One thing to keep in mind, if you don't to to babysit investments ETFs are very safe long term.Short term there will be horrible months and years but over time with their diversified holding it will be ok.You'll have exposure to dozens of companies and markets (US and international). Unless the entire global economy goes under over time it will be fine.If you just save money you are LOSING money due to inflation. Banks and CDs do not offer enough interest right now to beat it l.So every $$ you got sitting earning nothing is worth less tomorrow.
Sometimes numbers help, if you look at an average return of 6% over 15 years (not unlikely) and inflation at ~2%.$1000 today invested @ 6% average annual return would be ~$2300 in 2036.$1000 today saved @ 1% would be $863.One of those looks a lot better to me :).
I like your advice. I opened an account with Schwab when I was 24-25. I invest in a mutual fund that follows the Nasdaq and it has been doing very well. I also read Kiplingers and invest in some of the top 25 mutual funds they recommend with low fees.
@HOAAH I started around same age. Luckily my employer automatically signed us up for retirement savings... which I knew jack about but stuck majority in some target funds.Took me a few years to really start paying attention to investments but worth paying attention though. Especially starting at that age, 20s, since so long for it to grow and survive ups and downs in the market.In ~12 years went from -$60k net worth (student loan debts) to about $600k due to market performance (many years 20%+ return) and compounding interest. Not Elon Musk level of wealth but my only real goal is God willing be able retire one day and enough to give my kids a head start with generational wealth.
That's really awesome!
Scroll Down to Read Other Opinions
Consultants are mostly unnecessary unless you have a very large sum of money or unique financial situation. Investing today takes little to no effort with the well established index funds and other options. Even a total market index gives you vast exposure and fully diversified.Even target date funds if you want based on risk. Takes no real skill and little risk to lose everything unless you sell on a downturn market.Without investing you will have zero wealth growth. Savings doesn't make wealth and savings won't get you to retirement.
Thank you for your advice, but:1. I too have very little knowledge of the subject, so I don't really understand most of the terms you used.2. I don't live in the US so your original comment wasn't relevant to me, sadly.
Gotcha. Maybe your country has similar options?There's a number offered in European countries and North America. Assuming others may as well.A target date fund is great for someone that really wants absolute hands off approach. It basically holds a large mix of stocks, bonds, or commodities (gold, silver, other raw materials). The farther you are away from the target date the mix leans toward a riskier mix - since there's time to ride out any downturns - and automatically shifts toward less risky investments (but lower returns) the closer you get toward that date.So let's say you knew you need a new roof in 15 years but also risk averse. Can put some of that money into a target date like 10 years instead to get some growth and a couple years before needing the money go ahead and cash out if desired, netting the gains as profit.That way as the investor it's relatively hands off day to day. Just check in occasionally see how it is doing and if good gains and ready to cash out go ahead.
I agree with this, but the problem won't go away until people decide to learn about it. The saying "No one cares more about your money than you do" is very true, especially with all the different types of financial advisor/consultors out there. (Some of them are more salesmen than advisors).The best thing to do is just read, find some articles and read... then find other sites/books/opinions and read, keep slowly growing and understanding the basics. Read points for and against certain things, question everything.At the very least, I always recommend investing in index funds to people who don't know or care to know how things really work. Mostly because they are very cheap, have stable/good returns and basically fool proof. And like a savings account, you DON'T TOUCH IT unless there's an absolute emergency. Too many people want to do this day trader "get rich quick" stuff and it just ends up costing them a ton of taxes/fees and headache.
Lmao get your titty out of here Ma’m
Depends on the debt since not all debt is equal. A 3-4% mortgage (many now are even 2.0-2.6%) you are better investing than overpaying that debt. Especially with it really just prepaying interest.Student loans too if you can get them into a low rate and have sufficient emergency funds or resources to pull on in event of job loss etc (e. g., move back in with parents or other family if necessary). Since many if these can also be in the 2.75% range, which on average over time an index like S&P 500 in the US will outpace with average returns around 10%.Car loans as well if those are at good rates, which many are below the average return of many indexes over a 10 year period. So long as jobs and ability to work through hardship seems stable you can come out ahead over a 10 year period paying minimum on those and investing extra. Even if you then wanted to be debt free, cash out your earnings and use that to pay down remainder of those low interest debts.Credit cards yeah definitely try to deal with that though mainly since that is usually mega high interest.
I do dave Ramsey baby steps
Never looked at those before, but I'd say carry low interest debt though, especially if it's dischargeable in bankruptcy (where your retirement savings are generally safe from creditors).Paying off a home early just makes no sense to me. On a 30 year fixed mortgage it should become easier over the years to pay it as you find ways to increase earnings + inflation while your payment stays roughly the same - unless government jacks up taxes megahigh (like NY and CA).If that same money can earn three times the returns invested can't see why it's good. Just running numbers through calculators over a 30 year period - even with estimated tax increases - it's still way less money saved doing that than returns on investing with even a 6% annual return. Only real benefit I suppose is it's a guaranteed return... but if you've got a rate at 2.5% that's pretty bad return.Houses are also illiquid assets that you can't easily access funds with in an emergency. Stocks, bonds and cash are though. They're just money pits that may or may not turn a profit down the road.I made the mistake of paying off student loans in 6 years (only debt at the time). Average rate was 4%. If I had saved that money instead of overpayments I'd have been ahead thousands of dollars.But mentally just didn't want to drag that debt around. But it had a huge opportunity cost and would have been better investing instead, then cashing out and paying off debt later if desired.
Shocked we have something in common 😂 What’s your crypto portfolio look like?
@Not_Average voyager is giving me pretty good return currently.
Other than daytrading between Ethereum and bcsh on Robinhood.
Voyager is solid, but I never jumped on. ETH just came out with EIP1559 which makes it deflationary. It’s only a matter of time until capital moves from ADA, DOT, and BNB back into ETH. I’m a trader. My goal is to stack as much bitcoin as I can. This space will give you life changing money if you know how to play it right. This dip has been offering a lot of nice entry’s
What I'm looking at today. Saw this one coming. It will extend our pullback to the golden pocket fib level around 40k. That would be a killer entry
Meh that's blurry. https://postimg.cc/21QKMWwQ
It is safer, but it will never keep pace with inflation. Each day it becomes a little less valuable unfortunately, but at least it will never go anywhere.
@Minerate i never lost my money saving i did investing never again... just save and use ur money wisely.. that's my best advice really.
@Minerate Well im european so i dont have to deal with inflation like Americans do?
Not quite, basically every country has inflation in one form of another. According to this article, the EU inflation rate is around 1.5-2% whereas the US inflation rate is closer to 2.14-2.8%. So if you can get a savings account with a 2% rate, you will keep pace with it. (Though I don't know many that go above 1.5% and most are less than 1%.)Also regarding investing, you never really "lose" money unless you sell the investments. Sure, it may go down in the short turn, but unless the company completely fails (like in individual penny stocks) or you sell it, you will almost always see the value increase again. It may take a few days/months/years, but it'll grow.
@derdepedie301 The article referenced. www.investopedia.com/.../...pe-cheaper-america.asp
Everywhere has inflation really to some degree. EU countries some may be negative or positive, high or low.The only time you lose on an investment is if you sell for a loss or the underlying company goes belly up. Too many people though will see a big negative % and sell rather than hold, this means a big loss. There's too many index funds and diversified options in US, Europe, and Asia that many people should lose money long term. Might be crap years but unless the entire global economy collapses (if that happens a little extra cash won't matter... would want hard valuable things like gold/silver, food/water) it will recover. So long as there's enough emergency savings for fast cash access, investing builds long term wealth. Sitting in savings does not unfortunately, or does so much slower.Just $250 per month for 30 years at 6% return would give you $244k - only $90k principle and $154k in earned interest. That's 2.7x as much $ with relatively low risk diversified investment choices that are hands off funds (no need to actively buy and sell ever really, maybe once per year rebalance if needed of a few funds).Younger people have time on their side. Multiple years of economic downturn is ok, ride it out and keep investing. The longer compound interest piles up the bigger the gains get over time.
If you can afford to invest long term look at low fee ETFs and target date funds.They provide diversification without the need to "trade". Funds like VOO track the S&P 500. There's also target date funds that, in principle, are supposed to lower your risk as you get closer to needing the money by shifting away from riskier growth stocks.Charles Schwab and Vanguard have good ones with low fees. And you can open accounts for free.The main thing is don't panic sell and don't stonk (meme stocks from places like reddit) buy unless you can afford the gamble.Be an invester, not a trader, unless you really want to learn how to trade regularly. Investing about long term growth over years, not chasing immediate returns that many "traders" do that try to buy and sell short term.