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birb_cromble  7hr ago (text post)   105 thread views

Weekly Finance Thread (without clever alliteration)

A weekly thread to discuss financial matters - from personal all the way up to global.

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.
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Any business owners around here? No, minority shareholding doesn't count.

I've been wondering if doing it for the product vs doing it for the money is a useful distinction. From what I've noticed, doing it for the product leads to a wider array of outcomes, but doing it for the money has a better modal/median outcome.

I run a consultancy as a sole proprietorship. It's not anywhere close to my primary source of income, but it gets me a nice pop of cash every now and then.

What do you mean doing it for the product, exactly? Like someone starting a pizza place because they love the idea of making pizza?

What type of consultancy? It's something I've been off and on considering as a bit of a side gig for a while now.

I do software modernization for small companies running stuff that's 30-40 years old.

Are you the one putting all my favorite restaurants on Toast point-of-sale hardware?

Not toast, but yeah, I've done some of that.

To be honest, pretty much any POS system is a POS. I swear that the people who design, code , build, and sell them have never actually worked in a restaurant. It's one of the most egregious examples of not understanding the customer I've ever seen. Aloha is particularly bad.

What is your opinion on preferred stock?

I waffle between thinking it's a great mid point between bonds and equities in terms of risk, but then I look at the last few market downturns and it doesn't seem like that's actually true. It's hard to tell though, because preferred stock seems like it's uniquely vulnerable to the specific dysfunctions that caused the last few downturns. They're sensitive to interest rates, so 2022 smashed them. They're issued by financials more than other sectors, so the GFC did a number on them as well.

I'm thinking about picking up some PFF or PFXF to dip my toes into this instrument.

As someone who's lived through multiple currency debasements, anything fixed income has a very large psychological hurdle to pass before I consider it.

That being said, I like, and have owned this one: https://www.preferredstockchannel.com/symbol/c.prn/

It's SOFR+ so it's kind of inflation hedged, relatively safe and has a good yield. Due to some weird capital structure rules it's unlikely to get called, but it is still possible and a real risk.

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