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November 20, 2013


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I'm 34 and have net assets of about $280k. We live super frugally and are saving, investing and paying down debt.

That being said, I feel completely late to the world of investing, so it's really hard to realize that time has such a big impact and I should have started 15 years ago. It's like I missed the bus and there's no going back.

Anyway, sorry to be a downer. It's just honestly how it seems sometimes.

The upside is that it really motivates me to teach my kids better money management lessons than I was taught.

Just get started! If you had gotten started at the beginning of the year, you'd be up double digits already. Bull has plenty of room to run for the next few years.


I am quite a bit older than you. Trust me, you have NOT missed the boat. At 34, you have 30+ years until you are eligible for social security !

Keep reading this blog and others like it--educate yourself and--most importantly, live below your means, save and invest.

If you max out your 401K ( $17,500) starting now--and again and again for the next 30 years until you are 64 years old-- (and even if you only get a 5% return)--- your balance will be $1.2 MILLION. That is hardly "missing" the boat.

Start today. Educate yourself. End up a Millionaire.

Good luck.

@ MITM -

Some simple advice to getting started with anything:

The best time to plan an oak tree is 15 years ago. The 2nd best time is today.

Even for people that have poor mathematical skills it is important to understand the power of compounding money.
There is a well known rule called "The rule of 72". It basically says that if you divide 72 by the interest rate on an investment, then the answer is the number of years it takes for that investment to double.

Ex: At 6% return it's 12 years, at 8% it's 9 years, at 9% it's 8 years.

However taking a loss really upsets the "power of compounding" which is why they can be devastating. This is the reason why I learned quickly that to "Buy and Hold" an investment is not the best way to compound money because "Buy and Hold" by it's very nature implies holding an investment during a downtown. There is a term called "Maximum Drawdown" which is the worst drawdown that an investment sustained during a particular period. When your investment is setting at the lowest point since you bought you are experience the maximum drawdown and you have no idea whether it will continue to go down or whether it will start going up.

This is why I always bought investments that had a history of low volatility and I studied their charts daily and set a price at which I would sell immediately. I would then either buy another investment that had a better chart or I would stay out of the downtrending investment until it resumed an uptrend. There are many analytical methods for performing these analyses and I put in my time to become very proficient in using them. I have to admot however that this takes a lot of time and I just didn't have that kind of time while I was working so I made the majority of my money by investing wisely after I had retired. The two terms that describe my techniques are "Fund Selection" and "Market Timing".

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