Ask HN: Where do you all invest your money?

Starting off, you can guarantee a minimum of 2% return on your money in the absolute safest investments. All of your money should go to those, something like a money market account or a high yield savings account, just to prepare for investment. Basically don't keep most of your money in a checking account that gives you next to no interest.

Secondly, the biggest drain on any investment is going to be taxes. You should learn about how you are taxed, how roth and traditional iras work in terms of taxation, how capital gains tax works, as well as all taxation related to real estate (it still remains a pretty advantageous investment in terms of taxes but most people don't understand the concept of APR). Generally, you should be able to be comfortable computing the taxes manually on any sort of transaction, whether its your salary or investment - if you can do that, you are well read on it.

Outside of these constant things, economy fluctuates quite a bit, and future is impossible to predict, so there is no "right" investment. For example, this happened to a friend of mine - got job during the end of the pandemic in 2022, started getting salary, invested all of it into safe index funds. 2023 happens, all index funds take a dive, he gets laid off, and has to pull out funds at a loss to cover expenses between jobs. He would have made out better had he kept everything in a savings account.

So there isn't a right investment choice to make just out of the market, everything depends on your situation, your risk tolerance, your backup plan availability, e.t.c. For example, if you are ok with living super cheaply and you have no big financial responsibilities, you can take on a lot more risk which can pay of bigger. Meanwhile, someone with kids who need money for college cannot. So figure what those are for you, and then its pretty easy to run what if models for any sort of scenario, whether its buying a house, to playing the stock market.

Also, equally important, you get one life to live. You are young, you have energy. When you are old, you will have more responsibilities, less energy, and your genetics could cause you to start having more health issues. Do all the stuff that you want to do in life now, even if it costs money that you feel like you should be saving, and you will be 100% glad that you did it. It is much easier to settle down into a "boring" life later in life where you hold down a job and accumulate savings over time then it is to experience regret of never doing the things when you had the opportunity.

I would recommend to first break down your financial situation. Write down the amount of income and the amount of costs. Be as accurate as possible. If you have nothing left, there is not much to do. If you have something left, great.

Then you should ask yourself, if it is required to have some insurances... your job and your health are mission critical for all your investments, maybe it is good to insure them.

After this I would target monthly savings of at least 10% of your current income before taxes - if there is more left, even better.

Personally, I use a 3 pot strategy.

pot 1 is your current account - should be at least 1xincome

pot 2 is your call money account - should be at least 4xincome (more conservative 5x)

pot 3 is your passive ETF / indexing fonds with global diversification

Example:

- You have earnings of $2000 per month.

- Think over having a occupational disability insurance for 1800$ (good ones should be about $40-$70 a month - the earlier you get one, the cheaper they are)

- After you paid for everything (rent, car, living, etc.), let's say you have $500 left

- 10% would be $200, so you have $300 for fun, or save more if you like

- As long as pot 1 is below 2000$, put it there

- If pot 1 is >2000$, start transferring to pot 2

- If pot 2 is >8000$, start pot 3 (indexing)

Most important is, that you should adjust your investments once a year to your current situation. This way you have enough money for small disasters, like the car broke, you move to another appartment or even lose your job.

Passive indexing mostly means, that you should not touch any invested money after it is invested, even if the markets go down rapidly. Your target is to invest for 15 or more years.

If you have saved enough that you are asking yourself if this is still the right strategy, you can vary your investment to gold, real estate or other things, but I personally don't. ETFs are portable, stable and pretty easy to sell.

I instead started investing "socially responsible", but this may be risky and is not mathematically proven... additionally, it is not even fully "socially responsible", so this is not a recommendation :-)

Links that may help:

https://gerd-kommer.de/indexing-101/

https://www.justetf.com/

The bigger issue with your view is that in your case, your retirement will be essentially chilling, doing nothing. This is a big problem. It may seem appealing, but if you don't feel a purpose, even if you know you are doing nothing wrong, its going to accelerate your decline. Your younger self has a lot more neuroplasticity, which means you can do things like develop hobbies, try things, build relationships, quite a bit easier. This will carry on into your later years, where in retirement you will continue to do pursue those hobbies or relationships.

So: wads of cash (joke)*, commodities like copper, silver, gold, oil, houses, etc that appreciate and do not depreciate. A depreciating asset like a car is NOT an investment.

If you control that physical thing yourself, it is yours. Otherwise it isn't yours.

You can invest in the stock market, but the idea there is to obtain an ongoing return. Investing in stock market prices (aka 'trading') is merely glorified gambling.

If you are looking at numbers in a computer, such as stock prices, crypto, forex trading, etc. be aware that those numbers can be changed at the whim of some other person or company or government and you have no comeback at all.

If you can't physically control something like (say) diamonds in a Bank's safety deposit box, you don't own it, they do. And they can take that away from you whenever they feel like doing so.

* There's an old joke that you should keep your money safe under the bed and not in one of those risky Banks. Like all jokes, there's a good measure of truth in that. Read up on the Cyprus 'bail-in' back in 2013 when depositors' money was confiscated.

1. max out your 401k

2. invest in experiences, especially the ones you can do in your 20-30s and won’t be able to do later, eg physical activities.

also note that your earnings will grow in the next years, so you can also spend or risk a bit more right now.