Hillel Investment Advice

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En provenance du cours de Yale University

A Law Student's Toolkit

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Yale University

A Law Student's Toolkit

495 notes

Whether you are an advanced law student looking to review the basics, or an aspiring law student looking for head start, this course will help you build the foundation you will need to succeed in law school and beyond. This course will introduce you to terminology, concepts, and tools lawyers and legal academics use to make their arguments. It will help you follow these arguments—and make arguments of your own. This course consists of a series of short lectures and assignments. A reading list complements each lesson, providing you with a roadmap to help you explore the subject matter more deeply on your own. Although the lessons may cross-reference each other, they are modular in nature: you should feel free to approach them in whatever order fits your schedule, interests, and needs.

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Postscript

Hillel Investment Advice2:53

Rencontrer les enseignants

Ian Ayres
William K. Townsend Professor
Yale Law School

A man once challenged the rabbinic sage, Hillel,

to teach him the whole Torah while standing on one leg.

Hillel responded that which is hateful to you, do not unto another.

This is the whole Torah.

The rest is commentary.

Lots of people think that learning how to invest is as difficult as learning

the whole Torah.

I'm not a certified investment advisor, but

here's my attempt to teach how to invest for retirement while standing on one leg.

There are three simple rules.

Tithe to yourself, follow the birthday rule, and invest in low cost index ETFs.

The rest is commentary.

Let me explain, number one.

To make sure that you save enough, tithe to yourself.

Save at least one tenth of your after tax income.

You're probably screwing up if you're saving less than 5% of your income.

Number two, to make sure that you expose enough of your savings to the stock

market, follow the birthday rule.

Take 120 minus your age, and invest at least that percentage in the stock market.

So it you're 30, invest 90% of your savings in stock and

invest the remainder of your savings in bonds.

Do not sell stocks or bonds because you think the market is overvalued and

going to crash.

Number three, to make sure that you're diversified and

have low fees, invest in stock and bond ETFs.

Split your stock investment between Vanguard's total stock market ETF and

Vanguard's total index international stock ETF.

And split your bond investments between Vanguard's total bond market ETF and

Vanguard's total international bond ETF.

You're probably screwing up if your annual expense ratio is over

half a percent and if your investments don't expose you to hundreds of stocks.

So that's it.

Tithe to yourself, follow the birthday rule, and invest in diversified ETF or

mutual fund indices, with annual costs less than half a percent.

If you follow these rules, you can be pretty confidant

that you're saving enough, exposing your savings enough to the stock market, and

cheaply diversifying enough.

Usually, unusual circumstances might make it appropriate to deviate from

these rules.

But the vast majority of people who are currently deviating

from these simple rules would do a lot better if they didn't.

And if you feel the impulse to deviate, cheat just a little.

There is a lot more to say including that you might want to overweight small

caps stocks in your portfolio, or I think many young people can prudently

invest in stock, more stock, than ordained by the birthday rule.

But that will have to wait until I get better at balancing on one leg.

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