Since a lot of us here have expressed interest in not starving to death in a gutter, I figured I'd start a weekly thread to discuss financial matters.
Ground Rules
- Remember that we're all just Internet randos. Don't bet your life savings on a hot tip from this thread.
- Keep culture war in the culture war thread. Yes, global events may impact our personal finances, but that does not mean we have to incessantly harp on culture war aspects here. If you are going to discuss it, please stick to the practical impacts of it on an individual level.
- Be kind. Remember that everyone here comes from different circumstances. We all have different resources available and different risk tolerances.
- Don't let the perfect be the enemy of the good. Better is better. Celebrate people when they take a step up and work to move their finances in the right direction. Don't flame out because they haven't followed what you consider the optimal path. Everybody has to start somewhere.
Jump in the discussion.
No email address required.
Notes -
Oh, good timing, I just crossed a very large milestone in my portfolio today. A few questions:
Between 0 and 1 probability. In other words, who knows. (I think it's not). But this is irrelevant , imho, because the market has gone up so much, and stands to keep going up even more, that even if it were a bubble and does pop, you may still be missing out by not buying now, as no one knows where the top may be. People who thought home prices were overheated in 2013-2014 or waited for lower prices after Covid, were either forced to rent forever, sit on sidelines forever , or buy at a much higher price. If the Nasdaq gains another 30% this year and 100% within 2 years, you would need a pretty big crash to undo just those gains, so we're talking a once in 15-50 year event. I do not like those odds. I would rather just hold my nose and buy, accepting that market is possibly overvalued, but also that I will not get a better price either. Overpay now or regret later.
This is why the stock market is so great for wealth creation and inflation hedging, even compared to collectibles, cars, etc. Only MTG & Pokémon cards have outperformed the stock market long term. I am not sure about art--not much liquidity, lumpy markets and possible manipulation.
You're too late by 8 years. Stocks are clearly better.
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Congratulations! While I did not hit a large milestone or anything, I did hit a new net-worth PR on Friday thanks to another good day for equities. I imagine many are in a similar boat.
Me looking at a bubble in the elevator: "I don't think about you at all." Bubbles are only identifiable ex-post. Best to just stay the course with whatever you're doing instead of trying to time the market or outguess it. Investing at all time highs yields similar results as all other days.
4% might be a bit aggressive. Many recommend 3% instead for greater safety.
You can always start off slow by just stopping contributions and spending all your earned income, and reinvesting dividends/coupons to see how it feels. Then move on to spending earned income and any distributions instead of reinvesting. This would be to avoid triggering capital gains taxes. Then the final boss is actually starting to sell down your positions, capital gains be damned, and withdrawing.
I would hope so! That's the whole point of investing in anything riskier than government inflation-linked securities.
Buy bitcoin if you desire cryptocurrency exposure in your investment portfolio, don't otherwise. No ones really knows where the price is going. Today's a good a day as any to buy if you want that exposure. I personally own only a trivial amount of BTC for buying things from... alternative vendors.
Marry a spendthrift or someone who likes keeping up with the Jones's and you'll never have to generate such a desire yourself! Hooray!
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The last few tech-related meta cycles have both changed everything and not consistently boomed or busted from a stock price perspective. Personal computing in the '80s took over everything, but even Apple's stock has been up and down and looked like a loser before Jobs returned. The Internet around 2000 looked like it would change everything --- and it did --- but my pets.com shares were a bad idea.
I'd bet AI is similar, and picking a specific single winner is improbable. Weak predictions: local models can do most of what people want; big models don't scale much past human abilities, but enough to be game-changing; AI doesn't think truly creatively well enough to replace human cultural achievements, but it's consensus-centering output may be a pragmatic counterbalance to rage-seeking social media algorithms.
Wasn't that kind of the issue with early railroads? They wound up being transformative, but a great many of the early companies and frontrunners didn't do well?
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As one further bit of commentary, you say
I would be careful with that. If you're in your mid thirties, there's a decent chance you've never been financially active in a true down market. 2008 was awful. It didn't matter what inflation was, because everything was down 20-50%. Sequence of returns risk is scary if you ever have to withdraw in that kind of environment.
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I am 20 years older than you and would increase my standard of living by reducing current saving vs pulling from investments. Before I did that I would ask myself if we were entering a decade where I saw no increase in net worth would I still feel my investments were sufficient for my plans at the end of that decade.
If I lost my job now I would be fine for the rest of my life and likely be in a position where growth in investments exceeds my living costs. & I only need to consider another 40 years of life. I would still be cautious about increasing my living costs because once you do buy really nice yarn it can be hard to go back to the affordable stuff. But you can be perfectly happy if you never stop limiting yourself to the affordable stuff. OTOH while I also like nice tea, it's something I only indulge in on rare occasions and I am fine with the cheap stuff on the daily. If we entered a lost decade I would mourn my yarn and not think twice about my tea. (I do buy nice yarn - out of current income. I might pull from savings for a once in a lifetime experience but I would prefer to save up for it out of current income if I had the time to do so.)
So... What do you want that would require you to supplement from savings rather than current income? If you lost your job how much of a runway do you have? If your investments had no growth for a decade could/would/should you stop pulling from them during that time? If you needed to drop back to your current living standard how hard would it be? Could you do an experiment without locking yourself into a dependency? You have 60-70 years of remaining life to play with it. It's a tough balance.
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Betting against AI will make you broke, betting for AI will make you broke. Staying away is the smartest thing so far. Take Deepseek - they did magic with inference and the model is next to free now. I use it as daily drivers for heavy coding sessions and it is essentially free - I can barely burn trough 1$ daily. Even if they increase the price - I guess I will have the same USD consumption after 31st of may because flash is just a gem. With china compute ramping up and open models being so close behind the closed ones - the margins that Anthropic and OpenAI expect are just not there.
On the other hand - the technology is transformative. I don't think that there is a single programmer left that doesn't use AI heavily - even the holdouts grudgingly started to admit that latest models are better than juniors. I expect tokens to end up like electricity and oil - ubiquitous, affordable, metered by consumption but absolutely commodified with a mix of locally and remotely running models.
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