inoneearandouttheother asked:

Howdy! I'm young and I have a pretty good retail job at a home improvement warehouse that cannot be named. I have a 401(k) where they match the 3% contribution I give in my paycheck. I diversified with some money in a mutual fund set to mature when I retire, a higher risk fund, bonds and some common stock. What else can I do now (at 21) to ensure a bright and early retirement future?

If you want to retire early, you will need to open a brokerage account in addition to your 401(k). You cannot withdraw the money from your 401(k) until you are 59.5 years old without incurring a 10% penalty in addition to full income taxes on that money. Which would essentially mean giving up almost half of every dollar you withdraw early.

So, step 1: open a brokerage account. You can put money in and take money out of brokerage accounts whenever you want, as often as you want, with no penalties. A brokerage account allows you to invest like your retirement account but keeps that money under your control rather than locking it up. Why have a retirement account at all? Well, most are tax-advantaged, so it makes sense to max those first usually.

Step 2: figure out your number. Most people calculate the number they need to retire (early or not) by using some multiple of their current salary. Let’s say your current salary is $40,000 - traditional wisdom says you’ll need at least 25x’s that to retire, or $1,000,000. That’s a very quick and easy shortcut to the question “how much do I need to retire”. (you use 25x’s because history tells us you should be able to withdraw 4% annually and not deplete your principal during an average retirement)

Now, while that’s a good shortcut number, it’s not necessarily the best number. Instead, I would focus on how much you SPEND every year, not how much you make. If you only need to spend $2,000/month to cover expenses and have some fun money, or $24,000 annually, you don’t need to save $1,000,000 before retiring, you only need to save $600,000 (assuming the same 4% withdrawal) - way less than our shortcut provided.

Or maybe you’re making $40k a year, but spending $45k (going into debt every year to cover all of your expenses). If that’s the case, you need $1,125,000 to retire - more than our shortcut provided.

Hopefully that illustrates why it’s more important to focus on spending, not earning, when calculating your retirement number.

Step 3: research various investments. Know what you’re getting into. Know the pros and cons of every investment you buy. Each person invests differently, and for the most part, that’s okay, as long as you understand the risks and rewards and then shape your plan around those risks and rewards.

Me personally? I favor income-producing assets over equity assets. I like investments that pay me a dividend or royalty check every month/quarter vs a stock price that rises. I understand that over a longer period, on average, my income-producing investments will appreciate at a slower rate when compared to equity assets. But I also understand that over a longer period, on average, my income-producing assets will have less volatility. That helps me to not panic sell, that helps me to sleep better at night, and so I’ve traded a little bit of reward for a little bit of lower risk. That’s how I shaped my plan.

My plan won’t work for everyone. Someone else may want to be all equities and think I’m silly receiving dividends every month. They may not blink at 10% gains and 10% drops in the same week. You should do what makes sense for you and your plan.

There have been numerous studies done that show it doesn’t really matter too much what you invest in, so long as you are diversified, don’t panic sell, and stay invested. The vast majority of wildly different portfolios will usually end up in about the same place over a couple decades as long as you buy and hold. Period.

If you’re not sure what to invest in, but want to get your money into the market now (the old saying is “time in the market is better than timing the market”), then just buy a target date mutual fund from Vanguard. This is a great investment. The lowest fees anywhere. You are instantly diversified with thousands of US and global stocks and bonds. Every year Vanguard rebalances the mix for you automagically and over time they move you from mostly equities to mostly bonds, so your target date fund gets less risky as you get older. It’s the single best placeholder - and for a lot of people will be the only investment they ever need - while you do more research on other investment options.

Finally, step 4: If you plan on retiring super early (in your 30s or 40s), I highly recommend you set up some alternate sources of income. This is usually called passive income, though it’s rarely truly passive. This can come from a hobby (making and selling things on etsy or ebay), a royalty (designers and musicians make money every month from work they did in the past), a part-time gig (“job” sounds not-retired, so let’s use gig) that you love doing and happen to get paid for, etc. The 4% safe withdrawal rate is usually only applied to traditional retirements, those lasting about 20-30 years max. If you want to retire at the age of 30 or 40, one would hope you plan on living longer than 20-30 years and therefor you need to make your money last longer.

Having some sort of (even really small) income to supplement your investments will help a lot. For example, if you can rent out a spare room in your house, or cut lawns if you like being outside, or work at the library if you like being inside, etc making just $300/month, that’s the same as having an additional $72,000 invested in a fund paying a 5% dividend. When you think of small income drips in that way, you can see how powerful even “gig”ing a few hours a week can be.

Hope that helps. Please let me know if you want any more information on any of the above. Walls of text don’t go over well on tumblr, and believe it or not, this is the short version of all this. So ask away!

Top investor predicts tech bubble burst, mass unicorn die-off 

Many young technology companies valued at $1 billion or more – known in the industry as “unicorns” – are expected to crash soon, Sir Michael Moritz, chairman of Sequoia Capital, told The Times of London on Tuesday. “There are a whole bunch of crazy little companies that will disappear. There are a considerable number of unicorns that will become extinct,” Moritz said.

Moritz was an early investor in Google, PayPal and Yahoo, which helped him to amass an estimated fortune of $2.7 billion. He is now warning that the “euphoric” atmosphere in Silicon Valley is causing “sporty” valuations for “absolutely everything.”

How BuzzFeed (yes, BuzzFeed) beats the market

They post stuff like this…

….and yet they’re probably better stock pickers than 95% of professional fund managers.

BuzzFeed is one of the most visited news outlets in the world precisely because they understand what makes people click.  Literally.  They know trends better than anyone on the planet.

At LikeFolio, we really don’t care what people are saying about the stock… we care what they’re saying about the brands and products the company makes.  

Here’s the 10 companies behind the products that BuzzFeed has talked about the most (The BuzzFeed Top 10) over the past 12 months:

For those of us in the market, that’s quite a list:  $FB, $TWTR, $DIS, $YHOO, $NFLX, $AAPL, $GOOG, $TWX, $SBUX and $AMZN.

That basket of 10 stocks has 9 winners and 1 loser (Sorry $TWTR) over the past 12 months.

Even better, the BuzzFeed Top 10 returned a profit of over 17% for the past year, easily beating the S&P 500 (10.65%) and a vast majority of well-paid fund managers.  (Don’t get too cocky, BuzzFeed— Warren Buffet beat you out by 1%.)

Investing doesn’t have to be hard.  In fact, we believe it’s best when it’s kept simple.  Invest in the things you understand and like.  Find trends in social volume and ride them.  Have fun with it.  You’re good at this!

— Andy Swan is the founder of LikeFolio, which searches all of Twitter for important shifts in consumer behavior around the brands owned by publicly-traded companies.

Even Apple can't beat this -

Even Apple can’t beat this

EMERGING GROWTH BUY ALERT Apple wants to take over the world—have a product for everything you need. Well, I’m sorry Apple, but this company has already done it. This integrated technology company’s products are already only found in virtually every Ford,…


In 2012, Christina Cacioppo and I were invited by bobulate​ to teach at SVA’s MFA in Interaction Design Program.  Together, we redesigned the Entrepreneurial Design course weaving together our own unique experiences and perspectives as well as what we had learned during our time at Union Square Ventures.

I could talk forever about the similarities between investing and teaching, but the one lesson that stands out to me today is that there’s an indeterminable lag time in assessing the impact of your decisions.  

As an investor, you never know if you’re right until you are, and even then you may never really know why you were right.  In some sense, it doesn’t really matter.  Being right and being lucky are two sides of the side coin—you just know that you are.

Similarly, as a teacher you never really know whether your students have successfully acquired the knowledge and lessons you desired to impart, much less whether they really learned anything at all.  Even in my most confident moments, I am consistently surprised when it does happen, as well as with what the student actually learns.  I rarely try to understand the how or why.

Instead, what I think is more worthwhile is to focus on what you as the instructor (or the investor) are learning yourself.  What do you take away from the experience that enables you to abductive-ly reason or pattern match more effectively in the future?  What did you previously only understand intellectually that you are now able to internalize?

For teachers and investors, this is the way in which the “learn by doing” adage applies.  You’re not making a physical thing or an app, but you are making decisions based on a set of principles, observing the outcome, and iterating on the principles.  Then, you do it again and again.

It’s through this lens that I’ve best learned to frame the practice of teaching—not as a charitable act performed out of the goodness of ones heart, but as one of the most effective ways to continually learn once you are out of a formal, structured educational program or a thoughtful venture firm.

I teach so that I can continue to learn.  What I’ve found is that when you are privileged to spend time with as wonderful a group of students as I have, and you look at returns in 3 to 5 year window, it pays outsized returns in ways you would never be able to predict, much like the best venture funds.

Congrats to Sana and Tash on their See Think Make talks this week!

(images via @allisonacs and @seethinkmake)

remember my master plan to buy some shares of Voltage?  I do. so I’m doing my due diligence and all that and mmhmm mmmhmm yep yep yep check and check, uhhuh I see….

tra la la la la and NOPE

it’s the end of the dream y’all /cries

Fidelity Contrafund portfolio manager: I made a mistake with apple after Steve Jobs died

Fidelity Contrafund portfolio manager: I made a mistake with apple after Steve Jobs died

[cfsp key=”adsense_336x280″]”A lot of people have missed the boat on Apple Inc. in recent years with the company continuing to grow at a staggering pace,” Ritesh Anana reports for Benzinga. “However, rather than making excuses, great investors acknowledge their mistake and learn from them.”

“Will Danoff, Fidelity Contrafund’s portfolio manager, is among the investors who fall in the latter…

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What You Need To Know About This Boom: Our Q&A With A Biotech Expert

Brad Loncar has been investing in the biotech market for more than 10 years. We recently hosted a Q&A with him and the insights are spectacular. Especially in the light of the recent “correction” seen throughout the biotech sector:

The question everyone is asking: is biotech a bubble?

The answer is, no. We’re not in a bubble in a sense that it’s all an illusion. There’s too many interesting innovations happening right now

— Brad Loncar (@bradloncar)

Mar. 23 at 01:02 PM

However, biotech stocks are over-priced right now. Look at how hot biotech has already been in 2015.

— Brad Loncar (@bradloncar)

Mar. 23 at 01:05 PM

I was looking at my portfolio this morning. And I wouldn’t add to most positions unless they were at least 30% cheaper. Nothing’s cheap now.

— Brad Loncar (@bradloncar)

Mar. 23 at 01:07 PM

What are some of your favorite biotech stocks right now?

@MBean Two smaller ones I like are $OTIC and $AERI because they are innovating on unique areas. $BLUE is very exciting too, but risky.

— Brad Loncar (@bradloncar)

Mar. 23 at 01:24 PM

@scheplick Some favorites right now are $KITE and $JUNO, b/c CAR-T (immunotherapy) is going to revolutionize cancer care.

— Brad Loncar (@bradloncar)

Mar. 23 at 01:19 PM

Biotech and healthcare have become the hottest IPO market. Is this significant?

@BeckyHiu Over the long-term, yes. It’s sustainable because there’s so much neat innovation happening. Over the short-term, overvalued.

— Brad Loncar (@bradloncar)

Mar. 23 at 01:15 PM

A few comments about CAR-T and its potential to change cancer treatment:

@prx No, I don’t think CAR-T will be short lived. They are already curing some very sick patients. And that tech really is in inning one.

— Brad Loncar (@bradloncar)

Mar. 23 at 01:35 PM

@scheplick Innovation. With gene therapy for genetic diseases and CAR-T for cancer, there is hope for cures. Even though that word is taboo.

— Brad Loncar (@bradloncar)

Mar. 23 at 02:04 PM

Thoughts on two big cap bios:

@jakeosmith I think $GILD will trade in a range around the current price until they make a new, exiting acquisition.

— Brad Loncar (@bradloncar)

Mar. 23 at 02:05 PM

@rabmanduky You just need to look very closely at their organic growth. If that doesn’t pick up, eventually the rollup strategy fails. $VRX

— Brad Loncar (@bradloncar)

Mar. 23 at 01:59 PM

If you enjoyed this Q&A, please let us know in the comments below. Is there anyone who you want to hear from? We’re listening and taking suggestions for new Q&As. You can read our last Q&A here, it’s about energy and oil.


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How to Build a Home That Will Stand The Test Of Time

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How to Build a Home That Will Stand The Test Of Time

Building a safe home in a safe location is on the top of most peoples’ homeowner list. So where is the best place to buy a home if you are hoping to stand the test of time, and what features are smart to look for?

The location in which you buy is important. There is enough data to suggest sea levels have been rising. And even if the odds of harm are small, there are enough natural disasters each year to warrant thinking about where you will live. Plus, who wants to invest hundreds of thousands of dollars – only to see it washed out to sea?

Identifying Safe Locations to Buy Real Estate

There are some destinations which are prone to frequent natural disasters. Tornado Ally, and the South East coast of Florida are two of them. With many storms each year, you won’t buy here without great insurance and a willingness to rebuild. We’ve seen risk on the beachfront of the Northeast, Southwest Florida, and even California. Erosion and rising sea levels may not be an issue during most of our lifetimes. However, for those planning to buy lasting real estate, its worth thinking ahead.

Technology has made it easy to identify high risk zones. There are a variety of free apps and online tools to help. Some are free. Some are serious and others are just plain fun. and provide interactive tools. They show which areas could flood based on how high sea levels could rise. They also show the odds of sea levels rising to given amounts over time. Those worried about everyday crime can find many tools for evaluating local statistics. When it comes to crime figures, home buyers and investors need to read between the lines. What type of crime is it? Why is it happening? Are the numbers tainted based on new police policies and procedures?

Eminent domain may be another risk factor to keep in mind. Eminent domain actions appear to be on the rise. For some, this can bring a windfall of profit. For others, it means losing the family farm. And for far less than they should. So it’s worth paying attention to plans for new railroads, oil pipelines, airports, and highways.

Safe Building

Whether purchasing an existing-home or building a new one, it pays to consider what safety features you want first. Those building custom homes from the ground up may want to incorporate basements or build on stilts. You can add most other safety features later. Safe rooms, supply sheds, hurricane shutters, alarms, and security systems, are all easy to add.

One of the most important factors to keep in focus is sustainability. Water and electricity are basics. Utility costs are only expected to rise. Someday access to these resources could reach crisis point. In the wake of common natural disasters, homeowners will need their own resources. So will you have a well, spring, or rainwater harvesting system on your property? Will you have a generator or solar power with battery backup?

Healthy homes trump all the above. Few realize how many poisonous homes there are in America. From Chinese drywall to mold and contaminated land, there are many risks. Some consider new utility meters to be a threat. There is now healthy flooring, paint, air conditioning materials, and cleaners to use. We’ll all be effected by the healthiness of our homes.

The Safe Haven Hack Everyone Should Have

The truth is that we have little control over nature. All the data we have provides rough estimates, at best. So one of the best ways to prepare for all risks is to diversify. Maybe you don’t want to live in the safest little town, or mountainside cabin in the middle of nowhere. So why not buy many properties? Buy homes on both coasts. Invest in the middle too. You can always rent them out for income when not in use.

This is even more important for real estate investors. Geographic diversification will protect your wealth and income, no matter what comes.


Have fun with the tools listed above. Give some thought to safer and sustainable locations. Build in smart security features. Prize healthy homes. Perhaps most importantly, diversify.


Market Sold, Profits Jumped: Inside The Best Options Trade Today… 

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The Top Five Frontier Markets to Invest In

Frontier markets are the wild west of the investing world. They can be dangerous, corrupt and often poverty-stricken but they can also be hugely lucrative. Bloomberg’s Gavin Serkin travelled with some of the world’s best-performing fund managers to find out which markets are worth the trouble. He reveals his findings in his book “Frontier: Exploring the Top Ten Emerging Markets of Tomorrow.”