Comments on: Dear Graduate, do you want to retire in five years?

By: Jacob

Jacob — Wed, 25 Jun 2008 23:50:23 +0000

@mjukr - However, FundX has a very good track record. This suggests that the “market for mutual funds” is NOT efficient - and THAT is very interesting. It also seems somewhat reasonable that mutual fund investors are not analyzing their holdings to the same degree that analysts of individual stocks do. In that sense FundX will work until someone removes this inefficiency afterwhich yields will return to normal (minus the fee).

By: Jacob

Jacob — Wed, 25 Jun 2008 21:45:23 +0000

@mjukr - It’s a black box based on technical trading of funds. This already contains three concepts that I don’t like, personally But again, investing is an extremely personal enterprise.

By: mjukr

mjukr — Wed, 25 Jun 2008 20:53:19 +0000

What do you think of NoLoad FundX?

By: Rosie

Rosie — Fri, 20 Jun 2008 14:23:27 +0000

Great article, Jacob; as a professional student/academic :), this makes lots of sense. Just wanted to point out that you allude to the one useful skill not usually identified for recent graduates regardless of their field, the one skill that will serve them well given your advice: the ability to research and know how to learn. That skill has saved me time and again as I have moved toward self-sufficiency. Despite the expensive degrees, most graduates don’t understand that this is really the education they’re getting: comfort with and ability to find resources, evaluate them effectively, synthesize the information in them, and put the techniques into practice. It sounds simple, but this is often the barrier faced by those with a lot less education.

Just a small plug for the value of a degree in English (or anything else generally seen as non-commodifiable)

By: Jacob

Jacob — Fri, 20 Jun 2008 00:39:55 +0000

@mjukr - it depends on how you want to do it … index? ETF? mutual funds? or DIY? The former three seem no different than picking another investment goal. For the later, I’d start very basic. I still recommend joining aaii.com or at least reading their website (they have a starters guide). Also go to hussmanfunds.com and read his weekly commentary. For books, Graham and Dodd, and Pabrai.

By: mjukr

mjukr — Thu, 19 Jun 2008 15:35:53 +0000

@Jacob - What books/websites/other sources would you recommend to get started with investing for income?

By: Jacob

Jacob — Thu, 19 Jun 2008 15:04:12 +0000

@claire - When I excited grad school, I lived on about $500. $400 to rent a room, $75 for food, walked to work, no life insurance (no dependents), health insurance (included in job), clothes bought at thriftstores (~$0). When I moved together with DW, it changed to $550, $330 for the rent (each), about $75 in utilities, own water well, food increased at bit, car maintenance was added, no cable, furniture was thrift/used/free. DW paid off $10k in credit card debt over two years while she was on a grad student salary(!)

It is fully doable. The only question is whether one wants to do it. In my experience most people would want to spend a little more.

By: Patrick

Patrick — Thu, 19 Jun 2008 15:00:23 +0000

@ claire
I’m a new graduate, with no student loans and no consumer debt. My parent’s gave me a little but I worked the rest.
I don’t do this, but I could and here’s how.

Rent a two bedroom, utilities included, apartment for $600 and get a roommate - $300
BTW it’s within walking distance of my job and a grocery store, it’s also on the metro bus line so for $3 round trip I can get anywhere in the city given enough time.
$6 a day for groceries - $180
10 trips a month on the bus - $30
$50 for the house necessities for cleaning etc.
$30 for a Sprint SERO plan (500 minutes, unlimited text and data, nights @ 7, & PCS2PCS)
Leaving $160 for whatever else that month.

By: claire

claire — Thu, 19 Jun 2008 07:50:09 +0000

patrick - how on earth are you supposed to live on 750 per month as a new graduate, wouldnt someone who is earning a salary of 60k as a graduate have student loans etc, and where will they live - a cave?

come on guys get real - i am all for extreme early retirement but lets keep it realistic otherwise credibility falls away.

By: Jacob

Jacob — Wed, 18 Jun 2008 00:54:01 +0000

@executioner - Actually I have two jobs :-). A full time job and a (steady) contracting job where I can set my own hours.

BTW I don’t think i 35-40 years is arbitrary - I think it is exactly measured out to extract the maximum total productivity from the aggregate workforce.

@all - in terms of how to invest during those five years, clueless or blind stock investing is not the best option. After all, one might buy directly into a declining market and given that five years is shorter than a business cycle, one should think more like a retiree already and seek a very low beta the closer one gets to retirement keeping in mind that it is very close already. That was a long sentence :p