Podcast #128: We chat with Kent C Dodds about why he loves React and discuss what life was like in the dark days before Git. Listen now.
138

Sorry if it seems to be nitpicking, but what does “family friend” mean? I have come to understand the spectrum of friendship to be; an acquaintance will send you an email congratulating you on your move. A friend will bring you a house-warming gift. A good friend will help you move. Your best friend will help you move a body. With all the questions that we ...


128

Almost nobody would just give you a pile of money with no expectation of return. In most cases you exchange equity in the company for the investment. A simple example might be that I estimate your idea/company to be worth $4M currently, so for $1M I want 25% equity. When you sell for $30M, I get 25% of the proceeds. If you go belly up, I likely don't recoup ...


118

You grossly miscalculated because you forgot that money has to actually be in the account to earn. You earn nothing on the £50 you haven't deposited yet. And that is the first problem: compounding isn't working for you because compounding takes time, and only 600 quid is even in there for 4 years. You're getting fleeced Adjust for the above, and the ...


114

In general, borrowing money to invest is a risky proposition for a very simple reason: investments can go down in value, while the loans you had to take to make the investment absolutely do not go down in price if the investment didn't work out. So you have a guaranteed cost, but never a guaranteed return. That said, there are a number of red flags here ...


110

It means they're making a big loss in cash terms, yes. The claim that they are profitable is based on a theory that they are accumulating valuable assets in exchange. In Netflix's case, it's that they are spending lots of money on their content, which they expect to produce income in future years too. So essentially lots of cash going out the door now, but ...


102

No, what it says is “In half a year, we’ll give whoever holds this bond $10,000 for which you pay us $9,750 now”. This is equivalent to an annual interest rate of about 5% (the example is showing a yield way more than currently available). Plus you can sell the bond to another person in the meantime.


70

A few points. You may be interested in this website which helps you calculate the total cost of car ownership, and factors in things like insurance, gas, mileage, repairs, registration, etc... These costs are not inconsequential and have a tendency to add up. Even this calculator doesn't consider all the costs though because it ignores the lost opportunity ...


66

Do they want your help? Many times parents have difficulty taking advice from those whose nose and butt they wiped. Your accomplishments and investments are independent of the fact. What are their needs? They likely have social security and is that meeting their needs now? What happens after dad passes? Coming up with solid numbers is an important step ...


64

Private companies don't have liquid secondary markets. There are no identified buyers of your shares. The next time there's a fund raising round at the company they will include some or all of your shares in the transaction at whatever valuation is being used for the transaction. What you need to calculate the value of the shares is a buyer for your ...


59

In poker, you do a thing called "counting outs". That is, you count the number of cards that are still in the deck that, if you draw one of them, you will have a winning hand. "There are four 4s that will give me a straight, there are nine hearts, including the 4 of hearts, that will give me a flush, so there are 12 'outs' of the 47 cards lefts." In life, ...


57

I can use that property to get a loan for another real estate? Or that's not how loans work? That's not how secured loans generally work. You could get a mortgage on your rental property, but the bank will most likely ask why you are getting a loan (to find out if it is because you are in financial distress). You might as well just buy the second property ...


53

First congratulations and well done in both your salary and investment. Hopefully there will be more of this in the future. First I applaud your initial approach. Give some, spend some, save some. The disagreement with your wife is standard. One member of a partnership tends to be more conservative than the other; the disagreements help bring balance into ...


52

It's not necessarily free money. If the stock declines by >15% in the six months after you buy it then you've lost money on the deal. However assuming your company is performing at least reasonably compared to other stocks, you are, on average, getting a 15% bonus to your savings. You shouldn't be turning your nose up at that. (if whatever other stocks you ...


50

One problem with looking at investments this way is that only £50 of your money was in the market for the whole 5 years. That last investment of £50 was only in the market for a month, and £600 of it was in for less than a year. This makes it seem like your investment isn't growing very fast. To be able to see how it might grow I tend to use a ...


47

Probably they shouldn't be investing. It's too late for that. And if they aren't investing it's pretty simple: Sell the big property before they urgently need the money because that takes time, then pay off the mortgage on the other house because the mortgage only costs money and they probably can afford to pay it off. In that order so they always have some ...


43

One benefit of cash ETFs over a bank deposit is if you're interested in diversifying your currency holdings, they are a cheaper method than going to traditional currency exchanges. For instance, if you're in the US, and you want some of your cash holdings to be in EUR to hedge against the possibility of the dollar falling, you could exchange your dollars to ...


42

No, it is not correct. You bought those 909 shares for $90,900. You sold them for $99,990. Your capital gain is $9,090 Or you could calculate the cap gain by multiplying the share price increase by the number of shares sold: 909 * $10 = + $9,090


41

I am Swiss but I will attempt to answer this as good as possible: 1 Storage You get a bank account. Done. A bank account doesn't get you a lot of interest, but it is a safe way of storing the money and you'll have access to it at any time. 2 Bureaucracy Germany is a little more bureaucratic than Switzerland but a simple bank transaction should be enough. ...


40

No doubt about it: vehicles are capital expenditures which depreciate over time. Referring to a car as "a good investment" because it hasn't depreciated very much is metaphorical. Having said that, the exception that proves the rule are low-supply, high-demand antique and specialty cars.


40

The six months of savings is for an emergency fund. The advice is for 3 to 6 months. This emergency fund is to cover you for a six month period of time if you are not employed. This isn't invested in any instruments that have the risk of losing money. So what other purposes should you have a pot of money, in addition to the job loss emergency fund, that ...


36

During a recession, economic growth slows. This can lead to higher unemployment which in turn results in lower consumer and company spending which in turn leads to decreased company revenue and profit, lowering the fundamental value of stocks. Lower investor confidence contributes to market decline as investors move to safer assets (defensive stocks, ...


35

You're talking about the difference between Profit and Loss (as in, the accounting report with the same name) versus Cash Flow (again, accounting report of the same name). The difference exists because not all assets are cash. Yet a non-cash asset is carried on the accounting books at its cash value - the value of a building, the value of vehicles, ...


35

What you do with your income, and with your windfall, should be based on your retirement goals, which you have not mentioned. For many people, a paid-off residence and $1M in the bank would mean retirement could already start. But it seems your lifestyle (young children, Porche 911, etc.), won't quite allow for that. So you acknowledge that you will be ...


32

You've really answered your own question, without even needing to go into the financial details. "I just don't like the idea of getting in debt and not being able to move any time soon." If you want to be able to move at short notice, home ownership is not for you. OTOH, if you plan to stay where you are, like gardening, auto mechanics, woodworking, or any ...


26

Explain to your parents what a fiduciary1 is. Tell them that no matter how much they like this guy (gal?) they should only invest with someone that they have a fiduciary relationship with - because they only have one shot left and it needs to be the best thing for them. Steer them to someone who is a certified financial planner or any other ...


25

The cheapest way to buy stock is commission free Robinhood. They have many deficiencies but for a few Buy&Hold positions in a small account, that's probably your best bet. If you need anything more than that, you need to look at other brokerage firms.


25

I would call that strategy "waste of time": Your individual purchase decisions are not meaningful for the bottom line of the company. A single individual (you) simply isn't representative enough of the market as a whole. As the Canon example shows, how a company behaves depends of a lot more than consumer products, and many of those factors are difficult to ...


24

First, if you structured your rental properties correctly and had a Self-directed 401(k) you could each be contributing over $56,000 a year into it under various characterizations. As you mentioned, you are only making $40,000 and will never max it out, but you already indicated a desire to expand. It may be obvious to some, but there is still $40,000 that ...


21

Beware confirmation bias I have been reading a lot and doing as much research as I could and need some help to decide whether I could consider the action of buying a car as an investment. Oh, you have to be very careful here, of confirmation bias. Deciding which conclusion you want to reach, and then searching for the facts that support reaching that ...


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