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How Many of You Save Money?

#21

I think this may be changing. I put £100 in a fund, that was my start, and no large fees. There are many accessible and relatively cheap platforms for getting your foot in the door.

The obvious risks are that its riskier than having your money sit in a savings account making 0.2% (or effectively losing 1.8-2.8%) every year.

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#22

I’m to the point where I spend less than half of my monthly income and i don’t have a reason to spend more.

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#23

Sure, and the earlier you start the better.

It isn’t riskier, if you put your money in a low-expense index fund. The market outperforms savings accounts by a staggering degree. Lets put it this way, if every year was like 2017 I could retire in six years.

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#24

The stocks i have are generally from companies i work for and get at a discount or companies i know well and understand and pay out dividends that i want from them. I don’t put money in them to beat the market. That’s a game that’s difficult to play and many people lose at.

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#25

Very happy to see this.

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#26

Oh, that’s fine then. But I would suggest not focusing on dividends, because you’re paying taxes on them. I couldn’t give a fig about dividends, I want the value to go up.

The point of indexing your money is you aren’t trying to beat the market. The index is the market. You just ride the wave, you aren’t trying to outsmart anybody because-- and here’s the secret-- nobody knows anything special. That’s the myth of the sophisticated investor. Unmanaged index funds beat managed funds over time, every time.

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#27

This is whats good about them, and i think what makes it easy for almost anyone to invest and get a much better return on their money without needing to know a whole lot, just enough to understand their investment.

Or both :smile: I have such a small amount im not going to be paying tax on them for a while, and when or if i do hit the limit ill move them to an ISA to get the tax free benefit. The small portion of single stocks i do have make up a small portion of my portfolio (… as i wrote that i realised… i have become “that guy” who talks about his “portfolio” what have i become), and they’re from a small number of long standing well established stable companies who make money every year :smiley: plus, the dividends can pay for Netflix :rofl:

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#28

That isn’t quite right-- you see, low-expense, unmanaged index funds are the best investment vehicle for everybody, unless you’re approaching retirement age and want to strictly curtail your exposure to risk.

They’re the best investments because they consistently outperform every other investment over time available while also being extremely diversified (as they’re indices) to moderate risk.

I’m not exactly ancient but I know a lot of you guys are younger than me so let me just say the earlier you start the better. Compound interest is magical. The longer you’re in the game, the better off you’ll be later on.

Might not seem like a big deal now, but depending on your job and salary, your decision to contribute 11% to your 401k at age 22 could mean a couple hundred thousand dollars at 40 and millions at 65. It’s an important decision.

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#29

Out-of-control Federal public debt means ever-increasing pressure on the Fed to keep interest rates near the zero-bound. Saving doesn’t make sense any more. Stock market volatility is just algos churning — no place for humans to be.

My strategy is to invest in reducing recurrent expenses. Credit card — gone. Home loan — gone. Student loan — gone. Completely debt free. Low-tax acreage in the country — paid for in cash. New house — paid for in cash. Enough solar panels to generate credits each quarter — next up. Large tanks to reduce water bills to zero — after that. Then focus shifts to the garden and pond (to reduce grocery bills).

I don’t like to gamble in financial markets. I don’t get hot and bothered pouring over spreadsheets. Numbers on screens don’t impress me. I prefer money in my pocket, a good roof over my head, water in the tank, food on the table, and as few bills in the mail as possible.

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#30

Oh i’m not really going to disagree, it does depend on peoples appetite though, and while yes, tracking the market will basically do everyone good, that does also rely on people who arent donig that. But I think thats a complex discussion, so i will generally just agree, a global index tracker is pretty much the best bet for everyone (risk tolerance dependant).

It is absolutely ridiculous how much of a difference 1% can make, and how much of a difference saving 1 year earlier can make.

I think the saying is the best time to invest was yesterday, the second best time is now. and I think that’s generally true. The earlier the better, the best is right now.

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#31

Contributions to my investment accounts exceed all of my other expenses combined.

Being cheap as hell, combined with taking saving seriously adds up fast.

Indexing is probably the best route for most people, but I prefer to manage my portfolio myself for… reasons.

Most of my positions are long term holds, but I’ll occasionally make a swing trade here and there. Most of my holds are dividend bearing, especially the REITs.

Happy with my setup, more or less. I tweak by making additions to keep things balanced but don’t need to change things up very often.

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#32

You’re basically the perfect person for a global tracker then. There’s none of the above, you put a little money aside in an index tracker for 30 years and then stop working because you don’t need to anymore. Especially with your goal of having extremely low expenditure in the long run.

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#33

Reducing expenses is fantastic. But keeping your money in the mattress doesn’t put it to work for you.

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#34

I filled up my TSAP contribution limit and last year was the first where I also started investing in a RRSP. I have a now substantial saving account (also a TSAP) which is there for emergency situation, but will never pick in because I would therefor consider I failed at money :joy: So ya at the moment the saving goal is trying to have a down-payment ready all by myself.

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#35

Could you explain the terms? What country does that relate to? (not heard of them before).

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#36

In Canada, TSAP is tax-free saving accounts with yearly contribution limit and RRSP is the registered retirement saving plan (401k for the US).

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#37

The TFSA works basically like a ROTH IRA in the states except it isn’t tied to retirement.

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#38

Ah ok so they may be a close equivalent to an ISA in the UK for tax free savings. And a SIPP (self invested personal pension) or company based pension (a company can also contribute to your own SIPP here, but they are relatively new still).

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#39

I don’t keep it under the mattress. I spend it on chickens… which are a 410% ROI. I spend it on tractors… which are a 25% ROI. I spend it on seedlings… which sustain my ability to heat my house for free.

There’s a long list of real, productive assets that I can acquire with guaranteed returns far greater than what can be had on financial markets. That’s what I spend savings on.

No matter when the next recession strikes, or how hard it bites, nothing I buy will be affected.

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#40

Out of curiosity, what’s your plan for continued financial injections at retirement and old age?

I like your current investments though, I would love to have the land to extend my ability to be more self sustainable. I don’t even have land yet :sob:

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