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birb_cromble  1d ago (text post)   735 thread views

Weekly Finance Thread

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.

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  • 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.
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Oh, good timing, I just crossed a very large milestone in my portfolio today. A few questions:

  • What do you think the chances are that we are currently in a large (AI related or not AI related) bubble that will pop? It seems like the money printing of the past few years has massive upward pressure on the stock market so I don't know how to unpick the two.
  • I have always been a saver and live fairly frugally. But I am itching to increase my standard of living with some of my invested money. At what number in USD would you personally be comfortable beginning to draw down, say, 4% of your portfolio a year to increase your standard of living sustainably?
  • It seems like I am outpacing the rate of inflation with my investments. For example I have doubled my money in 4 years, whereas I am not paying nearly 2 times as much for gas or groceries or restaurants compared with 2022. And it seems like inflation is much slower at the lower end of prices- for example goods at thrift stores or antique stores seem to be retaining low prices while things like houses and fine art are exploding in valuation. Do you think it's likely to stay this way in the US for a while or do you think the inflation will be coming for lower priced goods as well?
  • Do you think it's too late to buy bitcoin or is it still wise to buy it today? I have only like $2000 worth of bitcoin because I never found it very appealing or interesting but I can see its use in hedging against fiat currency debasement and many people smarter and richer than me are still interested in its success.
  • The older I get, the more I have access to but the less I want. I have already satisfied most of my needs and desires from my youth. How do I generate more desire within myself as I grow older? (I am in my mid thirties if that is relevant.)

Oh, good timing, I just crossed a very large milestone in my portfolio today.

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.

What do you think the chances are that we are currently in a large (AI related or not AI related) bubble that will pop? It seems like the money printing of the past few years has massive upward pressure on the stock market so I don't know how to unpick the two.

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.

I have always been a saver and live fairly frugally. But I am itching to increase my standard of living with some of my invested money. At what number in USD would you personally be comfortable beginning to draw down, say, 4% of your portfolio a year to increase your standard of living sustainably?

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.

it seems like I am outpacing the rate of inflation with my investments.

I would hope so! That's the whole point of investing in anything riskier than government inflation-linked securities.

Do you think it's too late to buy bitcoin or is it still wise to buy it today?

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.

The older I get, the more I have access to but the less I want. I have already satisfied most of my needs and desires from my youth. How do I generate more desire within myself as I grow older?

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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