[serious]ask me about personal finance

[Litodude]

good debt(hah)/credit, bad debt, debt management, rent, investing, retirement, 401ks, ira, roths, i'm in college wtf do i do, i has a babby wtf do i do, i'm 16 wtf do i do, CDs, bonds, stocks, mutul funds, indices, forex, btc, futures.

i will answer ur questions when i wake up

do not ask me about death loans

[Izzy]

Re: [serious]ask me about personal finance

What are death loans?

[leonid]

Re: [serious]ask me about personal finance

Now everyone is going to ask about death loans and nothing else

[Litodude]

Re: [serious]ask me about personal finance

it's called a mortgage in french and none of u need that shit in ur life right now

ok gn

[Spenner]

Re: [serious]ask me about personal finance

Will there ever be another golden time to invest in a shitton of BTC like a few years ago when they were like 5USD a piece?

[rushyrulz]

Re: [serious]ask me about personal finance

i'm in college wtf do i do

[pokelda]

Re: [serious]ask me about personal finance

im 12

[DotKritic]

Re: [serious]ask me about personal finance

Should I buy TWTR stock?

[dAnceguy117]

Re: [serious]ask me about personal finance

401ks, ira, roths, CDs, bonds, stocks, mutual funds, indices, forex, btc, futures [serious]

I've probably learned about each of these at least once but have since forgotten. what are these things and what should I be doing with money that I might someday have

[Hateandhatred]

Re: [serious]ask me about personal finance

Is there a way to invest in MLMs? Like invest in their growth, then retract the stocks when the officials kill it?

[psychoangel691]

Re: [serious]ask me about personal finance

I actually had gotten a decent amount of money back from a tax return and was considering putting it into a stock but I have no idea what I'm doing when it comes to that stuff. My father used to use etrade some time ago, but I look at that site and I'm just like wtf am I doing. Info on how to invest in stocks would be cool.

[kommisar]

Re: [serious]ask me about personal finance

it's called a mortgage in french and none of u need that shit in ur life right now

ok gn

a house is a huge investment

whether you get return on it depends on your ability to predict the market in your area and your ability to increase the value of your property.



if I had any serious questions to ask you about finances, how much money do I need to get started in stock market trade?

[Litodude]

Re: [serious]ask me about personal finance

i wanna address the above 1st because didn't i just say something about not wanting to talk about it, but i have to run errands now:

yea because a house is a house is a house do not use your primary house mortgage as leverage or figure you are going to flip a house and sell it for a measly 5%-8% gain over fucking YEARS because a) fees might just eat you alive and you might never get profit in the first place b) do not think your house is liquid (only a room in your house is at most!!) c) why would you risk losing where you live d)this does not apply if you have multiple properties and d) you should learn by now since you've all livd through the housing crisis in the US and.

people..

abandoned their homes...

cuz they couldn't afford to sell it...

let alone make payments to live in it (that's another lesson about debt)

brb

[Reincarnate]

Re: [serious]ask me about personal finance

Adding my own shit to this thread.

The thing about personal finance is that it's personal. The answers will differ for everyone since so much depends on timing, circumstances, goals, risk sensitivity, education, patience, rationality, emotion, utility, etc.

That being said there are usually some pretty good heuristics to live by. IMO:

1. Ensure you have an emergency fund that will get you through at least 3-6 months of expenses. So if you lose your job, you have some time to get a new one while being able to pay all your bills. This is imperative which is why I am writing this one first. If you don't have an emergency fund, it should be your #1 goal right off the bat. If that seems too much for you, then at minimum, save at least $1000, which is enough to handle most emergencies that may realistically float your way (flat tire, hospital bill, etc). My point here is to have a buffer to keep you afloat. Otherwise you're totally exposed and at the mercy of chance, and believe me -- bad things can, do, and will happen. It's just a matter of when, not if. So prepare yourself! Keep this money in a money-market fund (such as those offered by Sallie Mae) and don't touch it unless you need it. Ideally you should never have to touch that money ever again. But it's there if you need it.

2. If you have a 401k option with your employer, you need to contribute at least whatever amount the employer matches. In other words, if they match half of your contributions up to 6%, you need to be contributing at least 6%.

3. You can get aggressive with the 401k more than you think. It's taken out of your paycheck pre-tax and so in terms of net pay, it's not as big a deal. The limit in 2013 is something like $17.5k.

4. If you can, open up something like a Roth IRA especially if you're young and in a low tax bracket. This is great not only for tax diversification purposes, but you have more fund choices (such as with Vanguard). The max cap is something like $5500 in 2013.

5. Pay off your credit cards in full every month so you never have to pay interest. If you owe interest, pay that shit off ASAP because you're tossing money down the hole. There's almost never a good reason to live off credit like that. If you are, then you fucked up somewhere, but that's OK -- all you can do is focus on making the right moves going forward.

6. Pay off your student loans aggressively, especially those with interest rates exceeding 4%. That's a hell of a guaranteed return, especially once you're clocking past 5, 6, 7%.

7. Mathematically speaking you are better off paying off your debts by order of interest rate, starting from the highest and working your way down. This guarantees that you minimize how much you waste in interest overall. However, personal finance is not purely mathematical -- it's also psychological. Sometimes you are better off eliminating small balances regardless of interest rate. The feeling of "eliminating debt" is usually an effective motivator to keep you going.

8. Don't time the market. You have no idea what the fuck you're doing. Seriously. This isn't me being facetious or arrogant. You have no idea what the fuck you're doing. And neither does anyone else. If you're going to buy something, plan to hold onto it for a while. Don't get in the habit of trying to "get in low and sell high" in the short term.

9. Live within your means. Just because you have $X doesn't mean you can afford something that costs $X. You also have to account for unforeseen expenses and give yourself some breathing room, and also consider money that you can leverage for later growth. Make sure whatever you spend is less than whatever you earn. A good rule of thumb (for starters) is to save at least 20% of your paycheck every month if you can. If you can't do that, then you need to cut expenses because saving less than that is not doing yourself any favors.

10. If you are considering buying something that you can't hold onto for at least 4-5 years, then don't buy it. For instance, don't buy sneakers that will turn to shit after 6 months of use. If you buy cheap, you tend to buy twice, or even thrice -- and you usually spend more in the end trying to cut corners.

11. Don't bother with financial instruments that come with hefty fees. On average, it's not worth it. Keep fees low -- those suckers add up.

12. Don't compare yourself to others or bother "keeping up with the Joneses." There will always be others out there who make more money, have fewer expenses, and have it easier than you do. Trying to mimic someone else's lifestyle to make yourself feel better is folly. All you can do is optimize your lifestyle and live within your means. You'd be surprised -- many people you think are living large are actually living on debt and are totally broke with no savings.

13. Save early, and save often. Try to have, at minimum, one year's salary in your 401k by the time you hit 30. Ideally you want more, but the point is to get used to saving for retirement early on. You won't want to be working when you're sufficiently old, and it's going to be harder to save the longer you wait, especially if you plan on having kids and shit.

14. Learn to cook. If you're always eating out, you're wasting a lot of money. A lot of people spend more money than they think when it comes to food. Girls also dig guys that can cook.

15. Don't listen to "financial fad" advice. It's sort of like physical fitness. Everyone wants the newest and latest diet pills and fad diets when really what matters if moving more and eating less. Same applies to finance. Spend less, save more. Don't get sucked into pyramid schemes and the latest "BUY GOLD NAO" fads.

16. Buy off-brand shit if you can. Usually it's the same (if not very close) to the name-brand stuff, and it costs a lot less.

17. Don't buy a car if you can help it. You not only have to buy the car, but you have to pay insurance, constantly buy gas, pay for repairs, pay for maintenance, and then you need to pay to ultimately park it somewhere. And you can only sell it for a fraction of what you paid for it. Yeah, public transportation for me, please. If I really need a car, I can either hit up a friend who already has one, or rent a car.

18. Never, ever co-sign a loan. Ever. Ever.

19. Schools and universities in the US are way too fucking expensive. Unfortunately, they're still worth it. Even so, try to pick one that'll be affordable in terms of loan payments if you don't have parents who can foot the bill. If you want a very, very rough rule of thumb, every $10k you borrow is another $100/month over 10 years. This isn't an exact figure but it gives you an idea of magnitude.

20. Apply for scholarships. You'll win a bunch of shit by default because most of your peers aren't really trying.

21. Don't buy a house because you think it's a good investment that you can sell off for more value later. Buy a house only if you want a house.

22. Don't fuck up your credit. Shit stays on your report for like 7 years and takes a lot of effort and consistently good usage to repair. Start early and always pay on time. Keep your utilization low (ideally under 30%, 10% if you can). If you're maxing out all your cards, you're not doing it right.

23. If all else fails, get a better job if possible. But don't expect it to be a cure-all. A $50k/year guy who makes smart decisions will be richer than the guy who makes $120k/year and doesn't give a shit.

24. Don't bother with stocks until you've got everything else in your life solidified.

25. Don't lend money to friends unless you're OK with the possibility of never getting it back.

26. Don't accept money from friends unless you have a plan to pay it back quickly. Otherwise you risk fucking up the relationship.

27. If you're financially stable, you'll be more attractive. I'm not even kidding here. Having your shit together = sexy.

28. Don't marry crazy. Always get a pre-nup, too. It's the smart thing to do.

29. People tend to be happier buying experiences rather than stuff. In other words, taking a trip with friends to another state is a lot more fun than blowing money on a bag or some tech gadget that'll wind up in the back of the closet after a few months.

30. Don't be afraid to reward yourself every once in a while. You don't have to live like a pauper to make smart choices. The goal is to get used to the idea of working with a lot less than what you're actually pulling in. Rewards help keep you going, too.

31. Just because a banker/advisor/officer/etc is willing to lend you money, it doesn't mean you should take it. Back before 2009, subprime loans were all the rage. Loans were being handed out like candy to people who couldn't afford them, and the officers knew this. But they profited off this structure and so it was in their best interest to arrange the transaction.

32. ...which leads into my next point. If you ever plan on seeing a financial advisor, make sure, firstly, that they "operate in a fiduciary capacity." This means they work for you. Otherwise they may be trying to sell you shit and get you to invest in things because the company is compelling them to, even if it's not in your best interest.

[kommisar]

Re: [serious]ask me about personal finance

i'm going to buy a house because the market here is cheap and I don't live in America. it'll be purely for living reasons, I don't expect to use it as a means to retire (HAH)

housing market in Calgary is INSANE and houses are selling like hotcakes faster than they can be built. That is probably one of the few places using houses for profit is a good idea