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I would personally advise against taking advice from Reddit beyond simply basic answers about various financial products and maths. My problem with larger comm

I 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 ago
I 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 ago
  The 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 ago
    I 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)
    - mercutio2 7y ago
      Is it possible you’re confusing the traditional-401k vs. Roth 401k question, with a Mega-backdoor Roth? Mega-backdoor Roth does not need to be an alternative to a traditional 401k. AFTER you’ve maxed out your tax advantaged opportunities (mostly, employer 401k), if your employer offers the necessary pre-requisites (of which there are many), a mega-backdoor-Roth is a way to put another $30-40k into a tax advantaged account every year. It’s an absurdly regressive tax expenditure for the 1%, but if that’s where you’re at, I can’t blame anyone for availing themselves of it.
- take_a_breath 7y ago
  ==in fairness we were in our mid 30s and on our second marriage== How much did you spend on the first marriage?
  - csa 7y ago
    Getting out of it was probably as expensive (if not more so) than getting into it. I wish I could /s this, but I have seen too many folks take a big financial hit during and after a divorce.
    - scarface74 7y ago
      And I had the great idea of giving her money instead of selling my real estate property. Because my real estate property was definitely going to appreciate. This was around 2007, what could possibly have gone wrong...
  - scarface74 7y ago
    Not much. Much less than $10K. A family member gave us the pictures for free (professional photographer) and a friend of hers did the catering as a gift. But, my now wife and I met at work. The company shut down and we had to scramble to find jobs. She found a job with benefits that paid less and I got a contract that paid more from a firmer customer of the company we worked for. She suggested we get married four days after I proposed so we could save money on my health insurance I was paying out of pocket.
    - waylandsmithers 7y ago
      Sure- but in plenty of communities the dress costs $10K.
scrooched_moose 7y ago
Agreed. Their prevailing opinion is good on average and is probably better than someone with absolutely no knowledge about personal finance winging it. But, like the infamous Air Force "Average Pilot" program [1], there are many things that will end up being wrong for the individual. 1) https://www.thestar.com/news/insight/2016/01/16/when-us-air-force-discovered-the-flaw-of-averages.html https://www.thestar.com/news/insight/2016/01/16/when-us-air-...
ryandrake 7y ago
> prevailing opinions seem to emerge, and anything that questions or disagrees with them gets downvoted to hell Hmm... sounds like another community we all know. This is not a unique problem to Reddit or large communities. It's inevitable in any forum when you try to use crowdsourcing to moderate/curate content.
- YawningAngel 7y ago
  How do downvotes even work here? I've been posting here for years and (as far as I know) am in good standing and don't have the option.
  - scrooched_moose 7y ago
    I think it unlocks at 500 total karma, although that number has changed a few times and I'm not sure if it's current. Looks like you're still at 330.
    - mrosett 7y ago
      It was 500 a few months back when I got it.
  - passivepinetree 7y ago
    You need 500 “karma” IIRC in order to gain the privilege.
- notduncansmith 7y ago
  Yes, but there is also public knowledge of HN’s biases, people comment with them in mind and are often self-aware when they express dissenting opinions. Some of the best comments open by admitting they run counter to the prevailing wisdom.
0xJRS 7y ago
I think most people who have read the PF subreddits came to the same conclusion that you can't live life eating lentils and driving a 93 camry forever.
- prostoalex 7y ago
  That approach is usually advised when one begins to build a "nest egg", and is not that different from the one pursued in business books, like "Rich Dad, Poor Dad". The point is to build predictable passive income stream on top of whatever else you're earning. Getting a general idea around predictable expenses will provide a "magic number" where your basics would be covered by passive income alone. Some people might choose to forego active earning opportunities at that point, but it's hardly a requirement.
bootlooped 7y ago
I think one of the problems is that many reddit users deploy downvotes against people who have a different subjective opinion than them. That is the lever that drowns out dissent from the majority. I have been thinking about that for a while now, what is the proper time to use a downvote? My MO is that it is only to be deployed against those who are arguing in bad faith or being disrespectful. Differing opinions should be allowed to exist.
- cylon13 7y ago
  The official reddit rules for using the downvote are similar to your MO. The problem is you can't expect people to read and abide by rules on when to use such a simple feature, and they're impossible to enforce anyway.
- mroche 7y ago
  Reddit does have some informal guidelines (Reddiquette) on this: https://www.reddithelp.com/en/categories/reddit-101/reddit-basics/reddiquette https://www.reddithelp.com/en/categories/reddit-101/reddit-b... Summary: DO: > - Vote. If you think something contributes to conversation, upvote it. If you think it does not contribute to the subreddit it is posted in or is off-topic in a particular community, downvote it. > - Consider posting constructive criticism / an explanation when you downvote something, and do so carefully and tactfully. > - Actually read an article before you vote on it (as opposed to just basing your vote on the title). > - Moderate based on quality, not opinion. Well written and interesting content can be worthwhile, even if you disagree with it. DON'T: > - Downvote an otherwise acceptable post because you don't personally like it. Think before you downvote and take a moment to ensure you're downvoting someone because they are not contributing to the community dialogue or discussion. If you simply take a moment to stop, think and examine your reasons for downvoting, rather than doing so out of an emotional reaction, you will ensure that your downvotes are given for good reasons. > - Mass downvote someone else's posts. If it really is the content you have a problem with (as opposed to the person), by all means vote it down when you come upon it. But don't go out of your way to seek out an enemy's posts. > - Moderate a story based on your opinion of its source. Quality of content is more important than who created it. > - Upvote or downvote based just on the person that posted it. Don't upvote or downvote comments and posts just because the poster's username is familiar to you. Make your vote based on the content. > - Report posts just because you do not like them. You should only be using the report button if the post breaks the subreddit rules.
lotsofpulp 7y ago
>I still think having a relationship with a financial advisor you trust is better than taking advice from strangers on the internet. What financial advisor is going to be able to make a living telling people to buy and hold a target date retirement fund from Vanguard/Fidelity/Schwab? It's all pretty common sense advice, that hopefully one can verify is correct with some basic arithmetic. And advice for 90% of people should be spend time and energy to figure out how to increase income.
- deleted 7y ago
  [deleted]
- brazzy 7y ago
  > What financial advisor is going to be able to make a living telling people to buy and hold a target date retirement fund from Vanguard/Fidelity/Schwab? The kind you pay for by the hour and for whom it would be a criminal violation of fiduciary duty sell you an expensive whole life insurance that they get a commission for.
  - lotsofpulp 7y ago
    The vast majority of people don't have enough money to go past this flow chart from /r/personalfinance: https://i.imgur.com/lSoUQr2.png https://i.imgur.com/lSoUQr2.png It would be the opposite of financial advice to pay someone to walk you through that flow chart and click a few buttons to invest it in the lowest cost index funds. I also don't recommend people hire a plumber to fix their toilet. Just youtube it. Do a few simple searches online, and you will find that you don't need to pay an "advisor", as much of their role has been obviated.
    - brazzy 7y ago
      First, that most people don't need a financial advisor doesn't mean nobody does. Second, your "few simple searches online" or "youtube it" could just as well land a financially naive person in the clutches of the worst kind of exploitative financial predator, or some disaster prophet telling them to put everything in physical gold, or some hype train telling them bitcoin will make them rich. It takes a certain amount of knowledge to recognize good advice, especially when it's boring. For the vast majority of people, paying someone $100/hour to tell them to buy and hold a target date retirement fund from Vanguard/Fidelity/Schwab is a much better option than the likely alternatives (going to a commission-based "free" advisor, or taking advice from random people in the internet).
Humdeee 7y ago
Financial literacy is pure garlic to every common vampire financial advisor. I have a couple friends right now that do not want wage raises because "it will knock them into the next tax bracket". Believe me, I've tried to explain how the simple concept of income and taxes work. I trusted my financial advisor years ago when I started my career. It took me a couple years to realize I was the product, not his client with his best interest in mind. Strangers, especially from more disciplined subs and without skin in the (your own) game, have been more valuable many, many times over. Everyone who takes what is said literally and in verbatim would be a fool. Validate what is said as it applies within your own context.
- mfoy_ 7y ago
  Almost all "financial advisors" are really just in sales.
  - Humdeee 7y ago
    Correct, and developing trust is a fundamental tool in every salesman's pocket.
  - GordonS 7y ago
    In the UK (and, AFAIK, across the EU) we have IFAs (Idependent Financial Advisors) who follow rules, such that they are nit permitted to get kickbacks from investments. Does such a thing not exist in the US?
    - jeremyashort 7y ago
      In the US we have "Fee-Only Financial Advisors": https://www.forbes.com/sites/davidmarotta/2012/06/11/fee-only-financial-planner-whats-the-difference/#30da618f3f24 https://www.forbes.com/sites/davidmarotta/2012/06/11/fee-onl...
    - mfoy_ 7y ago
      In Canada we have fiduciaries, but most people aren't that financially literate. If you walk into a bank and ask for a financial advisor they're just going to pass you to a sales rep. Enjoy your TD e-Series! (Although, admittedly, mutual fund MERs have dropped substantially with the rise of low-cost ETFs...)
didip 7y ago
You disagree that more than $10,000 for wedding is a waste of money? That's $10k that could have gone to student loans.
- brazzy 7y ago
  It really depends on your financial situation. What if you have no student loans and a six-figure income? A $10k wedding (or a $50k one, for that matter) is only a waste of money if you don't value big fanc events where you're the center of attention, and it's only a financially unwise decision if you cannot afford it.
  - mm89 7y ago
    Many lucky individuals from wealthy families (in the USA at least) do not pay for their own weddings out of pocket, since it is tradition for the bride's family to pay for the wedding and the groom's parents to pay for the honeymoon.
- thehappypm 7y ago
  Weddings are monumental, memorable, and fun events for family and friends. They add a richness to life. People in my family still talk about weddings from literally decades ago and it's a great way to bring people together and make memories. You don't need to spend $50k on a wedding. You also don't need to go uber-frugal. There's a happy medium out there for most people.
- waylandsmithers 7y ago
  I don't, and it is. This is coming from someone who spent a multiple of that amount on a wedding. My issue though, is that you're attempting to apply logic to something driven almost entirely by emotions in the first place.
sykick 7y ago
I disagree with your last paragraph but wholeheartedly agree with he first 2. One of the things that bothers me about the advice given there is a seemingly irrational aversion to bankruptcy or walking away from a debt. Sometimes that’s the financially wise option.
- pfranz 7y ago
  I really think "You should always have 18 months of expenses saved" (assuming this is in savings) isn't universal. If you're fairly young, single and have a new source of disposable income then a few months savings seems prudent and paying down debt seems like the best course of action. I remember diligently building a large emergency fund knowing I could scale down drastically if I lost my job and seeing interest accrue in accounts I could have paid off. If you have kids, a mortgage, and a single household income you really have to be more risk averse. I do think bankruptcy should be thought of more as a business decision than a personal decision.
magduf 7y ago
>"Look how smart I am for having a mega-backdoor roth ira instead of a regular 401k like all the idiot sheeple." Maybe you mean "traditional IRA" instead of 401k. The way I understand it, the backdoor Roth IRA depends on you using a company 401k so that you don't have any money in a traditional IRA, and can then contribute cash into an empty traditional IRA, and then "convert" it (move it) to a Roth IRA in the same financial institution. But it doesn't work if you have a traditional IRA with money in it, because then you have to enter the total value of that IRA on an IRS form and you end up paying double taxes on the conversion. The wedding thing is totally understandable. If you care a lot about saving money, it seems rather reckless and wasteful to spend $50k on a one-day event when you have a ~50% chance of getting a divorce anyway. Sure, if you're a multi-millionaire, that kind of money is no big deal, but if you earn $80k, I'm sorry, but it's not financially smart to blow that much money on a wedding, even though so many Americans do for some reason.
- mercutio2 7y ago
  You are referring to the backdoor Roth IRA, which has a contribution limit of ~$6k/year. A Mega-backdoor Roth is an even more extreme tax loophole, specifically involving employer 401k plans, which has a similar taxation structure just managed by your employer, and offers $30-40k of additional tax advantaged opportunity.
nophunphil 7y ago
While I think some of your points have merit, you are misrepresenting the subreddit quite a bit here. On the topic of emergency savings funds, the community tends to recommend sizing these to cover roughly 3-6 months of expenses[1]. Larger emergency funds are useful for edge cases. The community tends to recognize that anything more would simply be better served towards high-interest debt or retirement savings. Not everyone on the subreddit is quite so passionate about avoiding expensive weddings or financial advisors at all costs. In fact, fee-only fiduciary advisors are perceived quite positively[2]. [1] https://www.reddit.com/r/personalfinance/wiki/emergencyfunds https://www.reddit.com/r/personalfinance/wiki/emergencyfunds [2] https://www.reddit.com/r/personalfinance/wiki/financialadvisors https://www.reddit.com/r/personalfinance/wiki/financialadvis...
themodelplumber 7y ago
> prevailing opinions seem to emerge, and anything that questions or disagrees with them gets downvoted to hell. I've noticed this too. Also the general bias there is toward asking for help/answers. So if your post or reply indicates that you are encouraging subjective, open-minded experimentation, especially if there is any risk involved, you are flirting with a total freak-out. It's annoying but there's also a lot of good to be found there.
mindfulplay 7y ago
It's ironic that I upvoted this post to agree with you - which is exactly the issue you talk about in your post.
JMTQp8lwXL 7y ago
Mega backdoor roth (MBR) can be done in addition to traditional/roth 401k. When people discuss it on Reddit, usually MBR comes after maxing traditional 401k. The suggestion of being a replacement isn't a fair characterization of the going narrative.
the_watcher 7y ago
> You should always have 18 months of expenses saved The r/personalfinance "Common Topics" page suggests 3-6 months for most people and 9-12 for those with variable income.
icedchai 7y ago
You're better off educating yourself. I'm not saying they are all like this, but finance is one of those industries where you often don't get what you pay for...
libria 7y ago
> It can be harder to tell how accurate any answer is on Reddit, and any advice should initially be taken with a big grain of salt. > a little skepticism is your friend [...] further investigate on your own > always try to reference the true source material [...] don’t assume [...] cross-check [...] double check. > scrutinize the details, lead with skepticism, and, when appropriate, consult with professionals The article says almost the same things as you and even ends with your recommendation. Did you read it?
commandlinefan 7y ago
> from strangers on the internet ... who lean pretty heavily toward socialism.
throw0101a 7y ago
> * I would personally advise against taking advice from Reddit beyond simply basic answers about various financial products and maths.* A lot of people would do well to just get through the 'basic steps' (budget, emergency fund, empoyer-sponsored matching, high interest debt, etc): * https://old.reddit.com/r/personalfinance/wiki/commontopics https://old.reddit.com/r/personalfinance/wiki/commontopics > ... downvoted to hell. I think if you're going to go against the conventional wisdom, then you have have some good justification for doing so. People who think they've found a 'clever' new way of doing something often (a) have not considered all the ramifications, and/or (b) got lucky with respect to the particular circumstances of their success (e.g., investing in TSLA instead of SPY). > I still think having a relationship with a financial advisor you trust is better than taking advice from strangers on the internet. Depending on the "advisor", the strangers may actually give you more objective advise.
LegitShady 7y ago
I agree. If quartz is telling you something it's likely the opposite or about to end anyways. If there was value to be found on Reddit its just as easy to drown out as anywhere else.
downerending 7y ago
Very few people can afford to pay a financial advisor that is a true fiduciary (which is what you actually need). Lacking that, I don't take advice from Reddit, but it's a wonderful source of ideas, which I in turn research and consider myself.
ar_lan 7y ago
> You should always have 18 months of expenses saved I've never seen this sentiment on r/personalfinance. It's typically no more than 6 months, usually a 3-6 month range. Your money is (on average) better invested and the only reason to go beyond 6 months is if you really, really need that for some extra peace of mind and numbers/data don't mean anything to you. > Look how smart I am for having a mega-backdoor roth ira instead of a regular 401k like all the idiot sheeple. This is also uncommon. > I still think having a relationship with a financial advisor you trust is better than taking advice from strangers on the internet. Why not encourage people to do their own research? How much more can you really eek out from a financial advisor?
- luckyscs 7y ago
  My father is a financial advisor and holds my account. I wouldn't give him up simply because I trust him more than any human on the planet. Even so, I constantly seek out other sources and bounce my ideas about stocks, the market, the economy, politics, science and technology, so that he is exposed to thinking outside his bubble of finance and so that I can have his expert perspective to give me context on how professionals navigate with their knowledge, intuition, and analyst reports.
asdfman123 7y ago
You have to go in with the mentality that lots of communities have been infected by exaggerated groupthink. The core values and typically accepted wisdom is usually pretty decent, but people become zealots for it and the subreddits become more like weird experiments in enforcing ideological purity.
Jesus_piece 7y ago
spoken like a true financial advisor

scarface74 7y ago

I 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 ago
The 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 ago
  I 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)
  - mercutio2 7y ago
    Is it possible you’re confusing the traditional-401k vs. Roth 401k question, with a Mega-backdoor Roth? Mega-backdoor Roth does not need to be an alternative to a traditional 401k. AFTER you’ve maxed out your tax advantaged opportunities (mostly, employer 401k), if your employer offers the necessary pre-requisites (of which there are many), a mega-backdoor-Roth is a way to put another $30-40k into a tax advantaged account every year. It’s an absurdly regressive tax expenditure for the 1%, but if that’s where you’re at, I can’t blame anyone for availing themselves of it.
take_a_breath 7y ago
==in fairness we were in our mid 30s and on our second marriage== How much did you spend on the first marriage?
- csa 7y ago
  Getting out of it was probably as expensive (if not more so) than getting into it. I wish I could /s this, but I have seen too many folks take a big financial hit during and after a divorce.
  - scarface74 7y ago
    And I had the great idea of giving her money instead of selling my real estate property. Because my real estate property was definitely going to appreciate. This was around 2007, what could possibly have gone wrong...
- scarface74 7y ago
  Not much. Much less than $10K. A family member gave us the pictures for free (professional photographer) and a friend of hers did the catering as a gift. But, my now wife and I met at work. The company shut down and we had to scramble to find jobs. She found a job with benefits that paid less and I got a contract that paid more from a firmer customer of the company we worked for. She suggested we get married four days after I proposed so we could save money on my health insurance I was paying out of pocket.
  - waylandsmithers 7y ago
    Sure- but in plenty of communities the dress costs $10K.

scrooched_moose 7y ago

Agreed. Their prevailing opinion is good on average and is probably better than someone with absolutely no knowledge about personal finance winging it. But, like the infamous Air Force "Average Pilot" program [1], there are many things that will end up being wrong for the individual. 1) https://www.thestar.com/news/insight/2016/01/16/when-us-air-force-discovered-the-flaw-of-averages.html https://www.thestar.com/news/insight/2016/01/16/when-us-air-...

ryandrake 7y ago

> prevailing opinions seem to emerge, and anything that questions or disagrees with them gets downvoted to hell Hmm... sounds like another community we all know. This is not a unique problem to Reddit or large communities. It's inevitable in any forum when you try to use crowdsourcing to moderate/curate content.

YawningAngel 7y ago
How do downvotes even work here? I've been posting here for years and (as far as I know) am in good standing and don't have the option.
- scrooched_moose 7y ago
  I think it unlocks at 500 total karma, although that number has changed a few times and I'm not sure if it's current. Looks like you're still at 330.
  - mrosett 7y ago
    It was 500 a few months back when I got it.
- passivepinetree 7y ago
  You need 500 “karma” IIRC in order to gain the privilege.
notduncansmith 7y ago
Yes, but there is also public knowledge of HN’s biases, people comment with them in mind and are often self-aware when they express dissenting opinions. Some of the best comments open by admitting they run counter to the prevailing wisdom.

0xJRS 7y ago

I think most people who have read the PF subreddits came to the same conclusion that you can't live life eating lentils and driving a 93 camry forever.

prostoalex 7y ago
That approach is usually advised when one begins to build a "nest egg", and is not that different from the one pursued in business books, like "Rich Dad, Poor Dad". The point is to build predictable passive income stream on top of whatever else you're earning. Getting a general idea around predictable expenses will provide a "magic number" where your basics would be covered by passive income alone. Some people might choose to forego active earning opportunities at that point, but it's hardly a requirement.

bootlooped 7y ago

I think one of the problems is that many reddit users deploy downvotes against people who have a different subjective opinion than them. That is the lever that drowns out dissent from the majority. I have been thinking about that for a while now, what is the proper time to use a downvote? My MO is that it is only to be deployed against those who are arguing in bad faith or being disrespectful. Differing opinions should be allowed to exist.

cylon13 7y ago
The official reddit rules for using the downvote are similar to your MO. The problem is you can't expect people to read and abide by rules on when to use such a simple feature, and they're impossible to enforce anyway.
mroche 7y ago
Reddit does have some informal guidelines (Reddiquette) on this: https://www.reddithelp.com/en/categories/reddit-101/reddit-basics/reddiquette https://www.reddithelp.com/en/categories/reddit-101/reddit-b... Summary: DO: > - Vote. If you think something contributes to conversation, upvote it. If you think it does not contribute to the subreddit it is posted in or is off-topic in a particular community, downvote it. > - Consider posting constructive criticism / an explanation when you downvote something, and do so carefully and tactfully. > - Actually read an article before you vote on it (as opposed to just basing your vote on the title). > - Moderate based on quality, not opinion. Well written and interesting content can be worthwhile, even if you disagree with it. DON'T: > - Downvote an otherwise acceptable post because you don't personally like it. Think before you downvote and take a moment to ensure you're downvoting someone because they are not contributing to the community dialogue or discussion. If you simply take a moment to stop, think and examine your reasons for downvoting, rather than doing so out of an emotional reaction, you will ensure that your downvotes are given for good reasons. > - Mass downvote someone else's posts. If it really is the content you have a problem with (as opposed to the person), by all means vote it down when you come upon it. But don't go out of your way to seek out an enemy's posts. > - Moderate a story based on your opinion of its source. Quality of content is more important than who created it. > - Upvote or downvote based just on the person that posted it. Don't upvote or downvote comments and posts just because the poster's username is familiar to you. Make your vote based on the content. > - Report posts just because you do not like them. You should only be using the report button if the post breaks the subreddit rules.

lotsofpulp 7y ago

>I still think having a relationship with a financial advisor you trust is better than taking advice from strangers on the internet. What financial advisor is going to be able to make a living telling people to buy and hold a target date retirement fund from Vanguard/Fidelity/Schwab? It's all pretty common sense advice, that hopefully one can verify is correct with some basic arithmetic. And advice for 90% of people should be spend time and energy to figure out how to increase income.

deleted 7y ago
[deleted]
brazzy 7y ago
> What financial advisor is going to be able to make a living telling people to buy and hold a target date retirement fund from Vanguard/Fidelity/Schwab? The kind you pay for by the hour and for whom it would be a criminal violation of fiduciary duty sell you an expensive whole life insurance that they get a commission for.
- lotsofpulp 7y ago
  The vast majority of people don't have enough money to go past this flow chart from /r/personalfinance: https://i.imgur.com/lSoUQr2.png https://i.imgur.com/lSoUQr2.png It would be the opposite of financial advice to pay someone to walk you through that flow chart and click a few buttons to invest it in the lowest cost index funds. I also don't recommend people hire a plumber to fix their toilet. Just youtube it. Do a few simple searches online, and you will find that you don't need to pay an "advisor", as much of their role has been obviated.
  - brazzy 7y ago
    First, that most people don't need a financial advisor doesn't mean nobody does. Second, your "few simple searches online" or "youtube it" could just as well land a financially naive person in the clutches of the worst kind of exploitative financial predator, or some disaster prophet telling them to put everything in physical gold, or some hype train telling them bitcoin will make them rich. It takes a certain amount of knowledge to recognize good advice, especially when it's boring. For the vast majority of people, paying someone $100/hour to tell them to buy and hold a target date retirement fund from Vanguard/Fidelity/Schwab is a much better option than the likely alternatives (going to a commission-based "free" advisor, or taking advice from random people in the internet).

Humdeee 7y ago

Financial literacy is pure garlic to every common vampire financial advisor. I have a couple friends right now that do not want wage raises because "it will knock them into the next tax bracket". Believe me, I've tried to explain how the simple concept of income and taxes work. I trusted my financial advisor years ago when I started my career. It took me a couple years to realize I was the product, not his client with his best interest in mind. Strangers, especially from more disciplined subs and without skin in the (your own) game, have been more valuable many, many times over. Everyone who takes what is said literally and in verbatim would be a fool. Validate what is said as it applies within your own context.

mfoy_ 7y ago
Almost all "financial advisors" are really just in sales.
- Humdeee 7y ago
  Correct, and developing trust is a fundamental tool in every salesman's pocket.
- GordonS 7y ago
  In the UK (and, AFAIK, across the EU) we have IFAs (Idependent Financial Advisors) who follow rules, such that they are nit permitted to get kickbacks from investments. Does such a thing not exist in the US?
  - jeremyashort 7y ago
    In the US we have "Fee-Only Financial Advisors": https://www.forbes.com/sites/davidmarotta/2012/06/11/fee-only-financial-planner-whats-the-difference/#30da618f3f24 https://www.forbes.com/sites/davidmarotta/2012/06/11/fee-onl...
  - mfoy_ 7y ago
    In Canada we have fiduciaries, but most people aren't that financially literate. If you walk into a bank and ask for a financial advisor they're just going to pass you to a sales rep. Enjoy your TD e-Series! (Although, admittedly, mutual fund MERs have dropped substantially with the rise of low-cost ETFs...)

didip 7y ago

You disagree that more than $10,000 for wedding is a waste of money? That's $10k that could have gone to student loans.

brazzy 7y ago
It really depends on your financial situation. What if you have no student loans and a six-figure income? A $10k wedding (or a $50k one, for that matter) is only a waste of money if you don't value big fanc events where you're the center of attention, and it's only a financially unwise decision if you cannot afford it.
- mm89 7y ago
  Many lucky individuals from wealthy families (in the USA at least) do not pay for their own weddings out of pocket, since it is tradition for the bride's family to pay for the wedding and the groom's parents to pay for the honeymoon.
thehappypm 7y ago
Weddings are monumental, memorable, and fun events for family and friends. They add a richness to life. People in my family still talk about weddings from literally decades ago and it's a great way to bring people together and make memories. You don't need to spend $50k on a wedding. You also don't need to go uber-frugal. There's a happy medium out there for most people.
waylandsmithers 7y ago
I don't, and it is. This is coming from someone who spent a multiple of that amount on a wedding. My issue though, is that you're attempting to apply logic to something driven almost entirely by emotions in the first place.

sykick 7y ago

I disagree with your last paragraph but wholeheartedly agree with he first 2. One of the things that bothers me about the advice given there is a seemingly irrational aversion to bankruptcy or walking away from a debt. Sometimes that’s the financially wise option.

pfranz 7y ago
I really think "You should always have 18 months of expenses saved" (assuming this is in savings) isn't universal. If you're fairly young, single and have a new source of disposable income then a few months savings seems prudent and paying down debt seems like the best course of action. I remember diligently building a large emergency fund knowing I could scale down drastically if I lost my job and seeing interest accrue in accounts I could have paid off. If you have kids, a mortgage, and a single household income you really have to be more risk averse. I do think bankruptcy should be thought of more as a business decision than a personal decision.

magduf 7y ago

>"Look how smart I am for having a mega-backdoor roth ira instead of a regular 401k like all the idiot sheeple." Maybe you mean "traditional IRA" instead of 401k. The way I understand it, the backdoor Roth IRA depends on you using a company 401k so that you don't have any money in a traditional IRA, and can then contribute cash into an empty traditional IRA, and then "convert" it (move it) to a Roth IRA in the same financial institution. But it doesn't work if you have a traditional IRA with money in it, because then you have to enter the total value of that IRA on an IRS form and you end up paying double taxes on the conversion. The wedding thing is totally understandable. If you care a lot about saving money, it seems rather reckless and wasteful to spend $50k on a one-day event when you have a ~50% chance of getting a divorce anyway. Sure, if you're a multi-millionaire, that kind of money is no big deal, but if you earn $80k, I'm sorry, but it's not financially smart to blow that much money on a wedding, even though so many Americans do for some reason.

mercutio2 7y ago
You are referring to the backdoor Roth IRA, which has a contribution limit of ~$6k/year. A Mega-backdoor Roth is an even more extreme tax loophole, specifically involving employer 401k plans, which has a similar taxation structure just managed by your employer, and offers $30-40k of additional tax advantaged opportunity.

nophunphil 7y ago

While I think some of your points have merit, you are misrepresenting the subreddit quite a bit here. On the topic of emergency savings funds, the community tends to recommend sizing these to cover roughly 3-6 months of expenses[1]. Larger emergency funds are useful for edge cases. The community tends to recognize that anything more would simply be better served towards high-interest debt or retirement savings. Not everyone on the subreddit is quite so passionate about avoiding expensive weddings or financial advisors at all costs. In fact, fee-only fiduciary advisors are perceived quite positively[2]. [1] https://www.reddit.com/r/personalfinance/wiki/emergencyfunds https://www.reddit.com/r/personalfinance/wiki/emergencyfunds [2] https://www.reddit.com/r/personalfinance/wiki/financialadvisors https://www.reddit.com/r/personalfinance/wiki/financialadvis...

themodelplumber 7y ago

> prevailing opinions seem to emerge, and anything that questions or disagrees with them gets downvoted to hell. I've noticed this too. Also the general bias there is toward asking for help/answers. So if your post or reply indicates that you are encouraging subjective, open-minded experimentation, especially if there is any risk involved, you are flirting with a total freak-out. It's annoying but there's also a lot of good to be found there.

mindfulplay 7y ago

It's ironic that I upvoted this post to agree with you - which is exactly the issue you talk about in your post.

JMTQp8lwXL 7y ago

Mega backdoor roth (MBR) can be done in addition to traditional/roth 401k. When people discuss it on Reddit, usually MBR comes after maxing traditional 401k. The suggestion of being a replacement isn't a fair characterization of the going narrative.

the_watcher 7y ago

> You should always have 18 months of expenses saved The r/personalfinance "Common Topics" page suggests 3-6 months for most people and 9-12 for those with variable income.

icedchai 7y ago

You're better off educating yourself. I'm not saying they are all like this, but finance is one of those industries where you often don't get what you pay for...

libria 7y ago

> It can be harder to tell how accurate any answer is on Reddit, and any advice should initially be taken with a big grain of salt. > a little skepticism is your friend [...] further investigate on your own > always try to reference the true source material [...] don’t assume [...] cross-check [...] double check. > scrutinize the details, lead with skepticism, and, when appropriate, consult with professionals The article says almost the same things as you and even ends with your recommendation. Did you read it?

commandlinefan 7y ago

> from strangers on the internet ... who lean pretty heavily toward socialism.

throw0101a 7y ago

> * I would personally advise against taking advice from Reddit beyond simply basic answers about various financial products and maths.* A lot of people would do well to just get through the 'basic steps' (budget, emergency fund, empoyer-sponsored matching, high interest debt, etc): * https://old.reddit.com/r/personalfinance/wiki/commontopics https://old.reddit.com/r/personalfinance/wiki/commontopics > ... downvoted to hell. I think if you're going to go against the conventional wisdom, then you have have some good justification for doing so. People who think they've found a 'clever' new way of doing something often (a) have not considered all the ramifications, and/or (b) got lucky with respect to the particular circumstances of their success (e.g., investing in TSLA instead of SPY). > I still think having a relationship with a financial advisor you trust is better than taking advice from strangers on the internet. Depending on the "advisor", the strangers may actually give you more objective advise.

LegitShady 7y ago

I agree. If quartz is telling you something it's likely the opposite or about to end anyways. If there was value to be found on Reddit its just as easy to drown out as anywhere else.

downerending 7y ago

Very few people can afford to pay a financial advisor that is a true fiduciary (which is what you actually need). Lacking that, I don't take advice from Reddit, but it's a wonderful source of ideas, which I in turn research and consider myself.

ar_lan 7y ago

> You should always have 18 months of expenses saved I've never seen this sentiment on r/personalfinance. It's typically no more than 6 months, usually a 3-6 month range. Your money is (on average) better invested and the only reason to go beyond 6 months is if you really, really need that for some extra peace of mind and numbers/data don't mean anything to you. > Look how smart I am for having a mega-backdoor roth ira instead of a regular 401k like all the idiot sheeple. This is also uncommon. > I still think having a relationship with a financial advisor you trust is better than taking advice from strangers on the internet. Why not encourage people to do their own research? How much more can you really eek out from a financial advisor?

luckyscs 7y ago
My father is a financial advisor and holds my account. I wouldn't give him up simply because I trust him more than any human on the planet. Even so, I constantly seek out other sources and bounce my ideas about stocks, the market, the economy, politics, science and technology, so that he is exposed to thinking outside his bubble of finance and so that I can have his expert perspective to give me context on how professionals navigate with their knowledge, intuition, and analyst reports.

asdfman123 7y ago

You have to go in with the mentality that lots of communities have been infected by exaggerated groupthink. The core values and typically accepted wisdom is usually pretty decent, but people become zealots for it and the subreddits become more like weird experiments in enforcing ideological purity.

Jesus_piece 7y ago

spoken like a true financial advisor