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Ask HN: How to save/invest/deal with money?

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Re: Ask HN: How to save/invest/deal with money?

#11

Post by kareiva »

sureglymop wrote: post #9
kareiva wrote: post #8

Earlier quoted context omitted.

Be cautious with banks having crazy transaction fees for generic stock. Most of them have own funds and you can purchase them for low fees, while the rest can be even at 15 EUR per single transaction.

That's exactly what I noticed with my bank. They have high fees for investing and for withdrawing. And that's an issue for me since I would only invest a few thousand dollars every month whenever I get my salary paid... Perhaps I should compare the fees of all the local banks next.

Don't waste your time on banks. Just use a known and trusted investment platform.

Re: Ask HN: How to save/invest/deal with money?

#12

Post by 7steps2much »

sureglymop wrote: post #9
kareiva wrote: post #8

Earlier quoted context omitted.

Be cautious with banks having crazy transaction fees for generic stock. Most of them have own funds and you can purchase them for low fees, while the rest can be even at 15 EUR per single transaction.

That's exactly what I noticed with my bank. They have high fees for investing and for withdrawing. And that's an issue for me since I would only invest a few thousand dollars every month whenever I get my salary paid... Perhaps I should compare the fees of all the local banks next.

Banks often have high fees for investing/stock related actions.

Depending on what European country you are in you could also have a look at brokers/online banks, these usually have more sane fees.

In central Europe flatex would be an example of such a broker. Though I am not sure in which countries these are available.

Re: Ask HN: How to save/invest/deal with money?

#13

Post by sokoloff »

Start with something simple, like: https://jlcollinsnh.com/2011/06/08/how-i-failed-my-daughter-...

You may have to adjust it slightly if you can’t buy Vanguard directly, and should probably have more domestic exposure to whatever economy you’ll be participating in most throughout your life, but the basics really are pretty simple.

Anytime someone tries to make it seem more complex, assume they’re reaching for a slice of your pie. You’ll be right way more than not.

Re: Ask HN: How to save/invest/deal with money?

#14

Post by jstx1 »

sureglymop wrote: post #5
0xy wrote: post #4

Avoid speculative investments like single stocks, crypto or anything like that when you're starting out. Depending on your risk appetite, you may want to consider index funds from Vanguard (very low fee) or government bonds (low yield, consider this if you're extremely risk averse).

Thank you for your answer. But do you use any specific platform/website to do this? Again worth mentioning also that I'm not in the US.

The specifics depend on the country you’re in. In the UK for example there’s a type of investment account (ISA) in which you don’t have to pay tax on any income from capital gains or dividends. There are also private pensions that have other tax benefits but require you to lock your money until a certain age. Both of these might be preferable to a general investment account. Similar tax-advantaged accounts might be available in your country. And then there’s the choice of actual platform, and that also varies by country.

Re: Ask HN: How to save/invest/deal with money?

#15

Post by DonsDiscountGas »

(My apologies for any america-specific advice here)

1. If your company has a 401(k) retirement account match it's worth using the program, match = free money. They often have target-date retirement funds, just do 100% to those. Otherwise an S&P500 index fund. This isn't likely for part-time work but worth remembering for the future. Also probably not called a 401(k) outside of the US, but if you ask the HR person at your job they'll likely know what I'm talking about.

2. Save up six months of expenses in a savings account. Check around for the highest interest rate you can find. When you've done that, calculate what local market rent is, pretend you had to pay that, and save six months of expenses with that amount.

3. Open up an account at a low-fee brokerage. Ally, TD Ameritrade, etrade...it doesn't really matter just check out their websites and pick the one which you like the best.

4. With any extra money, dollar cost average into a broad market index fund (SPY, VEU, VTI are all popular choices). People will probably weigh in on which one is best, honestly the broad market funds are all correlated >0.95, just pick the one with the lowest fees. DCA: https://www.investopedia.com/terms/d/dollarcostaveraging.asp. It's best if you can set this up automatically somehow.

5. Generally speaking, any money you put into the stock market you should avoid touching for at least 5 years. Which is why I harped on the 6-months savings above. Also the people that do best in the stock market are often people that check their accounts the least often. Buy-and-hold ftw. Which is why I mentioned making the DCA plan automatic.

6. If you feel like taking some risk (individual stocks, options, crypto), it's best to have a separate account for that stuff and it shouldn't be more than 10% of your main account.

Re: Ask HN: How to save/invest/deal with money?

#16

Post by PubliusMI »

sokoloff wrote: post #13

Start with something simple, like: https://jlcollinsnh.com/2011/06/08/how-i-failed-my-daughter-... You may have to adjust it slightly if you can’t buy Vanguard directly, and should probably have more domestic exposure to whatever economy you’ll be participating in most throughout your life, but the basics really are pretty simple. Anytime someone tries to make it seem more complex, assume they’re reaching for a slice…

No post body was provided.

Re: Ask HN: How to save/invest/deal with money?

#17

Post by mamonster »

It is an absolutely horrible idea to "invest" the money you have coming into stocks/ETFs. Literally. You make it sound like you are under 25 years old, and the best thing you can come up in terms of using your hard earned money is to (from your perspective) put it in some magic box that will grow your money at X% per year?

1. Contribute whatever you need to contribute to your local pension.

2. Save the rest of your money.

3. Deploy your money when needed by either investing it in yourself(health, skills, whatever else) or into an area where you have an edge(so computers). At worst, if you have some idea for a startup later in your life you can use this as startup capital.

My general advice in this regard: Passive "income" for people under 25 is a pure financial trap. You need to be making active "income" and saving otherwise. All your money you earn right now should ideally be spent on developing and honing whatever edge you have in the area that interests you. And it obviously isn't the financial markets.

Re: Ask HN: How to save/invest/deal with money?

#18

Post by jstx1 »

mamonster wrote: post #17

It is an absolutely horrible idea to "invest" the money you have coming into stocks/ETFs. Literally. You make it sound like you are under 25 years old, and the best thing you can come up in terms of using your hard earned money is to (from your perspective) put it in some magic box that will grow your money at X% per year? 1. Contribute whatever you need to contribute to your local pension. 2. Save the rest of your m…

This seems very contradictory.

When you pay into a pension, what's the money held in? It will be either cash or some fund (actively mangaged, passive index fund, ETF, a bond fund etc).

When you save (point 2), what's the money held in? Cash? How much and for how long? If it isn't cash, then it will be invested in something, and if it cash, how is that less of a financial trap than investing in stocks?

You either spend 100% (or more) of what you earn, or you have an investment decision to make when it comes to any leftover money. Keeping your money as cash in the bank might not seem like an investment decision but it is and it comes with its own set of risks and rewards.

Re: Ask HN: How to save/invest/deal with money?

#19

Post by thenerdhead »

While most advice here is pretty standard, it may be in your best interest(pun intended) to read a variety of financial books to get a better understanding of what you can do with your money based on the amount of risk you’re willing to take.

Do some projections based on that risk and how long you plan to grow your money. Then build the habits and automate your investing to the point where you forget about your money while it grows.

If you have no idea what to do today, save it until you educate yourself enough to know what to do with it tomorrow.

Re: Ask HN: How to save/invest/deal with money?

#20

Post by mamonster »

jstx1 wrote: post #18
mamonster wrote: post #17

It is an absolutely horrible idea to "invest" the money you have coming into stocks/ETFs. Literally. You make it sound like you are under 25 years old, and the best thing you can come up in terms of using your hard earned money is to (from your perspective) put it in some magic box that will grow your money at X% per year? 1. Contribute whatever you need to contribute to your local pension. 2. Save the rest of your m…

This seems very contradictory. When you pay into a pension, what's the money held in? It will be either cash or some fund (actively mangaged, passive index fund, ETF, a bond fund etc). When you save (point 2), what's the money held in? Cash? How much and for how long? If it isn't cash, then it will be invested in something, and if it cash, how is that less of a financial trap than investing in stocks? You either spen…

Well when I say max out pension it isn't really an investment decision more than it is "this is how much money the government said I need to pay them for them to take care of me when I'm 70", which is really not even about investing. If you want to treat it like an investment, IMO it is like a tail hedge in case you don't acquire appreciable wealth during your work career.

Cash is less of financial trap because you are in charge of it. the investment decision with regards to being in cash is very simple: I don't have a great investment to make, so I will keep the cash until it comes. Passive income only works for really wealthy people.

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