319,171 posts

Get rich slow with the miracle of compound interest.

809 upvotes
by null on /r/TheRedPill
21 October 2017 01:44 PM UTC
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TL;DR Invest and get rich. Imagine having a balance on your credit card that pays you interest.

So the redpill isn't just about banging hotties and lifting. It's about making your life awesome and as a byproduct those women will want to be in it. Flashing money to attract a woman is definently a losing blue pill strategy but having a big pile in investments allows you to have freedom to accomplish more of your goals or survive tough times in the future.

So what is compound interest and why should you care? It's the thing that turns 10k into 6.5 million in 200 years. Google Benjamin Franklin compound interest experiment. Ok we don't have 200 years but what we do have is our whole lives to invest and that's a LOT of time. I'm 30 and in just about 5 years I've acumulated 100k and of that about 25k is interest and dividends. Even if I dont contribute another dime, in 6 or 7 years it will double, assuming we don't have a crash. But if we do, you just keep on investing because it will come back. Think of it as stocks went on sale. As you get older your earnings should go up and if you continue to grow your saving/investing muscle you will have massive amounts of wealth. Download a compound interest calculator and play with your numbers you'll be amazed.

So you're probably wondering where do I invest, sounds complicated. It's not at all. I would advise a Roth ira to start. 5500 is the max per year. It's not tax deductible but you have the flexibility to withdraw all of your contributions at any time without penalty if you need to use some of your built up reserves. You also have the option of using up to 10k in earnings for a downpayment on your first house when you get to that step penalty free. Obviously if you have a 401k or roth 401k that matches at work use that too. Not as liquid but adds more options if you want to take the penalty and pay the taxes. Once you max out the roth and 401k you might be able to do an HSA, next just in a regular individual account you would pay long term capital gains tax on any earnings there though.

Ok so if I get a Roth what do I invest in? Well that's simple the entire stock market. Index funds make it simple and they are extremely cheap fee wise(expense ratio). VTI, SPY, etc. You might think but I want to make more than the market why not an actively traded fund? Their fees and inconsistent returns loses in the long run. Buffet proved it. https://www.cnbc.com/2017/09/18/warren-buffett-won-2-million-from-a-bet-that-he-made-ten-years-ago.html

It's not hard but it's not easy. You have to purposefully live below your means and not buy all the fancy new toys you think you want. Now looking at this pile of cash I can't even remember what all those little self sacrifices were. I'm just thinking of how I can save/earn more so it grows to be a million by the time I'm in my mid 40s. You can do it too, start young your future self will thank you. My brother told me about the roth when I was in highschool and it took me 10 years to start. I wish I would have started sooner instead of buying that motorcycle or the 4 spring break trips I didn't really need to go on. Let me ask you, when is the best time to plant a tree? 10 years ago but the 2nd best time is today. Get started open that roth and watch your money work for you.

Anyway, not your traditional redpill lesson but hope it helps inspire someone.

Edit: 19 year old invests 30k put $100 in per month auto draft, forgot about it now 42 and its worth 1.3 million. http://www.youtube.com/watch?v=yR1uLJ2qrqs&t=11m30s



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Post Information
Title Get rich slow with the miracle of compound interest.
Author null
Upvotes 809
Date 21 October 2017 01:44 PM UTC (2 years ago)
Subreddit TheRedPill
Link https://theredarchive.com/post/46671
Original Link https://old.reddit.com/r/TheRedPill/comments/77tfib/get_rich_slow_with_the_miracle_of_compound/
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Comments

243 upvotesredpillbanana2 years ago

The hours you spend studying and managing your personal finance will be some of your most highly-paid hours. In the end, it could come out to thousands of dollars or even tens of thousands of dollars per hour. Compare this to the return on your time for watching professional sports or Game of Thrones.

A great book on personal investing is https://www.goodreads.com/book/show/79351.The_Four_Pillars_of_Investing

The greater lesson here is to think about where you are spending your time and what impact it will have on your life.

49 upvotesWhorehouseVet2 years ago

I'd like to add a few more suggestions:

A Random Walk Down Wall Street by Burton G Malkiel

The Little Book of Common Sense Investing by John Bogle

Winning The Loser's Game

The Behavior Gap (You're your own worst enemy, learn to recognize your emotions)

Your Money Or Your Life (More on how to change your mindset towards money than investing.)

The Millionaire Next Door (More on how rich people live, hint:they don't flaunt it.)

I would recommend any new investors to read the first 2 books and go from there.

20 upvotesredpillbanana2 years ago

All are excellent books. The Millionaire Next Door has one of my favorite phrases: "Big hat, no cattle."

14 upvotes • [deleted] • 2 years ago

I liked how it revealed wealthy business owners kids go off to college but rarely go on to create wealth trying to keep up with the jonses. Eventually inherit their parents wealth and squander it.

19 upvotesredpillbanana2 years ago

IIRC they mentioned that parents would rather their kids go up in class and prestige than in wealth. The legal field is more prestigious than dry cleaning yet many owners of dry cleaning businesses are multimillionaires. I've a friend who is a perfect example of this. His parents became so rich off of dry cleaning that they bought a whole shopping mall. Last I heard, my friend (early 30s) was still living at home and working on his Ph.D.

4 upvotes • [deleted] • 2 years ago

Ph.D. for what, though? If it's particle physics, that's impressive. I can tell you as a chem major I didn't have time to work while I was in college. Some people had jobs, but they were barely part time.

50 is my cutoff for living with parents. I don't anymore for personal reasons. But I'd say if you get to 50 and still live with your parents, you should probably re evaluate.

3 upvotesnoizef2 years ago

"shirtsleeves to shirtsleeves in three generations." i think it mentioned that a few different cultures have this same maxim: the first generation makes a fortune, the second one builds on it, and the third burns it down by trying to look rich.

5 upvotesROLLTIDE4EVER2 years ago

"How an economy grows and why it crashes." by Peter Schiff

5 upvotesredpillbanana2 years ago

Peter Schiff is always entertaining and a great resource for economics and finance. I don't agree with him on everything but he always does seem to have a good argument to back his position.

1 upvotesBoobToArmRatio2 years ago

Idk how I feel about Peter Schiff. I liked watching that video of him schooling the Occupy Wall St 99%ers on basic free market principles.

However, he also posts a ton of videos bashing crypto even though he doesn't understand it, in order to make more money selling precious metals through his own company.

3 upvotesy_nnis2 years ago

Thanks for suggesting a book, motivating others to do the same. Have been looking for a few resources on the subject this week and this seems godsent. Cheers man.

5 upvotesTroby012 years ago

I have that book from my now deceased father is it still timely?

6 upvotesredpillbanana2 years ago

I'd go as far as to call it timeless. Some of the examples in the book are from centuries ago.

2 upvotesTroby012 years ago

I shall give it a read, he tried over ten years ago.

1 upvotesAirskycloudface2 years ago

It takes a decade of applying these principles every single day to start to see results sprout.

My family is already 30 years into it and we were fucking poor as shit before we got our act together.

1 upvotesbluemoviebaz2 years ago

If you have 50000 just sitting there what is the best way to use it???

1 upvotes • [deleted] • 2 years ago

Learn how to invest it that suits your situation. Ready to buy a house? Use it as down payment and that's an investment. Want to start a business that will actually make money? That's an investment. Need to go to college to get a degree, that's an investment. Etc etc... Don't need it anytime soon and want to leave it alone an index fund is an investment.

1 upvotesPetefromAccounting2 years ago

Started investing at age 20. 7 years later my net worth is 6 figures, more than many other people my age. All that with just a college degree and a boring accounting job.

The only debt I have is my mortgage. I’m gonna take 25% of my wealth to open up my own firm within 3 years.

6 upvotesHeatCreator2 years ago

Nice! Man as an 18 year old in his first year of college any advice?

1 upvotesPetefromAccounting2 years ago

Network. Your net worth is as big as your network.

I went to career fairs, attended employer presentations, made friends with people in my major, etc. it’s all been instrumental in my career. Graduated with job offers in my back pocket and put firms in a bidding war for me.

It’s one of the main reasons I’m in a good position to open my own firm in 3-5 years.

1 upvotesTrooper_18682 years ago

For a second I read that as my daily driver is a ten year old.

20 upvotesBlazedazex552 years ago

Not OP but the best advice I would give is two fold.

(1) Do not fall into the notion that college is where you're supposed to live care free and find yourself. You should view college as an investment (especially since you are likely paying some out of pocket $$ to be there); therefore, you should expect a return.

(2) Obtain a degree that is in demand and pays well. It's hard to go wrong with STEM degrees but there are others that can be worthwhile as well. If you plan to study dance because you "like," don't be surprised that no one wants to pay you more than someone straight out of high school even with your "degree."

2 upvotes • [deleted] • 2 years ago

A lot of people don't do science degrees because they suck at math. I busted my ass, and Calc 2 at 8am was pretty brutal. Still wasn't enough for my final courses, taking quantum and inorganic in the spring, last two classes for my degree.

1 upvotesHeatCreator2 years ago

Thanks, I’m an Information Tech-major who is in the ATL area, is there much demand for it?

3 upvotesBlazedazex552 years ago

My understanding is that, iin general, it is a profession that is high in demand, but you should do your own research, particularly for the geographic market you want to work in.

Best of luck to ya.

2 upvotesBoobToArmRatio2 years ago

You picked a good enough major, so figure out what you want to do with your IT degree ASAP, and make that your primary goal in college. With an IT degree you could be making $30K a year fixing computers after you graduate, or you could start at $75K as a software engineer (even without moving to the bay area) so there's huge variability. You need to figure out which path you want to take so you can learn about the steps to take and follow them. Your starting salary will be one of the biggest things that dictates how fast you can grow your salary as a whole.

As a freshman, RP reader, and someone interested in your future finances, you are in a great position for life. Just don't do anything stupid to fuck it up lol. You should definitely have fun in college, just not at the expense of your future.

1 upvoteskenob2 years ago

Or, if you can, find a good job that doesn’t require college, or find a job that will actually pay for your college. Honestly, I think of college as a shit investment, depending on how much you are spending on it. My brother is $150,000 in debt for the field he went in. He is going to be paying that off for 20 years before he breaks even. I, on the other hand, dropped out, had a 6 figure job at 26 (currently 27), and have only my car debt to worry about. I’m almost maxing out my 401k, stuffing $500/paycheck away in savings, have investments, and still can buy whatever I want.

IF you can do it without college, I HIGHLY recommend it. Before I get crucified, it might not be for everyone. Personally, I think college is a waste of money due to the fact that you are getting screwed with loans, taking shit classes for two years, most of which don’t even pertain to your actual job, and then your degree most likely won’t be worth shit and you’ll end up working a shit job with all this debt over your head. I know sooo many people that this happened to it’s not even funny. Not people with stupid gender studies degrees either, I’m talking people with business degrees, etc.

2 upvotesBlazedazex552 years ago

I agree that there are many non college options that are not only viable, but lucrative. I personally considered being a welder before going to school because many people in my family do it and make bank. However, I wanted to work more in finance and college (with 1/2 payed for from scholarships) was the best option for me. I then worked 30-40 hours per week to cover most of the other half of college costs.

Many of the people I know that went to college would have been better off without it. They went for 4-6 years, racked up debt, couldn't get a job with their degree, and now work a job that doesn't require a degree at all which means their entire time in college was a waste of time and money.

2 upvoteskenob2 years ago

This exactly. Have a solid plan if you do end up doing college. Don’t go and try to “figure out what I want to do.” I say don’t step foot in the door until you know. I’ve seen this one backfire way too many times. People start going into double majors/minors, etc., because of this. $$$

Trades make you bank with little time and money investment. I highly recommend them, although I’m not in one.

1 upvotesTheloneykid2 years ago

If you dont mind me asking, what do you do?

1 upvoteskenob2 years ago

I work in IT. I was self taught and had a little bit of training. I currently hold my RHCE certification, pushing toward an RHCA in the end.

4 upvotesWhorehouseVet2 years ago

Get a degree that pays well and isn't horrible, such as STEM. Stay away from useless degrees like Anthropology or Philosophy.

Money will be tight, learn to budget, and use that skill throughout your life. Live like a student for the first 3-5 years of your career so you don't get trapped by lifestyle inflation. Meet lots of people and keep a network, you'd never know who will lead you to a job.

1 upvotesExtremely_Photogenic2 years ago

Don't get shackled with debt

7 upvotes • [deleted] • 2 years ago

17 year old senior in high school here. I’m going to a 2 year community college next year to save money and once I get my associates I’ll transfer. I’m also planning to work during my years at community college. Do you have any advice as to how I should save up my money?

49 upvotesLabRat3142 years ago

The financial independence sub changed my life. On track to retire at age 40

30 upvotesBoobToArmRatio2 years ago

Glad there are other FIRE readers here. It's like swallowing the financial red pill.

1 upvotesl000000002 years ago

It's weird to watch when a marriage thread comes up. Those (mostly) guys are so meticulous with optimizing every bit of return and mitigating possible risk yet when it comes to marriage which dwarfs almost everything in its financial risk they just have blind certainty they're going to marry a unicorn. Gotta take your pills together.

17 upvotesBoobToArmRatio2 years ago

Yeah, it's pretty bad. I try not to comment on those threads because anything that suggests that people should choose their partner carefully gets downvoted. Apparently making decisions that increase your net worth are extremely important, except when you need to sign a legally binding document putting at least half your assets on the line in the name of love.

4 upvotesArrys2 years ago

Which sub is that? Got a link for the curious?

4 upvotesBoobToArmRatio2 years ago

I don't know if we can link to other subs on here, but you can search for it easily. FIRE = financial independence / retire early. The sub leans a little too much to the frugal side imo though.

There's also FatFIRE, which is a similar but smaller sub that focuses more on the income side than savings. However, most of the readers there already make or will make $300K+ salary in the near future, so reading that sub as a regular Joe is kind of pointless and a bit depressing.

6 upvotesLabRat3142 years ago

I thought red pill was about self improvement. I have a grade 11 education and will make around 160k this year. If I can. You can. Excuses are only for losers.

8 upvotesBoobToArmRatio2 years ago

$160K isn't impressive unless you're still in your 20s. I make over $160K and $300K isn't entirely out of reach for me, but it's still a big jump since most of my income is salaried.

Besides, even if you reach $300K there are plenty of people on that sub with $3MM+ investible assets in their late 20s to compare to. It's already too late for me there. While I strive to improve myself wherever I can, I certainly can't go back in time.

There's a difference between excuses and realism. I'd rather focus on what I can control and stick with realistic goals.

2 upvotesArrys2 years ago

Haha yeah I can see how that’s depressing if you’re not in the $100k club.

I’ll take a look though, I’m always looking for more ways to save.

1 upvotesPlanner_Hammish2 years ago

FIRE to me is Finance, Insurance, Real Estate.

3 upvotessimkessy2 years ago

What you do or change in your life to be able to retire that early?

5 upvotesLabRat3142 years ago

Read the financial independence sub and learn. But I make a good income. Save 60% or more of all income. Invest in diversified index funds. Have rental property. And just keep on track

3 upvotessimkessy2 years ago

Mind talking more about your rental properties, curious. Would love to know when you got your first, what kind of property, how much you needed to put in, how much work to maintain it, has it been worth it so far, how long have you had them, how many. Anything you wouldn't mind sharing on the topic.

3 upvotesLabRat3142 years ago

At the moment. I only have 1 property. You could call it my primary residence. But I work out of town and travel so often that it would be silly of me not to rent it out. My tennant gets himself a whole house for cheap rent. He knows I come home for a few days a month. And I get a permanent house sitter that pays me. As for the financials. I put in 5% down. I've owned it for 2 years. Had it rented every single month so far. I've had to do a few things to it. Such as replace the washer and dryer. But birthing too extreme. The biggest thing is having a good responsible tennant who isn't going to wreck your shit or be short term.

2 upvotessimkessy2 years ago

Oh okay, so you bought a house and rent that out. If you incorporate you could probably claim a bunch of expenses, not sure if you're doing that. That's cool though. I've been thinking about getting a small complex, and renting that out to a few families. But I have to look into it more.

2 upvotes • [deleted] • 2 years ago

I retired at 36, got disabled in Iraq, so I don't work now. Finishing college, just because I only have two classes left.

1 upvotesthe_Elders2 years ago

Imagine you save $1000 a month for 40 years. At 5% returns plus or minus 2% you should expect about $1.5 million. But imagine you delay your savings for 5 years and train your mind to find a job that allows you to save $2,000 a month for 35 years. At 5% returns plus or minus 2% you should expect about $2.2 million.

If you are an 18 year old and want to take life seriously then right now is the time to be training your mind and body. Get an advanced technical degree, build relationships up, build your body up. By age 25 you can be the guy aiming for $2.2 million or more. There isn't a thing you can't perfect in 5 years of work but few are willing to sacrifice those years.

Compound interest comparison

13 upvotestelegetoutmyway2 years ago

Just a little anectdote to add. I'm in my early 20's have an engineering degree, no student loans, only debt is for the house I just bought with a 3.6% interest rate. First job out of college making 70k+. Save 16% (not including employer contributions) to roth 401k. Can confirm life is awesome and pretty set from here on out. To any high schoolers, definitely crack down on school and think about scholarships, then work your ass off in college. A couple of years of hard work and planning finances, and then its easy sailing.

4 upvotes • [deleted] • 2 years ago

Which engineering? I’m 21, associates/tech degree, and work as a Chemical Operator at a Polymer Plant. I work under a lot of mechanical engineers. I make roughly 50-55k a year with minimal overtime, but shift work sort of blows. I was thinking about going back for Mechanical.

2 upvotestelegetoutmyway2 years ago

Systems and Industrial Engineering (systems is usually not offered as an undergraduate to my understanding, but is so versatile it's ridiculous). Industrial is a bit more niche but I enjoyed the statistics so much I ended up focusing one of my minors in it actually. Honestly any engineering or STEM degree can get you in the door of whatever you think you may be interested in later (but I would go for it because eventually you will hit a wall without it).

5 upvotesBoobToArmRatio2 years ago

This post isn't bad, though I don't know how meaningful the math is since everyone's situation is different. The financial knowledge needed to know what the best choice to make in your own situation is invaluable though.

There is definitely a point where someone's salaried income can be too low to invest meaningfully. However, I would say in the long run improving your income and number of income streams and investing excess cash at the same time is the best way to get "rich".

18 upvotesTroby012 years ago

Nice charts they do not mean anything without the interest rate.

27 upvotes • [deleted] • 2 years ago

Some 40 years ago a gallon of gas was 5 cents. So failing to adjust for inflation, these numbers are meaningless. Sure you'll have literally "1.5 million dollars", but that will be just enough for a single person to afford a small trailer lot rent and cat food.

The problem is that inflation is taking the money from the people who save it. The only way to fix this is to put your money into things that the government can't inflate away back to thin air with a stroke of their Machiavellian pen. The only way I've figured out how to do this is to purchase real estate, purchase storage buildings on that real estate and store heavy industrial tools, high quality industrial construction vehicles/equipment and then invest into systems that keep those tools busy, like little employees.

Take the prices of sheetrock, metal/tile roofing, high quality plywood, these things stored properly lose their value very slowly, and if you keep your inventory moving while riding fluctuations up and down, you'll have buildings full of equipment you'll have spent hundreds of thousands of dollars on, which at the end of 40 years will be worth several million dollars.

You can't beat the government, you can only play their game by forming companies around real assets and providing a good or service. The one thing government knows not to fuck with is the men who under gird the economy. That's the house of cards their precarious throne and scepter rests upon. But none of this is guaranteed, because some of you are going to be motivated enough to go out and do as I've said, and find the competition too fierce because too many of you readers rushed into something you weren't prepared to handle.

The problem is it's like a rubber raft full of people. When everyone runs to the lucrative high-point on the raft, immediately that part is the one that sinks. While on the rubber raft, you need to run opposite way to where everyone else is going to enjoy the rising tide to lift your boats. By all means save your money, but you have to figure out how to plug the holes in the bottom of the bucket you store it in. When you solve the "hole-in-the-bucket" problem, you suddenly discover that everybody around you wants to give you their money. The game isn't about not spending the money, it's about treating each one of your dollars like a little employee and making sure they have the tools they need to depart your account every day and return a month later with 2 dollars. If you can figure that out, then saving your money is foolish advice, the correct advice is to spend it on things which provide likely return on investment. The key is understanding that money is how human labor is measured, so if you have cash in hand, you have labor in hand, If you can instruct the laborers wisely to go out and fetch more money than it cost to employ them, you can receive money for nothing more than relaying instructions. Knowledge + Employees + Tools + Opportunity + Preparation + Work + Risk + Refinement = a blast furnace that consumes one dollar, and spits out 2 dollars each iteration. Being a squirrel and locking all your accumulated Employees into a dark room makes them unhappy, and most of them escape when you're not looking.

9 upvotesNakedAndBehindYou2 years ago

The only way to fix this is to put your money into things that the government can't inflate away back to thin air with a stroke of their Machiavellian pen.

Invest in stock market index funds. Not everyone can start their own business but almost everyone can invest in the stock market.

1 upvotesFRedington2 years ago

Some 40 years ago a gallon of gas was 5 cents.

40 years ago was 1977.
In 1977 I believe a gallon of gasoline in central California was about $1.60.

My dad says that gasoline in the south east US was about $0.21/gallon in the early 1960s.

0 upvotesredpillbanana2 years ago

These are gas prices from the movie Die Hard in 1988: https://imgur.com/gallery/6MAcb

Note that the oil embargo started in 1973 so prices spiked afterwards.

2 upvotesFriskyPiranha2 years ago

That was a good read, thank you. Might I ask what inspired you to write it? Are you or was your father a business owner? I think a lot of young men intuit what you said, and then they arrive at the brick wall of "starting a business is a profound graduation from one's own affairs" and they settle for less, which I don't think there's anything wrong with. Leaders need followers and vice versa. The healthy compromise is to commit to your work while never forgetting that you can quit anytime and do it better, if you find out how, no?

1 upvotesShaman66242 years ago

True, that's called real and nominal interest.

1 upvotesPlanner_Hammish2 years ago

Take the prices of sheetrock, metal/tile roofing, high quality plywood, these things stored properly lose their value very slowly, and if you keep your inventory moving while riding fluctuations up and down, you'll have buildings full of equipment you'll have spent hundreds of thousands of dollars on, which at the end of 40 years will be worth several million dollars.

lol, this sounds like home depot. What you're saying isn't wrong, but I'd rather just buy NYSE:HD (and a bunch of other companies) and let the experts at plywood and sheetrock storage figure out how to make money, and just give me the profit.

1 upvotesthe_Elders2 years ago

3%, 5%, and 7% respectively.

-2 upvotesTroby012 years ago

I would kill for 5% right now.

1 upvotesthelastestofus2 years ago

Not gonna lie, if you aren't earning > 5% on your money right now you are fucking up. I believe my Roth IRA is hovering somewhere around 12% average over the last 4 years.

Unless you are literally just leaving all your money in a savings account chances are you are making >5%

2 upvotesdestraht2 years ago

Real inflation is a lot higher than what they say it is. Its just going into limited specific things like real estate and to a lesser extent consumable commodities. There has been a huge margin compression for years now and this means that the further inflation will translate into dramatically higher prices in the grocery store. People are often falling victim to extrapolating their profits without considering inflation or extrapolating the bubbles without considering the crashes and corrections. If you want to be doing actually well in real terms you need to be riding a bubble and then forces larger than can be imagined can pull the rug out at any moment. Its almost impossible to know the end of the bubble and some people pull out three years too early since they they see the movements that will end up destroying the bubble but then they underestimate the elites' dedication and the masses' apathy and ignorance.

The Federal Reserve can keep it going for a very long time (or not) and the reality is that they are serving the masses since they simply want to see that they have higher number points on a screen. Higher numbers are good and lower numbers are bad. Very few people actually get those profits since you need to actually sell to get that price and once people start selling it quickly becomes not worth that price. At the moment we have the entire Baby Boomer generation willing to be fooled while selling off the future so that they can ride out their final moments in glory. They don't want change, they want to retire and to live out their life surrounded by expensive foreign imports. They will get exactly that and the elites have figured out a way of sedating the masses while looting the country.

Price discovery is gone. The markets as based on unpayable debt, war, drug money laundering and insane stock market valuations of companies with ridiculous P/E and pathetically minimal dividends. The Federal Reserve issues the debt, people slurp it up and insert it back into the stock market since they are corralled there by a tax system that penalizes taking profits and encourages "investment". Its all a farce and few will ultimately receive what they think that they have now.

2 upvotesTroby012 years ago

I have a good junk of change in cash that I need to invest. Just do not know who to trust.

2 upvotesgeepy2 years ago

Seriously? Just buy index funds man.

2 upvotesTroby012 years ago

I read some things about that perhaps it was your post. Kinda of tough to invest a lot of money from info on Reddit. I will look into it. Thank you.

2 upvotesTroby012 years ago

I have been lazy after my parents passed. I need to get off my ass it has been 2 years now.

3 upvotes • [deleted] • 2 years ago

17 year old here. At 18 should I open a Roth IRA account and just save up? I’m going to community college next year to save money and I’m going to be working also.

3 upvotes • [deleted] • 2 years ago

where do you put 1K a month?

5 upvotesWhorehouseVet2 years ago

Lots of people don't believe you, let's use some backtest to prove your point.

Invest $2,000 monthly for 35 years, adjusted for inflation and rebalanced yearly, into an 80/20 split between S&P 500 and total US bond market, you get this:

Backtest on 35 years invested in 80/20 split

Basically you'd get $2.1 million dollars after 35 years, and that's thru the '87 crash, dot-com bubble, and FGC. Of course it's not guaranteed, but it's a pretty good bet than to just keep money in saving accounts.

13 upvotesTorabor642 years ago

Imagine you save $1000 a month for 40 years.

Having $1.000 less every month since being 20 to have a million when I'm too old to spend my million? Who honestly things this is a good plan? Let's not even mention that a constant 5% return isn't that realistic either.

1 upvotesthe_Elders2 years ago

when I'm too old to spend my million?

60 is not old and when your body is broken down and you are a greeter at Futuremart I'm gonna be laughing. Tom Brady, at age 40, looks like he is in his 20s. You should read up on his regimen.

Who honestly things this is a good plan?

Putting away $1,000 a month is nothing when you are pulling in 5k a month. And if you always use a condom that other $4,000 will take you far.

Let's not even mention that a constant 5% return isn't that realistic either.

You are right. The annual return over the last hundred years is over 5%.

Being an alpha in this world actually sucks. You have to put sweat and tears in and be on top of your game every single day. You have to ignore the fast food and 12 hour gaming marathons. You have to treat your body as your temple and build it 7 days a week. You have to engage with other people and make allies young. You have to sit down and study and work to get advanced technical degrees. There is no immediate reward. You can do some fast talking at the bar and stick it in the town slut or you can do the hard labor and build a foundation that will get you the 10/10 girl every week for years.

11 upvotesNitricTV2 years ago

60 is not old and when your body is broken down and you are a greeter at Futuremart I'm gonna be laughing. Tom Brady, at age 40, looks like he is in his 20s. You should read up on his regimen.

Just because he's not saving thousands and living like shit in his early years when he has most of his energy doesn't mean he's going to be a greeter.

Putting away $1,000 a month is nothing when you are pulling in 5k a month. And if you always use a condom that other $4,000 will take you far.

What age range are you doing here? Because I know for fact a 20 year old isn't making that on a regular basis.

You are right. The annual return over the last hundred years is over 5%.

Is it adjusted for inflation ?

Being an alpha in this world actually sucks. You have to put sweat and tears in and be on top of your game every single day. You have to ignore the fast food and 12 hour gaming marathons. You have to treat your body as your temple and build it 7 days a week.

This is so true I'm intermittent fasting right now and this really struck home.

60 is not old

Yes yes it is.

2 upvotesJLM192 years ago

Father Time always wins. No matter what. You can be really great to your body exercise be fit. I’m 24 by my old man will be 60 soon and his body has taken a beating. I’m in great shape, not built like a house by any means but physically fit. 60 is old.

1 upvotesfromCovington2 years ago

A dude i work with is 62 and i swear to god looks like he just turned 40. In better shape than anyone i know

-6 upvotesTorabor642 years ago

I've never laughed so hard. Nothing you said is even close to realistic. I don't know in which world you live that you can earn 5k a month (since you start working and without education, we are assuming you start saving with 20 years) and have an annual return of 5% for 4 decades. Good luck with that.

2 upvotesSTL-UPS-DRIVER2 years ago

I make almost $7500 a month and save $2000 a month. It can be done. My retirement account is up 13% for the year so far.

You’ve never laughed so hard?

1 upvotesBigBlue20182 years ago

Become an accredited investor and you can be guaranteed to make a hell of a lot more than 5%.

1 upvotes • [deleted] • 2 years ago

Right, 5% every year is optimistic. If you want more than 5 you need to be invested in the market. The market does not grow on a linear scale. Every loss you take destroys the compounding effect. We have a recession every 8 years on average. They say we’re in a bear market almost 40% of the time. There’s new research suggesting avoiding losses has a greater impact than capturing the greatest gains.

1 upvotes • [deleted] • 2 years ago

hey can you give the reason why you only mentioned an advanced technical degree? do STEM jobs pay more relatively?

5 upvotesBoobToArmRatio2 years ago

Take the S out of STEM. The only S that's valuable in terms of making money is physics, which falls under the school of engineering at a lot of good schools. For undergrad, I would do the following to get the best return:

1) Attend a target school and study something related to math or engineering - work in high finance.

2) Attend a top tech school and study engineering - work as a software engineer at a top tech firm.

3) Attend a good state school and pay as little tuition as possible. Study math or engineering - work an solid programming or corporate job.

1 upvotes • [deleted] • 2 years ago

I'm getting a Materials Chemistry degree, that seems pretty good. I have to take a lot of math and physics.

Not sure I'll ever work again, though. I think I'd rather hike and travel around the country, living as a vagabond, and going on adventures. Living in an apartment in society bores the shit out of me. I'm only here until I graduate, even now it sucks.

1 upvotesBoobToArmRatio2 years ago

Whatever works for you, man. I like the outdoors too, but I definitely could not do it 24/7.

When you're young you'll feel like you're invincible and have all the time in the world to do what you want, but at some point that will change.

I know my 40 year old self and my 50 year old self will be pretty glad I made the decisions I did in the 20s to set myself up for life. If I had an inheritance coming or someone else to support my lifestyle, then maybe I would relax more about my finances.

1 upvotes • [deleted] • 2 years ago

I wasn't able to realize my dream of doing this until 2016, when the VA approved my service connected disability. It won't make me rich, but I can swing it if I live frugally.

I'm 37 now. I do love being outdoors, and hiking 2500 mile trails and such. Not to mention, if I do this all the time, I'd be in much better shape than most Americans at 50.

Been sort of an odd duck my whole life. Never really fit into society, or felt like anyone was relatable.

I got a friend that started doing that in 2003, he does a long hike every year, did squatting and dumpster diving and worked cheap jobs off season. He's done about 30k miles of trail, been all over the US, lives in a van now. Seems happy as hell.

I'm doing a really in depth survival school next year too, 4 months in the woods, primitive skills, basically make everything yourself. Good stuff to know.

I won't depend on the VA to give me that money for life. Learning to minimize expenses helps, I've always been frugal.

I can't think of any other lifestyle in our modern world that would approximate true freedom as much. I've always had a thing for living completely without money, though I don't think it's really possible in our world today.

I'm a pretty hot guy, so I'll bring my beard trimmer along. Talk to women in towns when I want to get laid, after shaving and a shower, of course. Women seem to like that shit, it seems pretty masculine and romantic, though pussy is a side benefit, I'd never walk 2000 miles for anything but my own reasons.

1 upvotesWolvesontheloose2 years ago

I'm more for the:

I'm going crash and burn lifestyle where I won't stop developing myself until i have a life where I'm saving money because WTF do I need to do with all this money.

Either that or die trying. Poverty doesn't scare me, been living on the brink of homelessness for the last 2 years. Loving the edge and the hustle keeps my mind engaged 24/7.

This isn't a lifestyle for everybody tho.

1 upvotesthe_Elders2 years ago

Loving the edge and the hustle keeps my mind engaged 24/7.

So you wouldn't take a free million in the bank right now? Of course you would and so would everybody else. Do yourself a favor and start building your foundation young.

22 upvotesrpleo2 years ago

Exactly! We have enough Pussy getting courses on this subreddit.

We need this type of useful posts in our lifestyle. Keep posting!!

8 upvotesBoobToArmRatio2 years ago

What's that saying.. you can easily lose money chasing girls, but you will never lose girls chasing money!

I know a lot of guys on here love to talk about how little they spend getting girls in bed and getting girls to buy them drinks and dinner, but if you keep the RP mindset and are loaded, it only gets easier.

73 upvotesvengefully_yours2 years ago

Take it from experience. Do. Not. Get. married. EVER. That is the fastest way to go from having money to living in your car or under a bridge. It is impossible to save money when the state leaves you with less than you need to live, and takes more if you earn more. Imagine the time you lost you could have been earning for you, and saving for your future instead of paying her most of your gross for 20 years.

I'd have millions right now if I'd never gotten married.

41 upvotesMattyAnon2 years ago

I'd have millions right now if I'd never gotten married

Good lesson here. Marriage is very expensive. Divorce is extremely expensive. Being tied down to one place is a massive opportunity cost, limiting your career and your options.

The amazing thing is that it will cost you everything that you've earned so far, AND everything you'll earn in the future.

And the real tragedy: all this for no advantage. It's not like being married makes women suddenly nice, caring, generous, appreciative, sexual or faithful. It reduces all these things. It's a massive cost, and all you're getting out of it is a lower quality of life with less options.

Do Not Marry

15 upvotesWhorehouseVet2 years ago

Wedding reception is also retardedly expensive. Just came back from a $200,000 wedding, I shit you not.

Father of the bride was loaded, but still it's a shit tonnes of money for 1 day.

5 upvotesHardLessontoLearn2 years ago

Sounds like you married poorly. Imagine the time you married you were both earning what you made, both saving for your future. Imagine if you were still married with two incomes, saving using that compounding interest. You'd be a multi-millionaire right now if you'd married better.

0 upvotesPlanner_Hammish2 years ago

You'd be a multi-millionaire right now if you'd married better.

lol, I'd also be a multi-millionaire if I won the lottery.

wish in one hand, shit in the other; see which one fills up first.

5 upvotesApex_Steez2 years ago

No, you'd have millions right now if you had never gotten divorced.

14 upvotesWhorehouseVet2 years ago

And then there's this timely joke on the jokes sub.

"I’m seriously thinking about re-marrying my ex-wife…But I’m pretty sure she’ll figure out I’m just after my money."

6 upvotesPokeyTifu992 years ago

Agree completely. Married with two kids. Me and my wife make well over 6 figures together. Own two houses. Never had any issues. It's about who you marry. Both of our families are in the same boat. Marriage is dying in today's society because traditional marriages and conservatism is dead with Millennials. Stats prove there is only three things you need to be financial successful. Get married, don't have kids out of wedlock, graduate high school. I'll add a fourth one. Don't get divorced. Keeping frame and being a man is the backbone to a functional marriage. Also men don't marry women with goals, if she doesn't want to be a team member then you shouldn't pick her up on the team. Men today let women live off their successes and in the end it's never enough without having goals themselves.

1 upvotesDanzzo362 years ago

What if you have a kid? How is it any different than common-law?

-2 upvotesEndOfTheWorldGuy2 years ago

If your wife enables you to focus on your career by taking care of home life, you may end up earning just as much if not more. Plus the added bonus of not dying alone and childless.

8 upvotesBoobToArmRatio2 years ago

The problem then circles back to the entire premise of TRP. How do you find this unicorn? lol

1 upvotesLemmydollar2 years ago

You should probably start by not reading this toxic subreddit.

2 upvotesBoobToArmRatio2 years ago

Why are you here then.. to set the path straight for all of the misguided chumps here? No one is saying it's impossible to meet a girl, get married, and live a decent or normal married life. The odds of going through this experience in today's social climate are just really fucking bad and pulling the wool over your own eyes is not going to change that.

1 upvotesLemmydollar2 years ago

Your sad little subreddit was on the front page and I stumbled upon it.

14 upvotesTrumeau2 years ago

Vouching for this. I've been shunting money away into investments since I was 19. I'm 24 now with 110k in there.

Now that I'm back in school I was able to loan against my investments. They're still in the account making money but at the same time I can borrow against them for below prime interest rates at any time. I'm currently y cleared for 24k of no fee funds whenever I need them.

Do it early! You can always reevaluate your portfolio later.

4 upvotesmajorketone2 years ago

Im 19 now. What exactly did you invest in if you don't mind me asking?

4 upvotesTrumeau2 years ago

Basically your standard equities you see suggested. I prefer something managed so I don't ever need to look at it, personally. I aim for things with a historical track record >7% after management expense cuts.

1 upvotesC7LeadFarmer2 years ago

Where do you even start with the investing? I've been wanting to get into it for a while, but I suppose I haven't managed to sufficiently look into it. Would I start by asking my local banker, or is this something that I want to do myself (online?) somehow?

I wouldn't want to ask you to waste your time to carefully explain every detail and whatnot, but could you just give me a pointer to a way in the direction of starting all of this?

4 upvotesBoobToArmRatio2 years ago

Personally I don't trust anyone except myself to act in my own best financial interests. If you must have someone else do it, make sure the financial advisor you get is a fiduciary, or is at least paid a flat or hourly fee. If they work for commissions they will just tell you to buy whatever gets them the biggest payout in commissions.

Two good sources are the financial independence/retire early subreddit (read the sidebar) or the Bogleheads forum.

3 upvotes • [deleted] • 2 years ago

TDAmeritrade.com is what I use, they have 100 commission free etfs. Others in the top of the thread have recommended some books to help you get started.

1 upvotesHillarysdilddo_20162 years ago

Tdameritrade is a fucking rip off. Sure they have 100 commission free etfs. But it's $8 to invest and $8 to divest. That's $16 to execute a single trade. For a beginner that's a massive leech on capital.

Robinhood app is so much better. It's 100% free for each and every trade. You only have to pay some SEC fees which amounts to pennies when you divest.

2 upvotes • [deleted] • 2 years ago

robinhood doesn't have roth and you should be buying indexes not actively trading unless you know what your doing

1 upvotesHillarysdilddo_20162 years ago

Yeah I read too quickly. Just noticed you are focused on Roth.

Also if I'm not mistaken you can trade etfs on the general market, meaning you should be able to buy / sell etfs on robinhood, no? I thought I had some shares of SPY there, but that might have been on TD Ameritrade. :-/

1 upvotesInfiniteSpur2 years ago

How do you not know about Vanguard? They have the lowest fees in the industry and we're the original low cost investing brokerage. They are also owned by thier shareholders and don't try to make a profit.

0 upvotes • [deleted] • 2 years ago

I do know about them. You can buy their funds anywhere. many on the feefree 100 etf list.

1 upvotesInfiniteSpur2 years ago

So why use TDAmeritrade at all?

They just dropped access to Vanguard because Vanguard refused to give them kickbacks. https://www.forbes.com/sites/davidmarotta/2017/10/19/td-ameritrade-eliminated-low-cost-commission-free-exchange-traded-funds/

Just use Vanguard directly. They are actually aligned with your best interest.

1 upvotesHillarysdilddo_20162 years ago

I don't know about books/reading but look into the robinhood app for mobile. They offer 100% free trading.

Much better than the old school big bank trading platforms that get rich by stealing your money in commission fees.

-1 upvotesArrys2 years ago

There are many places that are dedicated to brokering trades. Charles Schwab, for example, is one you can use. There are plenty of others, and even new ones like Robinhood (which is a free app) that has no fee per transaction (that is, it doesn’t cost you to tell them to buy or sell a stock).

It’s something you can do online totally on your own.

I’m 22 with no background in investing, but I signed up for a Schwab account and have been investing my disposable income into the market for a good year now. I’ve read up a lot on companies I’ve heard of and have learned ones I’ve never heard of.

Generally I like to look at the value of their stock over the long run (5-10 years). If it’s generally gone up, even slowly, I bite. I like a proven track record. I’ve had a lot of success because the market is bullish right now.

The market is strong now, but it’s also cyclical. There will be highs and lows, and that’s totally okay.

If you pick safe, strong stocks you’ll do well to hold for the long run. Or take chances with some sexier, higher yield stocks.

2 upvotesBoobToArmRatio2 years ago

Great job. Starting young is the best way to go about it.

1 upvotes • [deleted] • 2 years ago

How did you first get started investing? Who led you down that path?

3 upvotesTrumeau2 years ago

I wanted to be financially independent, and short of winning the lottery, the only way to be truly free is to be rich, or have ownership of assets that allow you to not have to work.

I had a friend who worked for an investing company when I had the excess cash, her sales pitch is what got me started.

13 upvotesWISE_TURD2 years ago

Remember to NEVER SELL when the inevitable crash/pullback happens and keep 10% of your portfolio in cash so you can pounce on the low prices.

Market crashes typically redistribute wealth to those who already have it. Example from the last crash:

  • Average joe loses job during economic crash
  • Even IF joe held 10% of his overall portfolio as cash (unlikely, as he probably lives paycheck to paycheck), it's only $10k at best.
  • Joe has to either liquidate some of his retirement account to pay mortgage (incurring a 10% penalty in the process), or sell his house when both values are lowest. He realizes his losses, and is jobless.

  • rich bill's portfolio isn't as large as it was last year, but he doesn't have to sell because he held cash. In fact that 10% he held as cash is a great deal of money nominally, a little over $1 million.

  • rich bill goes out and looks for some well-located property to buy.

  • bill invests in multiple properties that total to $800k (one of which is joe's) and invests the rest in the s&p 500.

Moral of the story: have some cash on hand and multiple streams of income so your eggs aren't in one basket. If you work in an feast-or-famine industry like oil and gas, please don't buy a bunch of shit you don't need like a fuckhead.

3 upvotesBoobToArmRatio2 years ago

This is good advice. People who sell during downturns are the ones that get burned the worst.

2 upvotesDeterBenchPress2 years ago

People who sell downturns and but SPX puts are fucking rich as hell.

Or hold your shares and sell call options if you have enough.

3 upvotesBoobToArmRatio2 years ago

I meant the average Joe investor that sells near the bottom and doesn't buy back in.

1 upvotescherryCanSuckMyDick2 years ago

On the topic of oil and gas, is there any point in sticking with the field as it is right now?

2 upvotesWISE_TURD2 years ago

If you're expendable (as roughnecks are), save the fuuuck out of your money and maybe get some rental property. If/when a downturn occurs, go to school or start a business and use that supplemental income (in the form of rental income or dividends) to help keep you afloat.

If you mean pursuing petroleum engineering or something similar (chemical, mechanical), you'd be less likely to be laid off in the event of a downturn. At least the guys I know who are engineers at oil companies made it through alright, so this is somewhat anecdotal.

As I understand it, pivoting into another field is easier for harder engineering majors. A civil engineer is much less likely to work for an oil company compared to a chemical engineer getting a job at a civil engineering firm. Hope this helps.

1 upvotescherryCanSuckMyDick2 years ago

Im not an engineer actually, trained as a geologist, but I have some programming skill, so Im thinking strongly about focusing more on that area because the ROI for pursuing a geology career seems almost nonexistent right now

1 upvotesWISE_TURD2 years ago

Think of it this way: what can you later more easily go into after pursuing a career in other?

Example: If you start at an oil company (especially a reputable one like shell, halliburton, etc.), and you want to leave the industry entirely, do you think recruiters at a geology firm would be impressed by your resume?

If you start as a geologist, do you think an oil company would be impressed by your experience?

This is why a lot of people start at large investment banks knowing that they'll leave after 2-3 years of working their ass off. You can transition into so many things from a reputable company.

Get the best possible job, you can usually change to another that pays less more easily than vice versa.

1 upvotesInterstellarGlue2 years ago

Best return of investment is good health. Get your teeth fixed. Eat well. Do sports. Take care of your family and close friends. Educate yourself. Learn useful skills. No finance crash will take that from you while paper money goes poof in seconds.

A years worth of cash on hand and some long term investments are "nice to have" but won't be game changers. Most importantly lots and lots of paper money isn't worth your time, health, and happiness.

6 upvotesBoobToArmRatio2 years ago

Time is indeed the most important thing, followed by health (which is a function of time, really.) Life is all about finding a balance though, and having a pathway to wealth is something that a lot of people want, especially with a TRP mindset.

It's not about having the paper money, it's about having diversified assets and eventually becoming part of the ownership class rather than the worker class, which I think is very much part of the TRP mindset.

18 upvotesArchangel_19932 years ago

I generally agree with you but Interest rates are pretty low nowadays and that's the way the government wants it as they believe it encourages economic growth (Keynesian model). I will not go deep into this whole subject of economics, too hard to explain. I am more of a believer of Austrian and classical economics.

However, the returns from compound interest like a savings account are low you may have gained 25k in interest and dividend (which is impress in its own right) but I am going to ask you this question how much was lost due to inflation? 25k today is not the same as 25k 5 years ago.

If you understand that question and answer it right, then you understand the bullshit of the real estate lie that the value of property doubles every 7 years or something. (they didn't account for inflation)

You may have gained 3% on a savings account this year but inflation was 4% this year so your purchasing power decreased or the value money went down by 1%. (just an example)

You are very smart and having 100K in your bank account with no debt is pretty impressive and you are well off than most people. Congrats!

I just want you to think more and expand your horizons you can get more of a return from Stocks (if you become really good with stocks you can use option to magnify your returns by 10x), Bonds or real estate (you should be aiming for positive cash flow, don't fall for the negative gearing bullshit).

You have only reached the tip of the iceberg.

Girls and people generally don't care if you will be rich they only care if are rich now.

4 upvotesBoobToArmRatio2 years ago

Good comment.

1) Diversification is key. I would invest in as much hands-off stuff as possible, and then focus the excess in a few areas where you think you can beat the market (because you're passionate about it and actually have the capability of beating the market)

2) Girls do care if you will be rich, but not in the "right" way. A lot of girls that are digging for potential gold in college are going after med school guys and stuff (which is a terrible idea.) Might explain why doctors are always broke even with a high raw income.

On a side note, I find that girls who actually understand compounding and have a good grasp on their personal finances are probably even better than men at avoiding marriage or forcing their potential spouse to sign a prenup lol

4 upvotes • [deleted] • 2 years ago

Fed probably lies about the actual inflation**** rate so who knows. And if we get inflation out of control they'll tighten economic policy. I hear ya though

9 upvotestanqop2 years ago

We need more posts like this. It is so much more important than anything else. A healthy body with a healthy finance is the path to success in life.

37 upvotes2DamnAmerican2 years ago

The amount of uneducated hate on here is ridiculous. Great post OP

14 upvotesBlazedazex552 years ago

It's so obvious that most of the negative replies are from people who know almost nothing about finance. Probably Chad wannabes that live paycheck to paycheck.

12 upvotesWhorehouseVet2 years ago

There are some people who retardedly think being wealthy immediately equates to being betabux, so they want to be dirt poor. IDK, the male hamsters are strong.

Money gives opportunities, and opportunities allows you to grow.

2 upvotesRedPilledGodEmperor2 years ago

For the life of me, I can't understand someone who doesn't want to become rich because they don't want to be seen as betabux. I want money because it would allow me to live a dream lifestyle and remove a lot of stress. Just because you are rich, doesn't mean you have to flaunt it, but it does allow you to have your own place in a desirable location, which makes it desirable for logistics and getting women to your place (via tinder, night out, etc.)

Would they consider George Clooney, Leonardo DiCaprio or Derek Jeter betabux?

Probably not.

5 upvotesEverybodypoopsalot2 years ago

It's mostly just the dude equivalent of those girls who think they could never lose weight becuase they have little experience in or exposure to healthy eating.

2 upvotes • [deleted] • 2 years ago

I think it's more they don't want to put in the effort or self spending limits to build wealth so they hampster anyway they can to justify not improving their financial status. Personal finance is 10% knowledge and 90% behavior modification and they just aren't willing to make the necessary changes. And 5% of people might actually be retarded and can't imagine it actually works, too good to be true.

5 upvotesWhorehouseVet2 years ago

Those 5% who blow their paycheques every month is what's making my $TGT stock goes up. Thank you.

13 upvotesguysir2 years ago

Buy some Bitcoin too. Consider it a lottery ticket that has a decent chance of paying off in the next several years.

7 upvotesBoobToArmRatio2 years ago

I'm holding some cryptos too, but that's a whole other rabbit hole compared to traditional equities...

3 upvotes • [deleted] • 2 years ago

Sold my eth before it made it big, still made $400. Gains are gains!

11 upvotes • [deleted] • 2 years ago

Or get rich fast with the miracle of investing in Bitcoin and alts.

5 upvotesCRRZY_MAN2 years ago

Amen to that. The first best time to buy Bitcoin was in 2009. The second best time is now.

15 upvotessegagaga2 years ago

I am not in America, do you have any advice for compound interest investments in UK/EU?

13 upvotesnotevenatthestart2 years ago

You'll be looking for a stocks and shares ISA. There are any number of providers out there, but you can find a good comparison on the website Monevator, along with introductions to most topics of relevance to investing. That's probably the best place to start.

There's also a UK personal finance subreddit which has some useful (albeit basic) material collected on the sidebar.

4 upvotes • [deleted] • 2 years ago

Idk your tax free investment vehicles but you will still be able to invest in the US economy or world economy through a brokerage firm like TD Ameritrade or one similar.

2 upvotesWhorehouseVet2 years ago

Look up Sensible Investing, I believe they're UK based. They have one hr long video on index investing, highly recommended.

Also check to see if Vanguard has offered their MF/ETF's in UK/EU, they have the lowest fees.

2 upvotesRavelsBolero2 years ago

join us on the UKinvesting subreddit. some starter tips: read Tim Hale's Smarter Investing, and learn to read financial accounts. Accounts Demystified is a good book for that.

18 upvotescriveros2 years ago

And here I am about to put half my savings on bitcoin.

1 upvotesreturnofthemackX2 years ago

Wait for the dip, don't buy the top

2 upvotesguysir2 years ago

Protip: The dip may never bring it back down lower than it is now.

2 upvotessimkessy2 years ago

It's literally at it's all time high right now.

3 upvotesguysir2 years ago

Which means buying at any previous all-time high has led to a profit.

1 upvotessimkessy2 years ago

A smaller than one, it usually dips.

1 upvotesreturnofthemackX2 years ago

Stupid advice. Buying in bullruns is the most easy way to lose money.

4 upvotesguysir2 years ago

That's what they said about every other bull run, but look how that worked out.

11 upvotesGenghisKhanSpermShot2 years ago

Bitcoin has been amazing to me, just remember anything is possible. I think it has an amazing future but it's volatile, don't cash out if it takes a big dip and freak out, it does that. It's easier to gamble when you're younger but eventually it's good to diversify some, but ya I think Bitcoin has a long way to go.

0 upvotesWhorehouseVet2 years ago

Go for it, just have to remember that BTC intricately has no value besides what the next buy is willing to pay. Kinda like gold bars and tulip bulbs.

It's just my personal opinion, I wish you good luck.

3 upvotesbatavianguy2 years ago

"what the next buy is willing to pay" basically describes the entire world FIAT currencies (USD, Pounds, Euro, almost every currency on earth)

BTC is just more 'volatile' because the number of people convinced in agreement to use it is vastly smaller than the ones convinced in agreement to use USD, Euro, etc as valid currencies.

3 upvotesWhorehouseVet2 years ago

That's a good way to look at it, there's a lot of in-built optimism that crypto will eventually be as well-received as fiat currency.

I still don't understand BTC completely so I'm staying away for now. Kinda like me trying to explain to my friends why it's safe for me hold stocks of Wal-mart or Facebook, they just give me a funny look thinking I'm crazy.

3 upvotesdowild2 years ago

Right. Except that it's the most widespread way to transfer funds across the world without any centralized third parties. But yeah, basically tulips /s

3 upvotesBoobToArmRatio2 years ago

But why would you need to transfer funds without permission from the infallible omnibenevolent government.. are you some sort of criminal or black market dealer?

3 upvotes_fappycamper2 years ago

So doesn’t gold, diamonds, or usd.

5 upvotesno_face2 years ago

Bitcoin bro. Was 1000 at the beginning of the year. 'Nuff said.

5 upvotesInsendi2 years ago

The second paragraph opening needs more attention. I feel like someone people think TRP is just a get laid quick scheme but I’ve been following this for nearly 8 months now and while I have gotten laid, my life overall has gotten better.

4 upvotes • [deleted] • 2 years ago

This is a good post for youngsters but as you're only 30, 100,000 ain't shit and neither is a million anymore, really.

But keep on earning and it'll happen

4 upvotesDeterBenchPress2 years ago

Alternative tip: Buy OTM NFLX calls during the next earning report.

Reason: SJW will continue to abandon Hollywood, switch to Netflix.

Result: Get really fucking rich

4 upvotes • [deleted] • 2 years ago

Comon over to walstreet bets with that sort of talk. What expiry date?

2 upvotesDeterBenchPress2 years ago

One week after next earnings, so its like 3 months. Buy later, keep in mind tho

2 upvotesRedPilledGodEmperor2 years ago

HAHA. Funny you mention Wallstreetbets, since I frequent that sub. I have started doing call options on May 1st of this year and my options are 30% since then. $FB, $ABBV $CBOE and $V have been doing great for me. I need $COST and $JD to rebound.

I do longer term call options. My three $ABBV Jan 2019 $95 strike calls are up 113% since I bought them on September 18th

1 upvotes • [deleted] • 2 years ago

When do you close your position out? After you lose all your money back? Honestly I have no idea if you wait til just before expiration or get out early before earnings call or something you're worried about.

2 upvotesRedPilledGodEmperor2 years ago

I mean I haven't closed out any of the options positions yet. My feeling is that I would close out my position when I feel the stock has peaked or there are other opportunities out there. Time decay can eat up those precious gains.

My $FB Jan and Feb 2018 calls are up 87% and 92%. Depending on if it has a run up the next 1.5 weeks before November 1 (ER) will determine if I close out before then. I'm hoping it hits $180+. Only thing that worries me is that it sold off after last year's ER in early November 2016. At the same time, $FB is a beast and could shoot up after ER.

There is no rule that you have to hold till expiration. Some people buy LEAPS and close out the position after 3 months. Only thing holding me back from selling my $ABBV calls is that I think the stock can hit $120 next year, which would put them up over 400%.

With respect to earnings, it does depend on how long you have until expirations. For very long term calls, you have more time for the story to play out.

1 upvotes • [deleted] • 2 years ago

I would like to play with options in the future but seems too risky when I havnt maxed all my other stuff out yet. I don't even buy single stock anymore and watching news and all that doesn't appeal to me. I was thinking about selling covered calls someday.

6 upvotesSebassbacchanalia2 years ago

Can u tell us what cash u started w, how much you have added of your own capital and what the balance is? Want to see how much you’ve actually earned from the funds. I’ve been doing it for 3 years now and have put in about 30k of my own money. Over 3 years I have increased about 10% = 3k in interest. It’s not very exciting.

3 upvotes • [deleted] • 2 years ago

I started with just my roth in 2012 I could add it up but it was like 4k. My money that year is up 117.79% I reinvest my dividends. I invest in VTI. 15.48% annually.

3 upvotesfitzaudoen2 years ago

You might be looking at the math wrong, sp500 is up way more than that over the last 3 years. Places like E-Trade calculate the percent increase by taking asset value divided by price paid no matter when you bought it. So the stocks you bought yesterday (which have not appreciated) are weighting down the stocks you bought last year that have appreciated. So your gross return if you want to call it that is always going to be much less than the actual return you're getting from each individual stock purchase. You can work out in Excel what the gross return equivalent is of dollar cost averaging over time at a given rate of return.

1 upvotes • [deleted] • 2 years ago

Use your date you started and the fund and it'll tell you the % gained including dividends on a hypothetical 10k. Not perfect but something I found once.

https://www.dividendchannel.com/drip-returns-calculator/

1 upvotesMaroonPillAccount2 years ago

M.Eng student right now and evaluating some different offers in the six figure range in low cost of living areas.

At 22 years old, there's just something about the thought of paying off all my debt, living within my means, and being able to afford and pay off a house within a decade while maxing out employee matching, roth iras, and the like.

I'm hype as fuck.

5 upvotesWhorehouseVet2 years ago

It will be so easy too, since you're used to living like a poor af student. Live like a student for the first 3-5 years of your working career and save everything, I wish someone had told that when I graduated.

1 upvotesMaroonPillAccount2 years ago

The other thing I want to try at least is to moonlight as something/consult on the side. With classes alone I'm putting way more than 40 hours/week into what I'm doing. Two grad-level classes taking 25+ hours a week at minimum, writing my thesis, and a part-time job add up.

If I can keep the same form of discipline for just a couple of years early on I feel like the dividends will speak for themselves.

Always forwards towards the mission.

5 upvotesWhorehouseVet2 years ago

I did hustle a bit when I was in my late 20's, worked 6-7 days a week trying to bring in another buck. I wouldn't say I've made it, but now that I'm 10 years older, I can travel a bit more and work less.

Good luck to you, your degree will be useful.

3 upvotesBoobToArmRatio2 years ago

Yep, the best time to do extra work is while you're young when you actually have energy and the extra income has time to compound. At this point you're in a great position already.

3 upvotesfatmofoLOL2 years ago

I'm doing this, in the UK you can contribute £20k a year tax free into a ISA, I am able to contribute the max with my salary, if my investment get 8% a year over 40 years then my investment will be over £6million by my early 60s. Over time the contribtuion amount may go up to keep with inflation so it could amount to well over double digit millions (hopefully).

3 upvotesPossibleNurse912 years ago

Love this, def post that people need to save. How much is it to open a Roth IRA?

2 upvotessssozi2 years ago

It should cost anything but if it does, it would go to hold your account open.

I highly advise you to cap out if you can each year on Roth IRA as returns over time are really good. And it is post tax since you already get taxed before you put in. Depends how you want to see it of course, but I assume that tax now is lower than tax down the line.

FYI You can use your Roth IRA to buy stock as well. They will require a minimum of course

3 upvotessssozi2 years ago

More posts like this. It’s important to round yourself off financially and socially, this sub focuses mainly on socially though.

I’ve been investing since I was 16. Dad helped open my account and at 18 I’ve been on my own.

Roth IRA and mutual funds for me but returns are good, need to contribute more and read up more.

3 upvotesGalacticLinx2 years ago

this is the kind of luxuries a USA citizen can have, compound interest.

Imagine living in a 3rd world country where the inflation beats the crap out of your saving interest.

I hope BitCoin saves us from that, its unfair, but i cant find any wallet or vault with compound interest. The only one I found is a faucet which is one of the oldest (i wont name it to avoid spam or referals).

But i guess is still risky to put all your savings in bitcoins. It is such a young currency

6 upvotes • [deleted] • 2 years ago

At thirty, I started investing in rental properties. Bought 5, then focused on paying them off. Now, at 40, I have over 12, completely paid off, rental properties, worth over 1 million dollars. AND, they're relatively immune to economy crashes, since everyone needs a place to live, and the majority rent. Much better than the market, since it's physical assets, directly in your control.

1 upvotesshut_up_liar2 years ago

You have over 12 properties only worth over a million? What part of the country do you live in?

1 upvotes • [deleted] • 2 years ago

Midwest. It's stable, minimal disasters, and very affordable.

2 upvotes • [deleted] • 2 years ago

A lot more risk, not as diversified but I hear ya. I love real estate too. Wish I lived in an area that I could invest in rentals.

2 upvotes • [deleted] • 2 years ago

I'm getting some complaints on here saying building wealth isn't going to help you get laid and doesn't need to be factored into therepill, what are your thoughts? Does building wealth and having goals help you land better quality women or doesn't matter just learn game?

Maybe change's your mindset confidence etc?

9 upvotes • [deleted] • 2 years ago

It absolutely helps. Especially for attractive, post-wall women. At 40, I present myself as successful, articulate and put together. And I'm extremely in shape. It's nice to truthfully be able to casually comment about the countries I've traveled, that money isn't an issue, etc. I'm tactful and humble, but post-wall women are clued in to this. 30+ year old women will do things they didn't do in their 20's to try and convince me that they should be kept. I play the field, and do not commit, so I enjoy my turn. Women in their 20's are still thinking they can do better, so I don't have the success in that age bracket. They see me as old. I hunt where my game is, and accept it as a consequence of getting older.

6 upvotesgaki1232 years ago

If this post were some shit like "How my gf cheated on me" or "Man loses half his assets in a divorce" and some lame rage bait shit it would have more than 400 upvotes. SAD!

7 upvotesMisterMarbles19882 years ago

This reads like a Trump tweet.

4 upvotes • [deleted] • 2 years ago

Y'all need to read millionaire fast lane by MJ Demarco. In the game of life and finance, using the strategy of investing and relying on compound interest to create wealth isn't a good plan.

It is a strategy, but one shouldn't rely on it as their ticket to financial freedom.

6 upvotesBoobToArmRatio2 years ago

Here we go again.. I'm not a big fan of Millionare Fastlane because not everyone can, will, or needs to create a business to become "rich". Also, not every business will succeed and many entrepreneurs fail who you will never hear about because of survivorship bias. This is not addressed in that book.

The book is way too binary. No single strategy will get you rich unless you do the right thing at the exact right time, which is difficult to predict. What is known is that most self-made millionaires have multiple streams of income and built their wealth over time. This includes a small number of rich, young people who built businesses and succeeded, but mostly includes people with above average incomes that simply saved and invested.

If you have the drive and the means to build businesses and can survive a failure, then by all means go for it. For most people though, increasing your income and building multiple income streams, limiting unnecessary lifestyle inflation, and investing in diversified assets will get you to financial independence. The amount of time it takes is much less than most people think.

2 upvotesWorldNewPilla2 years ago

So, do you simply invest in stocks? What research do you do before hand?

6 upvotesWhorehouseVet2 years ago

Index investing, buy the entire market so you don't have to spend time on research.

1 upvotesMr-Kabuki2 years ago

how can i do this in canada?

1 upvotesWhorehouseVet2 years ago

I'm not too familiar, but looks like canadian couch potato has good resource.

Better asked over at r / canadianinvestor.

2 upvotesohsowetness2 years ago

Thank you for this. Which investment house / bank would you recommend starting a Roth IRA with?

What did you base your decision on ?

Gracias in advance

3 upvotesBoobToArmRatio2 years ago

1) Vanguard, 2) Fidelity

I use Vanguard, but those two are the most popular. You can read the FI sub or Bogleheads if you want to research it more.

Edit: Oh yeah, Vanguard has minimums though, so you'll have to play around that.

1 upvotes • [deleted] • 2 years ago

I use TD Ameritrade. They have 100 commission free ETFs, one of which is VTI which is what I buy.

1 upvotesWhorehouseVet2 years ago

If you're a US citizen, you can open an account with Vanguard directly.

2 upvotes • [deleted] • 2 years ago

17 year old here. When I turn 18 is it a smart idea to start a Roth IRA just keep putting money in? I’m saving money rn in my savings account and I have around $1K. The only things I spend money on is my Apple Music subscription and occasional food. I’m also going to Community College for 2 years to save money and work at the same time.

1 upvotes • [deleted] • 2 years ago

If you havnt built an emergency fund you don't need to be investing yet. Anything you invest you should assume could get cut in half short term. I'd pick up more hours at work in the mean time.

2 upvotesbigOlBeta2 years ago

If you can read, you can learn to invest. Don’t give control of your money to anyone

2 upvotesxytrooo2 years ago

its quite possible to live 200 years if science develops a therapy that takes a guy who is expected to live to 80 today and adds 10 years to that in the next 20 years, than 15 years over the next 20 , than 20 years over the next 20 , than 40 years over the next 20 , etc.

see you get more life expectancy the more time passes, you get more likely to stay, not immortal by any sense. but kind of getting less likely to die with time.

2 upvotes • [deleted] • 2 years ago

Cool man . Any UK equivalents to Roth? Thanks

1 upvotes • [deleted] • 2 years ago

Someone said earlier in the thread stock and shares ISA. And there us a UKinvesting subreddit on here too somewhere.

2 upvotes • [deleted] • 2 years ago

I'm 19 and set up a Roth IRA around March, invested $2500 into a health technology mutual fund that has excellent ratings and an average 14% annual return since it's inception. Compounds monthly.

Been putting in about $50 a month and have actually accumulated several hundred in interest already. I'm probably going to buy 2 or 3 more funds in different sectors to diversify, but this is a lot easier than I was expecting.

If you're my age, save your money (if you can) while you still live with your parents and don't have bills. Invest in a Roth IRA ASAP. It's one of the absolute​ best things you can do right now to get way ahead of the curve.

1 upvotes • [deleted] • 2 years ago

Don't get skittish when it goes down eventually. Just keep investing. Keep up the good work!

2 upvotesTheguygotgame7772 years ago

I would like to suggest a very nice book on just this subject, called "If You Can."

2 upvotes6d65746164656c74612 years ago

This is great. This advice is in very much need. Having your personal finance in control means freedom to chase other interests, and thus improve as a person. I have graduated in Law and in Economics (what would be in the USA two distinct majors), and have a good paying job in my country, and it baffles me how my coworkers are completely unaware of this advice (just as much as they are unaware of the redpill truths that permeate society).

The same discipline you develop by getting of the chair and hitting the gym is needed to avoid opening your wallet when you don't really need.

There are very good book suggestions in here, but I'd like to add William Bernstein's "The Inteligent Asset Allocator", as asset allocation is probably the most important factor in investment success and to create a passive income stream.

2 upvotesSpecialSpnk2 years ago

Up vote for this. I have just recently got serious in the study of finance and investing. It has already paid off largely with changing my mentally and how I think about money.

Invest invest invest. The difference between someone who retires poor and someone who retires rich is only consistency

2 upvotes • [deleted] • 2 years ago

Can agree that compound interest will not get you 'rich' by any stretch of the imagination. Saving cash is always good, but there is one concept I've only seen a couple times on this thread that I wanted to touch up on.

Home ownership. By definition the biggest investment of the middle class. Can be a huge money pit if you lack brain cells or luck. I bought my place at the height of the oil bust in 2015. Low interest rates locked in for 5 years, low price on the property. It's all about timing and having cash saved. Can be used to directly increase your wealth. If you're single, you can rent out rooms (or the whole house). Once its paid off it's obviously not going to cost you more than maintenance and utilities and you can take your cash and throw it around else where. When I bought my place, I made sure it had a shop. I use it to not only maintain my vehicles ie: fluid changes, tire rotations, wear part replacement. But I plan to rebuild my vehicles in it. I figure I can get thirty years out of a diesel pick up (The way I drive, the amount of mileage I may put on in a year). The biggest expense for that vehicle is the body rusting off of it every fifteen years. Buy yourself a mig welder and learn how to run a bead and lay down the spray and you can do everything yourself with enough time. That 20k investment for a used truck in good condition may last you a long long time. I've used the shop to flip/trade projects and toys so I don't have that expense. My roommates pay down the principal of my mortgage, I'm never home anyways so it's a win-win.

A lot can be said about purchasing required items for any sort of grid down scenario. This system is only going to be functioning provided something bad doesn't happen. IE: The Yellowstone Caldara blowing smoke and ash and inducing nuclear winter. Killing crops and burying everything under ash. Learn to enjoy yourselves. It's all meaningless anyways

Edit: Grammar. Probably still errors. Oh well

2 upvotesSlut_Slayer90002 years ago

Suggested reading for this topic: "Rich Dad Poor Dad" and "The Slight Edge" both very good books that hammer home the point of compound interest and using it to your advantage.

3 upvotesSnufek2 years ago

What is your interest rate, that your money will double in 6 years?

1 upvotesrollcyclones2 years ago

You use the rule of 72 to figure that out. 72/8% would be 9 years 72/12% would be 6. I'm being optimistic. but I've made 15.49 since 2012 so not completely crazy.

6 upvotesiguy222 years ago

What the heck are you investing in that is getting an average of 15% return over 5 years?

0 upvotesAfterC2 years ago

If you can stomach the risk, small cap science and tech funds, as well as junior mining/exploration companies can make you around 30% a year

10 upvotesTorabor642 years ago

Compound interest never made anyone rich, and certainly not in 10 years. It's actually more like living like shit during your good decades just to have enough to live when you are too old to do anything. No thanks, I'll pass.

Compound interest is only useful if you are already rich and want to retire.

18 upvotesfla16unt2 years ago

What's your plan? What are you doing now?

Having fun in your 20s and 30s and being fiscally responsible are not mutually exclusive. I do both.

This year I went on three vacations outside of the US (Cancun x 2 and Puerto Vallarta). Bought two top of the line fire arms (Arsenal AK and CZ PCR cajunized) and shoot about 500 rounds a month. I also spent about $1k on tattoos, just spent $600 on new snowboard equipment, and last week I blew $500 at a strip club on a Wednesday night. I go out to eat every weekend and party "hard" at times. Pretty much money isn't an issue for fun.

On the flipside...I bring my lunch to work and rarely eat out during the week. I invested in weights at home so no monthly gym membership. I don't buy designer clothes or many clothes, but I am well dressed. I try not to accumulate "stuff". I'm using a Nexus P, have a 6 year old lap top, and drive a 2013 Subaru that is paid off. Those are items people feel the "need to upgrade" all the time, but I'm going to use them until they break. I only have internet (no cable) and use T-Mobile at $50 month. I live in an apartment below my means. Pretty much every purchase is scrutinized for necessity and then searched for best value.

The result? I have a nice savings in cash and retirement (ROTH IRA and maxed 401k) and still having fun living in California. Granted I make a decent salary, but I don't do a special job by any means.

So there's no need to knock this info, unless you're talking about having the balls to be an entrepreneur and being your own boss.

1 upvotesTorabor642 years ago

My main point was that compound interest doesn't make you rich. Your job is what is making you rich. Certainly not everyone earns as much as you do, and probably you are working a lot of hours.

2 upvotesfatmofoLOL2 years ago

ou rich. Your job is what is making you rich. Certainly not everyone earns as much as you do, and probably you are working a lot of hours.

Lol you must be pretty retarded, compounded interest is one of the most easiest way to accumulate wealth. If you look at this chart you can see starting with £10k along with £1666 a month contribution and averaged 8% a year gain, the first year you'll make £1717 in interest, year 10 £24,500, year 20 £78,700, year 30 £199k, year 40 £466k

2 upvotesTorabor642 years ago

8% a year isn't realistic. 1.666 every month is a lot. 40 years is too much time.

If that works for you, cool, but don't tell me that this is the best way of earning a million.

2 upvotesfatmofoLOL2 years ago

So what are you doing to earn a million or plan to?

6 upvotesBoobToArmRatio2 years ago

Compounding returns don't make you rich, but it's still better than almost anything else you could be doing with the money. If you think that you have to live like shit to invest, then you either are spending too much of your income or don't make enough. Both of these can be remedied. Anyone who makes enough money for a regular lifestyle and plans to be wealthy should be investing.

Sure, starting a business is the fastest path to $1M, but not everyone has the capability or willpower do this. Besides, successful entrepreneurs suffer the worst in their youth putting in 100 week hours with no income to get their business off the ground, so I don't really see what your point is. For self-made millionaires in the US, not everyone is a full-time business owner, but all had at least 2-3 streams of income, and I highly doubt any of them avoid investing their money.

6 upvotes • [deleted] • 2 years ago

Go read the millionaire next door. Basically everyone gets rich through 401k or otherwise investing in their business. Doctors and lawyers and other high paying careers don't result in wealth unless you learn to save it.

-13 upvotesTorabor642 years ago

Implying I want to be a wage cuck all my life.

21 upvotes • [deleted] • 2 years ago

Keep scratching those lotto tickets ;)

-12 upvotesTorabor642 years ago

Keep thinking that going to college, getting a "good job" and saving 20% of your income is redpill.

7 upvotes • [deleted] • 2 years ago

Let's compare net worth in 10 years. And I'm a farmer by the way. Not using my college degree.

3 upvotesTheBattleshipYamato2 years ago

Even if you're a self-employed entrepeneur, you're still going to have to save part of your income. You want to be one of those guys with a luxury car but no money for gas?

2 upvotes • [deleted] • 2 years ago

I give you high five dude you told that slave what is his place.

1 upvotesBoobToArmRatio2 years ago

Saving 20% is so basic.. I save over 60% of my income and I live downtown in a major city. I can retire in my mid-late 30s at my current level of spending. And yes, I got my job because I went to college.. a cheap state school.

There is nothing red pill about blowing your money. What would you even spend it on?

*Travel - find a job that has lots of business travel or do churning.

*Getting Girls - the entire premise of TRP is to not waste money by being a BB.

*Buying bottles at the club - BB.

*Fancy clothes and Yeezys - What are you, a chick?

*Nice cars? A yacht? - I thought you didn't want to be a wage cuck.

Maybe I'm not creative enough. What exactly do you need to spend a ton of money on to not live like shit?

3 upvotesBoobToArmRatio2 years ago

The funniest thing about this whole "wage cuck" argument is that investing is the best way to escape the rat race if you don't want to work for someone.

2 upvotesMuhTriggersGuise2 years ago

I max out my Roth IRA (ooooo 5.5k!!!), 401k matching, and HSA. It isn't shit compared to my income. Beyond that I have an investment account for what's left over. I live quite well in my "good decades", and yet don't flush opportunity down the toilet.

It's bizarre to me that you think doing something useful with your extra cash is being a "wage cuck", yet blowing it all on stupid shit is I guess... alpha?

I guess if the crux of your argument is name calling, it isn't very convincing.

5 upvotesTorabor642 years ago

You do realize that you just recognized that you are getting rich by your income, and not because of the compound interest itself, right?

Why do you imply that I blow my money btw?

1 upvotesshut_up_liar2 years ago

If you are eligible to contribute to a Roth and you max that Roth, a 401k, and a HSA that is at least 25% of your income which is more ban “shit”.

2 upvotesBoobToArmRatio2 years ago

HSA is available to anyone with an HDHP. Roth IRA contribution can be backdoored at any income level. 401k is not subject to an income cap.

But yes, even if you make $200K+ those tax deferrals are awesome and you should be maxing everything.

2 upvotesLeftHello2 years ago

Compound interest is overrated. Yes, you should absolutely be investing and doing it, but it is way more effective to increase your savings, and increase your income.

Notice how every time you see articles about compound interest, they assume you are adding to the principle every month/year. Most of the final amount is just from you adding money to the principal, and a fraction is actually from the interest.

2 upvotesBoobToArmRatio2 years ago

Yeah, but what are you comparing it to? Letting the money sit around as cash? Investing in alternative assets? The best way to make money is to do everything. Increasing amount of income and number of income streams, reducing spending to a "reasonable" amount, and investing the excess cash in whatever asset class you think has the best risk-adjusted growth potential.

Comparing which move will give you the best yield depends entirely on the individual person's situation. Older people with more stashed away will benefit more from investments. Younger people will benefit more from earning more money. Everyone will benefit from keeping spending in check and avoiding unnecessary lifestyle inflation.

2 upvotes • [deleted] • 2 years ago

In the beginning, it doesn't seem like much but it has a snowball effect. Eventually your interest outweighs what you're putting in. Check out a compound interest table/calculator that shows you what you contribute vs. interest earned it will show you the tipping point.

3 upvotesMattyAnon2 years ago

It's the thing that turns 10k into 6.5 million in 200 years.

Flaw: banks and governments regularly go bust. Comprehensive list here, your country likely appears a number of times and surprisingly recently: https://en.wikipedia.org/wiki/List_of_sovereign_debt_crises

The odds of your money staying safe for 200 years are small. It's just too tempting for companies and governments to put their debts off into the future and then default on them when they get unmanageable.

One small but current example: the pensions crisis causing the city of Detroit to go bankrupt. The city pretended to act as a savings scheme for people (earn less now, bigger pension later!), which makes great short term sense on the balance sheets. They did it so much they now can't afford to pay and are defaulting on their debts. This was your pension that you worked 50 years for? Tough shit.

Even if I dont contribute another dime, in 6 or 7 years it will double, assuming we don't have a crash

The current interest rate is around 3%. Anything more than that and you're increasing the risk of losing all of it. That's 24 years to get a low risk doubling. If you want more risk then fine, but the risk lowers the effective average payback.

For most people, young especially, some sound advice is this:

Keep 3 months living expenses plus enough money to move city in cash. Live as frugally as you can until you have this. Later aim to increase this to 6 months. This is "fuck you" money - enough to be able to say "fuck you" to ANYONE in your life: your partner, your friends, your boss. This means you are no longer living in scarcity of options, because you can fuck off and leave without difficulty or hardship.

You have 3 months on hand in a current account. You then get another 3 months in a 3-month notice account. You won't need it instantly because you have the first chunk for that. Save what you can in government enabled tax-free accounts (varies by country).

The lets you leverage your primary asset - your time and skills. 5% per year on 100k is nothing compared to being able to move city and get a 10k/year pay raise every year or two.

In short, max out your career before trying to invest in stocks and bonds and stuff - it's lower risk, more fun, and provides better returns until your savings account is comparable to your annual wage.

4 upvotes • [deleted] • 2 years ago

The USA had way more chance of failing during Benjamin Franklin days. Don't invest fine with me.

1 upvotesHillarysdilddo_20162 years ago

Do you really believe that? Or is it just a witty comeback? All the markets are peak, debt is at all time highs, geopolitical instability are at highs, intranational instability are at highs, and banks are doing more financial manipulation than ever. You seriously think collapse/crash is not a serious possibility?

Besides that Matty did not say "don't invest". He said have your emergency fund on a liquid basis, which is very typical financial advice (6-month buffer). No one said some of that money can't exist in an investment account or CDs so long as they can be accessed in both the immediate term and short term.

2 upvotes • [deleted] • 2 years ago

Crash yes, 100% will happen again. But itll come back eventually. dow was cut in half in 08 now it's 15k higher. a collapse? like let's start hording gas, food and bullets? not likely. you shouldn't plan your investments around black swan events you can't plan for our you'd nev3r get started.

Of course 6 months of emergency fund is a no brainer and you shouldn't invest every dime you have to investments but invest the bulk of your funds.

1 upvotesReefer-eyed_Beans2 years ago

I feel like you're kind of missing the point.

If you're serious about poking holes in the 200 year plan...you ought to argue that the odds that someone will live for more than 200 years. I think that's considerably more problematic than the bank going bust.

Over the actual amount of time someone would invest for themselves (less than even 50 years for most laypeople), the risk of banks and governments busting becomes much more negligible.

Also inflation. Some people forget that in 200 years, 6.5 million will not really be 6.5 million. Not as you know it.

4 upvotesnovasoline2 years ago

The idea of being a wage slave through your youth so that when your old and can no longer get your dick up, and if the gods haven't struck you with some cancer or some brain deteriorating disease, and if the economy hasnt tanked, you can enjoy the priveledge of dying slowly but comfortably in your home... is blue pill, please send me back to the matrix type of garbage.

40 years is a shit load of time to not be living to the fullest of your potential. How many billions would warren buffet or bill gates pay to add 40 years back to their lives? Yet with "the miracle of compound interest" you can throw it away for a fraction of that.

5 upvotesBoobToArmRatio2 years ago

Personally, I think the idea isn't to exchange your youth for more assets in the future. It's not that black and white. It's more about looking at the ROI of the money you spend now and deciding if you want to spend it now or want more to spend later. Spending all of your money as soon as you earn it is not living to the fullest of your potential.

Your wage slave comment is pretty silly given that investing is probably the best way to escape the rat race. Most people aren't going to be business owners. Even if TRP readers are more likely to start and run businesses, there will still be plenty who don't. Most people who start businesses aren't successful. Sure, some succeed on the first try, and others succeed after trying many times, but there's a lot more survivorship bias involved when you read about young, rich people than older people accumulating assets over a lifetime. Investing is something accessible to everyone. If you believe that you need to sacrificing a lot now to save for your future, I think that you need to reevaluate why this is the case.

For a general audience with many people living paycheck-to-paycheck and not having any savings regardless of their income level, learning about managing finances (and investing) is one of the best things they can do.

2 upvotesfromthecrypt82 years ago

Great addition to the trp mindset. To put it simply, be smart with your money. It’s addictive seeing your funds grow. Get the shit you really want still, but be honest with yourself when it comes to stuff you want but still can easily do without. Pick a few gems (like if motorcycles is your big passion, save up for that new bike), then save and invest the rest.

4 upvotes • [deleted] • 2 years ago

Everything great but crisis is incoming and everything you save will be lost. Only increasing cash flow is the way to survive which means business is only way.

4 upvotes • [deleted] • 2 years ago

Nothing lost until you sell. Only person that gets hurt on a roller coaster are the people who jump off. I'll keep buying those on sale stocks until it rebounds.

1 upvotes • [deleted] • 2 years ago

Check what is inflation and what pulling off money changes nothing.

3 upvotesBoobToArmRatio2 years ago

Ownership in a business is one of the very few ways to get rich in your 20s or 30s, but it's definitely not the only way to be rich by your 40s or so.

People have been calling out a crisis for the last 6 years and that's 6 years of compounding wasted. No one knows for sure when the next crash will come.

1 upvotes • [deleted] • 2 years ago

There is many pointers that show incoming crisis like Shiller P\E ratio. We are like in the middle of bubble right now. There is another pointer to crisis, stocks achieve record-breaking prices. There is nobody who can tell when bubble pops out, because rolling national debt is so easy for countries to done that. Also you think when you are 40s you shouldn't start with bussiness? Wrong you have to with bussiness, you lost so many time in early years so only to roll out this is actually bussiness.

2 upvotesBoobToArmRatio2 years ago

You should review your English skills before trying to debate someone or use Google translate to convert it to your native tongue. You clearly don't have a grasp of what I'm trying to say, but I'll try explaining one more time.

You don't have to invest if you believe the market will crash but you can't say when it will crash. It could crash tomorrow, or it could crash years later. "Experts" have been calling it a bubble for years, and yes there are a lot of bubbles right now in a lot of markets with people having excess cash to invest. The choice is not whether investing or not is a good idea. It's about what to put your excess money into instead of letting it sit there. Investing in a business that you own is a viable option, but it's not the only one.

Also, if you're in your 40s already and aren't a multi-millionaire, who cares? Start a business, invest, do whatever you want. You're already behind the curve and aren't competing in the major leagues anymore.

1 upvotes • [deleted] • 2 years ago

I might agree, but bashing about being not native is not nice.

2 upvotesBoobToArmRatio2 years ago

This is RP and you should always be striving to improve yourself. If I can tell that you're a non-native speaker just by what you write, then you need to improve your English. FYI English is not my first language either, but no one can tell that I'm not a native speaker.

2 upvotesCOMMO_Fix_It_Bitch2 years ago

A longterm investment strategy that soley relies on time and the market not fluctuating... hey look at this compound interest calculator, it says if I get an annual return of just 8% every year for the next 10 years I will be a millionaire!

You're better off spending that money to increase your earning potential now with more education/certifications/etc, instead of putting it all away so it can fight off inflation, taxes, and management fees. Fucking high school level investment class bullshit post.

2 upvotes • [deleted] • 2 years ago

I am fully aware how basic this post is. if you want to inspire a young saver you don't go into economic theory. what's your net worth by the way?

3 upvotesCOMMO_Fix_It_Bitch2 years ago

Let me just ignore the content of your post and deflect by asking you how much your net worth is

Try harder fuckwad. Is your next post is going to be on how to calculate how much money you'll need when it is time for you to retire and be in the post-employment phase of your life?

How about avoiding real estate, because owning properties and being a slumlord having renters never paid off for anyone, this is why you need to put your money into an retirement device that will penalize the fuck out of you if you even think about using it before you're 59 years old!

Please go on, make another shitpost about financial advice outside a dedicated sub, because you think you're dispersing wisdom and not generic pamphlet content.

3 upvotesDeterBenchPress2 years ago

Go ahead and buy rental properties like a cuck, I am buying bank options when the interest rates rise and fuck property owners in the ass

Liquidity is so important in this day and age. Buy properties and you can't move for a better career, can't shift your wealth from real estate to FANG tech and then to retail

1 upvotesCOMMO_Fix_It_Bitch2 years ago

Jesus, what are you fucking living in 2007? Variable interest mortgages, what a throwback.

Who the fuck says you have to be the property manager, and not one of the property management companies that take a cut and deal with the tenants and maintenance for you? You get home owners insurance and hope the tenants burn it down for all you care.

Here's to you hopefully drowning on your liquidity!

1 upvotesDeterBenchPress2 years ago

What if you tie your property to a city like Seattle? Amazon announces HQ2 and then what? You get fucked. Real estate is too tied to the local economy, the risk and illiquidity is bonkers. I hope the city you live in grows and your local economy prospers :)

1 upvotes • [deleted] • 2 years ago

No penalty on roth fucktard

1 upvotesCOMMO_Fix_It_Bitch2 years ago

Age 59 and under. You can withdraw contributions you made to your Roth IRA anytime, tax- and penalty-free. However, you may have to pay taxes and penalties on earnings in your Roth IRA.

10% sure is a bitch aint it.

Hey I got a guaranteed investment opportunity if you're interested, it involves you dressing up in a cheap suite in a power stance for the cover of your book filled with your ideas on finance. Become the #1 selling book at garage sales and estate sales!

Let me guess, you don't actually work in finance, and are not a fiduciary are you?

1 upvotes • [deleted] • 2 years ago

duh 10% of the gains before you retire early. I can live giving the government 10% of free money if I need it. And I don't need to be a fiduciary I'm just giving my experience and if you base ypur retirement planning around some guys investing advice online without doing your own due diligence you're a retard.

1 upvotesHeatCreator2 years ago

Who do I talk with to open a Roth IRA, and do I need a lot of money?

1 upvotes • [deleted] • 2 years ago

I use TD Ameritrade. They have 100 commission free ETFs, one of which is VTI which is what I buy. There is no minimum to open the account.

1 upvotesdrsherbert2 years ago

If I start a Roth IRA, can I keep my money on the sidelines until after the market correction?

3 upvotes • [deleted] • 2 years ago

Yeah you can leave it on the sideline and time your entry. Dollar cost averaging with regular deposits is the way people usually do it. One study said invest in bulk at the beginning every year and you'll do better over dollar cost averaging. Everytime I bought in it was basically at the top of the market, one time I got lucky and hit a 10% downswing though. It just keeps moving upwards in the long run so 5% here or there isn't the end of the world.

1 upvotesCaffineAddictNYC2 years ago

Buffet didn't really prove what most people think with that study, and it harms more investors than anything else in finance by encouraging investors to invest without financial goals of an individual to be considered. It is however highly popularized by the internet boom combined with a period of sensational overall market growth, which will likely never happen again in our lifetimes.

The most important thing is to save and invest with individual financial goals in mind. Most people do not have the knowledge, time, or temperament to do this on their own. A study by Vanguard (the main index fund company) estimates a financial advisors worth is approximately 3% annually. https://www.vanguard.com/pdf/ISGQVAA.pdf

However, because we are in a period of such immense market growth, it is hard for people to understand these inherent risks. It is like trying to convince a first time homeowner that they should be wary of taking on too much debt to buy a home right before the Great Recession.

1 upvotes • [deleted] • 2 years ago

My local University offers Industrial Engineering. I was like the logistics side of things in it

1 upvotesRedPilledGodEmperor2 years ago

Get involved in options trading. Buy slightly out of the money call options that expire in 6 months - 1+ years, in stocks that you are bullish on.

2 upvotessssozi2 years ago

I wouldn’t get involved in options as a beginner. And that’s not necessarily the long slow way, you’ll have to be on top of exercising thoughts options. But if they have time and want to do the research options are viable

Mutual/index Ira/Roth is the long slow way with emphasis on interest of investing

1 upvotes1-8000-HOTLINEBLING2 years ago

I am 19 , studying BA and have 6000€ to invest. Where/how should I start, where can I learn? Any suggestions? Thanks

1 upvotesHillarysdilddo_20162 years ago

Hey OP,

I know people say "don't try to time the market" but how do you feel about investing at this very moment?

You've answered a couple of my comments, but this is specific to the general situation where the market seems peak. Literally historic highs. Do you think investing in the SPY or similar is a good idea right now? Market manipulators like Soros already bet against the SPY and he seems to have missed the mark, but that indicates that I'm not the only one thinking a downswing is necessary or near. I've read quite a few opinions that express confusion at how the market continues to climb.

Buying SPY at $260 / share could be a shitty investment in the coming year, but I just don't know. What do you think?

2 upvotes • [deleted] • 2 years ago

I just deposited 2k on Friday and buying Monday morning VTI no matter if its up or down. I've actually constantly been buying at the high my whole investing career basically, it dipped once like 8% and I got lucky but I didn't know if it was going to keep going down. I was always hesitant like "it hasn't dropped in a long time idk about this whatever, here goes nothing " then it just kept going up. and I said the same thing next big deposit. I have my plan so it helps calm my doubts. definitely scary if you have 100k and your not in the market yet and your trying to decide what to do. some guys say invest it in chunks of your worried about a drop. 50% now, then 25% in 3 and 6 months. Others say you'll miss out on potential gain waiting, like this year if your standing on the sideline it was a big mistake. One thing I know is noone got rich shorting the market long term, it always goes back up eventually. like 1% of 10 year periods didn't make money and most 5 year periods have too.

2 upvotesHillarysdilddo_20162 years ago

Cool. I might just buy in in smaller chunks like you mentioned.

thanks for your feedback.

1 upvotesatlantique162 years ago

My dad passed away last September and his retirement fund collected over $30,000 in interest in the last year. I don't know exactly how it was done or what kind of investment it is but I've been told it'll continue to rise and by the time I'm in my 30s (12 years or so) it'll be up to a million dollars.

1 upvotes • [deleted] • 2 years ago

I'm sorry for your loss. Amazing that he left a legacy like that behind for you. I would suggest you read some of the books recommended on this thread. That money will come with a lot of responsibility when you begin to manage it. Good luck.

1 upvotesnwhitey122 years ago

I much rather go on spring break trips to be honest Experiences>Money in my opinion

2 upvotes • [deleted] • 2 years ago

One of the trips was fun with long time friends to Mexico but the others were just big groups of aquaintences mixed genders and pretty much sucked. I don't regret them completely because I went to some concerts and banged a few chicks but definitely not worth it at all. If only you knew the money you were spending would guarantee a great experience but the majority of the time it falls short of your expectations.

0 upvotesblackedoutfast2 years ago

this is sub is for discussing sexual strategy, not repeating the same boring advice everyone has already heard a million times.

if you had some interesting or novel spin on finances then maybe it could be an interesting topic. but "if you are frugal and invest X amount of money now you can have a million dollars in a few decades!" is such a bluepill beta dad topic.

also you'll never be rich if you just rely on compound interest due to inflation. even the billionaires who are known for being frugal boring betas (warren buffet) made most of their money from careful investing, not just throwing it in a 401k and letting it ride.

3 upvotesBoobToArmRatio2 years ago

Even if this is the same boring advice, it needs to be repeated. Being aware of how investing works and actually having money invested in the market and thinking about your future net worth leads to thinking about how to get a high net worth in the future rather than just dreaming about it.

Most people don't have a pathway to one million dollars except through saving and investing. And the first million dollars is always the hardest to get. You will be relatively rich if you accumulate assets and invest, regardless of inflation.

0 upvotes • [deleted] • 2 years ago

https://www.cnbc.com/amp/2017/05/12/warren-buffett-says-index-funds-make-the-best-retirement-sense-practically-all-the-time.html

Well don't invest then I don't care. Many people have tanked me for posting.

2 upvotesSpets872 years ago

Warren Buffet says one thing and does completely another. He is not a compound interest investor. He doesn't just buy stocks and hope they go up in price. He buys enough stock to be able to have control over a company and have direct effect on its performance. Compare that to Joe Bloe who buys 10k worth of Apple shares, who has zero say in what Apple does.

3 upvotes • [deleted] • 2 years ago

In his will or after he retires I don't remember which he said he's going 10% in bonds and 90% in index. He said there isn't anyone he would trust to do active investing.

3 upvotesHillarysdilddo_20162 years ago

That really is the salient point about warren buffet. The other gem is:

"We don't pay enough taxes!" -Warren Buffet

But you never see this lying fucktard writing extra checks to the IRS.

It's almost as if he says one thing, but does another. Almost...

1 upvotes • [deleted] • 2 years ago

Just buy a low fee target date fund from vanguard and put $$ into it every month. That's it. Simple and the most effective

1 upvotes • [deleted] • 2 years ago

Not most effective the expense ratio for that is higher and they don't do anything except buy you some bonds as you go and you could do the same thing yourself. that .5% extra expense adds up in the long run.

1 upvotes • [deleted] • 2 years ago

No they mix large cap small cap foreign and international. Unless you want to rebalance yourself into other vanguard funds, this is the best fire and forget method. It's not just buying bond funds.

2 upvotesBoobToArmRatio2 years ago

It's easier, but if you're under 30 there's no point in buying any bonds in retirement accounts.

1 upvotesDmva1002 years ago

Invest in MREITs. Do it for the dividends. The way those companies are structured they are required to pay out roughly 90% of earnings to shareholders because they cannot hold excess cash balances.

0 upvotes • [deleted] • 2 years ago

I'm sure you know(he doesn't know) this but for others dividends come off of the price of the underlying asset so your not really gaining anything. You can see on their ex dividend date the price of the fund drops to pay for the dividend. Not bad, but not a reason to buy or hold. You want to buy an investment based on the annual return %.

-5 upvotesDmva1002 years ago

Yeah but the primary reason for investing in these type of stocks is for the dividend because the yield is higher. They aren't meant to be capitalized on for the share price.

It's good for this if the stock is say $20/share with a $2 dividend/share (10%). You buy 100 shares. You get that $200 after a year even if the stock price doesnt appreciate, so you are arguably in a better spot if you bought say, a tech stock that has the same share price but no dividend.

Good thing about MREITs is they don't fluctuate much.

1 upvotesBoobToArmRatio2 years ago

If you read what he said (or understood the asset you were buying) If the REIT paid $2, that's $2 off the share price. So if it stayed at $20 that means it would be $22 if the dividend was not paid out. There is no difference between a regular stock, except that you aren't as diversified investing in REITs alone as you would a full spectrum index fund. (Also index funds invest a portion in REITs since it's a piece of the market as a whole.)

1 upvotesVanityKings2 years ago

commenting for later reading

1 upvotesMr-Kabuki2 years ago

how can i start investing if i live in canada?

1 upvotesLinblow2 years ago

Compound interest is a Slowlane Strategy. Wanna get falsely rich by the age of 60 when you're not young anymore? Sure, go ahead.

You need a Fastlane. It allows you to get rich fastly(*) and get your true financial freedom. Put simply, make millions with your own buisness in 5-10 years. Consequently, you no longer trade your time for money. Instead, you make money work for you ("buisness tree") with your assets and passive income.

Long topic. Get the excellent book The Milionaire Fastlane by M. J. Demarco. This guy was already a multi-millionaire when he published it. He made it to spread the truth, not to earn money. Unlike the gurus who teach you one thing, but forget to tell you they make their money by precisely selling their book! They don't apply what they teach. Don't be a fool, go fastlane.

*nobody said it was easy!

1 upvotes • [deleted] • 2 years ago

I was friends with a guy in college who made millions playing online poker. In highschool he won a state chess competition, smart dude. He started with $50.... lost it.... deposited again and lost it. Did it again and never quit making money as far as I know. Moved to Las Vegas and Canada to play not gamble. Made fun of many professional tournament players you would see on tv. Last time I talked to him he said he was close to mastering the game. I tried gambling to make my millions with his tutoring and I still lost. Starting a business is the same way, many will try but few will make it. If you can, great but most that take that route fail. Most people need to be realistic and a roth and long term investing is the best option for them.

2 upvotesLinblow2 years ago

Indeed, such a journey is not for everyone to take. To each their own path.

1 upvotes_Ozu_2 years ago

Don't get rich slow, it's a losing strategy. Read 'The Millionaire Fastlane' for better advice.

4 upvotesBoobToArmRatio2 years ago

I don't view OPs post as a losing strategy. Rather, it's the basic starting point, and a good backup plan for having money laying around if the riskier ventures you try fail. Not everyone who tries to start a business will succeed, whereas almost everyone who has a middle-class income and starts investing in their 20s will get that second comma at some point. You have to consider survivorship bias when it comes to emulating self-made rich young people.

Of course, increasing your income and number of income streams, using leverage, and other things will help the money come along faster, but every self-made rich person invested in something whether it was a market or equity in their own business. Learning about investing is a necessity at any income level.

1 upvotes_Ozu_2 years ago

The stock market is a fine investment as long as it doesn't crash and wipe out all your savings. You have to ask yourself "how likely is a crash?" and decide whether the risk is worth it.

Don't put all your eggs in one basket.

1 upvotesBoobToArmRatio2 years ago

That's true, and most people that don't have capital need to put all of their eggs in one basket to start a business.

Smart investing is not just about investing in the stock market, it's about having a diversified portfolio and investing in everything with a reasonable risk-adjusted return. You should be investing in line with your risk tolerance.

If everything crashes at the same time, you have a lot more to worry about than your portfolio. Plus a startup business would also likely fail in such a economic climate.

1 upvotes_Ozu_2 years ago

Have you read 'The Millionaire Fastlane'?

1 upvotesBoobToArmRatio2 years ago

I have. It doesn't address survivorship bias at all. The author's view is too binary when it comes to business vs investing when you should be doing both. For most people to reach a large amount of assets it's a lot more practical to get a better paying job, save the money and invest it, than to start a business.

1 upvotesJohn_Philips2 years ago

Ha! Like I actually have the money to invest in the first place

4 upvotesMuhTriggersGuise2 years ago

I think being red pill and developing yourself to the point of earning more money than you need go hand in hand. You may not be there yet, but it should be something on your agenda if you're truly trying to be red pill.

2 upvotesfla16unt2 years ago

So make money. That's redpill mentality.

0 upvotesmax_peenor2 years ago

Given that I had to throw an unholy fit to get my primary clearing bank to not put a negative interest rate on my cash deposits, this might not be the best solution given the current political and financial environment. Thirty year ago, sure.

2 upvotes • [deleted] • 2 years ago

Index funds weren't a thing 30 years ago. You more than likely would have been steered wrong by a financial advisor wanting to earn the biggest commissions. The internet has really opened up investing for the little guy.

2 upvotesmax_peenor2 years ago

Yes they were. What do you think the DOW was created for in the first place? A cheerleading team?

I don't think you understand. I move large amounts of money through a certain bank account--thus the name 'clearing account.' Not only did the bank want to refuse interest on this money, but they wanted to actually charge me for it. No one looking for commission; a bank looking for a cash cow. It's amazing how quickly they change your mind when you start moving money out of their bank.

The internet has really opened up investing for the little guy.

I'm not the little guy. Cash and certificate rates are shit across the board. It wasn't that long ago where 5% was a typical thing. Now good luck with a percent. Either way, good luck keeping on with inflation with cash.

1 upvotes • [deleted] • 2 years ago

Why would anyone hold cash?

1 upvotesmax_peenor2 years ago

Sometimes you need to move money around to, like, do things. Good luck buying property or hamburgers with t-bills. They look at you funny.

Being a "modern investor," I'm a little surprised you don't understand what 'clearing' means.

-8 upvotesAverage_Scrub2 years ago

This is bullcrap. There will always be a crash. It's inevitable. The interest rates barely cover inflation.

8 upvotes • [deleted] • 2 years ago

Your right there will always be crashes. Expect them and dont sell when everyone else is panicked. 2008 there was a crash and now the Dow is like 15k points higher. it always come back in the long term. less than 1% of 10 year time periods havnt made money in the history of the stock market.

1 upvotes • [deleted] • 2 years ago

Yes only when company you bought stocks survives crisis.

2 upvotes • [deleted] • 2 years ago

shouldn't buy single stock

1 upvotesInterNetting2 years ago

Yes, 9 years later. What about those folks who retired in 07-08'?

3 upvotes • [deleted] • 2 years ago

Should have moved into bonds and cash. 100% stocks allocation is for young people.

2 upvotesBoobToArmRatio2 years ago

100% stock allocation (or very high equities) is also okay if your drawdown is much lower than 4%.

1 upvotes • [deleted] • 2 years ago

Thanks, good to know. Firecalc helps figure out if you'll likely make it in retirement with your drawdown.

2 upvotesWhorehouseVet2 years ago

That's the risk of investing in stocks, you have to be vigilant and know your risk tolerance.

Even if you were retiring in 07/08 when the market took a shit, you can adjust your expenses and delay selling your stocks.

3 upvotesfla16unt2 years ago

The S&P 500 tracks the 500 largest American companies. So basically when you invest in an index that tracks the S&P 500....you are betting on the American economy.

So yes there will be crashes...but unless you think the US economy will crash forever, there's a good chance it will grow over a period of decades.

2 upvotesMuhTriggersGuise2 years ago

Even including the great depression, black monday, the dot com bubble, and the great recession; average stock returns are about 7% after accounting for inflation.

0 upvotesAverage_Scrub2 years ago

Interest rate "is defined as the proportion of an amount loaned which a lender charges as interest to the borrower, normally expressed as an annual percentage. It is the rate a bank or other lender charges to borrow its money, or the rate a bank pays its savers for keeping money in an account. " I was not talking about stock returns. With stocks you can make a lot of money, of course, but you can lose a lot too. It's no sure thing like the OP says. If it were the case, everyone with half a brain would do it.

Someone once made an experiment using monkeys to pick stocks at random. Guess what, some did actually better than "informed" human investors ( http://www.marketwatch.com/story/how-hedge-fund-geniuses-got-beaten-by-monkeys-again-2015-06-25 ).

The guys who can live off of a passive income alone are millionaires. Every other guy needs to spend his income to live a decent life. Unless you wanna live like a hobo and gather a lot of money to reap the benefits when you're an old fart. And it's no sure thing either.

2 upvotesBoobToArmRatio2 years ago

You sound like a guy who has a lot of opinions about the marketplace, so I'll spend some time to write this post, which I hope you learn something from.

Interest rate "is defined as the proportion of an amount loaned which a lender charges as interest to the borrower, normally expressed as an annual percentage. It is the rate a bank or other lender charges to borrow its money, or the rate a bank pays its savers for keeping money in an account. " I was not talking about stock returns. With stocks you can make a lot of money, of course, but you can lose a lot too. It's no sure thing like the OP says. If it were the case, everyone with half a brain would do it.

It's common knowledge over the last few years that you don't get good interest rates from a savings account. It should be implied that OP is talking about compounding growth on asset classes that are most commonly invested in like equities and bonds.

Someone once made an experiment using monkeys to pick stocks at random. Guess what, some did actually better than "informed" human investors ( http://www.marketwatch.com/story/how-hedge-fund-geniuses-got-beaten-by-monkeys-again-2015-06-25 ).

Most people also know that picking individual stocks is a bad idea, which is why people invest in index funds that track the whole market weighted by the market capitalization of the stocks in the fund. You are essentially betting on the gross economy of every country in the world. If you don't think that will grow in the long run, then there are a lot more issues for you to be worried about than the return on your savings. Of course there aren't any sure things in life, but some things are definitely more likely than others. Imo investing in broad-market index funds is the best risk-adjusted return you can get on anything.

The guys who can live off of a passive income alone are millionaires. Every other guy needs to spend his income to live a decent life. Unless you wanna live like a hobo and gather a lot of money to reap the benefits when you're an old fart. And it's no sure thing either.

As for living off passive income, how do you get that million dollars in the first place? For most self-made millionaires they either had a regular job and a couple of side hustles, or a full-time business that was profitable.. but the key is that they invested their savings from those income sources over the years.. exactly what OP is suggesting for people to do.

Why do you need to live like a hobo to save money? I save over 60% of my income and I live in a pretty high COL area. I have a solid bachelor pad, I go on nice vacations, I have all the gadgets I want, and I can eat out or go out whenever I feel like it. With RP knowledge I don't need to spend much money to get girls back to my place. What exactly are people spending their money on to not feel like a hobo?

Most people buy crap that they can't afford to impress people they don't even like. What's the justification in that? Why not save the money instead and invest it so you have the freedom to do what you truly want at some point in the future? At a 60% savings rate I'll have the choice to retire by my mid-late 30s. Old fart? https://rationalmale.files.wordpress.com/2012/05/smv_curve1.jpg

2 upvotes • [deleted] • 2 years ago

You have zero idea what you're talking about.

0 upvotesfalcon104742 years ago

Ok, but with my social security number out there for anyone to buy and all these banks of america scandals, who do you even trust anymore?

And so what do i do? Take my money to reputable bank of something and say i want to open a roth ira and when they ask what do i want to invest in just say the entire stock market?

Can you open multiple roth iras with differant banks or just one per social security number?

Please save the do some research responses cause i've tried and information overload, it's just too much and then you get conflicting advise and you dont know who's right. Just a couple of simple questions asked and you'll never hear from me again

2 upvotesfcmcmvii2 years ago

Posting again with links to other subs removed...

Please save the do some research responses

Wrong attitude in my opinion. If you want to succeed in anything you need to do some homework. I like the OP's post but it's just a teaser... you can't build a personal investment strategy from 5 paragraphs on reddit.

My advice is to start reading and get interested. Start with some websites, read a few highly-recommended personal finance books, then read a few specialized books on stuff that interests you. Make it a lifelong habit, not something you do once at (current age) and never think about again.

I am Canadian so I don't know any widely recommended PF books for the States. The PersonalFinance sub has a wiki with a comprehensive reading list.

1 upvotes • [deleted] • 2 years ago

I opened an account online with TD Ameritrade. It lets you buy 100 etfs for free no commission one of which is VTI. Vanguard total stock market index. That's what I did and wish I started 10 years earlier.

0 upvotes • [deleted] • 2 years ago

Just to add something from a different perspective:

Yes, as an individual this is a great thing and should be used widely and strongly. For society its horrible though and should be avoided. There is a reason why religions ban this shit.

This system will necessarily destroy the real economy on which is it build. You can't out-produce compound interest on the long run. Thats why 8 people own as much as half of humanity right now.

I mean, even this thread shows how it works. People a) consume less to save money and b) realize, that working (i.e. producing) is less beneficial than owning things. So, they focus more on optimizing their finances instead of working and producing things. This has a big impact on how the economy can produce and sell things.

The simple question is what your money is worth in the long run. It has value, right? Where does that value come from? You can buy goods and services with it. Since you now-rich people don't have to work that hard anymore, you will not produce these real-values. Thats the whole point of this undertaking, right?

Yet, others have to work harder and harder to produce the value of your money in the real economy. And, which is important, you have to invest that money somewhere. Your interest money doesn't fall from the sky, it has to be produced in a productive undertaking of some sort. Even nowadays its getting harder and harder to find useful investment options for real economic activities. Often its more lucrative to put it in investment funds than trying to get a business going. That might be true for companies themselves, who then turn into some kind of banking-but-not-a-real-bank business. At that point the economy tries to pull off a magic trick. You put some money into a magic hat and hope you find more money in it than you put in there 2 minutes later. Right now that works. But at some point in time someone will realize that doesn't actually work and then everyone is fucked --> the system resets.

That is how it has worked for quite some time now and the smart people who win at this game put their money into actually existing values like land, real estate or productive businesses. Gold, art and many other options exist, too.

So, people work their asses off for a small slice of this whole cake and in the end the fatties at the table managed to win everything that is actually necessary for a living and wait till the next round of the game starts. Everyone else? They are fucked.

And that is why the big players stay at the top. At the beginning of the next round they start with a huuuuge advantage and simply keep buying more stuff (the truth is, on average you can not outcompete someone starting with a couple of millions unless they suck and you are awesome. Which does happen, but thats more an insult to them than a compliment for you).

This goes on until the normal people are fed up and start a revolution/war to level the playing field again.

Really, same shit different year. And everyone keeps playing because it pays off big time.

3 upvotesBoobToArmRatio2 years ago

This is TRP though. It's amoral and everyone here should be doing what's best for them, not society. Do we go around trying to "fix" the sexual marketplace? No, we take advantage of the situation as it is. Why would we give a shit what happens to the financial markets? Just do what's best for you. If you think shit is going down, then have some hedges just in case.

1 upvotes • [deleted] • 2 years ago

Why would we give a shit what happens to the financial markets?

Because you are a grown man, aren't you? You should know what you are dealing with and what happens down the line. In the end, it's your choice. That doesn't mean you should be dumb and blind about it.

1 upvotesBoobToArmRatio2 years ago

I personally care about the financial markets. My "we" refers to TRP as a whole.

0 upvotesdrsherbert2 years ago

With the DOW over 23,000 I’m a little nervous to buy at this point. I do however think Amazon is still a good buy as they continue to take over Walmart’s market share and the brick and mortars continue to get beat up by online retail. The malls are empty, but they keep building more retail space in my neck of the woods.

-3 upvotestailingloop2 years ago

You are not a man if you fall for this.

2 upvotesBoobToArmRatio2 years ago

This is just one tool of many that has to be used for a man to become wealthy.

-1 upvotesSpets872 years ago

Compound interest is bullshit unless you have massive capital to start you off. You have two options: 1. wait 50 or so years for compound interest to work on some paltry sum of money, and be too old to do anything worthwhile with it. 2. spend 10 years starting a business and get it up and running. Sell that business and then use the cash to invest into blue chip stocks/ bonds etc and live off dividends for rest of life.

3 upvotesBoobToArmRatio2 years ago

How is that a real comparison? You can't compare compounding yields to building a business, because you can (and should) be doing both.

If you're putting your money in your own business then you are still investing that money in hopes of getting a better return in your own business than the rest of the market. This could certainly be the case, but a lot of people do this, and a lot of people also go bankrupt. (Consider survivorship bias)

Compared to just letting the money sit there or spending it on frivolous crap, obviously investing is the better choice and that's what OP is getting at.

0 upvotesSpets872 years ago

The issue I have with compound interest it is touted as some magic bulletproof solution to all financial problems. "Just wait long enough and you will be rich". No one ever got rich with compound interest unless they either had massive starting capital and are just building up on an already sizeable portfolio, or they waited until they are too old to do anything with the money. I agree, business is certainly risky but as long as you provide value to your clients and there is a need for the product/ service it works.

3 upvotesBoobToArmRatio2 years ago

It's not a solution to all financial woes, but for the average person who earns more than they spend, it will definitely make them rich over time, compared to if they didn't invest at all.

For example, this: http://archive.is/iN5zj Sure, it was over a long period of time, but better than dying poor if your business fails.

Not everyone has a solid idea to build a business upon, and the capability of executing the idea, and the ability to maintain a good market share when competitors enter the space, and the resources to survive a downturn. In fact, most people won't ever start a business, especially one that will make great profits.

Also, I strongly disagree with needing massive starting capital or sizeable portfolio to enjoy the effects of compounding. Everyone self-made person must start from somewhere, and there are plenty of people (myself included) who graduated college with a $0 or negative net worth and built up their portfolios over time.

For example, lets look at this simple scenario.. at a standard assumption of a 10% yield for investing in equities, if each year you save 50% of your salary, then starting year two 4.8% of your increase in net worth would come from investments. In the third year it would be 9.5%.. increasing yearly and it would be 32.2% by the 8th year. After working just 8 years your income from investments is nearly half of your income from working, and your total investments would be 5.7x your annual salary. Considering people with 8 years of work experience are about 30 years old, I don't think they are too old to do anything with the money, and over the next few years it's more than enough "starting capital" to continue building upon and enjoying compound returns from.

-1 upvotesneo24199122 years ago

What a shitty post and i only read the title. "Get rich slow"? How about "learn and practice yourself into wealth", "develop your skills into wealth"? Screw compound interest, that ship has sailed. The big one is taxes, the one no one talks about and the one that steals the most out of our income and cuts our actives every year. Instead of having money sitting down, first build up a safety pile and use the rest to develop your skills (books, seminars, speakers, courses).

-1 upvotesRushingPrecision2 years ago

Lol the fuck is this a shitpost? Both wsb n r investing r both smh right now at this level of autism

2 upvotes • [deleted] • 2 years ago

First off you're a faggot. 2nd if people want investing advice they should read a book I'm just trying to inspire some young 18 year old college student to do what I didn't and start earlier. What's your net worth by the way?

0 upvotesRushingPrecision2 years ago

lol I'm a an asset mgr, everything you said here is some of the most basic bullshit that lacks any sort of knowledge or real advice. SAVE YOUR MONEY YOUR PENNIES WILL GROW lol fuccboiiii

1 upvotes • [deleted] • 2 years ago

and your net worth mr. smartypants? too smart to save anything?

1 upvotesRushingPrecision2 years ago

how small is yer dick that you are trying to compare bank accts on reddit

1 upvotes • [deleted] • 2 years ago

I'm just saying it's savings rate not investment strategy. have fun managing other people's wealth.

-1 upvotesGoGetting2 years ago

Getting rich slowly from compound interest is a false lesson.

Indeed getting rich slowly even by itself has little virtue. What use is $1M when you're 60 by living frugally? Yeah I'm a millionaire!... but just not in the way that makes people want to become millionaires...

The whole purpose of money is to spend it. Otherwise you're like Scrooge, sat in a dark candle-lit room counting your gold coins, like that's a virtue. Until you die and it goes to someone else.

But let's actually look at the "getting rich by compound interest" bromide. Suppose you live in a country with no tax on dividends and capital gains (I think HK?), and the market increase/interest you receive is above inflation: yes it's an OK plan.

But in the real world, where you currently get around 0% interest, against 3% inflation or more, which figures in after tax, there's no wisdom in it.

A simple illustration. Suppose I buy a house for $1M and sell it 10 years later for $1.1M. So I have a capital gain of $100k. I then pay tax of 30%, so I'll have to pay $30k. But concurrently, inflation has meant that $1.1M now is the same value as $1M 10 years ago. Therefore, I've actually simply lost $30k, not made $70k.

So the wisdom of this has everything to do with the rates, inflation rates, and tax regime you live under.

And always remember: $10k at 25 is worth way more than $10k at 40, in terms of the effect it can have on your life. Sometimes sacrifices are just sacrifices -- and do you consider a sacrifice alone to be a virtue?

Everything in balance and in context.

2 upvotes • [deleted] • 2 years ago

No money is a tool, you can use to make more money or use it for other opportunities. Start a business, an emergency, health issues and need time off work. If you spend 100% of what you make you're an idiot.

0 upvotesGoGetting2 years ago

You start a business to make more money (which you later spend); in an emergency or taking time off work, you spend the money.

Your money will be spent, the only question is how much you make, and how it will be spent. Inheritance is in a way "forced spending everything you have left on your kids", if you don't spend it before you die.

2 upvotes • [deleted] • 2 years ago

Is putting your money into a trust and setting up self sustaining scholarships spending or giving? But you aren't spending your money it's the trusts money at that point and it continues to earn it's own income. I also disagree an inheritance isn't spending either. You definently don't have the use of it anymore that's for sure.

2 upvotes • [deleted] • 2 years ago

0% interest wtf are you smoking? stock market has made me 15.49% annually. compounding my initial investment to 117%

0 upvotesGoGetting2 years ago

I said "to illustrate" not "for example", to illustrate the after-tax effect. I also mentioned in the previous paragraph the opposite extreme.

"Wtf am I smoking?" Not an honest inference.

2 upvotes • [deleted] • 2 years ago

You don't have capital gains on that 100k because there is a exemption up to 250/500k on your personal residence.





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