Author: Richard Thripp

I am an Education Ph.D. candidate (Instructional Design & Technology track) and technology instructor at University of Central Florida, Age 27. I have been keenly interested in personal finance for many years and want to improve the financial knowledge and behavior of others.

Be the Atypical Investor

02/05/2018 5 Comments Richard Thripp Investing

Today, February 5, 2018 we saw a large decline of the Dow Jones Industrial Average and other stock market indices.

DJIA drop on 2/05/2018

Although the stock market has had phenomenal gains since 2009, and especially in the past year, we are seeing a temporary decline that, in the past week, has erased the past two months of market gains.

Having a bias toward action is helpful in many areas of life, but investing is one area where inaction wins. In fact, investors who have died or simply have forgotten about their investments have results superior to the typical investor. The typical investor buys high, sells low, and then has fear of missing out (FOMO) and buys back in when the market is high again. The present “crash” spurs typical investors to sell, supposedly to prevent further losses. The typical investor’s behavior looks something like this:

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The key to financial independence

02/03/2018 No Comments Richard Thripp Big-Picture FI

Financial independence (FI) means having enough financial assets that you could live the rest of your life without working. Bloggers frequently use the FIRE acronym which stands for [become] financially independent and retire early. Such a life might be pictured as living off capital gains from one’s investments without reducing the principle, much like how a university or non-profit foundation lives off its endowment in perpetuity (albeit, often subsidized with tuition, sales, donations, etc.).

If FI means not touching the principle, this means you could live to 100 and your original investment would still be there (even when adjusting for inflation). This requires a combination of frugal living and large amounts of accumulated assets. You might be able to achieve FI with just a quarter million in assets if they live in a low-cost-of-living area, behave frugally, and invest in the stock market at-large (e.g., an S&P 500 index fund). Although there is luck involved (e.g., what the market does), one can certainly influence their income, investing, and spending. (On the other hand, if one chooses to avoid stocks entirely, it would be difficult or impossible to achieve FI with bonds or Treasury bills, due to their low propensity for growth.)

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