Hacker News Reader

Comment by onemoreact | Hacker News Reader

Spend less and Save more. If you save ~18-20% starting in your early 20's you can stop caring what the stock market does. Basically plan for 4.5% ROI and deal with it. If you happen to be able to retire at 50 great, if not your still going to be ok. Don't go to an expensive school and get someone else to pay for grad school. Also don't skip out on insurance because cheap does not mean good.

PS: An Indian friend of mine saved 20k over a year while making 42k and living in an expensive area. He had no car, never eatout, and had a lot of roommates, but he wanted to save up for his sisters dowery. You can still splurge a lot more than that and still build a nest egg quickly.

View on HN

Extremely good comment, just a minor important point here -

> Basically plan for 4.5% ROI

Warren Buffet notes that a nation's ROI overall basically can't exceed its GDP growth for an extended period of time. So if your country has a 1% to 3% growth rate and you're investing in an unsophisticated way, then 4.5% might be optimistic.

(It's still a thoroughly good idea to do the rest of your comment. I'd save most of my income even if my ROI was -10%, because money is more useful in large quantities, especially when you break certain thresholds like "can take 2-3 years off work when it's a good time to do so" and "can mix cash and and labor when joining a company to get a big equity stake" and "can buy tools and gifts without even looking at the cost if there's a productivity benefit" - cash is more useful/leverageable in large numbers than small for most middle class-ish people.)

1-3% is real GDP growth rate, net of inflation. With inflation at 2-3%, then planning for 4.5% growth, not adjusted for inflation, is not unreasonable.

Where are you getting the 4.5% ROI? It's obviously not the stock market, if you're not caring what the market is doing.

Is it in bonds? Several cities and states are looking at defaulting on those. Even if they're corporate bonds, you're right back to being tied into the stock market again.

Perhaps you have it all in CDs. Probably a 20 year Cd if you're getting 4.5%. Fifteen years from now, the bank elects a new president whose new investment strategy is Beanie Babies. There months later, the bank goes under and you're praying that the FDIC steps in to bail you out.

If you're getting any ROI, there's risk involved and you can get wiped out the same way that the boomers did.

Well the 30 year treasury is yielding 3.5%. Nominal. So you are not getting 4.5% in anything risk free. But as a long term return in shares, historically that has been the case. Whether it will be looking forward is another question.

Your friend's approach is all well and good if you're single, living with a bunch of roommates, and have no financial obligations other than to yourself. What happens when you get older, marry, and have a kid or two?

There's little financial difference between having children and buying Lambourghinis. The cultural difference is that only one of these is blameworthy if you get into financial trouble later. Perhaps both of them should be.

Maybe better neuter yourself? This is the most selfish statement in this thread.

Thanks for the demonstration of the mindset I'm talking about. Some people want children, other people want pets, other people want houses, other people want cars, other people want jewelry.

All of these things cost money, none of them are charitable, but it's somehow less ok to get in financial trouble over them, the further you move toward the end of that list. Why?

Your parents took that risk so you could have life. It seems extrodinarily arogant to belittle them for it.

My parents didn't have kids until they could afford them. They were in their mid-30s when I was born. If I'd been raised in poverty because they had kids at 18 and dropped out of college, I would be entirely within my rights to question their judgement.

I don't think anyone's taking issue with the notion of personal responsibility, but rather, with your original phrasing -- in which you (perhaps in a tongue-in-cheek way?) implied that having children was a luxury akin to buying a sports car. One of those things is a hardwired, biological imperative of our species; the other is a fancy toy. Apples and oranges.

Social signaling (such as flaunting luxury goods) is a hardwired, biological imperative of the entire Hominidae Family. Gorging on foods rich in historically hard-to-find nutrients like salt, fat, and sugar is a hardwired, biological imperative of the entire Mammal Class, at least--probably all animals.

You blame people who fail to control their unhealthy eating decisions; why don't you blame people who fail to control their unhealthy procreating decisions?

"You blame people who fail to control their unhealthy eating decisions; why don't you blame people who fail to control their unhealthy procreating decisions?"

That's not what I said.

I do blame people who make unhealthy parenting choices, i.e., who have kids before they're financially capable of supporting kids. I take no issue with that argument.

Rather, I took issue with the language in your original post, which seemed to imply that having kids at all is considered a high-end luxury. IMO, something's seriously wrong with any society in which that's categorically true.

I was very careful to separate the financial difference and the cultural difference, and I feel like you're ignoring that.

Having kids at all is not a basic human need on the level of food, water, and shelter. It is a biological urge, similar to the urge for french fries.

Now, I don't personally think that eating a reasonable serving of french fries while getting adequate exercise is blameworthy; nor do I think that buying a Lambourghini while earning $10M/year is blameworthy; nor do I think that having children you can afford and care for is blameworthy.

I do think that it's silly for popular culture to have sympathy and often admiration for unprepared parents, but scorn and derision for indebted luxury car owners.

FWIW, I am childless and drive a VW.

Your ignorance shows when you seem to think financial stability can be reached by most of the world. The reality is that most people will never achieve any sort of stability, living day to day, taking risks as they will.

Effectively you are telling the majority of people on this planet they don't deserve the right to have children.

What gives people the right to bring children into the world when they may not be able to support them properly? These are human lives we're talking about. I cannot think of any arrogance greater than assuming functioning genitals gives you the right to irretrievably screw up an innocent person.

This kind of "I'm going to make babies and you can't stop me!" attitude is what created the Iron Law of Wages.

Wow. Downvoted with no explanation. Not a single counter-argument ever given. I thought this would be one place I could question the attitude that popping out babies with no thought for the future is the god-given right of every person on earth.

Looks like, even here, that's something you just can't say http://www.paulgraham.com/say.html

Wasn't the ROI of the S&P 500 over the past decade roughly 0?

Only if you ignore dividends.

> Spend less and Save more.

What?! Be frugal and spend beneath our means?!

This man is a subversive. He and his kind should be hunted down and silenced.

Reply on news.ycombinator.com