I want to support LunchMoney.app. I've been using them for a few months, and Jen (the creator) has been really easy to reach for questions. It's the only online budgeting/finance web app that I've not felt was a chore, and I've tried almost all of the main ones like Mint and YNAB. LunchMoney "just works" and works really well. I highly recommend it.
Ask HN: How do you manage your financials?
71–80 of 113 posts
Re: Ask HN: How do you manage your financials?
#72I live well enough within my means that I don't have to bother with any kind of accounting. On a typical tech salary living in a relatively cheap COL area, I bought a house about half of the price I could afford. I exclusively purchase used vehicles (partly because I am am enthusiast and enjoy working on them, but even a 10 year old low mileage modern vehicle is pretty reliable and cheap to maintain), and I don't sho…
Investing in an index fund consistently gives returns of about 5-10% a year. This turns out to be a LOT of money in the long run (1.1 ^ 30 = 20x). Trying to time the market is a bad idea. Picking individual stocks is a bad idea. This is assuming your main goal is returns on your investment. Picking individual stocks or even 30 stocks is basically gambling. Really recommend reading "A Random Walk Down Wall Street": ht…
It depends on which index. The Dow Jones is an exceeding poor index and a good actively managed fund will out perform it easily.
The Dow does not take into account market cap or float, and when a security comes off of it at $5 a share and a new one goes in at $105 per share, then the index jumps $100 in value.
The S&P is better, but managed funds are usually better.
Re: Ask HN: How do you manage your financials?
#73Earlier quoted context omitted.
Investing in an index fund consistently gives returns of about 5-10% a year. This turns out to be a LOT of money in the long run (1.1 ^ 30 = 20x). Trying to time the market is a bad idea. Picking individual stocks is a bad idea. This is assuming your main goal is returns on your investment. Picking individual stocks or even 30 stocks is basically gambling. Really recommend reading "A Random Walk Down Wall Street": ht…
I'm so tired of these types of comments on HN that say investing in individual stocks is like gambling. It's such a tired piece of advice. Don't invest more than say, 5%, in an individual company, but choosing a selection of high quality companies that you believe in is not in any way like going to the roulette table.
It depends on the time-frame you plan to invest. If it's a short time frame, investing in individual stocks can be OK.
There's just so many variables that go into the price that something that causes the stock to go up/down 20% can be completely unforeseen.
A broad market index won't have these weird fluctuations. Almost every single market strategy underperforms broad market indices in the long run.
Even hedge funds that outperform the S&P in one period perform average in the next period. In other words, past performance of funds has no impact on future performance. On average hedge funds picking individual stocks consistently underperform compared to broad market indices.
Re: Ask HN: How do you manage your financials?
#74Like others in this discussion, I created a spreadsheet as well to keep track of my financial activity. I have 4 columns, one for me, one for my wife, one for my dogs, and one for the family. In the same table, I have a budget that is computed as the average cost of the last 3-6 months (which can be considered a good baseline) to make us informed about how we are deviating from it.
Common sense/ things that I'm applying:
- Never spend more than what you earn
- Save at least 20-30% to create an emergency fund & personal savings fund.
You may also be interested to read a recent & related HN post / course on this topic (CS 007: Personal Finance for Engineers – Stanford University 2017-20) https://news.ycombinator.com/item?id=21631834
Re: Ask HN: How do you manage your financials?
#75I use tiller, it creates a swanky spreadsheet with all my financials.
Re: Ask HN: How do you manage your financials?
#76There's two kinds of spending:
1) Assets - these make money and make you richer
2) Liabilities - these cost money and make you poorer
I spent at least 60% or more on Assets. And keep liability spening to an absolute minimum:
- almost never ever buy new clothes
- xmas gifts - we don't play this game. we spend time with each other and make our own gifts, or buy them super cheap at yard library book sales, etc.
- always buy used cars, at least 5 years old and keep them for at least 10 or 15 years.
- absolutely no subscriptions (monthly payments) except utilities (just electricity, water, internet, cell phone, HOA, insurance). if you have more subs than fingers then you've got problems.
- minimize car maintenance (there's these big myths that doing lots of extra maintenance will make your car last longer, not necessarily true)
- no frivolous spending - I never buy stuff, unless I absolutely need it.
- rarely eat out, here in CA. eating out is way too expensive around here. and you never know what they put in it.
- never buy stuff you can get for free. why buy tea, when there's a lavendar plant in the yard? Rosemary bush yields are enormous. if you know a neighbor that has one, they'll glad you give you all the rosemary you want. etc...
Re: Ask HN: How do you manage your financials?
#77I use Google Sheets and my banking app to keep track of expenses. I'm in my mid 30s, from the Netherlands, and work remote as a software engineer for a company in the USA. My net income is about 4500 a month, rent in Amsterdam (NL) costs me about 1400 a month, then another 1000 a month for all other costs (insurances, food, electricity, car maintenance, parking, water, phone, etc.) That sounds like I should save abou…
check out 'tiller'
Re: Ask HN: How do you manage your financials?
#78Earlier quoted context omitted.
Investing in an index fund consistently gives returns of about 5-10% a year. This turns out to be a LOT of money in the long run (1.1 ^ 30 = 20x). Trying to time the market is a bad idea. Picking individual stocks is a bad idea. This is assuming your main goal is returns on your investment. Picking individual stocks or even 30 stocks is basically gambling. Really recommend reading "A Random Walk Down Wall Street": ht…
It depends on which index. The Dow Jones is an exceeding poor index and a good actively managed fund will out perform it easily. The Dow does not take into account market cap or float, and when a security comes off of it at $5 a share and a new one goes in at $105 per share, then the index jumps $100 in value. The S&P is better, but managed funds are usually better.
90% of managed funds have underperformed the S&P over the last 10 years and studies have shown the funds previous performance has little to no impact on future performance.
https://www.cnbc.com/2019/03/15/active-fund-managers-trail-t...
Re: Ask HN: How do you manage your financials?
#79Earlier quoted context omitted.
I'm so tired of these types of comments on HN that say investing in individual stocks is like gambling. It's such a tired piece of advice. Don't invest more than say, 5%, in an individual company, but choosing a selection of high quality companies that you believe in is not in any way like going to the roulette table.
It depends on the time-frame you plan to invest. If it's a short time frame, investing in individual stocks can be OK. There's just so many variables that go into the price that something that causes the stock to go up/down 20% can be completely unforeseen. A broad market index won't have these weird fluctuations. Almost every single market strategy underperforms broad market indices in the long run. Even hedge funds…
The issue I have with your statement is not that you're guaranteed in any way to beat the market, but saying that investing in individual stocks is gambling. It just isn't true.
Again, if you have no more than 5% of your portfolio in an individual stock then a 20% drawdown on that one stock is not going to significantly hurt you.
People should feel free to decide for themselves if they want to spend the time to actively invest vs throwing everything into an ETF and no one should be shaming them into thinking it's akin to going to a roulette table in Vegas.
As someone in tech, I've done quite well investing in high quality tech companies like Apple, Netflix, Amazon, and Nvidia over the years. I keep my 401K in a broad index fund but enjoy actively investing a part of my wealth.
Re: Ask HN: How do you manage your financials?
#80We tend to keep it pretty simple. 1) We don't do debt. Certainly not for consumption purposes; we avoid it for capital purposes. We have a mortgage, but we saved and paid cash for the last car we bought; we might take a loan for a car... but even then we know the return we expect to get on the car would far out-weight the cost of the loan for the kind of car we'd entertain buying. A loan for education? Not unless a c…
Yup, i completely agree, especially on the budgeting.
The question should not be: do I have enough budget to make this pruchase. the question is: do I really need this thing I'm going to buy.
Budgets should be for estimating future spending or learning about your past spending behaviors. It's a tool for assessment, not a license to spend more.