Treat everything as if it were a bill. My wife and I started to treat savings and investment as a bill and it has changed our psychology a lot, especially the mindset of "Ehhh don't need it. We can spend it." to "We have to pay this bill!"
Ask HN: How do you manage your finances?
51–55 of 55 posts
Re: Ask HN: How do you manage your finances?
#52Earlier quoted context omitted.
Not really constant but growing maybe double the inflation? Most of my money is invested in things that pays 2/3x inflation and are quite safe investments. Also I'm not planning on starting taking the money out yet so probably will get to 20 or more years of expenses. Then, just the profits of the money would be enough to pay my expenses.
Do you rigorous budgeting to keep your costs that low?
No, pretty much the opposite but I'm reasonably frugal. Nowadays 1/3 of my income is enough to live well almost everywhere (if not everywhere) in the world. So I focus on 2 things: not spend too much and making more money.
Re: Ask HN: How do you manage your finances?
#53Read widely online and find a financially-oriented community that matches your level of expertise and situation. Serendipity can play a major role. Stumbling across early on LEAP (i.e. long-term option) trading and later learning to navigate the complex world of closed end funds, helped me -- after many twists and turns -- realize a very comfortable existence. Ruthless self-awareness of one's limitations is useful. E…
Never heard of LEAPs, will read in-depth about it! Thanks.
If you do delve into the beguiling world of options, so full of snares and pitfalls, at some point take the time to learn how option market making works behind the scenes. This will help provide a more seasoned understanding of why the price action of of stocks in advance of LEAP expiration (the 3rd Friday in January each year) exhibits apparently irrational behavior (often major drops, like AAPL recently) and can prove invaluable, e.g. in understanding why holding through expiration is normally foolish.
Additionally, a comprehension of the role of volatility in option pricing (part of the Black-Scholes formula) is crucial, often decisive. Enjoy the journey.
Re: Ask HN: How do you manage your finances?
#54Earlier quoted context omitted.
Never heard of LEAPs, will read in-depth about it! Thanks.
If you do delve into the beguiling world of options, so full of snares and pitfalls, at some point take the time to learn how option market making works behind the scenes. This will help provide a more seasoned understanding of why the price action of of stocks in advance of LEAP expiration (the 3rd Friday in January each year) exhibits apparently irrational behavior (often major drops, like AAPL recently) and can pr…
Thanks for the heads up!
I’m not in it for the money, more to try and understand how this works, so I’ll sure be reading a lot before I make the first step.
Re: Ask HN: How do you manage your finances?
#55Earlier quoted context omitted.
If you do delve into the beguiling world of options, so full of snares and pitfalls, at some point take the time to learn how option market making works behind the scenes. This will help provide a more seasoned understanding of why the price action of of stocks in advance of LEAP expiration (the 3rd Friday in January each year) exhibits apparently irrational behavior (often major drops, like AAPL recently) and can pr…
Thanks for the heads up! I’m not in it for the money, more to try and understand how this works, so I’ll sure be reading a lot before I make the first step.
Good, neither was I. Just a fascinating hobby that accidentally brought wealth.