Last week, we asked you how you keep costs down during the holidays. As you may recall, we struggle with gift-giving at Christmastime. We don’t struggle with it, but we struggle with our families who give gifts. Then we look like cheapskates for not participating. Or we give small amounts of gifts to our children, and then they come home from school wondering why everyone else got an iPod, a tablet, a laptop and a Wii for Christmas.
Thias from It Pays Dividends has found a system called Want, Need, Wear, Read, where you give one gift a child wants, needs, can wear and can read. I love this idea, and am strongly suggesting it to the grandparents. We’ll see how it goes.
Reader Lynne has done away with store-bought gifts, and this year is making vanilla to give. (I like vanilla…) I enjoy homemade gifts. I like to see what sort of creative thing someone has come up with. My friend Rose made a bunch of baked goods one year instead of gift exchange, and that was my favorite gift that year.
Reader Dawn saves money and the environment by using fabric as gift wrap. She bought some festive fabric after Christmas a few years ago, and the whole family wraps all the gifts in the fabric. They’re on their 7th year of the same fabric wrapping.
Brain from Debt Discipline had a beautiful line: The holidays don’t need to be grand, they just need to be special.
Reader Jacq uses credit card rewards to purchase gifts with no cash. Reader CPP also uses credit card points for gifts.
Freedom40‘s family did a secret santa with a high limit – $250. Each person bought for one other person. I’ve seen lots of secret santa gift ideas, but never one with such a high limit. He got something he really wanted (no more Budweiser holiday steins!) and still managed to spend less on gifts.
Kate from Goodnight Debt has come up with a smart plan for receiving gifts. Whenever anyone asks what she wants, she gives them a specific item – she asked for makeup remover for her birthday. “People also tend to take me more seriously if I ask for a specific thing instead of “just don’t buy me anything.” For some reason, many people think “don’t buy me anything” is a trap.”
Norm from Ridinkulous also makes homemade gifts, like snack mixes and apple butter. This year looks like soaps are the choice. (I like soap…)
I’m turning the page over to Mr. 1500 now, so he can talk about portfolio allocation (and other things.)
There are some very difficult questions that we must ask each day including:
- Why are we here?
- Who farted?
- To a group of four or more: What do you all want on your pizza?
- Why do I continue to read this blog?
Perhaps one of the most difficult questions that I routinely get asked is this:
What should my investment portfolio look like?
On the surface, the answer isn’t difficult; low cost index funds are the smart choice for most people. Case closed!
Not so fast.
There are loads of different types of funds. Do you want to just own companies in the United States? Just small caps? Dividend growth? Health care? Technology? Foreign markets? Emerging markets? And I haven’t even mentioned bonds or REITs.
I started thinking about allocation last week when I mentioned the direction that I’m steering my portfolio in. I had stated that I was uncomfortable that so much of my portfolio was US based:
84% is just too much to have in the USA egg basket.
More than one reader stated that this was actually OK and that I should reconsider.
To resolve questions like this, I tend to find the smartest people who will give me their opinion and listen carefully to what they have to say. Warren Buffett mentions 90% S&P 500 and 10% bonds. Jack Bogle, the founder of Vanguard has also stated that investors should be biased in favor to the United States.
Is portfolio allocation this black and white? Just like pizza, there isn’t one correct answer. There are probably some very wrong answers though; you’ll always have that crazy Uncle Larry that likes fish on pizza (nasty and an abomination) and buys nothing but gold because ‘the US is about to collapse into Martial Law.’ Keep digging your backyard bunker Uncle.
For the sake of simplicity and sanity, let’s eliminate the crazy outliers like Uncle Larry. I’m not sorry if I offended the fish-pizza or gold-bug crowd.
But now, what is the question? This is a broad and complex topic, so feel free to answer any or all of the following:
- How is your portfolio allocated? Bonus: Tell me how it will evolve as you age.
- Why on earth do you like fish on your pizza? This is unnatural.
- Who farted? If it was you, just admit it. We all know it wasn’t the dog.
- The big dogs like Warren Buffett and Jack Bogle shun foreign investments in favor of the US. Do you think they suffer from recency bias (20th century was incredible for US investors) or do you think the US will continue to dominate?
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