The stock market is a LARGE risk... a home is a risky neccessity... As for how much money you lost in the stock market, don't gamble with money you can't afford to lose. As far as a home is concerned... we should all live on the streets???
I wish more companies would feature discussions like this. I agree with you that a 401(k) is an easy and relatively inexpensive way to save money for your future. Most people figure this out only too late. Also, great idea suggesting that these meetings be split up into age groups. I never would have thought about this!
WHY WOULD NetSpend "even do a credit check"? As Xin said first off, it's a pre-pay debit card. Like what, they're rules are really lax about letting people spend their own money or something?!! Pre-pay cards don't check credit.
This type of card may be great for some, but that does not undo the bad acts Netspend perpetrated - outright stealing and withholding others' money. We pay co's like them for convenience and look what they do. And don't ever try to save your money with Netspend for a rainy day, etc - they will drain it away chunk by chunk. Never hide your NS card in a drawer thinking you'll have $ there later for when you need it. POOF! Your 'savings' will be gone....
For those in need of this type of card, check out GreenDot (as mentioned), Mango, BankFreedom cards and many others. I am shopping for an alternative to NS and see there are $5/month ones and some with free load'g, etc, etc....
Oh, heck, yes!! Other people grew up like me! :) My parents always had a huge garden, and my mom canned and cooked from scratch. We lived so far out in the country that driving to Arby's and using a coupon for the whole family was a *huge* treat. My mom sewed our clothes and my dad took us horseback riding and fishing for entertainment (and in the case of fishing, dinner). We received and passed on hand-me-downs. It was so exciting to open up that giant trash bag of hand-me-downs from my older cousin.
My mom could cook anything, and she always made the cheapest stuff sound like the most desireable thing. It was a treat to get fried bologna and sandwiches made with toasted hamburger buns instead of bread. My dad's boss would bring us a dozen glazed donuts out from town, and we would eat the stale ones sliced in half and toasted with butter. I recently mentioned what a happy memory those were, and my mom laughed and said she was trying to get more mileage out of free food! It was a powerful lesson to me--it was my parent's attitude about things. I never heard that *we* were poor, or couldn't afford things, or didn't have the money. My parents just scoffed at things we didn't need and suggested frugal alternatives. We always had a home, shoes, clothes, food, and love. I thought we were rich.
(Did anyone else get boosted into a dumpster behind the Wal-Mart to grab discards? Now it's called dumpster diving, but then it was just humiliation...)
I agree that airlines are really laying on the extra charges. I think I heard that one Irish airline is going to start charging passengers to use the bathroom! Your idea about buying clothes once you arrive in your destination is definitely an interesting idea, but you would still have to bring luggage along to transport your new clothes home with you, right? I think you should stick to your first four points, all which help alleviate these annoying charges.
The airline baggage fee irritates me SO much! You are no longer providing a cheaper and easier way to fly imposing all these fees. I would rather you just charge me up front in the ticket price instead of being hit with all these fees once I get the airport.
I wish I could fly Southwest but they do not fly into my airport. And the second hand store is a good idea, it would depend on what you were going out of town for. If it is a wedding, I wouldn't want to leave that up to chance.
There is always a better way to spend that money you give up for ticket. So don`t speed, be aware of others on the road and warn other drivers by flashing headlights. And don`t forget to respect police officers, at the end they are just doing their job.
Rude. Just plain rude. And yes, you are lucky. I won't even go into all that I did to try to keep nursing, but I will tell you no one I know tried even half as hard as I did. I guess we'll see when your luck runs out and then maybe you can be a little more accepting of others.
Thanks Philip, another fine article. We've been adding wild foods to our diet these last few years and have discovered purslane. A bit like lemony spinach, very nice in salads. Like David mentioned, gradual change is the way to go. I'd like it if we could get as low per person as he. Sounds good.
Good point. Most plans have an option to automatically rebalance your investments on a quarterly, semi-annual, or annual basis.
But you usually still have to reallocate your investments to lower percentages of stocks and higher percentages of bonds as you age. The plan won't decide these percentages for you.
And I haven't maxed out my IRA yet, but am planning to dollar cost average throughout the year.
I agree that ETFs are not necessary for most buy and hold investors who now have their money in index funds.
However, as WC Porter hinted in his comment, Vanguard ETFs can be attractive because of their lower expense ratios and lack of commissions. But this is only if you have over $50,000 to invest.
When I get to that point, I'll reconsider ETFs. Until then, I'm sticking with mutual funds.
Increment the savings. Our family of 6 is now under $300 per month for food. We eliminate or change one thing at a time such as grinding wheat, reducing cold cereal from 5 times a week to one.
Ice cream as a treat instead of a staple. Buy oats, wheat, and honey in bulk, etc.
Over a year or two, changing one thing at a time really adds up.
I agree about mutual funds—I am a full-fledged supporter of index funds over mutual funds. Not just for myself but for the average investor.
I should’ve chosen my words wisely. The goal of the article was to bring ETFs back down to earth and offer a little perspective. I know a lot of people that have heard all the ETF buzz and jumped right in (and not into the cheaper Vanguard or Fidelity versions, but the ones that cost as much as a stock to buy and sell) without really giving it much thought.
That was the goal and I let my sensationalist title get the better of me. I really hope the commenter who said they were unsubscribing isn’t going to let one tiny dissenting voice ruin all the great information on the site.
Arohan,
Subscriptions for the iPad work similar to subscriptions for the Kindle or other e-readers. They are a completely different type of service, and are billed and priced differently. I haven't heard of any magazines giving access to their iPad content to someone who has already paid for a print subscription. That would be an interesting model, however!
This article is definitely based on faulty logic. I understand your suspicion of ETFs, but you have to consider that the mutual fund industry has been ripping off unsuspecting Americans for DECADES with high fees, poor performance (most actively managed mutual funds underperform their benchmarks) and a lack of transparency.
Just because ETFs are used by traders does not make them in and of themselves bad. In fact, many pensions (Harvard, for one), investment advisors, retirees and other people who wouldn't necessarily be "traders" use ETFs, and they do so wisely. Yes, the intraday liquidity of ETFs make them easier for traders to jump in and out of, but that doesn't mean that that's their only application. Far from it.
Furthermore, as others have mentioned, online brokerages are offering amazingly good pricing thanks to increasing competition. Vanguard has the lowest fees in the industry and recently lowered prices on their brokerage platform. Schwab has free trading on their line of core ETFs and lowered commissions on all others. Fidelity has free trading on 25 core iShares ETFs. Yes, you have to trade smartly. You have to keep commissions in mind. But I would gather that most investors at home are not doing rapid-fire trading. They're buying ETFs and holding them in long-term accounts or buying them, watching and selling when the trend peters out weeks, months or years later.
Traders also give many ETFs their superior liquidity and help keep the spreads tight, so I wouldn't knock them too hard. They provide a service to investors at home. But you're right - it's foolish to try to keep up with them.
ETFs don't suck - they're a major innovation that have changed the way Americans invest and it's given the power of decision-making back to them, thanks to transparency, liquidity, lower cost and a range of core and niche options. Mutual funds are a rip-off, and I'm glad more people are finally realizing it. If the high fees were returned by market outperformance, that would be one thing. But that's not happening. Mutual funds are money down the drain.
I was on the fence, but this sensationalist and misinformed article has pushed me over the edge to unsubscribe from the Wise Bread feed. Please do research before spouting off, there are many who are not as savvy and will buy into this blatantly incorrect information.
If things don't work out you can move, you can get divorced, and you can change careers.
But what you can't do is discharge student loans in bankruptcy.
Big student loan debt is the big white, self-sabotaging elephant in this room.
This was the whole reason behind the invention of ETFs.
"the biggest selling point that gets touted again and again—that they trade like stocks..."
Not from what I read. As mentioned, the HUGE advantages of ETFs (over the long run) are low cost and tax efficiency. Try reading more Bogleheads, and less SeekingAlpha. You're replying to people who are already known to be wrong, and ignoring the reasons why ETFs are actually great.
You could have been writing about me in this article... same late-onset, same struggles with various over-the-counter remedies, the hesitation and shame to see a dermatologist over what I perceived to be a vanity issue... I just hope my story has the same happy ending! Unfortunately I am having little luck even with the various antibiotics and medicinal creams my derm has put me on. But she plans to start me on Accutane this Friday. I'm dreading it, but wish me luck!
Couple of things here: I’m not implying that anything a trader does is “bad.” But a trader’s needs and the average investor’s needs are very different. VERY different. I can’t stress that point enough.
I looked at the Vanguard ETFs and sure enough, the expense ratios are lower than their already super-low index funds (which I love). And you’re right, some places will let you trade ETFs without paying a commission. But there is some fine print: with Vanguard you need to have at least $50,000 in your account. Otherwise you’ll pay a $20 annual fee. So that needs to be calculated in there too.
In all, ETFs aren’t “evil” or anything, I just think that too much is being made of them. The ones that are actually useful to the average investor are glorified index funds. And the biggest selling point that gets touted again and again—that they trade like stocks and the price changes throughout the day—is meaningless for average investors investing in the long term.
The stock market is a LARGE risk... a home is a risky neccessity... As for how much money you lost in the stock market, don't gamble with money you can't afford to lose. As far as a home is concerned... we should all live on the streets???
I wish more companies would feature discussions like this. I agree with you that a 401(k) is an easy and relatively inexpensive way to save money for your future. Most people figure this out only too late. Also, great idea suggesting that these meetings be split up into age groups. I never would have thought about this!
WHY WOULD NetSpend "even do a credit check"? As Xin said first off, it's a pre-pay debit card. Like what, they're rules are really lax about letting people spend their own money or something?!! Pre-pay cards don't check credit.
This type of card may be great for some, but that does not undo the bad acts Netspend perpetrated - outright stealing and withholding others' money. We pay co's like them for convenience and look what they do. And don't ever try to save your money with Netspend for a rainy day, etc - they will drain it away chunk by chunk. Never hide your NS card in a drawer thinking you'll have $ there later for when you need it. POOF! Your 'savings' will be gone....
For those in need of this type of card, check out GreenDot (as mentioned), Mango, BankFreedom cards and many others. I am shopping for an alternative to NS and see there are $5/month ones and some with free load'g, etc, etc....
Oh, heck, yes!! Other people grew up like me! :) My parents always had a huge garden, and my mom canned and cooked from scratch. We lived so far out in the country that driving to Arby's and using a coupon for the whole family was a *huge* treat. My mom sewed our clothes and my dad took us horseback riding and fishing for entertainment (and in the case of fishing, dinner). We received and passed on hand-me-downs. It was so exciting to open up that giant trash bag of hand-me-downs from my older cousin.
My mom could cook anything, and she always made the cheapest stuff sound like the most desireable thing. It was a treat to get fried bologna and sandwiches made with toasted hamburger buns instead of bread. My dad's boss would bring us a dozen glazed donuts out from town, and we would eat the stale ones sliced in half and toasted with butter. I recently mentioned what a happy memory those were, and my mom laughed and said she was trying to get more mileage out of free food! It was a powerful lesson to me--it was my parent's attitude about things. I never heard that *we* were poor, or couldn't afford things, or didn't have the money. My parents just scoffed at things we didn't need and suggested frugal alternatives. We always had a home, shoes, clothes, food, and love. I thought we were rich.
(Did anyone else get boosted into a dumpster behind the Wal-Mart to grab discards? Now it's called dumpster diving, but then it was just humiliation...)
The best way to avoid baggage fees is mail or ship the items to your destination. Easier and simpler.
I agree that airlines are really laying on the extra charges. I think I heard that one Irish airline is going to start charging passengers to use the bathroom! Your idea about buying clothes once you arrive in your destination is definitely an interesting idea, but you would still have to bring luggage along to transport your new clothes home with you, right? I think you should stick to your first four points, all which help alleviate these annoying charges.
The airline baggage fee irritates me SO much! You are no longer providing a cheaper and easier way to fly imposing all these fees. I would rather you just charge me up front in the ticket price instead of being hit with all these fees once I get the airport.
I wish I could fly Southwest but they do not fly into my airport. And the second hand store is a good idea, it would depend on what you were going out of town for. If it is a wedding, I wouldn't want to leave that up to chance.
There is always a better way to spend that money you give up for ticket. So don`t speed, be aware of others on the road and warn other drivers by flashing headlights. And don`t forget to respect police officers, at the end they are just doing their job.
I have been reading some of the articles on your website this morning and
I have to say that I am really enjoying them. There is a lot of good
information here. I will be coming back soon for some more reading.
Thanks, Amalia
Rude. Just plain rude. And yes, you are lucky. I won't even go into all that I did to try to keep nursing, but I will tell you no one I know tried even half as hard as I did. I guess we'll see when your luck runs out and then maybe you can be a little more accepting of others.
Thanks Philip, another fine article. We've been adding wild foods to our diet these last few years and have discovered purslane. A bit like lemony spinach, very nice in salads. Like David mentioned, gradual change is the way to go. I'd like it if we could get as low per person as he. Sounds good.
Good point. Most plans have an option to automatically rebalance your investments on a quarterly, semi-annual, or annual basis.
But you usually still have to reallocate your investments to lower percentages of stocks and higher percentages of bonds as you age. The plan won't decide these percentages for you.
And I haven't maxed out my IRA yet, but am planning to dollar cost average throughout the year.
I agree that ETFs are not necessary for most buy and hold investors who now have their money in index funds.
However, as WC Porter hinted in his comment, Vanguard ETFs can be attractive because of their lower expense ratios and lack of commissions. But this is only if you have over $50,000 to invest.
When I get to that point, I'll reconsider ETFs. Until then, I'm sticking with mutual funds.
Increment the savings. Our family of 6 is now under $300 per month for food. We eliminate or change one thing at a time such as grinding wheat, reducing cold cereal from 5 times a week to one.
Ice cream as a treat instead of a staple. Buy oats, wheat, and honey in bulk, etc.
Over a year or two, changing one thing at a time really adds up.
David
I agree about mutual funds—I am a full-fledged supporter of index funds over mutual funds. Not just for myself but for the average investor.
I should’ve chosen my words wisely. The goal of the article was to bring ETFs back down to earth and offer a little perspective. I know a lot of people that have heard all the ETF buzz and jumped right in (and not into the cheaper Vanguard or Fidelity versions, but the ones that cost as much as a stock to buy and sell) without really giving it much thought.
That was the goal and I let my sensationalist title get the better of me. I really hope the commenter who said they were unsubscribing isn’t going to let one tiny dissenting voice ruin all the great information on the site.
Have you tried http://Bizag.com it has a free business value calculator.
Arohan,
Subscriptions for the iPad work similar to subscriptions for the Kindle or other e-readers. They are a completely different type of service, and are billed and priced differently. I haven't heard of any magazines giving access to their iPad content to someone who has already paid for a print subscription. That would be an interesting model, however!
This article is definitely based on faulty logic. I understand your suspicion of ETFs, but you have to consider that the mutual fund industry has been ripping off unsuspecting Americans for DECADES with high fees, poor performance (most actively managed mutual funds underperform their benchmarks) and a lack of transparency.
Just because ETFs are used by traders does not make them in and of themselves bad. In fact, many pensions (Harvard, for one), investment advisors, retirees and other people who wouldn't necessarily be "traders" use ETFs, and they do so wisely. Yes, the intraday liquidity of ETFs make them easier for traders to jump in and out of, but that doesn't mean that that's their only application. Far from it.
Furthermore, as others have mentioned, online brokerages are offering amazingly good pricing thanks to increasing competition. Vanguard has the lowest fees in the industry and recently lowered prices on their brokerage platform. Schwab has free trading on their line of core ETFs and lowered commissions on all others. Fidelity has free trading on 25 core iShares ETFs. Yes, you have to trade smartly. You have to keep commissions in mind. But I would gather that most investors at home are not doing rapid-fire trading. They're buying ETFs and holding them in long-term accounts or buying them, watching and selling when the trend peters out weeks, months or years later.
Traders also give many ETFs their superior liquidity and help keep the spreads tight, so I wouldn't knock them too hard. They provide a service to investors at home. But you're right - it's foolish to try to keep up with them.
ETFs don't suck - they're a major innovation that have changed the way Americans invest and it's given the power of decision-making back to them, thanks to transparency, liquidity, lower cost and a range of core and niche options. Mutual funds are a rip-off, and I'm glad more people are finally realizing it. If the high fees were returned by market outperformance, that would be one thing. But that's not happening. Mutual funds are money down the drain.
I was on the fence, but this sensationalist and misinformed article has pushed me over the edge to unsubscribe from the Wise Bread feed. Please do research before spouting off, there are many who are not as savvy and will buy into this blatantly incorrect information.
If things don't work out you can move, you can get divorced, and you can change careers.
But what you can't do is discharge student loans in bankruptcy.
Big student loan debt is the big white, self-sabotaging elephant in this room.
"...glorified index funds..."
This was the whole reason behind the invention of ETFs.
"the biggest selling point that gets touted again and again—that they trade like stocks..."
Not from what I read. As mentioned, the HUGE advantages of ETFs (over the long run) are low cost and tax efficiency. Try reading more Bogleheads, and less SeekingAlpha. You're replying to people who are already known to be wrong, and ignoring the reasons why ETFs are actually great.
You could have been writing about me in this article... same late-onset, same struggles with various over-the-counter remedies, the hesitation and shame to see a dermatologist over what I perceived to be a vanity issue... I just hope my story has the same happy ending! Unfortunately I am having little luck even with the various antibiotics and medicinal creams my derm has put me on. But she plans to start me on Accutane this Friday. I'm dreading it, but wish me luck!
Couple of things here: I’m not implying that anything a trader does is “bad.” But a trader’s needs and the average investor’s needs are very different. VERY different. I can’t stress that point enough.
I looked at the Vanguard ETFs and sure enough, the expense ratios are lower than their already super-low index funds (which I love). And you’re right, some places will let you trade ETFs without paying a commission. But there is some fine print: with Vanguard you need to have at least $50,000 in your account. Otherwise you’ll pay a $20 annual fee. So that needs to be calculated in there too.
In all, ETFs aren’t “evil” or anything, I just think that too much is being made of them. The ones that are actually useful to the average investor are glorified index funds. And the biggest selling point that gets touted again and again—that they trade like stocks and the price changes throughout the day—is meaningless for average investors investing in the long term.
One more thing: suck.
Note to self: don't take financial advice from someone who uses the word "suck"
This article is based on bad logic. If ETFs are good for A, they can't be good for B. WTF? Tain't necessarily so.