MONEY! Investing, stocks, and all that fun grown-up stuff

[theimage13]

Maybe there are people here who are super into stocks, or just like geeking out over investing in general. Or maybe there are people who totally suck at it (or just don't really know anything about it) and have questions. Or maybe you just need to rant about how awful student loans are before you bash your head against a $400 book that you'll use for roughly 30 minutes. Whatever the case may be, here's a catch-all for financial discussions.

(Also: am I stupid for not putting a HLAH reference in the title?)

[kel]

i had the opportunity to invest in netflix when it first launched and didn’t do it. i thought ordering dvds through mail was the stupidest idea ever.

welp.

[theimage13]

i had the opportunity to invest in netflix when it first launched and didn’t do it. i thought ordering dvds through mail was the stupidest idea ever.

welp.

I feel your pain. I didn't have the means to invest in Google when they went public, but told my parents that they really needed to buy some shares. They didn't.

Welp, indeed.

[klyrish]

My wife and I completed Dave Ramsey's Financial Peace University in November 2016 and in early December 2017, we made our final payment on her student loan, bringing the total amount of debt paid off between our wedding (7/1/16) and December 2017 to around $47,000.

It was excruciating. We cut back on everything, basically had no social lives for that entire time so we could put every spare dollar possible into paying off a few credit cards, her auto loan, and student loan (my truck has been paid off since 2011 and student loans since 2010). I started my own company to do freelance consulting on the side of having a full-time job and another contractor position for the company I now work for full-time. Between August 2017 and February 2018, I made just under $37,000 through my company by working 80-120 hour weeks, every week. It took until about September of this year before I finally fully recovered from all of that.

But now here we are: totally debt-free (aside from the mortgage), with a fully-funded emergency fund for 7 months of being able to continue living at the elevated middle-class level we do without changing a thing if both of us lose our jobs. We just did a cash-out refi and have used a bunch of the money to get a new fence (old one was at least 30 years old) and brand new, high-quality vinyl siding on the house (it looked like it was rotting).

For anyone who cares, here are some photos:

BEFORE
https://www.dropbox.com/s/2wkcv9joe9...rd_01.jpg?dl=0

https://www.dropbox.com/s/wlgquwvjsz...ce_01.jpg?dl=0

https://www.dropbox.com/s/x2hhni8m21...de_01.jpg?dl=0

https://www.dropbox.com/s/7xit2ws8vc...de_02.jpg?dl=0

https://www.dropbox.com/s/49irvnehaa...de_03.jpg?dl=0

https://www.dropbox.com/s/j0254rr339...de_04.jpg?dl=0

https://www.dropbox.com/s/dpmr55icz9...de_01.jpg?dl=0

https://www.dropbox.com/s/gptm3ku328...de_02.jpg?dl=0

https://www.dropbox.com/s/uxbprbih1y...de_03.jpg?dl=0



AFTER
https://www.dropbox.com/s/0csm3pd3lu...rd_01.jpg?dl=0

https://www.dropbox.com/s/091qn8mq7t...rd_02.jpg?dl=0

https://www.dropbox.com/s/6euz5limyn...de_01.jpg?dl=0

https://www.dropbox.com/s/9acwscgzbr...de_02.jpg?dl=0

https://www.dropbox.com/s/1uy3zii8wr...ce_01.jpg?dl=0

https://www.dropbox.com/s/n4g69ux85y...de_01.jpg?dl=0

https://www.dropbox.com/s/i2lup57zep...de_02.jpg?dl=0

https://www.dropbox.com/s/k5cbqt2j4x...de_03.jpg?dl=0

https://www.dropbox.com/s/jsx9fysjwg...de_01.jpg?dl=0

https://www.dropbox.com/s/ohhmy43fuy...de_02.jpg?dl=0

This whole process has been incredible. It's still hard to get used to this. I had crushing credit card debt (almost $20,000 back in 2008) and was so used to living like that, I just thought it was how life was. But now, being free and able to do things on a whim like go see NIN in Vegas without the slightest concern, and not being beholden to mountains of bills each month is just...amazing.

I was previously EXTREMELY anxious about the next financial crisis/collapse but given our current position, I'm actually looking forward to it so we can finally get in on the investing game with reasonable prices.

[theimage13]

That's awesome to hear; congrats! So many people are never able to get out from that kind of debt, even after scrapping everything but the bare essentials.

I hope you're not waiting for the market to slide more before investing though! Two sayings that I hold dear: "yesterday was the best day to invest; today is the second best" and "time in the market beats timing the market". If you've got the funds, I would be putting in regular contributions and continue to do so, instead of waiting until you think it's at the bottom. No one knows where the bottom is....so no time like the present to get those investments in.

[the duder]

@klyrish hells yes! My wife and I had a similar story! I brought about $80K in student loans into our marriage, we bought a house that was too expensive and we're treading water financially. Luckily we weren't in too deep with credit card debt, but it was enough for my wife to have major anxiety over. I was always the king of making ends meet, so I wasn't bothered in the least. We saw FPU was offered by our church and signed up. Game. Changer. Two years later, we're out of the overpriced house and in a much smaller home in a far more awesome neighborhood and we have zero student loan debt. We liked FPU so much that we're now facilitating the class and our final class is Wednesday. So stoked to see how much progress our class has made!

[klyrish]

That's awesome to hear; congrats! So many people are never able to get out from that kind of debt, even after scrapping everything but the bare essentials.

I hope you're not waiting for the market to slide more before investing though! Two sayings that I hold dear: "yesterday was the best day to invest; today is the second best" and "time in the market beats timing the market". If you've got the funds, I would be putting in regular contributions and continue to do so, instead of waiting until you think it's at the bottom. No one knows where the bottom is....so no time like the present to get those investments in.

Thank you! And you're totally right. We both have retirement plans that we actively deposit into each paycheck and I can't think of the term for it, but it's an insurance policy that has a cash value you can take out once it's built up enough. My wife also plays around with Stash and puts $25 or $50/mo into it. I need to start doing that since we don't have the liquid capital currently to open an account through TDAmeritrade or even through our financial advisor ($50k min there). I'd love to get a two- or three-fund lazy portfolio setup that I dump into monthly or with each check but it's off-putting because of the fees and/or high barrier to entry. Do you do day trading or anything like that? Any recommendations?

@klyrish hells yes! My wife and I had a similar story! I brought about $80K in student loans into our marriage, we bought a house that was too expensive and we're treading water financially. Luckily we weren't in too deep with credit card debt, but it was enough for my wife to have major anxiety over. I was always the king of making ends meet, so I wasn't bothered in the least. We saw FPU was offered by our church and signed up. Game. Changer. Two years later, we're out of the overpriced house and in a much smaller home in a far more awesome neighborhood and we have zero student loan debt. We liked FPU so much that we're now facilitating the class and our final class is Wednesday. So stoked to see how much progress our class has made!

That's awesome! I'm so glad to hear you completed the program and had so much success that you're leading classes now! Despite almost all of FPU being "duh, this isn't a secret/this is so obvious" it still provided many AHA! moments while watching and discussing each session. I recommend it to everyone I know. I really like Dave and as nerdy as it is, I love budgeting and staying on top of it each month. We use and pay for EveryDollar. It's not perfect but it's by far the best budgeting software we've used. My only real complaint about FPU is that he never really addresses what to do after eliminating your debt and building up your emergency fund. Yeah, he mentions giving (which we do and plan to do more of over the coming year) and paying off your mortgage faster, but never gets into investing or other endgame solutions.

If you're not already familiar with him, I highly recommend reading/following Mr. Money Mustache. He's funny and shows how to truly live like no else.

[theimage13]

Thank you! And you're totally right. We both have retirement plans that we actively deposit into each paycheck and I can't think of the term for it, but it's an insurance policy that has a cash value you can take out once it's built up enough. My wife also plays around with Stash and puts $25 or $50/mo into it. I need to start doing that since we don't have the liquid capital currently to open an account through TDAmeritrade or even through our financial advisor ($50k min there). I'd love to get a two- or three-fund lazy portfolio setup that I dump into monthly or with each check but it's off-putting because of the fees and/or high barrier to entry. Do you do day trading or anything like that? Any recommendations?

I've done a teeny bit of messing around with day trading free via the Robinhood app*, but I mostly stick to long term investments in ETFs. I'm a huge fan of Vanguard for that - no trading fees, expense ratios are extremely low, and many of their funds can be started off with a relatively small investment ($1,000 - $3,000 range).

*if you've never used it and are interested in playing around, I can give you a link that gives each of us a free share of a random company. When I signed up it was Groupon...which has dropped 50% since I got it. Oh well.

[klyrish]

I've done a teeny bit of messing around with day trading free via the Robinhood app*, but I mostly stick to long term investments in ETFs. I'm a huge fan of Vanguard for that - no trading fees, expense ratios are extremely low, and many of their funds can be started off with a relatively small investment ($1,000 - $3,000 range).

*if you've never used it and are interested in playing around, I can give you a link that gives each of us a free share of a random company. When I signed up it was Groupon...which has dropped 50% since I got it. Oh well.

Thanks for the tip on Vanguard! I'll look into Robinhood and will let you know if I decide to start using it. That's the one that rounds up to the nearest dollar on debit purchases and invests that, right? I never use my debit card out of fear of it being stolen and losing all my cash.

[theimage13]

Thanks for the tip on Vanguard! I'll look into Robinhood and will let you know if I decide to start using it. That's the one that rounds up to the nearest dollar on debit purchases and invests that, right? I never use my debit card out of fear of it being stolen and losing all my cash.

Nope, Robinhood is a stock trading app with no trading fees. They do offer paid versions, but if you're just looking to kind of mess around with buying / selling stocks on a small, "get to know the basics" kind of level, it's a good tool for getting your feet wet.

[Andallthatcouldhavebeen]

So idk if this fits here, probably, but I would like to share my story with finances. I grew up in Hawaii, with a low income family that never saved money. We were homeless a couple years, on welfare, etc. I guess I just assumed bad credit and debt that was never going to be paid was the norm when it came to finances. It would even get to the point that my mom would use a fake name on car registrations,because she never could "afford" insurance and car repairs and if our car broke down, she could leave it on the side of the road without it being traced back to her.

Once I started working in high school, I followed the same pattern. Spending on whatever I wanted, not managing my money whatsoever.

Fast forward to graduation. My father left my mom when I was young and asked me to go visit him in Georgia. My boyfriend and I decided to go. We visited and I got pregnant. (Whoops) We knew we weren't going to be going to college like we originally intended, but we decided we had a goal. To not fall into the same financial trap as our parents. To be the change. We left my dad's and moved to Tennessee. We got credit cards solely for the sake of building credit. We budgeted like crazy and ate a lot of ramen and mac and cheese that year. We worked what overtime we could at our warehouse jobs. Coincidentally and luckily for us, my father in law lost his job and moved in with us. He was another mouth to feed, as he was getting old and didnt want to work, but we didnt have to pay for childcare. We were all living in a cheap run down 1 bedroom apartment.

At age 20, my husband and I had great credit and enough for a downpayment on a home. We settled for a one story, 3 bedroom house. Not anything grand, but more than we ever dreamed of owning.

Now we have 2 children, and are paying as much extra towards our house as we can each month. We have an emergency fund and enough in savings for 6 months in case something were to happen. We have 401ks, which was something I thought was a fairytale sort of thing for the rich. We are by no means rich, with our 2003 run down car and 2011 minivan, but let me tell you I feel rich. Had I stayed in Hawaii, none of this could have happened. Houses there go for a million dollars. Jobs are centered around tourism, and homelessness is high. My family is toxic and dont understand how to manage finances.

When people tell me they dont understand why I left Hawaii, I smile and say it was beautiful and I'm sad I left. But I'm not. Being financially stable for myself and my family is literally a dream come true.

Sorry for ranting. I would like to learn about investing, and need to change my mindset that Investing isn't for me.

[klyrish]

We are by no means rich, with our 2003 run down car and 2011 minivan, but let me tell you I feel rich.

Owning a new/expensive car isn't a sign that you're rich, it's a sign you have little sense. There are few things worse to spend money on than expensive vehicles. I still drive my 2005 Ford Ranger XLT which I bought in 2007 for $12,500. It was the dealer vehicle given out when you had to leave your car all day/multiple days for work and had to get around so it was very well taken care of and had low mileage. I bought it with 15,000 or so miles on it and now, almost 12 years later, I don't even have 75,000 miles on it. It's old, it has absolutely nothing fancy inside, but you know what? It gets me where I need to go and that's all that matters. I'm going to drive it into the ground so probably another 10 years at least (working from home has huge benefits ). Buying a flashy vehicle to impress people you don't know and shouldn't care about is a hallmark of insecurity and complete lack of financial sense. Keep driving your vehicles until it's no longer financially viable to repair them and then buy a newer used vehicle!

Had I stayed in Hawaii, none of this could have happened...Being financially stable for myself and my family is literally a dream come true.

Good! That's amazing! And REMEMBER THAT ALWAYS! Don't fall into the traps of our hyper-consumerized society. We are at the pinnacle of advertising currently with it being almost impossible to go anywhere or do anything that isn't somehow commercialized. Even at Nuggets games, dunks have been bought by Toyota. Any time there's a dunk, there's a brief stop to the game so that it can be replayed with a commercial for some Toyota truck because a dunk is absolutely equivalent to and brought to us all by the toughness of Toyota, obviously!

Sorry for ranting. I would like to learn about investing, and need to change my mindset that Investing isn't for me.

It didn't come across as a rant to me, it was an inspiring story peppered with your personal history which is difficult and upsetting to bring up. It's crazy to think that so many of us would be in such different positions in life had we not made a few key decisions--if I hadn't left WI in 2010 for Denver, I'd likely weigh 150lbs more and would probably have a few DUIs if I hadn't already drank myself to death (and I'm only 34). That place was absolutely toxic and destructive for me for so many reasons and I made the (honestly, not so) tough decision of leaving it all behind for something new and hopefully better.

Our choices make us who we are and it sounds like you've made some very tough ones that were ultimately for the best. Don't be sorry for that, share your story so that others who might be in a position where you were can see that someone else took a risk and it paid off.

[theimage13]

Sorry for ranting. I would like to learn about investing, and need to change my mindset that Investing isn't for me.

Not a rant at all!! Sounds like you've worked your ass off to make your dreams come true, and that's something you should be proud to share.

I'm not sure what sort of things you need to learn about investing...you've already got a 401k set up, which is better than a lot of people these days. Do you actively decide what funds that money goes into, or is it just whatever your employer defaults to? Do you have any investments other than that, or is that your sole source of retirement savings?

[Andallthatcouldhavebeen]

I'm not sure what sort of things you need to learn about investing...you've already got a 401k set up, which is better than a lot of people these days. Do you actively decide what funds that money goes into, or is it just whatever your employer defaults to? Do you have any investments other than that, or is that your sole source of retirement savings?

My employer does up to 6% pre tax matching contributions for a 401k. I have about 8% going in each paycheck. I also have a pension, which is nice and I understand that most companies dont offer that anymore. I dont really have any investments other than that, although my husband owns stock in Amazon since he currently works for them. I'm glad they were awarded to him when stock was about $500 a piece and he hasn't sold them.

I'd like to strat investing/saving funds for my children to have when they graduate high school, and started a cd account which doesn't have much return on it at all. I'm currently trying to figure out a better way to save money for them.

[Andallthatcouldhavebeen]

Owning a new/expensive car isn't a sign that you're rich, it's a sign you have little sense. There are few things worse to spend money on than expensive vehicles. I still drive my 2005 Ford Ranger XLT which I bought in 2007 for $12,500. It was the dealer vehicle given out when you had to leave your car all day/multiple days for work and had to get around so it was very well taken care of and had low mileage. I bought it with 15,000 or so miles on it and now, almost 12 years later, I don't even have 75,000 miles on it. It's old, it has absolutely nothing fancy inside, but you know what? It gets me where I need to go and that's all that matters. I'm going to drive it into the ground so probably another 10 years at least (working from home has huge benefits ). Buying a flashy vehicle to impress people you don't know and shouldn't care about is a hallmark of insecurity and complete lack of financial sense. Keep driving your vehicles until it's no longer financially viable to repair them and then buy a newer used vehicle!


Good! That's amazing! And REMEMBER THAT ALWAYS! Don't fall into the traps of our hyper-consumerized society. We are at the pinnacle of advertising currently with it being almost impossible to go anywhere or do anything that isn't somehow commercialized. Even at Nuggets games, dunks have been bought by Toyota. Any time there's a dunk, there's a brief stop to the game so that it can be replayed with a commercial for some Toyota truck because a dunk is absolutely equivalent to and brought to us all by the toughness of Toyota, obviously!


It didn't come across as a rant to me, it was an inspiring story peppered with your personal history which is difficult and upsetting to bring up. It's crazy to think that so many of us would be in such different positions in life had we not made a few key decisions--if I hadn't left WI in 2010 for Denver, I'd likely weigh 150lbs more and would probably have a few DUIs if I hadn't already drank myself to death (and I'm only 34). That place was absolutely toxic and destructive for me for so many reasons and I made the (honestly, not so) tough decision of leaving it all behind for something new and hopefully better.

Our choices make us who we are and it sounds like you've made some very tough ones that were ultimately for the best. Don't be sorry for that, share your story so that others who might be in a position where you were can see that someone else took a risk and it paid off.

Yeah, the only reason we have a 2011 is because our 2004 jeep became more costly to fix at one point than it was worth. We saved and made sure to try to buy a new/used car that seemed reliable, with cash.

I hate commercials and the influence they have on creating a society that wants to believe that to have fun, you have to go into debt.

Happy to hear that you feel a major move also helped you improve your life! I feel like if I ever feel unhappy with my life, I wouldn't be afraid of needing to move for the better, after moving 5000 miles away from everything and everyone I once knew.

Saw you recommend a mr.money mustache in a earlier post, and I've checked out a couple of his articles. Interesting, worthwhile read.

[theimage13]

My employer does up to 6% pre tax matching contributions for a 401k. I have about 8% going in each paycheck. I also have a pension, which is nice and I understand that most companies dont offer that anymore. I dont really have any investments other than that, although my husband owns stock in Amazon since he currently works for them. I'm glad they were awarded to him when stock was about $500 a piece and he hasn't sold them.

I'd like to strat investing/saving funds for my children to have when they graduate high school, and started a cd account which doesn't have much return on it at all. I'm currently trying to figure out a better way to save money for them.

What is your 401k actually invested IN, though? "401k" is just the name of the account type, similar to a "checking account" or "savings account" - it can be invested in all sorts of different funds, depending on your company's choices. Target date funds are a popular choice and designed to be a kind of "set it and forget it" fund based on the year you plan to retire, so for example, Target Date 2045 if you plan on retiring around 2045. They're also likely to offer options like a total market fund which basically tracks the entire stock market, or an S&P 500 fund. For reference, Warren Buffet's primary advice for long-term growth is to just dump your invested savings into the S&P 500, as historically it has out-performed active traders. Then again, your company many only offer one or two different funds. I would ask where the money is actually going and get a list of all of your options. And not to be a downer, but while you're correct that pensions are indeed rare and you're lucky to have one, they're not guaranteed. What I mean by that is that the company can decide to stop offering it, or drastically slash the payout with little warning during your retirement years. I personally strive to invest in such a way that I could retire with no government or employer assistance, and anything else that becomes available to me would just be padding.

For your kids, I would look into a 529 account. In addition to letting the money grow, they also offer tax advantages. Here's a link to some info that applies specifically to TN: https://www.savingforcollege.com/529...gs-529-program.

[klyrish]

@theimage13 do you have any stocks/products you recommend (by ticker preferably)? I took control of my 401k and the investment allocations but none have really impressed me all that much. I logged into the site to manage it and we have a reasonable number of options to choose from. I saw this one as an option:

Vanguard 500 Index Fund Admiral Shares (VFIAX)

And given the name, I assumed this is investing in the S&P500 index but the performance chart a little ways down on the page compares this product's performance directly to the S&P500 index so it's not but similar?

[theimage13]

@theimage13 do you have any stocks/products you recommend (by ticker preferably)? I took control of my 401k and the investment allocations but none have really impressed me all that much. I logged into the site to manage it and we have a reasonable number of options to choose from. I saw this one as an option:

Vanguard 500 Index Fund Admiral Shares (VFIAX)

And given the name, I assumed this is investing in the S&P500 index but the performance chart a little ways down on the page compares this product's performance directly to the S&P500 index so it's not but similar?

That's actually one of the ones I hold, and it is an S&P 500 tracker. Someone with more detailed knowledge could probably explain the minuscule discrepancies in performance between the two. But look at the "portfolio composition" section in the overview on the main page for it - https://investor.vanguard.com/mutual...overview/vfiax - and you'll see that compared to the S&P 500, it's the same.

As for specific stocks, if your strategy is to simply buy and hold, I'm a fan of V (Visa) and MSFT (Microsoft). Lots of people are huge on AAPL (Apple), which is probably a pretty good bet as well. DIS (Disney) gets a lot of love from people too - keep in mind that the company is more than just a few theme parks and movies.

[klyrish]

Awesome. We can't choose specific stocks in our 401k options but I think I'll adjust my allocations to start using that VFIAX product going forward. Thanks!

[Andallthatcouldhavebeen]

What is your 401k actually invested IN, though? "401k" is just the name of the account type, similar to a "checking account" or "savings account" - it can be invested in all sorts of different funds, depending on your company's choices. Target date funds are a popular choice and designed to be a kind of "set it and forget it" fund based on the year you plan to retire, so for example, Target Date 2045 if you plan on retiring around 2045. They're also likely to offer options like a total market fund which basically tracks the entire stock market, or an S&P 500 fund. For reference, Warren Buffet's primary advice for long-term growth is to just dump your invested savings into the S&P 500, as historically it has out-performed active traders. Then again, your company many only offer one or two different funds. I would ask where the money is actually going and get a list of all of your options. And not to be a downer, but while you're correct that pensions are indeed rare and you're lucky to have one, they're not guaranteed. What I mean by that is that the company can decide to stop offering it, or drastically slash the payout with little warning during your retirement years. I personally strive to invest in such a way that I could retire with no government or employer assistance, and anything else that becomes available to me would just be padding.

For your kids, I would look into a 529 account. In addition to letting the money grow, they also offer tax advantages. Here's a link to some info that applies specifically to TN: https://www.savingforcollege.com/529...gs-529-program.

I have a vanguard account, and I think I adjusted where my investments went once. I am glad I am taking a look at it again. Its a target retirement 2060 plan, that I basically set up and forgot about, ha. The only options I have is to decide where my allocted funds go, which is between stocks, bonds and short term reserves. I've currently got most investments in a total market fund, and do not really have the option to change it to anything else. I have my old 401k contributions from my previous employer still on the website also, and that account had more options that my currently employer offers. I have tried to tell myself that I can't rely on the pension either, understanding that although the company has been around for over 50 years offering it, I still have over 40 years to go till retirement, if I wait until what retirement age is supposed to be. (Sigh)

I have heard of a 529, but never really looked into it as much as I should have. Thanks for the info!

[theimage13]

I still have over 40 years to go till retirement, if I wait until what retirement age is supposed to be. (Sigh)

You sigh, but from an investment standpoint, that's a great position to be in!

Check this out: https://www.investor.gov/additional-...est-calculator

I'm not going to ask you to post your personal finances on a public forum, so head over to the link and plug in your data. Make sure you put in "40" for the length of time you plan on leaving the investments in. It's amazing what compound interest does. As an example: if you started with $100 right now, and you added $100 monthly for the next 40 years, that's on track to leave you with $187,000 at retirement (and that's accounting for inflation). $187,000 for $100 / month. Time is on your side; let it work for you! The more you can comfortably invest now, the better - just make sure you aren't leaving yourself without an emergency fund now.