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Posted on 12/27/17 at 2:47 pm to blzr
That's okay
I'll continue to give the best investment advice while it exists.
If you wanna stay in you're little bubble. Just ignore it
I'll continue to give the best investment advice while it exists.
If you wanna stay in you're little bubble. Just ignore it
Posted on 12/27/17 at 2:49 pm to SouthMSReb
quote:
I've got 3 months salary set aside for my "just in case fund". Should this money be invested at all? Seems wasteful to have that lump sum sitting in a savings account, but I guess it's also much less risky.
I've never really understood the "x months salary saved up" approach. To me, it's how much you spend that's more important. I'd recommend about 4-6 months of living expenses in savings before investing. Just my opinion
This post was edited on 12/27/17 at 2:50 pm
Posted on 12/27/17 at 3:03 pm to Roberteaux
Thanks for the advice so far guys.
I'm wondering what factors y'all use in analyzing potential mutual funds to invest in? Where do y'all do your research? Was there a particular site or article you read that really helped you as a beginner?
I'm wondering what factors y'all use in analyzing potential mutual funds to invest in? Where do y'all do your research? Was there a particular site or article you read that really helped you as a beginner?
Posted on 12/27/17 at 3:11 pm to SouthMSReb
You're investing when the market is high - just so you know.
I'd buy a couple of CD's right now.
I'd buy a couple of CD's right now.
Posted on 12/27/17 at 3:12 pm to rocket31
quote:
When are you scooping some ETH bro?
Posted on 12/27/17 at 3:15 pm to SouthMSReb
quote:
I'm wondering what factors y'all use in analyzing potential mutual funds to invest in? Where do y'all do your research? Was there a particular site or article you read that really helped you as a beginner?
Bogleheads
Posted on 12/27/17 at 4:10 pm to HailToTheChiz
In my late 20s as well, I keep about 6 months cash, the rest is in vanguard and i have some in a franklin income fund. I dollar cost average and when there is a dip I'll double down some months if I have extra laying around. I also play stocks on the side but it's not a vehicle for retirement. My dad is a financial advisor so he is my main source of info but the Bogleheads forum is loaded with knowledge, id suggest you spend sometime reading it and even signing up if you are that interested.
I think the key for people our age is understanding the time value of money and how investing early and often is imperative to an early retirement (unless you're expecting a windfall)
I think the key for people our age is understanding the time value of money and how investing early and often is imperative to an early retirement (unless you're expecting a windfall)
Posted on 12/27/17 at 4:38 pm to SouthMSReb
To the OP:
The point of an emergency fund is so that you can handle things if something comes up. That may sound obvious, but stay with me for a second.
Having cash in savings is one way to do this, and has the advantage of being pretty damn simple. It has the disadvantage of tying up capital and not earning much with it.
You need to have the ability to obtain cash cheaply on short notice - that isn't the same thing as having cash in a low-interest savings account. For example, if you have a home and a steady income, it's quite feasible to just have a HELOC. If you suddenly need $5000, draw on that and divert some of your income stream to paying it down.
Get comfortable with having (and properly managing) low interest debt. It can make your financial life much easier and even enhance your net worth. Dave Ramsey's stuff is the financial equivalent of Alcoholics Anonymous - strong medicine for someone who can't handle money well. But if you can borrow cheaply and invest wisely, you can do very well for yourself. After all, that's how banks get rich.
The point of an emergency fund is so that you can handle things if something comes up. That may sound obvious, but stay with me for a second.
Having cash in savings is one way to do this, and has the advantage of being pretty damn simple. It has the disadvantage of tying up capital and not earning much with it.
You need to have the ability to obtain cash cheaply on short notice - that isn't the same thing as having cash in a low-interest savings account. For example, if you have a home and a steady income, it's quite feasible to just have a HELOC. If you suddenly need $5000, draw on that and divert some of your income stream to paying it down.
Get comfortable with having (and properly managing) low interest debt. It can make your financial life much easier and even enhance your net worth. Dave Ramsey's stuff is the financial equivalent of Alcoholics Anonymous - strong medicine for someone who can't handle money well. But if you can borrow cheaply and invest wisely, you can do very well for yourself. After all, that's how banks get rich.
Posted on 12/27/17 at 6:36 pm to LSUbase13
quote:
You're investing when the market is high - just so you know.
And what if the market doubles from now? That's the problem with market timing. Even if this is a peak and invest now; doesn't mean you're hurting your retirement goal assuming it's many years down the road.
Take a look at this scenario, which someone would have to be very unlucky to happen to them:
https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/
With the worst timing, Bob still came out ok. Also, if Bob would have dollar cost averaged or used bonds/new money to re-balance would have significantly increased his return.
The problem is that many people do worse than Bob because they sell when the market goes low. Then they either buy back in after the recovery has happened or they never get back in.
This assumes using index funds to invest in. If the OP, wants to try and pick individual stocks; well that's something else..
I'd say start here, even if u don't become a Boglehead there is plenty of good info in general:
https://www.bogleheads.org/wiki/Main_Page
Posted on 12/28/17 at 9:21 am to foshizzle
quote:
The point of an emergency fund is so that you can handle things if something comes up. That may sound obvious, but stay with me for a second.
Having cash in savings is one way to do this, and has the advantage of being pretty damn simple. It has the disadvantage of tying up capital and not earning much with it.
You need to have the ability to obtain cash cheaply on short notice - that isn't the same thing as having cash in a low-interest savings account. For example, if you have a home and a steady income, it's quite feasible to just have a HELOC. If you suddenly need $5000, draw on that and divert some of your income stream to paying it down.
Get comfortable with having (and properly managing) low interest debt. It can make your financial life much easier and even enhance your net worth. Dave Ramsey's stuff is the financial equivalent of Alcoholics Anonymous - strong medicine for someone who can't handle money well. But if you can borrow cheaply and invest wisely, you can do very well for yourself. After all, that's how banks get rich.
Can you expand on this?
Posted on 12/28/17 at 5:00 pm to Funky Tide 8
He's saying that debt can be a powerful tool if wielded properly. People with no discipline should avoid it at all costs, hence the Dave Ramsey crowd. For the rest of us it goes a little something like this:
If I had a solid investment that I could funnel as much money as I had access to into and make a great return my only limitation is the amount of money I have. If I make 50k a year and spend 30k on personal expenses that means I've got 20k to invest. Let's say it's a 10% ROI for easy math. That's 2k a year. Solid.
But if I took out a 200k loan at say 5% to put into this investment on top of that then I'm now at 12k per annum (that off of my income plus the ROI off of the loan minus the loan's interest (i.e. The ROI on the loaned investment is only 5%)).
Voila. You just put someone else's money to work for you at no extra cost to yourself. It would have taken 10 years for you to accumulate that sort of investment capital just working your day job. That's 10 years that you could have been spending plowing these new profits back into your investment over and over for even more gains (aka compounding interest).
Naturally, it's almost never this simple. A high-yielding investment is rarely a sure fire thing. The true cost of this loan is the risk, hence why so much money is spent on risk assessment. Since none of us are CEOs at G-S or Berkshire Hathaway we need to be able to do this ourselves in an accurate, unbiased manner.
If I had a solid investment that I could funnel as much money as I had access to into and make a great return my only limitation is the amount of money I have. If I make 50k a year and spend 30k on personal expenses that means I've got 20k to invest. Let's say it's a 10% ROI for easy math. That's 2k a year. Solid.
But if I took out a 200k loan at say 5% to put into this investment on top of that then I'm now at 12k per annum (that off of my income plus the ROI off of the loan minus the loan's interest (i.e. The ROI on the loaned investment is only 5%)).
Voila. You just put someone else's money to work for you at no extra cost to yourself. It would have taken 10 years for you to accumulate that sort of investment capital just working your day job. That's 10 years that you could have been spending plowing these new profits back into your investment over and over for even more gains (aka compounding interest).
Naturally, it's almost never this simple. A high-yielding investment is rarely a sure fire thing. The true cost of this loan is the risk, hence why so much money is spent on risk assessment. Since none of us are CEOs at G-S or Berkshire Hathaway we need to be able to do this ourselves in an accurate, unbiased manner.
Posted on 12/28/17 at 9:44 pm to SouthMSReb
Put a couple grand into a Robinhood account on your iPhone. Learn about the stock market for 6 months.
Posted on 12/28/17 at 10:41 pm to rocket31
quote:
That's okay
I'll continue to give the best investment advice while it exists.
If you wanna stay in you're little bubble. Just ignore it
Mate I dig your style but you are straight clowning. You are going to frick over some unwitting people on here with this kind of stuff.
Posted on 12/29/17 at 10:24 am to Lou Pai
Agreed. Great info and resources on this board, crypto is not a LT investment strategy and should be avoided by anyone just starting out with little capital.
Posted on 12/29/17 at 3:02 pm to Decisions
quote:
Decisions
Essentially what you said but it's possible to use debt more conservatively. Instead of borrowing cheaply to invest, it's feasible to borrow cheaply just to meet an emergency so you don't have to liquidate your investments. That way you don't have to lock up capital in an account that pays nothing "just in case". You can instead be fully invested and only borrow when you need to.
quote:
Since none of us are CEOs at G-S or Berkshire Hathaway we need to be able to do this ourselves in an accurate, unbiased manner.
For the higher-risk strategy you outlined, that's indeed the catch. Not many people can do this, at least not consistently.
Posted on 12/30/17 at 9:11 am to SouthMSReb
20 something? You're not late. Don't seek credible advice here. Find an advisor and get started. Time goes faster than you think! Be diligent.
Posted on 12/30/17 at 6:28 pm to 2geaux
quote:
20 something? You're not late
I second that. Actually, you're pretty early!
Posted on 12/30/17 at 7:56 pm to foshizzle
quote:
Essentially what you said but it's possible to use debt more conservatively. Instead of borrowing cheaply to invest, it's feasible to borrow cheaply just to meet an emergency so you don't have to liquidate your investments. That way you don't have to lock up capital in an account that pays nothing "just in case". You can instead be fully invested and only borrow when you need to.
Depending on the nature of the emergency and the environment when it happens, one has to be careful when thinking about borrowed funds (someone else's money) as always being accessible. When the credit markets froze up a few years ago, lines of credit got reduced and even eliminated, often without prior notice. Even people with high credit scores, sufficient assets and high incomes found it VERY difficult to borrow from banks with whom they'd had longstanding relationships.
I've been through two shi##y periods. One in the early 90's and one during the Great Recession. Especially after the last go-around, I made a conscious decision never to rely too heavily (at least not fully) on lines of credit as a rainy day fund. Maybe for something relatively minor, it's OK. But to me, if faced with a true "the feces has hit the air conditioner" episode, my money will always be my money. A line of credit is really someone else's money that I (may) have access to. Not disagreeing with your overall premise. But just saying that some past experiences have made me cautious of that.
Posted on 12/30/17 at 9:28 pm to 2geaux
quote:
Find an advisor and get started.
aren't financial advisers almost always a bad move?
last i read, if you just put your money in an index fund with the lowest cost and you'll end up ahead of financial advisers, long term
it's not sexy and requires patience and a view of the long term, but it's much more optimal as a retirement plan than active management
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