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I read many personal finance, investing, fitness, and military related articles throughout the month. I learned everything I know about investing and personal finance from reading more experienced and smarter people’s work. By sharing what I am reading with you, you can get smarter along with me.
This will be an ongoing series that I will update once a month for at least the next year (2017) with articles, blog posts, Reddit posts, and forum threads.
Here are 10 links I found worth read this month.
My book, The Intelligent Military Investor, is now available as a PDF here or on Amazon! It currently has all 5 or 4 star reviews, with 82% reviews 5 stars. The Amazon price is a deep discount from the PDF version. Both the PDF and Kindle version are DRM (digital rights management) free, so you can share the book with your friends, family, squadron mates, or anyone else you think may find it useful. It’s a short read, taking most people 2-3 hours to get through it, but I think it may have a lasting impact on your life. Please let me know what you think or if you would like a coupon code.
The Economist covers relationships and money in “Couples and Money.” I am amazed when I hear about my married friends who do not share any or little financial information with their partners.
I think many relationship problems have their root in people's fear, misunderstanding, and ignorance of finances. Educated yourself and your partner and you will probably have a more successful relationship. Personally, money was one of the first things my wife and I discussed when we started dating seriously.
Active vs. Passive Investing
More evidence that passive funds beat index funds from MarketWatch. In this study only 5% of active managers beat their index. Only 34% of actively managed large cap funds survived the last 15 years. That is insane! Not only do 95% of active managers not outperform the market, they cannot even keep their fund going for 15 years before it folds or gets adsorbed into another fund. Do yourself a favor and invest like I do. My Money Blog also had a good article on how hard it is for investment professionals to beat the market.
I heard this interview on NPR last week. It's the classic well paid white guy saves a lot of his money and “retires” by 30-40 years old story. Now he runs a blog and makes even more money than he did before by telling people how to save and invest their own money. Some good nuggets of information in the interview. The comments on the article are also funny to read, lots of people making excuses for their own financial ignorance and inability to save.
Business Insider has a roundup of advice from the financial independence, early retirement community. Motivating to see lots of people who have done it.
Joe at Retire By 40 hits 3 books he wished he had read in his twenties. I disagree with the “Your Money or Your Life” recommendation. Many in the FIRE community swear it's the greatest book ever but I really didn't enjoy it. Maybe because I started with Mr. Money Mustache and Early Retirement Extreme the concepts did not seem as revolutionary.
Overvalued Stock Market
Robert Shiller is sounding the alarm on stock market valuations. Personally I think he is right and we are headed for a crash by the end of the Trump presidency, probably by 2020. Take a look at the Shiller PE chart below:
We are approaching bubble territory rapidly. However, as seen in the nineties it's very hard to predict when the bubble will burst. The market could keep climbing for the next two years. I do not believe anyone can reliably time the market, so I stick to my personal investing principles and asset allocation through good and bad times. If you would like to try beating a buy and hold portfolio, try this quiz from Betterment.
Finally, Root of Good has a guest post on when enough is enough. This is something that comes up frequently in personal finance and FIRE discussions. Mr. Money Mustache covered this in his World Domination talk which I think is worth the 28 minutes of watching.
Personally, I think a lot of people never think about the life they want to live or how much that life would cost. If they did, I think people would discover that happiness can be found relatively affordably and their life may not fit the traditional consumer mold of education, job, marriage, kids, house, and work 40-50 years until retirement.