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Comment by tiew9Vii | Hacker News Reader

Must admit, reddit got me caring more about my finances.

It seems not many people are taught about money properly. I certainly wasn’t and non of my friends where.

I’ve always been good in that I never spent what I didn’t have and lived within my means. What savings I did have where in a zero interest current account though!

Following the finance Reddit’s at least put me in the right path. 6-12 months cash savings now in a high interest account, now have a pension plan, putting money in to ETF’s until I have enough in the ETF’s I’m willing to by some individual stocks which may not be as stable as the ETFs I have.

As someone who’s been a senior dev for 10+ years doing well but stuck in a rut I’m also finding the various cscareers Reddit’s useful about the job market. Seeing people’s salaries, negotiations, what jobs to look for, what companies to look for etc etc.

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> What savings I did have where in a zero interest current account though!

That's not great, but overall, I'm not making very much money from my "high-interest savings account". Maybe a grand or two over decades, but even that's generous. I don't know if it's worthy of an exclamation mark. The biggest losses are prevented by not overspending and some of the other things you mentioned.

Very true. Reminds me of this quote I had saved (I don't recall the source)

"Personal-finance gurus obsess over buying coffee not because it is unsustainable, Vanderkam suggests, but because being a personal-finance guru is. “The strongest finance advice can be summed up in a couple sentences,” she explains. Maximize your income. Limit your big monthly expenses. But if your job depends on doling out financial wisdom, Vanderkam notes, “you have all this real estate you have to fill on your blog, your podcast, and your books. That’s where all this little stuff winds up coming in, but in the larger scheme, it’s kind of irrelevant.”

This is such a true sentiment and is actually true for a lot of advice.

I think it's why a lot of people end up switching to giving talks or some other repeatable income stream.

Once you've written a blog post, that info is out there.

But if you can make it an "event", you can give the same advice over and over again.

>my "high-interest savings account". Maybe a grand or two over decades

Huh? Either you have very little savings for someone on this site, or your "high-interest" account isn't high-interest. Ally Bank currently has 1.6% interest on their savings account, so you'd make $1000 in interest in 1 year with a balance of about $62k. If your savings account doesn't have at least 1.5% interest, then why do you have it? There's lots of places with rates of 1.5-2%.

Really, 2%, where? Also, that’s probably going to get knocked down this week given the announcement from the Fed, unfortunately.

I get 5% interest on up-to a $20,000 balance in a high interest checking account. You'll see higher returns using a high interest checking as opposed to savings account if you can find one you qualify for.

High interest checking accounts: https://www.doctorofcredit.com/high-interest-savings-to-get/... Automation for meeting minimum spend requirements: https://github.com/jakehilborn/debbit

>High interest checking accounts:

I clicked through a few of those offers. Each one has a balance limit (after which interest drops to near zero), monthly fees, sign-up fees, or requires you to generate banking fees through another service.

And how could they not? Finance isn't magic, and we are in a world of all-time low rates. There is no possible way these companies can be paying you 5% on cash without making it up elsewhere.

The accounts typically have sign up bonuses, not fees. I got $125 bonus for signing up. The catch is typically that they require usage of the bank debit card N times per month. The github link is a program I wrote to hit that requirement by buying 50 cent Amazon gift cards and paying cable bills in small increments.

You'll never net more than $1000/year in one of these accounts given they have balance limits. Some folks sign up for multiple high interest checking accounts in order to park more money.

As I said in my prior message, Ally Bank has 1.6% on savings. I think CapitalOne 360 has either 1.6 or 1.7, Discover has something similar, etc. I think Tab Bank has a little higher rate. These aren't hard to find. You probably won't find a full 2.0% anywhere currently.

I know they aren't hard to find, I have an account at Ally Bank. My question was specifically 2%.

Anyway, 1.6% is going away given the Federal Reserve just cut rates by 50 bps yesterday. Expect an email from Ally soon.

It's unusual to have $62k or more in a savings account.

Either it's some sort of 6-month emergency fund and CDs typically make more sense (ladder or not) or it's money you want to grow, in which case investing in index funds is the better approach.

>It's unusual to have $62k or more in a savings account.

You're not paying attention. The OP said it would take decades to make $1k or $2k; I pointed out it doesn't take that much money to make that in only 1 year. It's not that unusual to have $30k in savings, so that's roughly $1k in interest in 2 years, which is an order of magnitude lower than what the OP was claiming.

In hindsight it’s something extremely basic, simple and obvious to do which is why I had the exclamation mark for my lack of knowledge.

In the past couple of years I’ve made $2-3k in interest. Not much but it’s $2-3k I wouldn’t of had if sat in a checking account so to me it’s free money for holding the exact same savings just under a different account with my bank.

> I'm not making very much money from my "high-interest savings account". Maybe a grand or two over decades

All that says is that you barely have any balance in the account. Maybe a couple grand.

>putting money in to ETF’s until I have enough in the ETF’s I’m willing to by some individual stocks which may not be as stable as the ETFs I have.

Are those retirement accounts or taxable brokerage. Because for many people, maxing out their IRA, 401K, and HSA is like 35K a year alone, and putting money into taxable brokerage should take a backseat unless 1) you like the gambling for its entertainment factor 2) you choose to keep your short term savings / emergency cash in the market (*I much prefer a combination of 6 months savings invested a little riskier than it should be + a large line of credit. Then you have the choice of selling stock or borrowing at 10% APR, for something you can hopefully pay off very very soon. A 15K LOC at a credit union is a godsend.) But other than my asterisk, taxable investments are usually an inefficient use of funds. 401K match and HSA are top priorities.

The downside is that putting money into those makes it harder to withdraw for when you do need those funds. Savings accounts makes it much easier to pull available funds. Other than that, you're right.

Thats what the line of credit is for. When you need immediate money, dont want to cash out stock, can pay it back in a month, or to give you a month to park it somewhere with a lower interest rate.

You can spend out of a brokerage account as if its a savings account. Sell your stocks, and youll have cash.

Another thing is that 401k and IRAs might not be great for someone hoping to retire early because of the early withdrawal penalties.

Maybe I'm missing something, but HSAs seem to me to usually only be available if you have a high-deductible health insurance policy. That can be OK if you're 25 and very healthy, but for many other people is a high risk.

HSAs are a no brainer if you can afford to spend the out of pocket maximum. Either you pay the insurance company more in monthly premiums for a lower deductible, or you pay a lower monthly premium and invest the difference in an index fund and you keep the returns. Which grow tax free in an HSA.

Your probability of having a healthcare expense does not change based on the type of insurance you choose (high or low deductible). Only the timing of the cash flow. But the government gives tax advantages for using an HSA. It's an IRA with the ability to withdraw penalty free any amount you used for healthcare anytime you were covered under an HDHP.

If you switch to say an HMO or PPO plan can you still use your HSA for out-of-pocket healthcare costs as you can an FSA? If not, what happens to your HSA/what can you do with it?

HSA is yours to keep forever. I recommend using Fidelity, no fee and access to all the best investment options. You should transfer all funds from an employer sponsored HSA if it's not Fidelity to Fidelity.

Any medical expenses you incur while you have a qualifying high deductible health plan (HDHP) can be expensed anytime in the future from your HSA. What I do is invest all of the HSA funds, and pay for all of the medical expenses with after tax money. I pdf all of the receipts for the medical expenses, and now, if ever in the future I need cash, I can withdraw it from the HSA penalty free since I have proof of the medical expenses. If you don't end up having medical expenses (good luck), and you turn 65, then you can withdraw and pay regular income tax like an IRA/401k (if you need the cash, you should of course use up your IRA/401k first).

I don't even understand how the government plans to prevent fraud if people decide to claim the same health expense multiple times, as you only have to keep tax records for a few years, and the law as it currently is lets you deduct health expenses from anytime in the past at any point in the future.

Its a Traditional IRA that doesnt tax growth. Its tax free going in, on its gains, and going out. Theres really nothing like it.

Best case scenario, spend all your health care with cash. Let the HSA grow as long as you can. Reimburse yourself for a decades worth of health care spending when you need the cash.

Do you mind sharing the subreddits?

/r/personalfinance ignore the subreddit and read the sidebar

and sibling /r/UKPersonalFinance for UK specific advice (since finance products, terms and laws tend to be different in different countries) There are probably ones for most other countries too. At least Aus from what I saw yesterday

/r/personalfinancecanada is the Canadian version.

/r/Finanzen for Germany, Austria and Switzerland :)

r/fatfire

/r/wallstreetbets

Just lost all my savings, thanks.

I know we’re discussing reddit here, but let’s please keep the reddit-style quips off of HN

Knowing that sub, there's a really good chance that the person you responded to was not joking.

Don’t know who downvoted you, but as someone who joined WSB two months ago, it is mind blowing. Yes, these are bets. You are likely to blow it all. But imho it gives perspective to the topic of personal finance. Even if it’s just to understand one’s own limits. Valuable sub.

If you’re following Nassim Taleb’s 80/20 rule, and have 80% of your money in bonds and 20% in high risk options, it can certainly pay off.

Please go to investing or personal finance, you're worse then OP.

I imagine that WSB is the internet version of what young wallstreet professionals are like.

Go out into the late evenings, drink excessively, do designer drugs, party it up, all while mixing locker-room talk and investing strategies.

r/fire - financial independence, retire early.

r/fatfire - same thing as above but for people looking to have more than "just enough" to retire (multimillion, mostly full of high earners like SWE's, agents or successful entrepreneurs where this goal is somewhat realistic).

r/personalfinance & r/ukpersonalfinance - well rounded finance forum.

r/frugal - okayish for if you are in a really tough spot. If you are doing ok I generally don't recommend them because ultimately you are trading your time/health using most of the hacks from here.

There are other country-specific personal finance forums on Reddit too, such as r/PersonalFinanceCanada.

r/financialindependence is the bigger FIRE subreddit

r/personalfinancecanada for Canadians, lots of great information here specific to Canada.

I'm partial to /r/financialindepedence

not a subreddit but I cross-reference bogleheads wiki and /r/personalfinance wiki anytime I want to look for consensus or diverging opinion. Bogleheads still has a slight edge on /r/personalfinance for its specific topics.

https://www.bogleheads.org/wiki/Main_Page

Between Reddit and bogleheads, that is all the financial wisdom you need. Bogleheads has deeply shaped my investment approach and it should be the same for 95%+ of other people as well.

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