The Random Walk Guide To Investing

I just finished a great book called The Random Walk Guide to Investing: Ten Rules for Financial Success by Burton G. Malkiel. I highly recommend this book for anyone who has a retirement account, such as a 401k or IRA. It lays out a simple plan using easy to understand rules on how to allocate and invest your retirement funds.

I am personally going to use this investment guide to manage Aliciana’s 401k. This book convinced us to start funding her 401k as soon as possible and to continue funding it over her entire career. Everyone should fund their 401k or IRA as much as possible… the tax benefits are amazing! The true magic of his plan is to simply start saving a little money out of every paycheck as early in your life as possible, save a ton on your taxes, and let compounded interest turn it into a large sum by the time you retire.

This book gives a very convincing analysis which supports its claim that for long term investing you are better off buying “Total Market Index Funds” and similar types of funds for bonds and REITs. These types of funds won’t make you rich overnight but over 20 years they will provide a very good annual return, at least 10% APR for the stock fund.

So, I recommend reading this book for anyone who has to manage their retirement funds. If you are paying a financial planner to do it for you, chances are that you would be better off firing him and managing your funds yourself. The author gives plenty of real world data to back up this claim.

As for how I am going to manage our own retirement funds, based on this book’s advice, it is quite simple. I am going to allocate 80% of our 401k funds in the Vanguard Total Stock Market Index, 10% in the Vangaurd Total Bond Market Index Fund, and 10% in the Vanguard REIT Index Fund. As we age, I am going to slowly allocate more money into the bond and REIT funds, so that by the time we are 55 I should have 40% in the stock fund, 30% in the bond fund and 30% in the REIT fund. It really is that simple, no financial planner needed, all you need is this book.


Apartment Wildlife

Here are some pictures of the wildlife native to my apartment complex. The ducks were busy taking a bath and were funny to watch. I also finally got a picture of the crazy looking bird that I think might be a woodpecker. He usually flies away before I can get my camera, but not this time.


Aperture Is Fun

I played around with the aperture priority mode on my camera this morning. By combining a small field of view (F3.2) with the macro mode I got some pretty cool shots of my desk animals.


Out For A Walk

Aliciana and I decided to get some fresh air along the mighty Kern River. We ended up walking 3.63 miles (according to the GPS) along the bike path that runs along the river. It was nice that the river actually had water in it for a change. Usually, the river’s water is diverted to the farm land. I think they should try to keep water in the river more often, it is much more pleasant to look at than a sandy river bed.


Seattle Needs To Take Its Weather Back

It is raining…. again. It has been raining in Bakersfield for weeks. If I had wanted to deal with this type of weather I would have moved to the Pacific Northwest.

One of the best things about Bakersfield is its incredibly mild winters. Most days are in the upper 50’s with a gorgeous blue sky and lots of sunshine. It is that sunshine that I miss. The great winters are the reward that nature gives us for spending the summer trying not to melt. It seems like Mother Nature is screwing us on our deal.


Sandy The Puppy

Aliciana and I took my Grandma’s new puppy, Sandy, out for a walk because it was such a beautiful day. After the walk, I decided to take some photos of Sandy because he is just so cute. He is a 4 month old miniature poodle and has so much fluffy fur he looks like a giant cotton ball. He is a very good puppy and very affectionate. It is commonly known that a picture is work a thousand words, so here is 10,000 worth: