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Ask HN: I have 50k. How do I make it more without a startup?

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Re: Ask HN: I have 50k. How do I make it more without a startup?

#41

Post by spoonie »

scorpioxy wrote: post #22
Kaizyn wrote: post #18

Earlier quoted context omitted.

Consider the alternatives to the index fund: 1. Pick individual stocks and directly buy those. (A lot less diversification and a lot more hands-on management required.) 2. Hire a stock broker to invest for you. This is like #1 except now you are at the mercy of someone else whose interests you cannot be guaranteed to align with you. 3. Managed investment fund. Funds are diversified based on the discretion of the fund…

Oh I agree. They're a good deal considering the alternatives but they also carry a lot of risk. Less risk than individual stocks of even specialized baskets but a lot of people throw the term around as if its magic. Several source I've read also assume that you'll constantly be putting money into the market and never withdrawing it to actually buy that house you start this whole thing for. Withdrawing the money means…

So if your time horizon is short buy bond index funds instead. The context of recommending index funds is almost always when saving for your retirement. Don't invest 100% in equities unless you're very young and can stomach the volatility. Your asset allocation should tilt more towards less volatile assets like bonds and cash as to get older. You slowly enter the stock market as you save up, and slowly exit it into other assets as you age.

Re: Ask HN: I have 50k. How do I make it more without a startup?

#42

Post by scorpioxy »

spoonie wrote: post #41
scorpioxy wrote: post #22

Earlier quoted context omitted.

Oh I agree. They're a good deal considering the alternatives but they also carry a lot of risk. Less risk than individual stocks of even specialized baskets but a lot of people throw the term around as if its magic. Several source I've read also assume that you'll constantly be putting money into the market and never withdrawing it to actually buy that house you start this whole thing for. Withdrawing the money means…

So if your time horizon is short buy bond index funds instead. The context of recommending index funds is almost always when saving for your retirement. Don't invest 100% in equities unless you're very young and can stomach the volatility. Your asset allocation should tilt more towards less volatile assets like bonds and cash as to get older. You slowly enter the stock market as you save up, and slowly exit it into o…

Yep, I'm aware of the recommendation to use your age as a rough percentage to how much you need to have invested in more secure vehicles. Solid advice I guess.

I still haven't looked at the numbers to see if it's worth it. In Australia, we're expecting a market correction to happen initiated by the real estate bubble finally busting. Which means that bonds would gain while the market loses. Of course people have been expecting that for many years now and statistically speaking it will have to happen at some time... Knowing this, I am still not sure whether to just invest and deal with the consequences if and when they happen or keep my money in my sock drawer.

Re: Ask HN: I have 50k. How do I make it more without a startup?

#43

Post by spoonie »

scorpioxy wrote: post #42
spoonie wrote: post #41

Earlier quoted context omitted.

So if your time horizon is short buy bond index funds instead. The context of recommending index funds is almost always when saving for your retirement. Don't invest 100% in equities unless you're very young and can stomach the volatility. Your asset allocation should tilt more towards less volatile assets like bonds and cash as to get older. You slowly enter the stock market as you save up, and slowly exit it into o…

Yep, I'm aware of the recommendation to use your age as a rough percentage to how much you need to have invested in more secure vehicles. Solid advice I guess. I still haven't looked at the numbers to see if it's worth it. In Australia, we're expecting a market correction to happen initiated by the real estate bubble finally busting. Which means that bonds would gain while the market loses. Of course people have been…

Don't forget the opportunity costs! Money sitting in a sock drawer is losing value to inflation. That's years of dividends and growth you could be missing while you try to time the market. If you are really conservative, try 60/40 bonds/equities. Or invest outside of Australia. I'm Canadian, and Vanguard has "all world, excluding Canada" funds, I'm sure they have something similar for Australia. That way you can hedge against risks in your local market.

Re: Ask HN: I have 50k. How do I make it more without a startup?

#44

Post by Bombthecat »

anotheryou wrote: post #3
gnarbarian wrote: post #2

Try an index fund.

Same boat here. I'm really scared of a stock market crash.

We are for sure in a bull market and bubble.

But no one knows when the time comes for it to pop.

But on the other side. Let's say you invest now. In three years the bubble pops. In five you should be way above on what you have invested. Say around 20% plus in eight years.

Re: Ask HN: I have 50k. How do I make it more without a startup?

#45

Post by scorpioxy »

spoonie wrote: post #43
scorpioxy wrote: post #42

Earlier quoted context omitted.

Yep, I'm aware of the recommendation to use your age as a rough percentage to how much you need to have invested in more secure vehicles. Solid advice I guess. I still haven't looked at the numbers to see if it's worth it. In Australia, we're expecting a market correction to happen initiated by the real estate bubble finally busting. Which means that bonds would gain while the market loses. Of course people have been…

Don't forget the opportunity costs! Money sitting in a sock drawer is losing value to inflation. That's years of dividends and growth you could be missing while you try to time the market. If you are really conservative, try 60/40 bonds/equities. Or invest outside of Australia. I'm Canadian, and Vanguard has "all world, excluding Canada" funds, I'm sure they have something similar for Australia. That way you can hedg…

I have a 6.5% interest rate savings account I still have back home so I guess you can call that some form of investment. Definitely one that beats a 4% inflation rate. Our currency is also fixed against the US dollar. But I don't believe this is sustainable.

I also don't believe this is going to last more than a few more months until the bank has attracted as much cash as it needs. Of course that's also a third world middle eastern country and so lots can go wrong there which I have no control over. Thus my interest in moving it here. Vanguard is looking more interesting by the day. And yes, they do have a similar option.

Re: Ask HN: I have 50k. How do I make it more without a startup?

#46

Post by Kaizyn »

scorpioxy wrote: post #42
spoonie wrote: post #41

Earlier quoted context omitted.

So if your time horizon is short buy bond index funds instead. The context of recommending index funds is almost always when saving for your retirement. Don't invest 100% in equities unless you're very young and can stomach the volatility. Your asset allocation should tilt more towards less volatile assets like bonds and cash as to get older. You slowly enter the stock market as you save up, and slowly exit it into o…

Yep, I'm aware of the recommendation to use your age as a rough percentage to how much you need to have invested in more secure vehicles. Solid advice I guess. I still haven't looked at the numbers to see if it's worth it. In Australia, we're expecting a market correction to happen initiated by the real estate bubble finally busting. Which means that bonds would gain while the market loses. Of course people have been…

The credit managers at one of the Big Four Australian banks are waiting for the real estate market to burst before they swoop in and buy investment properties. It would be better to wait on any sort of real estate based investments or other stocks that move with real estate.

I am starting to think the best investment possible is in your own business/company. That way there is a direct correlation between what you can control and what you put in to what you earn back out. Obviously you can't predict what the future will hold, but you at least can manage your endeavor prudently so as to better minimise damage in the face of bad circumstances.

Re: Ask HN: I have 50k. How do I make it more without a startup?

#47

Post by nicholas73 »

Kaizyn wrote: post #15

The only way to make it grow is through investing it. The more risk you take on, the higher it has the chance to grow. However, at the same time you have an increased risk that you'll lose your investment. A money market account is safe and leaves your liquid assets in a state where you can get them easily. The downside is a poor rate of return. Tax-exempt bonds (local, state or federal) are an attractive option prov…

"The more risk you take on, the higher it has the chance to grow."

Not true, and it's often opposite where higher risk means a higher overall worse performance. You can also do more homework than others, and/or have more patience than others.

Re: Ask HN: I have 50k. How do I make it more without a startup?

#48

Post by scraft »

I got 'talked into' moving a chunk of money out of a current account into a combination of investment ISAs and Personal Investment Plans with Scottish Widows. Over 5 years they have increased in value by about 35%, so average 7% per year. Here is one of the ones I used:

http://webfund6.financialexpress.net/clientsv21/scottishwido...

I went in knowing nothing, and wouldn't have done it if my bank hadn't pushed me in that direction (the department of the bank no longer exists) and I guess I got lucky, as it has worked out well for me.

PLEASE NOTE: investment ISAs/Personal Investment Plans with Scottish Widows can go up and down. Also bear in mind I an openly saying I know next to nothing about this, so please don't jump into anything without researching it carefully.

Re: Ask HN: I have 50k. How do I make it more without a startup?

#49

Post by ixacto »

powera wrote: post #34

Get a job. There's no way for you to reliably make even 20k in the next year off of an investment of 50k unless you are going to be personally involved in it. You will also almost certainly make at least 20k at your job in the next year, and can probably figure out a way to increase your salary by 20k.

Put 5k in NYSE:BND for your emergency fund, Fidelity/Vanguard/Etc work about the same. Then put 5500 in Roth IRA NYSE:VOO. Then do the same for your work 401k account if you have one. Put the rest in a brokerage account in NYSE:VOO, maybe save 5500 for 2018 IRA.

Re: Ask HN: I have 50k. How do I make it more without a startup?

#50

Post by cauterized »

Kaizyn wrote: post #15

The only way to make it grow is through investing it. The more risk you take on, the higher it has the chance to grow. However, at the same time you have an increased risk that you'll lose your investment. A money market account is safe and leaves your liquid assets in a state where you can get them easily. The downside is a poor rate of return. Tax-exempt bonds (local, state or federal) are an attractive option prov…

I agree with the rest of the advice, but buying a home is not a good investment in all parts of the country/world, nor at all times. A home you own decreases your mobility and thus your employment options, especially if the labor or housing market in your area plummets in the future.

In other markets, home ownership and all its associated costs (including property taxes and maintenance) is more expensive in both the long and short term than renting.

For instance, for what I pay in rent in NYC (PLUS a down payment), I would have to commute at least 3 times as long to afford to buy an equivalent home. And also have to add the responsibility (in time and expense) for maintenance - from upgrading the plumbing to shoveling snow from the sidewalk.) Further, it'd be much more difficult to see friends, whom I'd no longer live near. That's all time that could instead be spent with friends and family, being healthier, or even making money on a side project or freelancing.

And if you get poor terms on your mortgage (think variable rate loans), you're just setting yourself up for pain.

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