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Ask HN: How have you achieved financial independence?

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Re: Ask HN: How have you achieved financial independence?

#81

Earlier quoted context omitted.

If dividends weren't priced in then prices wouldn't dip when stocks go ex-dividend.

Sometimes they don't. Sometimes they go up. Lots of people think they're priced in, and the point at which they go ex-dividend is a convenient point to decide that it's now worth a bit less. Was it "priced in" before? No idea. Going ex-dividend is a single, identifiable point at which people can say it surely must be worth less now. I personally value dividend paying stocks more highly than non-dividend paying stocks…

>the point at which they go ex-dividend is a convenient point to decide that it's now worth a bit less.

The company has less cash ex-dividend, so as a matter of fact is worth a bit less.

Re: Ask HN: How have you achieved financial independence?

#82
post #10

Just turned 30. Invested most of my savings (20k€) into Bitcoin several years ago, and then converted everything to Ethereum in the pre-sale. Those 20k€ are worth roughly 1M€ pre-tax at the current rates. Started a fintech startup three years ago and we are close to a liquidation event that would net ~1.5M€ pre-tax. Right now, though, I have less than 10k€ in my bank account. Would be also really curious to hear how…

I had the opportunity to hear major german bank disappoint affluent customers by telling them that, in stark contrast to the past, there is no risk-free 4% in the stock market any more (when using the basic strategies available retail like investment funds etc). If true, you might have to play a more active role and "run a business" instead of "invest some".

What's the "risk-free" amount then? 2%? 1%? 0.25%?

2% just means you need more money saved, not that you need to actively run a business into your 80's to continue feeding yourself.

Re: Ask HN: How have you achieved financial independence?

#83

Related, I am wondering if any of you have any tips on securing financial independence / passive income that will hopefully be Tech recession proof. I.e, best way to see yourself through a Tech downturn without taking a severe hit to your wealth. I say this because I've had recent experience with people losing huge amounts of their wealth, and almost going bankrupt during the Oil price crash. For instance I know Oil…

Well, it doesn't help me at all in the tech job market, but my primary residence is 0.75 miles from the beach in the Northeast (Maine). At some point I'm pretty sure we'll move one more time for a career opportunity, at which point this becomes the 2nd home and an investment. We weren't really part of the housing bubble or the collapse here - things just kind of kept moving along at reasonable rates of appreciation. As a result, there aren't any bargains here, but I know a few people with similarly located homes renting them by the week in the summer to tourists and keeping them completely vacant from October-April. I'd like to get another property up here. Now, if you're talking about market investments, do yourself a favor and diversify. Just hold indexes and keep your expenses low if you don't quite know what you're doing.

That said, disclaimer, I'm not financially independent. I very much need my job, as I have a mortgage and student debt from law school, plus a child and probably having 1 more in the next couple of years. I'm nearly certain I'll never be financially independent, since I'm really trying to set that up for my children instead. I have no idea what college will cost in 15-20 years, but I see the direction it's headed and my financial plans are more around making sure they come out of school debt free. My folks did that for me, but then I was dumb enough to go to law school in 2005. I really can't complain, I have a pretty solid career doing fintech and data for a large company, but it's one major expense I could have avoided and been okay - although it does check the "advanced degree" box. I have some side projects and more coming, but if I make a few dollars there, it goes directly to my kids' savings. I do have US and EU passports, so there's potentially that option for retirement with affordable healthcare and housing, but that's projecting years down the road.

Re: Ask HN: How have you achieved financial independence?

#84
post #75
post #73

Earlier quoted context omitted.

It's actually surprising how little you can live on given small lifestyle changes. I haven't gone down to 10k/year but my expenses each year range from 14-17k. And that's on a salary about 7x that. It's all about little things that add up. If you go to Starbucks 5 days a week, that could easily cost you 1k a year. I mostly buy clothes at thrift stores, you can find furniture/kitchen appliances/etc on Craigslist. Inst…

Not sure why this was flagged except maybe the link to MMM (which is generally garbage advice for 80% of the population).

Isn't the core idea behind MMM just spend less, save more? Not sure how that's garbage advice. The particulars of some of the things he advocates aren't possible for everyone, sure. But reducing debt and increasing your savings is a goal that probably everyone who hopes to live another 10+ years should strive for.

Re: Ask HN: How have you achieved financial independence?

#85
post #24

Earlier quoted context omitted.

I would like to hear more about living on less than $10k a year. I'm still a student and my parents pay a lot, so I don't actually know how much I'd spend if I paid for everything myself currently. I just always assumed that $40k is about the minimum for a normal living. Doing the math though, counting food, rent and "service costs" (water, electricity, internet), I end up with a lower bound of about 6000 a year. Thi…

My first thought: you forgot medical insurance. But I guess if you are making under $10K a year you get it for free. I know I pay $11,500 for medical insurance with a $18K deductible, so could have as much as $30K a year in medical costs. Meaning you have to earn $50K just to cover medical (married 57 yrs old, self employed).

There are some exceptions, but the ACA lays out the maximum out of pocket for individuals and families. It's currently ~$6,500 for an individual and ~$13,000 for a family. The gov't has made it clear that even under a family plan, an individual shouldn't have an out of pocket greater than $6,500 in a given year (medical and pharmacy combined).

Re: Ask HN: How have you achieved financial independence?

#86
I worked for a very large company for over 20 years, and the stock I received, bonus and standard issue, made my wife and I fairly much independently wealthy given our frugal life style. We spend a fortune on travel, otherwise we live on very little money.

The other thing that helped was buying some income property when I was younger. Getting rent money from tenants every month is wonderful.

Re: Ask HN: How have you achieved financial independence?

#87
post #13

As others have mentioned, financial independence isn't hard. The hard part is financial independence without lifestyle compromises. I'm making roughly $2k/month with books and workshops. The marketing and content producing takes about 2h/day on average. It makes my life a lot easier and less stressful. But rent alone is $3500 in this stupid city (San Francisco). So I still need a day job for now.

What genre of books and workshops? Might as well sell us a book here!

Re: Ask HN: How have you achieved financial independence?

#88
post #75
post #73

Earlier quoted context omitted.

It's actually surprising how little you can live on given small lifestyle changes. I haven't gone down to 10k/year but my expenses each year range from 14-17k. And that's on a salary about 7x that. It's all about little things that add up. If you go to Starbucks 5 days a week, that could easily cost you 1k a year. I mostly buy clothes at thrift stores, you can find furniture/kitchen appliances/etc on Craigslist. Inst…

Not sure why this was flagged except maybe the link to MMM (which is generally garbage advice for 80% of the population).

Interesting, what makes you say that? I haven't read MMM in depth but have a feeling it might be down to certain circumstances (e.g. if you're renting in London, you're pretty much guaranteed you can't save 50% of your income)

Re: Ask HN: How have you achieved financial independence?

#89
post #27
post #18

Earlier quoted context omitted.

I just switched from Wealthfront to Betterment, because their software does a good job of helping you with this. It asks you what you're using the money for, when you'll need it, and about your tax situation. It'll automatically provide different investment options based on what you answer. So, for your situation you could put some of it into an income producing "goal", and put the rest into something more growth ori…

Both this and Welathfront only operate within the US, which is a shame. Anyone aware of a similar service operating within the EU?

EU criterion may drop away but... In the UK:

http://www.wealthify.com/ https://www.nutmeg.com/ https://www.moneyfarm.com/uk/

Re: Ask HN: How have you achieved financial independence?

#90
post #67

In the USA the surest and safest way to do this is to follow the American Dream... ie: buy a house. Specifically, buy a multi-family in a constantly in-demand area / big city. The devil is in the details on the economics of all this... how much you put down vs how much you borrow, etc.. etc... But within 30 years (assuming you get a 30-year mortgage) you will certainly be financially independent. The key is to manage…

Any areas specifically come to mind?
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