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

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

#141

Post by gordonbowman »

patio11 wrote: post #37

A Roth IRA, maxed every year, is my main form of "real" investment. I try to put about 75% into index funds and 25% into handpicked stocks, which are my concession to desire to gamble. I don't buy bonds or CDs -- I'm young enough that short-term loss is a non-event, since nothing short of "my children are starving on the street" will induce me to touch the Roth ahead of schedule. Wild volatility doesn't matter becaus…

I prefer to invest in individual stocks and not a fund. Funds do give you some protection, but they will also limit your upside. I prefer the risk/reward trade-off of investing in individual stocks and options.

I am still relatively young so my risk profile is more on the risk seeking side right now. I'll seek out more of the funds when I'm 35+, married with children, and have more to lose.

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

#142

Post by drm237 »

tastybites wrote: post #110
drm237 wrote: post #105

Earlier quoted context omitted.

You sold because you were afraid of another "double dip" that didn't happen, and now you think you had "pretty good forward-sight"? "You should have held on to it" is not hindsight, that's typically stock market investment advice. Unless a company's stats have changed to the point where it's now a bad investment, you should hold it and ride out the storm.

Yes, the entire point of my original post is that I am a terrible stock market/retirement investor and a much better small business person. You must have missed the part where I didn't sell at the bottom, started a profitable company, liquidated the equities to invest into myself at +60% off lows, and then came out ahead 2.5 years later. 'Oh you should have held' is hindsight advice, it's not real advice. It isn't ev…

  > 'Oh you should have held' is hindsight advice, it's not real advice.
I think Warren Buffett would disagree with you.

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

#143

Post by encoderer »

ydant wrote: post #106
encoderer wrote: post #61

Earlier quoted context omitted.

If there's no match, it's generally advisable to not do this simply BEACAUSE the usually crappy fund selection. You can open your own tax-advantaged IRA.

Which is limited to $5,000 per year at best (if not old enough for accelerated contributions), isn't it? Or am I missing something?

Only Roth IRA is limited to $5k a year.

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

#144

Post by mberning »

illumin8 wrote: post #94
mberning wrote: post #78

I got out of employer 401k. Yes they are tax advantaged, but your money is hostage and you will be harshly penalized if you ever need it for some unapproved use. I find that these penalties cause me to be much more conservative with the amount of money that I am willing to invest. Since I got out of tax advantaged accounts I now use an online broker to buy exclusively index funds. In the past I was only comfortable i…

Sorry, but this is terrible advice. You could be sheltering $16,500 per year from all taxes until retirement, not to mention possible employer matches. Right now, you probably have to earn about $23,000 (assuming 30% tax rate) just to invest the same $16,500. Then, you have to pay capital gains taxes or regular income tax every time you receive dividends, yields, or sell a stock at a profit. These taxes can eat anywh…

It does leave money on the table. I wasn't necessarily giving advice, just telling what I do.

Also, I find the concept of taking a loan on my own money detestable.

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

#145

Post by meterplech »

tastybites wrote: post #98
meterplech wrote: post #80

Earlier quoted context omitted.

This isn't controversial at all. This is pretty much the typical HN answer. But, the OP wasn't looking for this... "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?" Congrats on making this decision to do a startup, but that's not what he is looking for. For what it…

Oh come on, give me a little credit - here, I'll rewrite the facts of my original post, which you might find adheres to your expected response format (while presenting the same, and no new information information versus the original): I put a small amount into my retirement accounts while spending or investing mostly on my startup business, real estate, sports cars, and keeping cash. Which post was more interesting t…

Sorry if it was a bit harsh. You definitely wrote a more entertaining post. I was just pointing out that he was specifically requesting information that wasn't related to doing a startup.

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

#146

Post by tricky »

jbooth wrote: post #139
ydant wrote: post #100

Earlier quoted context omitted.

Self-storage might be a US phenomenon. It's basically someone building a bunch of windowless locked garages of varying sizes (some the size of a small closet, some bigger than a car) for people to store their excess stuff. The price per square foot is pretty high, and a lot of people will rent for years - never even interacting with the stuff. If the renter defaults, the storage company typically (through contract) o…

A high school friend of mine's dad made an entire career out of buying the crap from those storage contract defaults and re-selling it. Has his own furniture business and everything now. One time he got a corvette. Dissassembled, inside a storage shed. Apparently the way it works is they open the door and let you look in, but you can't actually go inside and see what's in the boxes or whatever. So it's kind of like g…

I'm guessing another perk of actually owning the building is you can have a look at the storage shed before you decide to hold an auction. Sounds like the owners of that particular facility probably only keep the assembled cars...

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

#147

Post by encoderer »

tricky wrote: post #116
encoderer wrote: post #59

Earlier quoted context omitted.

That goes likewise for his "pay off your mortgage" advice. If your note is 4.5% and here in the US mortgage interest is tax deductable making your nominal interest rate even lower. So the calculation becomes... paying off that mortgage is like getting a guaranteed 4% return on your money. But there are many low-risk vehicles that can eclipse that. It's possible that you'd want to take that guaranteed 4%, but it's not…

Are there really any zero risk vehicles that guarantee more than a 4.85% return? In other words, show me a zero risk 5% vehicle and I'll stop trying to pay off my mortgage immediately. edited for a dumb mistake....

No of course not. But that's not the question. The question is, suppose you've got a lump sum. Would you rather take a risk free 4.x% return by paying off your house, or take on some level of risk -- still far from high risk -- to earn quite a bit more than that.

The OP made the "risk-free 4%" one of his top must-do's. My point is, that's not always the case. Paying off debt is not always the best choice in the current times of very cheap borrowing.

YOU have no appetite for risk (judging only by this comment). That's not true of everybody.

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

#148

Post by tastybites »

drm237 wrote: post #142
tastybites wrote: post #110

Earlier quoted context omitted.

Yes, the entire point of my original post is that I am a terrible stock market/retirement investor and a much better small business person. You must have missed the part where I didn't sell at the bottom, started a profitable company, liquidated the equities to invest into myself at +60% off lows, and then came out ahead 2.5 years later. 'Oh you should have held' is hindsight advice, it's not real advice. It isn't ev…

> 'Oh you should have held' is hindsight advice, it's not real advice. I think Warren Buffett would disagree with you.

I'm not sure how many posts it's going to take to tell you I did hold on, and that's why I didn't go broke and had the money to investment into my own biz.

I think at this point you're just trolling me now, so I'll end it with one more point:

If you know anything about Warren Buffett, you'd know his main thesis is to invest in only the things you understand. That's the advice I ultimately followed to end up in a better place.

Holding onto investments that you don't understand is not his advice at all - that's just a shitty platitude.

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

#149

Post by encoderer »

arc82 wrote: post #89
encoderer wrote: post #59

Earlier quoted context omitted.

That goes likewise for his "pay off your mortgage" advice. If your note is 4.5% and here in the US mortgage interest is tax deductable making your nominal interest rate even lower. So the calculation becomes... paying off that mortgage is like getting a guaranteed 4% return on your money. But there are many low-risk vehicles that can eclipse that. It's possible that you'd want to take that guaranteed 4%, but it's not…

The discount to your mortgage is often quite small since you shouldn't count the entire mortgage interest write-off as a discount, only the amount above the standard deduction. Also, this discount will shrink over time as your interest payments shrink and the standard deduction rises.

A very large number of people -- those with kids -- have no trouble getting past the standard deduction

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

#150

Post by ydant »

encoderer wrote: post #143
ydant wrote: post #106

Earlier quoted context omitted.

Which is limited to $5,000 per year at best (if not old enough for accelerated contributions), isn't it? Or am I missing something?

Only Roth IRA is limited to $5k a year.

This doesn't agree with my understanding of the tax code as reported on IRS.gov. For example:

http://www.irs.gov/retirement/article/0,,id=202510,00.html:

"The maximum contribution that can be made to a traditional or Roth IRA is the smaller of $5,000 or the amount of your taxable compensation for 2011. This limit can be split between a traditional IRA and a Roth IRA but the combined limit is $5,000.The maximum deductible contribution to a traditional IRA and the maximum contribution to a Roth IRA may be reduced depending on your modified adjusted gross income."

Also, this table seems to agree:

http://www.irs.gov/retirement/participant/article/0,,id=2025...

This is for 2011, but my recollection is that 2010 had identical wording.

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