Reddit has become a guide to personal finance • Hacker News Board

Re: Reddit has become a guide to personal finance

#191

Post by beatgammit » Wed, Mar 04, 2020, 3:52 PM UTC

Kneecaps07 wrote: post #69

Quequau wrote: post #25

I use Reddit a lot and I find some of the finance focused subreddits to be really repellent. I don't know if this is because, while I have a degree in economics, I'm not an investor or that I just have a low tolerance for some of the conduct that frequently shows up in those communities. I really like /r/povertyfinance though clearly those folks are often going through way, way more trying circumstances I am. I guess…

I agree. If it were up to /r/personalfinance, everyone would have three credit cards and that's all they would ever use and it would solve every financial problem ever. They fail to realize that many people (myself included!!) are just not equipped for credit cards and it can cause huge problems.

If credit cards don't work for you, check out Dave Ramsay, he has a very low tolerance for debt.

That being said, if you can handle credit cards, not using them is just leaving money on the table. I get 2% back everywhere (more in certain categories), which is better than most high interest savings accounts. If you don't get that 2% back, you're still paying the interchange fees (~3%) for other people because stores don't charge a different amount for cash/debit vs credit.

However, getting 2% (or more) back isn't worth it if you end up spending more money. The emphasis should be on changing spending behavior, not on payment optimization

My wife isn't very good at saving, so our solution is that I review our spending periodically and we discuss anything over $50 that isn't routine spending (e.g. grocery stores), and we each get $X/month for guilt-free spending. She tends to spend it as she "earns" it, while I save up month to month until there's a good deal so I get more value, add I occasionally treat her if she's run out of cash and has a craving.

Re: Reddit has become a guide to personal finance

#192

Post by mfoy_ » Wed, Mar 04, 2020, 3:53 PM UTC

Humdeee wrote: post #179

waylandsmithers wrote: post #161

I would personally advise against taking advice from Reddit beyond simply basic answers about various financial products and maths. My problem with larger communities on Reddit is that prevailing opinions seem to emerge, and anything that questions or disagrees with them gets downvoted to hell. On the personal finance subreddits these include ideas like "You should always have 18 months of expenses saved" and "Any mo…

Financial literacy is pure garlic to every common vampire financial advisor. I have a couple friends right now that do not want wage raises because "it will knock them into the next tax bracket". Believe me, I've tried to explain how the simple concept of income and taxes work. I trusted my financial advisor years ago when I started my career. It took me a couple years to realize I was the product, not his client wit…

Almost all "financial advisors" are really just in sales.

Re: Reddit has become a guide to personal finance

#193

Post by iso1210 » Wed, Mar 04, 2020, 3:54 PM UTC

Humdeee wrote: post #179

waylandsmithers wrote: post #161

I would personally advise against taking advice from Reddit beyond simply basic answers about various financial products and maths. My problem with larger communities on Reddit is that prevailing opinions seem to emerge, and anything that questions or disagrees with them gets downvoted to hell. On the personal finance subreddits these include ideas like "You should always have 18 months of expenses saved" and "Any mo…

Financial literacy is pure garlic to every common vampire financial advisor. I have a couple friends right now that do not want wage raises because "it will knock them into the next tax bracket". Believe me, I've tried to explain how the simple concept of income and taxes work. I trusted my financial advisor years ago when I started my career. It took me a couple years to realize I was the product, not his client wit…

Dunno about the US, but in the UK there are a few wage points where a small rise can lead to a reduction in net income. Specifically moving into the higher tax bracket, which removes £200 off their personal allowance if they were using the pooling allowance option -- i.e. a £100 tax rise could lead to £46 extra income but £201 extra outgoing, a net reduction of £155

There are more perverse options with housing, childcare and income benefits being removed which I believe can lead to a negative income.

In the US the Benefit Cliff is real:

"There is this issue of the benefits cliffs, where some programs are designed so just a very marginal increase in earnings can result in a loss of a very important benefit. And a lot of states, unfortunately, have structured their childcare subsidies programs that way," explains Skinner.

"Typically, pay rises, income rises, but at some point you lose eligibility for a subsidies all together and it's an abrupt reduction in that family's resources," Skinner says.

https://www.theguardian.com/money/2014/jul/20/benefits-cliff...

Re: Reddit has become a guide to personal finance

#194

Post by magduf » Wed, Mar 04, 2020, 3:55 PM UTC

waylandsmithers wrote: post #161

I would personally advise against taking advice from Reddit beyond simply basic answers about various financial products and maths. My problem with larger communities on Reddit is that prevailing opinions seem to emerge, and anything that questions or disagrees with them gets downvoted to hell. On the personal finance subreddits these include ideas like "You should always have 18 months of expenses saved" and "Any mo…

>"Look how smart I am for having a mega-backdoor roth ira instead of a regular 401k like all the idiot sheeple."

Maybe you mean "traditional IRA" instead of 401k. The way I understand it, the backdoor Roth IRA depends on you using a company 401k so that you don't have any money in a traditional IRA, and can then contribute cash into an empty traditional IRA, and then "convert" it (move it) to a Roth IRA in the same financial institution. But it doesn't work if you have a traditional IRA with money in it, because then you have to enter the total value of that IRA on an IRS form and you end up paying double taxes on the conversion.

The wedding thing is totally understandable. If you care a lot about saving money, it seems rather reckless and wasteful to spend $50k on a one-day event when you have a ~50% chance of getting a divorce anyway. Sure, if you're a multi-millionaire, that kind of money is no big deal, but if you earn $80k, I'm sorry, but it's not financially smart to blow that much money on a wedding, even though so many Americans do for some reason.

Re: Reddit has become a guide to personal finance

#195

Post by nophunphil » Wed, Mar 04, 2020, 3:56 PM UTC

waylandsmithers wrote: post #161

I would personally advise against taking advice from Reddit beyond simply basic answers about various financial products and maths. My problem with larger communities on Reddit is that prevailing opinions seem to emerge, and anything that questions or disagrees with them gets downvoted to hell. On the personal finance subreddits these include ideas like "You should always have 18 months of expenses saved" and "Any mo…

While I think some of your points have merit, you are misrepresenting the subreddit quite a bit here. On the topic of emergency savings funds, the community tends to recommend sizing these to cover roughly 3-6 months of expenses[1]. Larger emergency funds are useful for edge cases. The community tends to recognize that anything more would simply be better served towards high-interest debt or retirement savings.

Not everyone on the subreddit is quite so passionate about avoiding expensive weddings or financial advisors at all costs. In fact, fee-only fiduciary advisors are perceived quite positively[2].

[1] https://www.reddit.com/r/personalfinance/wiki/emergencyfunds

[2] https://www.reddit.com/r/personalfinance/wiki/financialadvis...

Re: Reddit has become a guide to personal finance

#196

Post by lotsofpulp » Wed, Mar 04, 2020, 3:56 PM UTC

virgil_disgr4ce wrote: post #150

speeder wrote: post #98

Earlier quoted context omitted.

I dated a woman that had this job, but using Facebook (this was some years ago too). It was not just marketing, but PR too, for example she bragged about when Whirlpool had a serious problem with one of their washing machines in my country, and it was going viral, so Whirlpool paid the marketing agency to make all fake profiles (even ones not belonging to their campaigns) make other viral posts to drown out the washi…

The next logical step—as terrifying as it is—is automation. Generate those people with GANs, then you 1) don't have to pay the photo companies (and producing photos with real actors in real locations has MASSIVE overhead compared to just some compute time) and 2) the photos can't be found online. You can similarly generate the history and backstory of each fake person, complete with realistically banal social media p…

And hence we end up with an internet requiring verification via SMS to prove you're a real person or the stupid Google CAPTCHA images or simply having to upload your government issued photo ID.

Re: Reddit has become a guide to personal finance

#197

Post by notduncansmith » Wed, Mar 04, 2020, 3:57 PM UTC

ryandrake wrote: post #164

waylandsmithers wrote: post #161

I would personally advise against taking advice from Reddit beyond simply basic answers about various financial products and maths. My problem with larger communities on Reddit is that prevailing opinions seem to emerge, and anything that questions or disagrees with them gets downvoted to hell. On the personal finance subreddits these include ideas like "You should always have 18 months of expenses saved" and "Any mo…

> prevailing opinions seem to emerge, and anything that questions or disagrees with them gets downvoted to hell Hmm... sounds like another community we all know. This is not a unique problem to Reddit or large communities. It's inevitable in any forum when you try to use crowdsourcing to moderate/curate content.

Yes, but there is also public knowledge of HN’s biases, people comment with them in mind and are often self-aware when they express dissenting opinions. Some of the best comments open by admitting they run counter to the prevailing wisdom.

Re: Reddit has become a guide to personal finance

#198

Post by fullshark » Wed, Mar 04, 2020, 3:58 PM UTC

scarface74 wrote: post #173

waylandsmithers wrote: post #161

I would personally advise against taking advice from Reddit beyond simply basic answers about various financial products and maths. My problem with larger communities on Reddit is that prevailing opinions seem to emerge, and anything that questions or disagrees with them gets downvoted to hell. On the personal finance subreddits these include ideas like "You should always have 18 months of expenses saved" and "Any mo…

I can’t tell which of the ideas you think are crazy. - 18 months in low risk savings (not invested) - seems like overkill. - I personally think any money spent on a wedding is overkill - we went to the courthouse and saved a ton of money by having a smallish reception (in fairness we were in our mid 30s and on our second marriage) - 401K - I have no opinion either way. I haven’t thought about the pros and cons. I don…

The 1st and 3rd seem like clearly bad advice, there's no reason a mega backdoor roth should replace a 401k unless your company's matching policy / investment options for 401k are atrociously terrible.

The 2nd: I think splurging on a wedding is a frequently valid personal choice and I wouldn't belittle someone for doing it unless they did something insanely irresponsible.

Re: Reddit has become a guide to personal finance

#199

Post by nagyf » Wed, Mar 04, 2020, 3:59 PM UTC

joaodlf wrote: post #3

Yes! I have learned tremendously about personal finance from ukpersonalfinance. For anyone based in the UK, please go and read the content at https://ukpersonal.finance/ , it is invaluable for your future. Financial literacy for the millennial generation is my #1 recommendation for general life improvement. It doesn't matter what situation you are in: in debt; with lots of savings; lack of credit options; etc... You…

Agreed, the Canada version is really good as well: /r/PersonalFinanceCanada/

Re: Reddit has become a guide to personal finance

#200

Post by wlesieutre » Wed, Mar 04, 2020, 3:59 PM UTC

basch wrote: post #133

rgg_32 wrote: post #74

Earlier quoted context omitted.

I’m wondering how long it will take for large companies to realize that people are gradually adapting and starting to look for information on sites other than Google search bar. Today, Google results are a big problem in the sense discussed in the article, there are no more sources of information that can be trusted like in the old days. Some days I reflect with myself trying to figure out how it can be solved…I hope…

I still for the most part would put site:reddit.com or site:news.ycombinator.com into the google search bar. Mostly out of muscle memory, habit, and speed. If I need to use other tools to find something, its because google has failed. On a similar note, Google deranking Wikipedia (which used to be the first result for like half of my searches) makes it so much less useful. I now need to add wikipedia to my searches.

With DuckDuckGo as your default search, you can use "!w" to direct a search to Wikipedia, "!g" to send it to google, "!gi" for google images, "!a" for amazon, "!ais" for archive.is, and a lot of other options.

If you're using search as a shortcut to get to some other service, it can be nice to go straight there instead of sifting through whatever garbage has been SEOed to the top of Google.