Posted by roberdam 2 days ago
So I say: Good on you.
Somewhat related: I just got my son set up with a custodial account and put his "kid retirement" plan into it, and let him pick a couple stocks to put some money into, and put the majority of it into target retirement and a few stocks and EFTs, so he can get some ideas of how they perform, make it a little fun with picking things he's into, and also follow ups and downs of the market, all of which I think is good education.
A different reply said they waited until 26 to start - that is probably about the right time to start saving for retirement. Maybe a little late, but close enough. Before about that age you are still getting started and so you have little spare cash. You need to pay off school loans (if you took any). You need to save for down payment on a house, and buy a lot of those will last a lifetime household items everyone needs. You should be thinking about marriage and saving for it (even if you don't get legally married most people will live with someone else and should be planning on how to make that life work).
Most important: you don't know how long you will live. Save for the future, but not everything - you have no guarantee you will live to tomorrow - if you are under 60 odds are strongly in favor of it, but people die young all the time. You should have a little play money as well in your budget. Go climb Mt Fuji while your body is young and healthy enough to do so (I picked a random activity here, you should decide what you care about, not rush to Japan)
Saying "I'll do it later when it is rational" often translates to "I won't do it (for a long time)". Which is not rational
And even today, knowing way more about personal finance than I did at the start of my working life, I'm still amazed at how blocking out money in the budget astronomically increases your chances that that money actually goes to the thing you want.
care to share what you learn???
The great thing about saying "give 10%" is how well it scales.
10% for middle class is fine. That’s just one less night out.
People should not give to charity if they themselves are likely to be dependent on charity.
Telling people to wait until they're financially stable before giving risks creating a dynamic where people never start. The person who says "I'll give when I can afford it" at $30k is likely to say the same thing at $100k, because the scarcity mindset scales with income.
Small-scale giving early on helps build the identity and habits of someone who contributes to their community rather than just consuming from it.
And arguably there are network effects formed from generosity of time/money that can bring long-term benefits as well. It's a spicier idea, but I could even suggest that giving helps you see money as a tool rather than as security itself.
Then the habit is set up and you just log in to whatever and up the number.
One of the things I hate about my 30s is that I'm focused on money now and it feels like I'm not living the life that I want. It just feels like I'm preparing for death.
Which I'm not saying isn't the sensible thing to do, there's just something inherently managerial about it which doesn't seem intuitive to living a meaningful life.
One can lead a meaningful, enjoyable life while also considering their finances.
for most the amount we earn before about 25 is so little that even everything saved at the best return is insignifitant inretirement. at 25 a small percentage of your income saved becomes meaningful, but you are likely to earn enough more at 35 that the amount you can save then totals to more
This is where I disagree. I think there's a certain amount of naivety required to pursue meaningful things. There's so much in life that makes no financial sense that creates meaning. The moment you start having to think sensibly from a financial perspective, is when so many of these things no longer make sense.
Once you're plugged into the system there's almost no turning back.
I get the sentiment, but it implies the opposite of your conclusion.
Since so many things make no sense from a financial point of view, the only sensible strategy is to break free of the financial constraints as soon as possible. Money cannot buy you happiness, but it can buy you the freedom to pursue it.
Retire early to give yourself the best cushion (and best possible chance) to pursue meaningful things, without the everlooming sword of making ends meet. The added benefit of life experience to filter out pursuits that only look meaningful on the surface, is a nice side-effect of this strategy.
So I think the reason why this doesn't make sense (in my mind) is because in a state of retirement i.e. financial independence, you're still just as conscious of money as you were when you were accumulating wealth. You still need to manage money no different to when you were accumulating, it's just now you're not earning.
To me the freedom I'm referring to is similar to that of childhood - where you're not worried/concerned about "the system". You're just doing your own thing in your own world. That kind of purity no amount of money can resolve, even in an early retirement scenario.
The other issue is that a lot of stuff only makes sense when you're younger. Like it's a lot difficult for example to become a travelling musician or even to travel etc.
Now of course, early retirement provides it's own kind of freedom. But I would say that it's not equivalent to the kind of "freedom" that I'm referring to, which is basically being carefree.
The only ways you can live as an adult unconcerned about the system is 1. if you actually have a substantial financial backstop (trust fund, wealthy parents, etc.) and just pretend you don't, or 2. if you don't have a financial backstop, at which point "doing your own thing in the world" just means being a vagrant, drifter or bum.
I think you may be confused, I'm not part of the FIRE community. I'm only taking the statement that "doing meaningful things is not financially sensible" to its logical conclusion, not endorsing any position.
> If you trained yourself to live looking at the money you need to save to retire, your brain will most likely be wired to that behavior, and breaking free from that will be utterly difficult. On top of that, people with the FIRE mindset have probably by default already a strong (innate? taught?) bias towards enjoying optimizing their life and making it the end goal.
So many assumptions and claims without any supporting evidence:
- "FIRE people" train themselves to live looking at money only.
- This wires their brain to that behaviour (left unclear what this actually means in terms of concrete behaviour).
- Breaking free from this behaviour is difficult.
- People with this mindset have a bias towards enjoying optimizing their life, to the point this is their end goal.
- (Implied) This makes their life some combination of sad/bad/meaningless.
I don't really want to even argue against this because the burden of proof for providing any supporting evidence is yours, not mine. I'm not particularly interested in constructing some overarching psychoanalytic theories for a large category of people who I've never even interacted with, but you do you.
Sorry for that.
FAANG job at 22. Save up 25k a year for 4 years, that is 100k. You'll already retire at 56 with over 1.5M in the bank. It isn't perfect but it is a lot better than what most people do.
Really all you need to do as a programmer is max out 401k and maybe throw another 10k a year into savings on top of that.
I worked at MSFT for a decade and I would have retired at 40 if I hadn't spent 3 years trying to run a startup after my time at Microsoft.
This includes international travel every year, and 2 domestic vacations.
That 1.5M isn't inflation adjusted. If there is 0 inflation between now and when you die 1.5M is plenty. However the more inflation there is between now and when you die the more money you will need, the later you need to retire, or the less spending money you have. (of course we need to asking how things like social security fits into your plans as well, but this is already complex enough).
If you 22 and used to a FAANG income even with saving $25k/year every year you need more than 3M to retire retire without losing quality of life (even though most of that is luxury).
Are you willing to live on less, or will you discover with your free time you want to spend more money (hobby supplies? Now you have time to travel - maybe first class). I can't answer this question for you, but you need to think about it. Worse, your answer is likely to change over time.
Why would you assume they are mutually exclusive? You can just do both.
For real, I believe most 17 year olds on this earth do not have the funds to invest in education AND in a retirement fond, so there are choices to be made. (there are also the choices of creating social bonds and investing into activities together, ...)
I can't imagine a scenario where at 55 years old, you would miss the 5% of your summer income you invested back in high school. But I can totally see a scenario where investing those 5% led you to increasing it to 10% in college, 20% on your first job, and being financially independent way before you hit the age of 55.
If those 5% were the question of whether to go with the group on a adventure together or not - and you end up alone at 55 years and not invited .. you might have rather invested different back then. But on the other hand I don't think those 5% of earnings with 17 make a difference later.
The only real difference they can make, if they made you start a habit of saving income for important purchases. (But not really fore retirement at that age. But each to his own)
I think if a teenager is the social type, or they have a positive (non-toxic) friend group, then absolutely - spend the money! It’s an investment in your friends that may or more not pay off.
But some teenagers don’t have much in common with their peers, are bullied in high school, or just want to move on to the “real world” and graduate already. For those kids, invest!
In general sure, it really depends .. so invest in what? It can mean many things, like also saving for the drivers licence/first car to make that move away into a nicer worlds with better opportunities.
That usually helps answer questions like “if i invest X% of each paycheck into an S&P500 index fund, and put the remainder toward saving for my 1st car, i’ll have money for the car by date Y.”
And this skill translates to adult life really well. I find myself doing just that a couple times a year! Of course for some teenagers investing a substantial amount is simply not realistic…not every family is middle class after all.
One important reminder: inflation is no joke these days. I’d only recommend a savings account to a teenager for short term goals. Even if they are poor.
There is also a huge overlap between "kids who have wealthy parents" and "kids who can afford to invest".
A few examples: school loans, considering a house purchase to be a sound investment, purchasing once-in-a-lifetime household items, saving for a wedding (from the age of 17!?) or marriage (not sure what you even mean by that if you don't mean the wedding itself?).
Even if a house isn't right for you, you still need to save for the deposit on an apartment. You still need to buy furnishings for your apartment. You won't even know if a house is right for you until you are mid 20s to 30, so it is probably best to save for a house and if you decide at 30 it isn't right for you roll that money into retirement savings (if a house isn't right for you that means you need more retirement savings)
Relationships - even if you don't have a wedding or kids - come at the time you have those starting to get out on your own expenses. You will need to figure those out.
I meant, for many people (especially young ones), taking that same deposit to purchase an investment property (which could be a house or apartment, but has a tenant who lives there rather than being for oneself) can be a better deal than buying for themselves.
In the end, buying a place to live in is very much an emotional choice, which is totally valid. But in some locales and for some lifestyles, being a landlord who pays rent elsewhere can be a better financial decision.
These are key words to mentally breakpoint on and more carefully consider what is being said.
What kind of job will be in high demand in a few years and will remain in demand for at least 20 years?
I mean, sure, in a perfect world you can postpone retirement savings. But if we're doing perfect world, you shouldn't have to think about "investing in education", your government should have the basic cognitive skills that would let it recognize that they should invest in education - ROI is pretty spectacular.
Realistically, both, because... otherwise you just pick how screwed you'll be later in life.
While the market was a very good bet for the last 50yrs, its not a guarantee.
Especially in the current climate you should be fully aware that it's significantly more risky to start investing today vs 10 yrs ago.
(Riskier doesn't mean it's necessarily a bad idea. It should just be a conscious decision under the acknowledgement that the upward trajectory is not certain. Especially in current political climate - and that "hodl"-ing doesn't necessarily mean you'll eventually get back what you invested, if a downturn manifests)
First, I don't think this absolute statement is true; I think you need to look at it from the alternatives perspective. If not investing then what? bury gold? spend it all?
Second, are we at a much riskier time than past history, both short & long term? I made significant contributions in 2014, saw 30%+ wiped out within 6 months and seen it all come back and more with the power of long timeframes.
Third, investment can take a lot of forms, not just today's hot tech stocks. I won't get into it beyond the standard think long term and avoid leverage, which seems to be completely inline with start early; start now.
But really I would recommend nonetheless staying the course with investment advice on a stocks/bonds balance relative to your age. Increasingly, the economy distributes not through labour but through capital and holding stocks is essential even with their inherent risks. Even in light of that CNN article about meme stock and crypto investors having the last laugh over the past decade, indices of ordinary large-cap stocks bring you exposure to these things.
Inflation is mainly created by this act of "putting your money somewhere". For most people, this "somewhere" means loans. Money is being loaned out to people, spent, deposited back into the bank, and loaned out again, on and on it goes until $1,000 turns into $100,000 in circulation, not a cent of it real until all loans are paid back.
* Inflation is not caused by "putting your money somewhere" What on earth. * At a high level, inflation is caused by either "too much money chasing too few goods" and/or the cost of producing the goods rising. Money supply can increase without causing inflation if the supply of goods can also increase. In short, the supply of money can increase without causing inflation if productivity rises to match it. * Most people do not "put money" in loans what are you even talking about there? * Bank loans do not automatically increase the supply of money. When a loan is taken out, it is (mostly) deposited to another bank, resulting in a net-zero change in money. Increasing the supply of money requires the federal reserve to take steps.
You're actually agreeing with me. Money supply must be backed up by real wealth and production.
That's not how things work in current times. We have nearly zero interest rates, and currencies are backed up by literally nothing.
> Most people do not "put money" in loans what are you even talking about there?
Fractional reserve banking. Banks loan out the cash you deposit. They "efficiently allocate" the money in their custody.
> Inflation is not caused by "putting your money somewhere" What on earth.
It absolutely is. Banks can easily turn thousands of dollars into hundreds of thousands of dollars by repeatedly loaning out the exact same dollars numerous times.
It's some kind of society wide financial call stack. Too many defaults and everything starts unwinding.
> Bank loans do not automatically increase the supply of money.
Obviously they do.
Imagine you deposit $100 at your bank. It takes your $100 and loans out $90 of it to someone else. There are now $190 dollars in circulation.
Whoever took the loan goes off and spends it. Eventually it gets deposited back into a bank. Then the bank loans out $81 out of that $90. There are now $271 dollars in circulation.
And it keeps going.
You can inflate bitcoin via this algorithm.
> When a loan is taken out, it is (mostly) deposited to another bank
Irrelevant. Banks form interconnected systems. They all settle debts and accounts with each other.
> Increasing the supply of money requires the federal reserve to take steps.
The physical supply of money is irrelevant. It contributes only a small fraction of the circulating money supply. Money is numbers in bank databases now. They could run the money printers 24/7 and they'd never even come close to catching up to the inflation caused by banks.
The best time to plant a tree is ten years ago.
The second best time is now.
Investing is all about that long term gain and slow growth. Having 10 years of experience after finishing college will do so much more than Robinhood for refrigerators.
My daughter I just recently set up a ROTH for her and told her I'd match anything she puts into it, and stressed she should put something into it now from her savings, and then put some of her paycheck into it, anything is better than nothing. So far she's declined the free money. I'm going to set one up for my son, once he's at the point of having an income to justify it. She's very smart, but in some ways she's very stupid.
If you don't live in the US you will have different options, but the idea still applies
My kids have some 529 buffer, and we are paying for my daughter's school right now (though she's paid us back for the class she got an F in). My son, it's not clear that the typical school track is going to be the right thing for him, but we also have a 529 for him that I've been contributing to.
But you need to make your own decisions. For some your best ROI is dropping out of school at 16 - but for the vast majority more school will be worth it.
I don't know the first thing about student loans (interest rates, amortization periods). I never had one. I just search-engined 2025 federal student loan rates and I'm blown away by the interest rates. It looks like avoiding student loans at all costs is the way to go.
I wonder if spending a few years working (especially if your parents are able to continue to house you and pay for health insurance) and contributing to a 529 plan might meaningfully decrease the overall cost, albeit at the "penalty" of starting college later in life (at, say, 22 instead of 18).
That maximizes what they (as teenagers) can put into retirement accounts, their tax rate is 0% now, and though it doesn't teach them the deferred gratification aspect, it gets their retirement savings started.
We can talk about the deferred gratification aspect in other ways and/or later, but I'd rather they get 40-60 years of tax-free growth.
OP, enabling: - deposits (and withdrawals) - a matching logic (which we can do manually I guess, by doubling the deposit amount) - and correct calculation of compounding (if I had $100 for 11 months and add $100 in december, I shouldn't see the value compound $200 for the whole year)
would be great.
Bonus points if there was some kind of password (even hardcoded) so that the kids can't just click the gear icon and write themselves a blank check of $1,000,000
And I'm not even talking about what to invest in, I'm already confused at which platform/bank/whatever to do it through. The "meta", if you will. I just want to invest the 70% of my salary I don't need every month and not think about it for 40 years but how? Maybe an important detail, I'm from Switzerland, perhaps it's easier in the US with things like Vanguard.
If you start to get into truly high wealth amounts (USD$500K+) you might consider hiring a wealth advisor, who can probably do better even after accounting for their fees.
That's not nearly high enough for a "wealth advisor". Maybe a fee-only financial planner, but even then it's borderline.
People who try to time the market or wait for a perfect time or pick the exact right blend of stocks, on average, don't do as well as people who pick a boring index or mutual fund and forget about it for 40 years.
If you have doubts about the long-term __existence__ of the market, then investing in the first place necessitates "timing the market" since you'll need to determine when to sell before the panic sell-off which inevitably comes before the global minimum is reached.
Mind you, I'm not talking about figuring out whether or not to "hodl" through local minima. I'm talking about rolling into a different store of value (e.g., cattle, crops, ammunition) before the whole thing goes up in smoke.
I wasn't thinking of fighting off hordes or anything like that.
Ammunition can be used for barter, hunting, and self-defense. It can also be used as a tool to break locks, start fires, and send signals.
My BIL put money into Underarmor (he's an outdoors guy) and Electronic Arts (he's also a gamer), both of which have done good for him. My son put some money into Roblox (he's a gamer), and that's done well also.
I did this at 22, and that seed money has grown a ton.
In the UK I started out using https://www.charles-stanley-direct.co.uk/ and later moved to https://www.ii.co.uk/. I initially invested in https://www.vanguardinvestor.co.uk/investments/vanguard-life... which is a fund which is available on a bunch of platforms. These days I recommend https://www.vanguardinvestor.co.uk/ to some people as an easy and low fee way of getting started with Vanguard funds in the UK.
I don't know what the best trading platform options are in Switzerland - it looks like all of the ones I'm familiar with are not relevant to you.
The key thing is you want to minimise two types of fees: * Platform fees * Product fees
For example Charles Stanley Direct charge 0.3% platform fees, and https://www.vanguardinvestor.co.uk/ charges 0.15% platform fees.
Vanguard LifeStrategy® 100% Equity Fund charges 0.22%.
The bottom line is that there are lots of good choices, and the main thing is to make a choice and get started. You can always optimise/improve your choices later.
As a caveat your money will be in dollars and in American companies, which might not be what you want, but it's worked for me well so far
If you max out the 3a, you can start of thinking investing elsewhere. IBKR is the cheapest to buy a US domiciled world ETF. But the UX is not super easy and you will have to fill all transactions manually in the tax report.
Neon with investments is another option I can recommend if you prefer a swiss company and a simple user interface. Fees are low if you set up a savings plan and pick one of the 0% ETFs
If that's e.g. for a monthly $1000 investment, it means 1% of your savings is lost in fees each time. That'll be 1% that's not going into savings. If you end up with a million by some time, that small fee will have cost you 1% of that, which is $10k.
"It's just a cup of coffee" -> "that's a 10 000$ cup of coffee". But if you only save 200 a month, that 5% is 200k you've lost by the end.
One percent is often considered a reasonable cost ratio, but it's definitely worth considering what the real numbers are for a given option.
There is no need for a big bank here, in Europe. If one of those regulated companies goes bankrupt the etf is still yours and transferable to a different institution.
War in Europe is the remaining risk factor, but if that happens it won't matter anyway.
- There are many "getting started" guides available, I found Mister Money Mustache the most straightforward to my liking, but you're golden as long as you understand a couple of basics: 1. investing a high% of your income is more important than chasing returns (you seem to be there already), 2. don't trade, just buy the whole market (you mentioned Vanguard, they offer a "total market" ETF), 3. look for the lowest fees as long as you hold title to your shares (IB and Degiro do this ; eToro does not so if they sink, you're SOL), 4. don't time the market, just buy now and sit on it as it grows
Typical options in Europe: Trade Republic, scalable, Consors Bank.
Then the usual: Around 10K where you can access it directly, a small amount in an investment with percentage (scalable and trade republic both offer that, limit there is or was 50k), rest in one broad ETF like one that follows the FTSE all world (vanguard or invesco offer that, one is bigger, the other asks for less fees).
No affiliation, and I dont know whether being outside of the EU changes things. And yes, there is the risk that we are in a huge bubble now and it popping would at first significantly lower the money put into the etf. But you certainly do have access to vanguard etc.
Have a look now and at the latest this weekend you have this solved, hopefully forever.
About six years ago I was hired to make an investment simulator. I wish someone had show the results to me when I was a teen. I did show it to my daughter at the time (she was in college), and used it to explain the power of compounding interest.
I found they still an old preview online (sorry not https)
http://simulators.gibsoncapital.com/new-preview-for-total-si...
I'm 55, too. If I'd started studying HTML, CSS, JavaScript, Python, and Rust at 17, I'd be retired now. Waitaminnit....
Sarcasm aside, target retirement plans wouldn't come along for decades. Investing was very, very different when we were 17. And many of the people who were 55 when we were 17 had just lost a terrifying amount of their life's savings in a stock market crash that made Taleb rich because he'd bet against the market.
It seems extraordinarily unlikely that a 17-year-old today should do exactly what we wish we could have done when we were 17. About the best they can do is follow advice that's now centuries old: make friends, learn skills, live below their means, and, maybe, earn credentials.
And yet we complain that corps today are too focused on their market valuation over everything else; customer experience, longevity, worker conditions, R&D are all being neglected in order to make the needle go up.
'Investing' in stocks in order to flip them when the price goes up is feeding this insanity. Teaching kids that this is perfectly rational seems selfish and short-sighted.
Our children should be encouraged to invest into something like bonds which actually help promote economic growth.
For me, the notion of teaching kids to invest in some company they know (Disney, McDonalds, Coke, Apple, or whatever) and telling them that they are buying a tiny, tiny share of the company is an important mental model to help shape in them.
A well diversified fund would be the better alternative if you need to aim at a single thing. But it's hard to say what's the better first step if you're trying to teach personal finance management.
Corps have always been focused on their market valuation. It's up to society, and the laws it passes, to change their incentives.
There is definitely money left on the table when you ignore the market, even in a retirement fund.
However you don't know how long you will live. Don't be a miser who spends nothing. If you have surplus after the above you should either spend it or donate to charity.
That said, I don't think knowledge of investment gets you very far if your job pays subsistence wages. I worked for a popular fintech focused on personal investment and their narrative was essentially "financial freedom through investment". I think it's important to understand that even the most sophisticated knowledge of investment and personal finance does nothing substantial if you aren't making surplus money to begin with.
The problem is many kids don't have much money to save or invest. Or if they do, real banks kinda suck when you only have a kid amount of money ("Here's the 0.2% interest on your $37 balance"). So they can't apply what they learned. An app like this, backed by the Bank of Mom and Dad, is great for practice.
I think schools and curriculums could do a whole lot better in representing this important facet of life. More broadly, I often feel that "applying all that math you've learned to real things" is a subject that could be taught.
[1] Seriously, having applied math questions like "Johnny earns X per year, with a cost of living of Y. Assuming inflation of Z and average yearly returns of R, what percentage should he be putting away, starting at age 25, so that at age 50 he essentially gets the equivalent of his own salary each month?" would likely cause some lightbulbs to go off in the kids' heads.
Of course it was. You can't teach compound interest without referring to money or banks. That's the whole point of it. Otherwise it's just multiplication.
We're here to build bridges, not count stashes of money after all!
You'd probably get those if you went through "economic studies" (which is a different track and where math includes a lot more statistics even in high school).
Given current life expectancy, and particularly if you find a life partner, the chances of at least one of you surviving through at least 85 are pretty high (like above 60% for the US).
How do you teach "financial literacy" in a practical way without referring to specific products, offerings, or corporations? You really can't.
If you talk to people about investing or retirement, they're gonna talk about Fidelity, Vanguard, whatever. Which is very practical. But I'm not so sure we need our government and education system to basically directly endorse these corporations.
If they had taught you that in high school 10 or 20 years years ago, it would be outdated by now. People used to save in savings accounts. Then 401ks. Then individual brokerage accounts with index funds. Now crypto or whatever is hot using some fintech app.
> What is a stock?
That's fair. It can come up in basic economics but not always.
That's a fair criticism, but I don't think it's enough to outweigh the benefits. I think I learned how to write a check in second grade. It was useful information.
It's way easier to update the tail end of knowledge you have and practices you've learnt than to start from scratch when you have no time.
Likewise, if the only stuff we could teach in grade school was stuff that would never become outdated, then we wouldn't even be able to teach more than the highest level of recent history, math foundations, super basic geology and physics, which is a pathetically low bar. Things change, it's the way it is, we should have a higher standard.
Kids won't otherwise get early exposure to learning how to start a business unless their parents did so, or investing unless their parents did, which means they probably had a surplus of resources at home and the cycle of a widening class divide continues.
The most powerful type of compound interest is early exposure to anything; an idea, a sport, money, business, computers, art. If your parents did it, you're off to a great start, but if they didn't, you're automatically set back at least a decade if not two for any of those, and public school should aim to smooth out those bumps.
The vicious cycle! We have to start somewhere..
With my tinfoil hat on, I feel like that is by design.
If everyone is passively investing, that no longer works. Then it's not even a market. We don't even know, for sure, if that works.
If you use big index funds, you're the primary people contributing to Nvidia, Tesla, and openAI. You didn't start it, no, but you certainly propelled that ball forward like a bullet.
And, well, that's fine, because we cant expect anyone really to actively invest. The problem is we don't know if this works. This definitely has the potential to blow up. You have to realize that what we're doing here is undermining the stock market at a conceptual level.
~62% of US adults own stocks: https://news.gallup.com/poll/266807/percentage-americans-own...
Also, 'owning stocks' vs 'investing' feels different to me. My brother will go all in on tesla for one year, and then pull out and just sit there until he has another somewhat-random impulse. Likewise, my dad used to put all his money into some index funds for the 30 days leading up to Christmas, because 'the government always makes the stocks go up during the holidays, to keep everybody happy'. They count as 'owning stocks' (at least sometimes), but I don't feel they count as 'investing'.
Isn't that very little money?
Yes, there are people who don't invest. Where do they keep their retirement savings? 40-50% of Americans, at least, simply have no retirement savings! Most people in America aren't earning enough to put away a meaningful amount for retirement. It's going to be grim as boomers and millennials hit retirement age and have to keep working.
Median household net worth is around $193k, not negative. Maybe this is true on an individual basis because there a bunch of, say, young debtors and elderly parents who have transferred their positive assets living in households with working adults with more positive wealth than the youngsters and elders combined have net debt, but...
Also you’re neglecting the cost of transportation (almost certainly a car, with gas and insurance), rent, and medical expenses.
Assuming you work full time, you are making $3360 a month, less taxes.
That means that even if you get the bottom 25% of rents, over half your take home pay goes to rent. Then we need health care, food, taxes, transportation, clothing, etc.
Not a lot of savings easily available there.
Rest assured it usually isn't their choice.
People choose to marry, have kids, and buy a house.
Life can be cruel even if you've made great plans and took all the precautions you could think of. Illnesses, accidents, the lack of a social net because your country was set up that way, crime, the list goes on.
And yes, I am assuming you live in a developed country. I have Ukranian citizenship and right now the Ukrainian government is abducting men who are over 24 years old and sends them to death. If you live in a country like that, true, you shouldn't worry about investing because you don't even have basic human rights.
Or that there's no standard minimum wage, or income protection if something does go wrong. Student debt is crippling to people in itself never mind hospital events.
That's so many people you should think "something must be wrong with the system"
> Illnesses and accidents are exactly the things you need savings for
It shouldn't be though, if you pay taxes, the government should be there for you in an emergency when it comes to health.
As far as I know in the US your employer provides health insurance?
Many people here, if they are not educated, are forced to work manual labor jobs. Those jobs will always work you under full-time, so they don't have to give you insurance. Usually that means you have to work another job.
People who haven't lived that life just don't get. It just doesn't click in your head.
You can work 60 hours a week and just barely make rent and food. Not only can you do it, I think most people are. And there's nothing you can do. There is no higher paying job waiting for you somewhere, because you don't have a college degree.
How're you gonna get a college degree when you work 60 hours a week? Hm? You're not. You're stuck. Your best shot, really, is to work up through management. That's why you'll see people working at the same restaurant for 20 years.
They must be so stupid, why don't they get a real job? No, actually, that's probably their best bet.
If you are working many jobs in the US you get no health care. You have to pay for it yourself. Even jobs that provide it you still need to pay for it. The employer basically pays a portion of the insurance bill. Good employers pay a lot, bad employers pay none.
Then you have deductibles. The amount you have to pay out of pocket every year before insurance does anything. If you have a ten thousand dollar deductible, insurance only kicks in at $10,001 and beyond.
1 in 5 have $0
50% have enough to cover 3 months of expenses
You're saying that $500-600 (the amount you claim 50% of people have saved up, if it's the median) covers 3 months of expenses?
The math does add up. There is no contradiction in your parent’s post.
I have a family of 10 people. These people have, respectively,
$0 ; $0 ; $1 ; $5 ; $49 ; $51 ; $190 ; $8,000 ; $150,000 and $1,000,000.
What's the median amount of savings in this group?
And what amount would complete the sentence : "50% of people have ..."?
If the count of observations is even, it is usually the arithmetic mean of the two mid-points, so (49+51)/2 in this case.
The median does not have to be in the finite set of values.
Maybe Wikipedia can explain better than I can: https://en.wikipedia.org/wiki/Median
Back to the original post:
I'm assuming that "three months of expenses" would be roughly $6,000.
The parent post had the median at $500.
1. Given the sheer number of adult Americans (hundreds of millions of observed data points), wouldn't you say it's quite likely that the two mid-points are very close to each other (eg $499.97 and $500.02)? But definitely not (-$5,500) in debt for one mid-point individual vs $6,000 in savings for the next individual (which comes out to $500 in median and "top half has $6k")?
2. In the first scenario (almost continuous curve at the midway point), how likely do you think it is that somewhere right after that $500 mid-point, there is a huge discontinuous jump to $6,000 to accomodate the idea that the rough top half of observed savers has "3 months of expenses" saved?
3. Is there any other scenario I'm not foreseeing, that can reconcile: "the median is $500" with "the top 50% have $6,000+ in savings"?
I purposely didn’t because strictly that is not a median. Stupid example: median of 1,2,3 is 2 and 67% >= 2 here. We do agree that as N grows, the difference shrinks (to the point of no meaningful difference).
My point was that mathematically there is no contradiction. Let’s say half the population has $200 monthly expenses (3mo is then $600 saved), the median is $600 and it checks out.
That is a stupid assumption though - because who has such low expenses.
> I'm assuming that "three months of expenses" would be roughly $6,000
You then assume that we must be talking about the upper half, but that isn’t given.
We have to make SOME assumptions though, since the statement is underspecified: the OP didn’t specify what 3 months expenses means. It is unlikely that 50% of the US population have the EXACT same expenses, so I assumed an “on average” was missing somewhere which further relaxes the constraints.
I objected to your statement that the math doesn’t check out. There are many ways it could check out.
We came at this with different assumptions. I don’t think we fundamentally disagree and I didn’t mean to bicker.
I appreciate you taking the time to geek out on some statistics with me (and you even had me look up medians again because I was confused at your reply!)
- react app - pwa manifest - tailwind css
This is not at all a "plain html" file.
My firewall shows blocked connections to cdn.tailwindcss.com and unpkg.com
Any website you visit could have been compromised and serving malicious content. Upon first visit to a website, I block all connections to domains not in the address bar, then go back in and add rules to allow connections as needed. It doesn't address malicious activity by the site directly, like a server compromise, but does limit non-addressed connections, including ones to local addresses.
For example, a compromise of .google.com which leveraged assets/code from .googleusercontent.com wouldn't initially be able to run, unless I added a rule to allow the connection. Likewise, a compromise of *.discord.com that made a connection to localhost:8983, then tried to send that data to someserver.ru would get blocked and logged. Where this can't protect me is if the server sends the mined data back to itself, then forwards that data on using its own connection.
Ad networks sell to anyone. Malicious content can be injected almost anywhere. Its happened before; it'll happen again. This web browsing hygiene has protected me enough times for me to make it my standard practice.
The AI just picked react because that’s the most common framework.
I mean nothing wrong with that, I needed a silly calculator thingimabob too yesterday (for some CRC checks on a piece of text) and Claude quickly cooked something up for me.
But I'm not writing blog posts about it, releasing the tool in the wild, and claiming I wrote it. Blegh.
This type of calculator is so common you can even find one on an official US government website.
https://www.investor.gov/financial-tools-calculators/calcula...
EDIT: I wouldn't have expected external dependencies, though.
I might be wrong, but reading this, I couldn’t help but think: if we’ve reached the point where we’re building apps to get our kids into investing, maybe we’re living through our own “barber moment.”
I'm sure Mr. Rothschild would be fine with this learning tool.
Reality: Dump everything into Nvidia / S&P 500. Number go up.
Maybe we should get into what Natalie Rothschild said while being interviewed, about her family's fondness for incest? Or would that be anti-Semtiic as well?
What exactly can you say about the Rothschild bloodline (except for praising them) that isn't considered anti-Semitic? Please do tell!
Criticize individuals all you want, but don't do it by "bloodline", ethnicity, or whether they're a banker or not. Agency lies with the individual.
Sorry but I'm not going to kowtow to your ridiculous logic. It's perfectly fair to lob criticism at bloodlines, and if you had ever opened a history book you would readily understand that.
- the exact opposite of criticizing individuals; you're really just going after the group
- the definition of prejudice
- the foundation of most (all?) giant human catastrophes like the Holocaust, the various communist land reforms, the crusades, and all sorts of horrible events
I'm a conservative, but I have to say this idea of not being prejudiced is really something great that liberalism brought to the table over the past 100-200 years. I'm gobsmacked to see people rejecting this idea.
If I navigate to - https://en.wikipedia.org/wiki/Genealogy_of_the_Rothschild_fa... - every section of the page mentions the family being involved in banking. Am I stereotyping members of the Rothschild bloodline by saying they're involved in international banking? I don't think so.
I'm equally gobsmacked by people who claim we shouldn't utilize pattern recognition or who want to pretend stereotypes materialize out of thin air.
Thank you for pointing this out. I'll try to be more careful in my choice of words moving forward.
I definitely did not mean to sound like I was into eugenics or racial purity - I think these concepts are grotesque and as you said, people that focus on them or use them to excuse atrocities are indeed, very bad people. Thank you for giving me the benefit of doubt and highlighting why my choice of language is problematic.
"Bloodline", as in, the line of inheritance for an extremely wealthy and powerful family, like Medieval monarchs.
Perhaps we should be a tad more careful about our language use, but I see far too much outright bigotry to be worried about something obviously not used as a dogwhistle.
Still, if a 10 year old had started investing 10% in the market in 1920 and stuck through it during the depression, even with no income coming in at the time, they would have done handsomely through the recovery and into old age. In fact, a middle aged person who had been investing until 1929 would have not been fully cleaned out, and that money would have recovered its value by 1943. Margin was what killed fortunes in the day, so the lesson to learn is to avoid margin for your investment portfolio. (Speculation is a different story).
There is no such thing as "growth detached from value" lasting forever.
Even George Hotz understands this is the symptom of a larger issue and it is going to end bad: https://geohot.github.io/blog/jekyll/update/2025/10/24/gambl...
https://ibb.co/RTw5sCDJ https://ibb.co/ycRB8750 https://ibb.co/gLGQ0tKT
Also, what happens if one of the daily missions is not completed? Is there a passive income from those?
The dailies are a minimum requirement if they want screen time.
I spent a lot of time reflecting on video game incentives and disincentives and was incredibly careful not to teach the wrong thing. The very minimum behaviour we want to enshrine as routines. Everything else is treated as a bonus. Some days they get no coins and that’s fine. Points are never taken away. Coins are spent however they want.
The incentive was a slight rent reduction at the end of each month.
It completely failed to motivate my friends to do more chores, but it landed me my first job.
I should really clean it up and make a blog post about it. But wanted to share it here because this project reminded me of it :)
To avoid bankrupting myself—and to encourage them to get a real investment account when the time comes—the rate drops as the balance increases, similar to progressive tax brackets. By the time they get to $1000 balance, the annualized rate works out to ~6%, and after that it drops fast enough that it's essentially free for me to operate.
Overall, it's been quite successful. Now whenever the kids get money, they invest it immediately. And they often delay or forego spending so that they can get more interest the next month. They haven't turned into complete misers, but it has encourage a mentality of thinking about saving, and I think the concept of interest has landed quite well. I think things really started to click for them around age 8 or 9.
If you're interested in doing something similar, I made a sanitized version of the spreadsheet. Feel free to copy: https://docs.google.com/spreadsheets/d/1f3FgHUohw26sHuCoO40s...
Author then proceeds to put 15% annual interest rate...
(I'm told to no longer bet on even averaging 7% annually, over decades, on US stock indexes.)
11% may be the safest bond you have access to, but that doesn't make it _safe_ in absolute terms.
Imagine you have a scenario where inflation is 0 in currency A and 10% in currency B. Would you rather have a 2% bond in currency A or a 9% bond in currency B? This is why Euro bonds go negative sometimes, when USD interest rates were very low and the Euro was deflationary relative to the dollar, it could push rates even further lower.
The interesting question would be what their currency, where this 11% is offered, typically loses year-on-year
I was confused. What's this gobbledygook? So I asked around and got him the answers, and he responded with: max out your 401(K). Just do it. And do not ever think about taking money out of it.
So I followed his advice. At that time, the ~$5500 cut in paycheck (my gross was around $35K, IIRC) stung a little. I was single, footloose and fancyfree, and those extra few hundred dollars a month would have been fun to have. But I stuck to his advice.
Today, almost 30 years later, thanks to that, I have a nice nest egg and don't have to worry about retirement (modulo catastrophic illnesses, of course).
So recently my friends' kids started working, and I gave them the same advice: Max out your 401(K), pick a Vanguard Target Retirement fund, and forget about it. If your place offers a "Mega Back Door" option, use it to the fullest extent possible. And if your company has a HDHCP, put funds in your HSA too.
We have a lot of avenues to save these days. Make full use of them.
Consider investing your time, not just your money. In other words, do careful research, start a business, then put your labor into offering a product or service that fills a need, instead of simply working for someone else. If you fail, you'll still learn a lot for another try. And if you succeed, the payoff can be much larger and faster than anything else you might attempt.
You might actually be worse off saving for retirement, at early career stages. Of course, some will point out retirement savings are tax protected, but so are modest capital gains on primary residence.
https://i2.wp.com/financialsamurai.com/wp-content/uploads/20...
A very well-diversified, international fund usually performs at 8% annually which is far more than you would get holding REITs (or worse, properties themselves). What you invest for (e.g. education, retirement, projects) is irrelevant as long as your time horizon allows for crash recoveries (measured in decades at worst and months at best).
If I'm not mistaken, they usually pay at least 3% dividend which is added to your salary. ETFs don't trigger any tax as long as you don't sell. And I didn't check but REITs probably have higher annual fees.
It was not my intent to convey you should buy REITs instead of a place to live.
After early career this breaks down though, because the tax advantage are only good for primary residence modest value homes, it's not a strategy that can be continually employed.
Historically, yes - but the last 5 year average has been ~14% (I guess it's like ~9% if you're adjusting for inflation). I think 10% is a bit of a better number these days.
That's not to say I couldn't be eating my words when the market crashes tomorrow, however.
