4 ms·

Do you have debt? Yes? Pay it off! Do you have an emergency fund? No? make that your investment! Do you have 3-6 times your monthly expenses set aside? No? ma

Do you have debt? Yes? Pay it off! Do you have an emergency fund? No? make that your investment! Do you have 3-6 times your monthly expenses set aside? No? make that your investment! Still money left? invest in MSCI World oder S&P 500 ETFs and let it sit for a decade or two ... that should net you your 10x growth Edit: removed the MSCI EM ETF recommendation ... S&P 500 performs better.

giancarlostoro 8y ago
Care to elaborate on MSCI? I've looked at some of the returns for at least one of their ETF's and I'm not seeing 10x growth even with them paying dividends at a reasonable sum, am I just not savvy enough with investing or something? I must be missing something. Edit: I didn't account the increase of the value in the stock, saw one that doubled in value, so if someone had invested in it when it opened they would of gotten back twice what they invested, still not necessarily 10x but it's not bad for a safe low risk investment.
deleted 8y ago
[deleted]
randomacct3847 8y ago
Emerging markets have substantially underperformed US stock market for last few years...in a global recession those markets would be the first to go.
- cabraca 8y ago
  well you're right. fixed that in my post.
mooreds 8y ago
Great financial advice. I might quibble with the last bit, because we don't know what country the poster is in nor the time horizon for using the money. That will affect the investment possibilities. But the rest is spot on.
- mooreds 8y ago
  Actually I guess he is in the UK (the pound indicated that). Savings even more important in that case due to Brexit.
  - ratsimihah 8y ago
    I am indeed in the UK as a French citizen.
satysin 8y ago
I was about to post close to the exact same thing so I am glad to see it already mentioned. IMHO £5k is too little to be worth investing in anything if you don't have the three things you mentioned in order. Personally if I came into £5k and didn't need to clear any debts or top up my safety net I would treat myself to some new clothes, a new computer, a holiday or some other good experience before I think about investing it. Then again I have learnt the hard way that a lot of the time investing is just setting money on fire. These days I rather enjoy money when I get a little bit extra :)
IshKebab 8y ago
I have debt - a mortgage. But it's only 2%. Surely it makes more sense to invest in the stock market (~7% over a long period) than pay that off.
- fucking_tragedy 8y ago
  Liabilities are liabilities. If you got hit by a truck tomorrow, you'd still be on the hook for your mortgage, but your earning ability will have diminished. If the stock market tanks tomorrow, you're still on the hook for your mortgage and there goes your investments.
- pedrocr 8y ago
  Long-term stock market returns are 9-10%. 7% is after inflation but that's acting on your mortgage as well. Mortgages are indeed cheap leverage for your savings portfolio as you're basically using as collateral a probably somewhat oversized asset, since most people could easily live in a smaller/simpler house if an unforeseen event happens. It's still a higher risk investment of course.
- tomohawk 8y ago
  Paying off all of your debts is life changing. Lose your job with a mortgage or rent? How long is your emergency fund runway? Lose your job with a paid off dwelling? Runway is a lot longer. Want to take some time off and do something different? With a lot of debt hanging over your head this may not be possible. Everything paid off? No big deal. You have to look at risk as well as rewards. You also have to look at flexibility and opportunity.
- garmaine 8y ago
  The cutoff is between 3.5% and 4%, depending on your risk threshold. Anything less than that, keep it on the books and make minimum payments. Anything more than that and you'd be better off paying it down now.
- tonyedgecombe 8y ago
  That often quoted 7% figure is based on US investments, I wouldn’t expect as high a return in the UK. It’s also historical, there is no guarantee it will continue. It also includes an element of risk, whereas paying down your mortgage eliminates risk.
ratsimihah 8y ago
No, yes, nearly, and no. Aren't 2 and 3 the same thing? How is money set aside an investment? Thank you!
- cabraca 8y ago
  there is overlap 2 is more of a "oh shit the washing machine/car/stove broke" fund. stuff that costs more than i'm willing to cut from my income on a moments notice. 3 is leverage and runway. employer fucked up your salary payment? frustrating but you'll live. negotiating a raise? no need to bluff, bring in your written notice and sign it in front of them. important: ask them for a pen. the look on their faces is priceless and 3 month should be enough to get a new job. Want to go the extra mile? get a second bank account with another bank and split the money. remove the bank as a single point of failure.
ratsimihah 8y ago
Thanks! So for S&P 500 ETFs I'm seeing for example: * Boost Issuer Public Limited Company BOOST S&P 500 3X LEVERAGE DAILY * Boost Issuer Public Limited Company BOOST S&P 500 3X LEVERAGE DAILY 30/11/62 * Boost Issuer Public Limited Company BOOST S&P 500 3X SHORT DAILY * HSBC Etfs PLC HSBC S&P 500 UCITS ETF * HSBC Etfs PLC HSBC S&P 500 UCITS ETF $ How would I know about telling the difference between them and which one I should choose? Similarly for MSCI World: * Amundi Index Solutions AMUNDI MSCI WORLD ENERGY * HSBC Etfs PLC HSBC MSCI WORLD UCITS ETF * Ishares Iii PLC ISHRS CORE MSCI WORLD ETF USD (ACC) I'm considering picking them based on their Morningstar ratings and past performance over 5 years, would that make sense?

giancarlostoro 8y ago

Care to elaborate on MSCI? I've looked at some of the returns for at least one of their ETF's and I'm not seeing 10x growth even with them paying dividends at a reasonable sum, am I just not savvy enough with investing or something? I must be missing something. Edit: I didn't account the increase of the value in the stock, saw one that doubled in value, so if someone had invested in it when it opened they would of gotten back twice what they invested, still not necessarily 10x but it's not bad for a safe low risk investment.

deleted 8y ago

[deleted]

randomacct3847 8y ago

Emerging markets have substantially underperformed US stock market for last few years...in a global recession those markets would be the first to go.

cabraca 8y ago
well you're right. fixed that in my post.

mooreds 8y ago

Great financial advice. I might quibble with the last bit, because we don't know what country the poster is in nor the time horizon for using the money. That will affect the investment possibilities. But the rest is spot on.

mooreds 8y ago
Actually I guess he is in the UK (the pound indicated that). Savings even more important in that case due to Brexit.
- ratsimihah 8y ago
  I am indeed in the UK as a French citizen.

satysin 8y ago

I was about to post close to the exact same thing so I am glad to see it already mentioned. IMHO £5k is too little to be worth investing in anything if you don't have the three things you mentioned in order. Personally if I came into £5k and didn't need to clear any debts or top up my safety net I would treat myself to some new clothes, a new computer, a holiday or some other good experience before I think about investing it. Then again I have learnt the hard way that a lot of the time investing is just setting money on fire. These days I rather enjoy money when I get a little bit extra :)

IshKebab 8y ago

I have debt - a mortgage. But it's only 2%. Surely it makes more sense to invest in the stock market (~7% over a long period) than pay that off.

fucking_tragedy 8y ago
Liabilities are liabilities. If you got hit by a truck tomorrow, you'd still be on the hook for your mortgage, but your earning ability will have diminished. If the stock market tanks tomorrow, you're still on the hook for your mortgage and there goes your investments.
pedrocr 8y ago
Long-term stock market returns are 9-10%. 7% is after inflation but that's acting on your mortgage as well. Mortgages are indeed cheap leverage for your savings portfolio as you're basically using as collateral a probably somewhat oversized asset, since most people could easily live in a smaller/simpler house if an unforeseen event happens. It's still a higher risk investment of course.
tomohawk 8y ago
Paying off all of your debts is life changing. Lose your job with a mortgage or rent? How long is your emergency fund runway? Lose your job with a paid off dwelling? Runway is a lot longer. Want to take some time off and do something different? With a lot of debt hanging over your head this may not be possible. Everything paid off? No big deal. You have to look at risk as well as rewards. You also have to look at flexibility and opportunity.
garmaine 8y ago
The cutoff is between 3.5% and 4%, depending on your risk threshold. Anything less than that, keep it on the books and make minimum payments. Anything more than that and you'd be better off paying it down now.
tonyedgecombe 8y ago
That often quoted 7% figure is based on US investments, I wouldn’t expect as high a return in the UK. It’s also historical, there is no guarantee it will continue. It also includes an element of risk, whereas paying down your mortgage eliminates risk.

ratsimihah 8y ago

No, yes, nearly, and no. Aren't 2 and 3 the same thing? How is money set aside an investment? Thank you!

cabraca 8y ago
there is overlap 2 is more of a "oh shit the washing machine/car/stove broke" fund. stuff that costs more than i'm willing to cut from my income on a moments notice. 3 is leverage and runway. employer fucked up your salary payment? frustrating but you'll live. negotiating a raise? no need to bluff, bring in your written notice and sign it in front of them. important: ask them for a pen. the look on their faces is priceless and 3 month should be enough to get a new job. Want to go the extra mile? get a second bank account with another bank and split the money. remove the bank as a single point of failure.

ratsimihah 8y ago

Thanks! So for S&P 500 ETFs I'm seeing for example: * Boost Issuer Public Limited Company BOOST S&P 500 3X LEVERAGE DAILY * Boost Issuer Public Limited Company BOOST S&P 500 3X LEVERAGE DAILY 30/11/62 * Boost Issuer Public Limited Company BOOST S&P 500 3X SHORT DAILY * HSBC Etfs PLC HSBC S&P 500 UCITS ETF * HSBC Etfs PLC HSBC S&P 500 UCITS ETF $ How would I know about telling the difference between them and which one I should choose? Similarly for MSCI World: * Amundi Index Solutions AMUNDI MSCI WORLD ENERGY * HSBC Etfs PLC HSBC MSCI WORLD UCITS ETF * Ishares Iii PLC ISHRS CORE MSCI WORLD ETF USD (ACC) I'm considering picking them based on their Morningstar ratings and past performance over 5 years, would that make sense?