Financial advice thread

Financial advice thread

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mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
mrmoneymustache.com/2018/11/29/how-to-retire-forever-on-a-fixed-chunk-of-money/
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don't buy stupid shit. addiction to alcohol and nicotine is a thing but its not as potent as people describe. drugs are expensive don't do drugs. research in depth anything you buy ANYTHING you buy from toilet paper to insurance.

Your first and most important financial responsibility as an adult is to sever the link between your time/effort and your income.

mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

Before doing anything else major in life, complete this task.

no drugs
not fall for the wagie rhetoric

on this value your time and effort. Even your time off. Imagine hiring yourself to do a task and how much you'd pay yourself to do that task. It doesn't mean work 24/7 but if you were paid to relax and jack off for the evening and you did it the way you do would it be the best way to do it? and are you getting the most bang for your buck?

consider a hobby that makes you money just a side business and maintain a log on it. If you do have a hobby that doesn't make you money never consider it anything more than recreation.

Avoiding financing wherever possible.

Save at least 10% of your income.

Invest the majority of your assets in a diversified aggressive portfolio and minimize investment fees.

Carry enough disability insurance to protect your required income.

Minimize taxes.

With each wage increase, your savings should get more of that increase than the rest of your budget.

Find a financial partner (spouse or good friend). Going it alone is a western European value and it makes financial success way fucking harder.

Don't ever buy a brand new car unless you know exactly what you're doing, and you're buying a low cost high reliability car you will drive into the ground.

Dont get married avoid credit cards.

>don't get married

100% if you can help it but unfortunately women (not all but higher percentage than men) are better with personal finances than men.

>avoid credit cards.

the why of this is more important than the message itself. If you have to buy something on credit then you can't realistically afford it. If you can't afford something you don't need then why are you buying it.

A caveat though. In modern times with shit like amazon it can be cheaper to use a card to buy things normally unavailable in your area or just unavailable with cash. As an example rather than buying bottled water or filters since my local water supply is shit i bought a distiller. You can't buy them as the company i trust from history has no storefront. So i had to use a card. Even though i paid it off the following month i still paid the bank to use my own money and that should never be forgotten

bump for good thread for once

Agreed. Unfortunately, there's really not much to discuss with threads like these since it's mostly indisputable actions. No one is going to argue that paying high credit card interest is good.

You're doing it wrong. I use a cash back credit card for everything then just pay it off in full with the cash I didn't spend because I used the card. They pay me to use their money. This system only works if you're not retarded and and charge more than you should.

general tips are always appreciated.

>You're doing it wrong.
ok

I'll bite because I'm more well off than a lot of 32 year olds but also could've done a lot of things different.

#1, as said above, only buy a new vehicle if you plan on owning it until regular repairs cost more than a new car payment, and don't buy more than you need, or anticipate you believe you will need within the next 10 years. Applies for everything from 2 seater to 7 seater 4x4 with towing capability. Vehicles are the fastest depreciating asset you will ever own.

2. Better to buy than rent, but same as vehicle, not more than you need in next 10 years. Housing economy could flip, life could change, etc.

3. Depending on what your works retirement and your lifestyle is, depends on rather you should invest in your work retirement plan, or your own. Me personally, can't collect my work pension until 59 1/2. I live life pretty hard on my body, and also make enough vs what I spend that I don't put much in work, but diversify it in investments I can pull at any time with little to no penalty. Might not make as much as I would investing in my works plan, but if life throws me a curveball or I die before 59 and a half, it's there and if I wanted to pull some out to have fun, I could. Preferably invest in both if work retirement yields you more money, but if you can only pick one and your work retirement has an age requirement, I'd personally avoid it. You get cancer, your wife does, you have a kid with medical issues, both your cars blow the motor at the same time, life happens. Plan for it.

4. Shop store brands and discount stores. It's literally the same shit in a different package. My dad works in a germ X factory. Guess what? The same fucking substance gets put into the Germ X bottle as the Target and dollar general brand bottles.

5. Don't lend people money unless you know you'll get paid back within a reasonable amount of time in correlation with your relationship to them.

5. Don't be afraid to have fun, but don't be irrationally irresponsible.

cumulative interest
starting saving as early as possible, even if it's just a bit

dunno if i wanna trust someones advice on finances if they can't even count

Ok, here's one: If you have an appetite for some risk, buying a 2,3 or 4 plex is probably one of the best things you can do to reduce/eliminate your housing costs. Living in one unit and renting the others is a great way to build equity and get extra cashflow as well.

Google "househacking" for more info.

>Even though i paid it off the following month i still paid the bank to use my own money
You probably paid about 3.5% in card processing fees. You should be getting back at leads 1.5% on average in various rewards for your card; if not, switch cards. The merchant is presumably raising their prices to compensate for the processing fee, but the overwhelming majority of merchants do not charge different prices for credit card buyers and cash buyers. Given that, most of the time, if you're a cash buyer, you're *still* paying the processing fee and subsidizing the credit users. Unless a merchant charges a different cash price (some do, but again, most don't) you're far better off paying with credit, which amounts to a 0% 1-month loan (which at current rates is worth about 8bps) plus whatever rewards you're getting from the card.

this depends a lot on area and demo for renters. great idea if you live near a base or something but in the area i live meth heads and nigs are the primary reason rental units don't last

7. Try not to have credit cards or loans other than to initially build your credit. Once your credit is built enough that you can finance something at the best interest rate, you really shouldn't pay for anything other than a home or vehicle in borrowed money, preferably only a home. And when you do, take out the longest loan you can but pay it off as fast as possible. Life can happen and having a 30 year mortgage vs 15 will be nicer when it does.

8. If she'd leave you if you lost your job and couldn't find work, she's a money pit no matter how great she sucks or fucks.

About all I can think of for now and tired of typing tbh

Lol was writing it on mobile so I couldn't see the previous number. I'm tired because I get up early and work my ass off to make good money!

a likely story you 5 obsessed piece of shit

At least in the US, all major tax-deferred retirement plans have age limits on withdrawals, whether they be a work-sponsored 401k or 403b, or an IRA. Not sure what you're talking about in terms of an individual plan that lets you withdraw whenever you want. If you just mean a taxable investment account, then sure, I guess, but you should generally be taking advantage of tax-advantaged retirement plans.

don't all plans allow you to withdraw early with a penalty?

The rent/buy debate depends heavily on where you live now. Equities appreciate so much faster than real estate in most markets, and there's a huge cost to home ownership (time and money) that most people just don't factor.

If you can keep rental costs like and split with good roommates, it can be financially better than buying. Where I live it's a pretty even split whether it makes sense to buy or rent, so it becomes a values decision, not a financial one.

Generally yes, and early withdraws (or loans from the plan) are often available in case of "hardship". But the penalties for early withdrawal are severe and also immediately negate all the benefits of the tax advantage. If you plan to take the money out before the allowed time, you should really not be using these plans.

Let me know how that works out when you have 500k you can't touch until you're 60, and get laid off at 40 with only 20k in the bank when you just had your 3rd kid and your car blows a tire on the way home and your wife gets breast cancer. Sorry but unless you can afford it, as I also said to put money in both if you can, better keeping money on deck in low growth investments you can pull at anytime.

>If you plan to take the money out before the allowed time, you should really not be using these plans.
most emergencies aren't planned though

Except in 30 years when it is paid off a reasonable home won't cost you as much monthly in upkeep as apartment rent will be at that point.

Dont spend anything on anything that is not absolutely necessary. Never eat out. Never go out. Pirate what you can. Leech and make every dime last. Yee shall never have the worries of tender.

I mean that's the same as saying I'd rather pay $300 a month+inflation cost for a standard vehicle my whole life but when it breaks I don't have to fix it, than I'd rather pay 300 a month for 5 years for something that fits my personality, then only have something I might spend a years worth of payments on on a really bad year to fix it, but most years will not even come close, for the next 5-10, maybe 15 years.

Aye, but if you took the difference between what you would have needed to pay to own, and what you actually paid to rent, and invested it, it would afford that apartment forever more and you wouldn't need to worry about paying to get the roof replaced or the foundation repaired when you're 80 and can't do it anymore.

I can either pay $1500/mo mortgage + property tax + bills + insurance + maintenance, of 700/mo rent all in, and invest $800/mo. Over 30 years that investment will eventually be able to easily cover my cost of living through retirement, whereas I still need to find the money elsewhere to cover all those non mortgage costs as an owner.

Depends on where you live, rental rates, mortgage rates, etc, but it's not always better to buy

Or take that money you're gonna invest and just set it aside so when shit goes wrong you can fix it and you don't have to share 2 or 3 walls and parking with other people in an endless agreement with no benefit of selling for you or your kids..

Kids? In a financial advice thread? Don't have kids.

Oh, shit, yes, was just going to say that too.

Marriage and kids are totally off the table for sure.

A home in itself is an investment. Most homes appreciate 5-10% percent a year and only are about 1-2% a year of their value in upkeep.

I live in Australia and with all the taxes and shit on cigarettes it's probably worse than drugs at this point.

can you legally grow your own?

I knew that the rent-vs-buy argument would come up eventually. My opinion, both are risks and which one is better depends on the exact numbers.

why would i need to know about finances if daddy yang is gonna take care of us when he becomes king?

Yeah. Very situational.

2% inflation. 4.5% average home growth in the last 20 years here. 1 to 2% upkeep.

You're not getting ahead very well by ownership here.

He will never win good joke

I'm an investment banker and can offer general financial advice if anyone has any questions.

Trips prove it

Thread did much better than expected thanks people

pls ; ____ ; i don't want to work user. first bernie fought for the tendies but the evil capitalists turned him away now they come for daddy yang... y can't u just let me have my tendies user?

I don't want to work either but his winning is too unrealistic more than likely we'll end up with Joe Walsh even though he left the country with his mistress but let's not get into the halfwits in the 2 parties this isn't Sup Forums

Never count on the government for the bux. The best way to go NEET is to pursue a "DIY" mentality

mrmoneymustache.com/2018/11/29/how-to-retire-forever-on-a-fixed-chunk-of-money/

> Plan for retirement using a fixed 6% over inflation (counting divs) equity return
> No stochastic returns at all
> Completely ignore the betterment "bad outcome" analysis and focus on the median path, and claim it is "guaranteed"
Oof

good thing less and less people fall for these schemes though

Also someone who's 35 apparently somehow has 500k of tax-deferred savings, despite contribution limits that make that, while probably not physically impossible, tremendously unlikely.

Well, at least it gives people something to shoot for.

But I've always felt that equities are shit at generating income. Rental properties are almost the only choice in this regard.