Non tech ways of supporting the cruisers lifestyle?

[Steven UK]

Originally Posted by barnakiel

Wowow, slowow down. Now this portfolio, AD 2017, what would it contain actually?

Because I think US gov papers return nominal 1% while the inflation is 2.4%.

Meanwhile the stock market is flying very very high (DJ above P/E 20, much higher at NASDAQ).

Meanwhile the dividends pay 2 to 3% ...

So please step in and enlighten us on what such a portfolio should contain.

Because well managed rentals return 6%, which beats any financial instruments portfolio.

So, what investments do you have in mind?

b.

I have my investments split 50/50 between property and stock market. The properties are managed for me and the stock market I manage myself. The future is uncertain it is best not yo put all your eggs in one basket. Also I don't trust people that claim they can manage your portfolio...

How do you calculate the 6%?

[indiana_ct]

Originally Posted by Steven UK

I have my investments split 50/50 between property and stock market. The properties are managed for me and the stock market I manage myself. The future is uncertain it is best not yo put all your eggs in one basket. Also I don't trust people that claim they can manage your portfolio...

How do you calculate the 6%?

50/50 is a sensible approach.

I am wondering how much time you spend managing your portfolio and how much it also occupies your mind e.g. doing research, thinking of new ideas. The reason I ask is that I know someone who, in retirement, has managed to make managing his portfolio a full-time desk and internet job , which is what I really don't want. I want to focus on the "Voyaging on a Small Income".

[Steven UK]

I work on a computer probably 60-70% of my day so this makes 'monitoring' the investment easy (but a complete waste of time) actual investing and moving funds between different stocks I don't do too much, maybe an hour or two per month. This general happens about every quarter when the dividends arrive or when my bank account becomes over filled and I move it over to investments. I buy blue chip investments and plan on being in for the long haul, not day trading. So it costs me less than a week per year.

[denverd0n]

Originally Posted by indiana_ct

The reason I ask is that I know someone who, in retirement, has managed to make managing his portfolio a full-time desk and internet job , which is what I really don't want.

I manage my own investments. Have since I was in my 20s and first started investing. I spend no more than 3 hours per month doing the "managing." I know lots of people who spend a lot more time than that. The funny thing is, most of them don't seem to make any more return than I do, and a whole lot of them make less.

I suspect that is because they get so obsessive about every little up or down in their portfolio that they are constantly buying and selling, to try to be where the "hot" returns are. This is a mistake. It leads to buy high and sell low, which is exactly the opposite of what you want to do.

I read some years back that more than 70% of the people who invest in mutual funds earn a rate of return that is LESS than the average of all mutual funds. How can that be? Easy. They are doing exactly what I mentioned in the paragraph above. They are buying high, and selling low, trying to chase returns.

With a well-structured portfolio you don't have to chase the returns. You sit back and let the returns come to you. Over the last 40 years, with a reasonably conservative investment mix, I have averaged just under 8% per year in returns. I am very happy with that.

[indiana_ct]

Originally Posted by denverd0n

With a well-structured portfolio you don't have to chase the returns. You sit back and let the returns come to you. Over the last 40 years, with a reasonably conservative investment mix, I have averaged just under 8% per year in returns. I am very happy with that.

Thank you. That also helps with my property v investment calculations.

[Madwand]

Originally Posted by denverd0n

Over the last 40 years, with a reasonably conservative investment mix, I have averaged just under 8% per year in returns. I am very happy with that.

That's good to know, the money from the account that fills my socks is earning 8%. Now I feel even better about my socks and not investing.

[barnakiel]

Originally Posted by Steven UK

I have my investments split 50/50 between property and stock market. The properties are managed for me and the stock market I manage myself. The future is uncertain it is best not yo put all your eggs in one basket. Also I don't trust people that claim they can manage your portfolio...

How do you calculate the 6%?

Nominal and before management costs and taxes. Similar to dividend or bond yields (pre tax in these cases). Management costs are optional and as such should be held out of the equation.

It is OK not to trust people but can you manage the portfolio yourself? If not, then you should have a different portfolio, or a different manager.

Your portfolio mix IS irrelevant. I will avoid longer arguments but imagine the same 50/50 mix (=50% in financial assets) where in one case the assets were purchased 2002/-3 or 2008/-9 while in the other scenario the same assets were purchased in 2016. Forget about the mix for a moment, think of what they call the downward risk of each specific portion of the portfolio.

So this is actually somewhat an argument against managing your portfolio yourself. The pro can be costly but this may come out cheap if he sells or hedges your assets while you are cruising to places without phones, the Internet and Bloomberg terminals.

If you cruise where all the above are present then you may as well stay in NY and manage your wealth rather than pretend that you are out there in the blue yonder, relaxed.

Agree & disagree?

I am in the UNCIVILIZED portfolio management school: I know how to fix a marine toilet and how to skillfully patch a huge rip in that hypalon rib. So rather than manage my fears I sail & cruise while it all lasts.

I work while I can. And so do Jamaicans or Syrians that visit my homeland. I do not get any remorses. I do not tell African immigrants to Canary Islands that they are illegal aliens and should not work.

If your financial assets are recent, keep sharp eye on those tickers. And if you do, you are not sailing. ;-)

Love&freedomtokens,
b.

[barnakiel]

Yes you do. But look at stock market 40 years ago or the bonds market 20 years ago.

Getting this range of returns on a financial portfolio maybe today is impossible. And it is possible such a portfolio made today will be a loss soon and then too for a long time.

The financial markets are very high, money printing is at large, and bond yields are funny (unless you accept 7.5% on junk). Political stability is at an ebb and globalization seems to have spent its whole inertia. Few of us invest directly in China or India. None of my friends speaks Chinese either.

Where could FUTURE profits come from for someone making a financial portfolio today?

Old investments are old. They may be very good ones. But they can not be re-done today.

Where to place that 50% today to go cruising tomorrow and sleep well between annual dividend harvest???

Place it in the locker. Learn a skill people need and one they will need tomorrow. Do something universal (bartending, waiting the tables, doing the dishes, playing and singing, gourmet cooking, welding, spouse spying, gold mining), etc. Live free, day to day. That's what cruising is supposed to be all about, no?

b.

[Steven UK]

Place it in the locker. Learn a skill people need and one they will need tomorrow. Do something universal (bartending, waiting the tables, doing the dishes, playing and singing, gourmet cooking, welding, spouse spying, gold mining), etc. Live free, day to day. That's what cruising is supposed to be all about, no?

b.[/QUOTE]

I like your ideas but it's hard to walk away from something I have spent my life working for, that nest egg needs to keep on earning money. The unknown is a worry but that's why we diversify, property, stocks (not socks ) i have an eye on Kemah TX I think I can work part time and cruise the rest and keep the money in the bank for old age, which is creeping up fast. Right now we have moved around the world so much I gave my son the power ot Vito any further moves till he finished school. But he will be 18 soon and out of the house..., hopefully the markets don't collapse before then...

[barnakiel]

You cannot hedge, not diversify, death.

Your anxiety is not financial but existential. Because you cannot manage death you are trying to manage your portfolio. Read that Kahneman's book for gods' sake!

But life does not care about your portfolios. You will die of cancer at 35, of heart attack at 55 or in a car accident at 65. You are trying to manage something because the important thing, THE THING, is unmanageable.

I know one guy he spent all his life sailing, drinking and loving beautiful women. He did virtually everything to make sure his life was vibrant and not long enough to worry about retirement and (lack of) any pension plan. Now listen to this: he did live to the retirement age, and he died rich. How come? Now, he did not win lotto. He simply looked at the population statistics then he booked a holiday in St Tropez with the last of his money. They lived happily ever after. I actually believe he loved her very much.

So much for wasting you time trying to manage things. The time that could be much better used living.

I'd rather be handsome than rich. I'd rather be lucky than industrious. But since I am rich and industrious I resolved to stop worrying about managing my portfolios. I live here and now and this capirinha is the last tonight and I am off to my bunk.

Sleep well world,
Love,
barnakiel

[barnakiel]

Originally Posted by denverd0n

(...)

I suspect that is because they get so obsessive about every little up or down in their portfolio that they are constantly buying and selling, to try to be where the "hot" returns are. This is a mistake. It leads to buy high and sell low, which is exactly the opposite of what you want to do.

(...)

An even more pleasing explanation is they face more trading and settlement fees if they trade very actively.

If they additionally time their moves erroneously (and you are right this is easier when trading is more frequent) then their loss is your gain.

The more hectic idiots in the market, the better for the seasoned long range investor. Their loss is your gain ...

On the lighter vane, you have noticed some sound studies show buy low sell high is not an efficient long term technique. More studies seem to suggest buy and hold is the king of the investment styles that work best overall. Much as some people who bought GoPro and Fitbit shares in 2014/-15 might disagree.

My answer is: BUY SMART. Buy what WILL go up. This equals to buying anything, then winning the elections. Then introduce laws that your companies benefit from. Sell the stock. Retire and travel the world giving speeches on smart investing.

A bad retirement plan?

b.

[zboss]

Jack Bogle is always a great to listen to. I say stick with the idea that your future returns will suck and its a bonus when they don't.

Tips from Vanguard founder Jack Bogle for 'hazardous times'

[denverd0n]

Originally Posted by barnakiel

Getting this range of returns on a financial portfolio maybe today is impossible.

No offense, but people have been saying that for decades upon decades. I heard it back in the 70s when the market went through a few years of being flat. Market eventually rebounded and went up again. Heard it again back in the late 80s on what they called "Black Monday." Market eventually rebounded and went up again. Heard it yet again in 2001, and again in 2008, and will probably keep right on hearing it. And my bet is that the market will keep right on rebounding, and keep right on eventually going up again.

You can bet the other way if you want to, of course. But since the very beginning, of the very first stock market, the people who have bet that THIS TIME it really is done going up, have always --every single time -- turned out to be wrong.

[indiana_ct]

Originally Posted by denverd0n

You can bet the other way if you want to, of course. But since the very beginning, of the very first stock market, the people who have bet that THIS TIME it really is done going up, have always --every single time -- turned out to be wrong.

Got to agree with that one.

[valhalla360]

Small time real-estate can be a great option if you are local and want to be hands on. I can also see an experience real-estate guy doing OK if they plan the transition to remote carefully (though likely with lower returns as they farm out tasks they used to do and with higher risks as you can't be on top of everything).

The idea that someone who has never played at landlord is going to buy a couple properties and then immediately run them remotely without everything going to poo in short order is where the idea falls down in my mind. There are just too many pitfalls that can cost you thousands very quickly.

Much better to buy basic index funds and leave them alone, except for maybe a once a year rebalancing. (also agree that the doom and gloom market crowd have been wrong since at least the late 1800's. Even those who held on thru the Great Depression did very well.)

Regardless, none of these plans work unless you have a substantial nest egg to start with. If you head out without cash, it's very hard to generate a reliable income bouncing from country to country without a career that lets you work remotely.