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Comment by tvanantwerp | Hacker News Reader

This blog post is highly misleading. The only reason you made $6k in a month with index funds is A) because you would have already had about $60k in the account and B) because indexes were recovering from a large drop just before that one-month time horizon. To give more perspective, the 3-month return for your most heavily weighted fund is about half of the current 1-month average. To make $6k/month assuming average annual growth (not something you can always count on, but let's keep it simple), you'd need closer to $900k already in your account.

Should people invest? Yes. Should they invest in index funds instead of day-trading? Almost certainly. Should they expect $6k/month returns from whatever change they scraped from underneath the sofa cushions? No.

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I have more then 60k in the account. Yes, results are atypical. I said that in the blog post. I also said assume 8% a year returns on average.

Edit: Btw, everything you said is true. And great advice for those trying to follow a similar path. I rarely even check my on my stocks, it's mostly set it and forget it. I simplified this for family members and friends who I think would benefit greatly from investing.

Hey Steven,

I saw what your investing allocation was from your blog post 60% VTSAX, 25% VTIAX, 10% VGSIX, & 5% VBTLX

Have you heard of betterment? https://www.betterment.com/portfolio/

What do you think of betterments portfolio strategy and allocation? For younger people they recommend 90% stocks 10% bonds.

I think betterment is AWESOME, and well worth their nominal fee. As a matter of fact I am switching all of my non-tax advantaged investments over to them very soon. Mr money mustache on betterment: http://www.mrmoneymustache.com/2014/11/04/why-i-put-my-last-...

I like lazy allocations, take a look at this: http://www.bogleheads.org/wiki/Lazy_portfolios

Also, keep in mind that any investment you do it is WAY better to do it in tax advantaged accounts (401k, roth ira, ira, etc). Typical advice goes like this

Max out 401k up to company match Max out roth ira (currently 5500 a year) Max out 401k fully (up to 22,500 a year) Invest in non tax advantaged accounts

When you contribute to 401k it lowers your taxable income, so if you make 80k, and contribute 20k to your 401k, you only pay taxes on 60k which can be great for tax savings.

Why Betterment over Future Advisor? I really like the latter, but haven't really looked into Betterment all that much.

They cost more. They charge .5 percent on assets vs betterment charging .15 if you have over 100k, and .35% if you dont.

They both do the same thing, tax loss harvesting and automatic rebalancing. That fee difference over 30 years assuming an investment of 20k per year and an 8% return could cost you like 400k - which is not chump change.

How do these compare to https://www.wisebanyan.com?

It seems to be roughly the same idea, but without any fees at all (I haven't used any of them, so I'm likely missing something)

Probably also good to point newbies at the chart from late 2008.

Even accounting for 2008 and the great depression, historically the stock market returns 8% a year. It's a solid vehicle for wealth growth.

I agree. I just think newbies should understand the market doesn't only move up.

But the other tips on this blog post are right.

Yes there are some good one about saving money, but don't have kids? Don't get sick? Used clothes only? There has to be some balance, life isn't only about saving money.

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