didn't while raising a family ($$$). My son is the last to leave the nest this coming fall, and currently our monthly expenses hover around $2000-$2500. Once I stop feeding him, I'll save a little more

And then you will have grands and your wife will go shopping all the time for something one of the grands 'needs'. Translation, she/he would look cute in this!!

And then you feed them all every Sunday and end up with your kids, their spouses, and five grands sitting around the table pigging out. And there is the two year old we babysit two/three days a week that eats like an adult.

But it is worth it and you will be surprised how much your priorities gradually change when the grandkids arrive in the world.

RSKY

 

[RSKY]

Speaking of car payments. Let me tell you about a stupid move I made last year.

I bought a new vehicle in 2024. Took the money out of investments and paid cash. The fund that I took it out of had been up to $34 per share and had dropped to $28 when I took the money out. Stupid, stupid, stupid. That is typical for this high earning fund to have large swings. A month later I bought a similar vehicle and the price per share had already rebounded. So I came to my senses and am making payments on that vehicle leaving the shares in my portfolio to grow in value. Within a couple months the price was back up to $34 and twenty months later it is at $47.

A few months ago I loaned the money to a grand for a car and am making payments on that one too for the same reason. Leave the money invested to grow while taking out small amounts for payments.

The first vehicle I bought was for my wife and I as our primary vehicle. We are older and on the road constantly and I want something reliable with all the newest safety features. The second vehicle was for a daughter. She was getting ready to trade anyway and we used this vehicle to 'even up' between daughters as the other one had bought some family property for much under what it could have been sold for at auction or in Real Estate. The third vehicle is for the oldest grand. I have used the research on this vehicle and the explanations of why you do this with your money and don't do that with your money to influence her on her choice of a career and her handling of her finances. Her dad is an extremely hard working man but the influence from that side of the family is one of 'buy used vehicles and work on them constantly and have two or three junkers sitting it the yard' that can't be fixed!

RSKY

 

[drssg]

Speaking of car payments. Let me tell you about a stupid move I made last year.

I bought a new vehicle in 2024. Took the money out of investments and paid cash. The fund that I took it out of had been up to $34 per share and had dropped to $28 when I took the money out. Stupid, stupid, stupid. That is typical for this high earning fund to have large swings. A month later I bought a similar vehicle and the price per share had already rebounded. So I came to my senses and am making payments on that vehicle leaving the shares in my portfolio to grow in value. Within a couple months the price was back up to $34 and twenty months later it is at $47.

A few months ago I loaned the money to a grand for a car and am making payments on that one too for the same reason. Leave the money invested to grow while taking out small amounts for payments.

The first vehicle I bought was for my wife and I as our primary vehicle. We are older and on the road constantly and I want something reliable with all the newest safety features. The second vehicle was for a daughter. She was getting ready to trade anyway and we used this vehicle to 'even up' between daughters as the other one had bought some family property for much under what it could have been sold for at auction or in Real Estate. The third vehicle is for the oldest grand. I have used the research on this vehicle and the explanations of why you do this with your money and don't do that with your money to influence her on her choice of a career and her handling of her finances. Her dad is an extremely hard working man but the influence from that side of the family is one of 'buy used vehicles and work on them constantly and have two or three junkers sitting it the yard' that can't be fixed!

RSKY

To take a devil's advocate position, why do banks loan money to people, when they could get a better return in the stock market? Why don't I take out a home equity loan and invest the money for a better return than the loan interest?

It comes down to goals and risk management. There is a chance that you'll pay a bunch of money in interest AND lose the money in your investments. Wouldn't that suck!

Being debt free provides peace of mind and security that, to me, is worth the opportunity cost of MAYBE making more money by taking on debt.

 

[jyoutz]

To take a devil's advocate position, why do banks loan money to people, when they could get a better return in the stock market? Why don't I take out a home equity loan and invest the money for a better return than the loan interest?

It comes down to goals and risk management. There is a chance that you'll pay a bunch of money in interest AND lose the money in your investments. Wouldn't that suck!

Being debt free provides peace of mind and security that, to me, is worth the opportunity cost of MAYBE making more money by taking on debt.

There is nothing wrong with debt if managed with some thought. Any debt I have could be immediately paid off by other funds that I have in savings or investments. And the reserve funds are making more return than the debt interest or in some cases the 0% loans. I have plenty peace of mind related to debt.

 

[CloverKnollFarms]

I just find that I spend less, when I have to put down that wad of cash all at once. So, often I save 100%

 

[Snobdds]

Remember...If the money printer grows the money supply by 5-8% annually, if the S&P returns 9% annually, and inflation is 2-4% annually...a person actually sees their real worth decreasing by 2-3% annually. Then add in taxes and opportunity costs.

True wealth creation needs >20% per year.

The fed yesterday just noted they are going to be buying back 40 Billion of UST per month due to liquidity concerns. Quantitative easing is back.

Plan accordingly...

 

[CloverKnollFarms]

Is $40B of short term treasuries really the definition of QE?

Isn't QE quite different?

 

[Snobdds]

Is $40B of short term treasuries really the definition of QE?

Isn't QE quite different?

The fed buying UST is the exact definition of QE. You probably are remembering the fed buying mortgage backed securities, but them buying UST is the same thing, just supporting a different part of the economy.

https://www.moneymetals.com/news/2024/04/02/what-is-quantitative-easing-and-how-does-it-work-003092?keycode=GGL-MME-eComm-Performance%20Max%20-%20No%20Feed%20General%20-%20NCA&utm_source=google&utm_medium=cpc&utm_campaign=GGL-MME-eComm-Performance%20Max%20-%20No%20Feed%20General%20-%20NCA%20-%20wo%20Brand%20Excl-20812154600&gc_id=20812154600&gad_source=1&gad_campaignid=20805869190&gbraid=0AAAAADjyoCgCUmIUA2Od9FVyrqaRwZ83h&gclid=EAIaIQobChMI1oKj66O2kQMVQEP_AR2Lwzc4EAAYASAAEgKoffD_BwE

"In a QE operation, the Federal Reserve buys securities (primarily U.S. Treasuries and mortgage-backed securities) on the open market with money created out of thin air. This is sometimes referred to as "money printing." Of course, the Fed isn't running off $100 bills in the basement of the Eccles Building. It's more like using a debit card when no money is in the account. With a few keystrokes, the central bankers at the Fed transfer money that never existed until that moment to a bank or financial institution in return for securities."

 

[Torvy]

To take a devil's advocate position, why do banks loan money to people, when they could get a better return in the stock market?

The government limits where banks can invest their money.

If they were allowed, many banks would loan very little money. The rest would be in the market. 1929 ended that option.

The advantage successful banks have is good analytics. They have a pretty good idea who will pay.

The disadvantage is that politicians force them to ignore those analysts and loan to people who are unlikely to repay.

The rest of us pay higher rates or have fewer options because politicians value votes over stability.

 

[CloverKnollFarms]

Sounds like I’ll probably make money. I sorta feel like regardless of the doom and gloom for the past 20 years, I have.

Good thing too, building beehives isn’t a way to get wealthy

 

[CloverKnollFarms]

Doesn't printing money simply CAUSE inflation... It's not an additional cost on top of inflation?

So, can you really say increasing money supply by 5-8% is an ADDITIONAL cost on top of 3% inflation?

It seems that instead that 5-8% increase in money supply, is then felt through the resulting inflation it creates. Say 3-4%

Gains on investments are also compounded. Your tax burden on those gains are not. It's fixed.

So in 12 years you turn $1M into $3M and pay long term capital gains on $2M. A lot of people, me included, pay 0% long term capital gains. Even if you do pay the tax, it's equal to about 10% of that $3M account. The account grew 200%

Better yet, that money is in a Roth and you aren't paying taxes on the growth at all.

So I'm not sure the 20% return to become wealthy is accurate

 

[Hay Dude]

Killing it on precious metals. Silver up 121% YTD.
Gold up 61% YTD
Traditional paper assets not doing that well, but still pleased.

 

[LittleBittyBigJohn]

Speaking of gold and sliver... I had some cool old American gold pieces but I sold most of that back I think around 2010 when we had the first big increase. I still have some silver. I think this is the most unique silver currency I still have.

 

[steve tym]

I just looked at the first silver I bought in May of 2024, year and a half ago. I bought it at $30 including my dealers premium.

 

[dmccarty]

I don't have any kids (that I know of), but I don't have a problem with paying my share of education costs. Every dollar of my share that I don't pay gets put onto someone else. Raising a child is expensive, why add to parents' burden more than you have to. The only thing that kind of frosts me is the attitude many school boards have is "you don't have any kids in school, your opinion on what we do doesnt' matter". Bull. Almost 70% of my property taxes go towards schools, yeah it DOES matter....

Agreed. Years ago our local school board had a survey and one of the questions was do you have kids in the school system. That question, and there were a few others, I think was going to be used to filter out responses. We had kids in the school system but that question really ticked me off.

People living in the county are paying for the schools. Period. Home owners and renters are paying property tax, and a good part of the property tax is to the school system.

Everyone has a vested interested in having an educated population. A democracy really demands an educated population and someone who lacks education is almost certain to be a cost to the tax payer, one way or the other.

 

[jyoutz]

Speaking of gold and sliver... I had some cool old American gold pieces but I sold most of that back I think around 2010 when we had the first big increase. I still have some silver. I think this is the most unique silver currency I still have.

View attachment 4562471 View attachment 4562472

Wow. A collector’s piece for sure.

 

[ultrarunner]

Seems fake US silver coins are peddled everywhere now.

I was going to give some youngsters silver dollars but now wondering if they are even real Morgan Dollars or fake?

 

[Snobdds]

Doesn't printing money simply CAUSE inflation... It's not an additional cost on top of inflation?

So, can you really say increasing money supply by 5-8% is an ADDITIONAL cost on top of 3% inflation?

It seems that instead that 5-8% increase in money supply, is then felt through the resulting inflation it creates. Say 3-4%

Gains on investments are also compounded. Your tax burden on those gains are not. It's fixed.

So in 12 years you turn $1M into $3M and pay long term capital gains on $2M. A lot of people, me included, pay 0% long term capital gains. Even if you do pay the tax, it's equal to about 10% of that $3M account. The account grew 200%

Better yet, that money is in a Roth and you aren't paying taxes on the growth at all.

So I'm not sure the 20% return to become wealthy is accurate

Printing money causes the stock market to go up. Printing money causes a debasement of the dollar. Printing money actually causes less inflation as it causes more dollars to buy the same amount of something, then people just forgo the purchase. Most QE dollars end up in equities.

I just don't know how much the bubble can still be inflated.

Plan accordingly...

 

[Snobdds]

Killing it on precious metals. Silver up 121% YTD.
Gold up 61% YTD
Traditional paper assets not doing that well, but still pleased.

Last week I was able to sell all my precious metals.

Finally, I am out of that albatross.

Never again.

 

[WM75Guy]

Above our annual target of 5-10% at 13% YTD. ExxonMobil raised the quarterly dividend to $1.03/share for a 3.55% return, starting this quarter. That is 43 consecutive years of dividend increases. One of the few stocks we own outright, most of our funds are in ETF portfolios based on the risk level.