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This 4×6 index card has all the financial advice you’ll ever need

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Re: This 4×6 index card has all the financial advice you’ll ever need

#41

Post by drivebyacct2 »

JoshTriplett wrote: post #38
coldtea wrote: post #28

Earlier quoted context omitted.

> Bump it to two-thirds and retire in 10 years. Expand it by 100 and you would be already retired before you would were even born! I guess the point of the advice is to be realistic. > The only more important factor is "never borrow money", and in particular "never carry a balance on a credit card". Well, lots of people have started companies or saved themselves from starvation by maxing a credit card.

The idea that >20% savings rates are not "realistic" is a serious mindset problem. Almost anyone on Hacker News with a paying job (i.e. not an early-stage no-funding startup) should easily be able to save much more than that. Sure, saving two-thirds of your income might be out of reach, and even the 20% advice is better than most sites that often say 5-10%, but consider carefully whether you can increase it and retir…

:eyeroll: about the level of response this post deserves

Re: This 4×6 index card has all the financial advice you’ll ever need

#42

Post by kintamanimatt »

kondro wrote: post #6

I would have an opinion but Australian law prevents me from having one without providing a statement of advice.

I doubt anybody could construe a general opinion that's not tailored for a specific individual's situation as financial advice, if that's what you're getting at. Maybe it's different in Oz.

Re: This 4×6 index card has all the financial advice you’ll ever need

#44

Post by ankzap »

enraged_camel wrote: post #36
JoshTriplett wrote: post #9

Almost all of this is excellent advice, except for one point: "save 20% of your money". That's a bare minimum, which will let you retire after about 37 years of working. Bump it to 35% and you'll retire after 25 years. Bump it to 50% and retire in 17. Bump it to two-thirds and retire in 10 years. That's one of the most important factors in your personal finances: not how much you make off your investments, not whethe…

One of the recommendations is actually wrong, and in fact outright harmful. "Buy inexpensive, well-diversified mutual funds such as Vanguard Target 20xx funds." Yeah, no. Mutual funds, even those by Vanguard, have high expense ratios, and there is absolutely no evidence that they outperform their equivalent index funds. Jack Bogle, founder and retired CEO of Vanguard, himself recommends index funds over mutual funds…

Vanguard Target funds are nothing but a collection of passively managed index funds. The ER is slightly higher than doing it a la carte, but it re-balances without having to worry about it.

Re: This 4×6 index card has all the financial advice you’ll ever need

#45

Post by scott_karana »

enraged_camel wrote: post #36
JoshTriplett wrote: post #9

Almost all of this is excellent advice, except for one point: "save 20% of your money". That's a bare minimum, which will let you retire after about 37 years of working. Bump it to 35% and you'll retire after 25 years. Bump it to 50% and retire in 17. Bump it to two-thirds and retire in 10 years. That's one of the most important factors in your personal finances: not how much you make off your investments, not whethe…

One of the recommendations is actually wrong, and in fact outright harmful. "Buy inexpensive, well-diversified mutual funds such as Vanguard Target 20xx funds." Yeah, no. Mutual funds, even those by Vanguard, have high expense ratios, and there is absolutely no evidence that they outperform their equivalent index funds. Jack Bogle, founder and retired CEO of Vanguard, himself recommends index funds over mutual funds…

The MER for the Vanguard Target 2030 is 0.17%. Stated differently: 0.0017.

Yes, it's slightly lower if you buy all the composing Vanguard index funds individually, but for an index card comment, I'd say it's good enough.

(Minor quibble: index funds can be mutual funds or ETFs)

Re: This 4×6 index card has all the financial advice you’ll ever need

#46

Post by lisper »

baddox wrote: post #23
lisper wrote: post #5

Earlier quoted context omitted.

Seems like a no-brainer to me. The alternative is to have people panhandling on the streets. That's not pleasant -- on either side of the transaction. I'd rather live in a country where it wasn't necessary.

It's not a no-brainer to me. My brain desires more data on the economic efficacy of specific social programs, because even the broad implication that social programs reduce the number of people panhandling on the streets is not obvious to me.

The card said "support social programs." It didn't say to support any particular kind of social program. Of course you want to go find one that is more effective than doing nothing. But that people should support some sort of (effective) social program so that individuals (and their families) don't have to bear the full burden of bad fortune, or even bad decision making, seems like a clear win for everyone.

> the broad implication that social programs reduce the number of people panhandling on the streets is not obvious to me

I spent two years hanging out with pandhandlers, so I can tell you form first hand experience: there are a few people who choose that lifetyle, but the vast majority of them would give it up in an instant if they had a better alternative.

Re: This 4×6 index card has all the financial advice you’ll ever need

#47

Post by solarmist »

humanrebar wrote: post #16

I consider it to be a huge oversight that they left off building an emergency fund. Before buying a house, buying individual securities, or maxing any retirement contributions, you need enough liquidity in your investments to get you through an illness or layoff that leaves you without income for a year. It amazes me how otherwise intelligent peers of mine will be paying extra on mortgages, student loans, and retirem…

Wouldn't save 20% of your income cover that? It's just a management detail after that (i.e. leave some of that 20% liquid for emergencies).

Re: This 4×6 index card has all the financial advice you’ll ever need

#48

Post by dmethvin »

enraged_camel wrote: post #36
JoshTriplett wrote: post #9

Almost all of this is excellent advice, except for one point: "save 20% of your money". That's a bare minimum, which will let you retire after about 37 years of working. Bump it to 35% and you'll retire after 25 years. Bump it to 50% and retire in 17. Bump it to two-thirds and retire in 10 years. That's one of the most important factors in your personal finances: not how much you make off your investments, not whethe…

One of the recommendations is actually wrong, and in fact outright harmful. "Buy inexpensive, well-diversified mutual funds such as Vanguard Target 20xx funds." Yeah, no. Mutual funds, even those by Vanguard, have high expense ratios, and there is absolutely no evidence that they outperform their equivalent index funds. Jack Bogle, founder and retired CEO of Vanguard, himself recommends index funds over mutual funds…

Their expense ratios are pretty decent: https://personal.vanguard.com/us/funds/vanguard/all?sort=nam...

And, the idea of the target funds is that they become more conservative as you reach the target. The pure index funds do not. So they are basically index funds with portfolio rebalancing.

https://institutional.vanguard.com/VGApp/iip/site/institutio...

Re: This 4×6 index card has all the financial advice you’ll ever need

#49

Post by throwaway812 »

JoshTriplett wrote: post #38
coldtea wrote: post #28

Earlier quoted context omitted.

> Bump it to two-thirds and retire in 10 years. Expand it by 100 and you would be already retired before you would were even born! I guess the point of the advice is to be realistic. > The only more important factor is "never borrow money", and in particular "never carry a balance on a credit card". Well, lots of people have started companies or saved themselves from starvation by maxing a credit card.

The idea that >20% savings rates are not "realistic" is a serious mindset problem. Almost anyone on Hacker News with a paying job (i.e. not an early-stage no-funding startup) should easily be able to save much more than that. Sure, saving two-thirds of your income might be out of reach, and even the 20% advice is better than most sites that often say 5-10%, but consider carefully whether you can increase it and retir…

Yes, >20% is viable for Software Devs. Ask someone making minimum wage with no benefits to save more than 20% of their income and they will laugh at you.

Re: This 4×6 index card has all the financial advice you’ll ever need

#50

Post by jmharvey »

muzz wrote: post #13
JoshTriplett wrote: post #9

Almost all of this is excellent advice, except for one point: "save 20% of your money". That's a bare minimum, which will let you retire after about 37 years of working. Bump it to 35% and you'll retire after 25 years. Bump it to 50% and retire in 17. Bump it to two-thirds and retire in 10 years. That's one of the most important factors in your personal finances: not how much you make off your investments, not whethe…

The savings part sounds like advice from Mr. Money Mustache, there was discussion about his advice here before. "Never borrow money" would include never having a mortgage, which would be a huge lost opportunity for many. Not to mention borrowing money to invest in oneself, start a business, etc.

People frequently get themselves into serious financial trouble by borrowing money to "invest in themselves" or "start a business." On a case-by-case basis, these may actually be sound financial moves, but there are whole industries built on suckering people into making "investments" that aren't financially prudent.
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