Fuck I hate finance so much. Googling for like a year and I still haven't the faintest clue what to actually do with my money.
Just going to keep it all in cash and call it a fucking day.
And really what to do with the other half is what most of investing is about. If you have a lot of money then many people try and beat the market, which generally means they lose it all. Others hedge for bad times, which is a good idea if your wealthy and care about downsides more than upsides.
However, if you are like most people you can invest in other things. Save for unemployment, pay off your debt, pay for education, start a company, buy a house, buy solar panels, or buy a Prius etc. Chances are there are non 'investment' options that are better than the stock market after taxes, but it really depends on you and what you want to do.
pay for education: none
start a company: definitely not
buy a house: nope
buy solar panels: nowhere to put them
I literally have nowhere to 'put' my money except instruments. I already have all the instruments I need. Just finished selling off a good 80% of my possessions as well. I've hit my limit for 'desires'. My only goal now is to make that $20k/year off investments. So you say put half in there and sit on it, but I don't actually have anything to do with the other half.
Second, dump the other half into the same basic investment, but treat this as your early retirement pool. When you can make it to 65 with this money then "retire." The other half plus social security will last your retirement, and this half is your FU money.
Edit: To be clear when 1/2 your money is ~280k @ 50 ramping up to ~500k in @40 you can very likely pull out 20k/year till 65. So 1 mill total @ 40 and 560k @ 50.
Why do this? Well your expenses will rise faster than inflation. As you age you just need more help and have more health issues. So retiring as soon as you can is risky unless you living on a small chunk of your nest egg.
PS: By retire I don't mean living on a beach someone, just no longer forced to work a job for food. Further, social security is actually a significant amount of money if your single and had a good paying job for ~25-30+ years.
Yes my goal is to hit 20k/month just to cover my basic expenses, at which point nearly 100% of my income can go towards my accounts. I'm 23 right now making $100k USD (in Canada it's around $125k). Expenses are $1500/mo, rest just sits in the bank.
I figure if I keep working until I'm 40 (my cutoff age), it'll be much loftier. I also don't plan to live past 65 for personal reasons.
When I say 'retire' I really just mean ROI covers life expenses in full, otherwise my sub <20k/year expense lifestyle will do until I die. I still plan on working, just putting all that money into savings.
With this new information, how would you adjust your plan? Also can you please clarify the @50 and @40? Do you mean 50% and 40% respectively?
Thanks.
Can you go into this?
Clothing. Beats. Startups. Money. Let's get fucked up bro. You thinking DORSiA tonight bro? It's all pseudo. Even the people who are 'into shit' are usually into it just deep enough where they can virtue signal others of the same depth, then jerk each other off about how fucking amazing they are for being the x% of the population into $y hobby. It doesn't matter what club. The attitude comes in all themes - classical music, startups, etc. Most of it is an illusion, I've only met maybe 2 people in my entire life who've dissolved their ego's (no I am not one of them).
We've abstracted human connection and communication to such a disgusting degree we're most likely never turning back.
And please spare me the mental health responses.
I would encourage you to plan your finances as if you'll live to 90+, such that any decision to exit early will be driven by your own volition and not by financial stressors. No mental health argument here; I'm just trying to keep it practical.
Just way too much information way too quickly.
Is there something more specific you could talk about with this? "with demands for a certain conduct that I cannot sincerely present". Are we talking about something like being gay in an anti-gay society, or something far deeper about the basic structure of society?
Sorry for pressing, I'm just very curious in your point of view.
>Is there something more specific you could talk about with this? "with demands for a certain conduct that I cannot sincerely present". Are we talking about something like being gay in an anti-gay society, or something far deeper about the basic structure of society?
If I dress my thoughts up into a book with a narrative it might be just good enough where people excuse my depravity as 'wit'. I'll wait until I publish and if it goes nowhere, then I'll end it. Until then I'll keep pretending, and it's the pretending that kills me. Most people are lost. I get overwhelmingly sad when around people because I can't help them. Too much empathy and self awareness. I honestly have no idea. Just being around people makes me sadder than if I wasn't around them. What actually makes me happy is not chilling and hanging out, but teaching someone and watching them learn and seeing the resultant joy that brings. That's why I greatly enjoy getting lost in music and playing with friends. There's people I know where I honestly don't know a single detail about eachother's lives, we just play and communicate that way.
The point was the older you retire the less money you need. But, also retiring ASAP is often a poor idea as you tend to worry about cash more the less you have. If you are going to keep working then it's a purely theoretical exercise and you can quickly get far more savings than your lifestyle will ever spend.
I would also say 65 can feel rather young when you hit 65 or you might not make it. However, planning to have money indefinatly adds peace of mind even if you never spend it.
@23 just dump it all in a low cost index fund and ignore it, in 10 years you can rethink the situation. You could easily be married with kids or something. Also, get a solid understanding of the tax implications of what your doing. Some people say having X months of cash on hand is important but selling stocks is hardly the end of the world the real issue is tax deferred accounts can have withdrawal penalties.
The idea is that rather than holding liquid exchange media (money), you make that money work by investing it on a productive venture.
Investing in the stock market (or an index fund) is similar in many regards to starting your own business or putting the money into a partnership or investment property: you're investing financial capital (giving someone else the ability to buy stuff -- liquid exchange medium) in return for an ownership interest in the return.
On balance, investing in stocks is cheap, has little by way of management obligations, and (notable exceptions notwithstanding) tends to produce pretty good returns over time, especially as compared to holding cash. Your investment is also fairly liquid, as stocks themselves can be sold (converted to cash) at any time.
No, it's not risk-free. But it's a pretty decent risk, and in general you're in the same boat as everyone else.
Edit- by "no better" I mean if I can get 80-100% of your content from a common source then I'm better sticking with the common source.
Oh boy have I ever. And not a word was retained. Total gibberish. No idea how I can code but not understand finance.
Honestly, I don't have the time to 'get into' finance beyond reading up a couple hours a week. Just need a simple guide, my only goal is to leave my money somewhere for 20 years and not touch it while it grows so I can make $20k/year off my investments eventually. Not looking to day trade or do any of that. Been looking at Canadian Couch Potato (I'm in Canada) and Mr Money Moustache.
I don't have any lofty aspirations. I only want this apartment to be paid off for free every month, at which point I'll have the freedom to wake up every day and do whatever I want.
However, if you really just want to park money for 20 years, you probably want a target year fund like [2] which will have higher risk now (stocks, REITs, etc), and rebalance to lower risk (Bonds) as it gets closer to 2040. It's literally the definition of set it and forget it.
[1] https://personal.vanguard.com/us/funds/snapshot?FundId=0123&...
[2] https://personal.vanguard.com/us/funds/snapshot?FundId=0696&...
edit: I should add, I'm not your financial advisor, and I don't have a fiduciary duty. You should consult with a financial advisor (who has a fiduciary duty) before making any decisions about investments. However, target year funds are frequently (one of) the best decisions for many people.
That's like, just my .02 though.
That said if investing doesn't interest you just use a Robo advisor like Wealth Simple (Toronto based). You will pay maybe 0.2% more in fees but your performance will be the same as the couch potato approach, and you'll never need to think about investing.
Then, come back in 20 years and upvote this. :)
Comedy gold about the overfinancialization of everything. As early as 1988 no less!
Btw if "overfinancialization" is not a word, it should be.
Finance both is and isn't confusing. The language is obfuscatory. Many of the concepts are actually pretty straightforward. There are the occasional kinks.