What is Reddit's opinion of How a Second Grader Beats Wall Street: Golden Rules Any Investor Can Learn?

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Gracias por la mención. Creo que OP la puede salvar. Sí está salvable su asunto si es constante. Con retornos de VT o VTI yo creo que la arma, sin necesidad de correr riesgos exagerados. Finalmente ya le está ganando al promedio, pues el promedio piensa "Ahí dios proveerá". De que va a tener que ahorrar una buena parte del cheque, sí, sin duda. Pero puede hacer partícipe a los niños también. Hay un buen libro titulado "How a Second Grader Beats Wall Street" que más o menos narra cómo un padre de 50 años le enseña a su hijo de 8 a tener un portafolio diversificado y por qué es más fácil y con mejor retorno a largo plazo https://www.amazon.com.mx/dp/0470919035

Igual y por ahí podría empezar con los niños, al mismo tiempo. Crearles cuentas o algo así en las que ellos mismos metan "sus domingos" y que vean que es mejor invertir $100 que te pueden dar $10 cada año por el resto de tu vida; a gastarlos una sola vez y no tener nada al final del año.

Ahora que lo pienso, igual y también le hace bien leer a Mr. Money Mustache www.mrmoneymustache.com porque habla de cómo la vida moderna americana es un desperdicio de dinero y tiempo, y que por medio de ahorrar un porcentaje mayor al 50% de tu ingreso por medio de no comer fuera, no teniendo auto, usando transporte público y bicicleta, así como otros tips anticonsumo, puedes llegar a retirarte antes de los 65 años clásicos, pero siendo honestos, el salario en México es una mamada. Es como decirle aprende a nadar a la gente del Titanic. Me cagan los sindicatos charros, porque son parte del problema. Con sindicatos como los alemanes el salario no llevaría deprimido 30+ años. En fin. Leer blogs es grátis y podría aprender OP algo de ahí. Seguramente no de retiro anticipado pero sí de ahorro e inversión.

Allan Roth actually wrote a book whose title may be applicable to your situation: "How a Second Grader Beats Wall Street: Golden Rules Any Investor Can Learn" (link)

Joking aside, it's a pretty simple recommendation:

• 60% VTI (or comparable Total US Market fund)
• 30% VXUS (or comparable Total ex-US / International Market fund)
• 10% BND (or comparable Total US Bond fund)

I really like the 60/30/10 style portfolio for its simplicity. You break up your equity holdings 2:1 US to ex-US, and include 10% to bonds. I'm not a fan of equity-only portfolios, as I believe that having a portfolio consisting of imperfectly-correlated asset classes is important, and increases the diversity of the portfolio as a whole. The 10% bonds is not going to really drag down returns, and has actually had higher rolling returns than a 100% equities portfolio during certain 10+ year periods.

If I were to make an adjustment to the aforementioned portfolio, instead of BND (or equivalent), I would instead go with an intermediate duration treasury fund (e.g., VGIT or GOVT), for four reasons:

1. I'm a believer that you take the risk on the "equity" side of your portfolio, and the "bond / fixed income" side should be the safety side. Treasuries are not subject to default risk that is found with some of the other holdings in BND (e.g., corporate bonds).
2. Treasuries make up the majority of BND holdings.
3. Treasuries are less correlated to equities than corporate bonds, making them a better diversification.
4. Treasuries are exempt from state taxes.

Since you said you don't know much about investing, I think what's more important than what you do with this $5k is learning about yourself and finding tools that work for you. I recommend reading "How a Second Grader Beats Wall Street" by Alan Roth. It's a great into to read when you're starting out. (And it's probably available through your local library) https://www.amazon.com/Second-Grader-Beats-Wall-Street/dp/0470919035

There's a concept about CD layering in the that might work for your short/mid-term goals. Plus, it's a pretty quick read ��

The only investment book you need is: https://www.amazon.com/Second-Grader-Beats-Wall-Street/dp/0470919035

Establish a 6 month emergency cash fund. You might have that already.

If you have a job, open a Roth IRA at a broker, and fund it to the maximum. Your IRA should be in the S&P 500 (index fund) as you have suggested.

After you have exceeded your maximum a year, open a second account at the broker, and put your money again to the same index fund.

No problem. Check out the book "How a second grader beats wall street." It will give you some insight into how the simple path often beats the complicated path -- and some key concepts.

https://www.amazon.com/Second-Grader-Beats-Wall-Street/dp/0470919035

I just searched and found what looks like a good summary of the book if you'd like to get an overview.

https://thetaoofwealth.wordpress.com/2013/01/21/how-a-second-grader-beats-wall-street-book-notes/

Read this 16 pages of free and great information from William Bernstein. https://www.dropbox.com/s/5tj8480ji58j00f/If%20You%20Can.pdf?dl=0

Also this book was fantastic!

https://www.amazon.com/gp/product/0470919035/ref=oh_aui_detailpage_o04_s00?ie=UTF8&psc=1

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Learn about Index funds :)

I think you would benefit from reading about portfolio allocation - something like https://www.bogleheads.org/wiki/Three-fund_portfolio or https://www.amazon.com/Second-Grader-Beats-Wall-Street/dp/0470919035