THE BORE
General => The Superdeep Borehole => Topic started by: fistfulofmetal on June 13, 2016, 10:00:53 AM
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I'm still pretty young. I know I need to start planning for retirement now but I'm fucking stupid. I have a 401k and I'm putting money into it. I'm putting money in a savings account.
But what the fuck is an index fund. I've seen it referenced countless times as being the SMART THING TO DO. But what the fuck. How do I... do it? Do I have to choose something to invest in? Do I have to put a specific amount of money in? How?
I need someone who is smart to teach me how to be an adult in this specific aspect of life.
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http://bfy.tw/6F7c
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I can write out something lengthy a little later but short of it is this...
1) Index Funds are funds that are allocated in a way to mimic a particular market/index. For example, if you buy the Vanguard S&P 500 Index Fund then the fund is set up to purchase share of companies and have the holdings reflect the actual makeup of the S&P 500 exchange. The upside is that this is much easier to manage so fees are usually much less compared to your typical mutual fund. The managers aren't picking winners and losers in the stock market.
2) You can usually invest in these the same way you currently do in your 401k. Go to your Investments selections where you probably have some sort of targeted fund (2055, 2060, etc), you can choose index funds instead. Like Small Cap, Emerging Markets, S&P 500, etc.
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Someone saw Jon Oliver. ;)
Index funds track the market and are relatively low-risk unless the economy blows up.
They're better than a savings account because the interest on savings accounts is below inflation, while the various stock exchanges' growth outpaces inflation.
That's my understanding anyways. Someone feel free to correct.
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I'd wait until after the election to make sure you don't lose anything on the potential economic fuckery between now and then.
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They are an autopilot investment. You buy into it and it modestly grows (hopefully) until you retire because it was indexed to a market that (hopefully) grew.
They're popular because they're low information investments and because previous avenues of low information investment (savings accounts, certificates of deposit, et cetera) are worthless thanks to successive governments using interest rates as a tool of economic development.
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They are an autopilot investment. You buy into it and it modestly grows (hopefully) until you retire because it was indexed to a market that (hopefully) grew.
They're popular because they're low information investments and because previous avenues of low information investment (savings accounts, certificates of deposit, et cetera) are worthless thanks to successive governments using interest rates as a tool of economic development.
I base a portion of my worth in them as a kinda failsafe against the market :yeshrug
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I'd wait until after the election to make sure you don't lose anything on the potential economic fuckery between now and then.
Personally I disagree with timing the market for this type of thing. Historically people do better putting in a consistent amount regardless of the state of the market.
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I'd wait until after the election to make sure you don't lose anything on the potential economic fuckery between now and then.
Personally I disagree with timing the market for this type of thing. Historically people do better putting in a consistent amount regardless of the state of the market.
Yeah he's wrong. There is typically a boost in the time after a president is elected, then a steep decline when half their promises are not actually followed through.
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So am I actually picking a specific stock to put the money in? Also do I put a single amount in and just forget it or am I putting more and more money in over time?
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I've been telling my dad to just use an index fund for years but he loves the chase of finding hot stocks, paying to read Motley Fool, etc. Doesn't work out well for him outside of a few hits that justify everything else, of course.
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So am I actually picking a specific stock to put the money in? Also do I put a single amount in and just forget it or am I putting more and more money in over time?
No you're not picking a specific stock. You're picking a broad market to invest in - but more specifically your risk appetite. There's lots of room for fast growth in emerging markets but there's risk that those economies could blow up.
The 2nd question is another personal choice. But in general the advice is you should probably be putting in a recurring investment for these types of things. One time investments are trying to time the market or making a bet on a stock. These are long term investments so you should continue to invest and reap returns over the next 30 - 40 years readjusting your investments over that time as necessary.
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They are an autopilot investment. You buy into it and it modestly grows (hopefully) until you retire because it was indexed to a market that (hopefully) grew.
They're popular because they're low information investments and because previous avenues of low information investment (savings accounts, certificates of deposit, et cetera) are worthless thanks to successive governments using interest rates as a tool of economic development.
I base a portion of my worth in them as a kinda failsafe against the market :yeshrug
Against your other investments? I've seen more of that among HNWI with the waning utility of bonds for storing wealth, yeah. It's unfortunate that there aren't tons of alternatives, I guess REITs sort of fill the void.
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Does it really matter? No matter what you put your money into, a Jew is in control. :quark
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Just put your money into a good penny stock fistful. Lots of pump and dump should make it easy to exponentially increase your investment.
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Lots of pump and dump should make it easy to exponentially increase your investment.
Works for procreation too.
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Just put your money into a good penny stock fistful. Lots of pump and dump should make it easy to exponentially increase your investment.
I've been doing this with some cash I had sitting in my account.
Sophiris Bio last week. :omg
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They are an autopilot investment. You buy into it and it modestly grows (hopefully) until you retire because it was indexed to a market that (hopefully) grew.
They're popular because they're low information investments and because previous avenues of low information investment (savings accounts, certificates of deposit, et cetera) are worthless thanks to successive governments using interest rates as a tool of economic development.
thinking "high information" investments are better :P
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The only "information" that's foolproof is inside information :smug
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I didn't say they were better, fist asked what they were (which others answered quite well) and I added to that to contectualize why people were such evangelists for them since he seemed bemused by that.
I do think that the gold rush to invest with them is more or less recreating the trusts that gave way to antitrust laws, but that's a discussion for a different thread I think.
e: mac's ironic racism is actually ironically relevant to this subject too as part of the "only invest in index" pitch is playing on the popular prejudices against investment professionals.
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Gonna piggyback on Fistful's thread to say I want to start investing money with this platform:
https://www.wealthfront.com/
Mainly because of these features & benefits:
https://www.wealthfront.com/our-low-fees
https://www.wealthfront.com/tax-efficiency
https://www.wealthfront.com/proven-methodology
Someone feel free to tell me why I should or shouldn't invest my money on this platform.
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I use Vanguard. Works well for me. I have no idea about Wealthfront except that I see Tim Ferriss pimping it, which is a red flag to me :doge
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But it seems so promising. :doge
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I only read the tax section of that Wealth Front site (it being my background) and it seems like a site marketing to people who don't have a lot of experience paying affluence taxes. For example, there's nothing like loss carryover for dividend income, so always avoiding cap gains in favor of dividend income is ???.
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Ah, see. That's the kind of stuff I need to know.
I'm a total rube when it comes to most financial stuff. So, having non-rubes point out odd stuff is helpful. :doge
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I heard Wealthfront is good for $500-1000, higher than that Vanguard is the better bet. Wealthfront charges some decent fees after $10k I guess. I have an account there though.
When I strike it rich I'll probably go with Vanguard, which I've been told many times is the safest bet of any service.
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I'm happy with Vanguard. I use Acorns to do spare change investments automatically. It's a nice little "HEY LOOK AT HOW MUCH MONEY I HAVE NOW" thing. And I have a decent return on it so that helps too.
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I used to use Acorns and yeah it's nice for a little dopamine boost, but I kinda fell out of love with it. I wish it was bought by someone big, my biggest worry is that they're small and they're new so who knows what'll end up happening to them (and by extension my money.)
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Anyone here fuck with Robinhood?
Looks like "fun" but I don't believe you can do put options with it.