Any Financial Experts? - aka, what should I do with my money?

Ok, first off, I hope you are eating mouthfuls of salt as you read all this, because this is a very dangerous thread. I don't think anyone has identified themselves as an actual advisor, so you really should only be using the recommendations in this thread as a list of things to educate yourself about. Group suggestions from the internet are great for frivolous things like $1000 headphone amps, but actual sound financial advice that is tailored to your need and risk profile should be built by someone who knows (or gets to know) you personally. I was actually a licensed financial advisor as well as mutual fund industry insider for several years and I couldn't responsibly give you any more advice in this forum other than to educate yourself and know yourself.

Jason has perfectly expressed the path that I discovered after almost a decade in corporate america, and one which has already enriched my life beyond imagination (even if the actual financial enrichment has been slow to come). Entrepreneurship is most certainly not a path for everyone - it is more a way of life than an investment or wealth building strategy, but the core principle of creating value for others is absolutely at the heart of finding success on many different levels.

Take a good, honest look at yourself and try to figure out what you really need/want in life to die happy. Get a good handle on your risk tolerance. Learn about the basics of investing, real estate, and hell small business/entrepreneurship and see what makes the most sense in light of what you want and what you are willing to risk to get it. Once you know that, you can get specific help from an expert to build a plan or get you started.

 

Send most of it to me. As a buddhist, I'll be sure to spend it in ways that only promote happiness.

 

Damn guys, lots of stuff to think about and I really hope this is useful info for others in the crowd. Great long term advice.

I was more looking for info on what I could do with my savings in the short term to earn more than the like .15% my current savings account is earning. Doing some research about the best you can get from a savings account in America right now is 1% and the best you can manage from a 1-2 year CD is 1.5%.

I just got out of the Air Force, I have no job and will be starting school in a few weeks. Haha so I'm not really looking for ira or 401k stuff. I was just hoping the money I have in the savings that will slowly be whittled away while going to school, could do a bit more for me, but I guess just keeping it in the savings account, maybe find a better one, is the best idea.

 

It also depends on what you already have. If you're renting, get a property for yourself first. Hell, it could be a 4 unit in which you would occupy too. Property management is something you would have to learn though. If you're willing to put up with some inconveniences and time (minimal, way less than a full time job), someone else is paying off the property for you and you get money left over. Real estate for the next few years is VERY stable. We have basically been at rock bottom for the past few years and the only direction from here is up.

Entrepreneurship? Probably the best way. I definitely agree with that. Businesses failing? Most of those people never should have started a business in the first place because they didn't have what it takes.

 

To be honest, you aren't going to find any safe, short term instruments that will net you much more, especially if you need liquidity. You might find a money market fund that has low redemption fees, but it won't be much better. Focus on school and increasing your earning capacity. That will get you far more than a couple percentage points over the next couple years.

 

Investing over the short term is inherently risky. While I do think that buying index funds is the best option, they have a very high variance in the short run. As a rule of thumb I wouldn't invest in the stock market if I were planning to take my money out in less than 5 years. The stock market IS unpredictable in the short term, but has been consistently growing over the longer term. As long as you aren't greedy it really isn't that difficult to determine when the best time to take your money out is. Just be willing to be flexible and patient while you wait out the market cycles.

If you do find a solution to your problem I would love to know as I have been facing a similar predicament. Perhaps you can gain some comfort knowing that there really isn't much you can do in your situation and consider investing a portion of your money over the longer term.

When you are ready, just make sure you educate yourself. Seeing a financial advisor is a great idea, but they are usually sales people more than financial experts. Do your research first and find someone who fits in with your investment ideals/goals rather than taking any advice they offer at face value.

 

Geert Hofstede wrote about (humnn) culture and one often overlooked aspect is long-term orientation versus short-term orientation.

People with dedicated long-term oriented plans in societies that emphasis "now, now, now" are often under-appreciated. Focus on where you want to be on the long-term and you can still enjoy the small indulgences. I love coffee and this hobby but besides that I am saving again. I do not want to be broke again...

 

Better call Saul.

 

Just do what I do and spend all your money while waiting for your parents to die... then inherit and retire.

My time in stocks was harrowing. I bought 5 shares of Go Pro right before Christmas.. I was up like $3.00, and now I'm down like $20. Don't trust stocks.

I did buy enough Activision to tell the WoW GMs that I pay their f-ing salary, but it didn't stop me from getting banned for botting. Also, don't bot in MMOs. But, if you do, make sure you paid your sub with PayPal, as I did, because then, like me, you can get your money back when they ban you. Did I mention those jerks work for ME? I HAVE FIVE SHARES.

 

Oh, just to be clear, I am not a financial expert... technically. But once I read a quote that said something like nobody really knows anything, so to hell with it.

 

I'm about to graduate college, and all I can ever think is why the f**k did we not learn half this shit???

 

Seriously, check out reddit's personal finance subreddit.

 

Read Michael Lewis' "The Big Short", master accountancy basics and manage your finances and valuables. It hurts to be broke and having to sell off gear you really worked hard for.

I once trusted the wrong people and almost ended on the street, never again.

 

You have a lot of decisions coming up, and your peak earning years are still ahead of you. It would be incredibly foolish to lose out on compound interest by not starting to invest future earnings, however, especially because you have an emergency fund squared away and presumably(?) little-to-no debt. If we go into a recession and the stock market tanks, it's great for you because you'll be buying stock at a lower price as you begin your career (assuming the recession isn't so bad you can't actually find work).

I highly recommend reading this short PDF booklet by William Bernstein: If You Can: How Millenials Can Get Rich Slowly. Bernstein is a well-respected, no-nonsense author, and he also refers you out to other staples in the investment literature (including one of my favorites, The Millionaire Next Door). While in college, I read The Automatic Millionaire by David Bach for a personal finance course, and it really opened my eyes to what I was missing out on later in life by my financial choices then.

When you are ready to begin investing, focus only on the things you can control:

1. Minimizing debt,
2. Maximizing your savings rate,
3. Maintaining long-term discipline,
4. Minimizing your investment expenses, and
   
5. Choosing a diversified asset allocation comprised of broad market index funds and real property. (Your asset allocation alone, not which particular investments you pick within an asset class, determines roughly 90% of your results over time.)

Tune everything else out, including naysayers and market analysts.

 

Great list. The only things I'd add is that if the market is way down (15% or more) and you have cash, find companies like GE, GM, etc. that are down with the market, and put money into them. They're not going to go away so there's no real downside risk if they didn't already go bankrupt, and the upside is above average.

The second thing is that if you get a job that pays stock options/grants for various things, don't hold on to them. That's my Dad's one major regret about MCI, there were signs of the accounting problems, but he was holding his stock grants and options for more profit, and missed out on a HUGE payout. Take the money, invest it in an index fund or hold it in reserve.

 

Re: #1: We'll have to agree to disagree here. I would rather accelerate my savings rate on my regular contribution schedule and/or tweak my allocation for new contributions so they are slightly more stock-heavy after a big drop (which I also don't think 15% qualifies as).

Re: #2: Definitely agree. This also applies to people entering the tech companies space. Amazon, for instance, offers large awards in restricted stock units which vest over time to entice programmers to stick around. I wouldn't keep more than 5% of my total portfolio in any one company, even Amazon, and in most instances would sell such units as they vest.