Taylor Larimore > Quotes

“The shortest route to top quartile performance is to be in the bottom quartile of expenses. —Jack Bogle”
― Taylor Larimore, The Bogleheads' Guide to Investing

“I helped put two children through Harvard—my broker’s children. —Michael LeBoeuf”
― Taylor Larimore, The Bogleheads' Guide to Investing

“If you buy an S&P 500 index fund, your investment is highly diversified and its performance will match that of 500 leading U.S. corporations' stocks. Is it possible to lose all of your money? Yes, but the odds of that happening are slim and none. If 500 leading U.S. corporations all have their stock prices plummet to zero, the value of your investment portfolio will be the least of your problems. An economic collapse of that magnitude would make the Great Depression look like Lifestyles of the Rich and Famous.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“Index investing is an investment strategy that Walter Mitty would love. It takes very little investment knowledge, no skill, practically no time or effort-and outperforms about 80 percent of all investors. It allows you to spend your time working, playing, or doing anything else while your nest egg compounds on autopilot. It's about as difficult as breathing and about as time consuming as going to a fast-food restaurant once a year.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“Here is the crux of the strategy: Instead of hiring an expert, or spending a lot of time trying to decide which stocks or actively managed funds are likely to be top performers, just invest in index funds and forget about it!”
― Taylor Larimore, The Bogleheads' Guide to Investing

“There is a crucially important difference about playing the game of investing compared to virtually any other activity. Most of us have no chance of being as good as the average in any pursuit where others practice and hone skills for many, many hours. But we can be as good as the average investor in the stock market with no practice at all.
Jeremy Siegel, Professor of Finance, Wharton School, University of Pennsylvania, and author of Stocks for the Long Run”
― Taylor Larimore, The Bogleheads' Guide to Investing

“Warren Buffett, chairman of Berkshire Hathaway and investor of legendary repute: "Most investors, both institutional and individual, will find that the best way to own common stocks is through an index fund that charges minimal fees. Those following this path are sure to beat the net results (after fees and expenses) delivered by the great majority of investment professionals.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“It’s been said that whom the gods would destroy they first make mad. A large sum of cash can create illusions of endless wealth, especially if it’s a new experience.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“Finally, if you own a business, make sure you have a sufficient business policy to cover contingencies, such as key-man insurance, or insurance to cover a buy-and-sell agreement.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“As an investor you can be well above average by settling for slightly less than the index returns.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“Holding out until you get your price to sell an investment is playing a fool’s game.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“Young people shouldn’t fall for it, since they normally don’t have dependents who rely on them for support. Everyone should save and invest their money and not buy life insurance until the situation requires it.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“Don’t invest in things you don’t understand.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“Most of us have learned from experience that cheap goods and services are usually not as good as more expensive goods and services. Paying more will often buy a better house, a better car, better clothing, better airline seats, and better service. It is, therefore, understandable that many investors believe that paying more for expensive funds, expensive financial advice, and expensive investments will result in better results. The opposite is nearly always true.”
― Taylor Larimore, The Bogleheads' Guide to the Three-Fund Portfolio: How a Simple Portfolio of Three Total Market Index Funds Outperforms Most Investors with Less Risk

“William Bernstein, Ph.D., M.D., author of The Four Pillars of Investing, frequent guest columnist for Morningstar and often quoted in The Wall Street Journal: "An index fund dooms you to mediocrity? Absolutely not: It virtually guarantees you superior performance.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“On Nov. 11 of 1998, a physician in San Francisco invested $50,000 in a mutual fund called BT Investment Pacific Basin Equity. In January, scarcely seven weeks after he had bought the BT fund—he got the shock of his investing life. On his original $50,000 investment, BT Pacific Basin had paid out $22,211.84 in taxable capital gains. Every penny of the payout was a short-term gain, taxable at Dr. X’s ordinary income tax rate of 39.6 percent. He suddenly owed nearly $9,000 in federal taxes. As a California resident, he was also in the hole for $1,000 in state tax.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“To minimize risk, investors want funds with securities that act differently. If one stock or bond fund declines in value, we want other stocks or bonds in the portfolio to gain in value. If two funds hold securities that are the same (i.e., overlapped), diversification is reduced and risk increases.”
― Taylor Larimore, The Bogleheads' Guide to the Three-Fund Portfolio: How a Simple Portfolio of Three Total Market Index Funds Outperforms Most Investors with Less Risk

“Whenever possible, we will use index funds with their low cost and low turnover.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“If you don't think those miniscule costs matter, consider this: Let's assume someone puts $10,000 in a mutual fund, leaves it there 20 years, and gets an average annual return of 10 percent. If the fund had an expense ratio of 1.5 percent, the fund is worth $49,725 at the end of 20 years. However if the fund had an expense ratio of 0.5 percent, it would be worth $60,858 at the end of 20 years. Just a 1 percent difference in expenses makes an 18 percent difference in returns when compounded over 20 years.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“Morningstar found that investors who rebalanced their investments at 18-month intervals reaped many of the same benefits as those who rebalanced more often, but with less costs.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“Just as the gambling industry wants people to think they can beat the casino, the investment industry wants investors to think they can beat the market.”
― Taylor Larimore, The Bogleheads' Guide to the Three-Fund Portfolio: How a Simple Portfolio of Three Total Market Index Funds Outperforms Most Investors with Less Risk

“Index funds outperform approximately 80 percent of all actively managed funds over long periods of time. They do so for one simple reason: rock-bottom costs. In a random market, we don't know what future returns will be. However, we do know that an investor who keeps his or her costs low will earn a higher return than one who does not. That's the indexer's edge.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“Invest most or all of your money in index funds. Keep your costs of investing and taxes low.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“if you consistently practice the techniques recommended in this book, you will automatically side-step most of the emotional investment traps. Pay off your credit card and high-interest debts and stay out of debt. Formulate a simple, sound, asset allocation plan and stick to it. Systematically save and invest a part of each paycheck in accordance with the asset allocation plan. The earlier you start, the richer you become. Invest most or all of your money in index funds. Keep your costs of investing and taxes low. Don’t try to time the market. Tune out the noise, rebalance your portfolio when necessary, and stick with your plan. By doing those things, you will intelligently manage risk. You will buy low, sell high, and have the power of compounding working in your favor. You will slowly but systematically build wealth and a nest egg for a comfortable retirement. With a little luck, you will have more money than you dreamed you would ever have. These time-tested techniques have worked for millions of other people and they can work for you, too.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“In contrast, the majority of profits in an index fund are not taxed annually, but are deferred until the money is withdrawn—and then taxes are paid at the lower capital gains rates.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA) are one way that parents can earmark funds for their children’s education. Often gifts of cash for a child’s birthdays and other special occasions end up in this account, and it grows over time.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“We recommend that mutual fund investors avoid load funds. If financial advice is needed, use a fee-only financial planner—not a mutual fund salesperson who has a conflict of interest.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“Let’s assume a child is born today. For the next 65 years, she or her parents will deposit a certain amount into a stock mutual fund that pays an average annual return of 10 percent. How much do you think they need to deposit each day in order for her to have $1 million at age 65? Five dollars? Ten Dollars? In fact, a daily deposit of only 54 cents compounds to more than $1 million in 65 years. It really helps to start early.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“It turns out that an investment of $601 at the beginning of each month in stock index funds, coupled with an average annual return of 10 percent, grows to the sum of $1,249,655 in 30 years. Incidentally, $601 a month is approximately 28.9 percent of a yearly salary of $25,000. And in case you might be wondering, yes, the math works the same for everybody.”
― Taylor Larimore, The Bogleheads' Guide to Investing

“Nevertheless, it’s money that won’t be compounding in their accounts and building their net worth.”
― Taylor Larimore, The Bogleheads' Guide to Investing