Wall street programmer :)
Super high burn rate. 200k is a slave wage in Manhattan, or in SFO bay for that matter.
#shitHNsays
Ask HN: How have you achieved financial independence?
121–130 of 184 posts
Re: Ask HN: How have you achieved financial independence?
#122Earlier quoted context omitted.
Like most finance blogs, the core idea behind MMM (spend less, save more, retire early) is fine. It's the specifics that are either completely ineffectual (don't use AC because you'll get used to the heat anyway), or unrealistic for most people (walk or bike to work; spend $1k on a 20 year old Corolla and be your own mechanic). Edit: And (3) a lot of the advice is the same old thing rehashed in a different way (never…
Also if you are anything near minimum wage in most of the united states its useless advice. Saving that 9 dollars a month won't lift you out of poverty only growth will. Invest in yourself.
Sure, but given that the median income in the US is $51,939 (2013) I think it's safe to assume that most people (in the US) can gain a lot by following the simple tenant of spend less, save more. But even MMM has suggestions for people who make too little - I suspect most finance blogs do. MMM advocates getting into a profession where you can make at least the median income, because that's obviously the easiest way to increase your potential savings if you're low-income.
Re: Ask HN: How have you achieved financial independence?
#123Earlier quoted context omitted.
My first thought: you forgot medical insurance. But I guess if you are making under $10K a year you get it for free. I know I pay $11,500 for medical insurance with a $18K deductible, so could have as much as $30K a year in medical costs. Meaning you have to earn $50K just to cover medical (married 57 yrs old, self employed).
There are some exceptions, but the ACA lays out the maximum out of pocket for individuals and families. It's currently ~$6,500 for an individual and ~$13,000 for a family. The gov't has made it clear that even under a family plan, an individual shouldn't have an out of pocket greater than $6,500 in a given year (medical and pharmacy combined).
Does that include copays or just coinsurance?
Re: Ask HN: How have you achieved financial independence?
#124Earlier quoted context omitted.
You do realise you're gambling, right? There's nothing wrong with that, but be honest with yourself about the risks of having nearly all your money in one instrument (ETH) which could easily wildly fluctuate up or down. If you honestly think it's a bet worth making, go look up the kelly criterion.
This is always a good reminder. Then again, had I not done that investment or cashed out earlier, that 20k€ would be nowhere near 1M€. There simply doesn't exist many ways to achieve 50x ROI in Hard to say what I would be saying had I lost everything though. It's easy for me to rationalise the decision now that it paid off. And yes, we have to remember to look at the graveyard too. The non-linear utility of money put…
You could probably say that about playing roulette if you happened to win your first spin. Doesn't mean it's a good bet, though.
Re: Ask HN: How have you achieved financial independence?
#125Earlier quoted context omitted.
> the point at which they go ex-dividend is a convenient point to decide that it's now worth a bit less. The company has less cash ex-dividend, so as a matter of fact is worth a bit less.
Valuation isn't, however, a matter of fact, but of values. We distinguish descriptive facts from prescriptive valuations. It is an important distinction, lost on many Rijksbank "Nobel" prize-winning economists.
Valuation isn't, however, a matter of fact
No, but that variation caused by going ex-dividend clearly is.
Re: Ask HN: How have you achieved financial independence?
#126Earlier quoted context omitted.
Sometimes they don't. Sometimes they go up. Lots of people think they're priced in, and the point at which they go ex-dividend is a convenient point to decide that it's now worth a bit less. Was it "priced in" before? No idea. Going ex-dividend is a single, identifiable point at which people can say it surely must be worth less now. I personally value dividend paying stocks more highly than non-dividend paying stocks…
> the point at which they go ex-dividend is a convenient point to decide that it's now worth a bit less. The company has less cash ex-dividend, so as a matter of fact is worth a bit less.
And while I do care what it is worth, that is only one factor in what its price will be, and of those two, the latter is the one that counts.
Re: Ask HN: How have you achieved financial independence?
#127Earlier quoted context omitted.
"The benefit of the dividend is already priced into the stock, so they are no better than any other stock." I hear this sort of thing a lot, and in my experience, everything already being priced in isn't true (both of dividend stocks, and stocks not paying dividends). This relies on the efficient market hypothesis being broadly correct, and based purely on my own experience, it isn't. My findings are very much based…
> My findings are very much based on my own experience In my experience, people think they're far better at stock-picking and investing than they really are. Have you calculated your actual, after-all-expense returns? Because if you are consistently beating the market, risk-adjusted, start a hedge fund. I'm only half joking. It's important to interpret EMH "realistically", in that prices, on average, will reflect all…
"Have you calculated your actual, after-all-expense returns?"
Yes. I very rarely sell, so I can see it clearly, and the purchase costs listed in the interface include the purchase commission (I buy in lumps of 1000 GBP, so take a hit of about 1% on initial purchase). Holding charges comes out to a couple of hundred a year, which comes out of dividends.
In one account, I invested gradually over three years, from April 2012 to March 2015. That's up on the order of 50% as I look at it today - looking at it this very second (it's a little rough as I reinvest the dividends, which count as fresh purchases in the accounting - it's up exactly 46% if reinvested dividends are considered to be fresh money). Some of the early purchases are up 100 to 200 percent, later purchases less so. There are some losers in there as well. I have sold only once at a loss in that lot; some BP shares that I changed my mind on. All other losers are still in the mix, and I leave my worthless shares in KAZ there to remind me of my losses. Big winners - ARM, Nokia, a global smaller companies fund. Big losers - KAZ, Bonmarche Holdings, Tesco.
Another account that I opened (because I didn't want to exceed the government insurance limit) and placed money into for the last 15 months or so is currently up 20%. I've never sold anything from that. That is principally US and Japanese index funds, although some ARM in there is up 70% thanks to Softbank buying ARM.
An earlier investment from about 2009 (which was nothing but safety) is up a little over 50% today, but that really was safety. Likewise never sold anything.
I have done this by doing absolutely nothing special. Absolutely nothing. I simply took the common advice; low-cost index funds. I also read the news and sometimes buy into companies with brighter futures. A couple of years ago I read many articles about how GSK and AZN had been through tough times and were coming out of it. Bought some shares. Worked out well. That's all I do. For as long as I can remember, ARM has had nothing but growth in the news. Bought into them repeatedly.
I have significant advantages over hedge funds; they have to trade. I can sit and do nothing for month after month, and when I suffer a 20% drop, I can continue to sit still and do nothing. If anyone wants to pay me to tell them when I buy something, knock yourself out :)
Re: Ask HN: How have you achieved financial independence?
#128Earlier quoted context omitted.
> My findings are very much based on my own experience In my experience, people think they're far better at stock-picking and investing than they really are. Have you calculated your actual, after-all-expense returns? Because if you are consistently beating the market, risk-adjusted, start a hedge fund. I'm only half joking. It's important to interpret EMH "realistically", in that prices, on average, will reflect all…
"Have you calculated your actual, after-all-expense returns?" Yes. I very rarely sell, so I can see it clearly, and the purchase costs listed in the interface include the purchase commission (I buy in lumps of 1000 GBP, so take a hit of about 1% on initial purchase). Holding charges comes out to a couple of hundred a year, which comes out of dividends. In one account, I invested gradually over three years, from April…
This is not nearly enough evidence to conclude that EMH is invalid. Yes, it's not perfect, but to conclude from this evidence that dividends are not priced into the price of a stock is... well, it's not sound reasoning.
Re: Ask HN: How have you achieved financial independence?
#129Just turned 30. Invested most of my savings (20k€) into Bitcoin several years ago, and then converted everything to Ethereum in the pre-sale. Those 20k€ are worth roughly 1M€ pre-tax at the current rates. Started a fintech startup three years ago and we are close to a liquidation event that would net ~1.5M€ pre-tax. Right now, though, I have less than 10k€ in my bank account. Would be also really curious to hear how…
> Invested most of my savings (20k€) into Bitcoin several years ago, and then converted everything to Ethereum in the pre-sale Haha. I did the same except with only 30€ worth of BTC, now worth ~15K€ in ETH. If only I had had slightly more balls at the time…
Hey, I bought zero bitcoin because by the time I looked at it - when the price was still in two digits - I thought the bubble had come and gone and there were rumors of an impending government crackdown. So you did 15k better than I did!
Re: Ask HN: How have you achieved financial independence?
#130Earlier quoted context omitted.
"Have you calculated your actual, after-all-expense returns?" Yes. I very rarely sell, so I can see it clearly, and the purchase costs listed in the interface include the purchase commission (I buy in lumps of 1000 GBP, so take a hit of about 1% on initial purchase). Holding charges comes out to a couple of hundred a year, which comes out of dividends. In one account, I invested gradually over three years, from April…
This is not nearly enough evidence to conclude that EMH is invalid. Yes, it's not perfect, but to conclude from this evidence that dividends are not priced into the price of a stock is... well, it's not sound reasoning.
To quote myself, from earlier:
"The reason I believe this is not related to stock picking working for me."
So it seems we agree that my stock picking success is not evidence for my beliefs on dividends and stock pricing.