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

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

#241

Post by zhdc1 »

wincy wrote: post #169
nmhancoc wrote: post #95

Earlier quoted context omitted.

I think you’ve already got a lot of advice related to the mechanics of saving money (401k which has withdrawal penalties, maybe an IRA for greater friction, etc.) On the emotional management / discipline front, I’d suggest also exploiting the similarities between personal finances and healthy living. If money is particularly painful for you, try forming simple habits like going on a 10 minute walk each morning, or ea…

I did lose 50 pounds in the last year. I know I can manage my health properly, but during that same time didn’t manage my finances well at all. Maybe thinking about it the same way is key, thanks.

> I did lose 50 pounds in the last year. I know I can manage my health properly, but during that same time didn’t manage my finances well at all.

That's ok. Change comes slowly. Last year, and maybe this year, was about fitness. Make next year about your personal finances, and the year after that about something else (self growth, discipline, etc).

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

#243

Post by giantg2 »

zhdc1 wrote: post #234
giantg2 wrote: post #190

Earlier quoted context omitted.

"The median household income in the United States is $79.9K. Assuming that a family of four can live on $50K (including taxes) in - most - locations, ... " I think the main problem here lies in assumption of the distribution over the various locations. $50k+ in Appalachia is good money and you might be able to save $30k out of $80k. One would not be saving and investing in many of the large cities and their suburbs (…

> in many of the large cities and their suburbs (where more people live) A 50K expense target is comfortably doable in most locations (that is, outside of San Francisco, New York City, and VHCOL suburbs). Keep your housing and car expenses reasonable, and cook at home. > It will result in better outcomes, but it won't make people rich, like many claim. $3M in investments allows for a ~$150K annual withdraw at retirem…

Assuming a 2.5% annual inflation rate, that $200k will not be worth as much in 35 years. You would need $475k in 2056 to equal $200k today. $200k in that year is the equivalent of $85k today and after the first 15 years would be the equivalent of $58k. And that will only decrease in value further into retirement. One have to dig into the capital.

"they can 1.) go on 4-5 overseas vacations flying business class, 2.) eat out every night, 3.) purchase a new Mercedes E or S class. This isn't a bad way to live."

I find it hard to believe that people making $85k or $58k today can do these things. I think it will be even tougher with healthcare costs associated with aging.

"still makes for a comfortable retirement."

Yes, I think it would be a comfortable retirement. Where is the claim that it would make one rich? Otherwise where is the argument...

"It will result in better outcomes, but it won't make people rich, like many claim."

You also haven't addressed the $1.5M side of it properly. That $30k you're talking about is only worth $12k. If the income is $100k per year (half the $3M number), that's the equivalent of about $42K per year at retirement and only $29K after the first 15 years. I'm pretty sure money would be tight in any suburb or city on that amount. They certainly aren't rich.

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

#244

Post by dboreham »

wincy wrote: post #159
oramit wrote: post #89

Earlier quoted context omitted.

This is a really honest comment and my thought reading through it is that there isn't going to be "one quick trick" to help. Your troubles seem multifaceted and not completely about money. Have you considered talking to a therapist?

Maybe I haven’t found the right one yet. The last psychologist wanted to chat about the weather or something. I know I can set goals independently and execute on them. I lost 40 pounds during the pandemic after setting a weight loss goal. But you’re right it is multifaceted. It feels like a game of whacka mole where I put intentionality and care into one part of my life (career, or health) and the other parts languis…

Therapists are likely similar to software developers: only a small proportion are really good. These days there are some great psychology resources on YouTube that could be helpful.

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

#245

Post by astura »

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…

Have you been to a doctor? There's a few mental illnesses that can be the cause.

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

#246

Post by nly »

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…

> Saving $100 per week should be possible for most households today. $100 per week over 40 years with an 8% return is $1.3m.

A 8% annualized above-inflation return over the next 40 years is a big ask in today's low-growth world.

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

#247

Post by jacquesm »

jhanschoo wrote: post #229
jacquesm wrote: post #194

Earlier quoted context omitted.

> If I had to give 1 bit of general financial advice though: develop your talent stack. It doesn't matter if it's learning a new programming language, wood-working, learning to fix cars or toilets, taking a foreign language class, learning how to paint, or growing a great garden. If you have multiple skills you have more opportunities to make money as well as combining those skills in unique ways to create new busine…

> Fortunes are to be found on the intersection of almost any two skills, if you can add more to the pile you are adding more chances for capturing that value. Do you have some anecdotes to share regarding this?

Yes, in fact I have a blog post in draft (for years) already called 'crossroads'. I really should finish that and post it, it might be of actual use to some people.

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

#248

Post by rchaud »

oakfr wrote: post #56

You’ll never get rich unless you start a business. Oh by the way, lucky you, I happen to be selling tips for making millions off a blog (just click this sponsored link. I made $6M with mine, I swear). Seriously, since when did HN decide to sponsor this kind of self-interested clickbait?

I did a double take when I saw the navigation menu links like "Make money blogging". Is this 2004?

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

#249

Post by rchaud »

gonehome wrote: post #83
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".

It’s totally false even ignoring extreme outliers like Tim Cook. The reason there are so many angel investors in the Bay Area is because of the feedback loop of ipos giving regular employees 1-5M pretty often (and 5-50M+ less often). It’s also part of the reason a pretty unremarkable and small home on the peninsula costs $3M.

You don't have to be Tim Cook for the usual "save/invest x% of your take-home income" advice to pay dividends. A 22-year starting a job in investment banking or Big 4 management consulting will do just fine without needing to start their own business.

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

#250

Post by tsjq »

ASinclair wrote: post #31
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…

> The r/personalfinance and r/financialindependence subreddits are quite good and even cover more exotic details The great thing is you can read the subreddits casually for ~3 months and learn everything you need to know to autopilot your financial plan for decades if you go the boglehead route. After that you mostly need to pay attention to major changes in tax law and entitlements. I still read them all the time bu…

well said. fully agree with that.
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