7 ms·

The Best Financial Advice I Ever Got

58 points by RickJWagner 7y ago

dalfonso 7y ago
Mine would be, "Don't be pennywise and pound foolish". Sometimes it's worth it to spend the extra money. The example that's burned into my brain is hiring movers.
- jen729w 7y ago
  > The example that's burned into my brain is hiring movers. Or a nice coat. A nice coat doesn’t come cheap but it’ll last years. (Actually I think this applies to clothing generally. I don’t buy many clothes because I rarely buy cheap clothes.)
  - grogenaut 7y ago
    You subscribe to the Sam Vimes "Boot Theory" of economics: https://en.m.wikipedia.org/wiki/Sam_Vimes https://en.m.wikipedia.org/wiki/Sam_Vimes (sorry for general link due to mobile / bad internet). I do too.
  - deleted 7y ago
    [deleted]
  - easymodex 7y ago
    I always buy cheap clothes because the rare times I decided to buy something expensive it lasted about the same time as the cheap ones give or take.
    - lozenge 7y ago
      You need to care for them as expensive. "This shirt's dry clean only, which means it's dirty" -Mitch
      - _nalply 7y ago
        No. You aren't always an expert about things you buy. You should not then start to rely on the price as a proof of quality. If something is expensive it is either good quality or you have a greedy seller. To catch the greedy seller you need to understand what you buy. This is not always possible. Therefore: always buy the cheapest you can get if you aren't an expert or just don't buy.
        heavenlyblue 7y ago
        Oh wow, this is such a misguided advice. Assume it is the same advice government takes when procuring public projects...
        _nalply 7y ago
        The government has the task to know what it procures and also should have the resources for the task. However a single person doesn't always. Even for the government it is difficult. We all know stories about government being fleeced by providers.
      - grogenaut 7y ago
        You also have to know how to take care of them. Which requires work or paying folks. Even then the people who maintain it for you will give you instructions so it's still more work than t-shirt of the week
  - bigbaguette 7y ago
    Grandma used to say "we can't afford cheap clothing"
- lordnacho 7y ago
  That's "Don't sweat the small stuff", right?
josh_fyi 7y ago
> "Never open one of your 401(k) statements from the day you start work to the day you retire, 40 or 50 years later." Metaphorically, yes. But you absolutely should open them periodically. If there has been theft or an error, you want to report it immediately, not 50 years later.
- walshemj 7y ago
  And you may have several pensions (401k)s running at the same time so you do need to make sure you are happy with the allocations' I have three pensions plus my SIPP (self invested) running at the moment.
  - toomuchtodo 7y ago
    Whenever you leave a company, you should roll your 401k over to a Traditional (or Roth, if you had a Roth 401k) IRA, as the fund expense ratios are usually cheaper (I recommend Vanguard).
    - walshemj 7y ago
      Um I mentioned Pensions - I just added the 404 the usa's poor relation to even a DC scheme for context for US readers. We don't have IRA's we do have ISA's which are awesome in comparison (basically remove £20k pa into a tax efficient account) I think my main DC pension is about .5 and I will be moving my small NEST (government scheme) over to my self run pension shortly.
throwaway72873 7y ago
Do not get married!
- seanmcdirmid 7y ago
  Having kids is bad for your financial health as well but not all rewards in life are financial.
  - throwaway72873 7y ago
    One can have kids without a marriage.
  - dragandj 7y ago
    To be fair to the OP, they didn't mention (having or not having) kids at all.
  - chii 7y ago
    > financial health financial health is not a goal, but a means to an end. Getting good financial health is a means to having kids (ie, you will give your kids the best advantage they could if you're more financially capable).
  - conductr 7y ago
    Even financially. If they help you at all when you’re old, it’s worth the investment. The cost of in home care, independent living, etc is insane
    - seanmcdirmid 7y ago
      At least in the west, many of us don’t want to be a burden to our kids like that.
      - conductr 7y ago
        I get what you mean. I’m American. Grandparents have extended their independence in their home by 20 years, on land an hour outside of city, because their kids go over every 1-2 weeks to count out their meds, meal prep, and help out with a few other household things. They have done a few periods of livein care while they recovered from surgeries or falls. They’re in their mid90s and it’s getting pretty hard now because there’s some dementia and other issues setting in. They’d have much more help if my stubborn grandfather moved to the city near other family members (we could casually drop off groceries while we’re doing our own errands, etc). Every case is different, but I don’t think you have to be under one roof to significantly help some people keep their independence and avoid spending money on caregivers that are very expensive especially
lordnacho 7y ago
A lot of this advice is unrealistic. How many people are going to be able to live on one spouse's income alone? Of those who can, how many will want that second income vs time with the kids? About not getting into debt, how many people are can go to college ("invest in yourself") without? IMO the only good piece of advice is "be smart about probabilities", which if you follow it to its logical conclusion basically just means be informed about the facts, a general piece of life advice that makes a lot of sense.
- ajuc 7y ago
  > About not getting into debt, how many people are can go to college ("invest in yourself") without? Like 95% of the rest of the developed world ;)
  - fluffything 7y ago
    I only know a single "developed" country in which you have to indebt yourself to go to college, and that's the US. Are there any others?
    - lordnacho 7y ago
      Even in Northern Europe where tuition is free, students often take out loans to support themselves during uni. Source: I grew up in one of those places, plenty of people will borrow from the government on top of what they are given.
      - ajuc 7y ago
        Well in Poland university is free as it is in most post-communist EU, Scandinavia, and some other EU countries. Yeah you still have to have the money for food and place to live, but you'd need that anyway, and it's not that expansive. Most people get these money from their parents without loaning any money from banks.
      - Henk0 7y ago
        Just want to point out that the nature of these loans (at least in Sweden) differs greatly from student loans in the US. Interest rates and downpayments are low, and if you can’t afford to pay off your loans for a period (due to no or low income), you can get a temporary reduction of the amount you have to pay off every month. I maxed out my loans when I studied, at about $26k, and the maximum I have to pay monthly is ~$55 a month
InvOfSmallC 7y ago
Hahaha when you don't live in Europe, it's actually doable.
std_throwaway 7y ago
* Stop paying so much taxes. * Use money to make money. * Never get sick. * Never get divorced.
- ebg13 7y ago
  * Never have children. * Never get caught.
conchy 7y ago
LOL the best investing advice everyone in this generation ever got is "buy bitcoin" ... and not one of these clowns said it (before OR after the fact!)
jaclaz 7y ago
Quoting myself, an old Italian proverb: https://news.ycombinator.com/item?id=14594858 https://news.ycombinator.com/item?id=14594858 >In Italy there is (was, as it is not much used anymore) proverb: "Fare i conti spesso, moderar le voglie, spender men di quel che si raccoglie". >It cannot be translated easily, but more or less it amounts to: >Do the (financial) math often, limit your cravings, spend less than you can gather.
Jerry888 7y ago
If i could go back the best financial advice i would give to my self is: Earn more spend less.

58 points by RickJWagner 7y ago

Mine would be, "Don't be pennywise and pound foolish". Sometimes it's worth it to spend the extra money. The example that's burned into my brain is hiring movers.

jen729w 7y ago
> The example that's burned into my brain is hiring movers. Or a nice coat. A nice coat doesn’t come cheap but it’ll last years. (Actually I think this applies to clothing generally. I don’t buy many clothes because I rarely buy cheap clothes.)
- grogenaut 7y ago
  You subscribe to the Sam Vimes "Boot Theory" of economics: https://en.m.wikipedia.org/wiki/Sam_Vimes https://en.m.wikipedia.org/wiki/Sam_Vimes (sorry for general link due to mobile / bad internet). I do too.
- deleted 7y ago
  [deleted]
- easymodex 7y ago
  I always buy cheap clothes because the rare times I decided to buy something expensive it lasted about the same time as the cheap ones give or take.
  - lozenge 7y ago
    You need to care for them as expensive. "This shirt's dry clean only, which means it's dirty" -Mitch
    - _nalply 7y ago
      No. You aren't always an expert about things you buy. You should not then start to rely on the price as a proof of quality. If something is expensive it is either good quality or you have a greedy seller. To catch the greedy seller you need to understand what you buy. This is not always possible. Therefore: always buy the cheapest you can get if you aren't an expert or just don't buy.
      - heavenlyblue 7y ago
        Oh wow, this is such a misguided advice. Assume it is the same advice government takes when procuring public projects...
        _nalply 7y ago
        The government has the task to know what it procures and also should have the resources for the task. However a single person doesn't always. Even for the government it is difficult. We all know stories about government being fleeced by providers.
    - grogenaut 7y ago
      You also have to know how to take care of them. Which requires work or paying folks. Even then the people who maintain it for you will give you instructions so it's still more work than t-shirt of the week
- bigbaguette 7y ago
  Grandma used to say "we can't afford cheap clothing"
lordnacho 7y ago
That's "Don't sweat the small stuff", right?

josh_fyi 7y ago

> "Never open one of your 401(k) statements from the day you start work to the day you retire, 40 or 50 years later." Metaphorically, yes. But you absolutely should open them periodically. If there has been theft or an error, you want to report it immediately, not 50 years later.

walshemj 7y ago
And you may have several pensions (401k)s running at the same time so you do need to make sure you are happy with the allocations' I have three pensions plus my SIPP (self invested) running at the moment.
- toomuchtodo 7y ago
  Whenever you leave a company, you should roll your 401k over to a Traditional (or Roth, if you had a Roth 401k) IRA, as the fund expense ratios are usually cheaper (I recommend Vanguard).
  - walshemj 7y ago
    Um I mentioned Pensions - I just added the 404 the usa's poor relation to even a DC scheme for context for US readers. We don't have IRA's we do have ISA's which are awesome in comparison (basically remove £20k pa into a tax efficient account) I think my main DC pension is about .5 and I will be moving my small NEST (government scheme) over to my self run pension shortly.

throwaway72873 7y ago

Do not get married!

seanmcdirmid 7y ago
Having kids is bad for your financial health as well but not all rewards in life are financial.
- throwaway72873 7y ago
  One can have kids without a marriage.
- dragandj 7y ago
  To be fair to the OP, they didn't mention (having or not having) kids at all.
- chii 7y ago
  > financial health financial health is not a goal, but a means to an end. Getting good financial health is a means to having kids (ie, you will give your kids the best advantage they could if you're more financially capable).
- conductr 7y ago
  Even financially. If they help you at all when you’re old, it’s worth the investment. The cost of in home care, independent living, etc is insane
  - seanmcdirmid 7y ago
    At least in the west, many of us don’t want to be a burden to our kids like that.
    - conductr 7y ago
      I get what you mean. I’m American. Grandparents have extended their independence in their home by 20 years, on land an hour outside of city, because their kids go over every 1-2 weeks to count out their meds, meal prep, and help out with a few other household things. They have done a few periods of livein care while they recovered from surgeries or falls. They’re in their mid90s and it’s getting pretty hard now because there’s some dementia and other issues setting in. They’d have much more help if my stubborn grandfather moved to the city near other family members (we could casually drop off groceries while we’re doing our own errands, etc). Every case is different, but I don’t think you have to be under one roof to significantly help some people keep their independence and avoid spending money on caregivers that are very expensive especially

lordnacho 7y ago

A lot of this advice is unrealistic. How many people are going to be able to live on one spouse's income alone? Of those who can, how many will want that second income vs time with the kids? About not getting into debt, how many people are can go to college ("invest in yourself") without? IMO the only good piece of advice is "be smart about probabilities", which if you follow it to its logical conclusion basically just means be informed about the facts, a general piece of life advice that makes a lot of sense.

ajuc 7y ago
> About not getting into debt, how many people are can go to college ("invest in yourself") without? Like 95% of the rest of the developed world ;)
- fluffything 7y ago
  I only know a single "developed" country in which you have to indebt yourself to go to college, and that's the US. Are there any others?
  - lordnacho 7y ago
    Even in Northern Europe where tuition is free, students often take out loans to support themselves during uni. Source: I grew up in one of those places, plenty of people will borrow from the government on top of what they are given.
    - ajuc 7y ago
      Well in Poland university is free as it is in most post-communist EU, Scandinavia, and some other EU countries. Yeah you still have to have the money for food and place to live, but you'd need that anyway, and it's not that expansive. Most people get these money from their parents without loaning any money from banks.
    - Henk0 7y ago
      Just want to point out that the nature of these loans (at least in Sweden) differs greatly from student loans in the US. Interest rates and downpayments are low, and if you can’t afford to pay off your loans for a period (due to no or low income), you can get a temporary reduction of the amount you have to pay off every month. I maxed out my loans when I studied, at about $26k, and the maximum I have to pay monthly is ~$55 a month

InvOfSmallC 7y ago

Hahaha when you don't live in Europe, it's actually doable.

std_throwaway 7y ago

* Stop paying so much taxes. * Use money to make money. * Never get sick. * Never get divorced.

ebg13 7y ago
* Never have children. * Never get caught.

conchy 7y ago

LOL the best investing advice everyone in this generation ever got is "buy bitcoin" ... and not one of these clowns said it (before OR after the fact!)

jaclaz 7y ago

Quoting myself, an old Italian proverb: https://news.ycombinator.com/item?id=14594858 https://news.ycombinator.com/item?id=14594858 >In Italy there is (was, as it is not much used anymore) proverb: "Fare i conti spesso, moderar le voglie, spender men di quel che si raccoglie". >It cannot be translated easily, but more or less it amounts to: >Do the (financial) math often, limit your cravings, spend less than you can gather.

Jerry888 7y ago

If i could go back the best financial advice i would give to my self is: Earn more spend less.