Quoted from Richthofen:Congrats to all those who do well with investing. And I'm 100% about the premise: Investing in businesses, spending less than you make, etc. However, I've been out of the market for a while. People talk about timing the market, but for GenX, especially the tail end of it, like me born in 1980, the timing was kind of done for us and not in a good way.
In 1998 I enter college and tech jobs are tech companies are on fire. 320 kids in my Computing I class. Inflation had been low and deregulation combined with Greenspan's low rates lit stock markets on fire. I love computers anyways so no problem. In 1997 right before I entered college I saw Bill Gates appear on the big screen at Macworld. Apple was virtually bankrupt but I remember putting an Apple stock alert on Yahoo! so I'd get text messages whenever Apple had a big day. I had thought hey if I had any extra money I'd buy Apple stock but I was in college so I had zero dollars. After paying my way through college I learned the first lesson of timing:
Don't be graduating into the tech field in 2002 after the dot com disaster. No one was hiring inexperienced kids with CS degrees like they were four years before. It takes time to make enough to live on your own and save for retirement. By 2004-2005 I finally started making enough to save on my own (having, the years before, taken my passbook savings account down to close to zero). So I got one of those Ameriprise Fee only advisors and put as much away as I could dollar cost averaging into whatever they told me to. And I saved up for a condo because housing was doing awesome! So in 2006 I closed on a condo in an 'up and coming' neighborhood. As you can see, my timing so far is impeccable. Second lesson of timing
Don't buy in neighborhoods that are iffy during a housing bubble. Basically I was instantly upside down, ended up having terrible neighbors, putting my own money into the tiny condo association because the other owners were deadbeats, etc. I needed to sell my investments to keep afloat. By 2009 its obvious that my condo isn't worth half of what I paid. I am debt free other than the condo though, so I hunker down. I build a giant pile of cash and stop investing. Partially because I want the cash if I have to mail the keys to the bank and walk away, so I can get by with awful credit, and partially because no one went to jail after the housing / banking scam. Not exactly trustworthy times. I short-sold in 2011, worked with the bank and got out ONLY shelling out thousands of dollars.
Fast forward. in 2013 I was married and in 2014 we have a kid. I kept piling up cash because I still didn't trust the markets, and also because I have a family and do want a house of ours. We bought this summer. This time, I pick a well established neighborhood and buy a SFH. No associations, etc. (and yes, I'm aware we're likely in yet another housing bubble).
But I've painfully been out of the stock markets. I have been contributing the max up to match in my retirement funds and probably have almost six figures in retirement assets, but its invested in money markets and bonds, because I wasn't sure exactly how much I'd need to put down to get a house. Third rule of timing: I guess always put money in the markets? Six months after closing on the house I have zero desire to put money into a market with crazy high P/E, and a bunch of open frauds out there (IMHO Tesla is a wild fraud, along with maybe a 1/4 of the silicon valley companies out there). I expect a correction because every time interest rates have gone up, it eventually tanks the stock market. So yeah, I'm stuck. It's one thing to dollar cost average in a tall market but its another thing to rebalance into stocks right at the top. Oh and also not trust the markets at all.
Anyways, I'm not the worst off of my age/generation, and I'm a saver at heart and make a good salary. But I know I'm not alone, it seems every milestone I've hit as I get old enough to hit them times with a really shitty time to be investing/buying a house/etc. I guess given my experience I'm just too gun shy at this point about the stock market.
Right there with you. I read your story and there are so many similarities to mine and a lot of my buddies in my age group. Born in 77'. Got the body blow of trying to start a career in CA during the dot com bust, pulled myself off the mat, found my legs only to get the Tyson style uppercut from a bursting housing bubble in 07' that sent my newly purchased 500k house to 300k by 11'. Timing is everything. I too am a saver by nature and have spent the last 10 years sacrificing to get very stable and debt free. Now I find myself selfishly rooting for a really heavy correction in the stock market. I'm just so tired of buying high. And I want that correction/collapse to happen now, rather than when I'm 50 or 60 and can't recover. I feel like the big correction is coming soon though. Housing prices/rents once again seem insane, int rates don't seem like they can get lower and are indeed heading up, unemployment extremely low, and the stock market is at an all time high. The headlines also seem earily similar to 06' where everything is rosy and there is actually "a lot more room for this Bull to run". 2017 should be interesting.