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Ask HN: What are some good resources to learn how to invest and build wealth?

• CEO_Fart420 8y ago
  You’re gonna want to follow plane-Jane bog-standard investment advice. Remember, youre not a full-time Wall Street central banker and can’t devote all your time to due diligence. Go the buffet route and create a long-term, diversified portfolio of cheap low-fee crypto currencies and don’t touch it until retirement.
  • lacker 8y ago
    Come on, don't pretend that cryptocurrency is standard investment advice. If you meant to say "index funds" your advice becomes standard.
    • CEO_Fart420 8y ago
      When’s the last time you saw anything about “index funds” on the front page of HN or LinkedIn? How many YC startups are built around them? I’m assuming he wants to follow strategies that are appropriate for the future, not the past.
      • CompelTechnic 8y ago
        Running your personal finances like a YC startup means you will go bankrupt 90% of the time. Different goals for different situations. I admit to feeding the troll here.
    • tstock55 8y ago
      I think he was joking :)
  • hockeybias 8y ago
    Oh yes, crypto currencies for sure! I would go the ETF route per Warren Buffett's advice
• dclaysmith 8y ago
  https://www.reddit.com/r/personalfinance/ https://www.reddit.com/r/personalfinance/
  • davidhegarty 8y ago
    Going to echo this one. Plus the following two books: 1/ Richest man in Babylon 2/ Rich Dad, Poor Dad. Both written for the simplest of readers but great advice clearly told. (Summaries are probably good enough)
    • EnFinlay 8y ago
      Summary of Rich Dad, Poor Dad: Assets are things that give you money. Liabilities are things that cost you money. Therefore your house is a liability until it is sold, at which point it MIGHT be a net asset. Try to maximize your assets and minimize your liabilities. It sounds simple, and it is, but that's the primary lesson in the book IMO. It's eye-opening the first time you see things that way.
      • 0x4f3759df 8y ago
        The greater point is if you become a landlord, you get rich with the bank's money.
  • pembrook 8y ago
    Reddit is good for things like getting out of credit card debt, how big of a mortgage should I take, and other basic personal finance stuff. However I've seen some pretty bad advice thrown around when it comes to investing. Bogleheads is a much better resource for that.
• madeuptempacct 8y ago
  "Rich Dad, Poor Dad" is pretty much the only "finance" book that's useful to the common person that I know of. Explains the basics. "The Intelligent Investor" wasn't helpful to me at all, and I could actually understand what he is talking about, having a heavy background in finance. P.S. a college degree or being a CFA won't help, from personal experience, though every other finance grad claims it will. The moment I started doing fundamental analysis is the moment my portfolio went to shit. Helpful tl;dr: "index funds".
• dominotw 8y ago
  Always disappointed to see " index funds " repeated ad nauseum in these threads. I assuming op wants something creative and new advice. Not index fund advice.
  • ElectricalPast 8y ago
    I assume he wants his money kept safe for when he retires or wants to make a purchase. Not "creative and new advice."
  • hockeybias 8y ago
    Ah... The key is to make money not do something creative. That's why ETFs make sense.
  • CompelTechnic 8y ago
    If you want to have a little bit more fun, buy normal total-market funds with the majority of your portfolio, but put a little bit of money in specific areas- small cap value tilt, IT industry fund, etc.
    • dominotw 8y ago
      so every one these threads should have just one comment with 'index fund' in it?
  • ihsw2 8y ago
    > creative and new The best way to lose money fast -- chasing what's creative and new in the fund industry. To scratch that itch you should devote no more than 5% of your investment portfolio, otherwise you are willfully shooting yourself in the foot. The rest should be kept in a passively managed portfolio.
• vxxzy 8y ago
  One resource, to get your feet wet, is to get a Paper Trade Account. Take a look at interactive brokers. Read some books, get ideas, and test them out in a Paper Trade Account. Then when you are ready, and comfortable, move into "Real Life" trading.
  • 456hdsaq234g 8y ago
    or Robinhood. Free trades! No monthly fees!
• lacker 8y ago
  Bogleheads is a pretty good place to learn about conservative investment strategies based on minimizing risk and taxes. If you want to take a very brief look, start at: https://www.bogleheads.org/wiki/Lazy_portfolios https://www.bogleheads.org/wiki/Lazy_portfolios
  • ihsw2 8y ago
    This should be at the very top. Jack Bogle also has great books (including audiobooks) to learn from, albeit dense. `Common Sense on Mutual Funds` is an excellent treatise to the mantra of `time in the market is always superior to timing the market.` Vanguard continues to rocket to the top in every fund market it enters because people are sick and tired of slick salesmen masquerading as financial advisors.
  • pembrook 8y ago
    Bogleheads is the definitive resource for learning about investing on the internet, period. Some of the leading academics and financial advisors are active there and will actually respond to posts written about their research. Also, I would recommend subscribing to this: http://www.capitalminded.com http://www.capitalminded.com It's a weekly email newsletter that reminds me of Matt Levine's Money Stuff but with more a Boglehead-type focus. Kind of like a weekly reminder to stay-the-course backed up with some pretty interesting references from history and academic papers. Also, don't fall into the trap of checking CNBC, Yahoo Finance, etc. every day. The reason most retail investors fail to match the performance of the same funds they invest in is because of behavioral errors and getting drawn into the emotional drama of markets.
  • ivm 8y ago
    The only downside is that it's mostly US-focused. But I spent two weeks reading it and wrote a guide for non-US investors: https://qotoqot.com/blog/early-retirement/ https://qotoqot.com/blog/early-retirement/
• ElectricalPast 8y ago
  Read A Random Walk down Wall Street; Black Swan (by Nikolas Taleb); The Intelligent Investor These give a good intro on equities. If you don't already, open an IRA (Roth or traditional). Also, consider reaching out to a certified financial professional for guidance.
• bigbang 8y ago
  I've liked bogleheads forum. The usual advice would be to maxmimize 401(k), ROTH IRA and invest in index funds.
• imgabe 8y ago
  Start with the stock series from jcollinsh (financial blogger) http://jlcollinsnh.com/stock-series/ http://jlcollinsnh.com/stock-series/ This gives a good intro to why index funds are probably your best bet. If you are willing to put in a lot of additional time and research, you may be able to do better picking individual stocks, but probably not.
  • woldemariam 8y ago
    His book is also great https://www.amazon.com/dp/B01H97OQY2/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1 https://www.amazon.com/dp/B01H97OQY2/ref=dp-kindle-redirect?... The Simple Path to Wealth
• jaysonelliot 8y ago
  My number one piece of advice: invest in the market, never invest in individual stocks. Find the best index fund you can, and let your money grow with the market. If you want to get into things like individual stocks, or even angel investing, do it for the fun and the experience, but don't do it for the wealth. "Get rich slowly" is the best advice I've ever been given.
  • rubicon33 8y ago
    I'm curious, how many years did it take before you realized it was the best advice you've ever been given? I've been "getting rich slowly" for 8 years, and boy let me tell you, it sure is slow. Definitely doesn't feel like my wealth is growing in index funds fast enough to retire within this life time.
    • lacker 8y ago
      The last 8 years has been a pretty good time for investing in indexes. The S&P 500 has gone up by a factor of about 2.5x over that time! http://www.macrotrends.net/2488/sp500-10-year-daily-chart http://www.macrotrends.net/2488/sp500-10-year-daily-chart If the market hasn't been going up enough for you to feel good about your investments over the past 8 years, you are probably not saving enough to meet your goals.
    • BraveNewCurency 8y ago
      > Definitely doesn't feel like my wealth is growing in index funds fast enough to retire within this life time. Ha ha, I feel the same. But don't discount the fact that small percentage returns are actually exponential growth. (For example, 2% returns actually doubles your money every 10 years.) Just because it 'feels' like your investments are stalled doesn't mean that they are.
      • jackcarter 8y ago
        > 2% returns actually doubles your money every 10 years I wish! More like 35 years. 7% returns will double initial investment every 10 years.
• jacquesm 8y ago
  Mr. Money Mustache. Ignore the cult bits, read it anyway. The millionaire next door. This question keeps coming up by the way.
  • jvreagan 8y ago
    +1 on the Millionaire Next Door. Read it in my mid-20s 25 years ago, glad I did.
• BadCookie 8y ago
  Depending on how much time you want to spend, I suggest a subscription to Real Vision. If you just want to invest in an index fund, then it's probably overkill, but they have high-quality, interesting content that is definitely worth the $15/month.
• lukethomas 8y ago
  If you're interested in investing in the stock market (specifically picking individual stocks), I recommend the following books: 1. https://www.amazon.com/Little-Book-Still-Beats-Market/dp/0470624159 https://www.amazon.com/Little-Book-Still-Beats-Market/dp/047... 2. https://www.amazon.com/Acquirers-Multiple-Billionaire-Contrarians-Market-ebook/dp/B076GS7WF9 https://www.amazon.com/Acquirers-Multiple-Billionaire-Contra...
  • ydnaclementine 8y ago
    going to piggy back on this comment, if you're interested in technical analysis of stocks/ETFs/futures/etc, I recommend A New Trading for a Living by Alexander Elder. great book for basics and fundamentals of TA
• diverted247 8y ago
  We recently published our 3 courses on Udemy covering this very topic. ( https://www.udemy.com/courses/search/?q=vestu https://www.udemy.com/courses/search/?q=vestu ) The courses walk you through investment principles, investment assets, and portfolio implementation. Simple overview... Get the market return, get it for lowest cost possible, enhance returns by investing where the market historically outperforms, rebalance annually.
• snikeris 8y ago
  https://www.harrybrowne.org/articles/InvestmentRules.htm https://www.harrybrowne.org/articles/InvestmentRules.htm
• wtvanhest 8y ago
  Max out all tax advantaged accounts. Keep your investment costs low, i.e. no mutual funds, or hedge funds, just invest in a diversified bucket of ETFs.* If you seek financial advisory help, go with a "Fee Only" FA, and be ok spending thousands of dollars for impartial advice. IMO, if you have over about $500k saved, it is probably time to talk to someone. Make sure you have the right insurance, disability, and life. Disability should cover you in case you can no longer do YOUR job, not just any job. Life should cover your dependents/wife etc. Avoid timing the market. Evidence has shown that this doesn't work for anyone but the extremely lucky. *diversification gets hard, and you may need to pay for advice once you reach a certain level of assets (probably around $500k).
• arielweisberg 8y ago
  Four Pillars of Investing by William Bernstein https://www.amazon.com/Four-Pillars-Investing-Building-Portfolio/dp/B000OFHBQC/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=1529525699&sr=8-2 https://www.amazon.com/Four-Pillars-Investing-Building-Portf...
• ojbyrne 8y ago
  If you have a business, probably makes sense to hire an advisor, especially with the latest tax changes, because the business is an important vehicle for investment.
• gregorygoc 8y ago
  Is your business also your job? Then that’s sort of one source of income. Depending on how much money you have you might want to diversify.
• aantix 8y ago
  It's interesting: when questions like this are asked, you definitely hear the sentiment echoed of "nobody beats the market consistently." Which appears to be true, at least for the stats I've seen on money managers. But for the smaller investor, where liquidity is less of an issue (we're not dumping tens of millions at a time), could there be an advantage there? Or someone privy to industry information - e.g. I knew that New Relic was really popular, because I consult with startups, long before they went public. No surprise on their stock growth. Just thinking out loud here... I'll probably just stick with our Vanguard Target Date Fund. :)
• deleted 8y ago
  [deleted]
• whitepoplar 8y ago
  Read anything by William Bernstein or Jack Bogle. You can start here with Bernstein: https://www.amazon.com/Investors-Manifesto-Prosperity-Armageddon-Everything/dp/0470505141/ https://www.amazon.com/Investors-Manifesto-Prosperity-Armage... Or here with Bogle: https://www.amazon.com/Little-Book-Common-Sense-Investing/dp/1119404509 https://www.amazon.com/Little-Book-Common-Sense-Investing/dp...
  • hikarudo 8y ago
    This other book by Bernstein is also good: "The four pillars of investing" https://www.amazon.com/Four-Pillars-Investing-Building-Portfolio/dp/1932378014 https://www.amazon.com/Four-Pillars-Investing-Building-Portf...
    • whitepoplar 8y ago
      Definitely. And for someone who is already familiar with the Bogleheads philosophy, I think his "Investing for Adults" series is unmatched.
    • yannickt 8y ago
      It is the best book on personal investing I've ever read, and I recommend it wholeheartedly.
• vitaflo 8y ago
  As a business owner the single best benefit you have is contributing to a Solo 401k or SEP-IRA. You can contribute much more into these than an employee can in a typical 401k. It will also help come tax time. I recommend setting one up and maxing it out every year. As for what to invest in, just go with boring index funds with the lowest expense ratio possible. There is no reason to get cute with investments. Upping your savings rate will do more to build wealth than anything. Let compound interest do the rest. Finance and wealth building is mostly psychological. Thinking you're smarter than the market is a fools errand because you can't control it. Work on the things you can control like your income and savings rate. Increasing your sweat equity is something you have direct control over as well as how much you spend. Optimizing those will have huge effects on your long term wealth path.
• aarreedd 8y ago
  Investing in the market is good advice for most people. But many people are not such a great financial position as you. If you run a business the best investment you can make is in you own business. By all means, max out your 401k contribution. But if there is money left over to invest, conciser investing in your own business. Here is a podcast I listened to just the other day about this: http://www.tropicalmba.com/monies/ http://www.tropicalmba.com/monies/
• jsshah 8y ago
  Rule of 12: Start with $12000 and invest in index fund (S&P500 SPY) every month invest $1000 into that fund (you can always invest rest of the savings in other investments) S&P long term annual return is 12% (Assuming it remains that) After 10 years: ~250K After 20 years: ~1M After 30 years: ~3.25M So if you are in your 30s, when you retire you should have approx 3M from this investment alone (other mutual funds, stocks, real estate, 401K aside) Now each year you can withdraw 100K for next 30 years (65 - 95)
• startupdiscuss 8y ago
  I will sum up what we know in general about investing: Keep fees low and diversify. That is the best you can do without specialized knowledge or effort (and, depending on how strong a view you have of the efficient market hypothesis, even then this might be the best you can do). In this case you should put the bulk of your money in a robo-advisor like wealthfront or betterment. (I am not related to them in any way). If you do have insight into something -- maybe you are keyed into local real estate development or you feel you know your industry -- you could get a higher return. Take some small percent of your wealth (say 5%-20%) and put it into this thing you may be good at. This is my favorite overview: https://research.wealthfront.com/whitepapers/investment-methodology/ https://research.wealthfront.com/whitepapers/investment-meth...
  • pembrook 8y ago
    The problem with using is a robo-advisor is, if you earn even a moderately good income you're basically going to giving them hundreds of thousands of dollars in fees over your lifetime. Even though 0.25% seems small, I calculated the fees would compound over the next 40 years to over $460,000.00 for my wife and I. Thats an insane amount of money to pay someone just to put money into Vanguard index funds. Also, being a DIY investor forces you to actually learn how these things work, so you'll have a better chance of not making a stupid behavioral mistake when the market drops next time. By ignoring the whole "learning" portion of investing and just throwing your money at Wealthfront you'll be liable to pull your money out or stop contributing at exactly the worst time.
    • startupdiscuss 8y ago
      Those are two different issues though. Firstly, if you believe that you should hold your money through a crash, then you are free to do so whether or not you invest through Wealthfront. Secondly, that is a huge amount of money. Congratulations on making so much. Yes you can save that money by learning yourself but do value your time. If you are going to rebalance, tax harvest etc it can add up time wise. Thirdly, learning yourself may not be about saving in the areas that the robo-advisor is good. You don't want to learn about tax harvesting because it is better to leave that automated. You might want to learn about a particular stock, but even that is better left to analysts and you can rent the research. I had a friend who worked at Goldman. He analyzed three stocks total. He worked 16 hour days. He knew more about any of those stocks than I ever could.
• anorborg 8y ago
  Shameless plug, but we have a podcast around commercial real estate investing, a very popular investment type for passive income generation. We really have a big education focus: https://www.realcrowd.com/blog/2018/01/podcast-best-of-season-one/ https://www.realcrowd.com/blog/2018/01/podcast-best-of-seaso...
• JUDAS 8y ago
  Invest in start-ups? https://angel.co/ https://angel.co/
• Jemaclus 8y ago
  I highly recommend "I Will Teach You to be Rich" by Ramit Sethi, which I thought was a great way to get the fundamentals in place. I've bought copies for several of my friends who had no idea what to do with their money. If you really have tons of money and don't know what to do with it and also have your own business, I'd talk to a CPA about maximizing your tax benefits (if you haven't already) and also to a financial advisor for the rest. CPAs are one of those ROI multiplier type things, where you give them a little money and they save you a whole lot, especially if your tax situation is complicated.
• turc1656 8y ago
  As someone in the financial industry, I can throw out a few suggestions. These vary substantially depending on your level of interest, time, and risk-tolerance. I am not a financial advisor, nor should you consider any of this professional investment advice. I know your question is geared toward resource and learning. I will address that, but I'll also include the easier options if you decide to just say screw it and go the simple route. That being said... You could go the low risk, low-cost, near-zero time method of using index funds. For full disclosure, this is the area of the industry I am involved with. You can either choose the funds yourself or you can get someone to provide you some suggestions. There are advisors out there who specialize in tactical weighting of a defined set of index funds (i.e. the funds you have available in your 401k for example). They vary the weights usually on a quarterly basis on a set of criteria that is proprietary to them. This tactical weighting can outperform the market if they know what they are doing. They will, however, charge the standard advisory fee for this. You could just hand over the reigns to an advisor after speaking to one your are comfortable with. they'll charge their standard rate and if they are halfway decent they will match your investments to your risk profile/tolerance. Be wary, though, as many may just shovel you into a default set of index funds. If you pay an advisor you need to be sure they actually add some sort of value and that they adhere to fiduciary standards (not "suitability" standards) if you actually want to focus on individual stocks, please please please at least learn the absolute basics about fundamental ratios and how to look at a balance sheet or cash flow statement. Or actually know the company you are investing in. There are many books out there. The gold standard about value investing is Ben Graham's famous Intelligent Investor. real estate is a fairly tried and true method. investment properties produce reliable cash flow. there are property management companies out there that will charge usually around 10% of the rent to keep your place rented and handle the landlord duties. you could also focus on a stock market strategy geared toward passive income. something like a covered call strategy. that is a strategy commonly used in a sideways market or a market not strongly trending in either direction to produce cash flow by owning the stock and issuing/writing a call against it where you collect the premium. A few books I have read that offer some good intro to the basics of options strategies (and a few slightly more advanced methods) are the followings ASINs on Amazon - B014C59R9S, B01EPJC2T8, B0165YDUSS, and B00YBIK9P8. They're short and very straightforward to help understand the basics and also generate some ideas for yourself. They're only like $3 a piece, too. moving up the ladder of education and effort - you could pay for training courses for a site like WallStreet Mojo. I happen to have purchased all their stuff in a recent sale they had (like 85%+ off), which they have from time to time. They also have some free stuff for you to check out. It looks like they are running a special right now on the premium courses. Not sure how long that is in force. https://www.wallstreetmojo.com/courses/ https://www.wallstreetmojo.com/courses/ They have courses targeted for investment banking, CFA, financial modeling, etc. Their courses include videos and downloadable Excel templates/examples to learn with. It's time consuming, but if you are actually interested in how the financial analysts and investment bankers perform valuations then it's a pretty solid tool/resource. Their CFA courses are obviously geared toward the CFA exam, but the knowledge is the same and can be applied in any way you choose. You would be able to skip the compliance and ethics portions and just focus on the rest. this information combines to form a much more in depth valuation toolbox and you could theoretically choose stocks with success using careful analysis, or perhaps create fund-style strategy to spread out the risk of your personal portfolio. you could also purchase an existing business that is for sale. they are plenty of sites dedicated to these sales. if you find something you like, get an attorney who knows about these transactions. this basically is a sort of turn-key solution that provides relatively predictable cash flow. but it's not quite turn-key as businesses require work and you already own/run one. if you decide to go this route, i would suggest making sure the cash flow has enough wiggle room to hire someone to replace your own involvement, as you likely won't have the time to run it yourself.
• dokein 8y ago
  Broadly, I've been doing a 5-fund portfolio with a mix of several index funds in decreasing percentages (total US stock, total international, US bonds, international bonds, REIT). If I had enough money for it to be meaningful, I'd probably invest something on the order of 0.1% in cryptocurrency too. The rationale is that uncorrelated assets result in average returns (across the set of assets) but decreased risk. What's unclear to me is the performance of e.g. the S&P 500 once the percentage of investments that are just index funds passes a certain threshold. Presumably if all investors were index fund investors the market would be super stupid, so is there a point before 100% where there will be significantly aberrant behavior? If so, what is that percentage and what is the behavior?
  • deleted 8y ago
    [deleted]
• acconrad 8y ago
  It's known as "the index card"[1] and it's really the best advice for 99% of people who just want to make the most of their money: 1. max your 401k 2. buy a low cost mutual/index fund (e.g. VFINX) 3. never buy individual stocks/bonds 4. save 20% of your money 5. pay off your credit card balance in full every month 6. maximize tax-advantaged savings accounts (e.g. SEP, IRA) 7. pay attention to fees (i.e. avoid actively-managed mutual funds) 8. only use financial advisors who adhere to a fiduciary standard 9. promote social insurance programs to help people when things go wrong [1] https://img.washingtonpost.com/blogs/wonkblog/files/2013/09/pollack-card-800x600.jpg https://img.washingtonpost.com/blogs/wonkblog/files/2013/09/...
• thisisit 8y ago
  It really depends on how much effort and risk you want to take. Much of the advice you will receive on HN comes from Bogle and his Vanguard index funds. That is the lowest effort and risk you can take. But, if you want to invest some more time and take additional risk (and maybe better returns) try reading some books. Peter Lynch's - One Up on Wall Street and Benjamin Graham's - The intelligent Investor are two good ones to start with. These will give you a solid platform on stock selection.