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

#71

Post by jandrewrogers » Sun, Aug 29, 2021, 4:21 PM UTC

There are three levers for increasing wealth: increase savings rate, increase income, increase rate of return. For the average person, these are listed in order of difficulty, hence why most personal finance advice starts with increasing your savings rate.

Owning a small business is a chance at increasing rate of return. That's playing personal finance on hard mode for the average person. If you are risk averse, you'll be much better served focusing on increasing your savings rate and income.

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

#72

Post by cowpig » Sun, Aug 29, 2021, 4:21 PM UTC

MattGaiser wrote: post #34

umvi wrote: post #19

> Except we used our cards to make $3,624 in spendable cash last year, all while paying zero in interest — because we paid the cards off in full each month. Yeah except the merchants probably marked up their prices 4% to cover card processing fees so really we are just paying more for goods than we otherwise would have with cash and the card company is giving us a tiny kickback. Let's not pretend credit card kickback…

If everyone used cash, maybe, but since that isn't happening, those who don't use credit cards are paying for those who do.

I think both of these statements are true

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

#73

Post by kiba » Sun, Aug 29, 2021, 4:22 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 don't have complete answers, so I only give out solutions that has worked for me:

1. I set up a goal to only have one meal eating out per week and I did it by keeping track of whether I go to a restaurant that day. I used uHabit, an open source ads free android app to help me do this.

2. I also keep a spreadsheet for a certain aspect of my life: electronics and crafting. Each time I buy something craft related, I entered the expense. I have an expense goal that I try to keep it under per month.

These two strategies has allowed me to save me a lot of money and sometime I would go on for months without spending much money at all.

Also, it is likely that your spending habit is an emotional problem, not a discipline issue. I think it may be prudent to talk to a mental health professional.

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

#74

Post by thefounder » Sun, Aug 29, 2021, 4:22 PM UTC

paulpauper wrote: post #61

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".

Being the ceo is sorta an exception to this.

Not any CEO either.

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

#75

Post by californical » Sun, Aug 29, 2021, 4:22 PM UTC

giantg2 wrote: post #14

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…

I think an even deeper question is, is it possible for the masses to get rich and what would the macroeconomics look like? I would think competition and resource scarcity would prevent this.

It’s not scientific, but MMM has an article on this that was insightful in how society could change for the better as a result:

https://www.mrmoneymustache.com/2012/04/09/what-if-everyone-...

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

#76

Post by moltenguardian » Sun, Aug 29, 2021, 4:22 PM UTC

"Rich Dad Poor Dad" also made a similar point: you should look at what your advisor is doing, rather than taking their advice. If your financial advisor suggests a mutual fund, ask them if they themselves invest in it.

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

#77

Post by magnuspaaske » Sun, Aug 29, 2021, 4:22 PM UTC

I've read Ramit's book and Tony Robbins' book. Both mention entrepreneurship. The latter mention taxes. Don't really see the big lie here.

I'm most familiar with Ramit's work but he's also pretty clear that there's only so far you can go through savings but no upper bound on earnings.

It seems to me a bit like a strawman argument he's making when in fact some (or all) of the other gurus do talk about entrepreneurship and earning more.

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

#78

Post by pushrax » Sun, Aug 29, 2021, 4:23 PM UTC

dheera wrote: post #39

dragontamer wrote: post #2

I dunno who his target audience is, but I assume that the majority around here are computer programmers with anywhere from $70k/year single income to maybe $500k/year dual income ? Financial advice in general sucks. But when we get into the specifics... such as any say $150k/year programmer or higher, the generic financial advice of 6 months saving + max out 401k plan works. ------- The plan for people at average, 50…

> max out 401k plan works What are the advantages of 401k instead of say dumping it into half-VOO half-crypto and making millions one way or another?

The variance in potential outcomes of holding VOO is much, much lower than the variance of holding crypto.

Buying VOO buys a share of the profits of the work of many millions of people. It also speculates that other people will continue to want to buy those profits.

Buying a token only speculates that more people will want to buy that particular token. It's much harder to project that people will continue to want it.

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

#79

Post by dasil003 » Sun, Aug 29, 2021, 4:23 PM UTC

For a business owner this guy sure doesn’t understand much about market economics. Those gurus made their money by appealing to average people. In no way is it possible for a majority of that audience to all start successful businesses. So while a lot of what he says is technically true, and these gurus might be encouraging a lot of wishful thinking and fantasy, the authors message is likely to be a lot more misleading at scale if half the country all started businesses with the hope of getting rich.

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

#80

Post by zffr » Sun, Aug 29, 2021, 4:23 PM UTC

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".

Yes and several members of professional sports leagues like the NBA/NFL are also very rich too. While it is possible to become very rich working for someone else, I think the author's point is that it is extremely unlikely.