Comparing Stock Market Strategies

Quote: Archvaldor1

Quote: billryan

That is where discipline comes in. You MUST pay yourself first. If your take-home pay is $1,000, live on $850. If it is $3,000, live on $2550. That 15% off the top is sacred and untouchable.

That advice worked in the 60's through the 90's.

Nowadays for most people there simply isn't any excess to save. Indeed, a huge number of people are surviving on credit.

No amount of discipline is going to help them.
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It’s still great advice. Most people just live beyond their means. Which is understandable as credit is easy to obtain and impulses are hard to control.

Ran across a YouTuber documenting her beginning forays into trading and what I've seen so far in a couple videos is she is scalp trading for peanuts. She'd try to win $5 on a trade, then doubled it to $10, then doubled it to $20 but the market only moves a few cents so she's piling on more shares with each trade. I think she mentioned she uses the Schwab platform for her charts and the Robinhood charts aren't as good. I don't think Robinhood likes scalp traders and will ban them if they aren't big enough. After 120 trades, she's till adding on shares and is up to around 25 shares per trade, I don't know if these are leveraged trades because how can you short Tesla and only win $25? If they're not leveraged she'd have to plunk down some serious money for these trades.

Quote: unJon

Quote: Archvaldor1

Quote: billryan

That is where discipline comes in. You MUST pay yourself first. If your take-home pay is $1,000, live on $850. If it is $3,000, live on $2550. That 15% off the top is sacred and untouchable.

That advice worked in the 60's through the 90's.

Nowadays for most people there simply isn't any excess to save. Indeed, a huge number of people are surviving on credit.

No amount of discipline is going to help them.
link to original post

It’s still great advice. Most people just live beyond their means. Which is understandable as credit is easy to obtain and impulses are hard to control.
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I made $150k pa from my business during covid. After several huge tax bills, my roof falling in during storm and some very expensive family medical expenses there was basically nothing left. There was no lack of discipline there I spend literally nothing on my self, I don't even own a car or a smartphone.

I own my own home and had external income from investment and ap so I was fine, but I don't know how any one facing those issues earning less without extensive expensive in ap would cope with that type of bad but not especially extreme luck. If it had happened earlier in my life I would have ended up on the street.

In any case, even if you believe the problem is lack of discipline it doesn't really change the basic principle that investment talent is not going to help you that much with limited capital. It doesn't matter if the reason people don't grow their wealth is lack of capital of lack of discipline, the fact they are not growing their wealth means there is an additional barrier to investment success other than simply being good at investing.

Nice post. Agree with most all of it. And sorry about your hardships.

I was never espousing that having talent investing is an easy way to easy street. I’m actually very skeptical many people at all have any investing talent. I disagree with what I read you to say that beating the market is easy. It isn’t, IMO.

There’s still real value in the wisdom of Joseph:

“Now therefore, let Pharaoh select a discerning and wise man, and set him over the land of Egypt. Let Pharaoh do this, and let him appoint officers over the land, to collect one-fifth of the produce of the land of Egypt in the seven plentiful years. And let them gather all the food of those good years that are coming, and store up grain under the authority of Pharaoh, and let them keep food in the cities. Then that food shall be as a reserve for the land for the seven years of famine which shall be in the land of Egypt, that the land may not perish during the famine.”

Quote: Archvaldor1

Quote: billryan

That is where discipline comes in. You MUST pay yourself first. If your take-home pay is $1,000, live on $850. If it is $3,000, live on $2550. That 15% off the top is sacred and untouchable.

That advice worked in the 60's through the 90's.

Nowadays for most people there simply isn't any excess to save. Indeed, a huge number of people are surviving on credit.

No amount of discipline is going to help them.
link to original post

Most people should put more than 15% away. Instead of drinking a Starbucks coffee and spending $100's on tv services save that money.

Quote: Archvaldor1

Quote: TomG

-if $50,000 and $100,000 earners are both living pay-check-to-paycheck, the higher earner could remove themselves from that group simply by living the same way the lower earner does.

No that does not follow. A young healthy person has very few financial commitments. An older person may have medical bills, dependents etc. You have no choice in those things.If your roof falls in during a storm or your house floods or your family requires medical expenses that insurance does not cover, you can't simply wave a magic wand and switch places with a 20-something kid with no liabilities.

If the two people have vastly different expenses, then they don't qualify as living the same way. Your trolling is getting lazier. I know you can do better.

Quote: Archvaldor1

To actually grow your bankroll significantly at the marginal level requires a long and sustained period without any of the cataclysmic life-shocks which in aggregate occur frequently.

Maintaining a long and sustained period without any turmoil would go a long way in allowing someone to accumulate a lot of money. Same with a long and sustained period of beating the stock market.

Quote: billryan

That is where discipline comes in. You MUST pay yourself first. If your take-home pay is $1,000, live on $850. If it is $3,000, live on $2550. That 15% off the top is sacred and untouchable.

This is just weird. Two people earn the same amount of money each month. The first takes 15% of income, invests it, then spends the rest on stuff. The other spends some of the money on stuff, then invests the rest. There is a possibility the person who doesn't pay themselves first is the one investing more.

Quote: billryan

Picture yourself on a boat journeying to a new land. You bought food for the journey, but you also bought breeding pairs of pigs so you'll
have food in the new land. If you eat the pigs now, you and your descendants will have no pigs in the future. Therefore, you'll go hungry on the journey, but you'll have plenty of food later.

Picture a person who needs food, housing, transportation, and medicine. It all costs more than 85% of income. If she gives up that stuff now, she might not be able to earn much money in the future. Invest less this month to have plenty later.

Quote: DRich

Quote: Archvaldor1

Quote: billryan

That is where discipline comes in. You MUST pay yourself first. If your take-home pay is $1,000, live on $850. If it is $3,000, live on $2550. That 15% off the top is sacred and untouchable.

That advice worked in the 60's through the 90's.

Nowadays for most people there simply isn't any excess to save. Indeed, a huge number of people are surviving on credit.

No amount of discipline is going to help them.
link to original post

Most people should put more than 15% away. Instead of drinking a Starbucks coffee and spending $100's on tv services save that money.
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More intelligent people than I have determined the 15% mark. I was taught ten percent as a kid, but that was with the assumption I'd have a pension. Retirement was said to be a three-legged stool- social security, your pension, and your savings were supposed to be equal income streams. Going forward, fewer people have any sort of pension plan.

Quote: TomG

Quote: billryan

That is where discipline comes in. You MUST pay yourself first. If your take-home pay is $1,000, live on $850. If it is $3,000, live on $2550. That 15% off the top is sacred and untouchable.

This is just weird. Two people earn the same amount of money each month. The first takes 15% of income, invests it, then spends the rest on stuff. The other spends some of the money on stuff, then invests the rest. There is a possibility the person who doesn't pay themselves first is the one investing more.

Quote: billryan

Picture yourself on a boat journeying to a new land. You bought food for the journey, but you also bought breeding pairs of pigs so you'll
have food in the new land. If you eat the pigs now, you and your descendants will have no pigs in the future. Therefore, you'll go hungry on the journey, but you'll have plenty of food later.

Picture a person who needs food, housing, transportation, and medicine. It all costs more than 85% of income. If she gives up that stuff now, she might not be able to earn much money in the future. Invest less this month to have plenty later.
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It's called living within your means. If you can't live on 85% of your income, you have two choices: cut your expenses or raise your revenue. I worked a regular job, then did two shifts working security, and did at least one comic or baseball card show a weekend for a few years. I went about the smart way and had three jobs I loved. I doubt I'd have done it if I had a lousy job.

Quote: unJon

Nice post. Agree with most all of it. And sorry about your hardships.

I was never espousing that having talent investing is an easy way to easy street. I’m actually very skeptical many people at all have any investing talent. I disagree with what I read you to say that beating the market is easy. It isn’t, IMO.

There’s still real value in the wisdom of Joseph:

“Now therefore, let Pharaoh select a discerning and wise man, and set him over the land of Egypt. Let Pharaoh do this, and let him appoint officers over the land, to collect one-fifth of the produce of the land of Egypt in the seven plentiful years. And let them gather all the food of those good years that are coming, and store up grain under the authority of Pharaoh, and let them keep food in the cities. Then that food shall be as a reserve for the land for the seven years of famine which shall be in the land of Egypt, that the land may not perish during the famine.”
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Thanks for your concern. Fortunately I am fine. I pushback against this type of advice because I think for a lot of people no amount of hard work or discipline will help them and I think we need social reform in addition to personal respobsibility.

I do like that passage and it does indeed contain much wisdom. You have me at a disadvantage here though: I am embarrassed to say I am familiar with it from the musical not the original source material.

Quote: billryan

It's called living within your means. If you can't live on 85% of your income, you have two choices: cut your expenses or raise your revenue. I worked a regular job, then did two shifts working security, and did at least one comic or baseball card show a weekend for a few years. I went about the smart way and had three jobs I loved. I doubt I'd have done it if I had a lousy job.
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That's interesting. That was basically my approach: do something I love and work really really hard at it.It does get the money and you definitely CAN grow your bank that way.

But what was the cost in your case? In my case I ended up sitting at my pc for so long I ended up with type 2 diabetes. I got into shape and fixed it but it costs me a lot of time and effort to stay healthy now. So it is IMO questionable whether you aren't storing up problems for yourself in other ways over-working yourself even if you enjoy it-like running up a credit card balance.

Quote: Archvaldor1

Quote: unJon

Nice post. Agree with most all of it. And sorry about your hardships.

I was never espousing that having talent investing is an easy way to easy street. I’m actually very skeptical many people at all have any investing talent. I disagree with what I read you to say that beating the market is easy. It isn’t, IMO.

There’s still real value in the wisdom of Joseph:

“Now therefore, let Pharaoh select a discerning and wise man, and set him over the land of Egypt. Let Pharaoh do this, and let him appoint officers over the land, to collect one-fifth of the produce of the land of Egypt in the seven plentiful years. And let them gather all the food of those good years that are coming, and store up grain under the authority of Pharaoh, and let them keep food in the cities. Then that food shall be as a reserve for the land for the seven years of famine which shall be in the land of Egypt, that the land may not perish during the famine.”
link to original post

Thanks for your concern. Fortunately I am fine. I pushback against this type of advice because I think for a lot of people no amount of hard work or discipline will help them and I think we need social reform in addition to personal respobsibility.

I do like that passage and it does indeed contain much wisdom. You have me at a disadvantage here though: I am embarrassed to say I am familiar with it from the musical not the original source material.
link to original post

If a person doesn't want to work hard or practice the necessary disciplines, what social reform will allow them to prosper?

Quote: TomG

Picture a person who needs food, housing, transportation, and medicine. It all costs more than 85% of income. If she gives up that stuff now, she might not be able to earn much money in the future. Invest less this month to have plenty later.
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I don't know if that is true since over 66% of adults are married and share many of those costs I would guess the majority of adults have over 15% of their income left after food, housing, transportation, and medicine.

I just think too many people "waste" a bigger portion of their income than they will admit. I was amazed when I heard the average car payment on a new car is now over $750. Poorer people definitely need to spend much less on cars than they do.

Quote: DRich

Quote: TomG

Picture a person who needs food, housing, transportation, and medicine. It all costs more than 85% of income. If she gives up that stuff now, she might not be able to earn much money in the future. Invest less this month to have plenty later.
link to original post

I don't know if that is true since over 66% of adults are married and share many of those costs I would guess the majority of adults have over 15% of their income left after food, housing, transportation, and medicine.

I just think too many people "waste" a bigger portion of their income than they will admit. I was amazed when I heard the average car payment on a new car is now over $750. Poorer people definitely need to spend much less on cars than they do.
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Those numbers are skewed by Teslas and $100,000 pickup trucks.

Quote: billryan

If a person doesn't want to work hard or practice the necessary disciplines, what social reform will allow them to prosper?

I'm not talking about those people.

There are many couples working multiple jobs and still struggling to survive.

An individual should have personal responsibility for themself, the state should have the general responsibility for social welfare to make that possible.

Quote: DRich

Quote: TomG

Picture a person who needs food, housing, transportation, and medicine. It all costs more than 85% of income. If she gives up that stuff now, she might not be able to earn much money in the future. Invest less this month to have plenty later.
link to original post

I don't know if that is true since over 66% of adults are married and share many of those costs I would guess the majority of adults have over 15% of their income left after food, housing, transportation, and medicine.

I just think too many people "waste" a bigger portion of their income than they will admit. I was amazed when I heard the average car payment on a new car is now over $750. Poorer people definitely need to spend much less on cars than they do.
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I've made some observations about this. A bunch of things have changed over the past few decades and one of them is well known as the widening of the class divide and the disappearance of the middle class. So that space between being upwardly mobile and downwardly mobile is now more like a peak with no stable position and your either on the right side of it or you are not.

The thrifty and efficient habits that used to be part of being middle class are now considered lower class, and being seen doing those things now brings a social stigma. And one's access to opportunities has a huge social component. "It's not what you know, but who you know" has always been the case to some degree but more so now than ever in our lifetimes, now that so much wealth is inherited as well as prestigious positions, so a social stigma is more damaging than it was in the recent past, I was talking to some college guys and asked them why I don't see young guys like them working night shift jobs, waiting tables in diners, painting crews and such anymore, and they told me they don't want to be seen doing that by their peers. Word gets around, and they are no longer considered to be of the class that is upwardly mobile, and for young people still very concerned about dating and relationships and making their contacts for the future, that is devastating.

So I would assume spending a lot of money on cars and clothes and living in a trendy neighborhood is the same thing; people afraid to be seen as on the wrong side of that socioeconomic mobility line and using these items to identify themselves as someone who is moving up instead of moving down, and the fact that it is fake and unsustainable is not so important.

Quote: billryan

Quote: DRich

Quote: TomG

Picture a person who needs food, housing, transportation, and medicine. It all costs more than 85% of income. If she gives up that stuff now, she might not be able to earn much money in the future. Invest less this month to have plenty later.
link to original post

I don't know if that is true since over 66% of adults are married and share many of those costs I would guess the majority of adults have over 15% of their income left after food, housing, transportation, and medicine.

I just think too many people "waste" a bigger portion of their income than they will admit. I was amazed when I heard the average car payment on a new car is now over $750. Poorer people definitely need to spend much less on cars than they do.
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Those numbers are skewed by Teslas and $100,000 pickup trucks.
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I agree, but those are the people that are spending their monthly nut and not saving.

Quote: AutomaticMonkey

Quote: DRich

Quote: TomG

Picture a person who needs food, housing, transportation, and medicine. It all costs more than 85% of income. If she gives up that stuff now, she might not be able to earn much money in the future. Invest less this month to have plenty later.
link to original post

I don't know if that is true since over 66% of adults are married and share many of those costs I would guess the majority of adults have over 15% of their income left after food, housing, transportation, and medicine.

I just think too many people "waste" a bigger portion of their income than they will admit. I was amazed when I heard the average car payment on a new car is now over $750. Poorer people definitely need to spend much less on cars than they do.
link to original post

I've made some observations about this. A bunch of things have changed over the past few decades and one of them is well known as the widening of the class divide and the disappearance of the middle class. So that space between being upwardly mobile and downwardly mobile is now more like a peak with no stable position and your either on the right side of it or you are not.

The thrifty and efficient habits that used to be part of being middle class are now considered lower class, and being seen doing those things now brings a social stigma. And one's access to opportunities has a huge social component. "It's not what you know, but who you know" has always been the case to some degree but more so now than ever in our lifetimes, now that so much wealth is inherited as well as prestigious positions, so a social stigma is more damaging than it was in the recent past, I was talking to some college guys and asked them why I don't see young guys like them working night shift jobs, waiting tables in diners, painting crews and such anymore, and they told me they don't want to be seen doing that by their peers. Word gets around, and they are no longer considered to be of the class that is upwardly mobile, and for young people still very concerned about dating and relationships and making their contacts for the future, that is devastating.

So I would assume spending a lot of money on cars and clothes and living in a trendy neighborhood is the same thing; people afraid to be seen as on the wrong side of that socioeconomic mobility line and using these items to identify themselves as someone who is moving up instead of moving down, and the fact that it is fake and unsustainable is not so important.
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I call BS. Not on whether a couple of people told you they feel like they need to spend all their money, but on the truth that they actually need to. Keeping up with the Joneses has always been a thing. And not a healthy thing for your savings rate.

Quote: Archvaldor1

Quote: billryan

If a person doesn't want to work hard or practice the necessary disciplines, what social reform will allow them to prosper?

I'm not talking about those people.

There are many couples working multiple jobs and still struggling to survive.

An individual should have personal responsibility for themself, the state should have the general responsibility for social welfare to make that possible.
link to original post

Why is the couple with multiple jobs struggling? They don't have an income problem. They have cash flow problems for one simple reason- they spend more than they make. If only there were a simple solution to that. I realize it sounds old-fashioned, but making yourself valuable at your job and spending less than you make is a proven pathway to success. It's boring but that damn tortise wins the race more often than not.

Quote: billryan

I realize it sounds old-fashioned, but making yourself valuable at your job and spending less than you make is a proven pathway to success.

It doesn't sound old-fashioned, it sounds naive. I don't mean that in an unkind way: I actually envy your innocence.

My experience with conventional employment is that dark triad traits were generally more important than competence.

This is why I was drawn to ap and investment. You have to be good at it to succeed in the long-term.

Quote: Archvaldor1

Quote: billryan

I realize it sounds old-fashioned, but making yourself valuable at your job and spending less than you make is a proven pathway to success.

It doesn't sound old-fashioned, it sounds naive. I don't mean that in an unkind way: I actually envy your innocence.

My experience with conventional employment is that dark triad traits were generally more important than competence.

This is why I was drawn to ap and investment. You have to be good at it to succeed in the long-term.
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Common sense is uncommon these days.

Quote: Mr. A. Common Problem

Too cool for school, and too brilliant to put up with those incompetent business enterprises and all the stupid unemployable people they keep employing to run them. It's society, and the economy, because I know it can't possibly be me.