No. of Recommendations: 4
When I retired early at 58, I had a string of people come into my office and ask how I did it, so they could retire early, too. I told them that I worked 40 hours a week for Motorola and another 10 hours a week at investing.
Every single person lost interest at that point.
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As many of you know, I retired 30 years ago at age 38 once I'd accumulated enough capital to live off the "4% rule" at age 38. You're wasting your time if you're spending 10 hours per week on investing (though I assume it's an engaging hobby for some).
Numerous studies have shown that between 85% and 90% of the well-dressed, impressively credentialed, active mutual fund managers fail to beat the S&P 500 after fees. The long running DALBAR study shows that investors picking individual stocks as a group capture a small fraction of the S&P 500 return.
This is the way I explained the advantages of "long-term buy & hold, low-fee, index fund investing" to my engineering colleagues at the office.
"Imagine you could go to engineering school, never crack a book or attend a class, and still get a starting salary and lifetime income equal to or better than 85% to 90% of your classmates. Would you take that bet?
That's what investing in a low-fee index fund is offering you versus the rest of what Wall Street is selling."
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