Thread by @roncaruthers

1. It's time.

Let's address the 4 biggest risks to your money one by one.

Let's start with Market Risk.

THE single biggest risk to your money.

Here it is in short:

What goes up WILL come down.

Sometimes a little, sometimes a lot.

Sometimes slow, sometimes fast.

https://twitter.com/roncaruthers/status/1212089034119487491

2. But the market WILL go down at some point,

...and your money will go right along with it, if it is all in the market.

👉Do NOT have all your money in the stock market.

Like Uncle Warren Buffet said:

"Rule #1: Don't lose money.

Rule #2: NEVER forget Rule #1."

3. Here is an example:

The @WSJ listed 2019 as 'the best year for stocks in a decade'.

wsj.com/articles/globa…

And the market DID go up 29%.

But: here is what they didn't mention:

The market DROPPED 22% in the 4th quarter of 2018.

4. So if you had $100,000 on September 30th, 2018,

You would have lost $22,000, and ended the year with $78,000.

Then your money would have grown by 29%, but that would have brought you back to $100,620.

So, your 29% gain 'just' got you barely above break even.

5. Now, for those of you hallucinating that I'm saying 'Don't put money in the market ever,'

That is NOT what I said.

I just said not to have it ALL there.

I like to have about 50/50.

50% in the market, and 50% out.

(We'll talk later about where 'out' is)

6. Like the phrase says:

'Buy low, SELL high'.

Don't forget to SELL when the market is high.

They call it rebalancing.

Shoot, even GAMBLERS know not to go all in every hand.

And if ALL of your money is in the market, you, my friend, are going all in.

Every.

Single. Day

7. Here is another thing:

An investment company ran a study that showed that 2 couples could retire at age 65, pull the same amount from their retirement accounts

And have the same returns: 3 positive years and one negative year.

ONE variable changed: the order they earned in.

8. So, one couple had their best year first, then second best, then least best, then the negative year repeated.

The other couple had the worst year first, then the least good positive year, and so on.

Guess what?

The second couple ran out of money 13 years before the others

9. THIRTEEN !@#!@$ YEARS!!!!

So, WHAT you earn matters, but WHEN and HOW you earn it matters too.

One last thing: Harry Markowitz won a Nobel Prize for stating just that:

Don't have all your money in one place.

Diversify what you're doing.

10. Tomorrow, we'll discuss the next retirement risk, working our way through all four (plus a couple of bonus 'risks' that were pointed out to me.)

And then we'll discuss what to do next.

Questions? DM me.

11. If you already have DM'd me, I've been buried in requests and traveling, but please know that I value every one of them and WILL respond to each of them.

Except those of you offering to send nudes.

I KNOW one of you is a spy for my wife....