Before you invest in something, determine how that thing creates value. If you can’t determine how it creates value, it is most likely a short-lived scheme. Risk aside, it has also become a principle of mine that I refuse to try to generate income or gains from anything that, at the end of the day, isn’t generating real value for society.
One reason it's difficult to "time the market" is that doing so involves selling when it's going up and buying when it's going down, exactly the two things that are most difficult, psychologically, to do.
Time in the market is better than timing the market.
That's one of my favorite expressions - I think I first heard it in the Bogleheads subreddit. The redditor in question was trying to help a first time investor with a traditional three part portfolio (domestic, international, bond).
That land is more valuable than money. Reminded of this while watching Lakota Nation vs United States. The Oceti Sakowin refuse the just-compensation settlement claim for the Black Hills; a people can live many generations on the land, while money is an intermediary and too easily lost.
That doesn't strike me as financial advice; land is only more valuable than money if you care about a particular piece of land because of ties with it. Otherwise if you have money you can buy a piece of land. Having land takes effort, having money doesn't. You might enjoy the effort of course
See threads on "The Rate of Return on Everything, 1870–2015." Control-F "land."
We often make the mistake of equating money with wealth. Money is simply the currency needed to exchange for goods, services, or assets (which can include securities, commodities, real estate, amongst others), while wealth is control of something of both current and potentially future value to people who will pay for it (see assets previously enumerated, although the list is in no way exhaustive).
For example: Would you rather I give you $100? Or a share of SPY? If you intend to spend, probably the fiat. If you intend to hold for future wealth, more likely the security. And if you intend to be financially secure, you are very likely of the mindset of accumulating assets that will appreciate in value at favorable prices.
People, as a group, undisciplined. Without discipline, money in hand is money spent. Land, land sits there, doing nothing, menacingly. In that sense, land is 'default alive' and money isn't. Generations can go by without any land-atrophy.
It helps with another human weakness too. It's impossible to get a person to save at rates of 30-40% of their salary. But make it a mortgage, and suddenly they've learned conscientiousness.
Is this true? I think the difference in ROI between land speculation and investing in the stock market is minimal. At least according to my napkin math. And both incur their own risks. BTW, I am not making an arguement for renting instead of buying. But if you had a spare $1million, becoming a landlord won't make you significantly richer than just putting it in the stock market.
Yeah, I've noticed that. I've had the chance to meet with people who have their fortune on land. they might not have a lot in their wallet. but the amount of land they have is enough to build a small city.
A few of them
1. Health is best wealth.
2. Don't forget about the high risk when chasing high rewards.
3. If it's too good to be true, it's probably isn't good at all.
Sure. I worked in sales for many years and development for the last handful. It feels good to know that if somehow tomorrow development jobs were scarce I'd be able to walk into a sales job.
A few days before I found out a company I worked at early was going to go public, which ended up 5x-ing my net worth, I had just been thinking, "Even if I had all the money in the world, I don't think I would want to live somewhere else, or drive something else, or own other stuff."
Everybody and their brother had an opinion about what I "should" do with my newfound wealth, but having that "Don't let the world tell you what you want" refrain in my head kept me from blowing it on a bunch of stuff that wouldn't have made me any happier.
1. Your career provides your wealth
2. Don't assume you can replace your wealth
3. Recognize the difference between investing and speculating
4. No one can predict the future
5. No one can move you in and out of investments consistently with precise and profitable timing
6. No trading system will work as well in the future as it did in the past
7. Don't use leverage
8. Don't let anyone make your decisions
9. Don't ever do anything you don't understand
10. Don’t depend on any one investment, institution, or person for your safety
11. Create a bulletproof portfolio for protection
12. Speculate only with money you can afford to lose
13. Keep some assets outside the country in which you live
14. Beware of tax-avoidance schemes
15. Ask the right questions
16. Enjoy yourself with a budget for pleasure
17. Whenever you’re in doubt about a course of action, it is always better to err on the side of safety
Never ever buy a property (a flat in my case) together with someone else. You should rather better offer to pay half the mortgage or have the other party pay you half the mortgage, but never buy together.
Of course I heard this and did buy a flat with my now ex anyway. I was lucky enough to manage to buy back the remaining half (burning basically all of my savings) but for a few months i was hunted by the idea of having to give up the place i worked so hard for.
Another useful perspective is to recognize that a leaky vessel is better than no vessel at all. Savings is not just a poor performing investment vehicle. It's a security buffer which opens many choices down the road.
Imagine if early society decided there was no need to stock food for winter because there is some loss in the process...
If you need investment advice, I would recommend putting your money in an S&P 500 fund. Source - that's what Warren Buffet recommends most people should do.
That the nature of the stock market is such that it is always reaching all time highs. If you look back at any 5 year window historically on the S&P500 for the last hundred years, instantaeneously it will always seem like we are teetering at the top of an apocalyptic bubble. But stocks go up. Keep to a schedule of blindly buying index funds regardless of market conditions, being unafraid to DCA on the way down, and you are guaranteed to do well on a 10 year time frame.
Idk, keeping spending low and pumping everything I could into index funds worked really well for me with minimal risk. When you come from a poor background and can't bounce back as easily from setbacks, you may have a different risk profile.
This statement is so general that I feel it doesn’t really say anything.
It’s true that Larry Ellison didn’t become a billionaire by buying and holding index funds. But for people who don’t feel a strong desire to buy their own yacht, index funds can be a very good investment.
Read the Bogleheads Wiki [0] for a simple broad foundation on basic personal finance and wealth accumulation.
[0] https://www.bogleheads.org/wiki/Main_Page
Before you invest in something, determine how that thing creates value. If you can’t determine how it creates value, it is most likely a short-lived scheme. Risk aside, it has also become a principle of mine that I refuse to try to generate income or gains from anything that, at the end of the day, isn’t generating real value for society.
i.e. don’t play zero-sum games.
One reason it's difficult to "time the market" is that doing so involves selling when it's going up and buying when it's going down, exactly the two things that are most difficult, psychologically, to do.
Time in the market is better than timing the market.
That's one of my favorite expressions - I think I first heard it in the Bogleheads subreddit. The redditor in question was trying to help a first time investor with a traditional three part portfolio (domestic, international, bond).
I've been there. the anxiety of not knowing if it's the moment to sell, or if I would just lose extra gains.
That land is more valuable than money. Reminded of this while watching Lakota Nation vs United States. The Oceti Sakowin refuse the just-compensation settlement claim for the Black Hills; a people can live many generations on the land, while money is an intermediary and too easily lost.
That doesn't strike me as financial advice; land is only more valuable than money if you care about a particular piece of land because of ties with it. Otherwise if you have money you can buy a piece of land. Having land takes effort, having money doesn't. You might enjoy the effort of course
See threads on "The Rate of Return on Everything, 1870–2015." Control-F "land."
We often make the mistake of equating money with wealth. Money is simply the currency needed to exchange for goods, services, or assets (which can include securities, commodities, real estate, amongst others), while wealth is control of something of both current and potentially future value to people who will pay for it (see assets previously enumerated, although the list is in no way exhaustive).
For example: Would you rather I give you $100? Or a share of SPY? If you intend to spend, probably the fiat. If you intend to hold for future wealth, more likely the security. And if you intend to be financially secure, you are very likely of the mindset of accumulating assets that will appreciate in value at favorable prices.
https://academic.oup.com/qje/article/134/3/1225/5435538?logi... | https://doi.org/10.1093/qje/qjz012
https://news.ycombinator.com/item?id=40650326 - June 2024 (148 comments)
https://news.ycombinator.com/item?id=19817584 - May 2019 (260 comments)
https://news.ycombinator.com/item?id=16078059 - January 2018 (151 comments)
(additional threads exist, but without comment, therefore not cited)
No, land is illiquid, and that's a good thing.
People, as a group, undisciplined. Without discipline, money in hand is money spent. Land, land sits there, doing nothing, menacingly. In that sense, land is 'default alive' and money isn't. Generations can go by without any land-atrophy.
It helps with another human weakness too. It's impossible to get a person to save at rates of 30-40% of their salary. But make it a mortgage, and suddenly they've learned conscientiousness.
I think it's more along the lines of a bird in the hand.
Is this true? I think the difference in ROI between land speculation and investing in the stock market is minimal. At least according to my napkin math. And both incur their own risks. BTW, I am not making an arguement for renting instead of buying. But if you had a spare $1million, becoming a landlord won't make you significantly richer than just putting it in the stock market.
Something I read a while ago that has stuck with me is that you can actually buy just two things: time and space. Everything else is made up.
Yeah, I've noticed that. I've had the chance to meet with people who have their fortune on land. they might not have a lot in their wallet. but the amount of land they have is enough to build a small city.
A few of them 1. Health is best wealth. 2. Don't forget about the high risk when chasing high rewards. 3. If it's too good to be true, it's probably isn't good at all.
I lost a ton of money by not having the third one in mind. (mostly crypto)
Invest in skills that pay money and spend less then you make.
Skills are key because they’re inflation-proof, and no person or government can ever take them away
While this sounds good, and I agree, it’s hard to turn a big pile of skills into money. Employers are generally looking for exact fit puzzle pieces.
Employers don't really care about skills, they care about paper that says you have skills (e.g. education, certifications, job experience).
You could monetize the skill yourself, of course, though that's just called being an entrepreneur.
I always try to learn new things, and new skills that allow me to be able to get income even in a crisis.
but how do you expand that so it doesn't depend on you, In the end, our body has an expiration date.
Sure. I worked in sales for many years and development for the last handful. It feels good to know that if somehow tomorrow development jobs were scarce I'd be able to walk into a sales job.
That's what the majority of the planet's population are doing, and as a result they are getting poorer every year.
citation needed
The book, "The Richest Man in Babylon" has an incredibly basic rule in it. Save at least 10% of your income before you spend on anything else.
No joke: “Don’t buy stuff you can’t afford” - snl
https://youtu.be/R3ZJKN_5M44?si=Ahdvgr3FNIOl40Q9
Literally changed my life
I was one of those, I used to tell myself that I could afford it, and well. i couldn't
to be honest that's why I created my app. just so I have a small "advisor" on if I should or shouldn't buy certain things.
in case you want to give it a look. https://www.producthunt.com/products/innerwallet
Don't let the world tell you what you want.
A few days before I found out a company I worked at early was going to go public, which ended up 5x-ing my net worth, I had just been thinking, "Even if I had all the money in the world, I don't think I would want to live somewhere else, or drive something else, or own other stuff."
Everybody and their brother had an opinion about what I "should" do with my newfound wealth, but having that "Don't let the world tell you what you want" refrain in my head kept me from blowing it on a bunch of stuff that wouldn't have made me any happier.
https://thetaoofwealth.wordpress.com/2013/02/17/harry-browne...
Do not believe everything you read on an online forum (including HN). Always do your due diligence.
Never ever buy a property (a flat in my case) together with someone else. You should rather better offer to pay half the mortgage or have the other party pay you half the mortgage, but never buy together.
Of course I heard this and did buy a flat with my now ex anyway. I was lucky enough to manage to buy back the remaining half (burning basically all of my savings) but for a few months i was hunted by the idea of having to give up the place i worked so hard for.
Don’t… don’t do it.
Someone told me on another post. "don't get divorced", yours is a little bit more logical haha.
Wealth is options, options are freedom. Get wealthy as fast as you can if you want freedom.
To increase your savings and investments focus on making more, not spending less.
Compound interest. Save early.
The trick with compound interest is to find something that beats inflation, because inflation compounds more quickly than your savings interest.
Another useful perspective is to recognize that a leaky vessel is better than no vessel at all. Savings is not just a poor performing investment vehicle. It's a security buffer which opens many choices down the road.
Imagine if early society decided there was no need to stock food for winter because there is some loss in the process...
Sure, but the discussion is "where do I put my savings", not "should I have savings or not".
Index funds?
Yeah, hopefully.
You are either born in wealth or you make it through entrepreneurship.
... or by marrying into it. Or, by owning things that increase in value.
7 words: "Earn more, spend less, invest the difference."
If you need investment advice, I would recommend putting your money in an S&P 500 fund. Source - that's what Warren Buffet recommends most people should do.
That the nature of the stock market is such that it is always reaching all time highs. If you look back at any 5 year window historically on the S&P500 for the last hundred years, instantaeneously it will always seem like we are teetering at the top of an apocalyptic bubble. But stocks go up. Keep to a schedule of blindly buying index funds regardless of market conditions, being unafraid to DCA on the way down, and you are guaranteed to do well on a 10 year time frame.
Optimize your tax deductions. Things you think might not be deductible could be depending on the reasoning. Get a tax lawyer but deduct aggressively.
I've got a few i like:
Put your money to work for you.
Time in the market is better than timing the market
It's better to own a small basket of good companies than a large basket of mediocre ones
gold is an important security in some cultures; but the US economy is a better bet if you can make it.
90 something percent in SPY, the rest in speculative stocks. Hard to beat the s&p without significant risk.
Get to $1M without considering your primary residence net worth so you can invest in other mediums unavailable to the general public.
"Markets can remain irrational longer than you can remain solvent."
The main question is how to become solvent in the first place
Passive income only after your active income has stopped growing exponentially.
The skills (or traits) that make a quick fortune are the same that lose it overnight...
Diversification is for poor people
You concentrate wealth to get wealthy, you diversify to stay wealthy.
Or the sophisticated. A diverse portfolio has lower volatility, which means you can leverage it more which then leads to higher expected returns
Why is that?
Nobody gets rich from diversification. Its just what they tell uneducated people so that they dont take on huge risk
Idk, keeping spending low and pumping everything I could into index funds worked really well for me with minimal risk. When you come from a poor background and can't bounce back as easily from setbacks, you may have a different risk profile.
This statement is so general that I feel it doesn’t really say anything.
It’s true that Larry Ellison didn’t become a billionaire by buying and holding index funds. But for people who don’t feel a strong desire to buy their own yacht, index funds can be a very good investment.
So it's better to stick with it and focus your energy on one thing?
"Buy it right, or buy it twice"
Most of the market gains occur overnight, not during trading hours.