Keep going mate I started at 41... was in 7K debt and living in my overdraft. I'm now debt free have a 15K emergency fund. 20K saving pot and just surpassed 120K. Diversification and a clear understanding of your financial goals are key... I am almost 43 now!
I lost a lot chasing individual stocks and I feel pretty silly for not understanding how investing works. I have a double major in economics but I’ve been trying to make sense of the market. Well done on profits!
Paul and Chris have been meaningful influences to my own portfolio and I would actually love to do what they do as far as educating DiY investors. I still have my smaller allocations to more "fun" holdings, but the core of my portfolio is VTI, AVUV, SCHD, and VXUS to take advantage of factor tilts, some of which weren't discussed in this video. The biggest modification I have considered, but have no rush to make, is to swap out VTI in favor of SPLG or VOO. Absolutely no rush, for the reasons Paul shared in this video...they are effectively almost the same fund and performance difference has been miniscule over time. I appreciate the interview. Thank you.
I'm glad you enjoyed the conversation. And thank you for diving into how Paul and Chris have supported your financial education over the years! It was an honor to chat with Paul knowing all he has done for the DIY investing community for so long.
Similar portfolio here other than adding a small growth position (VOO, SCHD, AVUV and QQQM). What percent value allocation are you aiming for (schd plus avuv)?
Don't worry folks. The market will never go down again. There will never be another bear market where a 70% drawdown occurs and because you bought high you won't sell low. (Even though every bit of statistical data prove that is exactly what 80% of more of average investors do) Here is some actual wisdom you can use, from someone who has been investing for over 35 years and who's portfolio has turned $1 into $50 while the Nasdaq has turned $1 into $15 over the same time frame: "It is not the bull markets where you make most of your money, it is the bear markets..... because you invest in such a way that you lost 70% less than the market averages during those drawdowns".
VBR(not my recommendation), IJS, VIOV, DFSV, and AVUV. If you want cheap, I recommend IJS or VIOV. If you want affordable but with more factor tilt, DFSV or AVUV. Full disclosure, AVUV is a major allocation in my own portfolio.
Candidly speaking, I actually disagree with Paul on the bonds. Not because of the math, though. That part is fairly obvious. The reason I think 10% in bonds in a TDF at a young age works is because at a young age, our understanding of the market is lowest and our emotions are highest. The #1 factor long-term for wealth building is contribution rate, not portfolio returns. We can look at spreadsheets all day every day and find what portfolio returns the most(or even what asset class does and go all-in) but if we get scared out of the market at the first 10, 20, or even 30% pullback...that portfolio didn't work and that's why we end up with average 2.9% returns from investors from 10% markets. From a risk:reward, that 10% can *actually* make a meaningful difference. Potentially enough to keep an immature investor in the market, even.
@@xaldath4265 Excellent point. I tend to forget how I used to be when I started investing. The dips really did bother me. But over time I learned they are just a a part of a typical market cycle.
@@xaldath4265 that’s exactly why the 10% are in there. Jack Bogle even said he understands 100% equities would be better but it’s more important that young investors stay the course, and that their 10% bonds helped with that. I think Paul’s just saying we’re doing our young investors a disservice by leaving them uneducated on the topic. Maybe if they understood the data or long term history they wouldn’t panic in 100% stocks in their 20-30s.
What is your preferred investment portfolio?
Watching in my 40s... And only just starting I feel so behind!
You've got this!
Keep going mate I started at 41... was in 7K debt and living in my overdraft. I'm now debt free have a 15K emergency fund. 20K saving pot and just surpassed 120K. Diversification and a clear understanding of your financial goals are key... I am almost 43 now!
The only comparison that matters is the one to yesterday's self. Today you're starting which means you're already better than you were yesterday:)
I lost a lot chasing individual stocks and I feel pretty silly for not understanding how investing works. I have a double major in economics but I’ve been trying to make sense of the market. Well done on profits!
Paul and Chris have been meaningful influences to my own portfolio and I would actually love to do what they do as far as educating DiY investors.
I still have my smaller allocations to more "fun" holdings, but the core of my portfolio is VTI, AVUV, SCHD, and VXUS to take advantage of factor tilts, some of which weren't discussed in this video.
The biggest modification I have considered, but have no rush to make, is to swap out VTI in favor of SPLG or VOO. Absolutely no rush, for the reasons Paul shared in this video...they are effectively almost the same fund and performance difference has been miniscule over time.
I appreciate the interview. Thank you.
I'm glad you enjoyed the conversation. And thank you for diving into how Paul and Chris have supported your financial education over the years!
It was an honor to chat with Paul knowing all he has done for the DIY investing community for so long.
Similar portfolio here other than adding a small growth position (VOO, SCHD, AVUV and QQQM). What percent value allocation are you aiming for (schd plus avuv)?
Don't worry folks.
The market will never go down again. There will never be another bear market where a 70% drawdown occurs and because you bought high you won't sell low. (Even though every bit of statistical data prove that is exactly what 80% of more of average investors do)
Here is some actual wisdom you can use, from someone who has been investing for over 35 years and who's portfolio has turned $1 into $50 while the Nasdaq has turned $1 into $15 over the same time frame:
"It is not the bull markets where you make most of your money, it is the bear markets..... because you invest in such a way that you lost 70% less than the market averages during those drawdowns".
I prefer unit trust / mutual funds for now.
What are some small cap value etfs ?
VBR for example (not advice)
VBR(not my recommendation), IJS, VIOV, DFSV, and AVUV. If you want cheap, I recommend IJS or VIOV. If you want affordable but with more factor tilt, DFSV or AVUV.
Full disclosure, AVUV is a major allocation in my own portfolio.
@@xaldath4265 thank you ! Are any of these for canadians ? I have wealth simple and so far on have vfv in my portfolio
Avuv
The last 7 years, I have done much better with VTI than small cap value. Only time will tell what the.next decade will.hold.
I hear that! If we only knew the future!
I sure would have loved to hear more about that 4 different small cap indexes and the 2.5% differences
Paul has a wealth of free information on his website. Please give him a visit!
Bonds are you kidding? Never reach FIRE or beat inflation.
You haven't experienced a proper recession then.
The majority of this conversation is about equities. Are you referencing using bonds as you near retirement age?
Candidly speaking, I actually disagree with Paul on the bonds. Not because of the math, though. That part is fairly obvious. The reason I think 10% in bonds in a TDF at a young age works is because at a young age, our understanding of the market is lowest and our emotions are highest. The #1 factor long-term for wealth building is contribution rate, not portfolio returns. We can look at spreadsheets all day every day and find what portfolio returns the most(or even what asset class does and go all-in) but if we get scared out of the market at the first 10, 20, or even 30% pullback...that portfolio didn't work and that's why we end up with average 2.9% returns from investors from 10% markets.
From a risk:reward, that 10% can *actually* make a meaningful difference. Potentially enough to keep an immature investor in the market, even.
@@xaldath4265 Excellent point. I tend to forget how I used to be when I started investing. The dips really did bother me.
But over time I learned they are just a a part of a typical market cycle.
@@xaldath4265 that’s exactly why the 10% are in there. Jack Bogle even said he understands 100% equities would be better but it’s more important that young investors stay the course, and that their 10% bonds helped with that. I think Paul’s just saying we’re doing our young investors a disservice by leaving them uneducated on the topic. Maybe if they understood the data or long term history they wouldn’t panic in 100% stocks in their 20-30s.