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Reddit has become a guide to personal finance
- omarchowdhury 7y agoAnonymous people over the web have become guides to personal finance, reddit just facilitates that. The same advice was available during the "blogging/RSS era".
- TulliusCicero 7y agoYes, the advantage of Reddit is that you can more easily see the group consensus on an issue, as well as differing opinions (as long as those differing opinions aren't considered so extreme/wrong that they get heavily downvoted, which is certainly possible).
- omarchowdhury 7y agoTrue enough. The anonymity also leads to people being more candid, and that generally means an unveiling of information asymmetries.
- tonyedgecombe 7y agoThe group consensus seems to be to get the largest mortgage your bank will give you, buy an oversized car on a 7 year contract plan and fritter the rest on beer and takeaways. The best financial advice is usually drowned out by the consensus.
- TulliusCicero 7y agoWhat? This is absolutely the opposite of the consensus advice you'll get somewhere like r/personalfinance. It sounds like you're completely ignorant of the subs in question, and just spouting off whatever comes to mind.
- michaelt 7y agoI think tonyedgecombe is pointing out that relying on 'group consensus' is not a golden bullet, as the consensus revealed preference of the national population conflicts with the consensus advice of subreddits' self-selected populations
- TulliusCicero 7y agoBit of a useless point then, isn't it? Of course group consensus of people who care about finance is going to be more useful to finance discussions than group consensus of the general population. And it's the former that we were discussing anyway. Not to mention what they're describing isn't a group consensus on financial advice, it's just the stereotype of lowest common denominator behavior. It's like suggesting that there's a group consensus that playing the lotto is sound financial wisdom just because a large number of people do participate in it.
- dsfyu404ed 7y agoIt's basically the word for word consensus advice of decades past. At least two generations grew up in a world where "take out the biggest mortgage you can" was considered good advice by default. As history has proven that is not a consistently successful approach for individuals and has some pretty severe trade-offs at the societal level. I'm not sure if it was the point he was trying to make but in any case it should probably serve as cautionary tale that consensus is not necessarily correctness.
- TulliusCicero 7y agoBut we're discussing the group consensus of a self-selected group of people interested in finance, who are nerding out about it on the internet, not the group consensus of the general population.
- dsfyu404ed 7y ago"Take the biggest mortgage you can" became known by the general population because it was repeated again and again by every financial literacy magazine, talk show and newspaper advice column back in its day. If anything that is an even more refined interest group than Reddit because you needed more than an internet connection and an interest to get into it.
- mateuszf 7y agoHowever the group of all people in society and group of people interested in personal finance proactively finding and using these subreddits are different.
- joaodlf 7y agoNonsense. This is the polar opposite of what anyone in personalfinance subreddits will recommend.
- throwaway468883 7y agoThis is true of all subbredits. Basically the best way to use Reddit if you get into a hobby is to go to that hobby's sub, meticulously read the sidebar and leave the site without ever posting.
- dsfyu404ed 7y agoYou can see group consensus even when it doesn't exist. Reddit's upvote/downvote system does a very good job of fudging consensus on issues where you've got 49.9 one way and 50.1 the other.
- speedplane 7y ago> Anonymous people over the web have become guides to personal finance, reddit just facilitates that. The same advice was available during the "blogging/RSS era". Every generation needs their own form. Before blogging/RSS it was cable financial news on TV, before that magazines, and before that I don't know. Basic financial literacy (creating a budget, tracking it, adjusting) is sorely lacking. Today, you may be adept at trading $10k of stocks on Robinhood using money that you're parents gave you hoping over the year for a big 20% win, but you'll equally forget that you have $10k of credit card debt with interest accruing at 30%.
- nabla9 7y agoThere is whole generation of people who were reading goldbug blogs and absorbed investment advice from iconoclastic bloggers. They also read Mises and Larry Kudlow's articles to learn economics. You can still see the result. The most common response to any bad economic news is short 1-4 sentence outburst about how Fed is printing money, no matter how irrelevant it is to discussion.
- will_pseudonym 7y agoAnd the responses about the responses about how the Fed is printing money. And the response about the response about the response, no matter how irrelevant it is to discussion :)
- joaodlf 7y agoYes! I have learned tremendously about personal finance from ukpersonalfinance. For anyone based in the UK, please go and read the content at https://ukpersonal.finance/ https://ukpersonal.finance/, it is invaluable for your future. Financial literacy for the millennial generation is my #1 recommendation for general life improvement. It doesn't matter what situation you are in: in debt; with lots of savings; lack of credit options; etc... You will learn tremendously and can genuinely improve so many aspects of your life.
- dharma1 7y agoSeconded. You get generally quite well-informed discussion on /r/UKPersonalFinance, no pushing products or shallow reviews which is what you get if you try to Google same type of content. Also the discussion is two way, so you get to ask questions without paying hundreds to an IFA. In some instances you probably should speak to an IFA (or an accountant) for a holistic overview of your particular situation, but redditers are quite quick to point that out too.
- tron27 7y agoOne of the most valuable things I've seen is that the users on UKPersonalFinance are also not afraid to tell people when they're doing (or planning to do) a stupid thing. On the flip side of that, you'll generally get a good response if you are planning to do a stupid (within reason) thing but have yourself sorted out, followed the flowchart, got your emergency fund sorted and are paying off your dept. It's a good place for balance between getting yourself financially stable and enjoying the money you have.
- nindalf 7y agoThanks for the link, I'll definitely look into it.
- benhurmarcel 7y agoThere are communities by country indeed. For France /r/vosfinances is similarly very helpful.
- 7y ago
- levosmetalo 7y agoWhat's wrong with that? I find many people are more comfortable to share private information and seek advice anonymously on the internet than face to face. And in this anonymous stranger setting, many people are actually more inclined to give a good/harsh/honest advice than in face-to-face conversations.
- TulliusCicero 7y agoAs shown in the article, there's nothing wrong with that. In fact, it's a very good thing.
- LatteLazy 7y agoReddit is a weird mix of mechanical-turk-search-engine and social media lite. It doesn't do anything except facilitate people doing things... To be clear, I'm not criticising reddit. I'm just saying, reddit isn't doing this, reddit is a tool for people to do this.
- ace32229 7y agoFacilitating people doing things isn't valuable?
- LatteLazy 7y agoEdited to clarify.
- np_tedious 7y agoReddit doesn't help people. People help people
- TulliusCicero 7y agoThis seems really pedantic, since you could apply this reasoning to basically any (volunteer) group effort.
- bawolff 7y agoSo reddit isn't literally conscious with intentionality? You can basically say the same thing about literally anything that is not a person.
- djhworld 7y agoUK folk should head to https://www.reddit.com/r/UKPersonalFinance/ https://www.reddit.com/r/UKPersonalFinance/ I've always been interested in personal finance, but this community has helped me learn new things and everyone is very supportive.
- neuronic 7y agoGermany: https://www.reddit.com/r/finanzen/ https://www.reddit.com/r/finanzen/
- freetonik 7y agoEurope in general https://reddit.com/r/eupersonalfinance/ https://reddit.com/r/eupersonalfinance/
- Double_a_92 7y agoOr if your goal is retiring early: https://www.reddit.com/r/EuropeFIRE/ https://www.reddit.com/r/EuropeFIRE/ Seems like a more familiar community to me.
- Jlively22 7y agoCanada: https://www.reddit.com/r/PersonalFinanceCanada/ https://www.reddit.com/r/PersonalFinanceCanada/
- RWSen 7y agoFor The Netherlands: https://www.reddit.com/r/geldzaken https://www.reddit.com/r/geldzaken
- benhurmarcel 7y agoFor France: https://www.reddit.com/r/vosfinances/ https://www.reddit.com/r/vosfinances/
- yardie 7y agoI wish I had known about r/vosfinances sooner. As an American I tried to approach my finances from that perspective and encountered lots of roadblocks. Something like ETrade didn’t exist. My bank wanted to handle my money for me and pushing too hard for me to hire their investment team. It was way less friction to open a investment account back int the US and wire money to it. No pushy up sell
- prawn 7y agoPeople incentivised by karma systems seem to create better information sources than when they’re incentivised by money. Think about how often you turn to Stack Overflow, Reddit, forums (Whirlpool in Australia) over AdSense/affiliate blogs. The latter are almost always biased and essentially misleading.
- tgb 7y agoAlbeit probably only because they aren't yet being exploited by companies to the extent that search engines are. I don't expect it to last. Googling used to find you this level of grassroots enthusiast information but now is mostly content farms.
- prawn 7y agoI often append forum, reddit, whirlpool, etc to a search to avoid the content farms. I think it will hold out for a while longer.
- girvo 7y agoWhingepool has its own set of biases of course, they’re just less obvious than those motivated by money. Perhaps better, though.
- prawn 7y agoI am usually searching it for Australian-specific house-related info (sealing concrete was a recent search). I don't know many other Australian sources that have a broad range of content. There are some reno forums which have solid subject matter experts too.
- roenxi 7y agoWell; more than anything else the incentives around financial advice are so terrible that it almost can't be paid for. The financial advisers are dealing with people who are so bad with money that they don't see problems with spending more than they earn or taking on debt for things they don't need. The incentives for anyone profit motivated is to take their money and move on. No point offering any useful advice; it just cuts into the margins. Ideally, sell the client complicated financial products. The typical person paying for financial advice is basically putting a sticker on themselves that says "I'll buy anything; try and sell me a bridge!".
- xelhark 7y agoI think a much bigger point can be summarized with this sentence from the article: > Seven of the top ten results are trying to sell you something, which really makes you question the objectivity of the advice. This is true when searching for pretty much everything in Google nowadays, that's why if you're looking for any info, searching on reddit usually yields much more objective and generally better results.
- koboll 7y ago>searching on reddit usually yields much more objective and generally better results. Well, search on reddit has always been pretty terrible. I find that appending `inurl:reddit` to a Google search gives the best results.
- gniv 7y ago> I find that appending `inurl:reddit` to a Google search gives the best results. That works, but for many searches will include results from other sites, since the operator works on the entire URL, not just the domain. If you want to limit to just reddit.com, use `site:reddit.com`.
- atwork95 7y agoI usually search for recommendation on reddit because they seems to be more legit and so far it has always worked
- disiplus 7y agoand that's mostly thanks to subreddit moderators, if they weren't that aggressive it would be full of spam. u can notice that on some subreddits when moderators are away or some that have lax rules.
- read_if_gay_ 7y agoThat's because of the voting system.
- Quequau 7y agoI use Reddit a lot and I find some of the finance focused subreddits to be really repellent. I don't know if this is because, while I have a degree in economics, I'm not an investor or that I just have a low tolerance for some of the conduct that frequently shows up in those communities. I really like /r/povertyfinance though clearly those folks are often going through way, way more trying circumstances I am. I guess I'd be more interested in finances for the alienated precariat.
- Kneecaps07 7y agoI agree. If it were up to /r/personalfinance, everyone would have three credit cards and that's all they would ever use and it would solve every financial problem ever. They fail to realize that many people (myself included!!) are just not equipped for credit cards and it can cause huge problems.
- auiya 7y agoWhat does "just not equipped for credit cards" mean?
- cheese4242 7y agoLikely means that they have difficulty paying off the balance every month and incur interest charges. Because most credit cards offer some sort of cash back/reward for every dollar spent, they are great if you can pay off the balance 100% of the time. However, if you get hit with interest charges even once, it can wipe out any benefit you gained from the cash back/reward bonus. In such cases those people might be better off using a debit card or other means.
- Sohcahtoa82 7y agoPoor self control. They'll spend money on a credit card without considering whether or not they'll be able to pay it off in a reasonable amount of time. In some cases, they have negative cash flow but don't realize it because they haven't sat down and truly inspected their budgeting and spending. They're constantly deciding which bill they can choose not to pay so that they can still make rent. They think getting a credit card will give them breathing room, so they get a one and slowly the balance creeps up, or it jumps up because they suddenly think they can afford that fancy $2,000 TV.
- simongray 7y agor/personalfinance has 14 million subscribers!? I did not expect the subject to have that kind of extreme popularity.
- TulliusCicero 7y agoWasn't it made some sort of "default sub" a while back?
- rubidium 7y agoAnother great source I’ve enjoyed using is https://www.bogleheads.org/forum/index.php https://www.bogleheads.org/forum/index.php . This of course presupposes choosing that particular investment strategy, but the opportunity to ask anonymous, detailed financial questions and get thoughtful responses and ideas is great!
- jumbopapa 7y agoThe Bogleheads wiki should really be the first stop for financial questions. It's a fanatic resource and I found the answers/content to be higher quality than Reddit.
- JackMorgan 7y agoReddit is truly amazing, such that I've mostly replaced my usage of hackernews with it. I have serious issues with anxiety, and the inability for me to filter out content related to "current news" aka "clickbait fear mongering" means when I surf hackernews for too long I'll be upset for hours afterwards as I'm riled up with current events rewritten as FUD. Reddit can be filtered by subreddit, so I've got a view with no FUD. Also as a personal finance hobbyest, I can sub to finance, personalfinance, financialindependence, and economics without having stories of police overreach or failures in the justice system written to scare people. Also as a painter, there's another 10 subs I can subscribe to basically make my feed a walk through a museum. Absolutely fantastic micro culture and I'm thrilled to have found it!
- cool-RR 7y agoCare to share your collection of art subreddits?
- noahbradley 7y ago/r/art is a mixed bag but pretty good. /r/specart has a lot of good stuff. /r/imaginarylandscapes (and their sibling subreddits) is really high quality. /r/earthporn if you like nature photography.
- TecoAndJix 7y agoI'm a big fan of /r/wimmelbilder/ !
- ImprovedSilence 7y agoThanks for those lists. I can’t believe I never thought to use reddit like this! Google reader used to be my go to for scolling through art, and I’ve never quite recovered from its closure in terms of having interesting stuff to just look at.
- unixhero 7y agoWell if you haven't been using Subreddits. I don't mean to be rude, but then you've missed the entire point of Reddit up until now. Reddit is not just a front page.
- deleted 7y ago[deleted]
- walrus01 7y ago/r/wallstreetbets is to finance as Gwyneth Paltrow and Goop are to professional, rigorously scientific medical advice.
- WJW 7y agoThere's more to financial subreddits than just /r/wallstreetbets, thankfully.
- christophilus 7y ago80% of the stuff on /r/securityanalysis is actually top notch. Reddit is a combination of dumpster fires and brilliance.
- Proziam 7y agoIt's remarkable how true that is of almost all forums that have been around a while. There are dead serious experts on every subject to be found on 4chan for example. Reddit is no different, but each subreddit is basically a tiny little kingdom and not all of them are run well (the LoL subreddit, for example, is a nightmare due to corporate moderation from Riot).
- leetcrew 7y agogood lord. why would you ever voluntarily become responsible for moderating discussion about your game on a third-party platform?
- Proziam 7y agoNever underestimate the power of the human ego or the almighty dollar. It's just unfortunate that in many cases these motivators get used for corrupt purposes. EDIT - Since not everyone is familiar with the RIOT games example. In the case of RIOT, they use it to control external discussion about their game and manage PR. Since the LoL subreddit is the largest hub for LoL related discussion in the western world, it's worth it to them to play kingmaker with the moderators (and they've given those mods the same power over Valorant now as well) and place them into jobs, or just outright pay them. Of course, this turns into corruption because the mods have straight up banned credible journalists from the space, as well push discussion into uncomfortable directions. (Hating on certain people is not allowed, hating on others totally is.)
- cowsandmilk 7y agoI can’t help but question what he’s actually learned when his links don’t actually explain a topic. He says he learned about mega backdoor IRAs, but then links to a thread about regular backdoor IRAs. I’m not sure he does know what differentiates a “mega” from a regular backdoor.
- beatgammit 7y agoPeople get terminology wrong in niches like this all the time, especially when the terminology is so similar. The fact that the OP even knows that a backdoor Roth IRA exists (much less a "mega" backdoor IRA) puts this person leagues above the average person, who probably doesn't even know the difference between a Roth IRA and a traditional IRA, much less what an IRA even is. Honestly, I trust sources like OP mentioned more than most financial advisors because advisors tend to pitch a product instead of conveying information. Schools aren't doing it, so that basically leaves communities like this.
- tiew9Vii 7y agoMust admit, reddit got me caring more about my finances. It seems not many people are taught about money properly. I certainly wasn’t and non of my friends where. I’ve always been good in that I never spent what I didn’t have and lived within my means. What savings I did have where in a zero interest current account though! Following the finance Reddit’s at least put me in the right path. 6-12 months cash savings now in a high interest account, now have a pension plan, putting money in to ETF’s until I have enough in the ETF’s I’m willing to by some individual stocks which may not be as stable as the ETFs I have. As someone who’s been a senior dev for 10+ years doing well but stuck in a rut I’m also finding the various cscareers Reddit’s useful about the job market. Seeing people’s salaries, negotiations, what jobs to look for, what companies to look for etc etc.
- mlrtime 7y agoDo you mind sharing the subreddits?
- whatsmyusername 7y ago/r/personalfinance ignore the subreddit and read the sidebar
- abrugsch 7y agoand sibling /r/UKPersonalFinance for UK specific advice (since finance products, terms and laws tend to be different in different countries) There are probably ones for most other countries too. At least Aus from what I saw yesterday
- randlet 7y ago/r/personalfinancecanada is the Canadian version.
- carstenhag 7y ago/r/Finanzen for Germany, Austria and Switzerland :)
- willart4food 7y agoIf you want to see the future of Social Networks, look no further than Reddit. Reddit is the Future of Social Networks. The Next Social network, the one what will eat Facebook's lunch, just like Facebook ate MySpace's lunch, will not be people-to-people based, but it will be People-to-topic and topic-to-topic based; media-rich and mobile-friendly. And no, it won't be Reddit, too much Legacy crap with Reddit and not enough novelty. Clayton Christensen would agree.
- Double_a_92 7y agoAgree. I either want to talk to a community for each of my interests (on a subreddit or a dedicated forum) OR to a small group of close friends or family (messengers). Only rarely would I want to broadcast generic information / entertainment to everyone I know (facebook). One platform I'm missing is one where I could (anonymously) talk to strangers in my area. To discuss or ask about locally relevant things, or just see what people that aren't my friends think. The apps that already exist seem to be always targeted at students.
- beatgammit 7y agoReddit does pretty well for the "random collection of locals". I follow a subreddit for: - my state - the nearest metro area of my state - politics in my state It seems like most of the posters are actually in my local area, so it's fairly easy to kick off a discussion about some local issue. The downside is that there's a significant leftist bias (true for most of Reddit), but it's fine if you take that into account.
- bronco21016 7y agoWhile not anonymous, Nextdoor seems to really fill the space of local discussion. It has a lot of people from my town active on it, YMMV. Unfortunately, my town is going through some crap times politically and it makes it really hard to not spend time on Nextdoor just becoming enraged.
- scarface74 7y ago
- ausbah 7y agoreddit appears to me to have a lot of crap with the few nuggets in the rough. subs like personalfinance seems to be on net helpful for people, but "cousin" subs like investing are cesspits of grifters and ill informed maniacs
- swarnie_ 7y agoReddit also suffers from the dreaded circlejerk effect which simply reinforces an idea regardless of if its correct or not. Using your example of /r/investing, if you propose anything which isn't a broad market index your post just doesn't get seen, it just buried under 10 other comments which blindly followed the subs meta. I believe a sub is best when its small and focused, 5-10k subs max. Beyond that the ideas and culture get diluted by the mass mob. God help you if your little sub ever ends up on the front page, may as well just shut it down at that point.
- snowwrestler 7y agoSub-reddit quality on Reddit has a high correlation with how actively the sub-reddit is moderated.
- jcims 7y agoAnd the quality of that moderation. Any experience with heavy-handed moderation is incredibly frustrating. While I wouldn't call it a predictor because there are many many counter-examples, my favorite subreddits are generally between 10k and 100k subs. Much less and they are a ghost town, much more and you start getting too many drive-by assholes.
- snowwrestler 7y ago/r/askscience is a good example of where pretty heavy moderation has protected the high quality of the comments.
- jcims 7y agoFunny you mention that. Its sister subreddit /r/science is my example of something that has frustrated me greatly in the past. Most of the stories are something I'm trying to learn about, not an expert in, and I've found it very frustrating to try to engage. So if i see anything interesting there, i'll find somewhere else to talk about it.
- fierarul 7y agoSadly Reddit is locking down the personal finance subreddit behind their app so they can monetize it better. I find this article to have interesting timing as the readership on that subreddit must be going way down nowadays.
- ZekeSulastin 7y ago... what? I can get to it from the website and Apollo perfectly well.
- fierarul 7y agoI must be in the bad A/B bucket because I see 'This community is available in the app' and haven't been able to use Reddit a lot on mobile for weeks / months? Google gives me this article about the new trend: https://reclaimthenet.org/this-community-is-available-in-the-app/ https://reclaimthenet.org/this-community-is-available-in-the...
- 0xffff2 7y agoBased on that article, I'm guessing this is only a thing in the new mobile site. There are a somewhat ridiculous number of ways to browse reddit these days (desktop new/old, mobile new/old, app at least) and they all seem to offer a different set of features. I've used i.reddit.com on mobile for many years now and it hasn't been impacted by any of the nonsense that reddit has been pushing lately (yet).
- fierarul 7y agoI know that if I spend extra time I can edit the URL but honestly this reddit block has allowed me to just stop browsing reddit unless absolutely necessary. A positive thing in a way...
- beatgammit 7y agoI'm guessing you're on your phone? I get prompts urging me to use their app, but I have been able to opt for the browser instead, and I use Tor fairly frequently (phone and desktop). Have you tried old.reddit.com instead? Maybe it's specifically targeting certain browsers/platforms. I'm on Firefox on Android, maybe they're specifically targeting iOS?
- clircle 7y agoI have found a very enjoyable way to browse reddit: through RSS. I make RSS feeds of the top weekly posts in the three subreddits that I follow and subscribe to those. I use hnrss for reading HN, of course.
- jhn1618 7y agoAlmost the current internet is fked, unfortunately to say it after 30 years of existence.
- k__ 7y agofrugal_jerk is well worth reading. https://www.reddit.com/r/frugal_jerk/ https://www.reddit.com/r/frugal_jerk/
- deleted 7y ago[deleted]
- m23khan 7y agoI absolutely love reddit - a massive collection of discussion forums on very specific topics and most seem to be moderated by individual(s). I can find topic related to all my interests - finance, economy, devops, machine learning, politics, sports, specific country and even things like walmart and costco. Although effectiveness of advice can vary depending on topic (people are pretty opinionated on certain subreddits) but overall, it is a great community effort.
- bluntfang 7y ago>most seem to be moderated by individual(s). How can you tell the difference between an individual and a corporate shill account to a degree that you can make this statement?
- beatgammit 7y agoMy general rule of thumb: - > 1M subscribers - most definitely filled with shills - > 100k subscribers - probably lots of shills - < 50k subscribers - probably not many shills I try to avoid big subs and stick mostly to smaller subs.
- SXX 7y agoThis remind me of famous: > When the shoeshine boys talk stocks it was a great sell signal in 1929 https://archive.fortune.com/magazines/fortune/fortune_archive/1996/04/15/211503/index.htm https://archive.fortune.com/magazines/fortune/fortune_archiv...
- h1srf 7y ago2020 edition: when the news is quoting /r/wallstreetbets it might be a sell signal
- fokinsean 7y agoOr when a popular twitch streamer asks which "stonks" to buy. https://i.imgur.com/V8zRG5C.jpg https://i.imgur.com/V8zRG5C.jpg
- fullstop 7y agoI had non-technical people coming to me asking if I knew how to mine "bitcoins" right before the the crypto bubble popped. If I had any left it would have definitely been time to exit the market.
- SXX 7y agoI seen exactly same thing happen in one of my groups of friends where no one ever had any interest in IT before that point. For a month or two before crash they was talking about their crypto investments daily even though before this all they was interesting about are some extreme sports, woman and cars.
- Vysero 7y agoPersonally, I would rather ask questions on the Personal Finance & Money community at Stack Exchange, and watch videos on YouTube but to each their own.
- waylandsmithers 7y agoI would personally advise against taking advice from Reddit beyond simply basic answers about various financial products and maths. My problem with larger communities on Reddit is that prevailing opinions seem to emerge, and anything that questions or disagrees with them gets downvoted to hell. On the personal finance subreddits these include ideas like "You should always have 18 months of expenses saved" and "Any more than $10,000 for your wedding is a reckless and gross waste of money" and "Look how smart I am for having a mega-backdoor roth ira instead of a regular 401k like all the idiot sheeple." I still think having a relationship with a financial advisor you trust is better than taking advice from strangers on the internet.
- scarface74 7y agoI can’t tell which of the ideas you think are crazy. - 18 months in low risk savings (not invested) - seems like overkill. - I personally think any money spent on a wedding is overkill - we went to the courthouse and saved a ton of money by having a smallish reception (in fairness we were in our mid 30s and on our second marriage) - 401K - I have no opinion either way. I haven’t thought about the pros and cons. I don’t trust financial advisors. Unless you have a reasonably complicated situation the standard advice you can find from reputable sites like Vanguard would take you a long way.
- fullshark 7y agoThe 1st and 3rd seem like clearly bad advice, there's no reason a mega backdoor roth should replace a 401k unless your company's matching policy / investment options for 401k are atrociously terrible. The 2nd: I think splurging on a wedding is a frequently valid personal choice and I wouldn't belittle someone for doing it unless they did something insanely irresponsible.
- erikpukinskis 7y agoI just have to think this through because now I’ve heard both positions! ...if you put $1,000 in the 401k and it’s matched up to to $2,000 and then it grows to $20,000 and you’re in a 25% tax bracket then you’ll pay $5,000 in taxes on the $20k, leaving you with $15k. ...in the Roth IRA you put $1,000 and it grows to $10,000. You only pay $250 in tax though, so you’re left with $9,750. But that’s far less than $15k. So, seems like if there’s a match you should take it! After the match is used up, the next $1,000 in the IRA grows to $10,000 and you pay $2,500 in taxes on that... 10x more than the Roth. So it sounds like the rule is use the Roth after the match is used up. (Although that will depend on your tax bracket both at the time of investment and up it expected bracket for retirement)
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- Scoundreller 7y agoI miss fatwallet...
- sna1l 7y agoI would say the meta point to this article is that in general finding unbiased information nowadays is much harder. I was just lamenting with some friends about how much Amazon search has declined in quality in the past few years. You essentially have to do your research elsewhere (Wirecutter, etc), and then try to find an authentic version of that on Amazon.
- Tycho 7y agoHere's a simple personal finance question that seems very hard to answer: should you overpay your mortgage, or put more money towards retirement? The well informed answers you tend to see on sites like MoneySavingExpert seem to converge on putting money towards retirement. They cite things like difference in interest rates and tax relief. But I feel the analysis is too one-dimensional, and there's actually a myriad of utility considerations and possible future scenarios. It might be impossible to answer well but I feel someone should turn it into an optimization problem (in the engineering sense).
- sigstoat 7y ago> Here's a simple personal finance question that seems very hard to answer: should you overpay your mortgage, or put more money towards retirement? it's certainly subtle, and depends quite a bit on a person's circumstances. i feel like i've seen the financial forums answer that fairly well, though, when folks describe their personal situation (and risk tolerance!). > It might be impossible to answer well but I feel someone should turn it into an optimization problem (in the engineering sense). i think it might be hard to turn it into a concrete one (most of your effort would go into accurately estimating the user's current risk tolerance, and their expectations for future interest rates and cash flows), but it would be nice to see a rough flow chart produced, so that people could be walked through the steps that need to be considered.
- throw0101a 7y agoWe get this question a lot in /r/PersonalFinanceCanada/ and the 'towards retirement' answer is the "mathematically correct" one because most mortgage rates are <3% but equity returns are >5%. However, in Canada, if you put money into your RRSP, which is a tax-deferral account, you get a refund: so a popular option is to save for retirement and use your tax refund for your mortgage. Lastly, the other thing generally mentioned is the observation that some people are just uncomfortable with debt 'hanging over them'. So if it helps you sleep at night, there's nothing wrong with paying it down, as long as you recognize that there is a "financially better" option.
- Tycho 7y ago
- Areibman 7y agoThis isn't limited to personal finance either. I find that asking an open ended question to Google typically results in irrelevant results, discussions that are too precise to be useful (StackExchange), or just plain unhelpful (Quora). But appending "Reddit" to the end of my query almost always produces a relevant thread. Most web forums haven't figured out SEO or how to persist quality threads (TripAdvisor). Reddit is filling in that gap.
- sproketboy 7y agohttps://old.reddit.com/r/WatchRedditDie/ https://old.reddit.com/r/WatchRedditDie/
- fooker 7y agoHere is an experiment you can try today. Pick a topic which you are an expert in, then look at highly upvoted comments about that topic in a large subreddit.
- darksaints 7y agoAs long as they're not taking advice from /r/WallStreetBets, this is a good thing. Financial advice from financial institutions is a plague on our society.
- say_it_as_it_is 7y agoTaking advice from someone on social media is very risky. There's no reason to trust that whomever is giving the advice is an authority on the subject at hand. Not a lawyer, not a doctor, not a financial professional, just a hobby programmer with really strong opinions, not a partner in a VC fund but talking as if I were, etc. On the other hand, doing something professionally also doesn't imply expertise. My god have I paid for doing business with alleged professionals.
- magduf 7y ago>There's no reason to trust that whomever is giving the advice is an authority on the subject at hand. >My god have I paid for doing business with alleged professionals. This is the problem with getting advice from "financial professionals". Unless you're paying them a lot of money, a financial advisor is giving you advice that's going to benefit him, not you. Basically, they're salespeople; why else would they give you free advice? Even if you are paying them, that's no guarantee they're competent. After all, if they're so brilliant with managing money and investments, then why are they doing a comparatively low-paid office job for a salary? Professionals are rarely experts in their field; they're just people who managed to find someone to do work full-time in that field. You'll usually get much better advice from amateurs who are very passionate about that as a hobby. For instance, cars: would you get better repair advice from a professional mechanic who works on all kinds of different cars, and whose hobby is fishing, or from an internet forum full of people who own and love your model of car, and collectively know all the common problems with that exact year/model, plus where to get the best parts? Would, for instance, some average professional mechanic know that the engine mount on your Volvo can be replaced with one from a particular Ford for much less money? I seriously doubt it.
- m3kw9 7y agoReddit and such communities can act like filters for the web. A lot of people are really good at searching google for info and know when something is likely BS and that filter gets captured on forums like Reddit.
- balls187 7y agoI too recently started using reddit for personal finance r/investing. I was lucky in that my mom instilled the need to put money away for retirement, which I did as soon as I graduated college. On the flip side, both my parents were secretive about their finances. It was until now, as I am ensuring I am aware of my parents wishes through their golden years, that we are having honest discussions about money. The benefit I see is that many of the subs promote transparency. My college friends and I also discuss openly our savings and investing strategies. My financial goals are: 1) be able to live near my current lifestyle at retirement 2) Ensure both my children have money should they suffer a catastrophic loss near middle age, as my parents did for me.
- SeanFerree 7y agoLove Reddit!
- divbzero 7y agoFor me the most useful advice has come in the form of “How should I spend my money?” Reddit has an excellent detailed flowchart [1] that echoes a simplified version that fits on an index card [2]. [1]: https://www.reddit.com/r/personalfinance/comments/4gdlu9/how_to_prioritize_spending_your_money_a_flowchart/ https://www.reddit.com/r/personalfinance/comments/4gdlu9/how... [2]: https://www.npr.org/sections/alltechconsidered/2016/01/08/462250239/when-an-index-card-of-financial-tips-isnt-enough-this-book-is-there https://www.npr.org/sections/alltechconsidered/2016/01/08/46...
- MadWombat 7y agoReddit seems like an odd choice, but there is the personal finance stack exchange site https://money.stackexchange.com/ https://money.stackexchange.com/
- akrymski 7y agoAs the web matures around several core destinations, I find that Googling becomes increasingly less valuable. If you want to shop you go straight to Amazon. If you want advice you go to Reddit. Dev query? Stackoverflow. etc. The long tail of web-pages that Google used to be so great it is becoming increasingly irrelevant.
- galkk 7y ago> Traditional publications that offer financial advice, such as the Financial Times or the Wall Street Journal, communicate authority, trust, and centuries of accumulated wisdom. Though they are objective and accurate, these sources often lack the relatability of an answer on Reddit. objective and accurate... FT and WSJ.
- sub7 7y agoSifting through bullshit on the internet is a 21st century skill.