In my early years of investing I also did not hold bonds in my portfolio because I had time on my side. Now that I am about 8 years from retirement I cannot afford the risk of having 100% of my portfolio in stock mutual funds.
Yes, bond FUNDS will lose principle value as interest rates increase but individual bonds held to maturity do not experience this loss in principle.
So, a portfolio asset allocation for someone that is nearing retirement should look different than that of someone that has 25-30 years before retirement. My point is, be careful, asset allocation is a function of time.
It is too hard to predict future returns based on past returns. But being in index funds reduces your expense fees. Most people won’t get 12% because they won’t buy on dips and will sell in bad times.
I hope they are in a short term bond fund. Long term bonds will get killed in the coming years. Dave has never been an investment person. That is why he pawns it off onto others.
Fred is very very good at helping people get out of debt, but his seven-step plan is deliberately oversimplified. Anyone who gets to the point of having significant money to invest would be well served by seeing a financial advisor and thinking about a more sophisticated analysis.
That said, I’ve got money in my 401k in bonds from times past, but I’m not adding any bonds at the moment, because it really is a bad time to buy them. And when I found myself saying “growth-stock mutual funds” to my 83-year-old mother, I took a step back and said that with her aversion to risk and possibly short time frame she was better off staying out of it.
Although I have some of the same criticisms of his investment advise (All 4 investment categories are sans bond funds, the 12% rate of return though possible is most likely improbable, investing in loaded funds, etc.) I am a little surprised at the ferocity of the opposition from the professional financial community.
We (my wife and I) have been at BS 7 since 2007, got there using DR principles, but we have our own investment strategy that is not at all like the one DR professes.
Curious at what this community thinks…
1. that I got the house taxes paid (woohoo!!) and
2. I will be caught up with the mortgage AND
3. I have several nibbles on the 3 remaining pups, AND
4. the ex is coming to collect his stuff tomorrow, AND
5. When I got home I saw that the majestic old Elm tree had fallen down, roots up due to the storms this week (I know that’s NOT the exciting part lol) AND it had avoided the fence that I spent last week repairing to keep my sheep in. Definitely the Hand of the Divine at work there.
6. I do believe I can pay off 2 of the 4 credit cards; oh and the last one
7. I only have to pay 67c on my electric bill!!!
So counting my blessings and SO grateful!
PS On the down side, the Dr thinks I’m this close to pneumonia so I have instructions to take my antibiotics and rest this weekend – no sheep wrangling.
and when laid off, I just sooooooo wanted something different. Like working at home.
Gads, what a mistake.
Just like anyone sucked into a cult, I did everything I could to please. Throwing money hand over fist to “their” phone service, their advertising loops, thier web sites, their, well, you name it.
Hours and hours spent on the phone, tons of money (about $1K loan) to fly to “conferences”. Which were really nothing more than other schmucks like me following orders. Sure, the seats were filled, but that is the name of the game, isn’t it? Keep the newbies hyper and wanting the life advertised?
In reality, I truly wanted to believe in the product and sell it. Oh, silly me. What it really entailed was selling false dreams to someone else. And I could have done that if there was any true substance in the propositon.
Instead, after six months and thousands of dollars, I couldn’t stomach it anymore. Such as meeting members of my upline who left no doubt they had blatantly lied. (Honey, you are way too tall and way too big boned to have ever been a size 4, unless of course when you were 11.) Inablity to get my direct supervisor to explain how to actually sell the “cover” product and not just the biz. Rooming with a person who I finally got to admit that she’d spent EIGHTY GRAND to get to the level just above me.
And, of course, being at a conference and watching young protegees of the upline suck down a saucer full of “product pills” instead of any dinner.
for Capital One. NOOOO!!!!! Man, that SUCKS. I didn’t care when Alec Baldwin did CapOne commercials, because I don’t really like him. But Samuel is one of my favorite actors…
and this mandatory 10 hours a week is wearing him out. Plus he’s concerned about ds going out of town for 5 weeks of walk down. Ds has never done a walk down of this sort and neither have 3 of the other four that are going.
There are still a lot of variables in the game plan, like this week for numerous reasons dh only got 8.5 hours ot in, and the week of Thanksgiving and the week he goes to AU there won’t be any of course unless something is worked out. He’s been having some trouble with his legs and is just exhausted.
Didn’t help we had the top come out of a big cedar come down in the storm day before yesterday and it’s now on the back deck and stairs. It also looks like it took out quite a bit of another tree, one of our big pine trees, on its way down and so he’s going to have to do chainsaw work this weekend that he is NOT looking forward to.
So the good news was exactly what he needed to hear.
So I took him aside and put a smile on his face (not not that! Shame on you!).
What I told him was that I had been running and re-running the numbers for the last month because I couldn’t believe it was true, but what I found that was as off today’s paycheck IF the overtime keeps on the way they say it will between now and the end of the year, IF all the monies that are scheduled to come it do come on time and for the amounts we believe they will come in AND Johan stays away (that’s the scary part) we will be paying off a credit card every 30-45 days between now and the end of April!!! The first one, the Best Buy should die by the end of November or mid December(only 1975 to go on that one) and then others will fall in a row every 30-45 days. It is possible that we could be cc debt free by April 30! (If we don’t take a big tax hit) It’s a LOT of IF’s and dodging Jhoan, but dh has been smiling ever since.
I know it certainly made me a happy camper when I first discovered it about a month or so ago.
It’s called Patten University, a private, 4 year college, fully accredited. Quote “Our Unique low costs and monthly payment schedule helps you budget for your education and AVOID DEBT.”
Upside: Tuition is flat rated at between 1316 and 2000 a semester, (there’s a $400 add’l campus fee), they don’t take FAFSA, you can pay as you go by the month, roughly $350, basically a part time job, and they are in a nicer part of Oakland. No difference between a California resident or a non-resident. Has an online program same as campus, same rate.
Downside: really limited programs of study (if you want to be a teacher, it might be the place for you),
I get the feeling it has a stringent honor code, kind of like BYU. Nothing in writing that I see, but when 2 of the 7 degrees offered are Biblical Studies and Pastoral Studies…that might be the first hint they’re not looking for party-ers and pot-heads.
My only complaint with it is that you have to have the gauge checked every year for accuracy through the local extension agent. I’d prefer the one with the weights instead but won’t give this one up. Besides I got it as a birthday present.
But I do LOVE the size of it.
Thanks for the link to the second one, I think I may splurge and get that so I have it.
I did notice a couple of new accessories in the accessory pack which would be handy to have; namely: the large LCD digital timer and Jar Wrench. The kitchen tongs are not as handy as the tongs that I have (Oxo brand all metal) and I did purchase an additional stainless steel wide mouth funnel which I found worked better for me.
just because they don’t have cash, so I agree with you. And I know that Square works with debit cards as well – that’s how I buy supplies from a couple of rocket vendors in my club.
This past Saturday’s event was a craft show with food and a dj. We definitely made money over and above our booth fee and made money on each item we sold. One sale alone accounted for $144 which more than paid for our booth. We had several other sales as well and gave out a bunch of business cards and brochures about our products. The brochure is one I made up and printed on my computer and copied at our store. Low cost but it helps get the word out. I will work on tallying everything today … inventory and cash.
I will go over our remaining stock to see what we need to replenish for this week’s event. It is supposed to be a hugely attended event, even more than the last one. It has several band stages, a 5k race, a duck race on the bayou, a corvette show, and crafts of course. It is put on by the Chamber of Commerce of Thibodaux, LA, just a few miles from where I live. I have never been to this even as a visitor so I really don’t know what to expect. However, after church yesterday we drove over and drove down the street where my booth will be. I’ll be the 2nd booth over from one of the band stands. If any of you are in the area I hope you’ll come out and look for me. I’ll be in booth number 2 on 2nd street.
There is one thing that we do that goes against DR. I have a Square that works with our cell phones. If anyone asks if we have a payment preference we tell them we prefer cash but will take all forms of payment. It is a double-edges sword as the other business owners here know. The large ticket I had Saturday was on a cc. The up side is that I don’t have to worry about a check bouncing on a ticket like that. I received only one check, 2 cc transactions and the rest was cash.
I definitely see our business starting to recoup costs now. As many of you business owners know, sometimes you have to spend a lot before you get in the black. The best part of all this is that it has been cash flowed. No credit cards, loans or debt. We have begun to accumulate some cash and I will use it to pay back our savings and reserve some to replenish supplies. I’ll probably split it between the two in some percentage.
On the personal side I got our electric/gas bill paid and paid our cable bill early over the weekend. I still need to get our cash for envelopes though.
I did a happy dance when the CC company refunded what they’d overcharged in cc protection and something else to the tune of $381 AND, even more dramatic, my electric bill of $.67!!!
I spent the weekend resting per the Dr’s order, took my antibiotics, watched the ex collect his stuff and waved goodbye with nary a tear shed – weirdly, I felt completely neutral – I’m guessing that is a healthy response?!
I watched Monster’s University and World War Z, woke up late and went to bed early, pottered around slowly, baked up a whole pumpkin for creamy pumpkin soup and oven braised pork country-style ribs to be used for pork tacos sometime this week.
I played with the tervlets and cuddled with my pups and sheep and goats and marveled at how different I feel this year,compared to the same time last year. Emotionally and physically in a much healthier space, and next year I’ll be in better shape financially with the choices I’m making, and have been making. I’m looking forward to my birthday and don’t forget you and Gary
how close we truly are to being debt free we decided to celebrate by taking a one day staycation and go on a fall foliage tour near Lake Tenkiller in our area.
I’m so excited about the next six months (who would think you would get excited about paying bills—lol) that I find myself making more and more little payments between pay days. The end result was an additional $10 savings on interest on our Best Buy account this last month, which was kind of like making an additional small payment. LOL! I’m so weird!
After our trip on Saturday we spent Sunday doing more culling out and packing ds to send him off on a 3-5 week walk down of a gas plant. He’ll be home weekends, but this is the first big trip he’s ever done for a company and he was pretty excited about being given an expense account and a rental car.
However, his DR training did show up in the business meetings prior to him leaving when they started talking about sending a company credit card with the four of them or having them charge to their personal accounts and get reimbursed. He spoke up immediately and said “no thank you” to the company credit card and that he didn’t use or believe in using credit cards and he’d prefer an expense check. They quickly complied with his request, after all the owner is a DR fan as well.
So he’ll have to file and expense report when he gets back, but he prefers it that way. Wow! What a difference 4 years makes.
Ds won’t eat beans (allergies, plus he doesn’t like the texture of them) or onions. So while he’s traveling we are definitely on a beans and rice, rice and beans menu around here with LOTS of onions thrown in. Today’s dinner is Spicy Ranchero Beans (Pioneer Woman, aka: Ree Drummond recipe) and cornbread.
I plan Red Beans and Rice this week, followed later in the week with Hoppin’ John. Beans and rice, rice and beans, food storage rules!
Because I can tell from your post you are having a positive attitude and that is essential. I know a part of you is frightened, I was at 30 when I was diagnosed with stage 3.5 melanoma when I was 31 and mother to two children under the age of 10. And Looky here, I’m still here bugging the heck out of your guys 32 years later. You will be here being a beacon for folks in 32 plus years too. Heck you already give so many of us hope showing how well the TMMO works—just look at your post below. Even while breaking the news you show us all how well prepared you are because you decided to take control of your money and your life.
Like you said this is merely a challenge. You had the presence of mind to get checked and now you are taking care of it. We will all be here to cheer you on, just as you have cheered us in our temporary set backs.
Many years ago my best friend had breast cancer and I walked the path with her every inch of the way. At one point we thought I might even end up in the operating room because the minute I’d leave her so she could go back for surgery her blood pressure shot up. The doctor’s were ready to suit me up to hold her hand until she went to sleep. I finally got her calmed down enough without having to scrub up and now 20 years later she is still cancer free, because like you she took a positive attitude. We laughed a lot, we cried a little and we both learned volumes. I was Dale’s “Boobie Buddy” and while I’m not close enough to hold your hand literally I’m here if you need me. Feel free to contact me off list if you need to talk.
My very best to you and your family. I’m glad you’re in such a strong position financially. I hope your treatment program goes smoothly, and that you and your family come through this in good condition. I’ll add you to my prayers list. I’m sorry to say that several have preceeded you on that list, but I’m also happy to say they’re doing quite well now. Hang in there……..
My family is facing an unexpected challenge and I am so thankful we have followed Dave’s advice!
I was diagnosed with breast cancer last week and am undergoing tests and working with doctors to establish my treatment plan. I do know that I will be facing chemo and surgery and perhaps radiation. It has come as a complete shock – no family history and I’m only in my 40’s. Best news came tonight – my PET/CT came back clear of any additional spots. Just my breast and one lymph node have been effected.
My DH and I have always been savers and planners. What a relief it was last week when I got the call to know that everything is already in place. After reading Dave’s book several years ago we finally got our life insurance policies in place, as well as our wills. I don’t plan on needing them, but having them there is another load off. Especially when it will be harder to qualify for cheap insurance now.
We are debt free but the house and have a lot in savings and investments. It was such a relief to call our investment guy and for him to say that we have plenty of funds. Live how we need to right now, take care of our family, no worries.
Keep it up guys! It is so worth making sound decisions and putting yourself in a position to be ready for thank potential hurricane! We have the ability to focus on my health and not worry about the family finances.
however, Mr Summers says Jerry is running like a champ! He took her out for a spin on the highway and says she is running smoothly. Now I can use the oil money for something else. The leak was REALLY bad, not to mention how much it was costing is spark plugs every couple of months.
So, valve cover replaced, oil leak fixed, new spark plugs and spark plug leads and distributor cap.
Now I gotta remember to budget for an oil change every 2 months – there was no point since the leak was so bad I was doing an oil change just about every two weeks!