Ask HN: Investment Options | Hacker News Reader

Ask HN: Investment Options

4 pointsnikhilsaraf94 comments

Where do you personally invest your money: savings account / fixed deposit / 401k, ESPP, bonds, mutual funds, Betterment / Wealthfront, individual stocks, personal algorithmic trading / Quantopian, real estate / own a house, lending marketplace, angel investor, founded a company with savings, or other.

Looking for HN's opinion around the best place to invest one's savings with recommendations for allocation percentages of net worth across investment options (more than one of these options most likely). If you could also provide an approximate of number of years in the industry that would be helpful (1-4 years, 5-10 years, 10+ years)

Example: 1-5 years in industry Savings/Fd/401k 50% ESPP 30% Betterment / Wealthfront 10% Individual stocks 10%

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(US) I go by the old standard, in order:

* As much into your 401k as your employer will match (if applicable).

* Maximum federal allowance into IRA or Roth IRA (only the latter if you believe your retirement years tax rate will be higher than your current one). I go with the latter currently as having young kids means my tax rate is insanely low.

* Max out 401k.

* Tax-advantaged college savings for my kids (obviously a personal choice).

* Vanguard funds with low fees that track indices.

My reasoning is that I can spend a minimal amount of mental time thinking about my savings, and thus spend more time with my wife/kids and be more productive.

I second /u/ptype suggestion of paying down the mortgage. It is a guaranteed return that no other investment can guarantee. We paid off mortgage in 2011 and it was the best decision we made. After paying off mortgage, we redirected the mortgage payments to other investments while we were working. We lost jobs in late 2013. Not having mortgage payment has been a blessing, no stress of needing to generate cash flow to make mortgage payment.

As we no longer has steady paycheck/significant income from work, we have become more conservative with our investments and keep one year worth of expenses in cash and cash-equivalent. We still have a 7% play account that we invest in whatever fancies us typically individual stocks, options, and Peer to Peer Lending. Rest is in ETFs, mutual stock and bond funds (Index based) in combination of Traditional and Roth IRAs and taxable brokerage accounts at Fidelity and Vanguard.

It will be hard to find any investment options with better risk/return characteristics than paying down your mortgage. It's also quite tax efficient by construction compared to putting the money in an investment where you have to pay tax on interest/gains (though some countries allow for interest rate deduction from tax anyway). An added benefit is that it makes you more resilient to temporary loss of income etc.

3-6 months living expenses in cash/checking

Then, 100% in a S&P 500 index fund (VFINX) will be better than 95% of the population.

Don't bother with bonds, due to low interest rates and high inflation.

Advanced: pick individual stocks

PM ETFs (GLD, SLV)

consider buying gold and silver coins

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