Through the past years I’ve taken up an interest in personal finance. I’ve consistently found myself amazed with how little I/people in general know about this topic.
So let this thread be a place to discuss all those things. Savings, pay raises, investing, retirement, financial freedom. If you have questions or need tips, this could also be the place for that.
If you have anecdotes or want to share your journey I’d love to see that as well.
Sounds like a pyramid scheme.
What does?
dumb comment
Since no ones biting, guess i’ll share.
Started working at 16, got imo a cool car, blew all of my paycheck every month. I managed to save at one point but only with the goal of buying something.
Fast forward to 20 yo me, without job, minus in the bank, rent to pay.
I was fucked and decided NEVER AGAIN. The next years I kept a healthy emergency fund and just went on with my life. At some point, the fund had grown pretty large but I didn’t know what to do with it.
Bam, covid 19 motherfuckers. No job, but no fucking worries. I figured I’d just live off the savings until I figured out what’s next. So I did. For about a year.
This was such a cool experience and I wondered if I could make this not working situation a permanent thing. So I googled and it turns out there’s a whole movement of devoted savers sharing their journey towards early retirement. Wooooo hooo.
So today I save approx 50-60 % of my earnings and put all that towards investments. It’s hard to tell when I’ll reach my goal but I shoot for 15-20 more years of work.
Main take aways from what I’ve learned.
If you have debt, do all in your might to eradicate it. Borrowing money is expensive.
Live below your means. Don’t be a victim to lifestyle creep. If you manage that you will never lack money.
Invest in low cost widespread index funds. This way you lower what risk investing has and your money will work for you through compound interests. Ie interest on your interest.
KEEP AN EMERGENCY FUND. Meaning money enough to live off of for a few months in case you get sacked or your car breaks down.
Cut mercilesly on things that don’t give you value and spend all you want on things that does. For example, I don’t give a shit about my home so I live in a shoebox apartment. I’m super happy with that and at the same time it frees up money to spend on video games and food. Two things that I value a lot.
If you can do this you’ve pretty much secured your future and at some point will be able to live off of the investments.
I’m fully aware that I’m super privileged to be in this situation. However, I think it’s doable for a lot of people. This was foreign concepts to me and I hope I can inspire whoever finds it applicable.
We’ve been struggling with a question for a little while and maybe this is the right place to discuss.
We bought our house 10 years ago before the current housing market exploded. As a result, we have a mortgage that we currently owe something like 150,000 on. The house is worth, on the open market, between 490 and 520.
We could sell it now, take the 300,000 profit and buy another, smaller house outright, eliminating the mortgage entirely. We could also continue to pay down the mortgage for a while longer - but there’s no telling whether the current market will continue the way it is, go up even higher, or tank outright.
On a purely financial basis, it feels like it makes sense to move now. Kids are completely out of the house and we really have more space than we need. On the other hand, we love the house and the only bad things about it that we can realistically come up with are that it’s in an HOA and the location is less than optimal for actually going anywhere or doing anything.
We’ve looked at what’s available and while there are certainly houses that we could get in the same city, we aren’t in love with any that we’ve seen so far.
Our realtor suggest we put the house on the market and get get some offers in, even if we end up not selling it, just to see what those offers actually look like. We really can’t decide. If we move it will be for purely financial reasons and the idea of no longer having a mortgage is absolutely an attractive one.
What do you think?
Keep in mind that I have no experience with house ownership, but it sounds like you’re in a good spot.
If I were you, I’d stay for 5 more years and then see. You say you are happy there, which is the most important thing. And even if the market tanks, you would have a great place to live with an even smaller mortgage. Then wait it out and sell when the market is good again. How old are you if you don’t mind?
Old enough that whenever we move it’s likely going to be the last time. Retirement in the next 10-15 years.
There’s alot of considerations here. You mention transport yourself. This might be a stretch, but if you move could you sell a car? That, plus no mortgage would massively increase your headroom.
On the other hand, that house is your nest egg. Staying there for another 10-15 years and you’re almost garanteed a sweet tax free profit for your retirement. Would be a shame to miss out on.
It’s a question of whether you’d like the money now or potentially more later I think
Alright. I’ll comment.
I think it was last year my bank approached me about making some investments since I had so much in my savings account. They gave me a multi-page form or worksheet to fill out. I guess to see what I’d be interested in. But I was very afraid for the economy… So I never took it back.
Maybe that’s all I need to say at this point.
I doubt we’d be selling vehicles. We only have the two and I’m not interested in living downtown. The problem with where we live right now, transportation wise, is that no matter where else in the city we want to go there is always construction and it’s hard to get out of the area (and if one road is closed, the others all get backed up too). Plus, there just isn’t much in this area while almost all of the other areas have more amenities, better restaurants, better shopping, etc. All we have is fast food around here.
If we decide to move now, we’d likely be taking everything we would otherwise have spent on the mortgage and putting that into our retirement accounts so the money would be saved rather than spent, once all the moving costs are done with.
We’ve come to the same conclusion. Do we want the money now or later? I’d love to do away with the mortgage and keep the interest (although our current rate is very low) for ourselves. If we didn’t like the house itself so much this would probably be a no brainer so it becomes a toss-up between a purely logical financial argument an emotional attachment to the current house.
Yup, sorry I couldn’t be of more help haha! Either way you choose to go, I think you’re winning. 
Correct me if I’m reading too much into this but… Timing the market is a common misconception and it really plays no role if you plan do build wealth with broad index funds over a long period of time (think plus 10 years).
Look at this chart of the S&P 500 fx.
The average return on that fund is about 11% which is pretty great. Try googling some compound interest calculator and run your numbers. You’ll see what’s up after about 15-20 years even if you input the average interest to about 6-7% which is not at all unrealistic.
The saying goes; time in the market beats timing the market.
Another thing to keep in mind, I’d advice against investing through your bank. Either they sell you their own overpriced funds or they take a management fee which might not seem like a lot (0,5-1% yearly), but it will cost you alot of money in the long run.
Much better to do a bit of research, set up an account on a trading platform, select a couple of index funds you like (you can google this step to find the general consensus on what’s good) and then just autopilot and watch it build.
I have some long term investment funds and the best advice I can give to anyone concerning those types of funds is to ignore them as much as you can stomach. They do require some maintenance to make sure you’re in the right funds and make adjustments as your income and financial outlook changes, but obsessing over the day to day value or worrying about changes in the market is a recipe for a bad time.
Over the long haul, almost any long term investment fund is bound to pay off if you can stomach the ups and downs over the short term.
I’m not talking about specific stocks, obviously. Single companies can, and do, tank and close doors, but a solid mutual fund is a pretty sure bet long term.
Great post. Looks like you’ve been in this game for a while. If you don’t mind me asking how did you get started? Did your parents or friends talk about it?
Reason for me asking is that pretty much everyone I mention it to irl doesn’t know anything about investing at all. They see it as gambling or think it’s only for the super rich.
Over 25 years ago I got a 401k through work. When I left the job the owner told me I had to transfer the money to a private IRA so I had to find a financial advisor to manage it. Now I have accounts through my current job and private accounts. I barely ever look at any of them these days.
Having recently become interested in the overall idea of investing my money, and wanting to learn about everything involved with stocks and bonds and whatnot, I find that everywhere I turn I can’t understand a damned thing beyond the main concept of putting some money toward something and getting more back over time if done right, mainly because every article, every video, every stock simulator, every single source I go to for information to learn about this whole thing is so full of jargon that I can’t get anywhere! Anytime I try to learn what a particular term means, the whole explanation about it is full of more jargon that I then have to go and try to understand, and the whole process repeats itself!
Does anyone know any place that basically talks about investment and finances for true beginners? And when I say true beginners, I mean one that explains things to someone who doesn’t know shit about financial matters, and uses language no more complicated than what you’d see on basic television? I’m not going to be able to even get started if I don’t know what any of this shit means!
I completely understand info overload paralysis regarding this subject. I recommend you go to the local library and pick up the thinnest book about investing you can find.
The lingo doesnt really matter at the end of the day. To recap the whole process:
Set up an account on a trading platform of your choice.
Transfer your excess money to that account.
Buy index funds whenever you have money you dont really need.
Wait 30 years.
There’s other ways to go about it, like you mention yourself. This is just what i recommend because an index gives you MANY stocks so you spread out the risk compared to if you bought stocks in a single company. You can do all that if you want but index funds are a good starting point.
So there’s two things to think about and research. What do you want to invest in? How much is the yearly cost? (Cheaper is obviously better lol)
Hope this clears up some of your confusion.
