In praise of simplicity
Posted: Wed Jul 25, 2012 10:03 pm
Finally finished going through the giant Bogleheads thread. Whew! It made for great subway reading. I hope many of the discussions, information, and wonderfully entertaining literary turns of phrase have found their way into the new PP book.
From the recent posts on this forum, though, it seems there just isn't a whole lot else to say about the PP, reflecting its elegant simplicity.
I would just like to comment about one thing. Several posters (including me) have said, repeatedly, that starting the PP feels like you're going against virtually every financial expert opinion, and about to make the worst financial mistake ever. It takes holding your nose and jumping straight into ice cold water. But then, after a few months, you realize how smooth it actually is.
The PP had another effect that's worth a comment though: it pushes you into being a much more disciplined and responsible investor. The 25% cash requirement, which is unique among the "simple" portfolios, would be very hard to maintain without the PP's imposed discipline in these days of near zero interest rates, what with the constant temptations of alternatives that promise a better return.
The best part is that it doesn't feel like discipline at all - it's actually a relief to have a sensible template to follow, and the increased sense of security is as much from that as it is from the smooth, steady returns.
From the recent posts on this forum, though, it seems there just isn't a whole lot else to say about the PP, reflecting its elegant simplicity.
I would just like to comment about one thing. Several posters (including me) have said, repeatedly, that starting the PP feels like you're going against virtually every financial expert opinion, and about to make the worst financial mistake ever. It takes holding your nose and jumping straight into ice cold water. But then, after a few months, you realize how smooth it actually is.
The PP had another effect that's worth a comment though: it pushes you into being a much more disciplined and responsible investor. The 25% cash requirement, which is unique among the "simple" portfolios, would be very hard to maintain without the PP's imposed discipline in these days of near zero interest rates, what with the constant temptations of alternatives that promise a better return.
The best part is that it doesn't feel like discipline at all - it's actually a relief to have a sensible template to follow, and the increased sense of security is as much from that as it is from the smooth, steady returns.
