# How to become financially literate?



## ArkRoyal (Nov 21, 2013)

*The Short Question:
*
My girlfriend and I are 30 years old. We are financially responsible and disciplined savers, but we’re illiterate when it comes to investing. We currently have $40,000 sitting in a savings account that we contribute $4000 to every month. We have no mortgage or debts, and no other assets (other than our cars – which we don’t consider to be assets). She works for a hospital and I work for the public sector, so we both pay into good pension plans. At this stage, should we be thinking about investing some of our savings? Where do we start?

*The Long Question:
*
My girlfriend and I are both 30 years old. I graduated from grad school in 2011 with $23,000 in student loans, my girlfriend graduated with $30,000 in 2012. We were fortunate enough to be able to live with our parents after graduation and used nearly our entire incomes to pay back our debts. I repaid my student loan in Nov 2012, she just finished paying hers back in September 2013.

Our plan was to purchase a home together (encouraged by our parents as well). Our down payment would have been sourced from the little money I had saved after repaying my loans ($25,000) and the remaining amount would have been loaned to us by both our parents. However, we came to our wits and decided that we were not willing to leverage ourselves to such an extreme. We decided to rent together and save our own down payment rather than borrow it. However, after much research, I'm no longer willing to purchase a home in what I view to be overheated real-estate market in Toronto (by most accounts 20%-30% over valued). It seems far cheaper to rent a given property in the 0-5 year time frame than actually own it. We are content renting for now and saving instead. Our stats:


Combined Gross Income: $155,000/year (net $8500/month)
Rent: $2000 (it’s Toronto)
Debts: None
Assets: $40,000 in a bank account
Savings Rate: $4000 a month into a savings account each month


Just putting away $4000 into a bank account for the next few years is probably not the best strategy. Where would you suggest someone like us who have nearly zero knowledge in investing get started? What are some good resources? What would you do if you were in our shoes?


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## wendi1 (Oct 2, 2013)

Well, if it were me (and you understand lots of people are not), I would rent, save the 4K (a month! - wow), maximizing the TFSAs of both of you, and putting the rest in RSPs for both of you. This money, since it is earmaked for short term spending (0-5 years for house downpayment), would be put into HISAs at the best rate I could get that was covered by the CDIC.

Once I had $25K in each RSP, and had maxed out the TFSAs, I would start putting the remaining money in my RSP into the stock market, for eventual retirement. You have lots of time to learn about the stock market before that happens. Rob Carrick has a good book "The Good, the Bad and the Ugly", David Chilton's "The Wealthy Barber Returns", and the magazine "Moneysense" are good places to start. I also like Gordon Pape. Try the library.

For me, short term money belongs in a high interest savings account - and that is wedding money, house money, maternity leave money, and the like. Medium and long term money belongs in the stock market (US and Canadian), at the lowest cost you can find.

Good luck! And good for you for asking the questions before you get yourselves in trouble.


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## andrewf (Mar 1, 2010)

Do you want to buy a home in 5 years?

A good resource for getting started in the Moneysense Guide to the Perfect Portfolio, available on newstands now and on the web. I think it's great and have recommended it to a few people and it's pretty cheap. The guy who wrote it writes the Canadian Couch Potato blog, which is also a great resource. The book outlines info that is mostly on the blog, but in a more logical/organized format.

If your goal is to buy a home in the next few years, you can probably save enough for a downpayment (20% of what you would reasonably want to spend on a home) in something fairly cash-like (savings account, GICs, etc.). Don't forget to make RRSP contributions toward First Time Homebuyer Plan.


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## Siwash (Sep 1, 2013)

Do yourself a favour and buy *Millionaire Teacher...*


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## Oldroe (Sep 18, 2009)

Just be aware that a 20-30 % correction in the real estate market doesn't mean good deals. Most of the property's that are lost back to the mortgage lender are run done and need lot's of repairs.

Any that did have a good down payment and there fore cheaper to purchase are scooped by real estate agents.


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## Rusty O'Toole (Feb 1, 2012)

One of the world's most successful investors has answered this question more than once (Warren Buffet)

How do you learn to invest successfully?

Learn value investing. The Intelligent Investor by Graham is the best investing book ever written. Spend the time to study the stock market.

But there are thousands of stocks on the list! How can you learn them all?

Start with the As.

What if you don't have the time or the desire to do that?

Index everything. Invest in index funds.


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## alingva (Aug 17, 2013)

ArkRoyal said:


> *The Short Question:
> *
> My girlfriend and I are 30 years old. We are financially responsible and disciplined savers, but we’re illiterate when it comes to investing. We currently have $40,000 sitting in a savings account that we contribute $4000 to every month. We have no mortgage or debts, and no other assets (other than our cars – which we don’t consider to be assets). She works for a hospital and I work for the public sector, so we both pay into good pension plans. At this stage, should we be thinking about investing some of our savings? Where do we start?


The first thing is to read book. The LAST thing is to invest. You will have plenty of time to lose money. If you get advice from an advisor - think or ask how he/she benefits from his/her advice to you


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## My Own Advisor (Sep 24, 2012)

Agreed with other comments.

Read and read and read some more. 

Here are some books I've really benefited from:
http://www.myownadvisor.ca/books/

Highly recommend from this list:

Millionaire Teacher
The Wealthy Barber Returns
The MoneySense Guide to the Perfect Portfolio
The Investment Zoo
The Behavior Gap

Just putting away $4000 into a bank account for the next few years is probably not the best strategy. 

Agreed, but saving is more important than investing. You can't invest what you don't save.

Where would you suggest someone like us who have nearly zero knowledge in investing get started? 

See above.

What are some good resources? 

See above.

What would you do if you were in our shoes?

You were smart not to rush out and buy a home. Don't leverage yourself crazy. Keep saving and based on your high-incomes, look at putting money into an RRSP account to defer taxes. I would also look into starting a Tax Free Savings Account (TFSA) for both of you. Try to maximize your contributions to that account every year. I recently wrote about some TFSA basics here:
http://www.myownadvisor.ca/2013/11/tax-free-investing-tfsas-101/

Good on you to ask a bunch of questions before diving right into investing. The more you ask, the more you can know and make your own informed decisions.

Good luck!


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## Janus (Oct 23, 2013)

ArkRoyal said:


> Where would you suggest someone like us who have nearly zero knowledge in investing get started? What are some good resources? What would you do if you were in our shoes?


I'd start with the intelligent investor. Its language is a bit old-timey but it presents the best possibly way to think about the market as an investor. And aside from that, start reading about equity markets. Find what interests you and chase it (from a knowledge standpoint) - if you've got even an ounce of intellectual curiosity you'll find it becomes an enjoyable hobby.


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## Jon_Snow (May 20, 2009)

To the OP, you could do much worse than hang around this forum.... I've probably learned more here than all the investing books I've read combined.

There are some incredibly knowledgable folks hangin' around.


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## Islenska (May 4, 2011)

Reminds me our first foray into financial management.....
Didn't go the mortgage route, hey no problem I took out a personal loan on a house (why, I'm not sure), and it was the dumbest move ever made.

The house was a disaster, no proper foundation, plumbing, electrical troubles,,,,on and on. When we decided to move upwards for a brand new proper house, my old clunker wouldn't sell, it was that bad, so ended up renting it out and the renters were lets say not "upscale".

Lo and behold out of the blue ,kids playing with lighters set the junkbox on fire, no one was hurt and I collected a 30% premium on the fire insurance. Actually made good money on the first real estate go-around. Sometimes "the best laid plans..." but I have paid close attention to business acumen since those start out days and realize I was awfull lucky at the get go!


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## ArkRoyal (Nov 21, 2013)

I really appreciate the welcoming and helpful responses from everyone. More than enough resource suggestions to keep me busy for the next little while.

We were planning on purchasing a home because it was "the smart thing to do" and that "renting amounted to throwing away money" and that "We had to act now because we'd be priced out of the market forever", etc. I will own a home, but it will have to make financial sense first. Our primary goal in managing our money is to secure our futures financially. After our marriage, if kids are in our future (and we're not yet decided on that), I'd like for my wife to have the choice to stay home for a few years to raise the child (if that's what she desires). I have a hobby/passion that one day might transition well into a business and being financially secure is a personal perquisite. I believe being setup financially will reduce stresses and increases chances for success in almost anything.

We're saving a healthy portion of our income and we don't feel like we're sacrificing much at all. It's not easy however - there's a lot of judgement from people around us. None of our friends rent and because we do, the assumption is that we're struggling. The people around us spend their average level incomes on leasing/purchasing luxury cars, or collecting luxury purses, or going on expensive vacations. Even my father advised me to replace my 10 year old Jetta (well maintained and reliable) with a BMW. :hopelessness:

Great forum:encouragement:


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## My Own Advisor (Sep 24, 2012)

Jon_Snow said:


> To the OP, you could do much worse than hang around this forum.... I've probably learned more here than all the investing books I've read combined.
> 
> There are some incredibly knowledgable folks hangin' around.


True enough


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## AltaRed (Jun 8, 2009)

ArkRoyal said:


> Just putting away $4000 into a bank account for the next few years is probably not the best strategy. Where would you suggest someone like us who have nearly zero knowledge in investing get started? What are some good resources? What would you do if you were in our shoes?


Others have offered suggestions about how to become financially literate, and investing savvy. That aside, no one has advised you that if you plan on buying in the next 3-5 years, you need to protect your capital. Which means finding interest bearing investments that mature before, or about, the time you wish to use the funds as a down payment. You can certainly use both a TFSA and RSPs for that purpose, but stay out of equities in all forms (stock, preferred shares, mutual funds, ETFs), and stay out of any kind of bond mutual funds and bond ETFs. Those all have capital risk in the time frame you are considering. 

You should look up sources of optimizing interest received and there are lots of suggestions on http://www.highinterestsavings.ca/ Basically, High Interest Savings Accounts (HISA) and possibly a GIC ladder (of 1, 2, 3 year GICs) at appropriate CDIC insured institutions. Places like Home Trust, Peoples Trust and Canadian Direct Financial offer some of the best rates (without going to less secure Credit Unions). The major banks, especially at the branch level, do not usually offer the best rates, except sometimes on short term promotional rates.


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## andrewf (Mar 1, 2010)

^ I suggested that in post 3.

If you have a definite plan to buy a house in the near future, it's wise to keep it somewhat liquid and low risk.


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## MoneyGal (Apr 24, 2009)

It was also explicitly in the second post!


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## Causalien (Apr 4, 2009)

MoneyGal said:


> It was also explicitly in the second post!


Reading is good, but nothing beats trial by fire. This is the route I recommend.

1. Set aside $3000. This is it for your next 2 years. Have your spouse act as the gate keeper. To get more money in, you need to convince her.
2. Buy REIT. Learn how to value REIT and watch it grow. This will satiate your horniness to buy houses and teach you how ridiculous the fees are
3. Set aside $10000 spread it to 4 stock investments. Pick a technology stock, an energy/resource stock, a bank stock and a ETF. You should spend 5 years in this
If you made money, then liquidate everything to use and go into the next phase. Otherwise, go to couch potato. You are not good enough of a trader.
4. Buy bonds by borrowing revolving credit from the bank. 1 year
5. Buy and sell futures: 2 years day trading
6. Buy and sell options. 3 years monthly options

I recommend taking two months at the beginning of each phase to read up on the security of the new stage.
Once you've done until level 6 and still came out ahead of the benchmark. Then you are financially independent. Kudos if you lived through a big collapse and still came out ahead. This won't be quick and will be a long and painful road, but it's better if you know this than later. Stock market is not your get rich quick scheme.


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## AltaRed (Jun 8, 2009)

MoneyGal said:


> It was also explicitly in the second post!


In terms of what (second and third posts), but I did not see clear reasons given as to why. Protection of capital is above and beyond the most important thing.


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## GoldStone (Mar 6, 2011)

Causalien said:


> This is the route I recommend.
> 
> 1...
> 2...
> ...


I strongly disagree with these recommendations. Way too complicated and totally unnecessary for 95% of DIY individual investors. Couch potato should be the default strategy for most. Not the last option after everything else fails.

Financial literacy in 4 simple steps (_the rest is details_):

1. Build your career or business. Make tons of money.
2. Try to keep most of it by living frugally.
3. Invest the savings in a low-cost couch potato portfolio.
4. Stay the course and let compounding work its magic.

#1 is where 30 year olds should be focusing all their energy. Not trading futures and options.

My wife and I came to Canada at the age of 30. Our NW when we landed here was 20K. Fast forward 16 years. We are 46. Our portfolio is _almost_ large enough to fund a retirement. We never traded futures or options. We haven't dabbled in the individual stocks until very recently.

Keep it simple!


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## Plugging Along (Jan 3, 2011)

GoldStone said:


> I strongly disagree with these recommendations. Way too complicated and totally unnecessary for 95% of DIY individual investors. Couch potato should be the default strategy for most. Not the last option after everything else fails.
> 
> Financial literacy in 4 simple steps (_the rest is details_):
> 
> ...



+1. This is what we did. #1 is one of the keys to real wealth. We actually focused totally on the first point, only a little on being frugal, but always living below our means, just not much. One can only save so much if your income isn't average or low. Earning potential is unlimited in my mind.


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## james4beach (Nov 15, 2012)

ArkRoyal said:


> The Short Question:


You're doing _great_!

You're miles ahead of most others your age. You have no debt, and you have significant savings... this is really excellent. My first advice is: keep doing what you're doing. Keep saving some of your income, just put it in a high interest savings account as a "default" place. You can do a lot worse than a high interest savings account.

Don't be too hard on yourself by thinking that you could be doing "a lot more". Sure, read more and learn more, but given how far ahead of the average person you are, there really shouldn't be too much pressure on you.

As you read books and online advice, keep in mind that most of those people have an agenda and a conflict of interest in the advice they're giving. Generally, they have a product to sell or have an intrinsic bias because they previously worked in an industry such as the investment/mutual fund industry (and probably were indoctrinated by their career exposure). It's extremely rare to find financial advice that is free from this kind of bias and conflict of interest.

So my main advice is: keeping doing what you're doing. Save money, and high interest savings is really not too bad at all.
*Second advice is*: be a critical thinker, as you read "advice". This is key: think critically and seek several points of view, especially differing ones.

Any time you hear a convincing argument about something, your first reaction should be to go and seek contradicting opinions. Then you can read both and weigh their merits. For example, let's say you read a book that tells you that you absolutely have to invest in mutual funds. This should prompt you to start seeking answers to the question: what are reasons I should not invest in mutual funds? What are down sides and pitfalls of mutual funds? Here's a useful google search to do: what are things to beware of when investing in X?

The people with products to sell and other ulterior motives generally don't take time to address those questions. You must seek the answers yourself. A lot of investment ideas sound good when naively presented, with only the positives emphasized. The goal of a salesmen is to hook your interest with those positives; not to clearly present the downsides. _Beware of salesmen._



> Just putting away $4000 into a bank account for the next few years is probably not the best strategy


It's not a terrible strategy. You're already so far ahead of the average; doing the above will put you even farther ahead of the average.


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## Causalien (Apr 4, 2009)

GoldStone said:


> I strongly disagree with these recommendations. Way too complicated and totally unnecessary for 95% of DIY individual investors. Couch potato should be the default strategy for most. Not the last option after everything else fails.
> 
> Financial literacy in 4 simple steps (_the rest is details_):
> 
> ...


Oh, I thought the OP wanted financial literacy. I just maps out the road for him to take to learn everything about the financial world at minimal loss. Otherwise I'd say go all in since step 1.


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## andrewf (Mar 1, 2010)

No offense caus, but that is terrible advice.


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## alingva (Aug 17, 2013)

Jon_Snow said:


> To the OP, you could do much worse than hang around this forum.... I've probably learned more here than all the investing books I've read combined.
> 
> There are some incredibly knowledgable folks hangin' around.


Many books are written by billionaires, you will learn more from them than from regular folks.


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## GoldStone (Mar 6, 2011)

Causalien said:


> Oh, I thought the OP wanted financial literacy. I just maps out the road for him to take to learn everything about the financial world at minimal loss. Otherwise I'd say go all in since step 1.


Financial literacy has little to do with trading futures or options, or even picking stocks.


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## GoldStone (Mar 6, 2011)

alingva said:


> Many books are written by billionaires, you will learn more from them than from regular folks.


Here's a Forbes interview with Mohnish Pabrai, one of the greatest value investors alive and a self-made billionaire.

Start at 15m33s mark:

http://youtu.be/oaL2v1nVokw?t=15m33s

Transcript:

*Forbes:* What’s an individual investor to do? You have some unique advice for individual investors.

*Pabrai:* Well the best thing for an individual investor to do is to invest in index funds. But even before we go there, you know, Charlie Munger was asked at one of the Berkshire annual meetings by a young man, “How can I get rich?” And Munger’s response was very simple. He said, “If you consistently spend less than you earn and invest it in index funds, dollar-cost average,” because you’re putting in money every paycheck, he said, “that in, what, 20, 30, or 40 years, you can’t help but be rich. It’s just bound to happen.”

And so any individual investor, if they just put away 5%, 10%, 15% of their income every month, and they just bought into the low-cost index funds, and just two or three of them, to split it amongst them–you’re done. There’s nothing else to be done. Now if you go to active managers, the stats are pretty clear: 80% to 90% of active managers underperform the indexes. But even the 10% or 20% who do, only one in 200 managers outperforms the index consistently by more than 3% a year. So the chances that an individual investor will find someone who beat the index by more than 3% a year is less than 1%. It’s half a percent. So it’s not worth playing that game.

*Forbes:* And in terms of index funds, S&P 500 or–

*Pabrai:* I’d say Vanguard is a great way to go. I think you could do S&P 500 index. You could do the Russell 2000. And if you wanted to, you could do an emerging-market index. But you know, I think if you just blend those three, one-third each, you’re done. And if you’re in your 20s and you start doing this, you don’t need to even go into bonds and other things. You can just do this for a long time and you’ll be fine.


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## james4beach (Nov 15, 2012)

Interesting that Pabrai, who runs a series of hedge funds, advises just investing in the stock index.

Makes me wonder what value he thinks his hedge funds add. After all, he takes 25% of the performance as his fee... something doesn't add up.

It's really hard to trust the advice of people like this.


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## GoldStone (Mar 6, 2011)

What value he thinks he adds? Ha ha ha. His compounded rate of return from 1995 to 2013 is an astounding 26%.

His fund has long been closed to the new investors.


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## GoldStone (Mar 6, 2011)

BTW:



james4beach said:


> It's really hard to trust the advice of people like this.


That's just a drive by smear. You don't like the message so you attack the messenger. You don't know much about him, do you?


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## Causalien (Apr 4, 2009)

GoldStone said:


> Financial literacy has little to do with trading futures or options, or even picking stocks.


I see. Well, financial literacy for me means learning everything about how the financial system works.
Without futures, options and stock, it's just a simple summation game. Income > spending is good enough.


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## Jon_Snow (May 20, 2009)

alingva said:


> Many books are written by billionaires, you will learn more from them than from regular folks.


I stand by what I said. I have learned more from participating in this forum than by reading financial literature. That has been MY experience. By all means, if the billionaires help you more, have at em'....


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## GoldStone (Mar 6, 2011)

Causalien said:


> I see. Well, financial literacy for me means learning everything about how the financial system works.
> Without futures, options and stock, it's just a simple summation game. Income > spending is good enough.


You have a very unconventional view of what financial literacy means. I agree with andrewf, the advice you gave to a newbie investor is just terrible. Too bad you can't see it.


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## humble_pie (Jun 7, 2009)

Ark many persons come to this forum with some savings, sometimes no savings, sometimes varying degrees of debt or mortgage encumberment. Sometimes they have prior experience with financial advisors who, they feel, did not help them.

what they all have is a desire to learn how to manage financially throughout their entire life cycle. Just like yourselves.

i for one don't think that "learning" to "trade" futures or options, or storing money endlessly in non-paying bank accounts, are modalities that will help such persons learn anything.

usually - at least here in this forum - such newcomers to finance are guided to index funds or to core etf ownership programs. These are the famous couch potato portfolios.

i believe there is no substitute for this step. It can remain a lifetime policy, or it can be a series of stepping-stones. Perhaps, at some date in the future, with a solid core of index products well in hand, investors who want to will hive off some dollars to buy individual stocks.

just upthread, Ark, you will see goldstone & plugging along recommending sensible plans for your next 10 years. There you have it. You could go easy or even omit the bond portion of a couch potato portfolio strategy because of your pensions, though.

btw in both your cases, you & your friend should be funding & maxing both TFSAs & RRSPs, should you not? at least the higher earner between you should go for an RRSP in order to obtain the tax relief? we're late in the year now, so it's time to set aside & build up those contribution amounts to registered plans.

you might decide to go for the TFSAs first, since these can easily be invested in quasi-liquid HISA or shortish-term GIC products, in case you change your mind about housing & decide to buy a home in the near future.

on the other hand, it's possible that the higher income earner in your couple would benefit most from the RRSP tax reduction for 2013 that could be achieved if you took this route. An RRSP includes the possibility of withdrawal for home ownership purposes. Meanwhile, TFSA accounts, as you know, don't offer any income tax reduction benefits at the time of contribution.


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## donald (Apr 18, 2011)

I say jump in and learn(via-real life experience)I did this,have made some mistakes along the way,but.....the market will teach you!Investing is not something that ever ceases,this is life learning to the end.
I made some mistakes with,not selecting the proper accts ect but rapidly learned.
I went into straight individual stock selection(huge learning curve)but how the hell else are you going to do it?
I for one don't agree with reading books for the next year and than going a(e-series)b(etfs/couch)maybe c(individuals stocks)....and letting investing blog heads scarce/confuse you ect,scrap it,get down and dirty and get on with it(who cares if you lose 10-15%,early with lessons,price of capital markets school.
I never went to university but i will bet this will challenge/intellect, satisfy you,more than any class you can take,it is raw and clear cut(take no mercy).
Like learning to swim(you get throw'n off the dock as a near toddler and you learn to paddle)mo......dont do the conventional dribble of following the bullshit mantra.Ya learn by doing(even if you fake it till ya make it)do not over think.you will figure it out on your own as you go.


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## Causalien (Apr 4, 2009)

GoldStone said:


> You have a very unconventional view of what financial literacy means. I agree with andrewf, the advice you gave to a newbie investor is just terrible. Too bad you can't see it.


Yeah, I always advice the path to become an expert. Just my way and it fits people with the same temperament. Some people seek this type of knowledge some people don't.

I can see it is terrible from your point of view. But from mine, it is the safest way to learn all the in and outs for just $15,000. Less than your college education. Especially if you've already maxed out your expertise in the job of your choosing.


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## the-royal-mail (Dec 11, 2009)

I love this OP! Glad to hear that someone saw through rhetoric and realized the system was trying to scam them. Well done on continuing to rent and saving money!

$4000 a month is a lot of money. Even if you max out your TFSAs that will still leave a lot of money. In theory you can certainly afford a house but then you won't have as much money. In the meantime, I think about all you can do is indeed invest the money. Index investing can be fine but the results are far from guaranteed and do not work for everybody. And the amount of money you can save is too great to collect 1% on.

I would suggest learning about stock investing and consider getting a brokerage account. Your bank probably offers one and the fees will be good if you have more than $50K in the account.


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## Ihatetaxes (May 5, 2010)

Causalien said:


> Yeah, I always advice the path to become an expert. Just my way and it fits people with the same temperament. Some people seek this type of knowledge some people don't.
> 
> I can see it is terrible from your point of view. But from mine, it is the safest way to learn all the in and outs for just $15,000. Less than your college education. Especially if you've already maxed out your expertise in the job of your choosing.


How many millions have you made following your own plan? Looks like a train wreck to me. To the OP, I think any 30 year old is lucky that passive index investing is now a common and popular choice. I had to go through the hiring and firing of a lame *** advisor more concerned about padding his own income, moving on to buying and selling mutual funds and individual stocks I really had no business in buying (acting like a sheep and following the herd) and finally realizing I should be a pseudo-index guy (90% indexing with a few non-potato moves thrown in). Now our portfolio is growing by over $100k/year and the future looks bright.

Best advice I think I would give anyone in their 20's or early 30's is don't settle with your career. If you aren't happy and aren't making good money (or see the possibility to be making six figures by age 40) then find a way to change what you are doing. Seriously consider an entrepreneurial venture if you have the drive and vision to build something. All the saving and investing strategies are great but if you can amplify your income the rest just gets better too.


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## Rusty O'Toole (Feb 1, 2012)

james4beach said:


> Interesting that Pabrai, who runs a series of hedge funds, advises just investing in the stock index.
> 
> Makes me wonder what value he thinks his hedge funds add. After all, he takes 25% of the performance as his fee... something doesn't add up.
> 
> It's really hard to trust the advice of people like this.


Warren Buffet offers the same advice. He too beats the averages, and stopped taking new investors in 1963.

1) It is really hard to beat the averages. Very few managers do it consistently over the years.

2) The odds favor buying index funds

3) Buffet and a few others are the exceptions.

4) But you can't invest with them because they are not taking new investors (you can buy Berkshire Hathaway stock though)


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## Causalien (Apr 4, 2009)

Ihatetaxes said:


> How many millions have you made following your own plan? Looks like a train wreck to me. To the OP, I think any 30 year old is lucky that passive index investing is now a common and popular choice. I had to go through the hiring and firing of a lame *** advisor more concerned about padding his own income, moving on to buying and selling mutual funds and individual stocks I really had no business in buying (acting like a sheep and following the herd) and finally realizing I should be a pseudo-index guy (90% indexing with a few non-potato moves thrown in). Now our portfolio is growing by over $100k/year and the future looks bright.
> 
> Best advice I think I would give anyone in their 20's or early 30's is don't settle with your career. If you aren't happy and aren't making good money (or see the possibility to be making six figures by age 40) then find a way to change what you are doing. Seriously consider an entrepreneurial venture if you have the drive and vision to build something. All the saving and investing strategies are great but if you can amplify your income the rest just gets better too.


Trainwreck? Where did you get that idea from?

How many millions have you made?


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## Ihatetaxes (May 5, 2010)

Causalien said:


> Trainwreck? Where did you get that idea from?
> 
> How many millions have you made?


Zero trading options and futures. :rolleyes2:

If you want to compare self made assets or net worth though just let me know.


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## Taraz (Nov 24, 2013)

*You dodged the bullet by not buying a house.*

I agree. The nice thing about index funds (vs. real estate or individual equities) is that they require very little effort, so you can focus on work. Never underestimate simplicity; when you start getting into energy-intensive endeavors (especially rental property, or owning your own property), it distracts your from your career (which is where you should be focused). 

As long as you have a decent landlord, I'd invest in index funds and forgo property until you can purchase with cash (avoiding CMHC, mortgage setup fees, and interest). Also, avoiding a house purchase gives you the freedom to move at short notice when a career opportunity arises. Being a homeowner isn't all it's cracked up to be, especially since renting the money from the bank often costs more than renting the house from the landlord.




GoldStone said:


> Here's a Forbes interview with Mohnish Pabrai, one of the greatest value investors alive and a self-made billionaire.
> 
> Start at 15m33s mark:
> 
> ...


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## Causalien (Apr 4, 2009)

Ihatetaxes said:


> Zero trading options and futures. :rolleyes2:
> 
> If you want to compare self made assets or net worth though just let me know.


Nah, not interested in a match of who's dick is bigger, but you seem to enjoy it and like to imply things to smear people. What have you staked your reputation on?

You still hasn't answered where the notion of train wreck is from. Because I am trying to decide if I should be mad if it is a dig at my reputation as a trader/investor or agree with a thumb up if you are pointing out the train wreck relationship I have with my ex. Or is this another made up thing in your dreams?


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## Eclectic12 (Oct 20, 2010)

donald said:


> I say jump in and learn(via-real life experience)I did this,have made some mistakes along the way,but.....the market will teach you!Investing is not something that ever ceases,this is life learning to the end.
> 
> I made some mistakes with,not selecting the proper accts ect but rapidly learned.


 ... there's a point in time to learn from experience but learning first plus limiting the risk to what can be lost without killing one's finances is also important.

It's one thing to pick the wrong account so that a bit extra is being paid ... it's quite another to decide to learn by doing where the "doing" is to stick to one stock or perceived area of expertise with significant money.




donald said:


> I went into straight individual stock selection(huge learning curve)but how the hell else are you going to do it?


 ... learn at one's own pace and move into it as one is comfortable. Would you advise a would-be mechanic to learn their trade by skipping taking courses and diving into rebuilding an engine?




donald said:


> I for one don't agree with reading books for the next year ...


 ... depends on the time available and how fast the learning is happening. The key is to at least understand the basics.




donald said:


> ... (who cares if you lose 10-15%,early with lessons,price of capital markets school ...
> Ya learn by doing(even if you fake it till ya make it)do not over think.you will figure it out on your own as you go.


If one can afford 10-15%, I suppose that's okay ... though the losses may vary. Those I know who dived in then in short order complained about 30 to 60% losses.

So yes - one learns the most by doing but that does not require an all or nothing approach.


Cheers


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