*Investors Blog*

[gfh77665]

They are saying the true economy is in shambles.

Might be. Or not.

In either case stocks are a rockin'. I doubt all the gains are phantom gains. AI alone is a real factor in the gains. I glad I did not bail, even if there is a retracement at some point. I'll hold majority stocks over cash and bonds long term without hesitation. Speaking just for me, all to their own.

 

[JeffKeryk]

Might be. Or not.

In either case stocks are a rockin'. I doubt all the gains are phantom gains. AI alone is a real factor in the gains. I glad I did not bail, even if there is a retracement at some point. I'll hold majority stocks over cash and bonds long term without hesitation. Speaking just for me, all to their own.

Tech stocks are rockin'; actually AI tech stocks are rockin'.
And the stock market wealth is in the hands of the few.

It is thought a majority of Americans live paycheck to paycheck. The actual number is tough; while it may not be the majority, it is pretty high.

And pretty scary, IMO.

 

[ZeeOSix]

It is thought a majority of Americans live paycheck to paycheck. The actual number is tough; while it may not be the majority, it is pretty high.

And pretty scary, IMO.

This stood out to me in that article:
"About 70 percent of younger, working respondents reported pausing retirement contributions or delaying their retirement timelines as a result of what the bank referred to as a “financial vortex”—the “magnitude of competing financial priorities” that take precedence over retirement savings."

This can result in a huge impact for younger people on their retirement finances because in order to have a comfortable retirement financially people need to start saving and investing as young as possible. By the time younger people are old enough for SS, it probably won't even be around anymore, or drastically cut back. Can't really live on just SS in an inflationary economy.

If the economy doesn't allow them to start building a retirement fund early, and they have to spend money to live instead of towards a putting some towards a retirement fund, then that's going to be bad news many years down the road - or end up working until they die and never retire. The longer they wait, the harder it will be to "catch-up". People that barely make it paycheck to paycheck just don't have disposable money to start much if any of a retirement golden goose egg.

 

[alarmguy]

Tech stocks are rockin'; actually AI tech stocks are rockin'.
And the stock market wealth is in the hands of the few.

It is thought a majority of Americans live paycheck to paycheck. The actual number is tough; while it may not be the majority, it is pretty high.

And pretty scary, IMO.

"And the stock market wealth is in the hands of the few."

Maybe but that is by choice. Most Americans dont want to learn or bother. In fact they are perfectly comfortable turning over money from their paycheck into a 401k and funds for someone else to manage and also help that someone else get rich.

The other bunch, too immature to save money to buy stuff and they borrow money from other people to buy stuff and make those other people rich.

 

[JeffKeryk]

"And the stock market wealth is in the hands of the few."

Maybe but that is by choice. Most Americans dont want to learn or bother. In fact they are perfectly comfortable turning over money from their paycheck into a 401k and funds for someone else to manage and also help that someone else get rich.

The other bunch, too immature to save money to buy stuff and they borrow money from other people to buy stuff and make those other people rich.

I 100% agree we all need to take responsibility for our own finances, which is why I often state the need for teaching personal finance in schools, and start early. But that is not the point of my post. Here's some numbers:

• Top 10% of households: This group owns approximately 90-93% of all stock market wealth.
  
  
• Top 1% of households: This wealthiest 1% owns a significant portion, with ownership figures around 54-58% of the stock market.
  
  
• Bottom 50% of households: This group owns less than 1% of the stock market.

Beyond that, the stock market growth is dominated by tech, so unless you are invested in tech, your gains are probably not representative of the market growth.

What does it take to be "wealthy"? That's pretty suggestive; we all have our own ideas of what it takes to have achieved wealth. What I have found is, someone in a family breaks out of the mold, probably gets education, and does well. Generational wealth. Then perhaps others follow. Living week to week scares the heck outta me, because I used to live day to day. I never thought I could pay rent on an on-going basis. Fear can be a great motivator.

 

[JeffKeryk]

This stood out to me in that article:
"About 70 percent of younger, working respondents reported pausing retirement contributions or delaying their retirement timelines as a result of what the bank referred to as a “financial vortex”—the “magnitude of competing financial priorities” that take precedence over retirement savings."

This can result in a huge impact for younger people on their retirement finances because in order to have a comfortable retirement financially people need to start saving and investing as young as possible. By the time younger people are old enough for SS, it probably won't even be around anymore, or drastically cut back. Can't really live on just SS in an inflationary economy.

If the economy doesn't allow them to start building a retirement fund early, and they have to spend money to live instead of towards a putting some towards a retirement fund, then that's going to be bad news many years down the road - or end up working until they die and never retire. The longer they wait, the harder it will be to "catch-up". People that barely make it paycheck to paycheck just don't have disposable money to start much if any of a retirement golden goose egg.

Good post. Your point of starting early is key. And yes, the economy and one's economic status are critical components of financial health. There are those who will find a way, even in a tough economy, but they are the few. That's the numbers. Heck, even in good economies few will follow a disciplined approach; again, that's the numbers.

 

[alarmguy]

I 100% agree we all need to take responsibility for our own finances, which is why I often state the need for teaching personal finance in schools, and start early. But that is not the point of my post. Here's some numbers:

• Top 10% of households: This group owns approximately 90-93% of all stock market wealth.
  
  
• Top 1% of households: This wealthiest 1% owns a significant portion, with ownership figures around 54-58% of the stock market.
  
  
• Bottom 50% of households: This group owns less than 1% of the stock market.

Beyond that, the stock market growth is dominated by tech, so unless you are invested in tech, your gains are probably not representative of the market growth.

What does it take to be "wealthy"? That's pretty suggestive; we all have our own ideas of what it takes to have achieved wealth. What I have found is, someone in a family breaks out of the mold, probably gets education, and does well. Generational wealth. Then perhaps others follow. Living week to week scares the heck outta me, because I used to live day to day. I never thought I could pay rent on an on-going basis. Fear can be a great motivator.

Yup... I would say the top 15% or so pay attention to what they are doing and educate themselves and of course some were handed stuff on a silver platter.
Bottom 50% ... no comment.

Word of caution to the young, do not rely on generational wealth. That is like unrealized gains, anything can happen.

 

[Sj08]

Maybe it's different for the rest of the country, but each and everyone of the younger people I know that are living paycheck to paycheck is a choice they make.

For example my niece and her husband like to eat out at sit-down restaurants at least twice per week, usually 3 or 4 times. If they "wanted" to invest, they could cut their dining out in half and easily have an additional 3 to 5 hundred per month.

When I was working, we had scheduled OT during the winter, and at times excessive unscheduled OT. My mindset was if I can live comfortably without OT, I will invest it all, so my family can have a better future. My younger coworkers had a different mindset, they spent the entire OT check on fun stuff.

On a positive note, a few months before I retired at 49, a 31 year old coworker was starting to think about retiring someday, and asked me to help him get started. I helped him open an brokerage account, and also had him start contributing enough to get the max company match in his retirement account. I wrongly assumed that everyone was at least putting in enough to get the full company match, but found out very few people were.

 

[rijndael]

If they "wanted" to invest, they could cut their dining out in half and easily have an additional 3 to 5 hundred per month.

A guy I work with is younger, early 30s and just had his first kid. He's constantly complaining about daycare costs and how expensive kids are. He walks in with an McD cup, every morning, and spends $20 on lunch when we go out. That's $500 a month. I freely admit, tightening that belt is no fun.

 

[Owen Lucas]

A guy I work with is younger, early 30s and just had his first kid. He's constantly complaining about daycare costs and how expensive kids are.

Might be cheaper for his wife to stay at home and watch the child. Maybe he can even upgrade to Starbucks in the AM?

 

[ZeeOSix]

Working people who can invest through a 401K are probably going to do better over the long run letting the 401K managers handle the funds. Most full time working people don't have the time to constantly research, watch and tweek investment funds like a well managed 401K would provide. My 401K does allow people to decide what kind of basic funds (from more riskty to more conservative/stable) they wanted their money in. Many people at my work would swap their 401K funds a lot trying to get as many gains as possible. And others just went in certain balanced funds and just let it ride. Some guys were basically day trading their 401K until the company put some rules on how often you could swap funds without fees.

 

[Pablo]

Very very few have the discipline and dedication and diligence to pay themselves first.

I contend fight the battle for six months and you just might get hooked. If you increase your savings as much your next raise you will be addicted and on a very good path.

Saving is not an option or a nice to have.

 

[JeffKeryk]

A guy I work with is younger, early 30s and just had his first kid. He's constantly complaining about daycare costs and how expensive kids are. He walks in with an McD cup, every morning, and spends $20 on lunch when we go out. That's $500 a month. I freely admit, tightening that belt is no fun.

Kinda disagree, at least in the longer term. Self discipline leads to contentment. And a big fat 401K or whatever offers Uber contentment.

 

[JeffKeryk]

Working people who can invest through a 401K are probably going to do better over the long run letting the 401K managers handle the funds.

Spot on. Beyond that, I laugh at self directed portfolio management. How can I compete with financial analysts with proven track records in building wealth? I bet my portfolio, managed by the Schwab Wealth Advisory, has components most have never even heard of. When you get to a point, you need qualified help. Do you do your own brain surgery?

Flame suit on...

 

[Owen Lucas]

How can I compete with financial analysts with proven track records in building wealth?

I'm a noob to this mostly due to a focus on index investing but don't a lot of mutual funds almost never beat index funds?

I think the benefit of an advisor, in my case at least, is to structure everything optimally and take advantage of all the maximum contributions, tax loss harvesting etc that I wouldn't know about otherwise.

The guy does buy a few individual stocks his team selects though. SOme have been winners some have not.

 

[Pablo]

Spot on. Beyond that, I laugh at self directed portfolio management. How can I compete with financial analysts with proven track records in building wealth? I bet my portfolio, managed by the Schwab Wealth Advisory, has components most have never even heard of. When you get to a point, you need qualified help. Do you do your own brain surgery?

Flame suit on...

If I’m paying someone they better have extraordinary results 10%+ year after year. Something I can’t do myself. Nor can they do!

Less than that I’ve managed myself. Now I suppose my time is worth something but I enjoy it. I’m far too conservative to match the 20% guys here- but I’m all about capital preservation nowadays.

This said it is starting to take too much time and I want to travel more and lower stress. Plus the trusts will eventually settle. This will be hand off time. With just some trading dollars on side.

 

[Dave Hess]

Tech stocks are rockin'; actually AI tech stocks are rockin'.
And the stock market wealth is in the hands of the few.

It is thought a majority of Americans live paycheck to paycheck. The actual number is tough; while it may not be the majority, it is pretty high.

And pretty scary, IMO.

I’m at all time record highs thanks to this crazy silly AI run / hype.


Economy is still in shambles.

Daily Job Cuts . Com
The Lay Off . Com

 

[JeffKeryk]

If I’m paying someone they better have extraordinary results 10%+ year after year. Something I can’t do myself. Nor can they do!

Less than that I’ve managed myself. Now I suppose my time is worth something but I enjoy it. I’m far too conservative to match the 20% guys here- but I’m all about capital preservation nowadays.

This said it is starting to take too much time and I want to travel more and lower stress. Plus the trusts will eventually settle. This will be hand off time. With just some trading dollars on side.

Define "extraordinary results". At a certain age, it is about preservation, as you stated.
IMO many think they are smart investors but their gains are due to the incredible market boom since about 2010.
If you were in the market, you probably did well.

 

[JeffKeryk]

I’m at all time record highs thanks to this crazy silly AI run / hype.


Economy is still in shambles.

Daily Job Cuts . Com
The Lay Off . Com

AI is not that big a deal; probably all fluff, right? It's stupid.

Well done on your gains!

 

[Pablo]

Define "extraordinary results". At a certain age, it is about preservation, as you stated.
IMO many think they are smart investors but their gains are due to the incredible market boom since about 2010.
If you were in the market, you probably did well.

Over 10% year after year.