Ask HN: What kind of personal financial investment do you do?

I realize the general consensus around here may be that the best investment would be in yourself (have 25k? start a business!), but surely some people have "normal" investments, too. How do you hack it?

I don't think it'd be very beneficial to discuss specific stocks, funds, etc; but other than that it's a very open ended question.

Some thoughts (but post whatever),

* Do you have a 401k? IRA? Roth or not? Do you max them? Why or why not?

* Do you have an investment account that isn't a retirement account? Why or why not?

* Do you pick individual stocks? Do you have someone else? Do you use a managed mutual fund or ETF? Why or why not?

* Do you use passive index mutual funds? Bonds? CDs? Why or why not?

* And whatever else comes to mind...

Here is a short answer...

My wife and I both contribute maximum contributions to our 401K's (no employer match). This is ~$16.5K/year, and we pick the funds the 401k allocation is invested in. Like any 401k plan, the options are relatively limited anyway.

Our larger savings and retirement funds, and some other assets, are managed by a professional. We both have a higher-than-average amount of investment knowledge and experience, but it is really a full-time job. We don't have the time to obsessively watch market trends, do research, and then move investments around to maximize our gains.

We also keep (depending on various other factors) ~$70-$120K liquid at any given time. This is money in a decent interest-bearing money market account, short-term CDs (3-6 months), that sort of thing. It's basically our funds for emergency stuff, cover a job-loss (we both work in startup type businesses), buy a car, or things like that.

1. Education. Biggest investment, also bringing biggest returns in terms of increased earnings, in both me and my wife.

2. Shares. Me and my wife both take turns picking individual stocks. We tend to look at the news, look at what is cheap, a little bit of technical analysis. Mostly we just look at things that are cheap, try and find out why they are cheap, and if we think they will go up we buy. The goal is basically diversification, with a slight preference to smaller, riskier companies. As we age we will probably skew that towards larger, less risky companies, or perhaps indexes.

Oh the government forces us to put a lot of money into some retirement thing, but I think it is unsound, and do not consider it an investment. (The whole thing is based on todays workers funding todays retirees, and relies on an increasing population, whereas the population here is decreasing). I consider it money down the drain / tax.

My short answer is individual stock investing is fools path to being poor as you are betting against a full deck stacked against you.

Index funds is slightly better than mutual funds by-itself but not much better.

Most of my money goes into a high yield savings account to survive with no income for a while (trying to get 18 months in there!). I do fund an IRA, my employer 401k (to get the most matching), and two Roth IRAs though. The investments in those are relatively conservative, I consider investing in my own products to be my "high risk, high gain" strategy.

Roth IRAs are great, you can take the principle out at any time (since it's post tax money). It's only gains that are off limits until retirement. Not only that, you can roll normal IRAs and 401Ks into a Roth IRA and get that money out after something like 3 years. It's thing #1 I'm going to do when I quit receiving a paycheck and have a year of very low income to report. I largely consider the Roth IRA principle as part of my savings fund.

If I started working harder to manage those investments, I'd head over to the Bogleheads forum and spend a week or two reading. For now, I have a friend who knows his shit that just tells me where to stick the money to keep it reasonably safe. It's mostly no-load mutual funds with a pretty big chunk of bonds in them.