Ask HN: What is the best financial advice someone has ever given you? |
Ask HN: What is the best financial advice someone has ever given you? |
Time in the market is better than timing the market.
We often make the mistake of equating money with wealth. Money is simply the currency needed to exchange for goods, services, or assets (which can include securities, commodities, real estate, amongst others), while wealth is control of something of both current and potentially future value to people who will pay for it (see assets previously enumerated, although the list is in no way exhaustive).
For example: Would you rather I give you $100? Or a share of SPY? If you intend to spend, probably the fiat. If you intend to hold for future wealth, more likely the security. And if you intend to be financially secure, you are very likely of the mindset of accumulating assets that will appreciate in value at favorable prices.
https://academic.oup.com/qje/article/134/3/1225/5435538?logi... | https://doi.org/10.1093/qje/qjz012
https://news.ycombinator.com/item?id=40650326 - June 2024 (148 comments)
https://news.ycombinator.com/item?id=19817584 - May 2019 (260 comments)
https://news.ycombinator.com/item?id=16078059 - January 2018 (151 comments)
(additional threads exist, but without comment, therefore not cited)
People, as a group, undisciplined. Without discipline, money in hand is money spent. Land, land sits there, doing nothing, menacingly. In that sense, land is 'default alive' and money isn't. Generations can go by without any land-atrophy.
It helps with another human weakness too. It's impossible to get a person to save at rates of 30-40% of their salary. But make it a mortgage, and suddenly they've learned conscientiousness.
Skills are key because they’re inflation-proof, and no person or government can ever take them away
You could monetize the skill yourself, of course, though that's just called being an entrepreneur.
but how do you expand that so it doesn't depend on you, In the end, our body has an expiration date.
https://youtu.be/R3ZJKN_5M44?si=Ahdvgr3FNIOl40Q9
Literally changed my life
to be honest that's why I created my app. just so I have a small "advisor" on if I should or shouldn't buy certain things.
in case you want to give it a look. https://www.producthunt.com/products/innerwallet
A few days before I found out a company I worked at early was going to go public, which ended up 5x-ing my net worth, I had just been thinking, "Even if I had all the money in the world, I don't think I would want to live somewhere else, or drive something else, or own other stuff."
Everybody and their brother had an opinion about what I "should" do with my newfound wealth, but having that "Don't let the world tell you what you want" refrain in my head kept me from blowing it on a bunch of stuff that wouldn't have made me any happier.
1. Your career provides your wealth
2. Don't assume you can replace your wealth
3. Recognize the difference between investing and speculating
4. No one can predict the future
5. No one can move you in and out of investments consistently with precise and profitable timing
6. No trading system will work as well in the future as it did in the past
7. Don't use leverage
8. Don't let anyone make your decisions
9. Don't ever do anything you don't understand
10. Don’t depend on any one investment, institution, or person for your safety
11. Create a bulletproof portfolio for protection
12. Speculate only with money you can afford to lose
13. Keep some assets outside the country in which you live
14. Beware of tax-avoidance schemes
15. Ask the right questions
16. Enjoy yourself with a budget for pleasure
17. Whenever you’re in doubt about a course of action, it is always better to err on the side of safetyOf course I heard this and did buy a flat with my now ex anyway. I was lucky enough to manage to buy back the remaining half (burning basically all of my savings) but for a few months i was hunted by the idea of having to give up the place i worked so hard for.
Don’t… don’t do it.
Imagine if early society decided there was no need to stock food for winter because there is some loss in the process...
Put your money to work for you.
Time in the market is better than timing the market
It's better to own a small basket of good companies than a large basket of mediocre ones
gold is an important security in some cultures; but the US economy is a better bet if you can make it.
Get to $1M without considering your primary residence net worth so you can invest in other mediums unavailable to the general public.
It’s true that Larry Ellison didn’t become a billionaire by buying and holding index funds. But for people who don’t feel a strong desire to buy their own yacht, index funds can be a very good investment.