(Part 2) Top products from r/financialindependence

> (though you probably have fancy investor resources already telling you more than I could)

Haha very doubtful but I will definitely take you up on that.

This one below is the best for long distance RE investing. I am half way through it and from experience he's spot on. Rich Dad/Poor Dad is good if you want to learn more on why RE is a great investment in general. Real Estate Riches is good too.
https://www.amazon.com/Long-Distance-Real-Estate-Investing-State/dp/0997584750

https://www.amazon.com/Rich-Dad-Poor-Teach-Middle-ebook/dp/B0175P82RA/ref=sr_1_1?s=books&ie=UTF8&qid=1520516088&sr=1-1&keywords=rich+dad+poor+dad

https://www.amazon.com/Real-Estate-Riches-Bankers-Advisors/dp/0446678643/ref=sr_1_3?s=books&ie=UTF8&qid=1520516104&sr=1-3&keywords=real+estate+riches&dpID=51FsqaAKejL&preST=_SY291_BO1,204,203,200_QL40_&dpSrc=srch

Hello! Also from Ontario Canada! The best advice I can give you is.... Spend less than you make (create a budget and stick to it), pay off all your credit cards in full every month, try to keep the life style creep to a minimum, and live in a low cost of living (LCOL) area (if you can).

In terms of buying vs renting there are calculators for that and it's personal choice, but try not to buy more house than you can handle (we live in the GTA so house prices are crazy right now...) If you can live with your parents for a while, you can save a lot of money that way too (just contribute to the household!! If not in cash, at least do the dishes and laundry or something...!).

If you want to buy and do nice things, budget and save for them! Striving towards FI doesn't mean you have to live like a pauper... But be reasonable and have your ultimate goal in mind.

Some nice books to read (that are Canadian!) Would be Millionaire Teacher by Andrew Hallam and The Wealthy Barber/The Wealthy Barber Returns by David Chilton (you can just borrow from the library as an e-book or actual book!).

Since you are unionized and have a pension, I would say max out your TFSA first (check out the index fund model portfolios from Canadian Couch Potato and then your RRSP (whatever room you have left after your pension adjustment) and once you still have money left over open a marginal account (if you you are married by then,max out both those accounts for your spouse before you open any marginal accounts).

Also, read the side bar and the stickied posts. Enjoy your journey to FI. It's important to plan for the future, but you shouldn't forget to enjoy the present as well!

I have no real beef with anything you said, but I wanted to harp slightly on the whole idea of

> you are trading risk for returns

I'm currently reading Jack Bogle's Common Sense on Mutual Funds and the way he describes risk-adjusted returns finally made me understand it in a way that I could relate to, so I'm paraphrasing him here (and by all means, go to your local library and pick this behemoth up):

If you can achieve 10% growth with a risk level of 1.00, and 5% growth with a risk factor of 0.25, I always thought you had two choices:

1. Accept an expected 10% growth with a risk level of 1.00.
   
2. Accept an expected 5% growth with a risk level of 0.25.
   
   However, Bogle uses leverage to equate the two in different ways. We'll ignore the cost of that leverage for the sake of the example, but if you were actually implementing this, it would (of course) have to be factored in...
   
   So, if you'd like to get 10% growth, you don't just have to choose investment 1- you can instead borrow money and buy 2x the second investment option, giving you a return of (5% 2 = 10%) with only (0.25 2 = 0.50) risk. In other words, you could get the same growth out of the second investment using leverage with much less risk than by simply choosing the first option.
   
   Or, if you're comfortable with a risk level of 1, he says you'd be better off borrowing money such that you quadruple your investment in the second option, giving you a risk level of (0.25 4 = 1), and an expected return of (5% 4 = 20%).
   
   Therefore, option 2 was the better of the two because when you adjust for risk, the returns on that second investment were superior.

Congrats on cleaning out that debt! I know the great feeling I had when we finished off my wife's student loans, you really can't beat it.

Just putting in my two cents here. The book "The Millionaire Teacher" has a great section on things to watch out for in Financial Advisers (link). They also list typical things Financial Advisers will say and how to respond to them. Great ammo for any meeting with one.

That being said, if you are confident in your principles of investing (indexing, expense ratios, stocks/bonds mix) AND you understand HOW the Edward Jones guy is being compensated, then you may consider the meeting.

Even with all that, I wouldn't allocate any significant portion of my stash with anybody from Edward Jones.

Personally I like to meet with people like this. I like to bust their balls and see how well they know investments, early retirement, tax law, picking stocks, what their personal investments look like, insurance (for early retirees), education level, trading experience, net worth, etc. It's like being a black belt in personal finance and checking out a rival school to see what they have to offer (or not offer).

I disagree.

1. Her data/methods are probably decent. Published in a good peer reviewed journal so it's probably decent. Your critiques on sample and that size correlation =/= causation are pretty basic, and have probably been covered by the peer reviewers. I doubt these are actual problems in the studies, otherwise they wouldn't make it past peer review.
   
   
2. There's quite a bit of research on this subject already.
   Elizabeth Dunn, the study author, has performed some pretty extensive studies on how to spend your money for happiness. See her book (https://www.amazon.com/Happy-Money-Science-Happier-Spending/dp/1451665075) and her google scholar citations (https://scholar.google.com/citations?user=lwFe1V8AAAAJ&hl=en). Also see journal articles like:
   http://psycnet.apa.org/record/2012-34884-001
   http://psycnet.apa.org/record/2009-24670-006
   https://link.springer.com/chapter/10.1007/978-94-007-7368-4_3
   
   While the literature's pretty consistent there are a few counter arguments (e.g. https://academic.oup.com/jcr/article-abstract/36/2/188/1942750), which leads me to the third point:
   
   
3. A few of your points can be summed up as 'more research needed' and 'this isn't definitive'. Fair enough--more research is pretty much always needed in the social sciences. It doesn't discredit the validity of these results and the great number of other empirical studies supporting the idea that buying time is a better way to get happiness than buying stuff.
   
   If you have studies contradicting her results I'd love to read them.

I definitely am not an expert but I love MMM and he did an article on it where he laid out five steps: Mr Money Mustache: A Lifetime of Riches – Is it as Simple as a Few Habits?
https://gj837.app.goo.gl/bmDzVGYnZTUiyo9e2


He also recommended this book: https://www.amazon.com/dp/081298160X/ref=cm_sw_r_cp_awdb_t1_-iDDAbJ3S0HD2


I can't say I've read the book as I still have established a consistent reading habit like I would like to do. ;) But, it's well reviewed on Amazon.

This is exactly the situation that many people retire into. I'm talking about the so-called normal retirement, where people have spent the majority of their lives working and putzing around, eventually getting old enough to be pushed into retirement by health or unemployment.

So when you do actually retire, you have a huge existential crisis. You're just having it early.

You need to figure out what you can do that fulfills you, that provides a purpose for you. It can be just about anything, from painting to rescuing dogs to beginning a multimillion dollar company. The only requirement is that it needs to be something that you find needed and valuable, and fun. Often that means doing something to make other people (or animals or trees, whatever) lives better. Something outside yourself.

A good place to start is [How to retire happy, wild, and free] (https://www.amazon.com/How-Retire-Happy-Wild-Free/dp/096941949X/ref=sr_1_2?s=books&ie=UTF8&qid=1479804347&sr=1-2&keywords=Retirement). I've found this to be a good guide to figuring out what you do want, instead of what you don't want, and FIRE just makes it happen quicker.

One of the bigs keys is personal relationships. A partner in life, friends, co-workers, community. You need to build that network in the same way to build a professional network--by doing things toward a common cause. It takes time and it takes effort. Just start. You don't have to get it right the first time. Just keep trying things until you find some you want to do again, and eventually you'll find your way into a direction that fills your needs.

Not a FI book, but I've really enjoyed The Power of Habit (Feel free to PM me for PDF). It really opened my eyes to how good AND bad habits are made, and how to improve myself in a way that works. It also gave me a new perspective to understand how people operate, which has been enlightening in more ways than one.

My opinion on a holding individual bonds, is that I would only do it if: a. I wanted to provide myself near guaranteed cash flows (via a bond ladder) or b. had significant amounts (hundreds of thousands to millions) to invest in bonds.

If you know you will need money at a certain date in the future, individual bond purchases (ie: treasury direct) or CDs could be useful. The bond fund's price will fluctuate greatly with changes in rates, so you bear some risk of the price being low when you want your cash. This is the risk/benefit to weigh. I am not concerned about this as my emergency fund at LMCU gets 3% interest and would cover about 6 month of expenses. I also hold roughly 6 months of expenses in precious metals. I view PMs as currency diversification, not as an investment. I like diversification, so I hold my emergency fund in USD and PMs. My bond allocation is entirely through VBTLX currently. Consider tax efficiency of how you hold your bonds.

Rick Ferri has a book All about asset allocation that covers the concept of reducing volatility leading to higher long-term returns. It is a little less deep/technical than Bernstein.

Bernstein has a series I really enjoyed call "Investing for Adults". Rational Expectations (Book 4) covers the volatility/return relationship. He can get a bit technical this series, but I think it is worth reading if you are going to do your own financial planning. (Note: I am also a nerd and enjoy reading about these topics). Four Pillars was also a great read.

It's amazing that your wife is also capable of pulling in a 6-figure salary - your extraordinary combined income of nearly $300k/yr could go a long way to powering through any inefficiencies in your plan.

You sound like you will do wonderfully accomplishing the American dream: big house in the best school district, little non-mortgage debt, well-educated kids, and eventually a really comfortable retirement with all that equity and tax-sheltered retirement accounts. This a goal few are able to achieve, and by having such a large income - you're well-situated for it.

The typical American Dream works against financial independence though. You're fortunate that your extraordinary combined income will help power through it. However, you're probably going to be on the work treadmill longer than most here who strive for early retirement, just because your expenses will still be quite significant.

That all being said, I recommend this book: Set for Life, by Scott Trench. https://www.amazon.com/Set-Life-Dominate-American-Dream/dp/0997584718. It helps explain why retirement accounts, while wonderful to reduce your taxable income and allow money to grow for you tax-free: actively works against retiring early. The goal of FIRE is to live off capital income well before you're potentially too old to enjoy it. This means all of your labor income generated while young should be going to accounts that generate capital returns that you can realize before your 59.5 years old.

Assume marginal market returns, I anticipate living off a 2% dividend per year, while the capital appreciation grows by 3% (after inflation). My projections show that I'll likely have grown the account to a few million by the time I hit 60. Having another 500k come in from a 401k will be nice for sure, but not worth the extra 2-4 years of work years needed because I was not investing the (albeit smaller) after-tax amount directly into my portfolio.

As for the 5-9 year swing: I'm naturally cautious. I anticipate if I wait 9 years, it's because the market took a shit, or I wanted to build a buffer or slush fund of several hundred thousand.

Not FIRE yet. But I loved reading "Happy Money" for scientific understanding of what kind of spending makes us happy and what doesn't.

http://www.amazon.com/Happy-Money-Science-Happier-Spending/dp/1451665075

Ric Edelman's "The Truth About Money" is a great introduction.

http://www.amazon.com/The-Truth-About-Money-Edition/dp/0062006487

Some of his other books offer not-so-good advice so stick with just this one. :-)

The TL;DR of investing:

Stocks: You buy part of a company which has been sold to the public.

Bonds: You lend money to someone and they pay you interest

Mutual Funds: Someone else buys a mix of the above so you don't have to deal with the complexities of doing so, bundles them together, and sells you parts of the bundle like a stock.

Brokerage: A company where you open an account to buy and sell the above. They take your money and let you buy stocks/bonds with it. For a fee, of course. :-)

I've been reading lately about the future of economic growth, and I was wondering if any of you have had similar thoughts.

First, this episode of Freakonomics features an economist who thinks the future growth of the economy will be much slower because we've already picked the low-hanging fruit of technology.

Second, I've been reading Die Broke, where the author says fulfilling work makes most people happy. He argues you should "quit your job in your head", focus on making your personal life fulfilling, and take frequent sabbaticals instead of retiring.

I'm just starting on the road to FI/RE, so it's a lot to think about. I do agree that we'll probably see slower growth (though not apocalyptic slow growth), and I do think most people find fulfilling work rewarding. It makes me lean towards the "FI then part time approach", where you save a good nest egg, then work part time while your nest egg grows.

Like I said, I still have a very long way to go, so for now I'm just saving as much as I can, but I want to think about where I see myself with this long-term.

try [this one] (http://www.amazon.com/books/dp/1118073762)

The cover and title are a little over the top but once you get inside its full of good, solid, fairly conservative advice. Lots of really good explanations of investment principles that you don't need to be a math wiz to understand. (although, if you are a numbers person he has enough depth in the footnotes to keep it interesting)

Please do your research as there are many experts who make various claims.

We are just amateurs here on /r/FI and are not professional investment advisors in any sense.

Topics to explore are index funds versus actively managed funds, expense ratios and its effects on performance. I recommend this book, The Truth About Money, by Ric Edelman

https://www.amazon.com/Truth-About-Money-4th/dp/0062006487

I do some frivolous spendings once in a while. E.g., travel a bit, buy some new gadgets, basically keep myself happy without getting burnt out. Also suggest you read "Happy Money": http://www.amazon.com/Happy-Money-Science-Happier-Spending/dp/1451665075

First, many people are here just looking at 1M+ reach thinking financial independence means Retirement.

Retirement is a plan on its own, a kind of fulfillment in life. Being FI makes them towards that fulfillment.

People must read these two books, and plan for FIRE.

Retire Happy: What You Can Do Now to Guarantee a Great Retirement

[The Charles Schwab Guide to Finances After Fifty]
(https://www.amazon.com/gp/product/0804137366/ref=oh_aui_search_detailpage?ie=UTF8&psc=1)

I think you have the financial part down. You shouldn't worry about the money as much as the what are you going to do with yourself after retirement. I'm currently reading a couple of books that address the subject of life after retirement that have been helpful for me.

• How to Retire Happy, Wild, and Free
  
• The New Retirementality

I recommend reading Bill Bernstein's The Intelligent Asset Allocator. How to Build Your Portfolio to Maximize Returns and Minimize Risk.

1. Thank you for sharing your personal story.
   
2. Never be ashamed of being ignorant. We are all ignorant about many things.
   
3. Admitting ignorance is a power that many people lack. It is also the first big step towards learning. This is a super power that will propel you forward.
   
4. The majority of normal, everyday people, do not know the first thing about investing. Not knowing anything about investing is average. You are now confronting this. That makes you above average.
   
5. Start with these two books to learn about investing: The Simple Path to Wealth by JL Collins and The Little Book of Common Sense Investing by John Bogle.
   
6. Not exactly investing related but just in case you don't already know about it, you should read this too.
   
7. Congratulations on your daughter.
   
8. Congratulations on living a full and dynamic life where you are able to confront your fears and admit mistakes, even when the extenuating circumstances around your mistakes aren't your fault. Congratulations on being able to learn change and fight for your family and a better life.

No, I am more interested in privately holding properties in IN and my hometown in AL.

That one is still a work in progress. Getting very close to pulling the trigger on my first property, though.

One of the more useful books I've come across is:

• https://www.amazon.com/Long-Distance-Real-Estate-Investing-State/dp/0997584750

You have done everything nicely. Before going to planner or other web sites, just read these two used books which will help you.

https://www.amazon.com/gp/product/141330835X (first few chapters)

https://www.amazon.com/gp/product/0804137366 (chapter 1 enough)

These two saves you lot of time instead of going here and there in web.

Another one of my favorites is David Chilton's *The Wealthy Barber" (http://www.amazon.com/The-Wealthy-Barber-Updated-Edition/dp/0761513116). It is written as an introduction to personal finance and investing in a story style.

You should read The Millionaire Teacher, it's the best DIY investor book I have come across and it's built for Americans and Canadians (I think the author was a Canadian working in Singapore).

Can I recommend a book, "The Subtle Art of Not Giving a Fuck". It's an entertaining introduction to some of the concepts that helped me with these issues.

Is there any way you can study during your commute? Books if you're taking public transportation, or podcasts/audiobooks if you're driving?

Also, I read this book (borrowed it from the library of course) and really enjoyed it: The Power of Habit: Why We Do What We Do in Life and Business. It's helped me change a couple of my habits to be more productive.

How passive do you expect this to be? As you are researching this and start considering your criteria look at ways that reduce the work on your part. If you want this to be passive income you don't want to be fixing toilets and painting units on evenings and weekends.

You will still need to manage the team that you put in place to do those tasks.

Check out Set for Life by Scott Trench

The Wealthy Barber

• The Most Important Thing - Howard Marks
  
• Fooled by Randomness - Nassim Taleb

In "The Intelligent Asset Allocator" by William Bernstein [1], it's explained that adding a risky asset class to your portfolio will decrease the risk. For example, although bonds may have a lower risk, an 80% bonds/20% stocks portfolio should have a lower overall risk and higher returns. There's probably quite a few articles out there besides this book, sorry I haven't got one on hand!

[1] https://www.amazon.com/Intelligent-Asset-Allocator-Portfolio-Maximize/dp/0071362363

I would recommend Set For Life by Scott Trench for some ideas. I wish that book was around when I was 19.

I also recommend Rich Dad, Poor Dad by Robert Kiyosaki, but the majority of people here hate it. I find Robert to be pretty shady in real life too, but the overall theme of that book changed my life!

Non-mobile: http://www.amazon.com/dp/0025293508/ref=mp_s_a_1_1?qid=1426605519&sr=8-1&keywords=what%27s+wrong+with+your+life+insurance&pi=AC_SY200_QL40

^That's ^why ^I'm ^here, ^I ^don't ^judge ^you. ^PM ^/u/xl0 ^if ^I'm ^causing ^any ^trouble. ^WUT?

The Investor's Manifesto by William Bernstein

For those wondering: https://www.amazon.com/Conserving-Client-Portfolios-During-Retirement/dp/0975344838

William P. Bengen just did an AMA. Go check that out and then read his book. I'm reading it currently and just finished the chapter on longer-lived clients and their portfolio needs. He's got a SWR of 4.1% for a 45 year portfolio at 0% tax rate with 65% equity allocation. 4% for 50 years. With a 20% tax rate his numbers are 3.7% SWR for a 45 year portfolio with 85% equity allocation.

https://www.amazon.com/Conserving-Client-Portfolios-During-Retirement/dp/0975344838/ (I got it used for $12)

Read Piketty's Capital in the 21st Century and get back to me on the estate tax!

Thomas Piketty would have a word

https://www.amazon.com/Subtle-Art-Not-Giving-Counterintuitive/dp/0062457713/ref=sr_1_1?ie=UTF8&qid=1499401834&sr=8-1&keywords=not+giving+a+fck+book

You certainly could do that -- draw down your savings slowly, investing it over time.

You might spread it out over several years instead of a single year, as the volatility, measured by standard deviation of market returns, on rolling periods drops dramatically as the length of the period increases. If I remember my Bogle correctly, the one-year standard deviation of market returns is somewhere in the neighborhood of ~20%; increasing the period to two years almost divides that in half; and the standard deviation of returns on rolling ten-year periods is closer to ~2%. That is, the stock market is a rollercoaster in the short term, but the ride smooths out the longer you stay on it.

The real point is that, even if you drop $5,000 into the stock market today, and tomorrow the market collapses by 40%, yes, you will have just lost $2 grand in one day. But the entire history of the stock market suggests that, not only will it eventually recover what it lost (as it has done after the Great Depression, and every major recession) and climb even higher, but if you keep investing regardless of what the market does tomorrow, or what you think it will do tomorrow, some of your investment will inevitably happen at the bottom, where it will have nowhere to go but up.

Read this, my friend: https://www.amazon.com/Little-Book-Common-Sense-Investing/dp/1119404509/ref=sr_1_1?keywords=bogle&qid=1551396236&s=gateway&sr=8-1

Or just put it into a low fee (typically Vanguard) index based on the S&P 500. You can also put some in a bond index.

> Unfortunately for you, you are among the 90% of people who talk shit about finance and have no idea what they are talking about. You can't predict extreme results in the future, good or bad.

I recommend reading Taleb. E.g. http://www.amazon.com/Fooled-Randomness-Hidden-Markets-Incerto/dp/0812975219

> Why do you think no one or no fund has/is ever able to beat the market consistently, these guys spend every working hour studying this stuff and I'm sure they'd be in a better position than you to predict future movements.

You're very good at not getting what I'm trying to say.

> But it still goes on at 8%.

http://physics.ucsd.edu/do-the-math/2012/04/economist-meets-physicist/

Very boring Boglehead-style portfolio: most of my portfolio is VTI, the rest is VSS, with a bit of VNQ and VNQI. Besides that I have an emergency fund of about $100k split between VMFXX and BND.

To get to this style of investing, I really recommend The Little Book of Common Sense Investing.

It can get a bit dry, but I read "What's Wrong With Your Life Insurance" when looking into Life Insurance. http://www.amazon.com/gp/aw/d/0025293508/ref=mp_s_a_1_1?qid=1426605519&sr=8-1&keywords=what%27s+wrong+with+your+life+insurance&pi=AC_SY200_QL40

TL;DR: buy term insurance