Financial Independence: Methods, Mindsets and Cloth Diapers

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Financial Independence: Methods, Mindsets and Cloth Diapers

ntan1: Apr 29, 2009; sempai noticed me

baquerd posted:

I think I understand you now, but I'm not sure if I agree. You'd need an unprecedented stock market depression to really hurt your net compounding early on in your life. It's the later stage compounding towards retirement age that is the crucial point where a poorly diversified portfolio can wreck your retirement plans.

Correct. At a young age, you distinctly want the stocks to crash as hard as possible.

# ¿ Jul 17, 2013 22:52

Adbot: ADBOT LOVES YOU

# ¿ Apr 26, 2024 21:54

ntan1: Apr 29, 2009; sempai noticed me

Chadzok posted:

Investment Question
I think I'm ready to hand over some cash to a Vanguard Index Fund. Anyone with experience here, how does this fit into your portfolio? What percentage of your total investments do you place here? do they give regular 'dividends' or is it more like a bank account that accrues interest? This is a long-term investment, right? I shouldn't expect 7% returns my first month, but over the long-run (5-10 yrs) it should be that or higher? Is it better to put weekly deposits or irregular lump sums?
Total newb, just want to make sure I understand it all correctly.

5-8 years is not necessarily long term

Make sure you real the OP in the retirement thread, as this is one of the areas where you want to make sure you're not making mistakes before putting money in.

# ¿ Jul 23, 2013 08:29

ntan1: Apr 29, 2009; sempai noticed me

DanManIt posted:

Just a FYI but the average return of the market at 7-8% is after inflation is factored in. The reason for the 4% safe withdrawal rate is because that is the average dividend yield.

All of this is derived from long term trends (20+ years) and that's why the financial independence crew likes to use it.

5-6%, after inflation is factored in.

There may be specific years, but on average over the long term it has been above.

# ¿ Aug 3, 2013 02:37

ntan1: Apr 29, 2009; sempai noticed me

Jeffrey posted:

I can't imagine companies would be too eager to hire someone leaving after a few months without a good reason.

Depends on the reason and your skills in software engineering.

In any case, it's possible to save 50% of your salary in the bay area or NYC, but it also depends on company. Also, you'll probably have to live with roommates.

# ¿ Oct 18, 2013 05:31

ntan1: Apr 29, 2009; sempai noticed me

Cicero posted:

I had a 'realization' the other day that I want a second opinion on. I had previously been thinking that I'd want to wait to buy a house when the market is weak, because of course then home prices are lower. Sounds logical enough, right? Except then I realized, wait, most of my money while saving for a house will be in stocks...which move roughly in tandem with the housing market.

So if I wait until the housing market tanks, it may well be that the stock market tanks too, nullifying any housing price advantage, or possibly leaving me even worse off than if I had bought during a normal or strong market. Does that make sense?

The stock market does not move completely in tandem with the housing market. Especially in the Bay Area, where when the stock market dips, the housing market barely dips.

# ¿ Mar 21, 2014 05:54

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Financial Independence: Methods, Mindsets and Cloth Diapers