Hot answers tagged

79

You should invest in that with the best possible outcome. Right now that is in yourself. Your greatest wealth building tool, at this point, is your future income. As such anything you can do to increase your earnings potential. For some that might mean getting an engineering degree, for others it might mean starting a small business. For some it is both ...


37

In my opinion, your idea is bad and your husband's idea far worse. You need to find a way to live within your means, that is spend no more than 84K/year. That could be done in a few ways: You get that higher paying job now (I assume around 75K). He drops out. Is a doctorate necessary to make 75K/year? Spare jobs like the tutoring and other things. Some ...


36

Frugality When someone mentions living frugally, I always point to the book "America's Cheapest Family". I'm not affiliated with this book in any way and do not gain anything from promoting it. I'm just another happy customer. As much as you are already doing to curb spending, this book may give you some extra pointers or suggestions to help you out. ...


21

While your husband's basic premise that debt is reasonable to secure higher earning potential, not all debt is created equal. For example, mortgage debt may be reasonable because the interest paid is a substitute for rent expenses, and the interest rate is very low. This assumes you are not buying more house than you can afford. Student loan rates vary ...


18

This statement My attitude has always been that I prefer to live frugally and within our means both because it is a good habit and because I have always been very afraid of debt. and this statement little savings, and our income does not cover our expenses (with a several hundred dollar shortfall monthly). Are diametrically opposed. Both of these ...


14

This is a tough question, because it is something very specific to your situation and finances. I personally started at a young age (17), with US$1,000 in Scottrade. I tried the "stock market games" at first, but in retrospect they did nothing for me and turned out to be a waste of time. I really started when I actually opened my brokerage account, so ...


12

I started my career over 10 years ago and I work in the financial sector. As a young person from a working class family with no rich uncles, I would prioritize my investments like this: Achieve the full 401k match at your work. Fully fund your emergency savings (a full 6 months of expenses). I personally count up to $5,000 of my HSA funds toward this amount ...


6

That's a broad question, but I can throw some thoughts at you from personal experience. I'm actually an Australian who has worked in a couple of companies but across multiple countries and I've found out first hand that you have a wealth of opportunities that other people don't have, but you also have a lot of problems that other people won't have. First ...


5

You have a few correlated questions here: Can you invest with limited capital? Yes you can. There are only a few investment strategies that require a minimum contribution and those aren't ones that would get a blanket recommendation anyway. Investing in bonds or stocks is perfectly possible with limited funds. When should I start investing? You're never ...


5

What is the importance or benefit of the assumption that high-risk is preferable for younger people/investors instead of older people? Law of averages most high risk investments [stocks for examples, including Mutual funds]. Take any stock market [some have data for nearly 100 years] on a 15 year or 30 years horizon, the year on year growth is around 15 to ...


5

Stay in school, learn everything you can, and spend as little money as possible. And realize that the chances of you dropping out and becoming a millionaire are much lower than the chances of you staying in school and becoming a millionaire. You're unlikely to be a good investor if you make bets with negative expected payoffs.


5

As JoeTaxpayer has commented, the markets are littered with the carcasses of those who buy into the idea that markets submit readily to formal analysis. Financial markets are amongst the most complex systems we know of. To borrow a concept from mathematics - that of a chaotic system - one might say that financial markets are a chaotic system comprised of ...


5

I tell you how I started as an investor: read the writings of probably the best investor of the history and become familiarized with it: Warren Buffett. I highly recommend "The Essays of Warren Buffett", where he provides a wise insight on how a company generates value, and his investment philosophy. You won't regret it! And also, specially in finance, don'...


5

is it a smart thing for an entry level employee with a basic pay to buy a property on debt ? This is opinion based and can't be conclusively answered by others. Only you can make the choice. Their reasoning is that, since I am paying for their house rent right now(I have been doing this ever since I got into graduate school), I could divert it to pay for ...


5

While it is true that our family can help us out, I prefer to be self-sufficient as much as possible and would be mortified if we had to ask for help. You have your answer right here. If they can help, ask them. You did nothing wrong, you are just trying to have a family in a world where most people struggle to live decently. There is nothing to be ashamed ...


4

If you are just barely scraping by on your current income, then you shouldn't be thinking about buying a car or house unless you can present (at least to yourself) clear evidence that doing so will actually lower your monthly expenses. Yes, there are times when even buying depreciating assets such as a car can lower your expenses, but you need to think hard ...


4

You need a budget. You need to know how much you make and how much you spend. How much you earn and what you choose to spend you money on is your choice. You have your own tolerance for risk and your own taste and style, so lifestyle and what you own isn't something that we can answer. The key to your budget is to really understand where you money goes. ...


4

For some situations, an MBA can be overrated in the sense that given the cost of time and money, it isn't going to be a great return in some cases. There can be tens of thousands of dollars and a couple of years to get an MBA that some people believes should automatically make them worth $x more in their salary and life should be simple. I'd likely inquire ...


4

There's two reasons. One is that you have a longer time horizon, other answers cover that. The second is that for someone who is younger, most of their capital is human capital in terms of their future work output (and earnings). If you're 25 and your $20,000 portfolio gets wiped out, that's only a small amount of your total earnings. You still have 45 ...


4

The reason that you are advised to take more risk while you are young is because the risk is often correlated to a short investment horizon. Young people have 40-50 years to let their savings grow if they get started early enough. If you need the money in 5-15 years (near the end of your earning years), there is much more risk of a dip that will not ...


4

I would strongly consider renting; as homes are often viewed by people as "investments" but in reality they are costs, just like renting. The time-frame for return is so long, the interest rate structure in terms of your mortgage payments; if you buy, you must be prepared to and willing to stay at minimum 7-10 years; because anything can happen. Hot markets ...


4

You may think it sucks to have learned a crap ton of category theory, which is seemingly useless outside of academia, but have you considered picking up a "functional" programming language, e.g. Haskell? How about Java or, more recently, Scala? I would bet that you would love Haskell. And then you can make a fortune working at Jane Street Capital, which ...


3

Since then I had gotten a job at a supermarket stocking shelves, but recently got fired because I kept zoning out at work This is not a good sign for day trading, where you spend all day monitoring investments. If you start focusing on the interesting math problem and ignoring your portfolio, you can easily lose money. Not so big a problem for missed buy ...


3

If you spent your whole life earning the same portfolio that amounts $20,000, the variance and volatility of watching your life savings drop to $10,000 overnight has a greater consequence than for someone who is young. This is why riskier portfolios aren't advised for older people closer to or within retirement age, the obvious complementary group being ...


3

At your age (heck, at MY age :-)) I would not think about doing any of those types of investments (not savings) on your own, unless you are really interested in the investment process for its own sake, and are willing to devote a lot of time to investigating companies in order to try to pick good investments. Instead, find a good mutual fund from say ...


3

Source: I'm recently (2 years) out of college (Info Sciences + Technology degree) Disclaimer: Speaking from limited personal experience (see above) A lot of corporate recruiters like the prospect of hiring recent college grads of because of the location flexibility they have (typically own no real estate, are not married, and have no children). "What ...


3

Conventional wisdom says (100-age) percentage of your saving should go to Equity and (age) percentage should go to debt. My advice to you is to invest (100-age) into index fund through SIP and rest in FD. You can re-balance your investment once a year. Stock picking is very risky. And so is market timing. Of cource you can change the 100 into a other ...


3

A university education puts you in trouble financially during and quite some years after the education while it in general pays off in the long run. It makes sense to finance this education by debt, and I would see this rather as an investment in the future. It especially makes sense to not take any side jobs that would delay the completion of the course or ...


Only top voted, non community-wiki answers of a minimum length are eligible