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Quote:

Originally Posted by mispoken (Post 2595758)

The reason you have the most money in a particular set of companies on a market cap weighted fund is because they GREW to that spot. And so did your money along with it. AAPL wasn’t always at the top.... If you choose another method then you’re looking for a small cap index, perhaps where the next Apple and Amazon will grow into their size, but there are likely to be wild fluctuations and greater risk associated. The S&P 500 or total stock index are hands down the best option we have available to us to “set it and forget it”. You can always zoom in on a particular point in time on a chart and say “HA, look at the lack of growth here” then I can zoom in on 2008-present day and say “HA, look at all this growth in the S&P” AND THEN we can zoom all the way out and see that, in general, the market has gone up over its life. So for us younger guys with decades ahead of us, it’s our safest bet. Runner up are target retirement funds, but they bring more managers into it and thus higher fees.

You cite Mr Winkler, so I’ll cite Mr Buffett;

___________

“Let me give you a figure that’ll blow your mind I think. I bought my first stock when I was 11 years old. It was the first quarter of 1942, shortly after Pearl Harbor,” Buffett recalls. “I spent $114.75, [for] shares [of a stock.] $114.75. If I put that $114 into the S&P 500 at that time and reinvested the dividends, think of a figure as to what it…would be worth today,” he asked me?

So, what do think?

$10,000?

$75,000?

I’ll give you some help. That’s way low.

Let’s pick it up with Buffett again: “The answer is about $400,000. So if I as a little kid had taken that 114 bucks I’d saved— shoveling snow (LAUGH) or whatever I’d done, [I’d have] $400,000 today. [In] one person’s lifetime. That’s America. I mean, that isn’t me. You know, it’s the huge tailwind the American economy gives to any equity investor.”

https://finance.yahoo.com/news/warre...230140222.html
____________

Buffett's not wrong, but one can make the same amount of money for less risk by being more diverse.

A portfolio should be diversified among large and small value, large stocks, small stocks, large and small international. Those asset categories should be in certain proportions and then re-balanced when they get out of proportion. That achieves the highest reward with the lowest level risk, something an index fund doesn't do.

Quote:

Originally Posted by Peoloto (Post 2594913)

Yup, they are so stressed and work harder on their days off. Meanwhile the guys that just go to work and go home seem much more relaxed and more financially sound.

They may be more relaxed temporarily while times are good. When you have a medical, displacement, furlough, etc., the secondary income stream is very relaxing. The side hustle requires balance. Personally, the extra income provides more schedule flexibility and I'm less stressed at work.

Quote:

Originally Posted by Tummy (Post 2594496)

I agree. My side hustle is putting in green slips. Sometimes they call me. Most of the time they don't. I spend more time on the lake fishing than most professional fishermen.

That's not side, that's charging straight down the middle. It is probably the best option for trading hours for dollars though as you point out in your specialization remarks. It works great short term, but not so well long term unless the money is properly invested.

Quote:

Originally Posted by Tummy (Post 2594496)

As you know, the flip side is specialization and productive efficiency. I make more money for my time making myself available to fly airplanes than any other way.

Too many miss this valuable point when embarking on a side hustle. If you are managing properties, fixing toilets, painting, etc, you might as well print up business cards that say handyman. Just because you CAN do this work, doesn't mean you SHOULD. Embrace your specialty and let the other trades embrace theirs. Besides, if the investment can't support market rates for repairs and maintenance, it isn't really an investment.

Quote:

Originally Posted by Gunfighter (Post 2596017)

This right here! I CAN do lots of the work, but so can my handyman, who can do it quicker and likely better. Because I bought correctly, I can afford to pay the pros to do my repairs. This allows me to keep on golfing/fishing/etc... and stay relatively stress free. Today, I'm handling a minor issue (first one in over a year at this property), by letting the pros do it, all while tinkering in my garage.

Quote:

Originally Posted by SonicFlyer (Post 2595964)

Possibly, but again, that requires human hands making adjustments and thinking they’re timing it properly. Historically, that doesn’t work in our favor. If you can set it up to rebalance mechanically with a small, mid, large and international index funds it could work. But, the total stock index accomplishes almost the same thing. I think 500 companies (in the S&P) or 3000+ in the total stock market index is plenty of diversification. Really, how many more companies could you possibly need to own to feel diversified? Another thing is when people come involved multiple mutual funds both index and actively managed, they end up overlapping. So what they’re perceiving as security by diversifying amongst multiple funds, may be a false sense of security (although not necessarily adding more risk). Here’s an interesting article that uses the portfolio x ray tool at Morningstar.com to identify overlap. As you can see a lot of non s&p 500 fund allocations are pretty similar to s&p fund allocations.

http://genxfinance.com/avoid-fund-overlap-to-achieve-true-diversification-in-your-portfolio/

I’m not saying anyone is wrong here, the important thing is that money is being saved and invested. I can’t stand that the financial industry makes this seem so scary and over complicated and charge us huge fees to make us feel like we are safer, when it usually ends up the opposite. Just got to find what works for you and you’re comfortable with.

I’m an Importer/Exporter of latex goods.

Quote:

Originally Posted by FMGEC (Post 2596182)

I’m an Importer/Exporter of latex goods.

Vandelay Industries by chance??

Quote:

Originally Posted by Gators (Post 2596184)

Vandelay Industries by chance??

Serenity now.

I used to do occasional work on my brothers’ dairy farm. Didn’t earn a dime, but it made me grateful to be a pilot. :D

Quote:

Originally Posted by TED74 (Post 2594507)

Word on the street is that the next revision of the FOM will prohibit any side hustle work on any calendar day you have an obligation to Delta. You won't be able to do anything while on short call, long call, short layover, long layover, vacation day, 30-hour rest... and not even after release or before sign-in.

But sanding sheetrock mud on a rental house is how I relax ...

Quote:

Originally Posted by Gunfighter (Post 2595043)

That is nearly an exact match of my first rental property purchase. It's amazing how good the numbers really are over decade or more. Splitting investments evenly between the DC plan and real estate for the last decade has created a buy and hold portfolio with more equity than the retirement plan. The portfolio also produces monthly cash flow that the retirement plan does not. I'm a huge fan of buy and hold real estate as part of a retirement plan.

… and I would add, for a Delta pilot there are many advantages to setting this up in a self-directed IRA.

In 2015 my sort term gains were taxed at 51% after AMT, State and investment taxes specific to 1099 income from the company that runs the properties for me.

The real estate business was only ever intended to be a supplement to retirement. It makes sense to roll all of this forward in the IRA and tax it when you retire.