Playing the stock market to pay off your debt.

[808blessing]

My husband does sometimes when he finds something that will pay off. I don’t have the stomach for the risk. He managed to make enough to pay off our house so we are debt free now.

That is fabulous. I’d like to pick his brain! Wondering if it is intuitive with a little research, a lot of research, or just a really good source. It’s taken me years to stomach some risk. I am a big chicken throwing a few bucks ahead of the game to what ends up being huge winners. But I never ever go big.

 

[dvcgirl67]

That is fabulous. I’d like to pick his brain! Wondering if it is intuitive with a little research, a lot of research, or just a really good source. It’s taken me years to stomach some risk. I am a big chicken throwing a few bucks ahead of the game to what ends up being huge winners. But I never ever go big.

I know of another huge winner, VTSAX....vanguards total stock market index, that we own. It's up 45% over the last year. It's not sexy and/or incredibly dangerous like dogecoin, or "meme stocks" like GameStop that are soaring because people on reddit decided to buy it...in some kind of investor revolt, that makes no sense. Gamestop is effectively the Blockbuster video of video games....in a world where increasingly games are being downloaded from the internet. That will crash and burn...and you don't want to be circling for that last chair when the music stops. I won't pretend to understand crytocurrency, other than to say that I don't want to bet in that market, because all that it is at this point....gambling. I own a Tesla...and it's incredible, but it's owner is a little out there, and when he can tweet about dogecoin and the value drops by 30% in a minute...no thanks. But I do love the Model Y, so thanks for that Elon.

But give me a *45%* YTD return in an index fund with an expense ration of 0.04%.....and I'll take that "bet" (that isn't really a bet), every day of the week.

 

[808blessing]

Thank you!!! Great advice.
Yes, I do pretty well on Index funds. I mainly have Vanguard admiral but I only dabble in picking stocks myself. I spotted Whole Foods, Amazon and Apple well over a decade ago. Intel Pfizer ( Harley Davidson-lol) too. Bought a tiny bit, held for not long enough. I was just starting out. Then kinda gave it up cause of risk and index funds. Very conservative but with an eye and then when they hit after I sold small, I’m kicking myself later. I even taught an afterschool stock market simulation class for a few kids for fun once a decade ago. The elementary kids “bought” Disney for $90 back then. I’m pretty sure the kids have graduated and are already off to life with a strong portfolio. I’m waiting to run into them one day.

 

[SBE2]

The Fed put a stop in the market on 3/23/20. I doubt the market will ever go to zero or reach those March lows ever again. Invest in a low cost etf (VOO or VTI) if you don't have time to research individual stocks.

 

[808blessing]

But give me a *45%* YTD return in an index fund with an expense ration of 0.04%.....and I'll take that "bet" (that isn't really a bet), every day of the week.

https://fourpillarfreedom.com/vtsax-vs-vfiax-which-index-fund-is-better/
https://fourpillarfreedom.com/vtsax-vs-vfiax-which-index-fund-is-better/
I just looked up your index and mine and they are very similar! They also mention PP VOO VTI stocks on market.
My husband recently dabbled in crypto. He is not one to “win” or “play” stocks, nor has much discretionary funds so it was truly a stimulus gamble. Huge dog fans so yes he did the doge in honor of learning and my daughter. He “earned” enough for his Disney ticket for the year and got out. Not recommending, just relating.

 

[Starport Seven-Five]

That is fabulous. I’d like to pick his brain! Wondering if it is intuitive with a little research, a lot of research, or just a really good source. It’s taken me years to stomach some risk. I am a big chicken throwing a few bucks ahead of the game to what ends up being huge winners. But I never ever go big.

Few people (even professionals who have all day to research) beat the market average over a long period. Most that talk about their gains 1. don't compare to VTSAX over the same period and 2. don't talk about their losses.

I play with a small portion of my portfolio (<10%) for entertainment. It's cool when I'm right (DIS, TSLA put credit spreads) but it doesn't kill me when I'm wrong (BA).

 

[ford91exploder]

The problem is currently wall st is a casino and companies are the chips, Used to be you bought a stock and if profitable it paid you a dividend. There were utility stocks that they called ‘widow and orphan’ stocks because they always paid a dividend.

now some ‘analyst’ picks a EPS number out of a hat company goes nuts trying to beat the ‘projected’ earnings and damages the business in the process

 

[dvcgirl67]

The problem is currently wall st is a casino and companies are the chips, Used to be you bought a stock and if profitable it paid you a dividend. There were utility stocks that they called ‘widow and orphan’ stocks because they always paid a dividend.

now some ‘analyst’ picks a EPS number out of a hat company goes nuts trying to beat the ‘projected’ earnings and damages the business in the process

I wouldn't say this is true. There are still dividend investors out there for sure. Things always feel a bit crazy when the market has wild swings like it has in the last 18 months or so. Despite these big swings, the market marches upward over time.

 

[ford91exploder]

I wouldn't say this is true. There are still dividend investors out there for sure. Things always feel a bit crazy when the market has wild swings like it has in the last 18 months or so. Despite these big swings, the market marches upward over time.

then we agree to disagree the current stock market is a rigged game where the whales will be bailed out by the house but the retail investor will be fleeced. Heck we’ve even made ‘front running’ legal thats what the high frequency traders are there to do by strategically locating data centers they get notice of trades a few milliseconds before the rest of the market days does so they can make money on every trade in the market.

i dont gamble and today’s stock market is the very definition of high stakes gambling

 

[Sjm9911]

You need to find stuff with dividands. I have. There out there, you just have too look. And yes, stuff isnt what it was like years ago. Back then you could get 8 percent in cds, etc. But morgages were 10 percent. So it sort of balances itself out. Some companys cut there dividands or suspended them so they didnt go bankrupt in the last year. Who knows maybe they will bring them back. And yes everything is sort of like gambling. There is no sure thing in life.

 

[Starport Seven-Five]

then we agree to disagree the current stock market is a rigged game where the whales will be bailed out by the house but the retail investor will be fleeced. Heck we’ve even made ‘front running’ legal thats what the high frequency traders are there to do by strategically locating data centers they get notice of trades a few milliseconds before the rest of the market days does so they can make money on every trade in the market.

i dont gamble and today’s stock market is the very definition of high stakes gambling

You're pretty much guaranteed to lose in a casino. Anyone with a pulse makes money in the market over the long term.

Yes, there are aspects of it that are rigged (and I'm not a huge fan of companies that focus on their share price) but if you stay away from meme/pump and dump stocks you'll do fine.

You need to find stuff with dividands. I have. There out there, you just have too look. And yes, stuff isnt what it was like years ago. Back then you could get 8 percent in cds, etc. But morgages were 10 percent. So it sort of balances itself out. Some companys cut there dividands or suspended them so they didnt go bankrupt in the last year. Who knows maybe they will bring them back. And yes everything is sort of like gambling. There is no sure thing in life.

Eh, I find dividends to be pointless and a legacy of old world thinking. I could achieve the same net result by selling 1-4% of my non-dividend stocks each year... but I don't because it triggers an undesired taxable event.

 

[Sjm9911]

Its all about what amount of risk you are confterble with. Me , i like my dividand stocks. Most of mine are getting about 6 percent. Keep rolling over the dividands into the same stock and get a bigger dividand next year. No taxes untill you withdraw or take $$$. Yes its more conservative. But it can work out long term. I figure , if i play my cards the way i have, when i retire i will be getting minimum 3500 ( baised on like a 4 percent return) a month from my dividands at retirement without touching any assets. Not rich but not poor. You can do what you want, its your $$$. Me i think I'll stick to slow and steady. Not everyone invests the same, nor does everyone need the same. I have lost plenty of $$$ on sure things, waye of the future stocks etc. I have also gained on some. Its still a gamble, how much depends on what you are willing to risk.

 

[dvcgirl67]

You need to find stuff with dividands. I have. There out there, you just have too look. And yes, stuff isnt what it was like years ago. Back then you could get 8 percent in cds, etc. But morgages were 10 percent. So it sort of balances itself out. Some companys cut there dividands or suspended them so they didnt go bankrupt in the last year. Who knows maybe they will bring them back. And yes everything is sort of like gambling. There is no sure thing in life.

This is exactly right....people talk about the "good ole' days when CDs paid 15%".....yeah, they sure did. And mortgage rates were 18% and you had to wait in gas lines depending on the last number of your license plate.

We're just super boring investors....super low cost index funds with Vanguard for both tax-advantaged and taxable accounts. It hasn't failed us yet.

 

[dvcgirl67]

then we agree to disagree the current stock market is a rigged game where the whales will be bailed out by the house but the retail investor will be fleeced. Heck we’ve even made ‘front running’ legal thats what the high frequency traders are there to do by strategically locating data centers they get notice of trades a few milliseconds before the rest of the market days does so they can make money on every trade in the market.

i dont gamble and today’s stock market is the very definition of high stakes gambling

Well, if you're like us...don't fight the fed and stay invested. The S&P 500 has returned 10.8% over the last 50 years...1971-2021. Yes, there are certainly downturns, but it's possible to plan for these scenarios and enjoy a well-funded retirement.

 

[georgina]

Its all about what amount of risk you are confterble with. Me , i like my dividand stocks. Most of mine are getting about 6 percent. Keep rolling over the dividands into the same stock and get a bigger dividand next year. No taxes untill you withdraw or take $$$. Yes its more conservative.

Um, perhaps I am misreading this, but unless those dividend paying stocks are in a qualified retirement fund, you still have to pay taxes on the dividends each year even though you are reinvesting them.

 

[Sjm9911]

Correct, depends on the account, and what it is, and what stock you have , what invome your at, erc, etc, etc. , too many factors to list. But generally drips, are better, i may have overstated the tax free for all part.

 

[georgina]

Correct, depends on the account, and what it is, and what stock you have , what invome your at, erc, etc, etc. , too many factors to list. But generally drips, are better, i may have overstated the tax free for all part.

We did the DRIP thing for a while when my DH inherited shares of AT&T and all the Baby Bells in the early '90's. The record keeping became a pain as those companies started to recombine, spin off other companies, etc! The only one we still have is AT&T, dividend payout % is good but stock price not so good.

 

[Sjm9911]

Lol, i had T for a while, sold it a while back and just rebought it for hbo max. Now there spinning it off and i belive lowering the dividand or getting rid of it all together. I'll still hold it though. Hope hbo max does what disney plus didnfor disney.

 

[Starport Seven-Five]

Its all about what amount of risk you are confterble with. Me , i like my dividand stocks. Most of mine are getting about 6 percent. Keep rolling over the dividands into the same stock and get a bigger dividand next year. No taxes untill you withdraw or take $$$. Yes its more conservative. But it can work out long term. I figure , if i play my cards the way i have, when i retire i will be getting minimum 3500 ( baised on like a 4 percent return) a month from my dividands at retirement without touching any assets. Not rich but not poor. You can do what you want, its your $$$. Me i think I'll stick to slow and steady. Not everyone invests the same, nor does everyone need the same. I have lost plenty of $$$ on sure things, waye of the future stocks etc. I have also gained on some. Its still a gamble, how much depends on what you are willing to risk.

I was a bit aggressive against dividends in my previous post so let me refine what exactly I mean: I feel that dividends are a bad focus for an investor as it excludes otherwise good companies from consideration AND dividends are not guaranteed. I feel that potential total return is a much better metric to use when evaluating potential investments because if a stock without a dividend grows 20%, you can withdraw your 4% from it and have the same impact as a dividend. Dividends are a zero sum game because your share price drops equal to the dividend payment on the ex-dividend date.

I don't feel the risk profile is different between a heavy dividend portfolio and a more normal allocation. I'm heavy in index funds so obviously I'm also in the "slow and steady" camp.

 

[ford91exploder]

Well, if you're like us...don't fight the fed and stay invested. The S&P 500 has returned 10.8% over the last 50 years...1971-2021. Yes, there are certainly downturns, but it's possible to plan for these scenarios and enjoy a well-funded retirement.

i’m invested in real estate and bonds, After watching DW’s grandparents lose everything literally, during the dot bomb crisis. Watching as the broker racked up commission as her grandparents account value ran to negative numbers. I’d rather invest my cash with the Mafia it would be safer.