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Looking for insight on more ways to invest my money to make money on itself (1 Viewer)
- Thread starter FordPickup92
- Start date
OP
OP
FordPickup92
Royal Flush
If anyone else is curious as to what my holdings and investment mix is for my 401k I'm open to sending that via PM or text just didn't want to post freelance on the interweb
DrStrange
4 of a Kind
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There is ample good advice about maximizing matching and using retirement accounts, but I wonder if that is what the original post is really about. Let's spend time talking about some of the ABC of investing.
Higher risk SOMETIMES creates higher yield. It is quite possible to make bad decisions that have high risk and poor or no rewards.
There is a sneaky risk regarding inflation/taxation. Consider something "safe" like a one-year CD. It nominally yields 4%. But inflation is 2.5% to 3% this year. Let's say your tax rate is 20%. The 4% yield is 3.2% after tax but only 0.2% to 0.7% after taxes and inflation. Fully insured by the US government.
"Prudent" investing is slow and boring. An index fund investor doesn't have the exciting tales of success that a meme or crypto investor will have. And if/when the meme investor goes bust, we don't get to hear those stories. Just remember the flip side of exciting is terrifying.
Risk means something bad could happen. It has been a generation since we had a lengthy bear market. Easy for people to disregard the risks of even a simple index fund. It is one thing to make risky bets with pocket money. Quite another to be betting your life savings. It is tough to remain stalwart when everyone else is panicking.
Exotica may have exceptionally high returns in good times, but the risk of disaster is part of the deal. People have done quite well the last decade on these types of "investments", but let's not kid ourselves about the chance of ruin. If you can't understand the thing you are investing in, don't.
Diversification, done properly, reduces risk. When considering retirement accounts, reduced risk is a good thing. Do remember that the sneaky risk of inflation is almost as big a deal as buying high risk derivatives. Aim for a goldilocks sort of portfolio, not too much risk, not too little.
Older people need to keep more equities in their accounts. A 65-year-old couple have a 25-year joint life expectancy. retirement is way too early for most people to drop their equity investments.
Social security is a big deal. For many people those benefits are the biggest part of their retirement. This includes a lot more people that don't think about it. $2,000/month is $24,000/year. Something like a half-million dollars in total. AND it is inflation adjusted.
Ditto for home ownership. Owning your home, having Medicare and social security provide a massive resilience to a retiree's ability to age financially comfortably.
On the ugly side, end of life care is devastatingly expensive. Even if you have long term care insurance, the Insurance may not pay enough (if it pays at all). Almost no one is properly prepared for this risk. The insurance is so expensive that it will drastically limit spending on other parts of retirement.
You may only live once, but you also only die broke once - and that sucks. Let's not do that -=- DrStrange
PS For older people who own their home: Your home is at risk should a long term / memory care be required. Generally, the government assistance doesn't kick in until you are broke. There are trust options that can be a work-around but the rules very by state. Middle class people should seek legal advice well in advance. Expect there to be a multi-year waiting period for the trust to be effective. However, you CAN protect your home against long term medical costs if preventative measures are taken early enough. GET A LAWYER!
Higher risk SOMETIMES creates higher yield. It is quite possible to make bad decisions that have high risk and poor or no rewards.
There is a sneaky risk regarding inflation/taxation. Consider something "safe" like a one-year CD. It nominally yields 4%. But inflation is 2.5% to 3% this year. Let's say your tax rate is 20%. The 4% yield is 3.2% after tax but only 0.2% to 0.7% after taxes and inflation. Fully insured by the US government.
"Prudent" investing is slow and boring. An index fund investor doesn't have the exciting tales of success that a meme or crypto investor will have. And if/when the meme investor goes bust, we don't get to hear those stories. Just remember the flip side of exciting is terrifying.
Risk means something bad could happen. It has been a generation since we had a lengthy bear market. Easy for people to disregard the risks of even a simple index fund. It is one thing to make risky bets with pocket money. Quite another to be betting your life savings. It is tough to remain stalwart when everyone else is panicking.
Exotica may have exceptionally high returns in good times, but the risk of disaster is part of the deal. People have done quite well the last decade on these types of "investments", but let's not kid ourselves about the chance of ruin. If you can't understand the thing you are investing in, don't.
Diversification, done properly, reduces risk. When considering retirement accounts, reduced risk is a good thing. Do remember that the sneaky risk of inflation is almost as big a deal as buying high risk derivatives. Aim for a goldilocks sort of portfolio, not too much risk, not too little.
Older people need to keep more equities in their accounts. A 65-year-old couple have a 25-year joint life expectancy. retirement is way too early for most people to drop their equity investments.
Social security is a big deal. For many people those benefits are the biggest part of their retirement. This includes a lot more people that don't think about it. $2,000/month is $24,000/year. Something like a half-million dollars in total. AND it is inflation adjusted.
Ditto for home ownership. Owning your home, having Medicare and social security provide a massive resilience to a retiree's ability to age financially comfortably.
On the ugly side, end of life care is devastatingly expensive. Even if you have long term care insurance, the Insurance may not pay enough (if it pays at all). Almost no one is properly prepared for this risk. The insurance is so expensive that it will drastically limit spending on other parts of retirement.
You may only live once, but you also only die broke once - and that sucks. Let's not do that -=- DrStrange
PS For older people who own their home: Your home is at risk should a long term / memory care be required. Generally, the government assistance doesn't kick in until you are broke. There are trust options that can be a work-around but the rules very by state. Middle class people should seek legal advice well in advance. Expect there to be a multi-year waiting period for the trust to be effective. However, you CAN protect your home against long term medical costs if preventative measures are taken early enough. GET A LAWYER!
Last edited:
Frogzilla
Straight Flush
It’s telling that this paper is about speculation of soon being adopted as a currency … It’s been 12 years since this paper and from what I can see no one really uses it as a currency. It seems more like an expensive art market. It’s really close to investing in poker chips. And at 2+ trillion current cap for crypto thats seems like a risky endeavor.
Happy to catch up later. I recently bought 700 shares of General Mills in my Roth. Highly depressed and could go lower, but 5% dividend yield plus appreciation on a stable company got my interest.
Investing and poker are similar. There are many ways to play. A safe bet is that you can have fun or make money, but probably not both. I’m boring where it matters and have a lot of fun where it doesn’t.
in investing, boring is tax-advantaged accounts with low fee, diversified investments like Index funds.
Fun is crypto, stonks, etc.
Gamble with discretionary income, not your future.
But if you’re looking for a meme coin I recommend SDONK. We are always looking for more bag holders.
in investing, boring is tax-advantaged accounts with low fee, diversified investments like Index funds.
Fun is crypto, stonks, etc.
Gamble with discretionary income, not your future.
But if you’re looking for a meme coin I recommend SDONK. We are always looking for more bag holders.
kerami
High Hand
And you get theirs
OP
OP
FordPickup92
Royal Flush
Some of our more recent conversations sparked this thread
I've got a contrarian bent in my higher level understanding of investing as an American that I bet 90%+ of folks here would find a bit zany.
The general principals talked about here are very sound - reduce high interest debt, sock away an emergency fund, etc...
It's the dependence on equity investments (and to a much lesser degree bonds) that I tend to turn my nose up at. As they say, past performance isn't indicative of future results, and I apply this directly to the mainstream view that US Equities are in fact the right place for the bulk of one's investments.
What happens when the market quits performing? Japan's stock market chart has always been shocking to see. Could this happen in America?
The Mag 7 is driving returns in the last decade to a shocking degree. Just 7 companies! And of course they deserve their gains, they create incredible value. But there is fragility in such a small cohort being the main engine in a 500-stock boat.
I think this concentration will only increase as the big AI players mature and go public. Will America host the five largest AI companies? If so, a global windfall of cash is going to flow into them as they reshape the global economy. Imagine the state of the market if we didn't have the early digital players - IBM, Microsoft, Apple... and then the subsequent internet players of Google, Amazon, Facebook, etc... These digitally-native companies could have been started anywhere (like Spotify), but thankfully they were American.
If this is pure American ingenuity, this land being the cradle that fosters these great businesses, then we can hope to have more come in the future. That's my hope with the AI companies at least.
--
Another lens I use to evaluate this is economic trends. Is the American stock market simply downstream of the efficient market, or is it propped up in part by being the default place to invest? Virtually all Americans with investments default to putting this cash into the stock market. What flows in must also flow out. As demographics change, how will net inflows/outflows change? Boomers will quit contributing, instead relying on pulling out money every month to fund their retirement. There is a global investor base in American equities of course, but I mean to simply raise the question of net inflows.
--
Final point is how inflation impacts both perception and reality of investment returns. Is CPI correct, or is it over/understated? Is inflation 2%, and in turbulent times closer to 3%? Or is real inflation much higher? There is great contentious debate about this outside the mainstream economic world where these targets are taken as gospel.
Oof, enough of all that! All of the above is food for thought. And it's all things I've changed my mind on to varying degrees over the past decade. My interest in Bitcoin as a non-sovereign asset is largely downstream of a growing skepticism in standard (Keynesian) economics as the default approach of Western governments. These things are horribly complex of course, and tend to have a dozen inputs and perhaps three major inputs, making simple true/false approaches insufficient to explain them.
--
TL
R if you're bullish America, load up! If you're less certain, alternative investments and approaches (e.g. side gigs) to longterm value accrual may grow in importance
The general principals talked about here are very sound - reduce high interest debt, sock away an emergency fund, etc...
It's the dependence on equity investments (and to a much lesser degree bonds) that I tend to turn my nose up at. As they say, past performance isn't indicative of future results, and I apply this directly to the mainstream view that US Equities are in fact the right place for the bulk of one's investments.
What happens when the market quits performing? Japan's stock market chart has always been shocking to see. Could this happen in America?
The Mag 7 is driving returns in the last decade to a shocking degree. Just 7 companies! And of course they deserve their gains, they create incredible value. But there is fragility in such a small cohort being the main engine in a 500-stock boat.
I think this concentration will only increase as the big AI players mature and go public. Will America host the five largest AI companies? If so, a global windfall of cash is going to flow into them as they reshape the global economy. Imagine the state of the market if we didn't have the early digital players - IBM, Microsoft, Apple... and then the subsequent internet players of Google, Amazon, Facebook, etc... These digitally-native companies could have been started anywhere (like Spotify), but thankfully they were American.
If this is pure American ingenuity, this land being the cradle that fosters these great businesses, then we can hope to have more come in the future. That's my hope with the AI companies at least.
--
Another lens I use to evaluate this is economic trends. Is the American stock market simply downstream of the efficient market, or is it propped up in part by being the default place to invest? Virtually all Americans with investments default to putting this cash into the stock market. What flows in must also flow out. As demographics change, how will net inflows/outflows change? Boomers will quit contributing, instead relying on pulling out money every month to fund their retirement. There is a global investor base in American equities of course, but I mean to simply raise the question of net inflows.
--
Final point is how inflation impacts both perception and reality of investment returns. Is CPI correct, or is it over/understated? Is inflation 2%, and in turbulent times closer to 3%? Or is real inflation much higher? There is great contentious debate about this outside the mainstream economic world where these targets are taken as gospel.
Oof, enough of all that! All of the above is food for thought. And it's all things I've changed my mind on to varying degrees over the past decade. My interest in Bitcoin as a non-sovereign asset is largely downstream of a growing skepticism in standard (Keynesian) economics as the default approach of Western governments. These things are horribly complex of course, and tend to have a dozen inputs and perhaps three major inputs, making simple true/false approaches insufficient to explain them.
--
TL
R if you're bullish America, load up! If you're less certain, alternative investments and approaches (e.g. side gigs) to longterm value accrual may grow in importance 
Agree, but where do you think that money is going? It goes from stored wealth into the economy to medical, pharmaceutical, hospitals, not to mention non-healthcare companies as they live their lifestyles which means companies catering to aging populations are likely to see net revenue increasing resulting in potentially higher dividends, stock price etc.
Brie there are also good podcasts you can download on these topics and listen too while commuting to work or meet-ups. Index funds are great.
If you buy stock in individual companies, make sure you understand what they do, how they do it and, most importantly, who their competition is, how much competition they have in that field, or that can enter that field easily. Learn what Moat means.
You can get a free Schwab account and app on your phone to dip your toes in slowly and see how to buy/sell stock and the other options available to you that you can learn about. Put $100 bucks in and poke around a little bit.
Don’t just think about big companies like Apple, think about the companies that are selling the components that Apple uses in all of their equipment. They’re going make a pretty good margin themselves.
Just a few thoughts. Just remember compounding is your best friend, especially starting young.
Wow, how much did you lose at SQM XI ?!!?!! 
....i mean to be contemplating your entire financial future on the flight home! 
....i mean to be contemplating your entire financial future on the flight home! 
You can easily find funds that include international stock markets. For example, VTWAX is 65% American market and 35% foreign.TL
DrStrange
4 of a Kind
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@Gus
Can't help but notice you didn't offer your investment strategy; would you share it?
Regarding Japan's lost decade(s) - - yes that could happen in the USA even if there is no modern historical precedent. Japan's dead stock market wasn't a bolt out of the blue - local government and social factors lead to that result. Geographic diversification is one defense against such a risk - one can easily buy international equity funds.
One also might substitute other higher risk / higher reward asset classes such as real estate for US exchange traded equities, though real estate requires a lot more sophistication and substantially higher assets to get started.
It is rather common historically to find a high degree of concentration towards a handful of companies in the large indexes. This does pose a diversification problem. I mitigate this with 1/6th of my equity portfolio in the Russel 2000. Even so, I agree there is a degree of discomfort with the current situation. On the other hand, much of my gains are due to those seven stocks.
Please note a company need not be "American" to be part of the domestic large indexes. I am not even sure what "American" means in the context of a massive multi-national company whose operation span the globe. It is true the NYSE and NASDAQ benefit from being in the USA and presumably protected by the strong legal system. There are reasons why foreign firms list on the NYSE as well as their native exchange(s).
Inflation is in the eye and experience of the observer. e.g. ~40% of the CPI is housing. Yet, I own my house. Inflation in housing costs does not change my costs much at all. A vegetarian cares not about the cost of meat. A 20-year-old isn't affected by rising medical costs like a 60-year-old. Old people who own their homes are far less effected by inflation - they own their homes, their property taxes are frozen, their medical care is subsidized by Medicare and social security is inflation adjusted. Who you are and your life situation makes a big difference in terms of how you experience inflation.
It is not so easy to craft a clean solution to measure general inflation. But let's not through up our hands and give up. The CPI and other similar indexes give a broad-brush measure of inflation. Not perfect, but quite useful. If someone proports to know the "true" inflation numbers are greatly in error, there are trillions of dollars of investment opportunity to exploit the mistake. Such people could become rich beyond avarice, if they are correct.
Just in case someone is feeling curious, I offer you a difficult read from Ray Dalio https://economicprinciples.org/downloads/How-Countries-Go-Broke.pdf This is a somewhat technical read. Difficult in fact. But touches on some of Gus's issues.
Good luck getting through that one go. -=- DrStrange
Can't help but notice you didn't offer your investment strategy; would you share it?
Regarding Japan's lost decade(s) - - yes that could happen in the USA even if there is no modern historical precedent. Japan's dead stock market wasn't a bolt out of the blue - local government and social factors lead to that result. Geographic diversification is one defense against such a risk - one can easily buy international equity funds.
One also might substitute other higher risk / higher reward asset classes such as real estate for US exchange traded equities, though real estate requires a lot more sophistication and substantially higher assets to get started.
It is rather common historically to find a high degree of concentration towards a handful of companies in the large indexes. This does pose a diversification problem. I mitigate this with 1/6th of my equity portfolio in the Russel 2000. Even so, I agree there is a degree of discomfort with the current situation. On the other hand, much of my gains are due to those seven stocks.
Please note a company need not be "American" to be part of the domestic large indexes. I am not even sure what "American" means in the context of a massive multi-national company whose operation span the globe. It is true the NYSE and NASDAQ benefit from being in the USA and presumably protected by the strong legal system. There are reasons why foreign firms list on the NYSE as well as their native exchange(s).
Inflation is in the eye and experience of the observer. e.g. ~40% of the CPI is housing. Yet, I own my house. Inflation in housing costs does not change my costs much at all. A vegetarian cares not about the cost of meat. A 20-year-old isn't affected by rising medical costs like a 60-year-old. Old people who own their homes are far less effected by inflation - they own their homes, their property taxes are frozen, their medical care is subsidized by Medicare and social security is inflation adjusted. Who you are and your life situation makes a big difference in terms of how you experience inflation.
It is not so easy to craft a clean solution to measure general inflation. But let's not through up our hands and give up. The CPI and other similar indexes give a broad-brush measure of inflation. Not perfect, but quite useful. If someone proports to know the "true" inflation numbers are greatly in error, there are trillions of dollars of investment opportunity to exploit the mistake. Such people could become rich beyond avarice, if they are correct.
Just in case someone is feeling curious, I offer you a difficult read from Ray Dalio https://economicprinciples.org/downloads/How-Countries-Go-Broke.pdf This is a somewhat technical read. Difficult in fact. But touches on some of Gus's issues.
Good luck getting through that one go. -=- DrStrange
Just invest in the Icelandic housing market, it is a money hack feedback loop. I wish I had the extra funds to buy few apartments
“self-reinforcing” effect
This is the controversial part.
House prices go up
→ Imputed rent goes up
→ CPI inflation rises
→ Central Bank responds with higher interest rates
→ Mortgage costs rise (especially in Iceland, where many loans are variable or inflation-linked)
→ Housing costs rise further
→ CPI rises again
Aka the housing market in Iceland cant go down...
“self-reinforcing” effect
This is the controversial part.
House prices go up
→ Imputed rent goes up
→ CPI inflation rises
→ Central Bank responds with higher interest rates
→ Mortgage costs rise (especially in Iceland, where many loans are variable or inflation-linked)
→ Housing costs rise further
→ CPI rises again
Aka the housing market in Iceland cant go down...
OP
OP
FordPickup92
Royal Flush
Interesting... how would one invest from out of the country?
Mainly people create local companies here and buy properties to rent, some invest in stocks of companies that do similar but those companies also do business housing but usually those companies are always growing as well.
I just need to setup one hell of a group buy
OP
OP
FordPickup92
Royal Flush
Uhhh yeah you do!Mainly people create local companies here and buy properties to rent, some invest in stocks of companies that do similar but those companies also do business housing but usually those companies are always growing as well.
I just need to setup one hell of a group buy
Do you have names you can shoot me a DM of some stocks to investigate?
As a side note, if someone is serious about investing in Icelandic properties they can always send me a DM for info.
My retirement fund that I pay into invests my money and also gives out loans to... you guessed it buy houses.
General advice for investing is that diversify your investment and/or invest in things that you know will always maintain most of the value. Metals are good, housing, lands and so on are stable investments.
Stocks can be volatile and no matter what someone says they can fall like we have seen in the past. Crypto is high risk/ high reward.
My retirement fund that I pay into invests my money and also gives out loans to... you guessed it buy houses.
General advice for investing is that diversify your investment and/or invest in things that you know will always maintain most of the value. Metals are good, housing, lands and so on are stable investments.
Stocks can be volatile and no matter what someone says they can fall like we have seen in the past. Crypto is high risk/ high reward.
@DrStrange My personal investment strategy has been to be irresponsibly long the orange coin for a very long time. Occasionally I've sold to buy real estate, which has almost always been a disaster. Worse has been spending on frivolous non-investment goods, but alas! This is balanced by my wife's entirely conventional career and investments.
I don't recommend folks buy bitcoin anymore, only that they learn about it if they're interested. And I certainly don't try to use my portfolio as evidence in favor of people buying the coin. I'd rather have people complain about me being lucky than complaining that I suckered them into a terrible investment, both of which will be the case with such a volatile thing.
My long rant about US Equities being the default sponge for one's excess cash isn't meant to be anti-mature-stocks, but rather to help people think more broadly. I've got some friends who are hardcore FIRE guys and we have a good time ribbing each other as we trade off outperforming each other every other year (they've done extremely well just shoving all their cash into index funds and I'm happy for them!)
I also want to be careful not to be a doomer, always predicting a big crash or generally being sour on markets. I lean towards being very bullish America in the longer run but have found something I like even more for the time being. I do think bitcoin as an alternative is a potentially good diversifier to combine with index funds, almost like adding farmland (if you can find an investable vehicle) or an allocation into VC or other early stage products.
Big fan of Dalio, for folks new to him this is a good intro to his views on economics:
This looks to me like a classic "it keeps going up, so it'll keep going up, get in now for guaranteed returns!" I certainly believe that this is in fact the case, perhaps for the last 20 years, and perhaps it'll keep up for another decade or two. But I'm guessing it's an increasing problem for the non-owners of Iceland. Compare Tokyo to San Francisco... one grows supply with demand and housing is affordable, while the other largely prevents new supply and housing prices go skyward (SF Bay Area being essentially paradise on Earth, geography-wise). If Iceland's population is growing fast, and new housing is allowed to be built fairly freely, then this probably won't be too problematic long term
One day I might own some investment real estate again. My direct experience has been to get a bit over my skis, then the 2020 riots in Minneapolis happened and the area of my property went from highly desirable to pretty meh, and the city's financial management seems to get worse and worse so property taxes were going up ~10% per year... killer! Hyperlocal example of course, and I learned a lot from the experience. I lost 100% of my equity, and the person who bought the property from me at a much lower price than I paid has since let it fall into foreclosure (even after doing some decent renovations). Rough!
I don't recommend folks buy bitcoin anymore, only that they learn about it if they're interested. And I certainly don't try to use my portfolio as evidence in favor of people buying the coin. I'd rather have people complain about me being lucky than complaining that I suckered them into a terrible investment, both of which will be the case with such a volatile thing.
My long rant about US Equities being the default sponge for one's excess cash isn't meant to be anti-mature-stocks, but rather to help people think more broadly. I've got some friends who are hardcore FIRE guys and we have a good time ribbing each other as we trade off outperforming each other every other year (they've done extremely well just shoving all their cash into index funds and I'm happy for them!)
I also want to be careful not to be a doomer, always predicting a big crash or generally being sour on markets. I lean towards being very bullish America in the longer run but have found something I like even more for the time being. I do think bitcoin as an alternative is a potentially good diversifier to combine with index funds, almost like adding farmland (if you can find an investable vehicle) or an allocation into VC or other early stage products.
To me it means the profits ultimately flow into America, and the bulk of the jobs. If Google, Facebook, Netflix, etc... were all based in Spain or China, we'd have a huge net outflow of dollars into those countries. But having them based here leads to the money flowing into America. A simpler example is US oil/fracking companies who are of course selling energy products into a global commodity market, but having them based in America means a great deal of money comes in. Consider Germany's reliance on Russian natural gas.
Big fan of Dalio, for folks new to him this is a good intro to his views on economics:
This looks to me like a classic "it keeps going up, so it'll keep going up, get in now for guaranteed returns!" I certainly believe that this is in fact the case, perhaps for the last 20 years, and perhaps it'll keep up for another decade or two. But I'm guessing it's an increasing problem for the non-owners of Iceland. Compare Tokyo to San Francisco... one grows supply with demand and housing is affordable, while the other largely prevents new supply and housing prices go skyward (SF Bay Area being essentially paradise on Earth, geography-wise). If Iceland's population is growing fast, and new housing is allowed to be built fairly freely, then this probably won't be too problematic long term
One day I might own some investment real estate again. My direct experience has been to get a bit over my skis, then the 2020 riots in Minneapolis happened and the area of my property went from highly desirable to pretty meh, and the city's financial management seems to get worse and worse so property taxes were going up ~10% per year... killer! Hyperlocal example of course, and I learned a lot from the experience. I lost 100% of my equity, and the person who bought the property from me at a much lower price than I paid has since let it fall into foreclosure (even after doing some decent renovations). Rough!
ekricket
Royal Flush
Yeah the it sounds to good to be true. But the problem is that we don’t produce nearly enough materials to build houses so we need to import a shit ton and that is quite expensive when you are an island in the middle of nowhere@DrStrange My personal investment strategy has been to be irresponsibly long the orange coin for a very long time. Occasionally I've sold to buy real estate, which has almost always been a disaster. Worse has been spending on frivolous non-investment goods, but alas! This is balanced by my wife's entirely conventional career and investments.
I don't recommend folks buy bitcoin anymore, only that they learn about it if they're interested. And I certainly don't try to use my portfolio as evidence in favor of people buying the coin. I'd rather have people complain about me being lucky than complaining that I suckered them into a terrible investment, both of which will be the case with such a volatile thing.
My long rant about US Equities being the default sponge for one's excess cash isn't meant to be anti-mature-stocks, but rather to help people think more broadly. I've got some friends who are hardcore FIRE guys and we have a good time ribbing each other as we trade off outperforming each other every other year (they've done extremely well just shoving all their cash into index funds and I'm happy for them!)
I also want to be careful not to be a doomer, always predicting a big crash or generally being sour on markets. I lean towards being very bullish America in the longer run but have found something I like even more for the time being. I do think bitcoin as an alternative is a potentially good diversifier to combine with index funds, almost like adding farmland (if you can find an investable vehicle) or an allocation into VC or other early stage products.
To me it means the profits ultimately flow into America, and the bulk of the jobs. If Google, Facebook, Netflix, etc... were all based in Spain or China, we'd have a huge net outflow of dollars into those countries. But having them based here leads to the money flowing into America. A simpler example is US oil/fracking companies who are of course selling energy products into a global commodity market, but having them based in America means a great deal of money comes in. Consider Germany's reliance on Russian natural gas.
Big fan of Dalio, for folks new to him this is a good intro to his views on economics:
This looks to me like a classic "it keeps going up, so it'll keep going up, get in now for guaranteed returns!" I certainly believe that this is in fact the case, perhaps for the last 20 years, and perhaps it'll keep up for another decade or two. But I'm guessing it's an increasing problem for the non-owners of Iceland. Compare Tokyo to San Francisco... one grows supply with demand and housing is affordable, while the other largely prevents new supply and housing prices go skyward (SF Bay Area being essentially paradise on Earth, geography-wise). If Iceland's population is growing fast, and new housing is allowed to be built fairly freely, then this probably won't be too problematic long term
One day I might own some investment real estate again. My direct experience has been to get a bit over my skis, then the 2020 riots in Minneapolis happened and the area of my property went from highly desirable to pretty meh, and the city's financial management seems to get worse and worse so property taxes were going up ~10% per year... killer! Hyperlocal example of course, and I learned a lot from the experience. I lost 100% of my equity, and the person who bought the property from me at a much lower price than I paid has since let it fall into foreclosure (even after doing some decent renovations). Rough!
I thought by now Iceland would have all aluminum buildings with direct geothermal heating! Gotta play to local strengths
OP
OP
FordPickup92
Royal Flush
I recently found out my employer match applies to both my traditional 401k and the Roth. So I can essentially match 6% twice
Max out that free money!
Poker and investing are really similar in some ways. They both take many many years to fully understand. Early on I listened to the so called experts, read their books, watch their shows, ect. And mostly had negative returns on investing outside of mutual funds, including index funds. It wasn't til I started investing in companies that I personally used their products, fully understood their mission and became personally passionate about. That i started having some success in the market. But, it takes time and you'll find that somethings work and some don't. Time in the market (funds, stocks) is way better than timing the market. Because many life changing events happen when you least expect it.
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