1407: Taking Advantage of Mr. Bear by JL Collins on Tax Avoidance Investment Strategies
Optimal Finance Daily
JL Collins of JLCollinsNH.com talks about taking advantage of Mr. Bear. Episode 1407: Taking Advantage of Mr. Bear by JL Collins on Tax Avoidance Investment Strategies Mr. Collins is a senior executive with extensive P&L experience and a proven track record of growing revenue and profitability, integrating acquisitions, launching new products, developing and implementing business plans, creating powerful marketing strategies, building strong customer relationships and building effective teams. He is experienced in a broad range of markets including technology, automotive, investments, design engineering, electronics manufacturing, construction, horticulture and energy. Mr. Collins is also an accomplished consultant, author and speaker. He is retired, but continues to write on his blog. The original post is located here: https://jlcollinsnh.com/2020/03/09/taking-advantage-of-mr-bear/ Please Rate & Review the Show! Visit Me Online at OLDPodcast.com and in The O.L.D. Facebook Group Join the Ol' Family to get your Free Gifts and join our online community: OLDPodcast.com/group Interested in advertising on the show? https://www.advertisecast.com/OptimalFinanceDaily If you’re interested in investing, you need to join OurCrowd. The OurCrowd account is FREE, just go to ourcrowd.com/OFD --- Support this podcast: https://anchor.fm/optimal-finance-daily/support
When it comes to investing strategies, one of the most influential books available claims that if you keep it simple, you'll actually do better. Here to talk about the philosophy behind his investment strategy is one ofChooseFI's most requested guests, JL Collins, author of The Simple Path to Wealth, and popular blog series, The Stock Series. The influence of JL Collins cannot be overstated. The content he produced changed the trajectory of Brad's life and made him feel comfortable investing. In 2011, JL's daughter was in college but was turned off of all things financial after he pushed too hard. Because he wanted her to know how to invest and handle money, he decided that he needed to write it down for when she was ready. It was suggested that he archive the advice in a blog and share with friends and family. Much to his surprise, strangers began to find it and he quickly had an international audience. The book came out of the growth of his blog. Always having the ambition to write a book, The Simple Path to Wealth became a more organized and concise compilation of his blog articles. Four years later, 2020 has been its best selling year and the success has greatly exceeded expectations. Readers have responded positively to the authenticity of his writing, which he believes is because he was writing for his daughter. Now that she is a young adult, she's been receptive to the information and is now on board with the strategy presented. For Brad, investing always seemed like something that required thousands of hours of understanding and special insight until he began reading The Stock Series on JL's website. It gave him hope that he had a chance at long-term success for wealth that would last for many decades. JL acknowledges the method in the book is the last and best method he came to after going through other iterations involving picking stocks and actively managed funds. The other methods work, but they are harder and a lot less powerful than a low-cost index fund. JL says this method isn't just for beginners, it's the best way to invest for everybody. The most powerful way to invest is the simplest and the easiest. He realized that not everyone wants to think about investing the way he like thinking about it. Most people know it's important, but have more important things they want to do with their lives. His approach allows them to set it and forget it. The investing world is complex by design because the more difficult it is to understand, the more Wall Street can charge in fees. Jack Bogle, the founder of Vanguard, was the first one to invent index funds and talk about index fund investing. Because outperforming the market as a whole is extraordinarily difficult, only 20% of fund managers in any one year can do it. After 30 years, the percentage of fund managers that can do it is less than 1%. Even Warren Buffet wrote in his 2013 Berkshire Hathaway shareholder letter that he would advise the trustee of his estate to invest 10% in government bonds and 90% in a very low-cost S&P 500 index fund. A mutual fund, or similarly, an Exchange Traded Fund (ETF), takes money from a lot of investors and lumps it together to invest it in something. The S&P 500 index invests in the 500 largest US companies that make up the S&P index, while an actively managed mutual fund may focus on a different parameter, such as energy or technology. An actively managed fund attempts to pick stocks that over time will outperform the index which is an expensive route and reflected in what the investor pays for the fund, called the expense ratio. Every fund has an expense ratio, but what matters is how high it is. Because index funds don't have those expensive fund managers, the fees are very low. JL's most recommended Vanguard fund, VTSAX, has a 0.04% expense ratio. Actively managed funds average 1%. The impact 1% has compounded over time is dramatic. On a $1M portfolio, you may be withdrawing 4%, or $40,000, each year, while 1%, or $10,000, goes into the pockets of those managing your portfolio. That's money not going to you or working for you by growing over time. In an article Brad wrote several years ago, he looked at the impact fees had on an investment portfolio. With a 1% expense ratio and/or a 1% fee for assets under management, the fees over a 40-year period cost millions of dollars. Owning index funds means you own all of the companies within that index, both the winners and the losers. VTSAX is Vanguard's total stock market index fund which invests in virtually every publicly-traded US company. There is very little difference between VTSAX and the S&P 500 index fund since VTSAX is capweighted, meaning it owns more of the largest companies. Only 15-20% are small or mid-cap companies. JL loves index funds because they are self-cleansing, meaning that you benefit from the winners while the losers drift away. The worst you can lose is 100% on a company, but you can gain 200% or even 1000% with the winners. Tesla is a great example of the upside. An S&P 500 index or total stock market index fund is essentially the same regardless of which brokerage firm it is purchased from. JL prefers Vanguard because it is structured where its interests are identical with the investors. The investors own the Vanguard funds which helps to continually drive down costs. The impact of changing from a fund with a 0.04% fee to 0.02% or even 0% isn't tremendous. JL prefers to stick with a company like Vanguard that favors the investor over the owner. Another thing Vanguard is trying to do is make investing more accessible. They have lowered the minimum investment for VTSAX from $10,000 to $3,000. Those without an initial $3,000 to invest can opt for VTI, the Exchange Traded Fund version of VTSAX. VTI is primarily a trading vehicle that any amount of money may be invested in. Like a stock, buy and sell orders are executed immediately, while index funds prices are set at the close of the business day. Traditionally, investors have needed to purchase whole shares of ETFs. Companies like M1 Finance have made it possible to buy fractional shares. It would be wonderful if we could time the market, but it's more important to have time in the market. The best way to lose money is to try and dance in and out of the market. Trying to time the market does not work. When the market began to drop during the beginning of the COVID pandemic, JL held strong in his conviction that no one knew what the market was going to do. The important thing to do is to stay the course. You have to expect market drops during your investing lifetime. JL says no one should follow his advice unless they are absolutely clear that they will not sell when the market drops. Selling is not an option. Market drops are temporary. After Black Monday in October 1987, JL, despite knowing better, lost his resolve and sold near the very bottom of the market. He didn't buy back in until the market had completely recovered. Now, market fluctuations don't bother him. Roughly 20 companies make up 30% of your holdings in an S&P 500 index fund. Any company or sector that rises to the top means you'll own more of it. When those companies fade away, the individual who owned them in an index fund will fare better than an investor who owned them as a single stock. The most powerful companies today will not be the most powerful companies decades from now. Of the original companies making up the DOW, not a single one remains in the DOW. With an index fund, you never have to worry about what's fading out or what's rising. You will always be there. Resources Mentioned In Today's Conversation ChooseFI Episode 019 The Stock Series Part 1 with JL Collins If You Want To Support ChooseFI: Earn $1,000 in cashback with ChooseFI's 3-card credit card strategy. Share FI by sending a friend ChooseFI: Your Blueprint to Financial Independence.
Weighing Opportunities and Holding On In Down Markets (with JL Collins)
The Stacking Benjamins Show
When you make a decision about your money, do you weigh how that plays against your long term goals? Doing so is called considering your "opportunity cost." Today's guest talks about both the process of thinking about opportunities AND discusses how to weigh down markets. Should you move your money? He's been through a ton of down markets and has a world of experience with them. Today we're airing a very special episode with JL Collins, author of The Simple Path to Wealth. Doc G (in an interview originally aired on the Plutus award-winning Earn and Invest podcast) caught up with Collins last year, and asked him many questions, that we'll play for you today.What's your first response after finding out your online portfolio has been liquidated and cleared of its cash? Okay... so after THAT, you're probably calling your financial advisor until they pick up the phone, right? At the very least, solo investors should call the support line for their online brokerage.. right? What happens when NO ONE is available to help you figure out where the money went....or worse yet, when you do get a reply back it says that you'll need to hold tight for a few weeks? That's exactly what's happening to Robinhood investors... we'll unveil yet another issue at the troubled brokerage during our headlines segment.In our second headline: day-traders are often ignored by long term investors, but new research indicates these very-same day-traders could be a driving force behind market fluctuations, including the market rebound this year. Don't worry - we'll cover what that means to you and your plan.We'll finish out the show with a call from Ryan, who wants to know more about family contributions to a 529 plan. Ryan and his wife are expecting their first child, and would like their family members to contribute to their child's 529 plan instead of traditional gifts. Are there any online portals their family can use, or is it up to Ryan and his wife to collect contributions and investing the cash?Of course, we'll save some time for Doug's trivia. Doug was feeling generous today with his dino-trivia, and opted for multiple choice responses... enjoy! Learn more about your ad choices. Visit megaphone.fm/adchoices
148. The Future of Financial Independence (Rewind) with JL Collins
Earn & Invest
In this rewind episode JL Collins talks legacy, recession, and the future of financial independence live from Kibanda in Wisconsin. Recorded preCOVID, his words ring true today in the midst of recession.
MI041: The Simple Path to Wealth with JL Collins (Investing Podcast)
Millennial Investing - The Investor’s Podcast Network
Episode ResourcesSUBSCRIBE to the NEW Real Estate Investing PodcastGet a FREE audiobook from AudibleJL Collins' article “You, Too, Can Be Conned”JL Collins' article “Why I Don’t Like Dollar Cost Averaging”JL Collins' article “Too Hot. Too Cold. Not Pure Enough.”Vanguard Total Stock Market Index Fund (VTSAX)Vanguard S&P 500 Index Fund (VOO)Rick Ferri’s book The Power of Passive InvestingJoel Greenblatt’s book The Little Book That Still Beats the MarketDaniel Crosby’s book The Behavioral InvestorMohnish Pabrai’s book The Dhandho InvestorAll of Robert’s favorite booksDiscover CMC Markets, the ultimate platform for online trading on mobile and desktop.Capital One. This is Banking Reimagined.Get daily content from Robert on Instagram @therobertleonardRead this episode’s transcript and full show notes on TIP: theinvestorspodcast.com/millennial-investing
How to Achieve Financial Independence Through Index Fund Investing - with JL Collins
Marriage Kids and Money
Do you want to achieve financial independence? Author of The Simple Path to Wealth, JL Collins, shares how we can all work to achieve financial independence through index fund investing. We review how to start your journey to financial independence, where to invest your money and why index funds are a better investment choice.
A conversation with author and blogger, JL Collins about the psychology of investing. 30 years in the money business and I've never heard anything as profoundly helpful as what JL shares with us in this episode. If you've ever struggled with the risks associated with investing, you will find yourself listening to this conversation several times to soak in the wisdom.
116: Long-Term Investing: Coronavirus Changes Nothing with JL Collins
BiggerPockets Money Podcast
The stock market is up, then down, then down, then up. What is an investor to do?Today we bring JLCollins from JLCollinsNH.com back to the show to calm our fears and help us understand what is happening with the stock market.The market is falling. Or maybe today it’s rising. It’s SO VOLATILE, it can be scary to stay invested - especially if you’ve never been through a market downturn.JL expertly explains what’s going on - and his recommendations for the best course of action - based on 40 years of investing in the stock market (and making a boatload of mistakes along the way.)Long story short, stay the course. 105 years of historical stock market data says this too shall pass.While JL is an expert on the stock market, he doesn’t invest in real estate, so Scott and Mindy share their views about the real estate market and what this current stock market volatility might mean for real estate investors. They also share ways to hedge your bets in rental property investing through fully funded reserves.If you’re freaking out about the stock market, this episode can help calm your fears and keep you on the right course to give you the most chance for financial success.In This Episode We Cover:Why are people freaking about the crashHow one should handle this market drop if you risk losing your jobWhen to prepare emergency funds and how much to put into itWhy you should hold your portfolio foreverWhat an Index Fund isWhy it is important to "ignore" the marketHow index outperform stock pickingHow one can never time the marketHow those who say they predicted the market only did it because of luckThe only time the market is not going to recover...And SO much more!Links from the ShowBiggerPockets ForumsBiggerPockets Money Podcast 20: The Simple Path to Wealth—Index Funds Explained with JL CollinsMr. Money MustacheTaking advantage of Mr. BearA Guided Meditation for When the Stock Market Is DroppingStocks — Part XXXII: Why you should not be in the stock marketTime Machine and the future returns for stocksPinterestDow Jones - DJIA - 100 Year Historical Chart | MacroTrendsBiggerPockets Money Podcast 95: The House Hacking Strategy with Craig CurelopBiggerPockets Money Facebook PageMindy's emailScott's email