You might accuse me of being glib in saying this, but this scene from the movie The Gambler[1] contains a lot of wisdom. The movie as a whole is moderately OK, but this scene really distills a lot of good stuff into a few minutes.
Ask HN: Good resources to become financially literate
31–40 of 102 posts
Re: Ask HN: Good resources to become financially literate
#32Understanding the Bogleheads philosophy is a great place to start. Along those lines, the book “The Simple Path to Wealth”, by J. L. Collins is great for developing an initial mindset on how your money can work for you.
The nice thing about bogleheads is it starts pretty simple but scales into the minutia of various tax efficiency techniques, fund selection, real estate, and so on when you need it.
The other thing I like about it is that the forums have lots of detailed personal scenario discussions that are helpful for getting real life examples of the application of the dogma.
Re: Ask HN: Good resources to become financially literate
#33[deleted]
Re: Ask HN: Good resources to become financially literate
#34Dave Ramsey. Listen to his podcast episodes. It’s a quick way to get a feel for his advice and to hear how real people who call in benefit from it. Go back to 2020 or so before his co-hosts started taking more airtime. He catches a lot of flak because the debt snowball that he advocates is mathematically inefficient (folks prefer to pay debts with the highest interest rates off first). Also his political views. Look…
There's much valuable advice - sort of.
20+ years ago, he was one of a handful of well-known faces of personal finance, was nationally syndicated, books, etc. There were fewer outlets and fewer options than there are today.
His focus on debt and changing mindset around that will help some people, but if he's a turnoff (for whatever reason), you'll get 99% the same advice on most issues from dozens/hundreds of other personalities.
Re: Ask HN: Good resources to become financially literate
#35I found this on r/fatfire. A poster there uses it to give their children a quick overview of personal finance.
Re: Ask HN: Good resources to become financially literate
#36Dave Ramsey. Listen to his podcast episodes. It’s a quick way to get a feel for his advice and to hear how real people who call in benefit from it. Go back to 2020 or so before his co-hosts started taking more airtime. He catches a lot of flak because the debt snowball that he advocates is mathematically inefficient (folks prefer to pay debts with the highest interest rates off first). Also his political views. Look…
He's a real estate millionaire that has moral issues with declaring bankruptcy. Real estate is like life's cheat code: borrow money from the bank -- buy rental property -- pay the bank back with someone else's money. All this "get a second job"/"deliver pizzas" advice is disingenuous in my opinion when the real secret is borrow money and become part of the landed class.
Re: Ask HN: Good resources to become financially literate
#371. An app called YNAB (You Need A Budget). They use the envelope system of budgeting and they have group classes you can join. Absolutely transformative. 2. Rich Dad Poor Dad
Rich Dad Poor Dad should always be mentioned with the caviet that: A) 99% of the book is fabricated B) It's based on methods which are significantly harder to do in this day and age The biggest takeaway from the book is the mental shift to assets and liabilities. But the anecdotal stories are pretty poor and, as I said, fabricated.
I didn't read that book but watched a seminar via YT from the author. It talked about real estate investment and I found it eye opening from how/where profits came about. The example I remember (I have no idea if these are feasible numbers, just pulling numbers out of thin air for an example) goes something like this:
1. Buy 50 unit apartment complex for $10mln. Get investors to pay $4mln, loans for $6mln. Cash flow is $600k/year from avg of $1000/mo.
2. Slowly invest in the property, refurbish units by maybe adding in-unit laundry for example. Keep property well maintained.
3. After some time (3 years?), get property re-assessed and now its worth $15mln. Refinance the property to $15mln, pay off $4mln to investors, take $1mln from loan for renovation recovery/profit, tax free, pay off previous loan.
The eye opening part for me was that the goal is to not build and sit on the equity like a residential house but use the equity and increased property value to refinance and the extra money from the loan becomes essentially tax free profit. There is risk that something like a large employer leaves town/lays off people and now you have less renters and property value might decline and things like that. He had a real estate developer discuss how they would do this and do it well by researching areas, property values, etc. This also gives some insight into one element of why rents might be skyrocketing recently - loan rates are higher so developers/investors doing this re-assess/re-fi pattern have higher costs.
So what was portrayed in the YT video did not seem fabricated, he had an actual real estate developer talk through this process.
Re: Ask HN: Good resources to become financially literate
#38To me it seems like a lot of people enjoy having things more than being free and not having to worry about getting paid. Also 'spend less than you earn'. As simple as that - yet people struggle to follow this. It also boggled my mind to find that someone with masters degree believed they had money - despite it being cash withdrawn from a credit card. When challenged why do they not pay back their credit card - I hear…
I don’t understand. Cashing out a CC, paying fees, avoiding being out of money and having $ on the account - these statements mixed together make no sense to me.
Re: Ask HN: Good resources to become financially literate
#391. Spend less than you earn. 2. Learn about investing and develop an investing mindset. Investing can mean stock, but also a personal skill like cooking or a small business, a thing you can rent out, whatever. 3. Repeat. My friends live paycheck-to-paycheck and I got $300k stashed in cash and a mix of investments. I'm not living for the money, but this world is full of costly stuff you definitely do not need - and it…
I got $300k stashed in cash and a mix of investments Why? I can understand if you're saving to buy a house outright for cash, or to invest in a startup that needs a chunk of capex at the beginning, or something, but just sitting on a pile of depreciating cash assets is silly in an economic market where retail inflation is running at ~10%. If you're literally just holding cash because you can't think of anything fun t…
Emergency fund and savings for big purchases? Maybe a CD would be better for the latter, but that's still not beating inflation.
Re: Ask HN: Good resources to become financially literate
#401. Spend less than you earn. 2. Learn about investing and develop an investing mindset. Investing can mean stock, but also a personal skill like cooking or a small business, a thing you can rent out, whatever. 3. Repeat. My friends live paycheck-to-paycheck and I got $300k stashed in cash and a mix of investments. I'm not living for the money, but this world is full of costly stuff you definitely do not need - and it…
One irony between investing and spending is that people often use "investment" to refer to a big expense whether it provides a return or not. It's a dangerous mindset.
It's an "investment" in the sense that you are getting some conceptual return on it, even if the return isn't financial. For example, a $300 pair of boots is an investment, because you expect to get more than $300 worth of utility over the life of the pair of boots.