The best I ever received? Start saving and investing when you’re young to benefit from compound interest over time. I didn’t take the advice, but I received it!
Saving and investing is also way easier if you don’t give yourself the option to not do it. You won’t manually move 10% of your money each month, but if it goes to a 401k or a separate account automatically it’s far more likely to stay there.
If you worked for $8/hr and took 5% of your income and put it towards retirement (I know 5% is a lot when you’re broke) from age 18-67 assuming you got a 2% raise every year, you could retire with ~$385,000 in the bank and it would last you until you were 79. That’s using the default numbers from Bankrate. If you could bump your savings rate up to 15% using those same numbers (which is admittedly unrealistic) you would be a millionaire at retirement. The moral of the story is start early and be consistent.
If you’re making $8/hr, your head is going to be incredibly deep underwater. 5% is not remotely possible at that wage. At 15% you may as well be living in fantasyland.
Most people wouldn’t remain at $8/hr their whole life, you would likely earn more as you gained training and experience. My point was that at the extreme low of full time wages, your savings rate at an early age helps determine where you would end up. It’s doable especially at hire wages.
When I was making that kind of money, I still saved way more than 5%. Granted, after inflation, it is like $11.50 now. Still, 10% would have been pretty easy. 20% would be possible if I didn’t blow money on things like spend $3K on a bike for hobby use. Also, that’s assuming you don’t have unexpected expenses. I lived somewhere where having a car wasn’t necessary, so that made a huge different in budgeting. And when I needed surgery, I was lucky with insurance. Otherwise, that could have easily have eaten up the savings I had.
So 15% is definitely possible… with lots of luck and good circumstances.
The fucked up thing about plain money is that even if you have a million today, that million will be worth less than half when you retire, due to inflation and nrtions that keep printing more money to cover their expenses.
People with money usually don’t keep it as plain money though. On average, if you just invest it in S&P500 (assuming historical returns), it’ll be worth at least 4 million after adjusting for inflation after 30 years. 3 million dollars reward for having 1 million dollars. But even if you’re like a gold-standard fanatic and just put it in gold, the same applies.
Depends on if you have found your passion. I found the career I was passionate about at age 14 and now have more experience than the vast majority of my peers. Until just recently, I had never managed someone younger than me, and I’ve been a supervisor for a very long time now.
There are so many laws that it’s impossible not to break multiple at once if breaking a big one. Like planning and executing a heist requires you to break a hundred different laws.
I think it’s more like “don’t drive fast with a tail light out” or “come to a full and complete stop at a stop sign if you have (illegal) drugs in your car”.
You’re doing neither yourself nor anyone else a favour by being overly shy and reticent. You yourself will enjoy life much more when you are yourself and while not everyone will like you, the ones who don’t often don’t stay in your life long and it’s easier to find people you vibe with if they can see you for who you are.
Granted, I very much did not take this advice as a teenager and even now I’m occasionally too shy. But looking back it was good advice and I really wish I hadn’t wasted so much time and energy on not being negatively noticed by people I didn’t really care about then and who haven’t been in my life for years.
Just needed a friend to care enough to say something so simple, and it changed my life. Sobriety is terrifying for so many, but in my experience it was absolutely worth it.
Being myself, knowing myself without the dull edge of substances, actually being present in my life and in other’s lives. Drugs were an escape, a place to hide and avoid. Facing reality, while difficult, was such a more fulfilling experience than when constantly running from my own existence.
And then you get drunk again and forget them, rinse and repeat.
Physiological dependence ends within weeks, and they say after that people relapse basically because their life is bad and they miss being a checked-out junkie. OP’s response kind of reinforces that; they have a life now, and they enjoy it, so they don’t want to go back.
Obviously from everyone else’s perspective it doesn’t help. That and your reasoning are basically why I’ve stayed away from drugs and alcohol completely (and avoided caffeine), but I pride myself on being open-minded. As weird as it sounds, I need to at least consider that the guy on the piss-soaked mattress might have a point, or I’m not being intellectually honest.
Survivorship bias is a thing. Just because someone is successful doesn’t mean following their advice will make you successful. “I put all my money into lottery tickets and now I’m a multi-millionaire. Everyone should do what I did!”
The emergency fund comes first $1000 or 6 months expenses tends to be the sweet spot. It keeps you from taking on bad debt like credit cards and pay day loans. 5% of your paycheck is a good place to get started, that’s usually enough to build up funds fairly quickly without hurting too much.
Retirement doesn’t have to be a ton of money each pay check, especially if you start early in life, but if you ever want to retire you have to start as soon as possible because the later you start the more money you have to put away. Take the company match on a 401(k) or 5-20% of your paycheck. Invest in a target date fund or S&P 500, Russell 2000 fund, or whole market fund (and look at the expense ratio, you want that to be as low as possible) and call it a day. Individual stocks are for suckers, but if you want to gamble with individual stocks use 1-5% of your portfolio to do it so it’s not the end of the world if you pick a loser.
Finding your target for retirement is a big step to knowing what you need to save early. Play around with some retirement calculators and debt payoff calculators fairly often as your target number may change based on your lifestyle.
Did you get this from The Richest Man in Babylon? I just quoted another part of that book for this thread. That’s one of the core lessons of that book.
Depends on the point of view. If your biggest risk is you spending that loan money on gambling, then yes paying the debt early would help you get in less trouble.
From an economic point of view, if you don’t need that money at the moment, you should invest it, so that you can make a few bucks. If you get 1-2% more on every transaction that way, it really does stack up at the end, since this will make you exponentially more money.
Tbf I’m really not savvy in loans, but I mean any amount of money X that you have to pay back with Y% of interest in Z days. If you take that loan and you know an investment that will guarantee you (Y+1)% then you should borrow money. (That conclusion is of course completely neglecting risk management)
And that’s why interest on borrowed money tends to cost more than any guaranteed investment. Because otherwise the ones loaning would just take the investment themselves.
You are correct in your theory… In practice however there is no such guarantees, if there were, it would be a perpetual money making machine
Investment opportunities that guarantee a return will always guarantee less than the interest of regular loans. So unless you are a billionaire, there is no such luck.
In practice, regular investment like mutual funds average to x in the long run (10 years or so) but you’d never find a 10 year loan that does not require you to pay regularly and with accrued interest for that time, so it defeats the purpose of taking out a loan specifically for investing long term
Hmm I’ve never thought about it that way. Definitely seems like we’d be better off not getting taxed by employers throughout the year, as then it can offset mortgages etc before paying up.
Not sure what context this is supposed to apply… But I cannot imagine any that would not leave me in an uncomfortable position or being a total asshole
It’s more about non interest scenarios. If payment isn’t due for 30 days, you wait 30 days to pay. If it’s a place that won’t fight you, wait 40 and then pay.
It’s both really. Knowing people when you know nothing doesn’t do much for ya. But when you’re known as a skilled person by people with opportunities, then that’s a good position to be in.
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