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The Stock Market/Personal Finance Thread
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Author:  thodoks [ Tue Nov 10, 2009 6:44 pm ]
Post subject:  Re: The Stock Market/Personal Finance Thread
given2trade wrote:
Orpheus wrote:
I have no extra income so I have no questions to ask in this thread, but it's a good read nonetheless.


Financial questions are just as important (if not more so) for people with debt (not saying you have any). Should I spend money on this? Am I living in an apartment that costs too much? Is it smart to be paying 29.7% credit card interest so I can go to a Pearl Jam concert? I'm no Suze Orman but she does decent work and more people should listen to her/read her stuff even if I can't stand her.

So you're saying I should go buy art?
Author:  given2trade [ Tue Nov 10, 2009 6:45 pm ]
Post subject:  Re: The Stock Market/Personal Finance Thread
pnjguy wrote:
given2trade wrote:
pnjguy wrote:
given2trade wrote:
pnjguy wrote:
what would you do financially in this situation?

I am 26 years old, and make about $50,000 a year.
I have close to $30,000 in savings.
Value of my 401k is about $3,000.
Only debt i have is a montly $400 car payment.


Do i rent, or try to buy a place? Save more? How should I allocate my funds with all this uncertainty in our financial structure. Invest abroad?


You are way ahead of most people your age. You have no "net" debt as the car payment is backed by an asset (your car).

It's hard for me to tell you the best place to allocate your savings. What are your near term cash needs? How much do you save annually off of your salary? Do you have kids? Are you expecting kids? Married?

How long do you plan on living where you currently live? How much are you paying on rent? What would a condo/home cost that is similar?


I'm going to need about $3,000 for additional schooling, but thats going to be spread out over an 18 month period and will boost my salary another 5k a year.

No kids(knock on wood), and don't expect to get married for at least another 4-5 years. I'm currently living rent-free.

So basically i don't have any obligations other than some additional schooling. I don't HAVE to do anything in the near future.


Well, I see little reason for you to go buy a home. Why give up the flexibility? You can keep on saving more living rent free. A financial advisor would probably tell you to start investing your savings and excess earnings I good way to get started would be to take a small amount (maybe $5000 or $10000) and buy an index fund. Going forward, every 3 or 6 months, you should add to that index fund with your earnings. In time, 20, 30, 40 years, by starting now - you will see real compounding, at least better than what you will get by it sitting in cash (the worst). To learn more about index funds, google it. It's a non sexy way of investing in the stock market with extremely low fees.


It seems index funds are a giant blob of money that moves slow, but safe and the costs are minimal. Whats the advantage over a long-term CD, and compounding that way? I'm assuming index funds yield higher returns. And i have a 401k which is being matched, so the earnings in 30-40 years isn't really something i'm looking for.


The principal of investing is RISK/REWARD. If the risk is 0, the reward should be as well. As you move down the line from riskless to risky, you, theoretically, get higher returns but MORE VOLATILITY in you returns.

Practical example: Stock market is the most "risky" asset class but has returned the most over an extended period of time, usually 8-10% a year. However, if you decided to invest in 2008, you could be down 25-40% on your money right now. It takes a lot of 8% years to get back a 25% loss. This is why people say "never invest what you need in the near future". "Near future" can be defined differently by different people but is usually the next 5 years (maybe 10).

A CD has LOW risk and thus LOW reward. The difference between making 2-3% a year and 8% a year over 20 or 30 years is massive. You can play around with a compound calculator to see:

http://www.moneychimp.com/calculator/compound_interest_calculator.htm

An Index Fund is a low risk/low cost way to invest in a HIGH RISK asset class, equities. The stock market is not low risk. You can lose a lot of money in a very short period of time. However, by investing in an index fund you are selecting the most diversified, least risky way to do it. If you put money in regularly, over time, you are almost assured to beat inflation/other asset classes. You are being compensated for taking risk (volatility) while someone who buys a CD or keeps their money in cash has experienced very little risk (volatility).
Author:  washing machine [ Tue Nov 10, 2009 6:47 pm ]
Post subject:  Re: The Stock Market/Personal Finance Thread
pnjguy wrote:
what would you do financially in this situation?

I am 26 years old, and make about $50,000 a year.
I have close to $30,000 in savings.
Value of my 401k is about $3,000.
Only debt i have is a montly $400 car payment.

Lucky!
Author:  given2trade [ Tue Nov 10, 2009 6:49 pm ]
Post subject:  Re: The Stock Market/Personal Finance Thread
washing machine wrote:
pnjguy wrote:
what would you do financially in this situation?

I am 26 years old, and make about $50,000 a year.
I have close to $30,000 in savings.
Value of my 401k is about $3,000.
Only debt i have is a montly $400 car payment.

Lucky!


Actually, nothing lucky about it at all. He probably worked hard and instead of spending money on things he didn't need, he saved it. It's actually the exact opposite of luck...skill?
Author:  meatwad [ Tue Nov 10, 2009 6:50 pm ]
Post subject:  Re: The Stock Market/Personal Finance Thread
I have a 1/2 oz. American Eagle gold coin that I am thinking of selling. Is now the right time? How should I go about selling it?
Author:  pnjguy [ Tue Nov 10, 2009 6:51 pm ]
Post subject:  Re: The Stock Market/Personal Finance Thread
given2trade wrote:
washing machine wrote:
pnjguy wrote:
what would you do financially in this situation?

I am 26 years old, and make about $50,000 a year.
I have close to $30,000 in savings.
Value of my 401k is about $3,000.
Only debt i have is a montly $400 car payment.

Lucky!


Actually, nothing lucky about it at all. He probably worked hard and instead of spending money on things he didn't need, he saved it. It's actually the exact opposite of luck...skill?


well, it helped that my parents paid for my college education. Not everybody can say that. What scares me is the devaluation of the dollar as the fed monetizes their debt. How do we leap that hurdle. Investing abroad? Buy Gold? That seems safer than a lot of other avenues.
Author:  washing machine [ Tue Nov 10, 2009 6:51 pm ]
Post subject:  Re: The Stock Market/Personal Finance Thread
given2trade wrote:
washing machine wrote:
pnjguy wrote:
what would you do financially in this situation?

I am 26 years old, and make about $50,000 a year.
I have close to $30,000 in savings.
Value of my 401k is about $3,000.
Only debt i have is a montly $400 car payment.

Lucky!


Actually, nothing lucky about it at all. He probably worked hard and instead of spending money on things he didn't need, he saved it. It's actually the exact opposite of luck...skill?

I'm working hard too, though. We all are.
Author:  thodoks [ Tue Nov 10, 2009 6:52 pm ]
Post subject:  Re: The Stock Market/Personal Finance Thread
meatwad wrote:
I have a 1/2 oz. American Eagle gold coin that I am thinking of selling. Is now the right time? How should I go about selling it?

Send me a PM, friend.
Author:  given2trade [ Tue Nov 10, 2009 6:58 pm ]
Post subject:  Re: The Stock Market/Personal Finance Thread
washing machine wrote:
given2trade wrote:
washing machine wrote:
pnjguy wrote:
what would you do financially in this situation?

I am 26 years old, and make about $50,000 a year.
I have close to $30,000 in savings.
Value of my 401k is about $3,000.
Only debt i have is a montly $400 car payment.

Lucky!


Actually, nothing lucky about it at all. He probably worked hard and instead of spending money on things he didn't need, he saved it. It's actually the exact opposite of luck...skill?

I'm working hard too, though. We all are.


Where did I say you didn't work hard? I commented on your "Lucky!". He is not lucky, unless he hit the lottery. I'm going to go with that not being the case. Anyway, you're just trolling.

RE: Devaluation of the dollar. By owning equities, you are somewhat insulated there. The stock market will go up as the dollar goes down (that's what's been happening the last few months). The reason for this is a large amount (almost half) of corporate earnings are made overseas. So even if it's a U.S. listed, domiciled company, as the the dollar declines the value of their business overseas has not declined so has to be worth "more" in U.S. dollars. It's confusing but the only way to lose money in a hyper inflation scenerio is to own government bonds or be in cash. Holding cash is actually the worst thing to do.

RE: Gold coins. Kris is better explaining the best way to buy/sell those.
Author:  washing machine [ Tue Nov 10, 2009 7:01 pm ]
Post subject:  this was the best post i've read from you in 2 days
Sorry Matt.
Author:  given2trade [ Tue Nov 10, 2009 7:02 pm ]
Post subject:  Re: The Stock Market/Personal Finance Thread
pnjguy wrote:
given2trade wrote:
washing machine wrote:
pnjguy wrote:
what would you do financially in this situation?

I am 26 years old, and make about $50,000 a year.
I have close to $30,000 in savings.
Value of my 401k is about $3,000.
Only debt i have is a montly $400 car payment.

Lucky!


Actually, nothing lucky about it at all. He probably worked hard and instead of spending money on things he didn't need, he saved it. It's actually the exact opposite of luck...skill?


well, it helped that my parents paid for my college education. Not everybody can say that. What scares me is the devaluation of the dollar as the fed monetizes their debt. How do we leap that hurdle. Investing abroad? Buy Gold? That seems safer than a lot of other avenues.


Everyone is born with a different hand. Some are born rich, some poor. Some in a 1st world country, some 3rd. Some smart, some dumb. In the end, you need to do the best you can with the tools you have. Regardless of the fact that your parents paid for college, which I agree is huge, you chose not to spend your excess income but save it. Nobody made that decision for you. I'm sure you could easily find a way to spend $30,000. It's a mature decision saving vs. spending.
Author:  thodoks [ Tue Nov 10, 2009 7:06 pm ]
Post subject:  Re: The Stock Market/Personal Finance Thread
pnjguy wrote:
given2trade wrote:
washing machine wrote:
pnjguy wrote:
what would you do financially in this situation?

I am 26 years old, and make about $50,000 a year.
I have close to $30,000 in savings.
Value of my 401k is about $3,000.
Only debt i have is a montly $400 car payment.

Lucky!


Actually, nothing lucky about it at all. He probably worked hard and instead of spending money on things he didn't need, he saved it. It's actually the exact opposite of luck...skill?


well, it helped that my parents paid for my college education. Not everybody can say that. What scares me is the devaluation of the dollar as the fed monetizes their debt. How do we leap that hurdle. Investing abroad? Buy Gold? That seems safer than a lot of other avenues.

I know this is Matt's thread, but lemme share this with you (I'll spare you all the commodity stuff): we are headed for interesting times, and rather than put all your eggs in any one investment basket, put them in a lifestyle basket. That is, there is no way to know exactly how this fiscal house of cards will topple. It could go any number of ways (though the endgame is pretty much known). The best course, then, is to remain as flexible as possible and have as few commitments (kids, house, debt, etc) as possible so as to be able to take advantage of whatever opportunities do present themselves whereever and whenever they present themselves.
Author:  pnjguy [ Tue Nov 10, 2009 7:22 pm ]
Post subject:  Re: The Stock Market/Personal Finance Thread
thodoks wrote:
pnjguy wrote:
given2trade wrote:
washing machine wrote:
pnjguy wrote:
what would you do financially in this situation?

I am 26 years old, and make about $50,000 a year.
I have close to $30,000 in savings.
Value of my 401k is about $3,000.
Only debt i have is a montly $400 car payment.

Lucky!


Actually, nothing lucky about it at all. He probably worked hard and instead of spending money on things he didn't need, he saved it. It's actually the exact opposite of luck...skill?


well, it helped that my parents paid for my college education. Not everybody can say that. What scares me is the devaluation of the dollar as the fed monetizes their debt. How do we leap that hurdle. Investing abroad? Buy Gold? That seems safer than a lot of other avenues.

I know this is Matt's thread, but lemme share this with you (I'll spare you all the commodity stuff): we are headed for interesting times, and rather than put all your eggs in any one investment basket, put them in a lifestyle basket. That is, there is no way to know exactly how this fiscal house of cards will topple. It could go any number of ways (though the endgame is pretty much known). The best course, then, is to remain as flexible as possible and have as few commitments (kids, house, debt, etc) as possible so as to be able to take advantage of whatever opportunities do present themselves whereever and whenever they present themselves.


It's scary that it has to be that way. It just seems that everything that we were taught growing up as far as building your life is so out-dated and short-sided. The problem is, will the end happen in our lifetime. Betting against that is the greatest risk of them all.
Author:  washing machine [ Tue Nov 10, 2009 7:30 pm ]
Post subject:  Re: The Stock Market/Personal Finance Thread
pnjguy wrote:
thodoks wrote:
pnjguy wrote:
given2trade wrote:
washing machine wrote:
pnjguy wrote:
what would you do financially in this situation?

I am 26 years old, and make about $50,000 a year.
I have close to $30,000 in savings.
Value of my 401k is about $3,000.
Only debt i have is a montly $400 car payment.

Lucky!


Actually, nothing lucky about it at all. He probably worked hard and instead of spending money on things he didn't need, he saved it. It's actually the exact opposite of luck...skill?


well, it helped that my parents paid for my college education. Not everybody can say that. What scares me is the devaluation of the dollar as the fed monetizes their debt. How do we leap that hurdle. Investing abroad? Buy Gold? That seems safer than a lot of other avenues.

I know this is Matt's thread, but lemme share this with you (I'll spare you all the commodity stuff): we are headed for interesting times, and rather than put all your eggs in any one investment basket, put them in a lifestyle basket. That is, there is no way to know exactly how this fiscal house of cards will topple. It could go any number of ways (though the endgame is pretty much known). The best course, then, is to remain as flexible as possible and have as few commitments (kids, house, debt, etc) as possible so as to be able to take advantage of whatever opportunities do present themselves whereever and whenever they present themselves.


It's scary that it has to be that way. It just seems that everything that we were taught growing up as far as building your life is so out-dated and short-sided. The problem is, will the end happen in our lifetime. Betting against that is the greatest risk of them all.

As far as the current environment, I think this is a once in a generation opportunity to buy stocks. However, I have no idea where the bottom will be and I think we will be in a bad recession for at least 2 years.
Author:  given2trade [ Tue Nov 10, 2009 7:32 pm ]
Post subject:  Re: The Stock Market/Personal Finance Thread
thodoks wrote:
pnjguy wrote:
given2trade wrote:
washing machine wrote:
pnjguy wrote:
what would you do financially in this situation?

I am 26 years old, and make about $50,000 a year.
I have close to $30,000 in savings.
Value of my 401k is about $3,000.
Only debt i have is a montly $400 car payment.

Lucky!


Actually, nothing lucky about it at all. He probably worked hard and instead of spending money on things he didn't need, he saved it. It's actually the exact opposite of luck...skill?


well, it helped that my parents paid for my college education. Not everybody can say that. What scares me is the devaluation of the dollar as the fed monetizes their debt. How do we leap that hurdle. Investing abroad? Buy Gold? That seems safer than a lot of other avenues.

I know this is Matt's thread, but lemme share this with you (I'll spare you all the commodity stuff): we are headed for interesting times, and rather than put all your eggs in any one investment basket, put them in a lifestyle basket. That is, there is no way to know exactly how this fiscal house of cards will topple. It could go any number of ways (though the endgame is pretty much known). The best course, then, is to remain as flexible as possible and have as few commitments (kids, house, debt, etc) as possible so as to be able to take advantage of whatever opportunities do present themselves whereever and whenever they present themselves.


This is not my thread. Please, please, participate. The only thing I ask is to try to keep all the advice practical. All "theory" stuff should go into the econ thread.
Author:  Stephen_Malkmus [ Tue Nov 10, 2009 7:39 pm ]
Post subject:  Re: The Stock Market/Personal Finance Thread
Dead serious: Should I sell my Patrick Roy Autograph hockey card now or wait 10 years down the road? I can get at least 500$ for it, but it would most likely sell around 1200 to 1500$. The rarity of this card will always be there - there are only 2 of its kind out there. Will the collectors market crash anytime soon? I probably know the answer to this question, but i would love to hear this from a (presumably) non card collector.

cheers,
Matt
Author:  given2trade [ Tue Nov 10, 2009 7:40 pm ]
Post subject:  Re: The Stock Market/Personal Finance Thread
washing machine wrote:
pnjguy wrote:
thodoks wrote:
pnjguy wrote:
given2trade wrote:
washing machine wrote:
pnjguy wrote:
what would you do financially in this situation?

I am 26 years old, and make about $50,000 a year.
I have close to $30,000 in savings.
Value of my 401k is about $3,000.
Only debt i have is a montly $400 car payment.

Lucky!


Actually, nothing lucky about it at all. He probably worked hard and instead of spending money on things he didn't need, he saved it. It's actually the exact opposite of luck...skill?


well, it helped that my parents paid for my college education. Not everybody can say that. What scares me is the devaluation of the dollar as the fed monetizes their debt. How do we leap that hurdle. Investing abroad? Buy Gold? That seems safer than a lot of other avenues.

I know this is Matt's thread, but lemme share this with you (I'll spare you all the commodity stuff): we are headed for interesting times, and rather than put all your eggs in any one investment basket, put them in a lifestyle basket. That is, there is no way to know exactly how this fiscal house of cards will topple. It could go any number of ways (though the endgame is pretty much known). The best course, then, is to remain as flexible as possible and have as few commitments (kids, house, debt, etc) as possible so as to be able to take advantage of whatever opportunities do present themselves whereever and whenever they present themselves.


It's scary that it has to be that way. It just seems that everything that we were taught growing up as far as building your life is so out-dated and short-sided. The problem is, will the end happen in our lifetime. Betting against that is the greatest risk of them all.

As far as the current environment, I think this is a once in a generation opportunity to buy stocks. However, I have no idea where the bottom will be and I think we will be in a bad recession for at least 2 years.


You're a douche and I'm foeing you.
Author:  given2trade [ Tue Nov 10, 2009 7:43 pm ]
Post subject:  Re: The Stock Market/Personal Finance Thread
Stephen_Malkmus wrote:
Dead serious: Should I sell my Patrick Roy Autograph hockey card now or wait 10 years down the road? I can get at least 500$ for it, but it would most likely sell around 1200 to 1500$. The rarity of this card will always be there - there are only 2 of its kind out there. Will the collectors market crash anytime soon? I probably know the answer to this question, but i would love to hear this from a (presumably) non card collector.

cheers,
Matt


About 15 years ago, I had a sports card business. I used to set up at shows and wholesale autographs. I have not been involved since the mid 90's, however.

In general, sports cards make for horrible investments. However, a very rare card that has been around for a while (it's value is stable and it's not the "hot" thing) is a decent asset. I'd rather own a cash producing business or an asset that has economic value. I have no idea if you should sell your card or not.
Author:  thodoks [ Tue Nov 10, 2009 7:56 pm ]
Post subject:  Re: The Stock Market/Personal Finance Thread
I like this thread.
Author:  Stephen_Malkmus [ Tue Nov 10, 2009 7:59 pm ]
Post subject:  Re: The Stock Market/Personal Finance Thread
given2trade wrote:
Stephen_Malkmus wrote:
Dead serious: Should I sell my Patrick Roy Autograph hockey card now or wait 10 years down the road? I can get at least 500$ for it, but it would most likely sell around 1200 to 1500$. The rarity of this card will always be there - there are only 2 of its kind out there. Will the collectors market crash anytime soon? I probably know the answer to this question, but i would love to hear this from a (presumably) non card collector.

cheers,
Matt


About 15 years ago, I had a sports card business. I used to set up at shows and wholesale autographs. I have not been involved since the mid 90's, however.

In general, sports cards make for horrible investments. However, a very rare card that has been around for a while (it's value is stable and it's not the "hot" thing) is a decent asset. I'd rather own a cash producing business or an asset that has economic value. I have no idea if you should sell your card or not.


Thanks for the info nonetheless - i guess my presumption was wrong :lol:

As someone who's collected for 17+ years, I actually have a rather small collection of cards. I only collect the stable value type and not the "hot" player of the moment. Very good point made by you, sir.
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