Links: Hilarious real-estate bubble seekers, investing yourself (not through a broker), clueless friends and asset allocation

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Down to the last two weeks of my book manuscript, so things are going to be a little quiet around here. For now, here are some interesting links I’ve been reading.

Amazon book comments on a book titled Are You Missing the Real Estate Boom?: The Boom Will Not Bust and Why Property Values Will Continue to Climb Through the End of the Decade – And How to Profit From Them. Sadly, this book was written by the former head economist of the National Association of Realtors. The 5-star reviews from 2005 are sad, hilarious, cheerleader-ish comments for the real-estate boom.

Story about someone who had to cut his brother off because he kept asking for money.

JLP shows how you can save TONS of money by investing yourself instead of paying a broker.

How women look for men who have their financial house in order. It is wildly misconstrued by clueless commenters who are determined to miss the point.

His friends insist that long-term investing is “boring” but then have improperly allocated portfolios. With good math examples. Remember, asset allocation is the most important part of your portfolio, not the individual investments you choose.

See all my links on my del.icio.us feed and twitter.com/ramit.

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12 Comments

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  1. I have enjoyed the juicy linkage. I need to start investing, but I read somewhere something that made a lot of sense to me. “Sometimes the best return on your money is paying off your debt.” That’s clearly my first step.

    Anyway, if you need an extra set of eyes to edit your book let me know. I find typos in nearly every book I read.

  2. Newsweek had a great interview this week with David Lereah (author of the “Boom Will Not Bust” book (in the article, they comment on the “unfortunate title”.) He’s seriously changed his tune since quitting his job.

    http://www.newsweek.com/id/135724

    “Wall Street has an intense interest in [this], because they’re looking for when is the recovery going to come, and at what point does the cycle turn,” Lereah told me.

    His answer: not yet. “We’re not at the bottom,” he says. “[People] want it to be near the bottom, but we’re not there yet. The leading indicators are still very bad. Pending home sales are still in bad shape. Mortgage applications are low … There’s still supply out there in abundance … This thing is going to get worse before it gets better.”

    Ruh roh!
    -Erica

  3. so things are going to be a little quiet around here.

    As opposed to the flood of recent posts?

  4. Regarding ‘we’re not yet at the bottom’:
    I just passed-up a relocation-mortgage benefit of ~100k (50k in direct subsidy plus 50k in low-interest loan, to be realized over a 3 year period) due to the High Risk to Benefit ratio. I counted the risks: Anticipate continuous decline in house prices, unknown political affects of Proposition 98 on SF Bay housing, potential for broad-changes in my industry (biopharm) and potential to lose capital in the short-term due to potential for another relocation, unstable larger economy (as in higher prices), etc; Versus the benefits: potential for long-term asset appreciation (over renting), tax incentive on mortgage interest, ‘rewards of home ownership’, etc. Objective was to live and raise kids in SF. I do not yet make the state (~193k) or city (~220k) definitions of ‘middle class income’, but am likely to next year or the year thereafter. Would you have made the same choice?

  5. Hey Graham, if I haven’t been writing enough for your taste, I’d like to invite you to submit a guest post. Would you be interested?

  6. I might be, contact me via email and we’ll talk. And don’t get me wrong, I love your stuff – I just with there was more of it!

  7. Writing a blog, book, in a startup and working – how do you fit it all in. Would be interested to see a “day in the life” kind of post. I saw JLP’s article – interesting, but I don’t think brokers are going away anytime soon.

  8. Yup, the quality/ frequency of posts is decreasing. Spending too much time on your book?

  9. It would be cool to hear your opinion on women looking for financially savvy men (although I have an idea where you stand with your short description of the link).

  10. Frist I love your blog and read it several times a week.

    As to the purpose of this post. JPL shows you how to save tons of money by investing for yourself.

    I read over this article and have to say that it should be taking with a grain of salt. He left out alot of factors when he did the math to figure out the savings on not paying a broker. The most important snafu in his article is the assumption that both investment plans will yeild the same returns. Not only is this very unlikely. It is nearly impossible. Much more likely is the one recommended by the broker who has a great deal more research and experince doing this type of thing will return much more than the other. The fees that he showed are also incorrect. Most investors do not end up costing that much with different refunds and other sliding scales that are in use. I hate to say it, on the surface this seems like a great article but it really is poor advice unless you are very far into the know how on this type of thing. Of course if you are. You didn’t need that article.

  11. As a woman, I don’t think those comments in the marriage/money article were that far off. Her point seems to be that you shouldn’t choose a mate who has different “values” than you – its bad if one values saving and investing and the other doesn’t really care much about money. But we all know amazing couples who, on the surface, have different “values” – different religions, different nationalites, different political views. It certainly doesn’t mean you’re doomed to failure. If you only wanted to date peole who agreed with you on everything, what would be the point? How boring life would be!

    When I met my husband, he made very little money, had debt, and knew nothing about investing. If I had “said good-bye” as she suggests, I never would have fallen in love with the most caring, compassionate, amazing man I ever met! He worked in a job where he really helped people and made a true difference in the world. It never has and never will pay well, but he feels there are some things more important than money, and like many people with low incomes he had trouble making ends meet. I feel sorry for any woman who turns a man down because of such a situation – you just don’t know what you might be missing.

    Now, I work at a good job because I want the house, the nice vacations, and new clothes. My husband would be just as happy without that stuff, and I truly appreciate his perspective. I don’t look down at him because he’s not interested in having fancy toys or fat bank accounts, just as he doesn’t look down on me for being focused on material goals. Our lives are richer together than either of us would be alone- and I mean richer in every sense, not just financially. IMO, that’s a great marriage.

  12. I just came across your blog and read your article on poor portfolio allocation decisions.

    Unfortunately, the illusions that you refer to are ingrained in the minds of people who came into the markets in the giddy days of the dot com mania!

    Just reading the comments above suggests that many people still just do not get it. Studies after studies have demonstrated conclusively that the primary determinant of portfolio returns over a long investment horizon is asset allocation with little benefit ascribed to stock selection.

    That is not to say that there is no room for short term trading or stock picking – just that it should represents a small potion of ones overall portfolio.

    Besides, a key issue here is transaction costs and a major factor in favor of mutual funds is the very low expense ratios that they incur. One of the comments above advocating that people create their own index fund obviously fails to realize this crucial fact.