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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

#121

Post by Dylan16807 »

timr wrote: post #117
Dylan16807 wrote: post #116

Earlier quoted context omitted.

When you're talking about being retired for fifty years, it's the average that matters.

"When you're talking about being retired for fifty years" Yeah. We aren't. This whole thread spawned because the claim was that you can retire in 10 years if you save 66% of your income.

>Yeah. We aren't. This whole thread spawned because the claim was that you can retire in 10 years if you save 66% of your income.

I don't understand. Retiring after 10 years means you'll be retired for around 50 years, doesn't it?

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

#122

Post by sliverstorm »

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…

Think of maintaining a smaller emergency fund as a form of risk-taking. Every form of investment is a risk, so we are hardly new to risk-taking here.

For example, I keep a very low cash balance and divert most of my surplus to investments. This is partly a gamble, in that I may be forced to sell at a less than ideal time, and partly a credit-backed risk in that my credit cards provide me a buffer large enough to liquidate most of my investments.

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

#123

Post by jakebellacera »

gerickson wrote: post #71
ultimoo wrote: post #27

Earlier quoted context omitted.

This is really interesting and inspiring for someone like me who is in his mid twenties. Burning question: what to do when you have (education) debt? Do you put every spare dollar in repaying it or still inculcate a habit of saving 20%?

Recent college grad and young working professional here. I graduated with ~$25k in student loan debt 2 years ago and am due to pay it all off by April 2014. I struggled with burning question, as well. The general advice I got was that if the loan interest rate is less than 6%, you're better off investing the majority of your excess cash into something like an index fund since it theoretically will give you >6% gains.…

Good job! After years of putting around with debt, I have kept a promise to myself that I wouldn't get into debt unless it was under dire circumstances. Peace has value, in my opinion. Not having to worry about debts and payments really frees my mind (and my funds) for other things.

I'm not one for biblical citations, but "the borrower is slave to the lender" always gets to me.

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

#124

Post by sliverstorm »

ajross wrote: post #72
chris_mahan wrote: post #29

I trade in individual securities, but I put in the time to learn about the companies, the industry, and so on. Also, having taking econ, accounting, finance, and statistics in college helps.

Professional traders have been known to put in the time to learn about this stuff too. Don't fool yourself. You might make some good bets. You might make some bad ones. You're not going to systematically outperform a market as an individual investor by anything but luck (or plausibly by chasing a "hunch" based on good intuition and evidence that the professionals missed -- but don't fool yourself, that's luck too).

Professionals isn't all you are betting against. There's plenty of ordinary Joe's day trading as well.

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

#125

Post by wdr1 »

jellicle wrote: post #80

There are a couple of good parts about this post. The first is the HN comments, which are an unintentional fountain of hilarity. But the second is the assumptions. 50% of the US population can't afford to put even a dollar into any sort of investment security. Of the 50% of the public that does own some sort of security, most of them are in the three-figures range. This index card, without realizing it at all, has ta…

Honestly, when it did become so evil to give honest, practical advice to the middle class?

The wealthy have been sufficiently vilified that we now have to crucify those not born into money, bu starting to do okay?

This was a very reasonable & practical post with good advice for those starting to come into money. Why is that so bad? That type of advice can't be dispensed without a holistic social program? That's total bullshit.

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

#126

Post by derefr »

jellicle wrote: post #80

There are a couple of good parts about this post. The first is the HN comments, which are an unintentional fountain of hilarity. But the second is the assumptions. 50% of the US population can't afford to put even a dollar into any sort of investment security. Of the 50% of the public that does own some sort of security, most of them are in the three-figures range. This index card, without realizing it at all, has ta…

If you fall below those limits, do you really need "financial advice?" If you're making below, say, $60k/yr -- and you're still young enough that what you do with your long-term investments can serve to multiply your returns -- then what you probably need is not financial advice, but bootstrapping advice. Starting with "go to school for STEM--or finance, if you can."

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

#127

Post by dionidium »

Retric wrote: post #119
dionidium wrote: post #85

Earlier quoted context omitted.

The idea that your retirement years are a better time to live than your 20s and 30s is a serious mindset problem.

It's not about assuming that your 60's are better than your 20's. It's assuming that having 7 dollars inflation adjusted tomorrow is worth not having 1 dollar today. Clearly, the higher your savings rate the sooner you can retire but the lower that multiple becomes. More importantly when something bad happens you both have a cushion and a cheap lifestyle so it can last.

I'm sure we all agree that saving is both prudent and desirable. My comment is in response to the idea that you should be saving most of your money.

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

#128

Post by sliverstorm »

chris_mahan wrote: post #29

I trade in individual securities, but I put in the time to learn about the companies, the industry, and so on. Also, having taking econ, accounting, finance, and statistics in college helps.

I also trade individual securities. I'm not quite as thorough as you, so I typically pick companies I am familiar with on a more personal level.

I don't expect to beat the market, and I don't put much into individual securities. However, I have fun and have been making modest returns. Besides, you'll never beat the market if you never even try shrug. Of course, with the portion of my capitol that I put in, "beating the market" makes me feel good, more than it makes me money.

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

#130

Post by gerickson »

gerickson wrote: post #71
ultimoo wrote: post #27

Earlier quoted context omitted.

This is really interesting and inspiring for someone like me who is in his mid twenties. Burning question: what to do when you have (education) debt? Do you put every spare dollar in repaying it or still inculcate a habit of saving 20%?

Recent college grad and young working professional here. I graduated with ~$25k in student loan debt 2 years ago and am due to pay it all off by April 2014. I struggled with burning question, as well. The general advice I got was that if the loan interest rate is less than 6%, you're better off investing the majority of your excess cash into something like an index fund since it theoretically will give you >6% gains.…

As a follow up, after April I intend to reallocate so that 20% goes toward savings each paycheck.
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