Ask HN: What is your financial “setup”?

Some people may not use Gmail, or any free email services. Others use Apple Pay so the acquirer and bank cannot know what items you bought, and the merchant cannot know your credit card number. Finally, some people enjoy having a digital ledger so they know what they spent.

Do you feel your harsh words are justified here?

First, the penalty for the strategy of "not-thinking" just on a tactical level isn't 1-2%, more like a minimum of 10%, and a maximum of 100% or more when you take into consideration accumulation over time.

Second, from a "strategic" perspective, "not-thinking" leads to "not-understanding" the myriad "choices" presented/available to you- where often what's presented is very different from what's available, and often serves someone else's interest much more than some other available-not-presented option may serve yours.

Third, the state of "not-understanding" leads to the use of seemingly helpful services like Mint. In doing so you are making an enormous sacrifice in terms of privacy. There are rules that prevent the state of your deposit/savings data from being shared by the custodian (many more than the state of your credit data, for hopefully obvious reasons). To use those services you have to provide them with your deposit/savings credentials, and once they have them, that data gets out in the wild, which can have unexpected deleterious effects, particularly if you are a person of color, or a woman, or wind up in a weak financial position, which may happen for unexpected, surprising reasons.

The financial industry is predatory. Full stop. The industry harvests from people who choose to not think about it. There is so much- too much- money in the world, but to everyone individually/organizationally it is a scarce resource. Every day I see grim occasion to think about apex predator Danny DeVito in a David Mamet movie called "Heist"-

"Everybody needs money. That's why they call it money."

Good luck!

I pay poor people, teach them coding and help them move into middle class. I spent Most of my money doing that. 10 years of Bay Area swe pay, I only have $2k in my bank account. (Currently negative because of cc debts and holiday shopping).

Don’t be like me. I originally thought if I helped others become as wealthy as me (relatively) they’ll be able to lend me money whenever I end up in hard times. Turns out, most people don’t save up and instead just end up spending more. Their relatives suddenly appear with “investment opportunities” etc.

So now I’m just as broke as the other guy. The only bright side is I got to meet and marry another swe through doing this and our combined TC is over 600k. We plan to put everything we earned into a savings account, by a house next year and retire a few years after that.

Don't beat yourself up over not having a lot of money in the bank, it seems like you've still got your financial life mostly in order.

I often have to remind myself of this, as I send a significant amount of money to another country to help my spouse's family -- It's a significant amount for me, but it's generationally life changing for them to be able to get advanced education. Doesn't really make me feel happier when I look at my bank balance, but there are other things that are more important than a bank balance.

I use a credit union for checking. I'm currently planning to open up a second checking account with the same credit union to split my income stream into fixed and variable expenses as some have mentioned here.

General idea is as follows:

1) Deposit income check each month into checking account #1. Draw from this account for monthly and yearly expenses. Add some buffer so as not to over draw.

2) Initiate an auto-transfer from checking account #1 to checking account #2 after check is deposited each month. Work within the budget set by checking account #2 for variable expenses.

Why use a credit union? A for-profit bank does not share the same incentives as their clientele. If they can separate you from your money, they will. I'm generally wary of any industry that is rewarded financially for stealthily screwing their customers, e.g. insurance industry. Credit unions are also known for having very reasonable loan terms.

Why two checking accounts? It's nice to know what I'm spending each month on stuff like gym membership, streaming music, cellphone bill etc, versus things like coffee and dining out.

Investing setup

I'm young. I'm willing to incur risk for better long term returns (on average). I also recognize that I am not Rentec. If I were to outperform the S&P500 picking stocks, it would be almost entirely due to random chance.

I keep enough money in checking to survive an emergency that requires immediate access to funds. Everything else that I earn above what I need for the month goes straight into an S&P500 index fund. Both Vanguard and Fidelity are essentially fungible.

I'm open to others convincing me that this is a stupid strategy. It is entirely possible the S&P500 tanks, and I lose a large fraction of my money. Few counter points though. First, it is by definition a diversified portfolio of stocks. Second, it has performed very well historically. Third, it has enough people invested in it that it couldn't just "go away" without serious repercussions for the US and the world.

Perhaps the largest concern, is that there is way more wealth in the S&P than there are people actually trading it on a day by day basis. If there was a flash crash, there simply wouldn't be enough people on the buy side of the equation to drink from the firehose of people selling. This is really beyond my depth though so I'll stop here.

Other principles

I'm trying to avoid debt like the plague. Mostly for my mental health; I know it can be important to your credit score to carry some continual debt. Be wary what you sign up for (college, grad school, etc).

Keep in mind though, you always want to maximize your net effective interest rate. If your student loan rate is 4%, consider paying the minimum on your student loans and put the difference (what you would have paid) into the stock market. Only do this if you can automate the process as you will be inclined to spend the money and not save it.