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My family. Women I’ve dated. I’m back in my hometown for Christmas now and talking to people I knew from school. The average person doesn’t know about this stuf

My family. Women I’ve dated. I’m back in my hometown for Christmas now and talking to people I knew from school. The average person doesn’t know about this stuff (though most likely has some proportion invested through the default option in their 401(k)). I mean damn, my aunt’s husband died recently and we had to bail her out of 10k credit card debt where she was paying interest. The Hacker News crowd probably knows above average, though even then a lot of my colleagues could know more, e.g. haven’t heard of VTSAX, didn’t know our 401(k) does a mega backdoor Roth, etc.

tempsy 7y ago
Do they have 401Ks or pensions or other retirement accounts? Then they have stock or bonds.
- Moodles 7y ago
  Yes, I know. They don’t understand what they’re doing very well though. Education will affect their net worth massively.
  - tempsy 7y ago
    There’s a difference if you’re sitting on $100K in cash earning nothing or a few thousand to use for living costs. If the latter then investing in stocks is actually not very prudent.
    - Moodles 7y ago
      Hence why I said to follow the flowchart.
      - tempsy 7y ago
        I also think the reddit personal finance crowd is way too focused on how to invest their existing money when almost everyone would be better off figuring out how to make more money from their day job than worrying about whether they can make 4% here vs 5% there from their existing savings. Perhaps less true if you have a large savings of over $1M already, but otherwise no.
        thrower123 7y ago
        Or cutting extraneous expenses. It's cliche, but really, making your own coffee and packing lunch can save $20-25 a day. That adds up fast.
        tempsy 7y ago
        True, though I’m in the camp of “make enough money where I don’t have to feel guilty spending money on food”. If you’re more income strained then yes though.
        deleted 7y ago
        [deleted]
        mateo411 7y ago
        This is true, but it's also a good thing to go to lunch or have coffee with other people. You'll get personal enjoyment out of it, and if you are talking shop, the relationship you build could offset the savings of packing your own lunch. For example it's common that you will regularly have lunch with a work colleague, and then later they will recruit you to work at another company. Or they will give you insight on how to get support behind your project at your current company.
        thrower123 7y ago
        That might work for some, but lunch is also one of the few blessed hours of the day that one can get the hell away from other people and be alone. It's an invaluable battery and sanity recharging time.
        Moodles 7y ago
        Ok. It takes an hour though and it’s not particularly hard. I just wanted to answer OP’s question.
        SuoDuanDao 7y ago
        Is there a flow chart for figuring out how to make more money from one's day job? I've heard this line of thinking before but people are always frustratingly vague about the income side of things.
    - bsanr2 7y ago
      Confirming. In college, I received what I thought was a decent windfall for a young adult (and what was roughly what people say should be enough to "get started" investing). I invested it. This was just after the rally post-recession had hit its apex. Fast-forward 3 years later, when I've been laid off. Well, now I need that money, but the stock is worth less than when I bought it. I don't make enough to itemize taxes, so I can't even do anything with the loss. Welp. I'd have been better off just letting it sit in a bank. When you're a normal American - increasingly lower-"middle class," if that, these financial schemes are worthless to you. You're in perpetual survival mode. But try to convince wealthy capitalists to pay the average worker enough to allow them to actually be in control of their financial destiny. You'll be laughed out of the room.
      - brutt 7y ago
        Start your own business and pay to your workers as much as you want. It's easy.
      - mrgordon 7y ago
        You don’t need to itemize to claim a capital loss
        bsanr2 7y ago
        I filed with TurboTax that year.
- BeetleB 7y ago
  FYI less than half of American workers have access to a 401K plan. Less than 60% have access to any retirement plan.
  - shantly 7y ago
    And for unfathomable (haha, well, is it really though?) reason retirement accounts are set up to mostly benefit people with very high wages whose employers (gotta have an employer, too, or arrange things so you're your own employer—man is this dumb, it's as if it's set up to disadvantage the poor and middle class) also provide a high match rate. Meanwhile most folks are lucky to get a 1 or 2% match, leaving them way under the max possible cap even if they put as much in as they can, personally, per year.
    - esotericn 7y ago
      There are caps for contributing to tax-advantaged savings and pension accounts in the UK too. I wouldn't say that that 'disadvantages the poor and middle class'. It's the other way around - it disadvantages the upper-middle and wealthy because they hit the limit and have to find other ways to accumulate wealth.
      - shantly 7y ago
        The way 401k retirement accounts are set up in the US, you can't get anywhere near the contribution limit on your own, you have to have huge amounts of employer contribution, beyond simple matching, even. It's like (cough) it's designed to mainly benefit top-tier professional class folks and non-owning-class upper managers while chaining people to traditional employment or complex personal tax arrangements. The other tax-advantaged account, the IRA, has a much lower total contribution cap. [EDIT] to be clear it's not an absolute disadvantage to the poor and middle class versus having no such system, it's just that the way it's structured the overwhelming bulk of the tax savings goes to people who are already very well off, and those "beneath" them cannot possibly, no matter how frugal or responsible or fairly-well (but not excellently) compensated, hope to touch the level of benefit the very-well-off derive from 401k accounts. It's impossible, thanks to the way they're structured. [EDIT EDIT] they're actually ideal for rich people who want to transfer ~$56k/yr to each of their kids (about $1.5m over 30 years), tax-free. I'd bet there's a further scheme one can work out to direct the investment of the fund such that the personal benefit is much greater than that, even (oh, kid of mine, you want to start a business? Funny, our 401k fund also "wants" to invest in it!). How? Employ them at one of your C or S corps (LLC or partnership won't let you get anywhere near the contribution limit, because... reasons? I dunno, it's a really dumb system if [cough] you're trying to make it broadly available to and useful for normal people) in one of the many positions near the top that're well-compensated but are so easy that lots of folks (stalk some from-money C-suite or "investor" types on Linkedin to see what I mean) seem to find time to hold one of them and also a few other "jobs" at the same time, so it won't look out-of-the-ordinary.
jimhefferon 7y ago
If it ever comes up that you talk to them about it there are many sources of good information. But just to name one, https://www.iwillteachyoutoberich.com/ https://www.iwillteachyoutoberich.com/ is pretty good, I think. (Not associated.) There is a book that I gave my kids.

tempsy 7y ago

Do they have 401Ks or pensions or other retirement accounts? Then they have stock or bonds.

Moodles 7y ago
Yes, I know. They don’t understand what they’re doing very well though. Education will affect their net worth massively.
- tempsy 7y ago
  There’s a difference if you’re sitting on $100K in cash earning nothing or a few thousand to use for living costs. If the latter then investing in stocks is actually not very prudent.
  - Moodles 7y ago
    Hence why I said to follow the flowchart.
    - tempsy 7y ago
      I also think the reddit personal finance crowd is way too focused on how to invest their existing money when almost everyone would be better off figuring out how to make more money from their day job than worrying about whether they can make 4% here vs 5% there from their existing savings. Perhaps less true if you have a large savings of over $1M already, but otherwise no.
      - thrower123 7y ago
        Or cutting extraneous expenses. It's cliche, but really, making your own coffee and packing lunch can save $20-25 a day. That adds up fast.
        tempsy 7y ago
        True, though I’m in the camp of “make enough money where I don’t have to feel guilty spending money on food”. If you’re more income strained then yes though.
        deleted 7y ago
        [deleted]
        mateo411 7y ago
        This is true, but it's also a good thing to go to lunch or have coffee with other people. You'll get personal enjoyment out of it, and if you are talking shop, the relationship you build could offset the savings of packing your own lunch. For example it's common that you will regularly have lunch with a work colleague, and then later they will recruit you to work at another company. Or they will give you insight on how to get support behind your project at your current company.
        thrower123 7y ago
        That might work for some, but lunch is also one of the few blessed hours of the day that one can get the hell away from other people and be alone. It's an invaluable battery and sanity recharging time.
      - Moodles 7y ago
        Ok. It takes an hour though and it’s not particularly hard. I just wanted to answer OP’s question.
      - SuoDuanDao 7y ago
        Is there a flow chart for figuring out how to make more money from one's day job? I've heard this line of thinking before but people are always frustratingly vague about the income side of things.
  - bsanr2 7y ago
    Confirming. In college, I received what I thought was a decent windfall for a young adult (and what was roughly what people say should be enough to "get started" investing). I invested it. This was just after the rally post-recession had hit its apex. Fast-forward 3 years later, when I've been laid off. Well, now I need that money, but the stock is worth less than when I bought it. I don't make enough to itemize taxes, so I can't even do anything with the loss. Welp. I'd have been better off just letting it sit in a bank. When you're a normal American - increasingly lower-"middle class," if that, these financial schemes are worthless to you. You're in perpetual survival mode. But try to convince wealthy capitalists to pay the average worker enough to allow them to actually be in control of their financial destiny. You'll be laughed out of the room.
    - brutt 7y ago
      Start your own business and pay to your workers as much as you want. It's easy.
    - mrgordon 7y ago
      You don’t need to itemize to claim a capital loss
      - bsanr2 7y ago
        I filed with TurboTax that year.
BeetleB 7y ago
FYI less than half of American workers have access to a 401K plan. Less than 60% have access to any retirement plan.
- shantly 7y ago
  And for unfathomable (haha, well, is it really though?) reason retirement accounts are set up to mostly benefit people with very high wages whose employers (gotta have an employer, too, or arrange things so you're your own employer—man is this dumb, it's as if it's set up to disadvantage the poor and middle class) also provide a high match rate. Meanwhile most folks are lucky to get a 1 or 2% match, leaving them way under the max possible cap even if they put as much in as they can, personally, per year.
  - esotericn 7y ago
    There are caps for contributing to tax-advantaged savings and pension accounts in the UK too. I wouldn't say that that 'disadvantages the poor and middle class'. It's the other way around - it disadvantages the upper-middle and wealthy because they hit the limit and have to find other ways to accumulate wealth.
    - shantly 7y ago
      The way 401k retirement accounts are set up in the US, you can't get anywhere near the contribution limit on your own, you have to have huge amounts of employer contribution, beyond simple matching, even. It's like (cough) it's designed to mainly benefit top-tier professional class folks and non-owning-class upper managers while chaining people to traditional employment or complex personal tax arrangements. The other tax-advantaged account, the IRA, has a much lower total contribution cap. [EDIT] to be clear it's not an absolute disadvantage to the poor and middle class versus having no such system, it's just that the way it's structured the overwhelming bulk of the tax savings goes to people who are already very well off, and those "beneath" them cannot possibly, no matter how frugal or responsible or fairly-well (but not excellently) compensated, hope to touch the level of benefit the very-well-off derive from 401k accounts. It's impossible, thanks to the way they're structured. [EDIT EDIT] they're actually ideal for rich people who want to transfer ~$56k/yr to each of their kids (about $1.5m over 30 years), tax-free. I'd bet there's a further scheme one can work out to direct the investment of the fund such that the personal benefit is much greater than that, even (oh, kid of mine, you want to start a business? Funny, our 401k fund also "wants" to invest in it!). How? Employ them at one of your C or S corps (LLC or partnership won't let you get anywhere near the contribution limit, because... reasons? I dunno, it's a really dumb system if [cough] you're trying to make it broadly available to and useful for normal people) in one of the many positions near the top that're well-compensated but are so easy that lots of folks (stalk some from-money C-suite or "investor" types on Linkedin to see what I mean) seem to find time to hold one of them and also a few other "jobs" at the same time, so it won't look out-of-the-ordinary.

jimhefferon 7y ago

If it ever comes up that you talk to them about it there are many sources of good information. But just to name one, https://www.iwillteachyoutoberich.com/ https://www.iwillteachyoutoberich.com/ is pretty good, I think. (Not associated.) There is a book that I gave my kids.