One of my favorite quotes from this board

I copied this many years ago and it is page 1 in my investing notebook for my children!

There are two principles that need to be applied to accumulate wealth.

  1. Spend less than you earn (i.e. live below your means), and
  2. Invest the difference wisely.

If you violate either principle, wealth will eventually be destroyed. These two principles are seemingly very simple, but often we are our worst enemies when it comes to actually applying them. The first principle is often violated because we rationalize that we just can’t live below our means at this moment, but we are going to start saving just as soon as (Insert excuse here). Or we might delude ourselves into thinking that we are living below are means when we really aren’t. The second principle is often violated because emotions cloud our decision making (we succumb to greed and fear) or because of ignorance (or both).

I was just reading an interview in AARP with Jim Cramer. At age 65, with the suggestion of his wife he permanently went to 50% cash sometime around mid 2020. Her comment was if you are already wealthy what’s the point? You can only get unwealthy? That is all that can happen. Food for thought.

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"I was just reading an interview in AARP with Jim Cramer. "

Cramer is terrible.

A clown with an opinion on everything. Charlie has eviscerated him on at least one occasion.

And of course if you have been a Berkshire holder long enough, you may remember Cramer trashing Berkshire at the bottom of around $40k a A share back in the day.

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I think you would really enjoy reading “The Psychology of Money” by Morgan Housel who is a former writer for the Motley Fool and WSJ.

I’ve actually read it twice and can’t recommend it highly enough.

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Cramer is terrible … you may remember Cramer trashing Berkshire at the bottom of around $40k a A share

I have to thank him because I bought my first shares the day he wrote
Berkshire…there is only one thing to do… Sell! Sell! Sell!
(5.May 2009; $54k then; I think to remember that was the exact line he wrote)

[because] of his wife he permanently went to 50% cash … Her comment was if you are already wealthy what’s the point? You can only get unwealthy?

That he listened to her means he is more clever than I thought.

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Sorry, 5.May 2000 of course, not 2009.
(the “9” was just too close to the “0” on the keyboard)

P.S.: Wish TMF would allow editing at least within the first few minutes after posting.

“Wish TMF would allow editing at least within the first few minutes after posting.”

I see this type of phrase soooo often on the Fool.
There actually IS an edit when you post.

When you finish typing, look at the bottom and you will see PREVIEW … click it and you will see your post as you typed it. When you see something that you don’t like (anything) look at the bottom again and you will see EDIT … click it and you will be able to fix anything you don’t like about your post. USE IT and quit complaining that TMF doesn’t have an edit like others that you use.

Rich (haywool) long on getting things correct - editing

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I ALWAYS preview my post before sending it — WITH the mistake I overlook on preview (and only see sometimes later in cases where I look at the whole thread again).

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If I may add something: It’s not only about mistakes. It’s often (for me at least) about writing, previewing, sending — and a few seconds later regretting what I said (or not said).

All of that would be avoidable by being able to start an edit of one’s own post within the next 1 or 2 minutes — or to even delete it (the last weeks sometimes I asked TMF via the “Report Post” feature to do so if I (too) spontaneously replied to something and found my post directly after sending it to be just useless clutter, with the board being better off without it).

There actually IS an edit when you post.

When you finish typing, look at the bottom and you will see PREVIEW … click it and you will see your post as you typed it. When you see something that you don’t like (anything) look at the bottom again and you will see EDIT … click it and you will be able to fix anything you don’t like about your post. USE IT and quit complaining that TMF doesn’t have an edit like others that you use.

I think the reason they call it UI or User Interface is that the interface is supposed to be designed to work successfully with users. I’m going to go out on a limb and suggest that TMF has tried their non-defaulted preview option as a method to allow user editing for enough decades that we know now that it does not work, at least in the sense of actually being used by actual users in real life.

I think we also know that the free boards are the red-headed stepchild of the fool empire and that we should be grateful that the content here justifies using a “User” interface from the previous millenium. Thanks TMF!

R:)

PS no i did not prvewvei this message.

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I think the reason they call it UI or User Interface is that the interface is supposed to be designed to work successfully with users. I’m going to go out on a limb and suggest that TMF has tried their non-defaulted preview option as a method to allow user editing for enough decades that we know now that it does not work, at least in the sense of actually being used by actual users in real life.

I’d rather not blame TMF for the inability or unwillingness of some users to adequately police themselves.

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[Jim Cramer] permanently went to 50% cash

Cramer is estimated to have $150 million net worth.

How much of that he puts into cash is meaningless to us people who have 1% of that.

“How much of that he puts into cash is meaningless to us people who have 1% of that.”

At the age of 65, living in a small town with moderate living costs and modest needs, I think of everything over $3M as “Monopoly money”. I have read your posts at Mechanical Investing and I firmly believe that you can manage your excess money in a risk adjusted way better than I can. Same for Mungofitch. Maybe even for some of Saul’s disciples.

But now I am happy with a small basket of etfs, a pile of cash that I will average back into the markets over the next few years as my life expectancy shrinks, and cutting back on my posts here because I have little to offer on the investing front.

I have learned a lot from this board. I learned that I could retire at 62 instead of 70 if I continued to live modestly and stop living in fear that the markets would fall to zero the day after I retired. I learned to increase my low dividend growth positions in my taxable accounts with greater emphasis on total return in a more tax efficient way. I am moving money out of my sheltered accounts and investing the withdrawals in low or no tax accounts while I am retired but not yet collecting SS, so that I won’t face a ‘tax bomb’ when SS and RMD’s kick in.

And my basket of etfs cost me less than 6 basis points on average, versus roughly 2% in hidden and unhidden fees when I paid a Financial Advisor to make sector bets with mutual funds which had both hidden fees and unanticipated long term capital gains declarations that messed up my estimated tax payments.

I have learned a lot, but I don’t have anything new to teach.

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I think of everything over $3M as “Monopoly money”

You cannot even buy a decent house in Bay Area or Seattle. Sigh. COVID has debased USD and savings.

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At the age of 65, …

Betty White just died at 99. Munger is still here at 98, Buffett at 92.
I think the rational think to do is plan to live that long. So somebody 65 needs to plan for a 35 year portfolio.
If you carry a large percentage of cash, you’ll fall behind because cash is a losing investment.

as my life expectancy shrinks,

See, that’s the thing. With a prospective 35 years to go, your life expectancy is out of sight over the horizon. You can’t see it from here. I wouldn’t start counting down the shrinking year until age 90 or so.

…manage your excess money in a risk adjusted way…

Well, I retired just in time to walk into the 2008/2009 roaring bear market.
What I came to realize then, and what I continually say to people now, is that the actual risk is you run out of money to pay your monthly bills.
Even if the market drops by half–like 2008/2009-- as long as you can pay your bills you are fine.

Oh, and buy BRK. :wink:

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Not only trashing, Cramerrecommending to SHORT BRK…BRK was at its lowest and NASDAQ was at its highest.