The Bogleheads' Guide to Investing

Category: Investing
Author: Taylor Larimore, Mel Lindauer, Michael LeBoeuf
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by TerriblePop   2019-11-17

Nothing to apologize for. So you're interested in investing, eventually. I saw that you also have a 401(K). So while you're building up your emergency fund, maybe start by reading here: https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/1118921283

One of the best investing books I've ever read. It's not full of technical jargon and is an easy read.

by 5_yr_lurker   2019-11-17

I am a boglehead fan.

  • r/bogleheads
  • Website
  • Book: Bogleheads' Guide to Investing

All the info can be found on the webpage but I like books and read it. Other than reading through r/personalfinance I really had no retirement/investing knowledge but was able to read that book and easily understand it in under 2 weeks. If you follow that advice you'll be set if you want long-term investing advice. You should read it before you do anything with the money.

by Jim3535   2019-11-17

I get the feeling you'd be interested in the /r/financialindependence sub.

I can also highly recommend you read The Bogleheads' Guide to Investing as well as look at the Common Sense Investing youtube channel.

by [deleted]   2019-11-17

OP read this book. Its a pretty easy read and it explains concepts you should understand.

https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/1118921283/ref=pd_bxgy_14_img_2/134-5701116-1803216?_encoding=UTF8&pd_rd_i=1118921283&pd_rd_r=753f1a8f-a96d-11e9-ae12-fbad7273ae80&pd_rd_w=HT0vn&pd_rd_wg=FztaG&pf_rd_p=a2006322-0bc0-4db9-a08e-d168c18ce6f0&pf_rd_r=FT6KAPX3YW3PYSFVN14X&psc=1&refRID=FT6KAPX3YW3PYSFVN14X

Or just follow this guide and you'll get 90% of it: https://www.bogleheads.org/wiki/Three-fund_portfolio

by [deleted]   2019-11-17

Unless you need complicated estate planning advice, there is no reason not to DIY.

Read this book: https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/1118921283/ref=pd_bxgy_14_img_2/134-5701116-1803216?_encoding=UTF8&pd_rd_i=1118921283&pd_rd_r=753f1a8f-a96d-11e9-ae12-fbad7273ae80&pd_rd_w=HT0vn&pd_rd_wg=FztaG&pf_rd_p=a2006322-0bc0-4db9-a08e-d168c18ce6f0&pf_rd_r=FT6KAPX3YW3PYSFVN14X&psc=1&refRID=FT6KAPX3YW3PYSFVN14X

Or TL/DR version: https://www.bogleheads.org/wiki/Three-fund_portfolio

If you are just setting up a Roth IRA and want to get started, go on Vanguard/Fidelity/Schwab and buy a target date fund close to your retirement date. Done.

Paying loads and buying high cost mutual funds is beyond silly in 2019.

by jumbopapa   2019-09-05
Learn about it. I would recommend A Random Walk Down Wall Street [1] and The Boglehead's Guide to Investing [2]. They will give you a good primer, but in essence the best thing you can do it nothing at all. As you get older you'll want to make sure bonds take up a larger percentage of your portfolio, but really you're fine. The old sayings is "time in the market, not timing the market".

[1] - https://www.amazon.com/Random-Walk-down-Wall-Street/dp/03933... [2] - https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Lar...

by lobster_johnson   2019-07-21

Also comes as a book.

It's worth mentioning what a "boglehead" is. John C. Bogle was the founder of Vanguard, and was the creator of the first public index fund. Followers of his principles of investments (which emphasize holding a few low-cost index funds rather than trading stocks, for example) call themselves bogleheads.

by goodDayM   2019-07-21

Have you opened accounts like a Roth IRA or 401k (through work) or similar? Because you can invest within those accounts in whatever you wish, and you'll get great tax benefits.

For example, any money you put into a Roth IRA you can take out at any time for any reason. And you can invest that money into stocks, and the growth is tax-free and dividends are tax-free. (The government makes all that tax free to try and encourage you to save it in there as long as possible for use when you are old and retired.)

As for what to invest in: read about diverse, passive index funds. If you've never heard of those, there's a good book you can check out from your local library, Bogleheads' Guide to Investing.

by shae_ashbury   2019-07-21

Investing: The Boglehead's Guide to Investing. You don't need any other book. https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/1118921283/ref=sr_1_1?ie=UTF8&qid=1550686550&sr=8-1&keywords=bogleheads+guide+to+investing

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Other stuff:

The Gift of Fear, Gavin DeBecker: https://www.amazon.com/Other-Survival-Signals-Protect-Violence/dp/0440508835/ref=sr_1_1?ie=UTF8&qid=1550686596&sr=8-1&keywords=the+gift+of+fear

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The Power of Charm: https://www.amazon.com/Power-Charm-Anyone-Over-Situation/dp/0814473571/ref=sr_1_1?ie=UTF8&qid=1550686575&sr=8-1&keywords=the+art+of+charm

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by indexinvestoreu   2019-07-21

I'd suggest you start with a good book: The Boglehead’s Guide To Investing, The Little Book of Common Sense Investing.

That will give you a solid foundation and then you can ask questions here if you have more specific questions. The bogleheads wiki is also a good resource but I think that is hard to navigate if you don't know what you are looking for.

by niko-su   2019-07-21

I'm pretty much at the same boat with you (same age, Berlin, cash I'm sitting on) but my mortgage is a bit cheaper (1.04% since I made 50% downpayment I guess). So with 4% Tilgung and this 5% yearly payment, it should be paid off in 10 years, however, I'm still considering If will do it or will make this cash perform better when invested.

I currently have around 12% of my cash invested in ETF, the rest sits in my Tagesgeld. I will gradually increase the investment amount, since I only started last month so I'm still kinda learning before going full speed.

I suggest you to spend some time reading about it before going this path. finanztip.de has tons of info but only in German. The Bogleheads' Guide to Investing is a kind of classic book, a bit focused on US realities, but still gives a good overview of different investment instruments and personal finances.

by Fwellimort   2019-07-21

>Ways to Invest $20k for a Risk-Averse Investor

Usually, the answer could be because of lack of knowledge in investing.

I recommend reading through

https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/1118921283/ref=sr_1_1?crid=1LCWU39U9LV7X&keywords=bogleheads+guide+to+investing&qid=1553322166&s=books&sprefix=boglehead+gu%2Cstripbooks%2C158&sr=1-1#customerReviews

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Other than that, finding 4% returns right now without much risk is very difficult. If there was such, the bond market would be returning much more than 4%.

Hope you are able to find one that does return such value. I along with rest of the forum would be willing to ditch the current bond market for that 4%.

by danvers_starr   2019-07-21

I mean it's possible but 5 years from zero even with your generous salary is going to be hard. However you could be LeanFI pretty fast at your income level. I think it would be more like 8-10 years probably, but it really depends on what you spend. If the no rent situation is somehow permanent 4-5 years might be possible, if you figure out what you're going to do for health insurance.

I'm probably going to get flayed for this, but there's actually a pretty useful flowchart in the personalfinance subreddit sidebar to get you started. It doesn't sound like you have a lot of debt either so you're already pretty far ahead of the game.

The main thing you need to do is learn some real basic things first, like setting up a personal budget and tracking your spending. Off hand I'd say:

  • You've got plenty of money, pay that car off.
  • Figure out a personal budget. Honestly it will take you 6 months or longer to get an accurate one.
  • Read some personal finance classics like Your Money or Your Life that don't necessarily deal with financial independence directly. You just need that base level of knowledge. Honestly read a bunch of different ones, I still read a basic personal finance book once a year.
  • Read some basic investing books. I honestly don't think there's any need for 95% of us to get excited about Shiller ratios and CAGR and beta and other such concepts. I recommend looking into the Boglehead style of investing as a good touchstone. You may or may not agree with what you read, but if you look into this school of thought I think it would give you some practical knowledge. You can even learn a lot for free:

https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_philosophy

Or something like this is a good start:

https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/1118921283/ref=sr_1_1?hvadid=177204159060&hvdev=c&hvlocphy=9028301&hvnetw=g&hvpos=1t1&hvqmt=b&hvrand=11996353389198167752&hvtargid=kwd-2148148542&keywords=the+bogleheads+guide+to+investing&qid=1553044969&s=gateway&sr=8-1&tag=googhydr-20

  • Once you figure out what your budget is and how much you spend per month, then you can really start to figure out what it is you can do.
  • I'd probably stick 6 months or so worth of bare bones expenses in a simple savings account (you can get a high yield one from an online bank) as the first concrete thing, that's always a good plan.
  • And just be careful and go slow. Really this isn't intellectually complicated, it just looks like it is. The trick is learning to be disciplined. It's 10% knowledge and 90% behavior/discipline.
  • Finally, you sound to me like someone who has a very high paying but terrible job. In your case, it might be worth considering sticking with it for just a few years, investing most of your salary, and then go do some other job that maybe doesn't pay as much but isn't as terrible. They call this "BaristaFI" sometimes, and normally I think it's a little silly but in your case it might be worth considering, it just sounds like you make a lot of money but that job doesn't make you happy. I get that any job is inherently kind of terrible but it could be you're just in a really bad headspace right now.
by goodDayM   2019-07-21

Step 1 may be the hardest step: figure out your financial goals. Buy a new car in 2 years? Buy a house in 10 years? Retire by age 60 (or sooner)?

The reason this matters is because how you save & invest for a goal depends on how far into the future you need that money. The sooner you need money: put that into low risk & low return investments (high interest savings account, money market fund, CDs, Treasuries). The further into the future you need money: put that into higher risk & higher return investments (stocks & bonds).

One thing I didn't realize when I was younger was how many different savings & investing accounts I would end up with. You have to save for different life goals in different accounts because they have different tax advantages and such.

I don't want to overwhelm you so I recommend checking out the book The Bogleheads' Guide to Investing.

by dasbif   2017-08-19

(I don't know about the pros and cons of debt consolidation, and I hope other /r/personalfinance community members can help you with that part of your question.)

You sound like you have the right attitude and are on the right track. You know specifically what you owe, to who, and, what the interest rate and minimum payments are. That is a hell of a lot better than a large portion of people who come here seeking help.

Check out the wiki and the links provided by AutoModerator. There are some tools in there that may help you out.

Is there any way you can increase your income and/or reduce your expenses? Do you accurately track your spending (www.mint.com, www.youneedabudget.com, etc.)? Your mortgage BY ITSELF is more than most young people make in a month. Before their taxes!

Rule-of-thumb guidelines:

  • Housing + Utilities: <40% of your take-home pay
  • Transportation: <15% of your take-home pay. Don’t finance excessively for a new car!
  • Food: <$300 per month. Restaurants/take-out are budgeted as Entertainment, not Sustenance.
  • Debt: if you have debt, you should be aggressively paying it down. “Aggressively” means “sacrificing or skimping on some wants and desires in pursuit of paying the debt off faster”. Your debt is an emergency. You know this already
  • Cooking reasonably healthy meals, getting enough sleep, and regular exercise are all MANDATORY.
  • Emergency Fund – save at minimum $1,000, ideally three-to-six months worth of expenses, in an Emergency Fund. Then continue saving for other goals in another account.
  • Support your local Library , the Millionaire Next Door , and the Bogleheads Guide to Investing .

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I truly recommend "The Millionaire Next Door" and "Your Money Or Your Life" to you. You currently spend 3650/5700 = 64% of your income on housing alone, which is insanely high as either a percentage OR as a dollar amount.

by JustMid   2017-08-19

I just bought this book .

The investopedia has a bunch of information as well.

You can also simulate trading stock with fake currency but in the real market. I just set up an account with sprinklebit because some guy recommended it.