Ask HN: Do you have a backup career? • Hacker News Board

Re: Ask HN: Do you have a backup career?

#11

Post by ryanworl » Fri, May 01, 2015, 2:19 PM UTC

smt88 wrote: post #4

a3n wrote: post #2

Maybe your "backup career" should be the side project of learning how to invest the money you make now to become independently wealthy, or close to it, as soon as practical.

Seasoned professional investors, such as those who managed hedgefunds or buy real estate, are rarely able to beat inflation by much. I doubt that someone investing a small amount (under $500k) part-time is going to become "independently wealthy". Adjusting one's lifestyle to decrease expenses is a much better way to "create" wealth.

I think you mean they rarely beat the market index their fund is compared against, which is true. But that is usually (long-run) mid to high single digit percentage growth nominally depending on where you look. Inflation eats some of that, obviously, but not anywhere close to all of it.

Re: Ask HN: Do you have a backup career?

#12

Post by J-dawg » Fri, May 01, 2015, 2:47 PM UTC

auxym wrote: post #9

akg_67 wrote: post #7

I have changed career fields (industry and skills required) every 10 years, most of them grew out of my side hobbies. From my experience, always have a side hobby that can grow up to become a new career if you want. Also, having a side hobby, that is not connected to your current career, will make you think and act differently even in your current career job. The demand for trade skills (plumbing, carpentry, electric…

Out of curiosity, why is the HN Folklore not fond of MMM? I mean, you don't have to take it religiously, but pouring over his blog made me think a lot my career plans.

+1 for this, I'm a huge fan of MMM and this is the first time I've heard he's not popular here. I'm also curious to know why.

Re: Ask HN: Do you have a backup career?

#13

Post by a3n » Fri, May 01, 2015, 2:57 PM UTC

smt88 wrote: post #4

a3n wrote: post #2

Maybe your "backup career" should be the side project of learning how to invest the money you make now to become independently wealthy, or close to it, as soon as practical.

Seasoned professional investors, such as those who managed hedgefunds or buy real estate, are rarely able to beat inflation by much. I doubt that someone investing a small amount (under $500k) part-time is going to become "independently wealthy". Adjusting one's lifestyle to decrease expenses is a much better way to "create" wealth.

Yes, and then what do you do with the wealth that you've created by living below your means?

Re: Ask HN: Do you have a backup career?

#14

Post by smt88 » Fri, May 01, 2015, 5:32 PM UTC

a3n wrote: post #13

smt88 wrote: post #4

Earlier quoted context omitted.

Seasoned professional investors, such as those who managed hedgefunds or buy real estate, are rarely able to beat inflation by much. I doubt that someone investing a small amount (under $500k) part-time is going to become "independently wealthy". Adjusting one's lifestyle to decrease expenses is a much better way to "create" wealth.

Yes, and then what do you do with the wealth that you've created by living below your means?

"Storing" money in low-risk investments is a given.

But if you have, say, $100k in income and $100k in the bank, you're going to "make" far more money by decreasing your costs by $20k than you could by investing that $100k (on average).

Obviously there are people who get lucky buying houses and whatnot, but no one can reliably double $100k in 5 years.

Re: Ask HN: Do you have a backup career?

#15

Post by smt88 » Fri, May 01, 2015, 5:34 PM UTC

readme wrote: post #5

smt88 wrote: post #4

Earlier quoted context omitted.

Seasoned professional investors, such as those who managed hedgefunds or buy real estate, are rarely able to beat inflation by much. I doubt that someone investing a small amount (under $500k) part-time is going to become "independently wealthy". Adjusting one's lifestyle to decrease expenses is a much better way to "create" wealth.

Where'd you get that information? I thought the average return just from the stock market was 7%.

"by much" was a key in my comment.

If the average return from an index fund is 7% and inflation is, say, 3%, then you're making an extra 4%.

If you're investing $100k, you'll double the value of your money in 20 years. That's not great for someone who doesn't have much other cash and could use that $100k over those 20 years for significant lifestyle improvements.

Re: Ask HN: Do you have a backup career?

#16

Post by smt88 » Fri, May 01, 2015, 5:37 PM UTC

ryanworl wrote: post #11

smt88 wrote: post #4

Earlier quoted context omitted.

Seasoned professional investors, such as those who managed hedgefunds or buy real estate, are rarely able to beat inflation by much. I doubt that someone investing a small amount (under $500k) part-time is going to become "independently wealthy". Adjusting one's lifestyle to decrease expenses is a much better way to "create" wealth.

I think you mean they rarely beat the market index their fund is compared against, which is true. But that is usually (long-run) mid to high single digit percentage growth nominally depending on where you look. Inflation eats some of that, obviously, but not anywhere close to all of it.

I actually meant inflation.

In the investing world, index funds are very useful, and they often beat inflation by a few percentage points. But that return is only significant when you have tons of money.

As I pointed out in another comment, turning $100k into $200k (adjusted for inflation) would take 20 years, assuming index funds grow 7% every year and inflation is a constant 3%.

Re: Ask HN: Do you have a backup career?

#17

Post by akg_67 » Fri, May 01, 2015, 8:48 PM UTC

J-dawg wrote: post #12

auxym wrote: post #9

Earlier quoted context omitted.

Out of curiosity, why is the HN Folklore not fond of MMM? I mean, you don't have to take it religiously, but pouring over his blog made me think a lot my career plans.

+1 for this, I'm a huge fan of MMM and this is the first time I've heard he's not popular here. I'm also curious to know why.

It might be just my perception based on past discussions on HN.