Hard-won lessons about money and investing
mattcutts.com
Hard-won lessons about money and investing
1–10 of 264 posts
Re: Hard-won lessons about money and investing
#2I'm at the start of a long career and trying to save sacrificially. I know if i over-save i still have it if i need it, but so far every dollar i have put into savings has been on a one-way trip!
I wonder and worry about how to save up for later in life, and who knows what the political landscape will look like then. In my country inflation has been 2.16% on average during the years I've been alive.
Where can I store my money in a way that I know it will be there later whn I need it?
(I'm a little nervous about the bank, one time I had a court order against my bank account so it was drained, and I was beingpaid by cheque, but even when I took my paycheque to the bank to deposit it, until that debt was paid off i couldnt even take out enough for groceries. I want something that cant be taken away at a whim without recourse. I negotiated a deal with the collection agency for a repayment schedule, but they still drained my account 2-3 times after our agreement just because. Oops!)
Re: Hard-won lessons about money and investing
#3> If you’re an employee working for salary, it’s going to be hard to reach that level of independence. ... You can try to radically lower your financial burn rate, but few Americans have taken that step.
So many people are quick to dismiss living well within one's means as a way to financial independence. Here's the link to the facts again:
http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...
TL;DR: Live on 35% of your after tax income and you're retired in 10 years. Get it down to 25% and you retire in 7.
Re: Hard-won lessons about money and investing
#4> If you’re an employee working for salary, it’s going to be hard to reach that level of independence. ... You can try to radically lower your financial burn rate, but few Americans have taken that step. So many people are quick to dismiss living well within one's means as a way to financial independence. Here's the link to the facts again: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim... TL;DR: Live o…
And don't have kids.
Re: Hard-won lessons about money and investing
#5https://www.bogleheads.org/wiki/Getting_started
Short version: Open a Vanguard account and invest >=15% of your salary in the appropriate target date fund for the year you want to retire.
P.S. Where possible, become a millionaire in Google's IPO.
Re: Hard-won lessons about money and investing
#6> Think about working for equity vs. salary
It's really common for people to drastically overestimate the value of startup equity, or to just not understand the basic mechanics of it at all. In my experience people look at the face value of their options and are pretty clueless about how taxes (or even their strike price!) affect what they might actually wind up with.
Re: Hard-won lessons about money and investing
#7I'm of the opinion that the stock markets are now inherently unstable, and they will continue to crash every 7-10 years. I'm expecting a market crash somewhere between 2015 and 2017. Most of my money is in cash, but I do hold a few select stocks like AAPL, GOOG and TSLA.
I also believe that the stock market is a game, not an investment vehicle. The nature of the market has transformed every since the day trader, quants and HFT have entered the markets. As long as you understand this, then putting money in the markets is fine. If you don't want to be a part of the game, then regular people should buy bonds (not bond funds, but actual bonds that pay interest).
My opinion is that Wall Street has shifted focus since the 80s to trying to convince people to dump their money, all their money, into mutual funds. Then these massive fund managers take their 1-3% in various fees and just move money back and forth. I don't trust Vanguard any more than I trust any of these other large mutual fund companies, and I happen to know a lot of people that work at various asset management companies in the Bay Area. They print money without ever beating the SP500, instead they try to change the equation by claiming they beat the SP500 on a risk-weighted basis, etc. The entire thing is a sham, and as the OP remarked, why do the mutual fund managers have yachts but none of the clients do? It's because they make their money from the hundreds of billions of dollars they skim off the top of their customer funds.
Re: Hard-won lessons about money and investing
#8> Think about working for equity vs. salary It's really common for people to drastically overestimate the value of startup equity, or to just not understand the basic mechanics of it at all. In my experience people look at the face value of their options and are pretty clueless about how taxes (or even their strike price!) affect what they might actually wind up with.
I agree. It's easy for Matt Cutts to say that you should take more equity, because he has only seen massive success. I've been in the Bay Area exactly as long as he has, and I've had 1 company out of 6 where my options actually made me money. The rest were all worthless.
Re: Hard-won lessons about money and investing
#9Hedonic adaptation is the devil. You'd hope/intuit that spending more resources would make you happier, but that's just not the way it works. That said, you can use knowledge of this quirk of human psychology to make you richer and more secure compared to your higher-consuming self, not sacrificing any long term contentment or satisfaction to do it. Here's a more in-depth review of the topic[1].
[1] http://www.mrmoneymustache.com/2011/10/22/what-is-hedonic-ad...
Re: Hard-won lessons about money and investing
#10I've been considering moving from holding Vanguard ETFs (one of their Total Retirement funds) over to Betterment or Wealthfront to take advantage of their automated tax loss harvesting.
Does anyone have any thoughts about whether automated tax loss harvesting is worth the 0.15-0.25% fees that the robo-advisers charge?