Thread by @enigmack09

I finally read "Just Keep Buying" by Nick Maggiulli @dollarsanddata, which changed my outlook on investing and finances.

Here are some powerful takeaways for myself from the book.

#investing #finances #retirementplanning

1) Key to saving more is to increase your income.

Your expenditure does not ⬆️ in line with your ⬆️in income.

The amount you can consume is limited while the income you can create is unlimited.

The gap between them is your increased savings

2) How do you know if you are good at picking stocks

Most of Fintwit including me think that we are good at picking stocks.

But Nick has shown that even the best fund managers have periods of non-performance.

It is hubris to think that we can outperform the market.

3) Another way of rebalancing

Instead of selling the overvalued portion of your portfolio, consider buying more in the undervalued portion.

This increases your portfolio value instead of it maintaining the status quo.

Do not leverage to do so.

4) When can one retire?

Crossover assets are the amount of assets you need to retire on.

Formula = monthly expenses/monthly investment returns

Eg: you want $4K in retirement and your returns are 3% p.a

Amount needed = 4k/(3% divided by 12) = 1.6 million.

Such simplicity

5) Do not forget the reason for investing

It is to fund the lifestyle you want and don't gamble the funds you need to do so.

6) Here are some notable quotes from the book:

"Fear has a greater grasp on humans than the impressive weight of historical evidence" - Jeremy Siegel

"We begin our lives as growth stocks and end our lives as value stocks"

7 ) Nick made it easy for laymen to follow his train of thought and challenge conventional finance dogma. You will take away much more than you expected from this book.

Do share/comment below if there are anything I have missed out on.