Reminds me of an article from 2017 (2018?) about a guy who sincerely thought he had gamed out his state’s lottery system and would regularly buy thousands of tickets on the same number. Over time his random winnings occasionally got him tens of millions and people began investing in him, and he lived a lavish lifestyle.
Didn’t work out.
Veering back from my anecdote I see no reason for the average actuary to pay for financial services. Exceptions may be complicated taxes (businesses or something), estate planning, or if you are seriously rich to the tune of millions. I pay something like 0.03% fees and have never had an issue, I don’t know what a financial planner would add.
Studies have shown that people who use financial planners make more than those that dont. Imo its because financial planners stop people from timing the market incorrectly.
Fella by the name of preet banerjee, a canadian figure in finance, told me what he used to do when he was an advisor. He would have people sign a letter saying they want to buy low and sell high. Then when the inevitable happened and his clients wanted to act irrationally, he’d tell them he was going to fax the letter over and asked them to change it to i want to sell high and buy low, sign it, and send it back.
Same amount every 2 weeks, direct to investments (with a brief stop in a money market account, for the accounts other than the 401k.) Almost no deviance, only adding a small amount more with each raise, and an occasional few thousand when I have extra cash.
Yes, absolutely. Unfortunately most consumers are unable to control themselves. Actuaries should be better at this. I don’t use a financial planner, because I’m entirely convinced that I have the highest probability of getting the best return over the long term by not tinkering beyond rebalancing. So, I quit worrying about the markets - it’s not even on my radar.
I have no desire to pay someone to make decisions for me on how to invest, what to invest in, how to time the market, or anything linked to asset allocation, etc.
I do want a service, that I have a tolerance to pay a small amount for, that automatically does the transactions to invest PER MY INSTRUCTIONS AND INTENT on the days of the month that I deposit money into the account.
Let’s say I want to invest $400 every 15th of the month, and just buy SPY (aka Spiders, a low cost ETF that is a preferred way to invest in the broad US large cap market). I don’t want to have to think about it. I don’t want to have to remember that “oh crap it’s the 15th I gotta log in and trade during trading hours” I just want it to happen with the same effortless ease that my mortgage payment gets auto paid out of my checkbook every month.
I think you should be able to autoinvest in indexed mutual funds with a fixed amount on a certain day since those trade at EOD vs ETFs which require actively purchasing each time.
What is the purpose of this? The jackpot is split amongst the winners, no? So if you had 1,000 jackpot-winning tickets each one would get 1/1000th of the pot. But 1000 * (1/1000) = 1 … same outcome as if you’d only bought one ticket except you’d have saved $999.
I guess if there were two winners then you’d get 1000/1001 instead of half. And you’d get more of the minor prizes. But it still seems like a less efficient use of $1,000 than buying 1,000 unique tickets.
My understanding (I’ve never played the lottery) is that the “level” of tickets he was purchasing paid out a flat amount if you were close enough to the totality of the numbers, with jackpots going to exact matches.
So, have a team of people raid every convenience store in town and buy thousands of tickets, eventually you’re going to hit a $10M or $20M total, convincing more rubes that you have a winning strategy and they give you millions more.
Hmmm, well most of the expected value on the tickets is the jackpot, so unless you really knew what numbers were going to be drawn it would be pretty hard to make money on the lesser prizes for any material period of time, even though random fluctuations.
Obviously if you know which numbers will be drawn then you can employ any number of strategies to make money.
Uhhh this exists for free on Robinhood. Just set up a recurring investment and it will buy whatever you tell it to at what ever time interval you want.
I imagine every broker has something similar for free as well.
It should cost you nothing extra. Please stop letting Schwab robbing you
Winfall was a lottery game where you picked (or had the lottery machines draw random) 6 numbers. If there was no winner, the prize rolled over to the next week.
But unlike other lotteries with continual rollover potential, Winfall stopped the game when the jackpot reached 5 million. They stopped it by splitting the prize amongst any player who had 5 of the 6 correct numbers the week the jackpot hit 5M. That effectively made the expected value of $1 bet more than $1 for that “last week” before resetting the game.
A convenience store owner, who had a math degree, realized the expected value condition and used to to win 26M for himself and family and friends over several years in both Michigan and Massachusetts.
Ah, yes, well if the EV truly is positive then you can definitely capitalize on that. A friend of my ex-husband’s used to go to an Indian casino that paid 2x for blackjack on Sundays which results in a positive EV even without counting cards. His wife was uncomfortable with him gambling though, so she didn’t want him betting much money, so he never got rich or anything. I assume someone must’ve.
CD’s (any interest earned really) get the worst worst worst possible tax treatment. Marginal Fed Rate, Marginal local tax rates, marginal state tax rate, and possibly the Net Investment Income Tax (Obamacare tax).
I don’t want interest. I want capital gains, and I want them unrealized and deferred, and I want them on a Long Term basis, not short term.
EV might still be negative with me at the table. I’ve had people look at me with raised eyebrows at the black jack table lol. Shut up, it’s my money buddy, and don’t start with ‘it effects the others at the table’ crap either.
It was higher than the tax adjusted yield available on muni bond options.
Yes, long term capital gains are better, but i also don’t think piling everything into stocks all the time, so just looking for other ideas.
I kind of want to replicate an EIA by putting say 10k into the CD and taking the $450 in interest and buying 1 year call options on the S&P. Something that will involve understanding how to purchase the options and determining the payoff in various scenarios. I think i could do it if written as an exam problem, but have no idea how to translate that to making it happen online.
Buying 3-5k increments in a handful of different stocks is probably the better way to go.