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What has done best for American investors over the last few decades: buying index funds. Which is why everyone recommends them. In 2023 it isn't always good adv
by rr808 4y ago
What has done best for American investors over the last few decades: buying index funds. Which is why everyone recommends them. In 2023 it isn't always good advice, especially outside of the USA.
The best things are paying off debt, avoiding debt, stabilizing yourself, and get ready for buying a house. If your employer matches some pension contribution do that.
At your age you should look at investing in yourself. Think about if you can buy knowledge to improve your career, maybe a masters degree or even books etc. Either more engineering skills or maybe management skills. This will give much better returns over the next few decades than an index fund.
Finally Financial knowledge is a great thing to learn if you're so inclined. I was always interested in investing in markets as well as small local businesses. Learn accounting and basic business speak and follow the stock market, maybe buy a few companies - even if you lose money you'll learn a lot if you follow them. This will be helpful when you're older and have more money. Be careful because for half the people in the world its not worth doing this, and are better off ignoring it so make sure if its you or not.
- jleyank 4y agoI strongly suggest not buying a house unless you can stay in the house if/when you switch jobs. The things can lose value and/or can be rather illiquid in downturns and it sux losing a job, having to move and learning what the term bridge loan means. Of course, if you’re able to handle two domiciles due to high salary or successful career, consider getting a 2nd house where you’d like to retire to. It also sux having mortgage payments in retirement.
- rr808 4y agoDefinitely buying a house in 2023 is a risky investment. It depends a lot on the person and the location about what to do. I bought my place mid thirties, it would have been 500k cheaper if I bought in my mid twenties, OTOH I enjoyed the freedom to move around have live with other people. In either case if you're thinking about investments, buying a house in a few years or ten should be something to think about.
- yucky 4y agoOne thing to consider now with the traditional advice of "just put your money in index funds" is that this has led to empowering 3 firms beyond belief: BlackRock, State Street & Vanguard who control over $20 TRILLION (with a T) of managed assets now thanks to these "index funds" that Americans mindlessly pour their money into. This is over half the value of the S&P 500. Way too much power for 3 firms, and the Directors behind them. [1] https://www.nytimes.com/2022/05/12/opinion/vanguard-power-blackrock-state-street.html https://www.nytimes.com/2022/05/12/opinion/vanguard-power-bl...