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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

#141

Post by kjs3 »

Dylan16807 wrote: post #118
timr wrote: post #105

Earlier quoted context omitted.

I don't disregard the possibility of retiring in cities other than San Francisco -- I just dispute the notion that a $25k/year "retirement" is anything but silly dreaming by 20-somethings who don't understand what choices life is going to bring their way. Want to have a family? Want to send your kid to college? Want to be ready for the day when you're old and paying for medical problems? You're not living "like a kin…

>Want to have a family? Want to send your kid to college? Marry someone with their own $25k/year and you'll be able to pay for plenty of college. >Want to be ready for the day when you're old and paying for medical problems? Insurance?

Silly Dylan, you know these folks don't believe poor people deserve insurance.

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

#142

Post by markkat »

chris_mahan wrote: post #104
ajross wrote: post #72

Earlier quoted context omitted.

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).

I have consistently outperformed the market since 2007, when I started investing (I refer to the market as the DOW). Just because the average salary in the United States is $57,000 (random-ish number) does not mean that's what I have to settle for because it's the average. If I put in the time, work smart, work hard, and keep learning, then the expectation is that I can beat the average income. Likewise, I can beat t…

I agree with this approach. Keep the number of individual stocks you invest in at a manageable level. Know why you invested in them, and go long. IMO the longer you go, the less noise in the decision-making. Ex: Ford is at >$2. Will Ford go bankrupt, or will it survive? If it will survive, then it will be worth having in 10 years, especially if dividends return. In that case, you have based your risk on just one question that you need to settle to your satisfaction. A much more difficult question is: Will Ford be higher next year than it is now?

I also agree with investing in the management.

Finally, I think investing in some individual stocks is probably a good way to stay mindful about your investments in general.

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

#143

Post by kjs3 »

dionidium wrote: post #85
JoshTriplett wrote: post #38

Earlier quoted context omitted.

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…

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

Logan's Run wasn't really intended as a desirable way to structure society.

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

#144

Post by superuser2 »

ajross wrote: post #54
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…

That sounds wrong. An unexpected year-long unemployment isn't unheard of, but for an already-employed investing professional (i.e. not a recent entrant/re-entrant to the employment market who wouldn't be able to take this advice anyway) it's really quite rare. Certainly it's not true that most people "need" to do that, as it won't happen to them. This sounds like the kind of failure mode better addressed by solutions…

2008? Lots of well-established, middle-aged homeowner professionals became unemployed for long stretches. The unemployed college graduate narrative gets a lot of play in the media because it challenges assumptions (i.e. that a college degree means you're set for life) but professional middle managers got hit pretty hard also.

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

#145

Post by derekp7 »

superuser2 wrote: post #135
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…

Never borrow money ? You've just completely eliminated car ownership for a good chunk of the middle class, and homeownership for pretty much everyone but the very rich. That's probably a defensible position, but it's definitely not normal financial advice. If putting $7,000 away for retirement right now nets you more by retirement age than the lifetime cost of a car loan, you should take the loan.

I've owned cars since I was 17 year old, and never had to borrow money for a car till I decided to buy a brand new car years later Since then, I've decided to do the following: So you make "car payments" into your savings account every month, and after 1 - 3 years you can get a usable or very nice used car. Then continue to make car payments into your savings, and 5 years afterwards you can get a brand new car -- one that will last you for 15 years (at least). Then, in the last 5 years, do the same thing if you want to continue to drive new vehicles.

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

#146

Post by superuser2 »

peterjancelis wrote: post #120

Doing a startup is inconsistent with the advice give here.

Because doing a startup is not financially advisable to most people without a financial cushion. It may be fun, it may be thrilling, and it may work out better than your wildest dreams, but good financial advice for the general public it is not.

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

#147

Post by superuser2 »

derekp7 wrote: post #145
superuser2 wrote: post #135

Earlier quoted context omitted.

Never borrow money ? You've just completely eliminated car ownership for a good chunk of the middle class, and homeownership for pretty much everyone but the very rich. That's probably a defensible position, but it's definitely not normal financial advice. If putting $7,000 away for retirement right now nets you more by retirement age than the lifetime cost of a car loan, you should take the loan.

I've owned cars since I was 17 year old, and never had to borrow money for a car till I decided to buy a brand new car years later Since then, I've decided to do the following: So you make "car payments" into your savings account every month, and after 1 - 3 years you can get a usable or very nice used car. Then continue to make car payments into your savings, and 5 years afterwards you can get a brand new car -- one…

Buying brand new cars is not good financial advice either. Instant depreciation, no time for problems to blow up in someone else's face first, tiny longevity gain over buying a 2-3 year old car for drastically less.

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

#148

Post by [deleted] »

kjs3 wrote: post #137
wdr1 wrote: post #125

Earlier quoted context omitted.

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…

Get over yourself. What is total bullshit is entitled twats like you mentally rewriting the article so it's not "all the financial advice you’ll ever need" as claimed but "all the financial advice you’ll ever need if you're in the minority and an up and coming middle class wage earner who has sufficient disposable income to act on the advice".

[deleted]

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

#149

Post by mechanical_fish »

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…

The percentage of US workers with access to a retirement-benefits plan is 71%. 57% of all US workers participate in such a plan.

(Source: U.S. Bureau of Labor Statistics, 2009 National Compensation Survey, http://www.bls.gov/ncs/ebs/benefits/2009/ebbl0044.pdf)

In Table 2, it says that even 15% of the lowest income decile - people making less than 90% of workers - find a way to participate in a retirement plan.

Here's a more detailed writeup from the Bureau: http://www.bls.gov/opub/cwc/cm20100520ar01p1.htm

Meanwhile, the "top 10%" of households earn $135k per year or more, while the median income is around $50k.

(Source: http://www.economist.com/blogs/dailychart/2011/09/us-househo...)

Anyone making over $60k per year could (in theory; this is a highly abstract argument at this level, of course!) save 20% of their income without dropping below the median household income of $50k; households making over $60k per year appear to constitute 32% to 40% of the population, if I read this Census Bureau chart correctly: https://www.census.gov/compendia/statab/2012/tables/12s0690....

None of which says anything about the effectiveness of 401k plans, or anything else. But if you're going to handwave about numbers it's nice to hit the right order of magnitude.

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

#150

Post by ww520 »

I don't know how good the advise is to max out 401K and other retirement account. Some of the 401K accounts have very limited choice of investment. For example, you can't do real estate investment.

If you know what you are doing, you might want to retain the money outside and do the investment yourself on investment that are not available in a typical 401K account.

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