Personal finance experts don’t get wealthy by following their own advice • Hacker News Board

Re: Personal finance experts don’t get wealthy by following their own advice

#121

Post by skybrian » Sun, Aug 29, 2021, 5:10 PM UTC

crunchyfrog wrote: post #92

wincy wrote: post #43

This seems like a good place to be vulnerable and ask for advice. I am 35 and still spend like in a teenager. I grew up really poor where if the money didn’t get spent right away it would just sort of disappear, into drugs or beer or whatever my mom and stepdad were spending it on. My only real asset is my house which has appreciate significantly in value, but all it would take is one job loss to get me behind on tha…

You're trying to cure the symptom, not the disease. You need a therapist, not financial advice. You know what you're doing is unhealthy but you can't stop. A good mental health professional can help you deal with the pain you're trying to cover up with buying junk.

I think it’s worth a try, On the other hand, figurng out how to deal with symptoms also counts as helping the patient.

Re: Personal finance experts don’t get wealthy by following their own advice

#122

Post by BooneJS » Sun, Aug 29, 2021, 5:11 PM UTC

Can I apply this article to the theme of the site? You’ll never get rich by joining a startup. Founders and investors have too much control writing the rules and making the decisions. Everyone hates bureaucratic institutions but the alternative with a startup is an oligarchy consisting of (often) inexperienced people playing the role for the first time. Even bad exits favor the founders over the employees.

Re: Personal finance experts don’t get wealthy by following their own advice

#123

Post by adamsb6 » Sun, Aug 29, 2021, 5:11 PM UTC

wincy wrote: post #43

This seems like a good place to be vulnerable and ask for advice. I am 35 and still spend like in a teenager. I grew up really poor where if the money didn’t get spent right away it would just sort of disappear, into drugs or beer or whatever my mom and stepdad were spending it on. My only real asset is my house which has appreciate significantly in value, but all it would take is one job loss to get me behind on tha…

> I wish I could put money into an account that would then only disburse small amounts of it over the year, and I couldn’t override that.

Work for a company with stock trading blackout periods. Setup a 10b5-1 plan to periodically sell your company stock, then when the blackouts are lifted invest the money you want to save into your company stock.

This has the drawback of being undiversified, but undiversified savings may be preferable to no savings at all.

Re: Personal finance experts don’t get wealthy by following their own advice

#124

Post by foogazi » Sun, Aug 29, 2021, 5:13 PM UTC

giantg2 wrote: post #25

gonehome wrote: post #8

Earlier quoted context omitted.

The r/personalfinance and r/financialindependence subreddits are quite good and even cover more exotic details like the “mega back door roth” otherwise known as “after tax 401k contribution in plan conversions to roth” (which can let you add an additional 36k to a Roth IRA over the 6k limit each year in addition to the normal 19.5k for a traditional 401k). They’re mostly bogleheads so are a little risk averse, but fo…

$61.5k in yearly contributions is out of reach for most people. I can't even max out my 401k due to high cost of living (with a family) and mediocre income.

TC?

You talk about maxing out your 401k, but have looked into you maximizing your income to the be able to save more?

(Of course money is not the only important thing in your life)

Re: Personal finance experts don’t get wealthy by following their own advice

#125

Post by JamesBarney » Sun, Aug 29, 2021, 5:14 PM UTC

wincy wrote: post #43

This seems like a good place to be vulnerable and ask for advice. I am 35 and still spend like in a teenager. I grew up really poor where if the money didn’t get spent right away it would just sort of disappear, into drugs or beer or whatever my mom and stepdad were spending it on. My only real asset is my house which has appreciate significantly in value, but all it would take is one job loss to get me behind on tha…

> I wish I could put money into an account that would then only disburse small amounts of it over the year, and I couldn’t override that.

You can do this with a trust or annuity. Have you looked into them?

Re: Personal finance experts don’t get wealthy by following their own advice

#126

Post by FabHK » Sun, Aug 29, 2021, 5:15 PM UTC

dtjohnnymonkey wrote: post #10

This is a mischaracterization of Ramit Sethi’s class. I’ve taken it and it’s the opposite of what the article claiming. It focuses on helping you build your business and income streams.

Agreed. I haven't taken this class, but Ramit disparages the "skip a cappuccino a day and become rich" nonsense explicitly.

Re: Personal finance experts don’t get wealthy by following their own advice

#127

Post by carnitine » Sun, Aug 29, 2021, 5:16 PM UTC

californical wrote: post #66

PKop wrote: post #5

Part of the discussion should be, can the 'masses' "Generate income not based on hours worked", "Minimize taxes", and "Leverage time and debt to become wealthy like the personal-finance gurus themselves did?"... in other words, is becoming wealthy possible? It is worth being honest about the false hope these authors are peddling about "becoming wealthy", instead of what they are really advising which is, to become ab…

Definitely not everyone, but most people in America can become millionaires (inflation adjusted) within their lifetimes. Saving $100 per week should be possible for most households today. $100 per week over 40 years with an 8% return is $1.3m. If you think the market will be slower in the future, or higher inflation, or whatever, use the absurdly conservative 6% and it’ll take 50 years instead of 40. Add in the possi…

The problem isn’t that inflation will erode the return percentage, but that it will erode the value. $1.3m in 40 years really doesn’t sound like that much money.

Re: Personal finance experts don’t get wealthy by following their own advice

#128

Post by waynesonfire » Sun, Aug 29, 2021, 5:16 PM UTC

giantg2 wrote: post #25

gonehome wrote: post #8

Earlier quoted context omitted.

The r/personalfinance and r/financialindependence subreddits are quite good and even cover more exotic details like the “mega back door roth” otherwise known as “after tax 401k contribution in plan conversions to roth” (which can let you add an additional 36k to a Roth IRA over the 6k limit each year in addition to the normal 19.5k for a traditional 401k). They’re mostly bogleheads so are a little risk averse, but fo…

$61.5k in yearly contributions is out of reach for most people. I can't even max out my 401k due to high cost of living (with a family) and mediocre income.

i agree, mega backdoor seems to be a perk for staff / VP level employees.

Re: Personal finance experts don’t get wealthy by following their own advice

#129

Post by rossdavidh » Sun, Aug 29, 2021, 5:18 PM UTC

From his own article: "I’m not suggesting the advice the gurus are giving is outright wrong. Their recommendations will make you modestly successful. You’ll more than likely live an OK life and have an above-average net worth."

In fact, Suze Orman and the like are talking exactly to this audience, and their advice is in many cases a lot better than what they are doing now.

Also, being married to a small business owner who knows a lot of other small business owners, there's a "dirty little secret" that this article doesn't mention: most of them never get paid a dime by their own business. They are spending their way through a business loan, or they have family money, or some other source. Yes, there are people who get rich from starting a business, but if popular finance experts told everyone to start their own business, that would be a lot worse advice than what they are saying.

Re: Personal finance experts don’t get wealthy by following their own advice

#130

Post by carnitine » Sun, Aug 29, 2021, 5:19 PM UTC

moltenguardian wrote: post #68

hn_throwaway_99 wrote: post #44

I'd just like to point out the irony of the bolded, all caps statement in this article, "You’ll NEVER get rich by working for someone else", the recent HN frontpage article about how Tim Cook got a $750 million payout working for Apple, and that the title of this post is "All Personal Finance Experts Are Liars".

Considering the majority of CEO pay is in company equity, they are working for themselves.

That’s a fair point, what about traders then? There are people working for eg. RenTec who have earned tens of millions despite being regular employees who don’t even manage anyone. And this is not given as equity, bonuses are cash.