Peace, Love & Spreadsheets

At the beginning if 1994, if you invested $1000 in an S&P 500 fund, you might have been sad the next year. You invested at $482 per share. A year later, your shares were worth $470 and your $1000 portfolio was only worth $985. If you'd given up and sold those shares, you'd have lost money.  But let's say you didn't... in fact you decided to try again and invest another $1000. You buy in at $470 and wait a year. Good news - by 1996 your $1000 is worth $1350! And your 1994 "loser" shares are worth $1319 - you're ahead! You just had to stick it out another year.  Of course, a 35% increase in one year isn't normal, that's oddly good. But a 2% decrease isn't normal either - most of the time, the stock market grows from the beginning to end of the year. If you want to predict what this next year will be like, you can't do better than a dart board. Will 2024 be another 2008 (bad) or a 2021 (great)? If you take the average of all these years, y...

Every January I'm exhausted from holiday materialism and looking forward to the annual No Spend Month trends. Seriously!  Reasons to do a No Spend Month 1) Saves you some money! 2) Teaches you what your baseline needs are - how little money could you live on if you suddenly had to cut your budget for reasons outside your control? 3) Inspires you to find strategies that might really save you money in the long run - cheap meals and  entertainment, automatic bills you can unsubscribe from. It's a reset. Rules for the no spend month 1) You can buy food, but I'd recommend looking at the USDA Cost of Food Reports for your spending limits on food. You'll find that the Low plan doesn't give you budget to eat out, and if you can make it on Thrifty you're even better.  2) You can pay your bills and anything you're legally required to pay, obviously. 3) You can donate to charities. One reason I budget so carefully is that money is precious in our world. I budget so I ...

I love the book "The Simple Path To Wealth" because it lays out this investment strategy: 1) Find a whole market index fund with a low expense ratio. It says VTSAX, but I'm in FZROX because I use Fidelity. 2) Invest in it. 3) Done. You might hear some people talk about S&P 500 funds. Good for them. I brought up a comparison chart between two fidelity funds with a lot of history. FSKAX is an S&P 500 fund. FXAIX is an index fund. Here is the difference between their performance over 11 years.  The end result? 229.63% vs 221.91%. Let's say you had $10,000 11 years ago. You'd have... $22,963 if you'd invested in FXAIX (S&P 500)  $22,191 if you'd invested in FSKAX (whole market) That is a $772 difference - $70 a year. And that's just a snapshot on the one day I picked. Since these funds both fluctuate and go up and down themselves, either one could easily change by 4% on a given day and it doesn't make a huge difference long term.  So my con...

 The summer after my senior year of high school, I had $1000. I'd saved up babysitting and summer job money. I had a meal plan at school and not much to buy, so my family helped me invest it in a mutual fund. I was hoping that when I got out of college and needed to really start life, that fund would be my first down payment on a car, deposit on rent, wardrobe for an office job. Four years later I graduated and my $1000 had grown to... $600! So I swore off investing for a really long time. Now, I could say more about that particular fund and the fees involved, but I now understand more about why my fund did so poorly. Here's what the S&P 500 looked like while I was in college: That's a pretty bad 5 year snapshot. I didn't pick the WORST time to invest... 2000, right at the top of the dot com bubble. But I didn't pick the best time either. So what does that mean? Am I bad at timing? Is the stock market an losing enterprise? To answer those questions lets look at ...