The wisest thing that should be on every wise individual's list is to invest in different stream of income and don't depend on the government to bring in money especially now the pandemic is hitting the economy
That's correct the right choice of investment has always been a big problem for me because picking up the wrong investment will possibly leave a big scar in the future... Have you made any profit whatsoever working with this pro ?
I love that your videos have great structure and check-list style. Given that ... I think adding chapter markers for each item in your lists would be a beautiful thing :)
All great points! All of what you said holds true as we get closer to or in retirement. If we make a mistake in our 30's, 40's or even early 50's we may have time to recover. Playing it safe is the way to go although a little gambling money could be fun as long as you can afford it. Yes, even legendary stocks tumble eventually and we can't predict the future ... even the "experts" can't either!
Absolutely correct on rule #1 ... when talking about individual stocks. There is no right time to double down because you just never know where the bottom is for any one company. A good reason to treat individual stocks as speculation, not investment. However, if you're playing the market average through an index fund, a market downturn is a great time to tweak your contributions toward stocks.
Love the content!! 👍 I’m hoping to retire in 18-24 months. Do you have a video on what a person should be doing with their 401k in this time frame? The switch from investing plan to retirement plan is confusing. At least for me! Thank you Geoff!
A lot more information is needed to answer that question. For example, do you know what your expenses will be, and will you have them covered? Will you have other sources of income, such as a pension, and how will they position you? If you're pretty much set, you don't need to be especially careful, but if you're counting on having the money there, you should ensure it's invested wisely (conservatively and diversified).
In the case of the companies you mentioned, their crash wasn't a surprise if you paid attention to the news. That said, my son's company was skyrocketing up then took a sudden crash because some bright bulb decided to massively overestimate the profit for the next quarter. When they didn't make it, the stock crashed to almost nothing. My son lost close to a million dollars. However, big companies are watched, and it's often apparent when they are in trouble.
We had a patient at my office who worked for Social Security and he said most people should take their SS benefits as soon as they’re eligible. He said one big reason the government discourages that is they want you to keep paying into SS. You should add up all those SS payments you won’t be getting between the ages of 62 and 70, then add to that what you would have paid in to make an informed decision about delaying it to get more money later.
Many factors go into when to take SS. Your scenario assumes that you keep working from 62 to 70, and thus keep paying into SS. You could truly retire and live on your investments until you take SS, and thus not pay in for those 8 years. If you do keep working, those salaries could push your eventual SS payout higher. Again, many factors. SS is set up to be actuarially based, so that - on average - it pays out the same total amount. You just decide if you want more, smaller payments or fewer, larger ones. If you live beyond average, you'll come out ahead regardless - moreso if you opted for the larger payments.
@@danknauer5091 I am waiting 2 more years until I am 70. SS says i will collect $46,000 a year then. Mathematically, if I live past 80, I'll be the winner. If I die before then, I won't know that I made the wrong choice.
@@richardt1792 Sounds like a plan. Many are driven by anecdotal situations, e.g. I know someone who died at 64 and go nothing, rather than by the numbers. Even if you knew when you're going to die, it's hard to project your wants and needs until you get there.
Some very good thoughts, as usual. Regular contributions (dollar-cost averaging) to a target-date, blended index fund will address all except #5. You're not in one stock, the fund re-balances regularly automatically, taxes are deferred (if this is an IRA or 401k), the fund targets your future need, and the risk should be matching your personal risk tolerance/horizon. And being all in one fund, it's simple too.
Investors should avoid picking stocks unless they are actually willing to research the company. If you listen to these TH-cam guys and chase big returns by investing in the latest hot stock, you're likely to overpay
@Dr Vlad Sorry for your loss my friend. I’d suggest you look into passive index fund investing and learn some more. Buy Companies stock which you think has huge potential to grow. For me, I hired a stock expert and she provides entry and exit points on the security I focus on while I go about my other businesses. Investing has no one way to do it, eyes on the prize!!! Mistakes are expensive
Part of Rule #1: Individual stocks don't act like diversified broad market funds. Rule #3: there is no such thing as a Forever stock. R.I. P. Briggs & Stratton (got personally burned on that)
I sold out of GM right before it going bankrupt. My logic in buying it was "How can GM go bankrupt?". LOL. Now that was a painful loss. But I suppose a beneficial one. I learned a few things from it.
I lost my shirt!. I didn't put a stop on my trade. I lost it all. I was really sick. That was the last time I traded. My husband did not say anything. I know he was not happy. It's been awhile . .I'll never get over it.
Thanks Schmidty going back to work because there are no young people to do the jobs! Buying heavy on Amazon and Google with the split coming and the zoom in the lower priced shares!
#7 - If a finance expert says "It's conventional wisdom to wait till 70 to collect SS." While it could work out mathematically for some, MOST will die before the break-even point. Those who win only reap rewards a little bit at a time in their mid-80s and you'll never win an amount equal to what you risked upfront.
There are many factors that go into deciding when to take SS, as Geoff has addressed in other videos. Per AARP, the breakeven point for taking SS at 70 is 10 years. Average life expectancy at 70 is 84-86, so most will not die before breaking even . Also on average, women live longer and men earn more, so when the husband dies his wife can get his higher SS payments. if you don't need it, you can take SS and invest it. Many though need it. Like I said, lots of factors. Full retirement age might be a better option for many.
@@danknauer5091 - If you're going to make an argument, try to make one where you understand the info. First, your AARP quote is likely from 62 to 70 and 80.5 for a straight up break-even that neither accounts for inflation (which greatly deflates those delayed dollars value when received) nor lost earnings. Second, if you have stopped working and are paying for that delay out of your own assets, then not only are you not getting the SS you are depleting your assets, so if you die before break-even not only does the government keep everything you did not collect, your family gets less because you handed their inheritance to the government to make a bad gamble. Third, you don't seem to understand that those longevity numbers you quote are extremely skewed, because by saying if your alive at 70 most people will make it longer ignores the fact that they come to those higher chances by eliminating everyone who dies prior age 70 from the equation. Thus with every birthday you have a higher percentage chance of making the next older age.....if that makes sense to you, then good luck understanding more complex issues. YOUR odds are not any better than they always were. And fact is average American dies BEFORE 80, which means you are absolutely incorrect saying most will not die before break-even, MOST WILL die before. You have 8 years of people dying from 62 to 70 before those even collect a single cent (if their plan was to delay till 70), and then more than a decade more (closer to decade and half)....this isn't an argument it is a FACT! Fourthly, even if you have longevity running in your family history and are healthy yourself, you will never get as much in additional SS as you risked up front to get it, and any win you do get is pieced out to you a little bit at a time (monthly) in your most elderly years when you are least likely able to enjoy it and your spending will have gone done statistically in every area except healthcare. So you traded you most youthful and productive retirement years to have a small bump in your sitting at home years. Fifth, if you want to postpone your best retirement years just so your wife (not everyone has one so only those who do should even consider this point) gets that small monthly bump after you die, then good for you if that trade makes sense. If it was YOUR idea, fine...but if it is the wife who suggest you should give up your retirement years for her small bump, probably not a wife worth giving it to. Finally, if you watch Holy Schmidt's video on the TRUE breakeven point of delaying SS, you'd see he pegs it at 84 (accounting for small inflation and low investment returns), which again, does not make your argument any better. Only reason to delay till 70 is either giving in to your fear and making fear based financial decisions, greed which you just have to have that extra $$ you THINK you'll get or if you simply have not taken care of your finances and can not live on the SS amounts you'd receive before then....but in that case you are likely working till 70 as well, maybe beyond. All things considered, if you are not in need, delaying till 70 in a losing bad bet for MOST people!
@@tomm8025 I'll try to respond, and in a less insulting manner. 1. The breakeven point at 70 is the basic math. Inflation and 'lost earnings' are both variables. Note: Working while taking SS comes with penalties until you reach FRA, so that's another variable. 2. "If you have stopped working" - variable. Odds are you will reach the break even point. That's how the actuary tables work. 3. The average lifespan of an American IS skewed by those who die young, so if you reach 70 you'll likely live to 84 (man) or 86 (woman). Even Geoff missed the first point in one of his videos, as he was using the average lifespan as a retiree's lifespan. Those who die before 62 get no SS at all, so when to take it is moot. The model works because some pay in while getting nothing. 4. If longevity is on your side and SS is to be your main source of income in your latter years, you might be happy with that bump (8% annually between FRA and 70, plus COLA increases) for as long as you live. About 20% have SS as their sole income. 5. Having a wife is a variable; many do though. If you don't have longevity but your wife does (women in general outlive men), she might be glad for the extra income regardless of who suggested it. She might not have any SS herself. 6. Regardless of the breakeven point, outliving one's money can concern many. A larger SS income helps mitigate that. So the only reasons to defer are fear or greed? Not longevity, risk profile, work plans, investments, spousal situation, heirs, etc.? For someone with no other retirement income who plans to work until 70 anyway, deferring SS is probably the best bet. Good to know that in this complex situation, you have THE answer.
The advantage for the house is that the payout is based on 50/50 for red/black, when the actual odds are lower. If the ball lands on 0 or 00, both red and black (and even and odd, and all other bets) lose. You can also bet on 0 and 00, also known as betting with the house.
GM is trading at over $40 a share today. That might not have been the best example. The person in your equation made a killing, and proved his financial advisor correct.
That is a new stock if my information is correct,those are not the same shares as the GM that went bankrupt and those shares (the original GM) continue to be worthless,or non existent.
Unfortunately that person did not prove his financial advisor correct. They lost all their money. David’s point is correct. When a company goes bankrupt the equity shares are wiped out. After the company comes out of bankruptcy it can restart. That is what happened to today’s GM.
The wisest thing that should be on every wise individual's list is to invest in different stream of income and don't depend on the government to bring in money especially now the pandemic is hitting the economy
you are definitely right , waiting on the government is a big waste
Investments are the stepping Stones to success especially if you been guided by a professional
Investing is good but investing in the right thing is the actual key to success . who is your pro ?
There are so many investment out there but if profits must be considered then not all investments are good to go into.
That's correct the right choice of investment has always been a big problem for me because picking up the wrong investment will possibly leave a big scar in the future... Have you made any profit whatsoever working with this pro ?
I love that your videos have great structure and check-list style. Given that ... I think adding chapter markers for each item in your lists would be a beautiful thing :)
Just retired and always followed live below your means .
Good advice at any age!
All great points! All of what you said holds true as we get closer to or in retirement. If we make a mistake in our 30's, 40's or even early 50's we may have time to recover. Playing it safe is the way to go although a little gambling money could be fun as long as you can afford it. Yes, even legendary stocks tumble eventually and we can't predict the future ... even the "experts" can't either!
Absolutely correct on rule #1 ... when talking about individual stocks. There is no right time to double down because you just never know where the bottom is for any one company. A good reason to treat individual stocks as speculation, not investment. However, if you're playing the market average through an index fund, a market downturn is a great time to tweak your contributions toward stocks.
Love the content!! 👍
I’m hoping to retire in 18-24 months.
Do you have a video on what a person should be doing with their 401k in this time frame? The switch from investing plan to retirement plan is confusing.
At least for me! Thank you Geoff!
A lot more information is needed to answer that question. For example, do you know what your expenses will be, and will you have them covered? Will you have other sources of income, such as a pension, and how will they position you? If you're pretty much set, you don't need to be especially careful, but if you're counting on having the money there, you should ensure it's invested wisely (conservatively and diversified).
In the case of the companies you mentioned, their crash wasn't a surprise if you paid attention to the news. That said, my son's company was skyrocketing up then took a sudden crash because some bright bulb decided to massively overestimate the profit for the next quarter. When they didn't make it, the stock crashed to almost nothing. My son lost close to a million dollars. However, big companies are watched, and it's often apparent when they are in trouble.
We had a patient at my office who worked for Social Security and he said most people should take their SS benefits as soon as they’re eligible. He said one big reason the government discourages that is they want you to keep paying into SS. You should add up all those SS payments you won’t be getting between the ages of 62 and 70, then add to that what you would have paid in to make an informed decision about delaying it to get more money later.
Many factors go into when to take SS. Your scenario assumes that you keep working from 62 to 70, and thus keep paying into SS. You could truly retire and live on your investments until you take SS, and thus not pay in for those 8 years. If you do keep working, those salaries could push your eventual SS payout higher. Again, many factors.
SS is set up to be actuarially based, so that - on average - it pays out the same total amount. You just decide if you want more, smaller payments or fewer, larger ones. If you live beyond average, you'll come out ahead regardless - moreso if you opted for the larger payments.
@@danknauer5091 I am waiting 2 more years until I am 70. SS says i will collect $46,000 a year then. Mathematically, if I live past 80, I'll be the winner. If I die before then, I won't know that I made the wrong choice.
@@richardt1792 Sounds like a plan. Many are driven by anecdotal situations, e.g. I know someone who died at 64 and go nothing, rather than by the numbers. Even if you knew when you're going to die, it's hard to project your wants and needs until you get there.
Some very good thoughts, as usual.
Regular contributions (dollar-cost averaging) to a target-date, blended index fund will address all except #5. You're not in one stock, the fund re-balances regularly automatically, taxes are deferred (if this is an IRA or 401k), the fund targets your future need, and the risk should be matching your personal risk tolerance/horizon. And being all in one fund, it's simple too.
Such great advice - buying index funds is the way to go for the average Joe!
Most despised phrase - "Your getting paid to wait". Yeah, to lose your shirt!!!
Thank you for your advice.
Thank you valuable information once again.
Excellent work. Simple, but right on. Yup , stay away from " the smartest guy in the room"...
Thank you.
thanks, G
S, you are more than welcome!
Thanks Jeff…!
Investors should avoid picking stocks unless they are actually willing to research the company. If you listen to these TH-cam guys and chase big returns by investing in the latest hot stock, you're likely to overpay
@Dr Vlad Sorry for your loss my friend. I’d suggest you look into passive index fund investing and learn some more. Buy Companies stock which you think has huge potential to grow. For me, I hired a stock expert and she provides entry and exit points on the security I focus on while I go about my other businesses. Investing has no one way to do it, eyes on the prize!!! Mistakes are expensive
@@gaileickhoff116 That’s impressive result! How could someone go about a consultant for guidance?
@@gaileickhoff116 Thanks you for sharing. I just looked into her and am impressed 👏👏👏
Part of Rule #1: Individual stocks don't act like diversified broad market funds.
Rule #3: there is no such thing as a Forever stock.
R.I. P. Briggs & Stratton (got personally burned on that)
Sears stock looks like a good value.
I sold out of GM right before it going bankrupt. My logic in buying it was "How can GM go bankrupt?". LOL. Now that was a painful loss. But I suppose a beneficial one. I learned a few things from it.
Thanks for the comment C.D. A lot of people were in the same boat
I lost my shirt!. I didn't put a stop on my trade. I lost it all. I was really sick. That was the last time I traded. My husband did not say anything. I know he was not happy. It's been awhile . .I'll never get over it.
"Taxes saved, is money made"....... Risk is real, but we don't necessarily know how to assess it or structure our investments to take it into account.
Thanks Schmidty going back to work because there are no young people to do the jobs! Buying heavy on Amazon and Google with the split coming and the zoom in the lower priced shares!
Thanks Richard. Good time for those that want to work!
#7 - If a finance expert says "It's conventional wisdom to wait till 70 to collect SS." While it could work out mathematically for some, MOST will die before the break-even point. Those who win only reap rewards a little bit at a time in their mid-80s and you'll never win an amount equal to what you risked upfront.
Thanks for the comment
There are many factors that go into deciding when to take SS, as Geoff has addressed in other videos. Per AARP, the breakeven point for taking SS at 70 is 10 years. Average life expectancy at 70 is 84-86, so most will not die before breaking even . Also on average, women live longer and men earn more, so when the husband dies his wife can get his higher SS payments.
if you don't need it, you can take SS and invest it. Many though need it. Like I said, lots of factors. Full retirement age might be a better option for many.
@@danknauer5091 - If you're going to make an argument, try to make one where you understand the info. First, your AARP quote is likely from 62 to 70 and 80.5 for a straight up break-even that neither accounts for inflation (which greatly deflates those delayed dollars value when received) nor lost earnings.
Second, if you have stopped working and are paying for that delay out of your own assets, then not only are you not getting the SS you are depleting your assets, so if you die before break-even not only does the government keep everything you did not collect, your family gets less because you handed their inheritance to the government to make a bad gamble.
Third, you don't seem to understand that those longevity numbers you quote are extremely skewed, because by saying if your alive at 70 most people will make it longer ignores the fact that they come to those higher chances by eliminating everyone who dies prior age 70 from the equation. Thus with every birthday you have a higher percentage chance of making the next older age.....if that makes sense to you, then good luck understanding more complex issues. YOUR odds are not any better than they always were. And fact is average American dies BEFORE 80, which means you are absolutely incorrect saying most will not die before break-even, MOST WILL die before. You have 8 years of people dying from 62 to 70 before those even collect a single cent (if their plan was to delay till 70), and then more than a decade more (closer to decade and half)....this isn't an argument it is a FACT!
Fourthly, even if you have longevity running in your family history and are healthy yourself, you will never get as much in additional SS as you risked up front to get it, and any win you do get is pieced out to you a little bit at a time (monthly) in your most elderly years when you are least likely able to enjoy it and your spending will have gone done statistically in every area except healthcare. So you traded you most youthful and productive retirement years to have a small bump in your sitting at home years.
Fifth, if you want to postpone your best retirement years just so your wife (not everyone has one so only those who do should even consider this point) gets that small monthly bump after you die, then good for you if that trade makes sense. If it was YOUR idea, fine...but if it is the wife who suggest you should give up your retirement years for her small bump, probably not a wife worth giving it to.
Finally, if you watch Holy Schmidt's video on the TRUE breakeven point of delaying SS, you'd see he pegs it at 84 (accounting for small inflation and low investment returns), which again, does not make your argument any better.
Only reason to delay till 70 is either giving in to your fear and making fear based financial decisions, greed which you just have to have that extra $$ you THINK you'll get or if you simply have not taken care of your finances and can not live on the SS amounts you'd receive before then....but in that case you are likely working till 70 as well, maybe beyond.
All things considered, if you are not in need, delaying till 70 in a losing bad bet for MOST people!
@@tomm8025 I'll try to respond, and in a less insulting manner.
1. The breakeven point at 70 is the basic math. Inflation and 'lost earnings' are both variables. Note: Working while taking SS comes with penalties until you reach FRA, so that's another variable.
2. "If you have stopped working" - variable. Odds are you will reach the break even point. That's how the actuary tables work.
3. The average lifespan of an American IS skewed by those who die young, so if you reach 70 you'll likely live to 84 (man) or 86 (woman). Even Geoff missed the first point in one of his videos, as he was using the average lifespan as a retiree's lifespan. Those who die before 62 get no SS at all, so when to take it is moot. The model works because some pay in while getting nothing.
4. If longevity is on your side and SS is to be your main source of income in your latter years, you might be happy with that bump (8% annually between FRA and 70, plus COLA increases) for as long as you live. About 20% have SS as their sole income.
5. Having a wife is a variable; many do though. If you don't have longevity but your wife does (women in general outlive men), she might be glad for the extra income regardless of who suggested it. She might not have any SS herself.
6. Regardless of the breakeven point, outliving one's money can concern many. A larger SS income helps mitigate that.
So the only reasons to defer are fear or greed? Not longevity, risk profile, work plans, investments, spousal situation, heirs, etc.? For someone with no other retirement income who plans to work until 70 anyway, deferring SS is probably the best bet.
Good to know that in this complex situation, you have THE answer.
I appreciate this and other videos. But why doesn't he comb his hair?
Casual look
✌️
:)
If you bet on red and there is only black or red, how is that less than 50/50?
0 and 00 on the wheel, that's the house advantage. It is not 50/50.
Because there are 18 red, 18 black and (to reduce the odds below 50/50) 2 green on the wheel.
Yes, it's actually 47.5% not 50/50.
The advantage for the house is that the payout is based on 50/50 for red/black, when the actual odds are lower. If the ball lands on 0 or 00, both red and black (and even and odd, and all other bets) lose.
You can also bet on 0 and 00, also known as betting with the house.
GM is trading at over $40 a share today. That might not have been the best example. The person in your equation made a killing, and proved his financial advisor correct.
That is a new stock if my information is correct,those are not the same shares as the GM that went bankrupt and those shares (the original GM) continue to be worthless,or non existent.
Unfortunately that person did not prove his financial advisor correct. They lost all their money. David’s point is correct. When a company goes bankrupt the equity shares are wiped out. After the company comes out of bankruptcy it can restart. That is what happened to today’s GM.
Anyone that says risk is an illusion is a idiot. Tell the to some of my friends that have lost their nest eggs over that kind of thinking.
Hear hear!
Thank you.