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Ask HN: I've saved up $80k USD. What should I do with it?

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Re: Ask HN: I've saved up $80k USD. What should I do with it?

#21

Post by WJW »

First off: Well done saving up! If you are paralysed about (getting started with) investing, I can recommend the books "A random walk down Wall Street" and the (very thick but well worth it) "The intelligent investor".

Especially the last one opened my eyes a lot about how to approach investing. I have the revised edition from 2006, though the original publication was in 1949. The 2006 edition has a section after each chapter discussing how the original chapter fared in the decades after publication. Without exception, the lessons discussed in the book from the 1929 recession and earlier turned out to have been very applicable in the dotcom crash of 2000, the "black monday" crash of 1987, etc. It really shows how most things are nothing new and gives a lot of perspective on the markets.

Reading up and understanding how the stock markets work can take away some of the pressure. Finally, there is no rule about having to start big or small. If it makes you feel better, start with $500 and see how it goes. The sister comment by "ForHackernews" about starting with a diversified index fund is good advice (and probably what you'd conclude anyway after reading the books).

Re: Ask HN: I've saved up $80k USD. What should I do with it?

#22

Post by CalRobert »

keiferski wrote: post #17

Do you have any interest in building a startup yourself? If so, $80k will last you 4-5 years for bootstrapping if you move to a low cost area and don’t have any dependents or other expenses.

This is a great thing to do (for some people) but keep in mind that 4-5 years of lost income should be included in the calculation.

Re: Ask HN: I've saved up $80k USD. What should I do with it?

#23

Post by stevekemp »

sneak wrote: post #10

Short answer: Dump it all in VFIAX and ignore it for about 30 years. Alternately, wait for the housing market freefall that is scheduled to hit about 180 days from now, and buy a foreclosure or two. EDIT: Cosigning the above recommendation about maxing out a Roth IRA each and every year as well, and of course maxxing out any company-matched 401(k) options.

Even if there were to be a massive freefall in housing it would take the banking system months, and probably years, to get round to processing all the mortgages which were in arrears.

Foreclosure is a slow, slow, slow process even at the best of times. People can avoid paying their mortgages and still be living in a property for many years. If you're imagining something that covers a significant amount of property that will take even longer.

Re: Ask HN: I've saved up $80k USD. What should I do with it?

#26

Post by iso1210 »

Myce wrote: post #8

I would prefer to buy property any time. People will always need housing. So while the price of the property is pure speculation, rent is a nice steady source of income.

Only if people want to live where you buy the property. If you bought property in Detroit in 2005, how much rent would you have collected in the last 15 years?

Re: Ask HN: I've saved up $80k USD. What should I do with it?

#29

Post by neilgodwin »

stevekemp wrote: post #23
sneak wrote: post #10

Short answer: Dump it all in VFIAX and ignore it for about 30 years. Alternately, wait for the housing market freefall that is scheduled to hit about 180 days from now, and buy a foreclosure or two. EDIT: Cosigning the above recommendation about maxing out a Roth IRA each and every year as well, and of course maxxing out any company-matched 401(k) options.

Even if there were to be a massive freefall in housing it would take the banking system months, and probably years, to get round to processing all the mortgages which were in arrears. Foreclosure is a slow, slow, slow process even at the best of times. People can avoid paying their mortgages and still be living in a property for many years. If you're imagining something that covers a significant amount of property th…

So, you're saying no fall in prices in the short to mid term is expected?

Re: Ask HN: I've saved up $80k USD. What should I do with it?

#30

Post by keiferski »

CalRobert wrote: post #22
keiferski wrote: post #17

Do you have any interest in building a startup yourself? If so, $80k will last you 4-5 years for bootstrapping if you move to a low cost area and don’t have any dependents or other expenses.

This is a great thing to do (for some people) but keep in mind that 4-5 years of lost income should be included in the calculation.

If you don’t do a startup because of supposed lost income, frankly you shouldn’t be doing a startup in the first place.
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