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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

#91

Post by damascus »

returningfory2 wrote: post #59

All of the comments so far have talked about mechanical things (researching investment vehicles, what percentage to save, etc), but in my experience to move beyond a paycheck-to-paycheck lifestyle the biggest change you need to make is psychological. You can do all the research you want, but if you don't change your mindset around money it won't make any difference. In my case I was lucky. At the age of 25 I was also…

I just finished the book The Psychology of Money and found it very informative in exactly this regard. Definitely recommend.

Re: Ask HN: Good resources to become financially literate

#92

Post by _yb2s »

bombcar wrote: post #74
_yb2s wrote: post #58

This blog has clear information on how to be deliberate with money, and retire early on a fixed income. I also find his writing funny and enjoyable to read. https://www.mrmoneymustache.com/

The "deliberate with money" is really the whole key. Once your income is greater than your expenses, you can work out many things to do with the surplus, but getting out of the "I will just buy this now because I need a bit of joy" is huge. One go-to I used for awhile was hamburgers - does the price of this thing please me more than the equivalent number of good burgers would?

Very valuable point. People joke about 'retail therapy,' etc. and I think this is a real problem, where buying things becomes an addictive habit used to escape negative feelings about other things. Its especially easy now that you can shop in an instant online from anywhere.

I think one way to combat this is to setup some rules- e.g. add non-urgent purchases to a 'cart' where you consider them for a week before actually buying, and don't ever buy non-essential things when you aren't feeling well emotionally.

This is why when you get deep into ideas about responsible money use, it ultimately ends up focusing on concepts like Stoic philosophy and Cognitive Behavior Therapy (CBT), where you can work on reprogramming the internal narratives that lead to buying things you don't really need or possibly even want.

Re: Ask HN: Good resources to become financially literate

#93

Post by jvanderbot »

pclmulqdq wrote: post #56
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…

The stuff on personal finance does not apply to anyone with weird life circumstances or too much money - past a certain point, you need to do weird forms of diversification. Also, if you are saving part of your money for a short-term goal like a house, rather than retirement, you have to adjust the mix accordingly.

Short term large purchases are covered nicely.

And OP definitely said "paycheck to paycheck" which seems quite normal, and didn't mention anything too strange.

But yeah, there's no one-size-fits all, but as a philosophy, this flowchart is spot on: Cover your butt, then maximize money growth by optimizing paydown / investment by interest rates, and cover your butt more over time.

Re: Ask HN: Good resources to become financially literate

#94

Post by FredPret »

esskay wrote: post #6
FredPret wrote: post #4

1. 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.

Agreed, the author is not the smartest either. However, the concepts aren't high philosophy either, and he covers the important things well.

- buy assets that generate profit, not liabilities

- keep a budget

- business is the way to money, not a salary

- he covers various aspects of business on a high level, and emphasizes the importance of sales

Re: Ask HN: Good resources to become financially literate

#95

Post by atlgator »

rr888 wrote: post #52

Paycheck to paycheck is vague though. If that includes having a secure job putting money into a 401k and paying down a mortgage maybe its a perfectly good strategy. If you aren't doing those things then you need to change.

Paycheck to paycheck is an idiom that means you're spending all of your earnings on basic day to day expenses (whether necessary or discretionary). No or negligible retirement contributions, emergency fund, or savings. It aligns with short term thinking. Such people are often one major event (medical expense, car problem, job loss) away from disaster.

Re: Ask HN: Good resources to become financially literate

#96

Post by vlod »

Lots of people talk about investment basics below (FIRE is a bit crazy for me, but worth evaluating for the underlying message).

For me it's about respecting money and saving like social security will be next to useless by the time you retire. To start, save for a 6-12 month runway, invest in ETFs (QQQQ - nasdaq100 / IVV s&p500) and take advantage of employer matched 401K (it's free money!). Don't pick individual stocks as you most likely don't have the time to invest in this.

I think it's too easy to buy crap you don't need using a credit card. Yeah I fancy that fancy-coffee and muffin for breakfast, click 25% tip and don't even look at the total, just click buy-now. It's magically gone from your mind.

TIP-1: Stop using the credit/debit card (yeah, yeah, everyone thinks this will be nuts, but it will work). Make it a pain to spend money. Going to the ATM because you keep burning all your cash makes you aware of all the crap one buys. Yeah, you could use spreadsheets and technology and all that to track, but nothing is more of a pain than going to your ATM. And really stop buying coffee and if you can, make your own lunch/eat leftovers.

TIP-2: Don't go into debt for crap you don't need. I hate debt (yeah, it's probably not cool). I don't have ANY. I pay of my credit-card in full and I get a massive sense of security that I don't have anyone chasing me.

TIP-3: Do you really need spotify/netflix/fancy iphone. Oh you'll be miserable you say. Well go to the library (yeah they still exist) and read some books.

TIP-4: Don't lease, as one tends to overspend. If you can't afford it, save up.

Re: Ask HN: Good resources to become financially literate

#97

Post by vlod »

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…

I've always thought that a good metric is that if you had to leave the US in a real hurry (not sure if it would make a difference, but for e.g. Yellowstone is going to explode), do I have enough liquid to charter a private jet to somewhere else.

Probably $80K to $100K for that, plus extra for snacks. :)

Re: Ask HN: Good resources to become financially literate

#98

Post by Mcbrough72 »

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Re: Ask HN: Good resources to become financially literate

#99

Post by tjansen »

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…

Yes, was about to suggest Ramsey as well. His advice is quite repetitive (baby-steps..), but that's kind of the point: there are some easy rules that you will learn by heart if you listen to Ramsey for a few months. I live in Europe and half of what he says doesn't even apply to me, and yet I still think about them every time I consider a financial transaction. "Can I buy this car? - no, it's over 10% of my household income".

Re: Ask HN: Good resources to become financially literate

#100

Post by hacknewslogin »

LVB wrote: post #25

William Bernstein has written many finance/investing books, though most of them can get quite advanced. But he also wrote a much more approachable, 27 page booklet available for $1 called “If You Can: How Millennials Can Get Rich Slowly” that is a good intro to the space. I greatly appreciate the wit and no BS style of his writing.

Seconded, the book is actually free:

Bernstein has given permission for Cuffelinks to provide a complete copy of his 2014 booklet, ‘If You Can: How Millennials Can Get Rich Slowly’. It is his simple recipe for young people starting on an investing journey. It is linked here:

If You Can: How Millennials Can Get Rich Slowly https://gallery.mailchimp.com/34a7cea33f33e45eedceea223/file...

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