Believing in Santa Claus is more profitable. The fluctuation in the paper value of your holdings only matters if you have the need to sell it all at once, or if you’re silly enough to be driven by panic and sell it all once, and then you lock in that loss. And if you aren’t already a Rentometer customer, they make it really easy for you to test them out with a free trial, a real free trial with no credit card required and access to the full system. Oh, I mean, I think it’s the same all the time, you want to spend less than you make and use that surplus to pay off debt if you have debt, and get rid of the debt. Let’s hope with the coronavirus sticks, but to go further though, Mindy, I want to say that I agree with your approach of ignoring the market, and I characterize it, and I have in the past, that’s a superpower. And that lack of interest means that she’s not going to be paying attention to the market. It’s a really helpful chart to see the historical annual data on the stock market. The crash was always 12 days to 18 months away according to the pundits, no matter what time of the market that you’re in. Their  high-tech, low-cost online platform lets you track the progress of every single project, and keep more of the money you make. With Rentometer, the market rate no longer has to be a mystery. And then stay they invested forever and just draw up a little bit you need when the time comes to live on it. Yeah. Rich living on less money The fear of missing out- we’ve all experienced that emotion before! Scott: So it is a winning formula if the index funds that we describe or what I had termed that I’m very proud of that, I coined our self-cleansing, because the losers fall off, the new companies that gets started and build up and are good at it, and the companies that succeed are left to run as far as they can possibly run. They are high-risk portfolios. I don’t want to be bossy, but I’m bossy. Not really. I can tell by your expression you know we bought a new car, but-. Jim: Love it. And he did a great job on it. Scott: Well, I would say the same thing, I’d say stay the course. Don’t try to say, “I’m going to wait till it’s lower.” Just put as much in as you can whenever you can and keep doing it over time and you’ll take advantage of the drops when they happen and you’ll be there for the rises that happens there. That’s something best done when the waters are calm and the markets are peaceful, not in the middle of a turbulent storm. Jim: 10 years, Scott? Mindy: But maybe in America, it’s going to be 80%, probably not. Collins puts it in his book “The Simple Path to Wealth”, “Nobody can [time the market]. People who don’t touch their portfolios have the best returns because they set it and forget it. Frankly, I think all these people that are arguing with you just want to argue with you on the off chance that they can prove you wrong, “I proved Jim wrong.” Jim doesn’t care. Receive a free digital download of The Ultimate Beginner's Guide to Real Estate Investing. And if it was worth it to you to buy the thing at X dollars three weeks ago, it should be even more worth it to you to buy it now at its current lower price. Now, in the middle of a market crash is not the time to try to sort through whether you should have an emergency fund for instance, or how much you should have allocated to stocks. It is been a volatile a couple of weeks. Jim: Is that really true? And we will also link to that in our show notes. Join BiggerPockets Community Manager and Podcast Director Mindy Jensen and CEO Scott Trench weekly for the BiggerPockets Money Podcast! JL COLLINS – A Guided Meditation for When the Stock Market Is Dropping This is a great video to watch if you get nervous when the market is dropping. Scott: Mindy: And studies suggest that checking your portfolio more often leads to worse results, because you are more likely to make a change and get worse returns in the long run (hint: staying the course wins again). Thursday. If you don’t believe me, look at the trend of the Dow Jones over the last 100 years (inflation adjusted): At any one of those recessions (1929, 2000, 2008/2009), if you had jumped out of the market in order to time things on the way back up, you would have missed the opportunity to “buy stocks on sale” and to see their value climb as the market began it’s assent. If it’s keeping you up, if you’re worried, if you’re thinking, man, “I need to sell before I get out,” you should never have been in the market to begin with. Says the woman who used to drive an NSX. So if you want to go pick individual stocks, if you want to sell your stocks in a panic and drive the market down so I can buy it cheaper, you go for it. I am not super excited about bonds because they don’t have an aggressive growth rate typically. You know, Jim, I really can’t top that. And we talked about what happens if you are closer to 65, and that’s why you move your allocation more towards bonds as you get closer to traditional retirement age. Download, Empower, that’s E-M-P-O-W-E-R in the App Store or Play Store. Thus I thought, this timing of the market is so easy. Jim, when was the last time outside of this, I read your article, so outside of this selling, because you might buy a house and taking your bonds and doing that, when was the last time you sold like a significant portion, not the whole I’m living on that stuff? No, it’s not. How will the market do that?” And well, yeah, then the market’s not going to recover. Stocks -- Part III: Most people lose money in the market. His company ... BiggerPockets Money Podcast That’s why the go-to source for rental data is Rentometer. And there was a woman by the name of Elaine Garzarelli, who was a stock analyst on Wall Street, young woman and she predicted the crash almost to the day, like in August, and she was lionized for that. Jim is open to debates. He’s also the author of the famed Stock series, and the even more well-known book called The Simple Path To Wealth. Jan 24, 2021. And we’re recording this after the market has closed on Friday, but the last couple of weeks had been quite crazy. Yet we lose countless hours to activities that bring us little joy such as commuting, chores and staring at our phones. Today, Jim is going to talk about how to navigate this financial crash and his philosophy about longterm investing by staying the course in index fund investing. Since your crystal ball is as broken as mine, you likely would’t have gotten this right anyway (see point 1 above). Jim: Scott and I have a document that we chat back and forth with, and he said, “Wait, there’s like a 10,000 point crash over the past two-ish weeks.” And he’s right, I was talking about on Monday. Scott: Second, attempting to time the market encourages you to speculate with emotional decisions. That means she’s not going to be freaked out when it goes down. Jim: How should that person be thinking about their overall financial position and navigating the challenges that may come with the recession, with the market going forward? Most people will follow yours though, Scott. The second thing you mentioned is, you’re only going to lose in this market downturn if you have to sell your holdings and the only people who should be selling their holdings are people who are already retired who are selling 2% of their portfolio under the 4% rule, which we’ve talked about in previous podcasts as well. Mindy: Okay. I mean, just incredible wealth created over that period of time. My holding period, Mindy, for VTSAX is literally forever. Written by financial journalists and data scientists, get 60+ pages of newsworthy content, expert-driven advice, and data-backed research written in a clear way to help you navigate your tough investment decisions in an ever-changing financial climate! All we have to do is keep staying the course. I always have a good time, so thank you. [For those who want to learn how to invest in real estate without being a landlord, the Passive Real Estate Academy sign ups close today (11/11) at the end of the business day. ‎Are you looking to improve your family's financial wellness and create a life of true wealth and happiness? Scott: That said, there are times that you’ll have to dip into your reserve and that’s fine, that’s what it is there for, but you need to have a healthy reserve. So my emergency fund is almost nothing. And if you don’t have debt or once the debt’s gone, then use that surplus to invest. When an oil tanker sinks as a result of a freak accident and kills a lot of birds, this can drive down the price of a company’s stock. Come find out why this is not only impossible, but isn't even worth trying. While living abroad, it can be very difficult to invest in assets in your home country, especially if you’re an American. The market is saturated with books and guides on how to get rich. Timing the market assumes that you can make accurate predictions, which just doesn’t happen consistently enough to make it worth it. First, timing the market means you must pay more attention to the market. So you don’t protect yourself from market volatility by trying to figure out how to time it, which so many people seem to think they need to do, you protect it either having that cashflow from your earned income or by your allocation, which includes bonds. Oh, tell me when it’s hitting the bottom. Mindy: Jim: The total stock market index fund, which is what I favor, is a dividend of about 2%. Yup. The “time in the market” investor will then stick with the market until the original reasons for buying change or they’ve reached their intended goal e.g. Feb 04, 2021. Here’s how, because anybody who had that ability, it would be 10 times or more richer than Warren buffet and far more lionized, name that person for me. I think it’s the same analogy there. Mindy: Mindy: Unfortunately, there are people who will fight this ideology vehemently. But, if you don’t have a healthy reserve account, you should not be purchasing properties where you are providing housing for other people. I’m getting a lot of questions right now from people who are looking at the market and they are well prepared. Long story short, stay the course. Notify me of followup comments via e-mail. Mindy: Hello, hello, hello, and welcome to the BiggerPockets Money podcast. Mindy: Yeah, and like you said, Scott, you said on the Facebook Group, that’s filled with almost 3,000 people who are doing it just like you. Jim: I’ve got-. That’s no worst thing you could possibly do. If you’re living on your portfolio and you’re using the 4% guideline and you’re pulling 4% of your portfolio, you don’t even, not only when the market goes down, you do not have to sell all your stocks at a big loss, you don’t even have to sell 4% of them a year because 2% of that’s funded by the dividends. And 20 years from now, it’ll be worth far more than it is today. Jim: Just stay the course, time in the market is much better than timing the market. The market always recovers. Jim: When the market rises to great heights (and before it comes tumbling back down), they then time the market again and sell those assets for a pretty penny. Go do whatever you want to do. Mindy: Jim: Use at least 8 characters. It’s gambling, you’re at the casino, that’s what will keep you interested, enjoy. Scott: Should we get out of here? Or maybe today it’s rising. I’m sorry, going through the roof, so it’s so high, not crashing. And it’s a very rare market decline that doesn’t resolve itself within say five years. I recently got this question from somebody and my answer was, let’s say you have $10,000 excess cash sitting around and you’ve been waiting for this moment, you’re ready to play it, put 8,500 of it into an index fund, you can put it in all at once today, you can dollar cost average it put in a couple of hundred bucks every day for the next month if you’re worried. Mindy: It’s SO VOLATILE, it can be scary to stay invested—especially if you’ve never been through a market downturn. Mindy: It could flat, it could just be flat on Monday. And the ones that fail just fall off the index and the most they can possibly lose is 100%, the ones that succeed, there’s no limit to how high they can go. Mindy: I never have to sell. I don’t remember exactly, Mindy, but disturbingly recent. Jim: Jim: Okay. Mindy: And I’m delighted to hear that it gets such positive comment from your listeners. Mindy: Right? One, we’ve talked a couple of times about my now somewhat famous line that the market always goes up and that of everything I’ve written, I think that’s gotten the most pushback, and I’ve had people say things like, “Well, at some point, the sun’s going to expand into a red giant and then engulf the earth and burn it to a cinder. Expenses obviously also increase in inflation, but mathematically that translates to greater and greater cashflow growth over the very long term as well. Mindy: This is where we want to be helpful and where we want to be useful. And just like Jim said, if this virus kills off so much of the population that there’s a panic, an oversupply and under demand of the population, we’ve all got bigger fish to fry and you shouldn’t be in real estate if you’re afraid of that reality. I think with this, Mindy and I are extremely passionate about helping you guys succeed financially over the long term. It’s simple, right? At the end of the day, one will be higher than the others because that’s the way of the world, but there’s no predicting which that’ll be. Mindy: Mindy: Mindy: I can sell, I can refinance, I can buy more, but I am trying to apply the exact same long longterm philosophy. So be like Mindy and don’t pay attention to the market. You can read both and you decide, I don’t care. And you’re right, nobody can time the market there. Having too much money in investment accounts seems like a good problem to have, but it’s a problem nonetheless. Timing the market is about as valuable as fool's gold. Do Nothing Many investors repeatedly shoot themselves in the foot due to a lack of discipline and good investing behavior.Investors typically buy high in a bull market euphoria and then sell low in the bear market doldrums. Yeah. You have to time the buy and the sell. And again, we’re protected because we’ve made long term good, neat, smart financial decisions of spending less than we earn, building up a reserve that’s appropriate relative to our financial positions. I need to do all those things tonight. Yeah. By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions. But if you’re just selling a little bit you need to live on, it’s probably not going to affect you very much, and you just let the rest ride for when the market inevitably turns. What Are The Best ETFs For European Market drops are your friend because that amount of money you put in every week or every month or whatever is now buying more shares. So if I’m listening and I am on my way but not quite there, maybe not even halfway to financial independence. What are you talking about, Scott? … So the market clearly, clearly is searching for a direction and it doesn’t quite know what to do and nobody, and certainly at least of all me knows what it’s going to do on Monday. At 20 years old your money will have decades to grow. Mills Started at $30k a Year and Grew a US Rental Empire from Japan, How to handle this market drop if you risk, Why some correct predictions can be explained by, “People freak out whenever the market does something unexpected, whenever it drops.” (, “Investing is not play money; investing is serious money.” (, “There’s no ideal time to buy stocks.” (. It was such a quick blip on the radar, but this one looks like it has extended a few weeks and my guess is it’ll extend a few more, but that’s only a guess. I want to answer your question, Scott, and say, yes, you should invest in the cruise ships and the airplanes and all of that, and you do that by buying an index fund. So anyway, the point is that the more you’re living… Ironically enough, the more you’re living paycheck to paycheck, the less resources you have. Jim: And these are usually comments that are prefaced, by the way with, “Jim, I’ve read all your stuff and I’m actually absolutely on board [crosstalk 00:37:22]right one, but the market’s going down. Share market not doing much. Mindy: It’s called AutoSave. Mindy: And that basically is interesting in this context because it looks back at the period between 1975 when I first began investing until, I don’t know, 17, 18 whenever I wrote that post and looks at all the traumatic things that happened in the world and to the market in that 40 plus period of time, a lot of the very much more dramatic than what’s going on now, and yet over that 40 years, the market postage just shy of a 12% return. Jim: Nathan and Kristen own their home and multiple rental properties as well. That’s very recently. Rentometer uses proprietary technology and data to provide a thorough rent comparison analysis in seconds. Jim: There would be no power investing power, more powerful than actually being able to time market, not the phony claims that you see on all the TV shows of people who tell you they can do it. And then if I was convinced I knew when it was finally hitting the bottom, I would put all my money back in. They work at the NBA arena near you, and now they can’t pay their bills because they’re not getting paid. I think the total market decline has Thursday’s drop came to 26 or 27% over a couple of weeks. Intressant! Visit fundrise.com/bpmoney. You should look for wealth building investments, you should look for your entertainment fun elsewhere. But if you scroll through this, I was writing an article for the BiggerPockets blog and I was scrolling through this and like a positive year is a green number and a negative year is a red number, and I’m scrolling through, I’m like, “There’s a lot of green. You just have to sell 2% of your holdings each year. For those younger people out there who are still working, still building their wealth, this drop and any drop is a gift because if you’re following my plan, my path, basically you have a high savings rate and you are putting as much as you can whenever you can into a broad-based stock index fund like VTSAX. Let’s hear that one more time for people who are listening to this episode. The one thing I did, and I described this in my most recent post I put up a few days ago, is I noticed that as the market was dropping, it was dropping the value of the shares that I was holding in my taxable account to a break-even point And that was interesting to me because sometime in the next five years, there's a possibility we may give up our nomadic life, buy a house and settle down. Breeding unicorns is more likely.”  ~JL Collins. I predict on Monday the market is going to go up and I predict that Monday the market is going to go down. Jim: And nobody, and certainly at least of all me, knows what is going to do on Monday. These are examples of attmpting to time the market, which is when people try to buy low and sell high. Is now a good time to buy? Focus on time in the market, not timing the market. A collection of somebody is going to come up, low-cost online platform you! Of this show, maybe not even Wednesday example, check out the Empower app our phones is,! 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