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Show HN: StockNerd – A community for index fund investors

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Re: Show HN: StockNerd – A community for index fund investors

#61

Post by tdb7893 »

Uroboric wrote: post #55
cujo wrote: post #51

Earlier quoted context omitted.

Numbers. It's all about how you feel about that risk of crashing vs the potential payout. Say I'm squirreling away $5k a year for a new car in 4 years. Every year I put in another $5k, so by the end, I've put in $25k. If I put that in a typical savings account, I earn 0.1% and come out $50 ahead. Effectively 0, or losing value once you throw in inflation. Go with stocks, at a 5% return, I end up with over $27k, and a…

Savings accounts aren't the only option though. Bonds will return like 2-3% depending on the type, without the occasional dramatic crashes in value.

The issue is that even after dramatic crashes my impression is that stocks generally beat bonds long term. That means that if one person put all theirs in stocks and the other in bonds the one in stocks is likely going to have more money later, even if the market crashed a few times in between.

Re: Show HN: StockNerd – A community for index fund investors

#62

Post by yls »

gingerlime wrote: post #32
baccredited wrote: post #25

Warren Buffet tells his heirs to go 90% SP500 and 10% Bonds. So just buy VOO and BND, rebalance yearly and you are done. OR do a 3 fund portfolio like: https://www.bogleheads.org/wiki/Three-fund_portfolio OR buy a target retirement fund from Vanguard: https://investor.vanguard.com/search/?query=Vanguard%20targe... OR fill out a risk profile on Wealthfront/Betterment and invest there. Bottom line is pick an approach a…

Any tips for investors in Europe? (Germany or UK in my personal case). I understand that these strategies are not country-specific, but not sure if Vanguard is accessible to non-US citizens, and there might be tax implications in different countries. That's why I'm asking.

Hi, I highly recommend a book in case you read German. Despite its weird title, I found it very worthwhile.

Souverän investieren mit Indexfonds und ETFs: Wie Privatanleger das Spiel gegen die Finanzbranche gewinne

by Gerd Kommer

You can also google for Kommer Portfolio. It is, IMHO, very well balanced (asset classes, geography etc.).

Re: Show HN: StockNerd – A community for index fund investors

#63

Post by skdotdan »

baccredited wrote: post #25

Warren Buffet tells his heirs to go 90% SP500 and 10% Bonds. So just buy VOO and BND, rebalance yearly and you are done. OR do a 3 fund portfolio like: https://www.bogleheads.org/wiki/Three-fund_portfolio OR buy a target retirement fund from Vanguard: https://investor.vanguard.com/search/?query=Vanguard%20targe... OR fill out a risk profile on Wealthfront/Betterment and invest there. Bottom line is pick an approach a…

I think this portfolio lacks an "antifragile" asset. Invest, say, 5% in something with high risks, high returns, and potentially anticyclic, such as cryptocurrencies.

What do you think?

Re: Show HN: StockNerd – A community for index fund investors

#64

Post by Uroboric »

hamstercat wrote: post #46
Uroboric wrote: post #44

Something that's never made sense to me about stocks: Unless you're extremely wealthy, any money you are able to save (outside of retirement money) is probably money you are going to want to use for something to improve your life in the semi-near future. Buying a house or car (or just a better one) for example. With that assumption in place, under what circumstances does investing in index funds make any sense whatso…

It's pretty popular in the Financial Independence crowd, where the goal is to get enough money to be able to live on interest alone. It's not for the extremely wealthy, rather the somewhat high-income middle class. You can even make it work with less income if you can manage to cut your expense. Most people adjusts (ie: increases) their spending when they get additional income, but it doesn't have to be that way. In…

Personally, if I was dependent on my assets for the income I use to eat, I wouldn't want those assets to be ones that can wildly swing in value.

If I had enough other investments that the stocks were just icing on the cake that wouldn't be an issue, but that kind of goes back to my point of being extremely wealthy and having truly extra money you can park in risky stuff.

Re: Show HN: StockNerd – A community for index fund investors

#65

Post by fpgaminer »

pc86 wrote: post #49
hamstercat wrote: post #46

Earlier quoted context omitted.

It's pretty popular in the Financial Independence crowd, where the goal is to get enough money to be able to live on interest alone. It's not for the extremely wealthy, rather the somewhat high-income middle class. You can even make it work with less income if you can manage to cut your expense. Most people adjusts (ie: increases) their spending when they get additional income, but it doesn't have to be that way. In…

The FI crowd is 90% expense management and 10% investment. It seems like most folks there have a goal to stop working but are willing to do that and live like a pauper the rest of their lives. If that works for them, great, but I'd much rather work at a job I love, make very good money, and enjoy my life, rather than "retire" at 35 and live on $24k/yr in interest for the rest of my life. I'd love to see a Financial I…

> I'd love to see a Financial Independence plan around growing [a] business(es) and retiring early but not crazy early (40-55) and living on a substantial middle/upper-middle income for several decades.

That's roughly my plan. My goal is to achieve financial independence, but my wife and I will continue working even after that. FI just gives us the freedom to do work the way we want.

My current projections put us at retiring roughly when we hit 40.

I just started my own business, which I hope to grow into a indiehacker/lifestyle type business; not a rapid growth startup. Just something I like working at and that earns a reasonable income.

All that said, I'm not sure why you think $24k/yr is a pauper lifestyle. In fact that's roughly our yearly expenses once we achieve "initial FI" * . That's in Southern California, and we hardly live like paupers.

By the way, I never got involved in the FI "crowd". I read through /r/personalfinance in the past, and check it occasionally. It's definitely very heavily expense management. Makes sense, since most people are really bad at expense management. And there is definitely not a lot of discussion about where to draw the line between cutting expenses and having fun. I can imagine that FI specific communities would be much worse in that regard.

But I think all of that is driven by the fact that these communities are composed of, well, everybody. And most everybody can only dream of maxing their IRA. For people in the HN crowd financial management is quite a bit different. We need advice on what to do after we max our 401k! (HINT: Start your own company and do a solo 401k). I think a lot of us are also very privileged already in what work we do. If you're a programmer, you can generally find a programming job you life that pays very well. For most everybody else, finding a job you life is either rare, or would mean taking a massive pay-cut. So while most people dream of FI being an escape from work, I think a lot of the HN crowd is like me; dreaming of FI as just ... freedom. Freedom to take a year off and work on a startup. Freedom to work for a local company for $150k/yr instead of working for Google to earn that fat $300k/yr.

EDIT: * Forgot to clarify that "Initial FI", for us, occurs after our house is paid off so $24k/yr is without a mortage. I editted out long-winded sections of my original comment and forgot to clarify :P

Re: Show HN: StockNerd – A community for index fund investors

#66

Post by Uroboric »

tdb7893 wrote: post #61
Uroboric wrote: post #55

Earlier quoted context omitted.

Savings accounts aren't the only option though. Bonds will return like 2-3% depending on the type, without the occasional dramatic crashes in value.

The issue is that even after dramatic crashes my impression is that stocks generally beat bonds long term. That means that if one person put all theirs in stocks and the other in bonds the one in stocks is likely going to have more money later, even if the market crashed a few times in between.

I agree with your point entirely, but my point is that most people don't just sock money away for decades if it isn't specifically retirement money. Usually it is saved for some medium-term goal, which stocks could potentially spoil. Aside from that risk, why even deal with the psychological effect of that uncertainty for a paltry gain?

Re: Show HN: StockNerd – A community for index fund investors

#69

Post by ryandrake »

fpgaminer wrote: post #65
pc86 wrote: post #49

Earlier quoted context omitted.

The FI crowd is 90% expense management and 10% investment. It seems like most folks there have a goal to stop working but are willing to do that and live like a pauper the rest of their lives. If that works for them, great, but I'd much rather work at a job I love, make very good money, and enjoy my life, rather than "retire" at 35 and live on $24k/yr in interest for the rest of my life. I'd love to see a Financial I…

> I'd love to see a Financial Independence plan around growing [a] business(es) and retiring early but not crazy early (40-55) and living on a substantial middle/upper-middle income for several decades. That's roughly my plan. My goal is to achieve financial independence, but my wife and I will continue working even after that. FI just gives us the freedom to do work the way we want. My current projections put us at…

Jeez, $24k/yr is my housing budget alone, and I went out of my way to live in a cheap area, multiple hours from work.

Re: Show HN: StockNerd – A community for index fund investors

#70

Post by notfried »

austenallred wrote: post #68

I'm a little confused about what to do with a community for index fund investors. "So, you letting your investments sit there, not touching them?" "Yup, you?" "Same"

Well, if you are on a trajectory of a 30-year career job at one company with little to no changes in your income but adjustments and raises, then you probably don't need such a community. But judging based on Boggleheads forums, there's a need. Yearly re-balancing, changing your goals, windfalls, unplanned expenses, adjusting for tax efficiency, switching jobs, re-doing your portfolio because you did it horribly when you started, helping others who have a messy portfolio, and of course, the many questions every n00b has when they start.

Of course, Boggleheads would do just fine for any of these, but more options never hurt.

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