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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Notes -
OP includes the premise that social security is going to be gone when he reaches retirement. I am not optimising for 'what financial instrument will hold up best if the US goes into recession'. I am optimising for, 'what can I do/buy to make my life as happy and comfortable as possible without standing out from the crowd in times of severe financial hardship'.
Ultimately, in my opinion, if the US ends up being divided into the 20% of people who have full savings for retirement, the 20% who have partial savings, and the 60% who have nothing, then the US is going to go full socialist at lightning speed. It will not be a good time to have lots of money in an accessible pot that the government knows about, no matter how sophisticated the contents of that pot. Britain has already gone through multiple rounds of reneging on benefits and discounts and tax deductability on pensions, because pensions are big lumps of money and there are lots of voters in the UK who don't think they have enough money.
In short, however sophisticated your financial instruments are, it won't matter if the US institutes a wealth tax. I still remember all the breathless enthusiasm about how crypto was going to break Americans free of the government's stranglehold on the money supply, and make taxation impossible because the government won't know how much BitCoin is in your anonymous wallet or what income is going into it or what you're spending it on. Needless to say, none of that has happened, because the government got one whiff of that kind of thing and now mandates full exchange reporting of all transactions, plus using analytics to match activity to users. Anybody who handles crypto anywhere that touches the US is dead meat; there is nowhere you can put value that won't go the same way.
(There is also simply the issue that as you get older and wealthier, more and more people and industries have an incentive to sponge on you. From family to carers to hearing aid providers, everyone knows that the elderly are the easiest segment of society to milk.)
Fine china and furniture are things I recommend not because they keep their financial value but because they keep their actual value. Having bought them, they will stay basically as nice and useful and pleasant to use for the next 50 years. Likewise, the government cannot tax your memories, nor your social circle. If you are interested in time and autonomy then I would suggest attempting to arrange for sabbaticals now rather than saving up for retirement under circumstances that you do not yet know.
As a small point of order, I don't think social security will be gone - I just think it won't be 100% of what should be available, and I'd rather ignore it entirely than try to predict what the real percentage will be.
Fair. This is overlapping partially with my thoughts to the effect that, given the future is more radically uncertain than usual, and I don't have enough money to meaningfully aim for FIRE or something like that, it would be wise to obtain things now that have long-term utility in the event my salary drops sharply. So I've been thinking about what those might be.
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