What are your Investment Rules?

[Lego_Man]

This discussion is an important reminder of how useful PIE funds are with their 28% top rate.

For top tax rate payers (39c) the annual tax benefit is 0.5% per annum on offshore FDR assets versus not holding your stocks in a PIE. With cash and bond returns in NZ now north of 5%, this is even more pronounced as every dollar of interest income is taxed.

The holy grail is a low fee PIE structure.

[SBQ]

This discussion is an important reminder of how useful PIE funds are with their 28% top rate.

For top tax rate payers (39c) the annual tax benefit is 0.5% per annum on offshore FDR assets versus not holding your stocks in a PIE. With cash and bond returns in NZ now north of 5%, this is even more pronounced as every dollar of interest income is taxed.

The holy grail is a low fee PIE structure.

True for the 'HIGH' income earner. For those under the 28% tax bracket = no dessert for them. And just as i've tooted before, the rich in NZ get all the benefits.

[777]

The US 401k plan has the option for paying tax on the return as you go and then getting it tax free at the end.

[SBQ]

The US 401k plan has the option for paying tax on the return as you go and then getting it tax free at the end.

ROTH-401k plans are not very common for the simple fact, there's very very little benefit to the person saving for retirement. I can only think of if the person is young, and 'anticipates they will be paying income taxes at a higher tax rate AT retirement, then that would make sense to do ROTH-401k. But no one with any certainty can predict what will happen in 30 or 40 years time. In a similar way, another reason for ROTH-401k is if you live in a state where income taxes are low (ie states that have no state income tax), AND you INTEND to move to another state that has HIGHER income taxes during retirement, then ROTH-401k would make sense.

There are other issues such as if future income taxes will continue to rise. One that chooses a ROTH-401k vs the Traditional must ask these bets, "will income tax rates go up in the future?" Unfortunately no one really knows and no financial advisor would accept clients to go ROTH-401K on the basis of a "maybe" factor. Individual circumstances always change and when you're talking 30 or 40 years out into the future, a lot can happen.

One thing certain is during retirement, seniors typically have lower incomes and therefore benefit from their retirement fund withdrawals. It makes absolutely no sense for a top income earner in their younger years, to be paying taxes up front ; when in the long term future, they will not be in that same tax bracket. But that's what we have here in NZ with Kiwi Saver.

[kiora]

"I look for three things: team, TAM [total addressable market] and traction"
https://finance.yahoo.com/news/crypt...100035459.html

[kiora]

For those in need of some advice (if the Greens don't get it first).

From Bruce Sheppard

"Quick check list of things to help you survive getting rich

Define what success looks like so you can pat yourself on the back.
Avoid the envy of others. Celebrate your own success.
For at least 12 months post a significant change in your wealth, do nothing. Pat yourself on the back feel good about it, make no decisions on anything big.
Work out who to trust, and not. Make sure you find a trusted advisor if you do not already have one. Someone who you will listen to when they tell you, you are being a dick head.
Avoid arrogance and being flashy.
Remember to keep walking, i.e. don’t get so scared that you do nothing.
Start spending time with your family and the preparation of them for what is coming down the pipe at them.
But above all else, remain real. A purpose of wealth is choice and freedom. Learn to not give a f*ck. Compulsory reading: The subtle art of not giving a f*ck, click here for the book. (This link no longer appears to work so here's author Mark Manson's website, Ed).

https://www.interest.co.nz/opinion/1...row-money-once

[kiora]

"The Heretics of Finance."
https://www.amazon.com/gp/customer-r...SIN=1576603164

[kiora]

"25 JESSE LIVERMORE TRADING RULES : ULTIMATE GUIDE TO THE BOY PLUNGER"
https://stocksoftresearch.com/jesse-...s-boy-plunger/

[kiora]

"As Charlie Munger said, over a long time, it’s hard for a stock to earn a much different return than the business that underlies it earns.

But that’s in the long term. In the short term, beta can significantly affect our returns."

https://twitter.com/10kdiver/status/1378421887890456577

[Valuegrowth]

It’s really interesting to read some of his rules and how he cornered the cotton market. BTW I have read his book “Reminiscences of a Stock Operator.”

“1. NOTHING NEW EVER OCCURS IN THE BUSINESS OF SPECULATING OR INVESTING IN SECURITIES AND COMMODITIES.

Another lesson I learned early is that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again. I’ve never forgotten that.

What Jesse means is that the same market moves and patterns occur over and over again. Markets are run by people, which means the same patterns will always occur. Throughout history we have seen the same speculative bubbles and market crashes time and time again. From the South Sea Bubble, to Tulip Mania, to the depression, to the 2008 credit crisis.

These crashes and bubbles are just an inevitable feature of the markets.

humans in the first place. And often, when a major market event takes place, the computer programs are programmed to turn themselves off.

Jesse Livermore lived through the Great Depression and saw some of the most difficult trading conditions ever seen. Still, he was able to create massive fortunes trading volatility and trends.

Even if no day is ever the same, Jesse Livermore knew that markets and market patterns repeat themselves and investors act out the same behaviours year in year out. By recognising this, you can be start to believe in your ability to learn and adapt to the swings of the market.

4. YOU DON’T HAVE TO TRADE

After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!”
“Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money.

8. DON’T TRADE TOO LARGE OR RISK TOO MUCH

If you can’t sleep at night because of your stock market position, then you have gone too far. If this is the case, then sell your position down to the sleeping level.

25. AVOID GET-RICH-QUICK SCHEMES.

People who look for easy money invariable pay for the privilege of proving conclusively that it cannot be found on this earth.

The sucker has always tried to get something for nothing, and the appeal in all booms is always frankly to the gambling instinct aroused by cupidity and spurred by a pervasive prosperity."

https://www.warriortrading.com/jesse-livermore/

On two occasions, Livermore cornered the Chicago cotton market.

"The US government, specifically President Woodrow Wilson, took notice of this and called Livermore to the White House to discuss the matter.
Reportedly, when asked why he cornered the market, he responded with “to see if I could, Mr. President.

Jesse Livermore reportedly sold the position at roughly breakeven as a favor to the United States because he didn’t want to cause harm to the economy.”

"25 JESSE LIVERMORE TRADING RULES : ULTIMATE GUIDE TO THE BOY PLUNGER"
https://stocksoftresearch.com/jesse-...s-boy-plunger/