5 ms·

I live well enough within my means that I don't have to bother with any kind of accounting. On a typical tech salary living in a relatively cheap COL area, I bo

I live well enough within my means that I don't have to bother with any kind of accounting. On a typical tech salary living in a relatively cheap COL area, I bought a house about half of the price I could afford. I exclusively purchase used vehicles (partly because I am am enthusiast and enjoy working on them, but even a 10 year old low mileage modern vehicle is pretty reliable and cheap to maintain), and I don't shop for the fun of shopping. The result is a guaranteed growing savings which I periodically invest in various assets while trivially maintaining a buffer for emergencies. The trick is to live modestly even if you have money. Also, stocks are basically equivalent to savings, since with modern tech liquidating funds and transferring them to your bank in an emergency can take as little as minutes. There's so much uncertainty in money management that you're probably IMO wasting your time micromanaging. Pick a couple decent assets, or even an index fund, diversify with a little bit of gold or alternative market hedges, and leave the funds alone. There's no reason to overthink money management if you plan everything with a healthy buffer - but that requires self control. Less stress this way though.

keehun 7y ago
Do you do any sort of financial planning for retirement? What you've got going for yourselves seems like it's working for you, but curious to know hat would happen if the "tech salary" were to stop.
spurdoman77 7y ago
You forgot bitcoin. Lots of bitcoin on the side. That way you can retire in peace.
- Gabriel_Martin 7y ago
  this is terrible advice. They should put it all on red.
  - hef19898 7y ago
    What an amateur advice. Every sophisticated roulette player know you don't do that. You put it all on Pair.
kevmojay 7y ago
I agree with your conclusion but for me personally, I am afraid of spending even though I have money to spend. And when I do spend the money, it gives me a lot of anxiety. I started keeping track of my budget so I can comfortably spend without the stress.
- hello_moto 7y ago
  I feel like you need a goal or you need some sort of framework to make yourself feel safe. Say here's just an example (DO NOT QUOTE THIS): Most people don't know how much money they should have for retirement. The FIRE movement suggest Expense * 25 = Your Nest so you can take 4% annually. People don't have to follow the FIRE lifestyle but the calculation itself could give some deadline/goals to keep yourself "sane" because Mathematically it looks "sound" (better than NOBODY KNOWS!).
- allovernow 7y ago
  Nothing wrong with being extra responsible!
hef19898 7y ago
Yeah, that's what we do as well. After the first couple of years in my first job, during which I spent a little bit more on stuff I couldn't afford before (sport equipment and such) but within my means, we stopped spending at a level below what our combined salaries would allow. It's a nice feeling to have enough buffer for a couple of months. And the opportunity to opt for a lower salary without any financial risk. Generally sound advice to live below ones means. And stay there. EDIT: One thing that helped a lot in doing so was to treat any bonuses, whether that is stock, years end bonuses or any variable salary elements, as just that. A bonus. Don't plan with it as part of your salary, put it aside. And only use it for stuff, like, a house. Or true emergencies. Also, have a separate bank account at different bank. Put every month, even a small sum is enough, on that account. Every month. Every year. And never look at that account, ever. Until the world is to end and you need cash. Until that point, don't even think about that account, never ever. Forget it is there.
jmeyer2k 7y ago
Investing in an index fund consistently gives returns of about 5-10% a year. This turns out to be a LOT of money in the long run (1.1 ^ 30 = 20x). Trying to time the market is a bad idea. Picking individual stocks is a bad idea. This is assuming your main goal is returns on your investment. Picking individual stocks or even 30 stocks is basically gambling. Really recommend reading "A Random Walk Down Wall Street": https://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393358380 https://www.amazon.com/Random-Walk-Down-Wall-Street/dp/03933...
- tempsy 7y ago
  I'm so tired of these types of comments on HN that say investing in individual stocks is like gambling. It's such a tired piece of advice. Don't invest more than say, 5%, in an individual company, but choosing a selection of high quality companies that you believe in is not in any way like going to the roulette table.
  - jmeyer2k 7y ago
    It depends on the time-frame you plan to invest. If it's a short time frame, investing in individual stocks can be OK. There's just so many variables that go into the price that something that causes the stock to go up/down 20% can be completely unforeseen. A broad market index won't have these weird fluctuations. Almost every single market strategy underperforms broad market indices in the long run. Even hedge funds that outperform the S&P in one period perform average in the next period. In other words, past performance of funds has no impact on future performance. On average hedge funds picking individual stocks consistently underperform compared to broad market indices.
    - tempsy 7y ago
      The issue I have with your statement is not that you're guaranteed in any way to beat the market, but saying that investing in individual stocks is gambling. It just isn't true. Again, if you have no more than 5% of your portfolio in an individual stock then a 20% drawdown on that one stock is not going to significantly hurt you. People should feel free to decide for themselves if they want to spend the time to actively invest vs throwing everything into an ETF and no one should be shaming them into thinking it's akin to going to a roulette table in Vegas. As someone in tech, I've done quite well investing in high quality tech companies like Apple, Netflix, Amazon, and Nvidia over the years. I keep my 401K in a broad index fund but enjoy actively investing a part of my wealth.

keehun 7y ago

Do you do any sort of financial planning for retirement? What you've got going for yourselves seems like it's working for you, but curious to know hat would happen if the "tech salary" were to stop.

spurdoman77 7y ago

You forgot bitcoin. Lots of bitcoin on the side. That way you can retire in peace.

Gabriel_Martin 7y ago
this is terrible advice. They should put it all on red.
- hef19898 7y ago
  What an amateur advice. Every sophisticated roulette player know you don't do that. You put it all on Pair.

kevmojay 7y ago

I agree with your conclusion but for me personally, I am afraid of spending even though I have money to spend. And when I do spend the money, it gives me a lot of anxiety. I started keeping track of my budget so I can comfortably spend without the stress.

hello_moto 7y ago
I feel like you need a goal or you need some sort of framework to make yourself feel safe. Say here's just an example (DO NOT QUOTE THIS): Most people don't know how much money they should have for retirement. The FIRE movement suggest Expense * 25 = Your Nest so you can take 4% annually. People don't have to follow the FIRE lifestyle but the calculation itself could give some deadline/goals to keep yourself "sane" because Mathematically it looks "sound" (better than NOBODY KNOWS!).
allovernow 7y ago
Nothing wrong with being extra responsible!

hef19898 7y ago

Yeah, that's what we do as well. After the first couple of years in my first job, during which I spent a little bit more on stuff I couldn't afford before (sport equipment and such) but within my means, we stopped spending at a level below what our combined salaries would allow. It's a nice feeling to have enough buffer for a couple of months. And the opportunity to opt for a lower salary without any financial risk. Generally sound advice to live below ones means. And stay there. EDIT: One thing that helped a lot in doing so was to treat any bonuses, whether that is stock, years end bonuses or any variable salary elements, as just that. A bonus. Don't plan with it as part of your salary, put it aside. And only use it for stuff, like, a house. Or true emergencies. Also, have a separate bank account at different bank. Put every month, even a small sum is enough, on that account. Every month. Every year. And never look at that account, ever. Until the world is to end and you need cash. Until that point, don't even think about that account, never ever. Forget it is there.

jmeyer2k 7y ago

Investing in an index fund consistently gives returns of about 5-10% a year. This turns out to be a LOT of money in the long run (1.1 ^ 30 = 20x). Trying to time the market is a bad idea. Picking individual stocks is a bad idea. This is assuming your main goal is returns on your investment. Picking individual stocks or even 30 stocks is basically gambling. Really recommend reading "A Random Walk Down Wall Street": https://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393358380 https://www.amazon.com/Random-Walk-Down-Wall-Street/dp/03933...

tempsy 7y ago
I'm so tired of these types of comments on HN that say investing in individual stocks is like gambling. It's such a tired piece of advice. Don't invest more than say, 5%, in an individual company, but choosing a selection of high quality companies that you believe in is not in any way like going to the roulette table.
- jmeyer2k 7y ago
  It depends on the time-frame you plan to invest. If it's a short time frame, investing in individual stocks can be OK. There's just so many variables that go into the price that something that causes the stock to go up/down 20% can be completely unforeseen. A broad market index won't have these weird fluctuations. Almost every single market strategy underperforms broad market indices in the long run. Even hedge funds that outperform the S&P in one period perform average in the next period. In other words, past performance of funds has no impact on future performance. On average hedge funds picking individual stocks consistently underperform compared to broad market indices.
  - tempsy 7y ago
    The issue I have with your statement is not that you're guaranteed in any way to beat the market, but saying that investing in individual stocks is gambling. It just isn't true. Again, if you have no more than 5% of your portfolio in an individual stock then a 20% drawdown on that one stock is not going to significantly hurt you. People should feel free to decide for themselves if they want to spend the time to actively invest vs throwing everything into an ETF and no one should be shaming them into thinking it's akin to going to a roulette table in Vegas. As someone in tech, I've done quite well investing in high quality tech companies like Apple, Netflix, Amazon, and Nvidia over the years. I keep my 401K in a broad index fund but enjoy actively investing a part of my wealth.