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Ask HN: Good resources to become financially literate

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Re: Ask HN: Good resources to become financially literate

#41

Post by HEmanZ »

Advice here seems generally good. I did start learning about finance and investing very young, and my views have changed a lot as I’ve gotten older. So take this advice as stuff after you learn investing basics.

1) financial independence is great, but you could also die tomorrow. Make sure you understand what your most important values and priorities are, and don’t put them off in favor of more future wealth.

2) health is wealth, don’t ever sacrifice health for more savings. I promise it won’t be worth it.

3) relationships are wealth. Don’t sacrifice the people that matter to you for a little bit more savings. In my own life this meant going from spending very little on traveling to see old friends to quite a bit traveling to see old friends.

4) it’s often much easier and more enjoyable to increase your pay 25% than it is to decrease your spending 25%. Most people are actually not good at navigating “how do I get paid more per hour worked” and a little bit of brainstorming and long term planning in this department can take you leaps and bounds further financially than penny-pinching.

Re: Ask HN: Good resources to become financially literate

#42

Post by lowercased »

boxedwino wrote: post #16
amelius wrote: post #9

Earlier quoted context omitted.

You should at least provide some motivation to do that.

If you are living paycheck to paycheck. You can not afford to lose your job, or not have one while you are looking for another one. This economy should make you immediately do anything and everything in your power to quickly amass at least 3 months of living expenses. This will give you that safety net necessary to be able to find a new gig if the need arises. You will be amazed at how much stress it can take off you…

Agreed. I have probably a couple years of living expenses available now, and I still have some anxiety around work/income/etc. When I lived check to check, it was even worse. There's not no stress now, but far less, knowing I can still eat/live/etc if some engagement is cut short or reduced. Beginning of covid, early lockdown stuff, the company I was working for cut some folks, and reduced me to ... limbo for a few weeks. The project I was on had no clients willing to renew their contracts because... lockdown - they had no idea what was coming in the next few months (who did?). 15 years ago I'd have freaked out about having a project suspended like that. This time, it was... a blip. True, there were bigger things to be concerned about anyway (covid) but short term financial stability wasn't an issue. Longer term - would still like enough to be even 'lean fire', but not quite there yet.

Re: Ask HN: Good resources to become financially literate

#43

Post by hiq »

jvanderbot wrote: post #24

The subreddit personal finance has straightforward advice, and a very nice algorithm for determining where to put your money (and an exit criteria after which you can do whatever you want). That basic flowchart has helped me set my goals for years, and to maximize my progress towards those goals. It's very simple, a 10 minute read, and backed by most the books and advice you're likely to receive anyway, including bas…

I assume you're talking about:

https://old.reddit.com/r/personalfinance/wiki/commontopics

linking to:

https://i.imgur.com/lSoUQr2.png

Re: Ask HN: Good resources to become financially literate

#44

Post by bittercynic »

boxedwino wrote: post #16
amelius wrote: post #9

Earlier quoted context omitted.

You should at least provide some motivation to do that.

If you are living paycheck to paycheck. You can not afford to lose your job, or not have one while you are looking for another one. This economy should make you immediately do anything and everything in your power to quickly amass at least 3 months of living expenses. This will give you that safety net necessary to be able to find a new gig if the need arises. You will be amazed at how much stress it can take off you…

This - and more.

Having slack in your finances may not solve all your problems, but life is much better when you escape from the class of problems surrounding lack of money.

It takes a while, but when you get used to having enough money your time horizon can extend much further, and you can start to make decisions that will be likely to help you in the future.

I say this as someone with household income below the local median, but with thrifty habits and a financially compatible spouse, and who had the good fortune to buy a house before things got so crazy. If housing wasn't a mostly-solved problem for us life would be very different.

Re: Ask HN: Good resources to become financially literate

#45

Post by avgDev »

nasablast wrote: post #14

Understanding 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.

Bogleheads subreddit and forums are generally great. A lot of great knowledge there, as most investors there are familiar with riskier investment as that is how many started.

I have read some insane upvoted comments in r/personalfinance and r/investing but bogleheads are generally on point.

Re: Ask HN: Good resources to become financially literate

#46

Post by mejutoco »

onion2k wrote: post #21
token8791 wrote: post #11

1. 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…

> and a mix of investments

I don't think OP means 300k cash, but (cash + mix of investments) = 300k.

For all we know it could be 10k cash and the rest investments.

Re: Ask HN: Good resources to become financially literate

#47

Post by jmathai »

ninethirty wrote: post #36
jmathai wrote: post #12

Dave 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.

He personally likes real estate but his advice is mostly to get into mutual funds (swap with ETFs if you prefer).

He strongly advocates against taking debt to buy real estate. He only recommends purchasing real estate in cash.

The recommendation to get a second job only applies as people are getting out of debt (baby steps 1 and 2). After that he doesn’t really recommend it.

Re: Ask HN: Good resources to become financially literate

#49

Post by throwaway22032 »

Have an analogy.

Imagine you're lanky or fat and you want to build muscle and get in shape.

Saving is like going to the gym and lifting. You'll look and feel a ton better.

Putting together a budget is like going to the gym with a routine and maybe a rough diet plan. You'll get there faster.

Investing is optimising your routine so that you hit every muscle group once you're starting to plateau.

But it's all built on the basic mindset that you need to go to the gym. It's not optional, you just do it.

The main thing is to build the mindset of saving. You spend what you _need_ to, and perhaps a bit on top for fun. Money that comes in is saved by default.

Re: Ask HN: Good resources to become financially literate

#50

Post by mindcrime »

onion2k wrote: post #21
token8791 wrote: post #11

1. 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…

There's something to be said for having some cash, despite inflation. Obviously you want enough to cover short-term emergency situations. But beyond that, the advantage of cash is that it's liquid AF and having a stockpile can enable you to take advantage of opportunities that you might not be able to seize if you don't have cash on hand.

No, you don't want your entire "life savings" in cash stored in pillow-cases under the bed, but you do want enough cash where the value of "enough" varies depending your circumstances.

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