There's an awful lot of negativity here, but as someone who's 55 and has earned a good wage since I was 17, I really wish I had taken investing more seriously from the very beginning. While I knew of compound interest, I really didn't understand it until like a decade ago. If I'd started putting 5% of my money into a target retirement plan from 17, I'd be retired now. As it is I'm not doing badly, but I really wish I'd started earlier.
So I say: Good on you.
Somewhat related: I just got my son set up with a custodial account and put his "kid retirement" plan into it, and let him pick a couple stocks to put some money into, and put the majority of it into target retirement and a few stocks and EFTs, so he can get some ideas of how they perform, make it a little fun with picking things he's into, and also follow ups and downs of the market, all of which I think is good education.
Investing for retirement at 17 is a bad idea! At 17 you should still be thinking about investing in education - the right education investment today will pay back far more than any other monitory investment. There are of course bad education investments, and some are not willing to study even more (or not able to pass a good education course), in that case retirement might be the best investment you can make, but it should not be your first choice.
A different reply said they waited until 26 to start - that is probably about the right time to start saving for retirement. Maybe a little late, but close enough. Before about that age you are still getting started and so you have little spare cash. You need to pay off school loans (if you took any). You need to save for down payment on a house, and buy a lot of those will last a lifetime household items everyone needs. You should be thinking about marriage and saving for it (even if you don't get legally married most people will live with someone else and should be planning on how to make that life work).
Most important: you don't know how long you will live. Save for the future, but not everything - you have no guarantee you will live to tomorrow - if you are under 60 odds are strongly in favor of it, but people die young all the time. You should have a little play money as well in your budget. Go climb Mt Fuji while your body is young and healthy enough to do so (I picked a random activity here, you should decide what you care about, not rush to Japan)
This is true of most money behaviors! My mom taught me the same thing about giving.
And even today, knowing way more about personal finance than I did at the start of my working life, I'm still amazed at how blocking out money in the budget astronomically increases your chances that that money actually goes to the thing you want.
They mean don't wait till you're rich to start giving charity. Just give what you can when you can. Many people tell themselves they are great people because of all the money they'd give away just as soon as they are rich enough to do it but die without giving anything.
Except it doesn’t. If you’re poor, 10% directly impacts your life negatively. It means less (or lesser quality) food. It means less money set aside for yourself in the case you need it — and you will.
10% for middle class is fine. That’s just one less night out.
People should not give to charity if they themselves are likely to be dependent on charity.
I could get into virtue ethics or religion but I know this is Hacker News, so maybe I can frame it like this:
Telling people to wait until they're financially stable before giving risks creating a dynamic where people never start. The person who says "I'll give when I can afford it" at $30k is likely to say the same thing at $100k, because the scarcity mindset scales with income.
Small-scale giving early on helps build the identity and habits of someone who contributes to their community rather than just consuming from it.
And arguably there are network effects formed from generosity of time/money that can bring long-term benefits as well. It's a spicier idea, but I could even suggest that giving helps you see money as a tool rather than as security itself.
Yeah no. I used to let people of a higher social order (politicians and media figures) guilt trip me into giving to charity when they themselves just conjure money from taxes I’ve already paid, while the rare few times I’ve needed help due to work injuries the state nor charities were never there for me.
I will help my neighbours and my friends first, real people who will also be there for me. And when it comes to charity for foreign nations, I will never do it. Suicidal empathy is being weaponised and I’m through with it.
I think this reply shows that we're engaging this idea on different planes. I'm primarily focused on the giver, and giving as habit/character formation. (I didn't say a word about who to give to!) You're coming at this through the lens of...something else? Institutional trust? Geopolitics?
> I will help my neighbours and my friends first, real people who will also be there for me.
That sounds great, and perfectly compatible with everything I'm saying.
This comment perfectly illustrates the mindset folks are talking about. "I'll give when it doesn't hurt me so much" is another form of "I'll give when I have more." It doesn't make the person "bad" or any such thing for not giving, but you won't convince folks to not give by saying "but what about you, don't you want nicer food/clothes/etc."
I live in reality. It's me first, then it's my family and my close friends, and then my local community and then, finally, local charities. That's how my budget works. A budget is money in and money out. And when all of that is good, then maybe I'll think about larger charities where I can't be directly involved to see where my help actually goes.
Most people do think they have less than they really do - which is to say there are families living on less income than they are thus proving it is possible with some luxury quality of life compromises. However that doesn't destroy the point that there are people at or near the bottom who shouldn't be giving.
Probably something like this: https://www.youtube.com/watch?v=6ayPuijerjQ tldr; have your kids split their money into three separate "jars": Spend (can be freely spent), Save (this jar generates interest from the money in it, they also have to wait some time to access the money if they want to spend them) and Give (for charity).
I think it's actually a bad thing to think about money early on. Because it adds a layer of responsibility which I think takes away from simply enjoying life and focusing on what you might be truly passionate about.
One of the things I hate about my 30s is that I'm focused on money now and it feels like I'm not living the life that I want. It just feels like I'm preparing for death.
Which I'm not saying isn't the sensible thing to do, there's just something inherently managerial about it which doesn't seem intuitive to living a meaningful life.
The earliest years of your earning life contribute overwhelmingly more to your final retirement figure than your later years. Anyone lucky enough to have a job in their teens that gives them disposable income after each paycheck really, really, really should be saving and investing. Like OP, if I was more serious about investing in my early years, I would be retired by now.
One can lead a meaningful, enjoyable life while also considering their finances.
> The earliest years of your earning life contribute overwhelmingly more to your final retirement figure than your later years.
for most the amount we earn before about 25 is so little that even everything saved at the best return is insignifitant inretirement. at 25 a small percentage of your income saved becomes meaningful, but you are likely to earn enough more at 35 that the amount you can save then totals to more
> One can lead a meaningful, enjoyable life while also considering their finances.
This is where I disagree. I think there's a certain amount of naivety required to pursue meaningful things. There's so much in life that makes no financial sense that creates meaning. The moment you start having to think sensibly from a financial perspective, is when so many of these things no longer make sense.
Once you're plugged into the system there's almost no turning back.
> There's so much in life that makes no financial sense that creates meaning. The moment you start having to think sensibly from a financial perspective, is when so many of these things no longer make sense.
I get the sentiment, but it implies the opposite of your conclusion.
Since so many things make no sense from a financial point of view, the only sensible strategy is to break free of the financial constraints as soon as possible. Money cannot buy you happiness, but it can buy you the freedom to pursue it.
Retire early to give yourself the best cushion (and best possible chance) to pursue meaningful things, without the everlooming sword of making ends meet. The added benefit of life experience to filter out pursuits that only look meaningful on the surface, is a nice side-effect of this strategy.
> Since so many things make no sense from a financial point of view, the only sensible strategy is to break free of the financial constraints as soon as possible. Money cannot buy you happiness, but it can buy you the freedom to pursue it.
So I think the reason why this doesn't make sense (in my mind) is because in a state of retirement i.e. financial independence, you're still just as conscious of money as you were when you were accumulating wealth. You still need to manage money no different to when you were accumulating, it's just now you're not earning.
To me the freedom I'm referring to is similar to that of childhood - where you're not worried/concerned about "the system". You're just doing your own thing in your own world. That kind of purity no amount of money can resolve, even in an early retirement scenario.
The other issue is that a lot of stuff only makes sense when you're younger. Like it's a lot difficult for example to become a travelling musician or even to travel etc.
Now of course, early retirement provides it's own kind of freedom. But I would say that it's not equivalent to the kind of "freedom" that I'm referring to, which is basically being carefree.
> To me the freedom I'm referring to is similar to that of childhood - where you're not worried/concerned about "the system". You're just doing your own thing in your own world. That kind of purity no amount of money can resolve, even in an early retirement scenario.
The only ways you can live as an adult unconcerned about the system is 1. if you actually have a substantial financial backstop (trust fund, wealthy parents, etc.) and just pretend you don't, or 2. if you don't have a financial backstop, at which point "doing your own thing in the world" just means being a vagrant, drifter or bum.
Oh, the FIRE community. If you trained yourself to live looking at the money you need to save to retire, your brain will most likely be wired to that behavior, and breaking free from that will be utterly difficult. On top of that, people with the FIRE mindset have probably by default already a strong (innate? taught?) bias towards enjoying optimizing their life and making it the end goal.
I think you may be confused, I'm not part of the FIRE community. I'm only taking the statement that "doing meaningful things is not financially sensible" to its logical conclusion, not endorsing any position.
> If you trained yourself to live looking at the money you need to save to retire, your brain will most likely be wired to that behavior, and breaking free from that will be utterly difficult. On top of that, people with the FIRE mindset have probably by default already a strong (innate? taught?) bias towards enjoying optimizing their life and making it the end goal.
So many assumptions and claims without any supporting evidence:
- "FIRE people" train themselves to live looking at money only.
- This wires their brain to that behaviour (left unclear what this actually means in terms of concrete behaviour).
- Breaking free from this behaviour is difficult.
- People with this mindset have a bias towards enjoying optimizing their life, to the point this is their end goal.
- (Implied) This makes their life some combination of sad/bad/meaningless.
I don't really want to even argue against this because the burden of proof for providing any supporting evidence is yours, not mine. I'm not particularly interested in constructing some overarching psychoanalytic theories for a large category of people who I've never even interacted with, but you do you.
Sorry, I wasn't addressing directly at you, even if I was technically answering to you. It was more of an unsolicited rambling about the general topic.
> One of the things I hate about my 30s is that I'm focused on money now and it feels like I'm not living the life that I want. It just feels like I'm preparing for death.
FAANG job at 22. Save up 25k a year for 4 years, that is 100k. You'll already retire at 56 with over 1.5M in the bank. It isn't perfect but it is a lot better than what most people do.
Really all you need to do as a programmer is max out 401k and maybe throw another 10k a year into savings on top of that.
I worked at MSFT for a decade and I would have retired at 40 if I hadn't spent 3 years trying to run a startup after my time at Microsoft.
This includes international travel every year, and 2 domestic vacations.
> You'll already retire at 56 with over 1.5M in the bank
That 1.5M isn't inflation adjusted. If there is 0 inflation between now and when you die 1.5M is plenty. However the more inflation there is between now and when you die the more money you will need, the later you need to retire, or the less spending money you have. (of course we need to asking how things like social security fits into your plans as well, but this is already complex enough).
If you 22 and used to a FAANG income even with saving $25k/year every year you need more than 3M to retire retire without losing quality of life (even though most of that is luxury).
Are you willing to live on less, or will you discover with your free time you want to spend more money (hobby supplies? Now you have time to travel - maybe first class). I can't answer this question for you, but you need to think about it. Worse, your answer is likely to change over time.
For real, I believe most 17 year olds on this earth do not have the funds to invest in education AND in a retirement fond, so there are choices to be made. (there are also the choices of creating social bonds and investing into activities together, ...)
The root comment was talking about investing 5% of their earnings. If you're making any kind of income at 17 (which admittedly is not everybody) then learning to save+invest a small portion of that can have incredible positive snowball effects beyond the compounding itself.
I can't imagine a scenario where at 55 years old, you would miss the 5% of your summer income you invested back in high school. But I can totally see a scenario where investing those 5% led you to increasing it to 10% in college, 20% on your first job, and being financially independent way before you hit the age of 55.
"I can't imagine a scenario where at 55 years old, you would miss the 5% of your summer income you invested back in high school."
If those 5% were the question of whether to go with the group on a adventure together or not - and you end up alone at 55 years and not invited .. you might have rather invested different back then. But on the other hand I don't think those 5% of earnings with 17 make a difference later.
The only real difference they can make, if they made you start a habit of saving income for important purchases. (But not really fore retirement at that age. But each to his own)
I think this really comes down to how a teenager is wired and life circumstances. Some of us made all our close friends in college and dont even live near our hometowns anymore. My high school friendships are all “dead” so to speak.
I think if a teenager is the social type, or they have a positive (non-toxic) friend group, then absolutely - spend the money! It’s an investment in your friends that may or more not pay off.
But some teenagers don’t have much in common with their peers, are bullied in high school, or just want to move on to the “real world” and graduate already. For those kids, invest!
"or just want to move on to the “real world” and graduate already. For those kids, invest!"
In general sure, it really depends .. so invest in what? It can mean many things, like also saving for the drivers licence/first car to make that move away into a nicer worlds with better opportunities.
absolutely! It’s always a good idea to write down your life goals and major planned expenses. Then you can prioritize them as needed.
That usually helps answer questions like “if i invest X% of each paycheck into an S&P500 index fund, and put the remainder toward saving for my 1st car, i’ll have money for the car by date Y.”
And this skill translates to adult life really well. I find myself doing just that a couple times a year! Of course for some teenagers investing a substantial amount is simply not realistic…not every family is middle class after all.
One important reminder: inflation is no joke these days. I’d only recommend a savings account to a teenager for short term goals. Even if they are poor.
Most 17 year olds have very low income and education goals. They will miss that 5% in a retirement fund because they are forced to take a student loan to cover that.
Forgive my puzzlement, as I come from a country where you would not consider taking a student loan (if this even existed) to cover the $50 you put into an ETF from your summer job.
Im not claiming everyone can do it. Im saying they are not mutually exclusive. If they were mutually exclusive that would imply no one could do both. For those that have to chose one or the other I agree they should choose education, but thats a subset of cases.
It seems like learning about personal finance is itself educational, and there are a lot of jobs where you deal with money. So this isn't entirely separate from investing in education, depending on which kind of education you mean.
As with many times when we use the word "should" (and you've used it a lot), the perspective you're sharing is deeply influenced by your own cultural background and might not apply to many people reading.
A few examples: school loans, considering a house purchase to be a sound investment, purchasing once-in-a-lifetime household items, saving for a wedding (from the age of 17!?) or marriage (not sure what you even mean by that if you don't mean the wedding itself?).
Even if a house isn't right for you, you still need to save for the deposit on an apartment. You still need to buy furnishings for your apartment. You won't even know if a house is right for you until you are mid 20s to 30, so it is probably best to save for a house and if you decide at 30 it isn't right for you roll that money into retirement savings (if a house isn't right for you that means you need more retirement savings)
Relationships - even if you don't have a wedding or kids - come at the time you have those starting to get out on your own expenses. You will need to figure those out.
You just replaced "buying a house" with "buying an apartment", proving my point about cultural bias :-)
I meant, for many people (especially young ones), taking that same deposit to purchase an investment property (which could be a house or apartment, but has a tenant who lives there rather than being for oneself) can be a better deal than buying for themselves.
In the end, buying a place to live in is very much an emotional choice, which is totally valid. But in some locales and for some lifestyles, being a landlord who pays rent elsewhere can be a better financial decision.
I'd offer learning skills, personal finance and other life skills, (more or less public) speaking, potentially languages and (modest) mathematics as some examples of skills that will probably be useful for any foreseeable future including most dystopias. Particularly they are things that many 17 year olds will be lacking.
> At 17 you should still be thinking about investing in education
I mean, sure, in a perfect world you can postpone retirement savings. But if we're doing perfect world, you shouldn't have to think about "investing in education", your government should have the basic cognitive skills that would let it recognize that they should invest in education - ROI is pretty spectacular.
Realistically, both, because... otherwise you just pick how screwed you'll be later in life.
Sometimes I feel like I started investing late at 26. Already, six years into the best decade for compounding in your life. But such was the power of compounding that I had reached a substantial net worth by age 35. So even just nine years can make such a tremendous difference even into later ages. It's never too late to sock money away.
It remains to be seen what's going to happen over the next few decades. It's entirely possible that it'll all get wiped out (the substantial gains, not all value).
While the market was a very good bet for the last 50yrs, its not a guarantee.
Especially in the current climate you should be fully aware that it's significantly more risky to start investing today vs 10 yrs ago.
(Riskier doesn't mean it's necessarily a bad idea. It should just be a conscious decision under the acknowledgement that the upward trajectory is not certain. Especially in current political climate - and that "hodl"-ing doesn't necessarily mean you'll eventually get back what you invested, if a downturn manifests)
>> Especially in the current climate you should be fully aware that it's significantly more risky to start investing today vs 10 yrs ago.
First, I don't think this absolute statement is true; I think you need to look at it from the alternatives perspective. If not investing then what? bury gold? spend it all?
Second, are we at a much riskier time than past history, both short & long term? I made significant contributions in 2014, saw 30%+ wiped out within 6 months and seen it all come back and more with the power of long timeframes.
Third, investment can take a lot of forms, not just today's hot tech stocks. I won't get into it beyond the standard think long term and avoid leverage, which seems to be completely inline with start early; start now.
Your money has to go somewhere or it will rot to inflation. If you're ultrabearish on stocks, snap up bonds. If you're bearish on stocks and bonds alike, snap up gold. Either way, bare minimum of what to do with your money long term is to preserve its value across inflation.
But really I would recommend nonetheless staying the course with investment advice on a stocks/bonds balance relative to your age. Increasingly, the economy distributes not through labour but through capital and holding stocks is essential even with their inherent risks. Even in light of that CNN article about meme stock and crypto investors having the last laugh over the past decade, indices of ordinary large-cap stocks bring you exposure to these things.
> Your money has to go somewhere or it will rot to inflation.
Inflation is mainly created by this act of "putting your money somewhere". For most people, this "somewhere" means loans. Money is being loaned out to people, spent, deposited back into the bank, and loaned out again, on and on it goes until $1,000 turns into $100,000 in circulation, not a cent of it real until all loans are paid back.
You are very confidently incorrect. So incorrect, it is hard to even start correcting you.
* Inflation is not caused by "putting your money somewhere" What on earth.
* At a high level, inflation is caused by either "too much money chasing too few goods" and/or the cost of producing the goods rising. Money supply can increase without causing inflation if the supply of goods can also increase. In short, the supply of money can increase without causing inflation if productivity rises to match it.
* Most people do not "put money" in loans what are you even talking about there?
* Bank loans do not automatically increase the supply of money. When a loan is taken out, it is (mostly) deposited to another bank, resulting in a net-zero change in money. Increasing the supply of money requires the federal reserve to take steps.
> In short, the supply of money can increase without causing inflation if productivity rises to match it.
You're actually agreeing with me. Money supply must be backed up by real wealth and production.
That's not how things work in current times. We have nearly zero interest rates, and currencies are backed up by literally nothing.
> Most people do not "put money" in loans what are you even talking about there?
Fractional reserve banking. Banks loan out the cash you deposit. They "efficiently allocate" the money in their custody.
> Inflation is not caused by "putting your money somewhere" What on earth.
It absolutely is. Banks can easily turn thousands of dollars into hundreds of thousands of dollars by repeatedly loaning out the exact same dollars numerous times.
It's some kind of society wide financial call stack. Too many defaults and everything starts unwinding.
> Bank loans do not automatically increase the supply of money.
Obviously they do.
Imagine you deposit $100 at your bank. It takes your $100 and loans out $90 of it to someone else. There are now $190 dollars in circulation.
Whoever took the loan goes off and spends it. Eventually it gets deposited back into a bank. Then the bank loans out $81 out of that $90. There are now $271 dollars in circulation.
And it keeps going.
You can inflate bitcoin via this algorithm.
> When a loan is taken out, it is (mostly) deposited to another bank
Irrelevant. Banks form interconnected systems. They all settle debts and accounts with each other.
> Increasing the supply of money requires the federal reserve to take steps.
The physical supply of money is irrelevant. It contributes only a small fraction of the circulating money supply. Money is numbers in bank databases now. They could run the money printers 24/7 and they'd never even come close to catching up to the inflation caused by banks.
There is never a guarantee, but all I can say is that there have been people claiming we're in a bubble for over a decade now. Maybe we are, but that doesn't mean you shouldn't be investing instead of spending all of your money.
Historically, it takes about 7-10 years to double your money in the stock market. So between doubling your money and incremental saving, yeah you should see a pretty significant difference from 26-35. And that's before it skyrockets :)
I started my daughter investing with a custodial account at 13. She put a few hundred dollars of her money in and I convinced her by matching her investment and told her if the amount ever went below the original investment I would backstop any loss.
Investing is all about that long term gain and slow growth. Having 10 years of experience after finishing college will do so much more than Robinhood for refrigerators.
I've made a similar deal with my kids: Around 7 years ago I set up a "kid retirement" plan for them, where they couldn't touch the money until they were 18, but any money they put in I would match, and I'd also give them 10% APY with monthly compounding. My daughter aged out of it a couple years ago, she got something in the $100 range. Her brother still has a 18 months left, and I just recently rolled his over into the custodial account, he's got over a grand in there currently.
My daughter I just recently set up a ROTH for her and told her I'd match anything she puts into it, and stressed she should put something into it now from her savings, and then put some of her paycheck into it, anything is better than nothing. So far she's declined the free money. I'm going to set one up for my son, once he's at the point of having an income to justify it. She's very smart, but in some ways she's very stupid.
That young you should be investing in a 527 education account not a ROTH retirement account. Education is a much better ROI when you are young than anything else. As you get older the value of education decreases. In generally the cross over is sometime in your early/mid 20s (Could be as young as 16 if you don't do well in school, or as old as 35 for things like medical doctor)
If you don't live in the US you will have different options, but the idea still applies
I'm doing a 529 as well as wanting to set up the ROTH Note that you can also just take money from your other investments, deposit it into a 529, and then immediately pay yourself back for educational expenses you've paid for off the 529.
My kids have some 529 buffer, and we are paying for my daughter's school right now (though she's paid us back for the class she got an F in). My son, it's not clear that the typical school track is going to be the right thing for him, but we also have a 529 for him that I've been contributing to.
You mean a 529 account right? 527 seems to be associated with political contributions. I looked it up to ensure I wasn't missing out on something I did not know about...
There are a lot of it depends. If you are going to be a retail worker all your life there is no reason to go to college. A music degree has questionable value on its own, but many people get them understanding that "any degree" is needed for some good jobs and those that find those do well enough (your generals and non-major electives are important). The school matters - Harvard is expensive but the networking can be worth it if you network well in school. State schools tend to be a lot cheaper than private or out of state as well, and generally pretty good. Scholarships enter in as well. Degrees like Engineering or Medical doctor tend to have a much better ROI long term, but only if you pick the right one and pass.
But you need to make your own decisions. For some your best ROI is dropping out of school at 16 - but for the vast majority more school will be worth it.
This would be fun to model. Lifetime earnings are higher for those who have more education, but there's potentially decades of servicing a potential mountain of non-dischargeable debt to consider (potentially decreasing post-college investment ability) too.
I don't know the first thing about student loans (interest rates, amortization periods). I never had one. I just search-engined 2025 federal student loan rates and I'm blown away by the interest rates. It looks like avoiding student loans at all costs is the way to go.
I wonder if spending a few years working (especially if your parents are able to continue to house you and pay for health insurance) and contributing to a 529 plan might meaningfully decrease the overall cost, albeit at the "penalty" of starting college later in life (at, say, 22 instead of 18).
I take that even a little farther. Whatever my kids make (up to the Roth limit), I give them money to put into a Roth IRA [and they can keep what they earned].
That maximizes what they (as teenagers) can put into retirement accounts, their tax rate is 0% now, and though it doesn't teach them the deferred gratification aspect, it gets their retirement savings started.
We can talk about the deferred gratification aspect in other ways and/or later, but I'd rather they get 40-60 years of tax-free growth.
Is your daughter feasibly going to make “real money” in the future? I personally look back on working a job in college as a waste of time and attempting to save money then as a waste of effort. Should have just taken more debt, the amount I did take turned out to be trivial to pay off and double or triple wouldn’t have been that bad. I feel like there are two worlds employment wise, and some advice leaks between them which ends up being maladaptive in its new environment.
I hope that @roberdam reads this and implements those into his PWA.
OP, enabling:
- deposits (and withdrawals)
- a matching logic (which we can do manually I guess, by doubling the deposit amount)
- and correct calculation of compounding (if I had $100 for 11 months and add $100 in december, I shouldn't see the value compound $200 for the whole year)
would be great.
Bonus points if there was some kind of password (even hardcoded) so that the kids can't just click the gear icon and write themselves a blank check of $1,000,000
Excellent suggestions! For now, what I do is update the amount every time there's a deposit or withdrawal, and I set the initial date to the day of the withdrawal or deposit.
Ah, she's barely out of her teens, give her a break :) Better things to spend one's life on in those years than worrying over a few hundred bucks in a bank account. She'll come back around in a few years.
You say that now but as a young person with a decent income and no family or many responsibilities it's hard to even know where to start.
And I'm not even talking about what to invest in, I'm already confused at which platform/bank/whatever to do it through. The "meta", if you will. I just want to invest the 70% of my salary I don't need every month and not think about it for 40 years but how? Maybe an important detail, I'm from Switzerland, perhaps it's easier in the US with things like Vanguard.
Don't know about Switzerland, but most US brokers offer some kind of "target retirement date" fund, which automatically shifts from higher-risk assets to lower-risk as you approach retirement. VFIFX is one from Vanguard, for example. Pick one you like (just ask a coworker what they use, if you pick a big-name brokerage it really doesn't matter which one), shove your extra cash into it regularly, and forget about it. Then cross your fingers the market isn't actively crashing when you plan to retire (this is unlikely, but it does happen a couple times per century).
If you start to get into truly high wealth amounts (USD$500K+) you might consider hiring a wealth advisor, who can probably do better even after accounting for their fees.
The idea is that over a 40 year window that 20% (or more) crash is eventually going to rebound, so just sitting on the target retirement fund is going to do well over it's lifetime. As you get closer to retirement, and don't have the time to recover from the crash, the plan moves to safer investments.
My understanding is that, if the market generally continues on the rate of return it's averaged throughout its history (that is, if you're not a doomer), then the single most important thing is showing up to play.
People who try to time the market or wait for a perfect time or pick the exact right blend of stocks, on average, don't do as well as people who pick a boring index or mutual fund and forget about it for 40 years.
If you have doubts about the long-term __existence__ of the market, then investing in the first place necessitates "timing the market" since you'll need to determine when to sell before the panic sell-off which inevitably comes before the global minimum is reached.
Mind you, I'm not talking about figuring out whether or not to "hodl" through local minima. I'm talking about rolling into a different store of value (e.g., cattle, crops, ammunition) before the whole thing goes up in smoke.
This depends heavily on geolocation. Experiencing economic collapse in the Montana wildnerness would be very different from experiencing it in Washington DC.
I wasn't thinking of fighting off hordes or anything like that.
Ammunition can be used for barter, hunting, and self-defense. It can also be used as a tool to break locks, start fires, and send signals.
Yes, however: My father in law gave me some great advice: Pick a stock or two and put some small amount of your investments into it, like 1-5%. This makes the investing more fun. And he was very right, not the least of which because the stock I put $7K in exploded and ended up worth over $200K. ;-)
My BIL put money into Underarmor (he's an outdoors guy) and Electronic Arts (he's also a gamer), both of which have done good for him. My son put some money into Roblox (he's a gamer), and that's done well also.
All the choices you have to make can be very daunting. I was very lucky to have a colleague at work who gave a talk at the right time in my life with some plausibly right choices.
Vanguard LifeStrategy® 100% Equity Fund charges 0.22%.
The bottom line is that there are lots of good choices, and the main thing is to make a choice and get started. You can always optimise/improve your choices later.
I'm also in Switzerland, currently my approach is to invest in Vanguard VOO (tracks the S&P500) via Interactive Brokers. There is a way to setup auto transfer and invest every month
As a caveat your money will be in dollars and in American companies, which might not be what you want, but it's worked for me well so far
Are you saving for retirement or buying property? Then start filling your 3rd pillar (Säule 3a) first because of the tax cut. Ideally in a low cost provider (viac/finpension), but the bank you already have probably has an offer too. It might be a bit more expensive than viac, but still much better than not investing. Stay away from 3rd pillar at insurance companies, they might be hard to cancel. Do yourself a favor and do this just for the tax cut.
If you max out the 3a, you can start of thinking investing elsewhere. IBKR is the cheapest to buy a US domiciled world ETF. But the UX is not super easy and you will have to fill all transactions manually in the tax report.
Neon with investments is another option I can recommend if you prefer a swiss company and a simple user interface. Fees are low if you set up a savings plan and pick one of the 0% ETFs
Your bank probably has an investment platform, you can just use it, it doesn't matter. My portfolio is 70% XEQT 30% CASH.TO—don't bother with anything else.
Oh, that can be bad advice. It does matter a lot if the bank asks for high fees, which would be the case with all(?) German banks, and I'd be surprised if that's different in Switzerland.
Banks don't typically charge any fees for a self-directed account that holds primarily ETFs, beyond maybe a small trade fee or account fee(?) - which we would never pay in North America. Active management of either your account or the products you hold is where they stick it to you. Each product will have a management fee which you should check, but you'll likely avoid the big bank and insurance company products because they do no better than the market funds and take more in fees so the returns suck.
My bank also charges a trade fee which I think is bullshit, but at least it's a major bank. It's like $10 so doesn't matter all that much, not sure how much it would be for Switzerland, but you could just buy the stocks in larger batches if trades are expensive.
With the amount people usually trade $10 is a huge percentage. When you factor that in with the missed compound interest of that money you usually lose tens of thousands of dollars until retirement, likely more.
There is no need for a big bank here, in Europe. If one of those regulated companies goes bankrupt the etf is still yours and transferable to a different institution.
War in Europe is the remaining risk factor, but if that happens it won't matter anyway.
Not sure how it's like over in EU, but in Canada, at this point, I assume all fin tech startups are scam. Neo financial and wealth simple are definitely fucking scam. Major banks may suck but at least you get what you pay for.
Curious about your opinions on WealthSimple, if you can share. I got introduced to them when they bought out SimpleTax, and so far they've been pretty reasonable for investments.
They require a paid subscription to use USD. They claim to have customer support, but the button isn't actually working, it does nothing. At least they respond by email. That's all I found so far, but I haven't actually made any trades yet.
$10 may not feel like much, but it's the proportional costs that you have to figure out.
If that's e.g. for a monthly $1000 investment, it means 1% of your savings is lost in fees each time. That'll be 1% that's not going into savings. If you end up with a million by some time, that small fee will have cost you 1% of that, which is $10k.
"It's just a cup of coffee" -> "that's a 10 000$ cup of coffee". But if you only save 200 a month, that 5% is 200k you've lost by the end.
One percent is often considered a reasonable cost ratio, but it's definitely worth considering what the real numbers are for a given option.
- Your bank's platform will cost an arm and a leg; Interactive Brokers or Degiro are both available in Switzerland and you will save so much on fees (especially if you only buy and hold ETFs of which Degiro offers many with 0% fees) that it's the equivalent of faster returns on your money.
- There are many "getting started" guides available, I found Mister Money Mustache the most straightforward to my liking, but you're golden as long as you understand a couple of basics: 1. investing a high% of your income is more important than chasing returns (you seem to be there already), 2. don't trade, just buy the whole market (you mentioned Vanguard, they offer a "total market" ETF), 3. look for the lowest fees as long as you hold title to your shares (IB and Degiro do this ; eToro does not so if they sink, you're SOL), 4. don't time the market, just buy now and sit on it as it grows
For the plattforms, that also blocked me for a while. But it is easy now. You just get one account at a platform that offers a free broker account and supports buying the etf you want without extra fees.
Typical options in Europe: Trade Republic, scalable, Consors Bank.
Then the usual: Around 10K where you can access it directly, a small amount in an investment with percentage (scalable and trade republic both offer that, limit there is or was 50k), rest in one broad ETF like one that follows the FTSE all world (vanguard or invesco offer that, one is bigger, the other asks for less fees).
No affiliation, and I dont know whether being outside of the EU changes things. And yes, there is the risk that we are in a huge bubble now and it popping would at first significantly lower the money put into the etf. But you certainly do have access to vanguard etc.
Have a look now and at the latest this weekend you have this solved, hopefully forever.
Same. But is same for most people. Average American retirement savings is like $200k. I've done better that that but not by orders of magnitude.
About six years ago I was hired to make an investment simulator. I wish someone had show the results to me when I was a teen. I did show it to my daughter at the time (she was in college), and used it to explain the power of compounding interest.
I found they still an old preview online (sorry not https)
That's why you shouldn't leave it up to a kid with very little money who quite literally cannot understand the long term impacts of their decisions to invest or not. Instead, put aside something for them. You can even start well before they are 17.
Naw, dawg, Imma try and try to encourage them to get started early and put a little bit away, because it's good for them. I'm acutely afraid of a scenario where they have bad habits and anything I leave them they flush down the toilet because of those bad habits. I'm hoping to leave them plenty, but they need to be in a position to not waste that for it to be worth anything.
> There's an awful lot of negativity here, but as someone who's 55 and has earned a good wage since I was 17, I really wish I had taken investing more seriously from the very beginning. While I knew of compound interest, I really didn't understand it until like a decade ago. If I'd started putting 5% of my money into a target retirement plan from 17, I'd be retired now. As it is I'm not doing badly, but I really wish I'd started earlier.
I'm 55, too. If I'd started studying HTML, CSS, JavaScript, Python, and Rust at 17, I'd be retired now. Waitaminnit....
Sarcasm aside, target retirement plans wouldn't come along for decades. Investing was very, very different when we were 17. And many of the people who were 55 when we were 17 had just lost a terrifying amount of their life's savings in a stock market crash that made Taleb rich because he'd bet against the market.
It seems extraordinarily unlikely that a 17-year-old today should do exactly what we wish we could have done when we were 17. About the best they can do is follow advice that's now centuries old: make friends, learn skills, live below their means, and, maybe, earn credentials.
Thanks for your encouragement!. I started investing in my mid-30s, and compound interest really works wonders after a while. I hope my kids do better than me, though.
> and let him pick a couple stocks to put some money into
And yet we complain that corps today are too focused on their market valuation over everything else; customer experience, longevity, worker conditions, R&D are all being neglected in order to make the needle go up.
'Investing' in stocks in order to flip them when the price goes up is feeding this insanity. Teaching kids that this is perfectly rational seems selfish and short-sighted.
Our children should be encouraged to invest into something like bonds which actually help promote economic growth.
Teaching children to invest in bonds is spectacularly bad asset allocation. Investing in stocks or bonds both help promote economic growth.
For me, the notion of teaching kids to invest in some company they know (Disney, McDonalds, Coke, Apple, or whatever) and telling them that they are buying a tiny, tiny share of the company is an important mental model to help shape in them.
Stock picking and speculation especially with a single company is indeed a spectacularly bad strategy, but it can be a motivating start.
A well diversified fund would be the better alternative if you need to aim at a single thing. But it's hard to say what's the better first step if you're trying to teach personal finance management.
Actively invested retirement funds throughout 30+ years can also catch more concentrated moves if you are educated on a sector. For example, choosing the mag7 in the early 2010s vs just the SPY. Following the market could also let you pull out during serious world events.
There is definitely money left on the table when you ignore the market, even in a retirement fund.
Be careful here. You should have some "rainy day" savings. You should have some retirement plans. You can save for big items like a vacation.
However you don't know how long you will live. Don't be a miser who spends nothing. If you have surplus after the above you should either spend it or donate to charity.
I said that because I find it puzzling when asked the reason why I invest. They're like, are you saving for a house? No, I'm saving in general, and then I buy whatever I want.
Financial literacy is a gift, and absolutely omitted from standard education, which is unfortunate.
That said, I don't think knowledge of investment gets you very far if your job pays subsistence wages. I worked for a popular fintech focused on personal investment and their narrative was essentially "financial freedom through investment". I think it's important to understand that even the most sophisticated knowledge of investment and personal finance does nothing substantial if you aren't making surplus money to begin with.
I don't know what you mean by that. They teach compound interest in every school. Basic economics too. Anything more advanced is going to be lost on most kids, because that's most adults' level of financial literacy too.
The problem is many kids don't have much money to save or invest. Or if they do, real banks kinda suck when you only have a kid amount of money ("Here's the 0.2% interest on your $37 balance"). So they can't apply what they learned. An app like this, backed by the Bank of Mom and Dad, is great for practice.
While I certainly had the _concept_ of compound interest taught to me at some abstract mathematical level, the application to real life practical financial scenarios was definitely not done [1]. Economics as a whole was an optional subject.
I think schools and curriculums could do a whole lot better in representing this important facet of life. More broadly, I often feel that "applying all that math you've learned to real things" is a subject that could be taught.
[1] Seriously, having applied math questions like "Johnny earns X per year, with a cost of living of Y. Assuming inflation of Z and average yearly returns of R, what percentage should he be putting away, starting at age 25, so that at age 50 he essentially gets the equivalent of his own salary each month?" would likely cause some lightbulbs to go off in the kids' heads.
> the application to real life practical financial scenarios was definitely not done
Of course it was. You can't teach compound interest without referring to money or banks. That's the whole point of it. Otherwise it's just multiplication.
It... is just multiplication. And can't talk about GP's experience, but I can tell you that going through scientific schooling and engineering schools in the French system you'll learn exactly how to calculate the math and never have a single example such as mentioned above.
We're here to build bridges, not count stashes of money after all!
You'd probably get those if you went through "economic studies" (which is a different track and where math includes a lot more statistics even in high school).
Not only you can, I still don't see how the financial "magic of compounding" isn't bullshit for vast majority of people - you can't really make significant money this way in reasonable time spans (5 years rather than 50).
5 years is "get rich quick!" scam territory. The real aim is to manage finances for the rest of your life which may or may not be 50+ years, but will definitely be in double digits if you're of an age for thinking of managing your savings. If your horizon is shorter than that, you're essentially on your deathbed already.
5 years isn't a reasonable timespan. Compounding over the course of a 35 year career, earning a modest wage, will fund a comfortable 20 year retirement. If that's "bullshit" for most people then too bad. Good things come to those who wait etc.
A 20 year retirement on the back of 35 years of working means dying before you're 80?
Given current life expectancy, and particularly if you find a life partner, the chances of at least one of you surviving through at least 85 are pretty high (like above 60% for the US).
I assumed that a "real" career and substantial savings, after paying off debt, begin at age 30. And the 20 year retirement was me being conservative. In truth, saving only 20% of your take-home for 35 years will be more than enough for 40 years.
I wonder where it will go when Y>X. Maybe open question what is the solution. A) Violent revolution and Johnny taking over means of production. B) Death.
The problem is that the financial industry is, like, capitalism-maxxing.
How do you teach "financial literacy" in a practical way without referring to specific products, offerings, or corporations? You really can't.
If you talk to people about investing or retirement, they're gonna talk about Fidelity, Vanguard, whatever. Which is very practical. But I'm not so sure we need our government and education system to basically directly endorse these corporations.
My statement was intentionally under specified, and as usual my word choice was not great. My primary intention with the comment was to indicate that knowledge of investment alone is not very useful without surplus money. There is a narrative that investment alone can alleviate poverty or provide financial independence. I don't believe that's true and that was my main point.
If they had taught you that in high school 10 or 20 years years ago, it would be outdated by now. People used to save in savings accounts. Then 401ks. Then individual brokerage accounts with index funds. Now crypto or whatever is hot using some fintech app.
> What is a stock?
That's fair. It can come up in basic economics but not always.
> If they had taught you that in high school 10 or 20 years years ago, it would be outdated by now.
That's a fair criticism, but I don't think it's enough to outweigh the benefits. I think I learned how to write a check in second grade. It was useful information.
It's way easier to update the tail end of knowledge you have and practices you've learnt than to start from scratch when you have no time.
Likewise, if the only stuff we could teach in grade school was stuff that would never become outdated, then we wouldn't even be able to teach more than the highest level of recent history, math foundations, super basic geology and physics, which is a pathetically low bar. Things change, it's the way it is, we should have a higher standard.
Kids won't otherwise get early exposure to learning how to start a business unless their parents did so, or investing unless their parents did, which means they probably had a surplus of resources at home and the cycle of a widening class divide continues.
The most powerful type of compound interest is early exposure to anything; an idea, a sport, money, business, computers, art. If your parents did it, you're off to a great start, but if they didn't, you're automatically set back at least a decade if not two for any of those, and public school should aim to smooth out those bumps.
I give my kids a copy of their 529 accounts I opened and contribute to in their name. This is real money and they can see a return on investment and growth happening.
I don't think you even need to wear a tinfoil hat to reach this conclusion. Knowing about the origins of the modern outcome-based education systems in the West (we borrowed from the Prussian education system which replaced the classical education system based on the Trivium and Quadrivium) I would assert that your claim is spot on.
This type of investing isn't about day trading following the latest hype. It's about putting some surplus money to better use for when you need it in 10-20 years.
That's even worse, because the entire point of the stock market is supposed to be that investors choose where to put their money based on how the company is performing and what they're saying. I.e., you vote with your wallet, and the market therefore punishes bad behavior and rewards good behavior.
If everyone is passively investing, that no longer works. Then it's not even a market. We don't even know, for sure, if that works.
It's gambling and we're already there. Hardly anyone cares about what any company does when investing in it; all that matters is whether it grows and whether you can time a jump elsewhere before it drops.
Right but those wildly overvalued companies become that way because millions of passive investors just mindlessly dump their money into them.
If you use big index funds, you're the primary people contributing to Nvidia, Tesla, and openAI. You didn't start it, no, but you certainly propelled that ball forward like a bullet.
And, well, that's fine, because we cant expect anyone really to actively invest. The problem is we don't know if this works. This definitely has the potential to blow up. You have to realize that what we're doing here is undermining the stock market at a conceptual level.
There are people who don't invest? Do they just keep their retirement savings in cash? I imagine for most people either the government or their employer invests for them.
Most of my family and extended American family doesn’t really invest. I think probably 10% of us “believe” in the stock market. The rest sometimes buy houses (which I encourage because it’s better than nothing), but otherwise are planning on social security, pensions, and lump-sum savings to cover their retirement
Most of my family is farmers or missionaries, and I bet those groups are less likely than most to own stocks.
Also, 'owning stocks' vs 'investing' feels different to me. My brother will go all in on tesla for one year, and then pull out and just sit there until he has another somewhat-random impulse. Likewise, my dad used to put all his money into some index funds for the 30 days leading up to Christmas, because 'the government always makes the stocks go up during the holidays, to keep everybody happy'. They count as 'owning stocks' (at least sometimes), but I don't feel they count as 'investing'.
In short, yes, but my family is very cheap, so it is doable with sacrifice. I think I'm middle class (or maybe upper-middle?) now, but I think I'm the first generation that can say that. And even I rented closets, garages, and spaces behind TV's until about 4 years ago, lol.
I mean no offense, but your understanding of a median seems flawed. The median is the number/point that separates the upper half from the lower half - it is not what 50% has.
The math does add up. There is no contradiction in your parent’s post.
You didn't answer my second question. Yes the median in my example is $50. Thus it would be accurate to say "50% of people in that sample have $50 (or $51)". But not anything further than that middle point.
Back to the original post:
I'm assuming that "three months of expenses" would be roughly $6,000.
The parent post had the median at $500.
1. Given the sheer number of adult Americans (hundreds of millions of observed data points), wouldn't you say it's quite likely that the two mid-points are very close to each other (eg $499.97 and $500.02)? But definitely not (-$5,500) in debt for one mid-point individual vs $6,000 in savings for the next individual (which comes out to $500 in median and "top half has $6k")?
2. In the first scenario (almost continuous curve at the midway point), how likely do you think it is that somewhere right after that $500 mid-point, there is a huge discontinuous jump to $6,000 to accomodate the idea that the rough top half of observed savers has "3 months of expenses" saved?
3. Is there any other scenario I'm not foreseeing, that can reconcile: "the median is $500" with "the top 50% have $6,000+ in savings"?
I purposely didn’t because strictly that is not a median. Stupid example: median of 1,2,3 is 2 and 67% >= 2 here. We do agree that as N grows, the difference shrinks (to the point of no meaningful difference).
My point was that mathematically there is no contradiction. Let’s say half the population has $200 monthly expenses (3mo is then $600 saved), the median is $600 and it checks out.
That is a stupid assumption though - because who has such low expenses.
> I'm assuming that "three months of expenses" would be roughly $6,000
You then assume that we must be talking about the upper half, but that isn’t given.
We have to make SOME assumptions though, since the statement is underspecified: the OP didn’t specify what 3 months expenses means. It is unlikely that 50% of the US population have the EXACT same expenses, so I assumed an “on average” was missing somewhere which further relaxes the constraints.
I objected to your statement that the math doesn’t check out. There are many ways it could check out.
We came at this with different assumptions. I don’t think we fundamentally disagree and I didn’t mean to bicker.
I appreciate you taking the time to geek out on some statistics with me (and you even had me look up medians again because I was confused at your reply!)
Incredible HN post. I'm hoping it's because you are from a country where people are generally well taken care of.
Yes, there are people who don't invest. Where do they keep their retirement savings? 40-50% of Americans, at least, simply have no retirement savings! Most people in America aren't earning enough to put away a meaningful amount for retirement. It's going to be grim as boomers and millennials hit retirement age and have to keep working.
> More than half of Americans are net debtors, with a negative net worth.
Median household net worth is around $193k, not negative. Maybe this is true on an individual basis because there a bunch of, say, young debtors and elderly parents who have transferred their positive assets living in households with working adults with more positive wealth than the youngsters and elders combined have net debt, but...
Your comments make me think you've never seen hardships in your life that weren't self-afflicted.
Life can be cruel even if you've made great plans and took all the precautions you could think of. Illnesses, accidents, the lack of a social net because your country was set up that way, crime, the list goes on.
Illnesses and accidents are exactly the things you need savings for, and aren't really relevant here because they don't prevent you from saving until and after they happen. The issue appears to be that 50% of Americans live paycheck-to-paycheck and have no savings? I can't imagine how this could be anything other than them just spending money on shit they don't need.
And yes, I am assuming you live in a developed country. I have Ukranian citizenship and right now the Ukrainian government is abducting men who are over 24 years old and sends them to death. If you live in a country like that, true, you shouldn't worry about investing because you don't even have basic human rights.
> The issue appears to be that 50% of Americans live paycheck-to-paycheck and have no savings? I can't imagine how this could be anything other than them just spending money on shit they don't need.
Or that there's no standard minimum wage, or income protection if something does go wrong. Student debt is crippling to people in itself never mind hospital events.
That's so many people you should think "something must be wrong with the system"
> Illnesses and accidents are exactly the things you need savings for
It shouldn't be though, if you pay taxes, the government should be there for you in an emergency when it comes to health.
Many people here, if they are not educated, are forced to work manual labor jobs. Those jobs will always work you under full-time, so they don't have to give you insurance. Usually that means you have to work another job.
People who haven't lived that life just don't get. It just doesn't click in your head.
You can work 60 hours a week and just barely make rent and food. Not only can you do it, I think most people are. And there's nothing you can do. There is no higher paying job waiting for you somewhere, because you don't have a college degree.
How're you gonna get a college degree when you work 60 hours a week? Hm? You're not. You're stuck. Your best shot, really, is to work up through management. That's why you'll see people working at the same restaurant for 20 years.
They must be so stupid, why don't they get a real job? No, actually, that's probably their best bet.
Oh. No. Not in most jobs. Many jobs do provide some health care.
If you are working many jobs in the US you get no health care. You have to pay for it yourself. Even jobs that provide it you still need to pay for it. The employer basically pays a portion of the insurance bill. Good employers pay a lot, bad employers pay none.
Then you have deductibles. The amount you have to pay out of pocket every year before insurance does anything. If you have a ten thousand dollar deductible, insurance only kicks in at $10,001 and beyond.
I.... they are dealing with systemic poverty. Being poor is expensive. They absolutely know they need to save, but if the choice is "starve to death today but save for retirement OR don't die, but don't save for retirement" most people are going to choose the latter.
McDonald’s will not let you work 40 hours a week, or any consistent schedule at all. You will show up when they tell you to and that’s that. Same with grocery stores or most retail jobs.
Also you’re neglecting the cost of transportation (almost certainly a car, with gas and insurance), rent, and medical expenses.
Median rent value in Seattle is $2300/month if you are looking for a one bedroom, a little cheaper if you are looking at a studio. Minimum wage here is $21/hr. The first quartile for rent is $1600.
Assuming you work full time, you are making $3360 a month, less taxes.
That means that even if you get the bottom 25% of rents, over half your take home pay goes to rent. Then we need health care, food, taxes, transportation, clothing, etc.
I rent a room. But to be fair when I first came to Canada and was told by a local "of course you won't get to have a whole apartment all to yourself" my mind was blown away.
So people's work shouldn't result in private housing? That's an acceptable outcome? I'm not clear what your insinuation is here. People should live in communal bunks but also be saving for retirement?
If everyone was an "investor" it means they aren't blowing all their spare cash on goods and services. Demand drops and you need fewer people to work to provide said goods and services. It kinda balances out.
investment for many is more important than ever, because with home ownership out of reach younger people those with any savings are looking for alternatives. I just hope that - much like how you wouldn't buy and sell your house every day - they can resist the urge to be overly active investors.
Sure but if you learn a lot about investing then surely you have learned a lot about other stuff too and maybe have chances at a good job. Not that I disagree
In my opinion this can't even be labeled as a single HTML file, because it loads external files to complete the app. But back to the question, a "plain html" file doesn't load any external resources and is usually semantically described.
Any website you visit could have been compromised and serving malicious content. Upon first visit to a website, I block all connections to domains not in the address bar, then go back in and add rules to allow connections as needed. It doesn't address malicious activity by the site directly, like a server compromise, but does limit non-addressed connections, including ones to local addresses.
For example, a compromise of .google.com which leveraged assets/code from .googleusercontent.com wouldn't initially be able to run, unless I added a rule to allow the connection. Likewise, a compromise of *.discord.com that made a connection to localhost:8983, then tried to send that data to someserver.ru would get blocked and logged. Where this can't protect me is if the server sends the mined data back to itself, then forwards that data on using its own connection.
Ad networks sell to anyone. Malicious content can be injected almost anywhere. Its happened before; it'll happen again. This web browsing hygiene has protected me enough times for me to make it my standard practice.
That's the first thing I thought when opening it. Sure looks like a "make me an app" response that Claude would output.
I mean nothing wrong with that, I needed a silly calculator thingimabob too yesterday (for some CRC checks on a piece of text) and Claude quickly cooked something up for me.
But I'm not writing blog posts about it, releasing the tool in the wild, and claiming I wrote it. Blegh.
There’s definitely nothing wrong with it normally but then like you said it’s got the blog post and the project basically clones every calculator out there that already exists.
This type of calculator is so common you can even find one on an official US government website.
You are that guy. It was obvious that he built some interactive app packaged in a single html file. There's going to be javascript and stuff in there...doah.
EDIT: I wouldn't have expected external dependencies, though.
There’s an old story about Rothschild getting a haircut when the barber started giving him stock tips. Rothschild thanked him, left the shop, and immediately sold all his holdings. The reason was: “When even the barber is investing, the market’s gone too far.”
I might be wrong, but reading this, I couldn’t help but think: if we’ve reached the point where we’re building apps to get our kids into investing, maybe we’re living through our own “barber moment.”
The reasonable interpretation of such a project is not to pump the stock market even higher by getting children to invest their savings into it, but to inculcate the habits of investing over time so they can do it properly as adults.
I'm sure Mr. Rothschild would be fine with this learning tool.
The Rothschild bloodline is responsible for helping to orchestrate every modern war since the Napoleonic Wars, by loaning money to both sides of the conflict. Major General Smedley D. Butler wrote about this in War is a Racket. I personally, don't give a damn what Mr. Rothschild would be fine with, or the rest of his disgusting family.
Standard bs defense to prevent any legitimate criticism of Jewish people no matter how reprehensible their actions are. Please spare me.
Maybe we should get into what Natalie Rothschild said while being interviewed, about her family's fondness for incest? Or would that be anti-Semtiic as well?
What exactly can you say about the Rothschild bloodline (except for praising them) that isn't considered anti-Semitic? Please do tell!
To your credit, your original comment didn't mention all Jews, just made heavy allusions to stereotypes about them. But now you've removed all possible doubt about what you meant.
Criticize individuals all you want, but don't do it by "bloodline", ethnicity, or whether they're a banker or not. Agency lies with the individual.
I am criticizing individuals - individuals who are members of a bloodline that have historically engaged in war profiteering and have been instrumental in running the international central banking cartel. You're right that I didn't mention all Jews, because that would indeed be anti-Semitic.
Sorry but I'm not going to kowtow to your ridiculous logic. It's perfectly fair to lob criticism at bloodlines, and if you had ever opened a history book you would readily understand that.
Criticizing individuals because they're part of a bloodline / ethnicity is:
- the exact opposite of criticizing individuals; you're really just going after the group
- the definition of prejudice
- the foundation of most (all?) giant human catastrophes like the Holocaust, the various communist land reforms, the crusades, and all sorts of horrible events
I'm a conservative, but I have to say this idea of not being prejudiced is really something great that liberalism brought to the table over the past 100-200 years. I'm gobsmacked to see people rejecting this idea.
So when authors of history-related works criticize or make remarks about bloodlines such as the Hapsburgs or the Medicis or the Colonnas are you equally as outraged as when it involves a bloodline of Jewish people?
If I navigate to - https://en.wikipedia.org/wiki/Genealogy_of_the_Rothschild_fa... - every section of the page mentions the family being involved in banking. Am I stereotyping members of the Rothschild bloodline by saying they're involved in international banking? I don't think so.
I'm equally gobsmacked by people who claim we shouldn't utilize pattern recognition or who want to pretend stereotypes materialize out of thin air.
I think the word "bloodline" has gotten people wrapped around the axle. You could have just said "the Rothschild family" and been in the clear. "Bloodline" veers a little close to smearing an entire ethnicity over the actions of one relatively small family. I'm sure it's not what you meant, but as soon as you start talking about the contents of people's blood, people's ears start perking up and looking for bigotry.
Well I don't really understand the difference between the words family and bloodline, because what is a family besides a lineage of people connected by blood? Just for clarity - I am referring to Mayer Amschel Rothschild and his descendants who have been and continue to be involved in central banking. I am most definitely not referring to all Jewish / Ashkenazi Jewish people, any ethnicity or anyone with the last name Rothschild who isn't or hasn't been involved in central banking and orchestrating wars.
Thank you for pointing this out. I'll try to be more careful in my choice of words moving forward.
"Blood" euphemisms are commonly used by antisemites and racists of all types. Hitler made many reference to "German blood, "Jewish blood," "our blood," and so on, essentially as shorthand meaning ethnicities. The KKK repeatedly emphasizes the importance of "blood purity" to promote its ideology. Which is why Trump's recent claim that immigrants are “poisoning the -blood- of our country” got so many people riled up--it's an obvious dogwhistle, using the preferred terminology of some very, very bad people.
Thank you for shining light on these examples for me. I've been studying quite a bit of history, esoteric spirituality and the occult sciences over the past few years and have fallen into the habit of using this term when talking about lineages of influential people and their families.
I definitely did not mean to sound like I was into eugenics or racial purity - I think these concepts are grotesque and as you said, people that focus on them or use them to excuse atrocities are indeed, very bad people. Thank you for giving me the benefit of doubt and highlighting why my choice of language is problematic.
For what it's worth, my reaction to the word "bloodline" used in this way is exactly what it would have been to the word "dynasty".
"Bloodline", as in, the line of inheritance for an extremely wealthy and powerful family, like Medieval monarchs.
Perhaps we should be a tad more careful about our language use, but I see far too much outright bigotry to be worried about something obviously not used as a dogwhistle.
It's certainly apocryphal and you have the British version, probably. In the US it is usually Joe Kennedy and a shoeshine boy, and also didn't likely happen. These stories are useful parables, and they serve the purpose of explaining why the smart money didn't get cleaned out when the rubes did.
Still, if a 10 year old had started investing 10% in the market in 1920 and stuck through it during the depression, even with no income coming in at the time, they would have done handsomely through the recovery and into old age. In fact, a middle aged person who had been investing until 1929 would have not been fully cleaned out, and that money would have recovered its value by 1943. Margin was what killed fortunes in the day, so the lesson to learn is to avoid margin for your investment portfolio. (Speculation is a different story).
In December 2017 I literally saw shopkeepers and barbers checking Coinbase every few minutes when they weren't with customers. I sold a substantial portion shortly afterwards. Of course I'd be much richer today if I hadn't done that. But I don't really regret it because it's not real investing; it's speculation.
Different as in much worse? It's not that you're wrong but, just to be clear, the problem with investing as the only place to keep up with inflation means that markets will detach from value, and become a giant Ponzi scheme.
There is no such thing as "growth detached from value" lasting forever.
Sure, I did that in 2018 as I was leaving London. Cabbie was talking about the coins he was buying and this and that. Bitcoin was $10k/coin at the time. I sold my bitcoin as soon as I reached Heathrow. This was a very wise move because I followed the story.
I think the assumption here is the investment vehicle will be large bundles of diverse stocks, e.g. via a mutual fund or equivalent ETF. That's the standard way to invest 401Ks and other savings, and something for which stock tips are no use.
I had a very similar idea this summer. But my kids are 6 and 8, so I approached it using the video game approach. It's been an absolute smash hit and entirely altered the habits of doing chores in this home. It's been about 3 months and it's still going stronger than ever. The whole thing is a static page, driven by a Google Spreadsheet that Mom and I edit to adjust goals and track progress.
I wrote it in an evening so it’s disaster code. I might clean it up and make it public this holiday break.
The dailies are a minimum requirement if they want screen time.
I spent a lot of time reflecting on video game incentives and disincentives and was incredibly careful not to teach the wrong thing. The very minimum behaviour we want to enshrine as routines. Everything else is treated as a bonus. Some days they get no coins and that’s fine. Points are never taken away. Coins are spent however they want.
This is such a great idea, I would love to implement this for my kids! Could you post a link to your blog or GitHub so people who want to know can follow you when/if you release it?
M dashes everywhere, bold text everywhere ... what's next, teaching them to over-rely on LLM's? And if we're teaching them about investing, can we also teach them about the ethics of investing? As in, employing a bunch of people to direct the profit of their work into the hands of investors?
For me, the ethics of investing is a bit more profound. I see stock market investment and share holding to be one of the main drivers of civilisations obsession with endless consumption and growth. To me those things are damaging to our minds and our planet. This is just doing the same retarded shit we’ve been doing since the end of the war. Personally I feel like we need to turn a corner now; ease-off this obsession with accumulating as much money as possible for ourselves and focus on our communities, our families, living in balance with nature, and securing a healthy future together with new values and goals that last. Investing into the stock market is like the opposite of this. Just my opinion.
I run a "Bank of Dad", tracked in a spreadsheet for my kids. They can choose to "invest" their money with me or not. To make investing meaningful for them, I pay 10% interest per month, up to a $50 balance.
To avoid bankrupting myself—and to encourage them to get a real investment account when the time comes—the rate drops as the balance increases, similar to progressive tax brackets. By the time they get to $1000 balance, the annualized rate works out to ~6%, and after that it drops fast enough that it's essentially free for me to operate.
Overall, it's been quite successful. Now whenever the kids get money, they invest it immediately. And they often delay or forego spending so that they can get more interest the next month. They haven't turned into complete misers, but it has encourage a mentality of thinking about saving, and I think the concept of interest has landed quite well. I think things really started to click for them around age 8 or 9.
These kids are going to be so mad at how low interest rates are at actual banks that I wonder if this is ultimately going to teach them to borrow rather than save. I guess it’s the same thing, really: they’re learning the time value of money either way.
When I started working at 24, a friend of mine (a few years older than me) asked me if our company had a 401(K) and what was the match.
I was confused. What's this gobbledygook? So I asked around and got him the answers, and he responded with: max out your 401(K). Just do it. And do not ever think about taking money out of it.
So I followed his advice. At that time, the ~$5500 cut in paycheck (my gross was around $35K, IIRC) stung a little. I was single, footloose and fancyfree, and those extra few hundred dollars a month would have been fun to have. But I stuck to his advice.
Today, almost 30 years later, thanks to that, I have a nice nest egg and don't have to worry about retirement (modulo catastrophic illnesses, of course).
So recently my friends' kids started working, and I gave them the same advice: Max out your 401(K), pick a Vanguard Target Retirement fund, and forget about it. If your place offers a "Mega Back Door" option, use it to the fullest extent possible. And if your company has a HDHCP, put funds in your HSA too.
We have a lot of avenues to save these days. Make full use of them.
Consider investing your time, not just your money. In other words, do careful research, start a business, then put your labor into offering a product or service that fills a need, instead of simply working for someone else. If you fail, you'll still learn a lot for another try. And if you succeed, the payoff can be much larger and faster than anything else you might attempt.
I’m in my 30s. Very very few of my friends have been able to match my tech income (and investment portfolio my tech income gave me) with their startup or local business.
Many of them are realizing how far behind they are with someone that stuck with their tech career for 15 years.
I used a lot of the money I could have 'saved for retirement' on a house instead. Given how fast housing prices have risen and the compounding issue of the cost of rents, I'm not sure I'm too far behind. If you look at REITs, which combine the value of housing appreciation with increased values of rents, they are beating stocks in general over the period I've been working.
You might actually be worse off saving for retirement, at early career stages. Of course, some will point out retirement savings are tax protected, but so are modest capital gains on primary residence.
> You might actually be worse off saving for retirement, at early career stages.
A very well-diversified, international fund usually performs at 8% annually which is far more than you would get holding REITs (or worse, properties themselves). What you invest for (e.g. education, retirement, projects) is irrelevant as long as your time horizon allows for crash recoveries (measured in decades at worst and months at best).
REIT is largely a reflection of property appreciation plus rents, which is the opportunity cost of not owning your own property. The link I posted was showing an 8+% return once accounting for both over the a 20 year period that doesn't even include the recent COVID era price explosions.
If I'm not mistaken, they usually pay at least 3% dividend which is added to your salary. ETFs don't trigger any tax as long as you don't sell. And I didn't check but REITs probably have higher annual fees.
I was using REITs as a proxy for the value and opportunity cost of buying your housing rather than investing in a retirement account. If you actually buy REITs this breaks down because REIT capital gains are taxable, while residence capital gains on a primary residence of modest value are not.
It was not my intent to convey you should buy REITs instead of a place to live.
After early career this breaks down though, because the tax advantage are only good for primary residence modest value homes, it's not a strategy that can be continually employed.
Historically, yes - but the last 5 year average has been ~14% (I guess it's like ~9% if you're adjusting for inflation). I think 10% is a bit of a better number these days.
That's not to say I couldn't be eating my words when the market crashes tomorrow, however.
So, bonds basically all tend to converge on the same risk adjusted yield. If you're seeing yields that look like this, the market believes the currency will slip or there's repayment risk (relative to USD bonds that are in the 4.75% range.)
Imagine you have a scenario where inflation is 0 in currency A and 10% in currency B. Would you rather have a 2% bond in currency A or a 9% bond in currency B? This is why Euro bonds go negative sometimes, when USD interest rates were very low and the Euro was deflationary relative to the dollar, it could push rates even further lower.
I wrote an article (it's in Spanish) in which I took data from the central bank since 1990 and created a tool to simulate various scenarios. The tool includes a column showing the average interest rates on central bank-backed investments. Maybe you might find it interesting.
https://roberdam.com/jubilar.html
It's not an inherent feature, but they steer it in such a way so, no, there isn't (at least not for long), unless someone would make a good case for it at some point in the future
The interesting question would be what their currency, where this 11% is offered, typically loses year-on-year
Showing siblings' investment performance side-by-side on a fridge-mounted screen.
Author understands child psychology.
You can't motivate kids by filling their heads with theory. Instead, make the outcomes of their actions visible to them - then they -motivate themselves- to learn how to improve those outcomes. Add in some friendly peer-competition and you're golden!
Nice! I also created a "virtual bank account" for my kids when they were 7-8yo. They can choose to take the weekly cash or put it in their savings account. My bank gives them a 5% interest rate per month, which isn't bad. Explaining the idea of compound interest this way is easy.
However, I think that's the easier part of being an investor. The more complicated part is risk management. With a savings account, there is basically zero risk. But that's not how you invest these days.
Yes, it's 5% per month. You wouldn't be able to explain the concept of a yearly compound interest rate to such young children. One year is an eternity in their life. I also don't give them too much pocket money to encourage them to save. They would spend it on junk food if they had too much cash.
A agree, that the currency is not a 100% safe investment. Inflation especially makes it bad for long-term savings. Indeed, money in any savings account is insured only up to a certain amount. However, that's not something you can explain to kids with a "virtual account." I suppose the idea that Daddy's bank will go bankrupt is probably not an ideal way to teach kids financial literacy.
And can they take loans with negotiated interest rates and lock-in periods? Or invest in more risky products such as derivatives with a corresponding chance to lose all money? So much potential... ;)
Just add a $6-7CHICKENJOCKEY memecoin where they can put money in, see a 50% daily return for a random period of time, and suddenly have it go to zero.
Or even worse, in the tradition of these unclickable javascript buttons of the late 1990's, just detect when the finger is approaching the "withdraw" button and have the asset crash right before they can click!
Be careful with comparing real-life things and experiences with a (virtual) number on a screen, especially for children.
I used to know an adult who only cared about that number going up, despite making more than a comfortable amount of money. Live with parents, save on rent/mortgage, number goes up faster. Buy cheapest food, take leftovers from work-catered lunches, number goes up faster. Scam your way into being hired for a position you are severely underqualified for, get terminated after three months, keep the salary and sign-on bonus, number goes up. Invest pretty much everything (because there are almost no expenses), compound interest.
Being encouraged to invest is nice but having the ability to is a massive luxury.
I knew I wanted to save a lot for my future and retirement since I was in high school. I didn’t gain any reasonable ability to do so until much later.
A much better life skill in my opinion would be to teach about budgeting, how to cook economical meals, how to avoid debt traps and lifestyle inflation.
Not the OC, but yeah I've noticed this myself actually. I read HN because I love science and technology, but I don't work in either area. I work at a dead-end job as a cashier and barely make ends meet. Some of the people on here are exceedingly privileged and really don't realize it.
You're giving a 15% growth rate with zero volatility? That isn't going to teach many important lessons.
How about offering a range of rates with volatility increasing as rate increases. Then they can think about the benefit of guaranteed return vs the benefit of long-term growth, or a combination of both.
OP: I think introducing volatility (which you can just model with one percentage variable and a sinusoidal multiplier based on this: 100% volatility means if your "real" balance was going to be $100 today, it varies between $0 and $200 ; 10% volatility means you're fluctuating between $90 and $110) is also a good idea in teaching kids to refrain from the impulse of withdrawing the money just because today's daily gain is in the red.
The biggest challenge with pensions is convincing people in their 20s to invest in high risk/high return investments. This is usually the right strategy because of the long time horizon of several decades until they will need to crystallise losses/gains.
However if they see their pension balance fall in a big correction, they can panic and move to less volatile investments, thus reducing their long term gains.
You can theorize all you want but the best way to learn to cope with this is for it to happen to you so it would be great to include it in the simulation!
I think an even better option would be to show diversification. You could have some part in a higher risk volatile thing and another part that shows steadier positive growth. Get people to decided how much of each to mix. One of the most important lessons is that all your eggs don't need to be and usually should not be in one basket.
> I explained to my kids that investing is like having a magic box that generates more money over time.
That is wildly misleading. Investing is super important, but it shouldn't be described in this fairy-tale way. Young people might be misled into trusting investment advisors/counselors/brokers, whose real goal is to enrich themselves at your expense. In fact, there are adults who haven't yet learned this.
An article about investing that doesn't mention the WSJ dartboard contest isn't worth reading -- essentially, over 14 years, random stock picks produced returns equal to those of stockbrokers, before the stockbroker's fees and other costs were subtracted.
An investment counselor's primary goal is to make you think you need his services. His secondary goes is to keep you from performing your own research to discover that is false.
never speak about investment counselors on the article, I will forward the WSJ article to my 7 year old girl so she won't be scammed by her broker (me).
Not for the same audience but for much the same idea I made a progressive visualization of saving and compound interest in a blog post about pension saving:
One note: I noticed when opening the installed PWA in airplane mode, styles didn't load. You might be interested in this article on PWA caching from MDN:
I wouldn’t want kids to grow up chasing a number. It’s just too reductionist. If you want them to be financially secure, teach them skills and the money will follow. TC obsession is a blight.
They invest with “The first national bank of dad” as user loloquwowndueo pointed out, I'm their broker, no penalties when they want to make a withdrawal
I think what he's saying is: Given a balance of $50, they "earn" $5/mo. Given a balance of $200, they "earn" $10/mo (or $199*0.10 + $1*0.05). If they don't spend it, I'm assuming it's "rollover", and if they eat into their capital (eg: buy an xbox) then they feel the sting of earning less-per-month.
Tangentially i can't help but notice a pattern. Generation1 says "build more homes", then they build them and convince Generation2 to invest despite ever climbing real estate prices. Then the internet happens and Generation2 says "build more companies". They build them , and proceed to convince Generation3 to invest in those companies despite ever climbing stock values. Seems like these trends run in cycles
> The phone is attached to the fridge and works as a panel or dashboard where my kids can see their money growing each day.
Or alternatively, your kids can see their money going up and down in value randomly, giving them constant anxiety if they're gonna lose it all while the US president uses the stock market as a pump and dump scheme.
The number one thing people fail to truly take advantage of is the triple tax advantage of HSA accounts. So powerful.
Even better is that you can save medical receipts throughout your life and withdraw all that money for any purpose in the future without paying income tax on it.
I remember watching the statements for my savings account as a kid and getting like 2¢ of interest per statement and thinking… that’s it?? Why bother??
And on top of that there's huuuuuuuuge variance over time. You have to scale in and out of the market over a very long time to actually get the ~7%. Any one time investment is just a straight up gamble. It's only in aggregate over a long time that you get something somewhat reliable. But then the numbers aren't that impressive. I understand why people are so fond of buying bigger or second houses instead. It's a shame because it drives up the price of housing making it less available for our young. We're basically saving for our future by robbing the future of our young. It's pretty dark to be honest.
Yes, the trick with houses is that it’s the only chance most retail can get 5:1 leverage. Your brokerage will never extend that to you to invest in equities.
But without leverage, long run return of residential real estate is like 3% after costs, which is less than equities but above bonds.
At least that’s what I tell myself as I go to sleep in my apartment, a non-homeowner watching people accumulate serious paper gains in their houses ;(
Source: a paper called the real return on everything.
Leverage comes with a cost though through interest rates. It is entirely possible (and even typical) to come out with a loss even on appreciating real estate, since your house must appreciate by more than the interest on your loan. In the UK at-least you can get 1:5 leverage on equities, but you'd be looking at a 20-25% APR, instead of the 5% mortage.
The paper "the real return on everything" notably cuts off in 2010 and is talking about global averages, if you narrow it down to specific countries we can see stark differences. In the USA and UK you get 8.4% and 7.2% returns on equity, but only 6.03% and 5.36% returns on housing, a stark difference. Adding in mortage leverage adds on about a percent or so of return, thus still not bringing housing in-line with equities.
If we narrow our window to post 1980, we see in the UK returns of 9.34, 6.81 and 6.67 % for equity, housing and bonds. If we look at post 2010 in the uk, house prices have only stayed the same or decreased in real terms since then in the uk for instance, whilst equities have soared.
Good points! And the period since 2010 has been mostly up and to the right.
While the housing market as a whole may go up, the likelihood that any individual house will go up probably varies more.
How do you get that much leverage from a brokerage to invest in equities? In the US we have something called Reg T, which basically says brokerages can only lend at 2:1 against securities in most cases.
Even most leveraged ETFs will generally stop at 3X.
> As my eldest son’s birthday was approaching, we suggested that instead of asking for physical gifts, he ask for their equivalent in money. That way, he gathered a decent amount of capital for his first investment adventure.
Yes, why would you want a toy or a book? Why waste time having fun or learning? You could instead watch a number go up slowly while you do nothing. Fun for the whole family, seconds at a time!
> Each day, as they watch their small fund grow, they grasp the magic of compound interest — and that, more than any gift, is a lesson I hope will stay with them for life.
This feels like raising finance dude bros and gambling addicts. There is no “magic” to compound interest, no one should have “watch money accumulate” as a life goal.
All I mean by that is having an honest job I don’t totally dread, not getting a high-paying job that wrecks my mental health solely because it pays a lot, buying only what I need with minimal wants, trying to live simply without extravagance. I do in fact track budgeting very consistently and have a 401K, among other things, so that I avoid homelessness and stuff. But I do not think about how to make more and more money constantly.
The simple way would be to not "manage" your finances, don't build an investment portfolio. Have an honest work, live happily within your means and save whatever's left in cash.
Kids used to be encouraged to work hard and to learn. Every day I realize that some kids are not raised with this idea. Why work hard when others can, and you'll get even richer? Learning schmearning
Kids are 7 and 10 , this is a mini "Marshmallow Test" and they can use their money whenever they want if they find a book or toy they like while they learn how investments work.
If he's not able to also provide them with a sizeable initial capital, this lesson is also completely irrelevant. No one becomes really wealthy by investing savings off their modest salary.
It's better to invest in assets though than just the stock market. The wealthy build wealth by borrowing and buying assets like real estate. This ways makes it easier to avoid income taxes and capital gains taxes and you also get massive tax deductions for asset deprecation that you can use to offset most or all of what income it does provide.
agreed - he doesn't say the age of the kids but I imagine they're both under 10? Done right this could set them up for life and make them millionaires with virtually no effort by the age of 30 and still give them a childhood filled with toys and fun. But removing birthday gifts entirely from a young child... woah. Kids need physical items and tangible hobbies to share and bond with friends, even if it's just a cool looking stick. Is a child's brain developed enough to understand, enjoy and share a lot of these concepts, could it maybe lead to them becoming isolated?
>Done right this could set them up for life and make them millionaires with virtually no effort by the age of 30
This seems hyperbolic. Given that money doubles in roughly 10 years at a 10% rate of return, if kiddos are 10 years old they get two doublings by 30. To be a millionaire by 30 requires a present value investment of $250k per child.
It’s been my experience that when people are talking about some future sum of money without specifying real or nominal they are referring to a real sum, based on their current day concept of monetary value.
How is teaching your kids to invest some portion of their money "raising finance due bros and gambling addicts"? Just because modern culture has incentivized these kinds of people doesn't suddenly make investing bad. This is such a wild take.
> How is teaching your kids to invest some portion of their money
That’s not what the article says. I explicitly quoted the relevant part. It’s not “a portion of their money”, this is not money they had lying around in an envelope that grandma gave them. This father is incentivising the kids to not get what they want for their birthday and instead ask for money with which they’ll do nothing but unrealistically watch grow for a period of time. That’s not a good core memory, no one looks fondly on “that birthday I had as a kid where I got nothing but a number on an app stated growing at a snail pace”.
> doesn't suddenly make investing bad.
That’s not the argument. Nowhere in my comment does it say investing is bad.
> This is such a wild take.
Any take is wild when you blatantly misrepresent it. Don’t straw man.
Kids are 7 and 10 , this is a mini "Marshmallow Test" and they can use their money whenever they want if they find a book or toy they like while they learn how investments work.
Seems more like a "mega" Marshmallow Test. Instead of putting off a snack for 15 minutes they're giving up an entire year of birthday gifts for a reward years into the future.
I dunno, while they didn’t tell me to ask for cash, my parents basically made me invest any cash I got as gifts, plus everything I earned at summer jobs. I think that this kind of “investing by default” mindset (plus getting my own desktop computer for Christmas at age 11) extremely significantly impacted my current life in a positive way.
Also, learning to use Excel by playing fantasy stocks during the dot-com bubble, and having a Lycos homepage “Portfolio” widget just like my mom did is a fond memory for me, and zero people on Earth would call me a finance bro today.
The major difference is that in all your examples you were already getting cash. In the article, the poster is incentivising their kids to get cash instead of something else specific. From the article:
> we suggested that instead of asking for physical gifts, he ask for their equivalent in money.
For their equivalent. In other words, the kid has to decide something they want then deliberately choose to not get it so they can “invest” it and see line go up.
It would’ve been different if this had instead been a case of “grandma just gave you an envelope with cash; if you don’t have plans for it, how about investing?”. Which works on many levels, they could’ve also spent some portion of the money on something they wanted then invested the surplus, or a myriad other options.
> You could instead watch a number go up slowly while you do nothing.
and then...spend it on something nice?
> This feels like raising finance dude bros and gambling addicts.
This is a super reactive take speaking from no experience whatsoever. My own parents did something like this for us when we were in elementary/middle school and it taught me restraint in spending, not the opposite.
> This is a super reactive take speaking from no experience whatsoever.
You have no idea what my experience is, please don’t assume.
> My own parents did something like this for us when we were in elementary/middle school and it taught me restraint in spending, not the opposite.
I’m glad it worked out for you. Truly. But don’t assume your experience is universal, because I unfortunately know for a fact it’s not. Also, the argument isn’t that it causes unrestrained spending, that’s not what financial dude bros are about. Excessive restraint in spending can also lead to unhappiness and an unhealthy attachment to money.
What is the point of your comment, actually? At least GP is talking about children psychology and is totally on topic. Wanting a faster profit then getting scammed or lose money in a crash market is also part of the learning.
It's for the lolz. I laughed and upvoted, just imagining my kids someday lecturing me on crypto. Then I thought about creating a bubble for them and then saying to their faces "Annnnnd it's gone."
At the point with investment I was lost. Children should learn to be patient (saving money) and prepare for bad situations (saving money). That’s enough.
When older we can teach them what capitalism considers as investment. Capitalism is a longer word for greed.
Money doesn’t work. Employees do. Customers pay. Both suffer to make greedy persons rich.
Give them a piggy bank. Teaches the concept of preparation.
Even saving can be seen as greed. Someone can focus too much on accumulating for themselves. Both investing and saving can be seen as preparation.
To avoid things becoming evil, you just need to make sure that your interactions with other are cooperative and not zero sum, and not all investments are zero sum.
You say "when older we can teach them what capitalism considers as investment" but you never specify the age. What exactly counts as older? My mom started telling me about how the new home we just moved into was both a place to live and also an investment at age 8. My dad started telling me about his brokerage account when I was 7. My dad also explained to me why the new car we just bought was not an investment when I was 6.
That's to say, I strongly disagree. It's almost never too early to teach this to children. As soon as children know money could be spent on exchange for things, they should begin to think about how money is made.
Capitalism itself is a rather modern idea around 1800. And greed is maybe rooted in human nature, within the need to keep a buffer of food.
But we’ve brains and are social entities. I don’t think greed is necessity. But greed of other harm our needs. And we need to get greedy to get enough?
Examples:
I want a nice bicycle. I need small house or nice flat. I enjoy good food from time to. I’m rather sure I don’t need a super-yacht, no swimming pool and no villa. I think stuff which I cannot keep myself clean is too much. If I cannot keep it clean myself it was greed?
But we’ve big dreams?
For the big dreams I would probably consider a cooperative society. These airliners are so expensive and suffer from not being used. Sharing them would be nice? Like…like owning airline stocks. Without the enforcement to gain money. Maybe some people enjoy flying it around, other maintaining it and others care about safety and passengers. Others maybe want fly to the moon. And others enjoy ships. Maybe sharing them deliberately makes sense?
That's quite interesting. When do they start to understand that saving is better, if they do? I can imagine kids never wanting to save for later, but also I remember that I enjoyed saving more than spending coins when I was a kid.
> One thing that school doesn’t teach you (not even high school) is how to manage your personal finances.
Can we stop with this myth? Most states require financial literacy courses to graduate. The reason it feels like it isn't happening is because it's boring and most just don't pay attention or absorb the lessons.
> Most states require financial literacy courses to graduate.
Prior to 2020 only 8 states required a standalone financial literacy class. So a good percentage of people from the US on here probably didn't have to.
There were also states that had it integrated with another course but I'd question if they were any good. My state was like that and all we did was a 2 week project where we pretended to trade stocks starting with $1k. Which didn't even include things like dividends, short vs long term capital gains tax, etc...
We weren't taught basic things like budgeting, planning for emergencies, how loans and interest work, how taxes work, how credit scores work and affect you, etc...
My mistake, it's just such a common trope in the US I didn't realize it was a universal complaint. It is true for US incidentally, people generally don't remember it because a) the learning and real world practice are too far removed b) people often are poor with finances regardless of knowledge.
Here in the UK there's never been financial literacy taught at a national scale that I'm aware, there certainly wasn't when I was in school, albeit that was some decades ago now, and from what I've seen of my nephews/nieces it still isn't.
My children are still too young to worry about the minutiae, but we're already trying to teach them about income/outgoings and saving even at their middle single-digit ages.
Investing is something I can't say I'm extremely comfortable with the details of even at my advanced age besides the simple things like "I have a pension" and "I have a LISA".
I definitely think there's room for some self-service tools to aid in teaching these things to our kids from an early age.
Have you considered that "people generally don't remember it" because most of them graduated before 2020? People are going to reflect on their own experiences at school, which will often be from decades ago. If they aren't a teacher, they probably aren't going to find out about any changes to the curriculum. Maybe if they have a child, but that potentially takes an 18 year delay between implementation and learning about it if it's about a high school, if the teenager bothers to report that they had a boring finance class to their parent.
Are you from the US? I went to a good high school and even that class was awful. No one wants to teach it and genuinely, you learn more about money in history, english, science, and math. Additionally, you can take it online and over the summer, which kids do so they can take nicer looking classes. Granted, students with a work ethic tend to learn these things on their own.
I graduated high school almost 30 years ago so whether I'm from the US or not isn't particularly relevant. I did live in the US for 25 years though, and up to however many minutes ago, I didn't know these classes were a requirement in any state (let alone 30).
But going from "it's not a requirement" to "the class is awful" would kinda be moving goalposts, no?
The goalposts were that "school doesn’t teach you (not even high school) is how to manage your personal finances." is a myth. It doesn't matter if there's no class or the class is useless, the statement is almost as true in either case. Students don't learn personal finance in school. They particularly don't learn practical investment as a way to manage their savings.
And for many of us, financial education, if there was any, was probably from boomers going "debt bad! credit bad! get a job and make money!".
I guess that depends on how you read up the thread.
Seems pretty clear to me that the comment I was originally replying to was about whether there was a requirement for financial classes in the US, not about the quality of the classes.
So we clearly weren't looking at the same goalposts.
There's an awful lot of negativity here, but as someone who's 55 and has earned a good wage since I was 17, I really wish I had taken investing more seriously from the very beginning. While I knew of compound interest, I really didn't understand it until like a decade ago. If I'd started putting 5% of my money into a target retirement plan from 17, I'd be retired now. As it is I'm not doing badly, but I really wish I'd started earlier.
So I say: Good on you.
Somewhat related: I just got my son set up with a custodial account and put his "kid retirement" plan into it, and let him pick a couple stocks to put some money into, and put the majority of it into target retirement and a few stocks and EFTs, so he can get some ideas of how they perform, make it a little fun with picking things he's into, and also follow ups and downs of the market, all of which I think is good education.
Investing for retirement at 17 is a bad idea! At 17 you should still be thinking about investing in education - the right education investment today will pay back far more than any other monitory investment. There are of course bad education investments, and some are not willing to study even more (or not able to pass a good education course), in that case retirement might be the best investment you can make, but it should not be your first choice.
A different reply said they waited until 26 to start - that is probably about the right time to start saving for retirement. Maybe a little late, but close enough. Before about that age you are still getting started and so you have little spare cash. You need to pay off school loans (if you took any). You need to save for down payment on a house, and buy a lot of those will last a lifetime household items everyone needs. You should be thinking about marriage and saving for it (even if you don't get legally married most people will live with someone else and should be planning on how to make that life work).
Most important: you don't know how long you will live. Save for the future, but not everything - you have no guarantee you will live to tomorrow - if you are under 60 odds are strongly in favor of it, but people die young all the time. You should have a little play money as well in your budget. Go climb Mt Fuji while your body is young and healthy enough to do so (I picked a random activity here, you should decide what you care about, not rush to Japan)
If you start investing a small amount at age 17 you can build the habit and increase totals later.
Saying "I'll do it later when it is rational" often translates to "I won't do it (for a long time)". Which is not rational
This is true of most money behaviors! My mom taught me the same thing about giving.
And even today, knowing way more about personal finance than I did at the start of my working life, I'm still amazed at how blocking out money in the budget astronomically increases your chances that that money actually goes to the thing you want.
"My mom taught me the same thing about giving."
care to share what you learn???
They mean don't wait till you're rich to start giving charity. Just give what you can when you can. Many people tell themselves they are great people because of all the money they'd give away just as soon as they are rich enough to do it but die without giving anything.
More or less: yup.
The great thing about saying "give 10%" is how well it scales.
Except it doesn’t. If you’re poor, 10% directly impacts your life negatively. It means less (or lesser quality) food. It means less money set aside for yourself in the case you need it — and you will.
10% for middle class is fine. That’s just one less night out.
People should not give to charity if they themselves are likely to be dependent on charity.
I could get into virtue ethics or religion but I know this is Hacker News, so maybe I can frame it like this:
Telling people to wait until they're financially stable before giving risks creating a dynamic where people never start. The person who says "I'll give when I can afford it" at $30k is likely to say the same thing at $100k, because the scarcity mindset scales with income.
Small-scale giving early on helps build the identity and habits of someone who contributes to their community rather than just consuming from it.
And arguably there are network effects formed from generosity of time/money that can bring long-term benefits as well. It's a spicier idea, but I could even suggest that giving helps you see money as a tool rather than as security itself.
Yeah no. I used to let people of a higher social order (politicians and media figures) guilt trip me into giving to charity when they themselves just conjure money from taxes I’ve already paid, while the rare few times I’ve needed help due to work injuries the state nor charities were never there for me.
I will help my neighbours and my friends first, real people who will also be there for me. And when it comes to charity for foreign nations, I will never do it. Suicidal empathy is being weaponised and I’m through with it.
I think this reply shows that we're engaging this idea on different planes. I'm primarily focused on the giver, and giving as habit/character formation. (I didn't say a word about who to give to!) You're coming at this through the lens of...something else? Institutional trust? Geopolitics?
> I will help my neighbours and my friends first, real people who will also be there for me.
That sounds great, and perfectly compatible with everything I'm saying.
This comment perfectly illustrates the mindset folks are talking about. "I'll give when it doesn't hurt me so much" is another form of "I'll give when I have more." It doesn't make the person "bad" or any such thing for not giving, but you won't convince folks to not give by saying "but what about you, don't you want nicer food/clothes/etc."
I live in reality. It's me first, then it's my family and my close friends, and then my local community and then, finally, local charities. That's how my budget works. A budget is money in and money out. And when all of that is good, then maybe I'll think about larger charities where I can't be directly involved to see where my help actually goes.
Most people do think they have less than they really do - which is to say there are families living on less income than they are thus proving it is possible with some luxury quality of life compromises. However that doesn't destroy the point that there are people at or near the bottom who shouldn't be giving.
> give what you can when you can
Probably something like this: https://www.youtube.com/watch?v=6ayPuijerjQ tldr; have your kids split their money into three separate "jars": Spend (can be freely spent), Save (this jar generates interest from the money in it, they also have to wait some time to access the money if they want to spend them) and Give (for charity).
Yes. You can make it a 2% contribution at 17 then add another 2% each year, until you hit say 24% at 29 then keep it there.
Then the habit is set up and you just log in to whatever and up the number.
Get your habit be investing in an education savings account.
I think it's actually a bad thing to think about money early on. Because it adds a layer of responsibility which I think takes away from simply enjoying life and focusing on what you might be truly passionate about.
One of the things I hate about my 30s is that I'm focused on money now and it feels like I'm not living the life that I want. It just feels like I'm preparing for death.
Which I'm not saying isn't the sensible thing to do, there's just something inherently managerial about it which doesn't seem intuitive to living a meaningful life.
The earliest years of your earning life contribute overwhelmingly more to your final retirement figure than your later years. Anyone lucky enough to have a job in their teens that gives them disposable income after each paycheck really, really, really should be saving and investing. Like OP, if I was more serious about investing in my early years, I would be retired by now.
One can lead a meaningful, enjoyable life while also considering their finances.
> The earliest years of your earning life contribute overwhelmingly more to your final retirement figure than your later years.
for most the amount we earn before about 25 is so little that even everything saved at the best return is insignifitant inretirement. at 25 a small percentage of your income saved becomes meaningful, but you are likely to earn enough more at 35 that the amount you can save then totals to more
> One can lead a meaningful, enjoyable life while also considering their finances.
This is where I disagree. I think there's a certain amount of naivety required to pursue meaningful things. There's so much in life that makes no financial sense that creates meaning. The moment you start having to think sensibly from a financial perspective, is when so many of these things no longer make sense.
Once you're plugged into the system there's almost no turning back.
> There's so much in life that makes no financial sense that creates meaning. The moment you start having to think sensibly from a financial perspective, is when so many of these things no longer make sense.
I get the sentiment, but it implies the opposite of your conclusion.
Since so many things make no sense from a financial point of view, the only sensible strategy is to break free of the financial constraints as soon as possible. Money cannot buy you happiness, but it can buy you the freedom to pursue it.
Retire early to give yourself the best cushion (and best possible chance) to pursue meaningful things, without the everlooming sword of making ends meet. The added benefit of life experience to filter out pursuits that only look meaningful on the surface, is a nice side-effect of this strategy.
> Since so many things make no sense from a financial point of view, the only sensible strategy is to break free of the financial constraints as soon as possible. Money cannot buy you happiness, but it can buy you the freedom to pursue it.
So I think the reason why this doesn't make sense (in my mind) is because in a state of retirement i.e. financial independence, you're still just as conscious of money as you were when you were accumulating wealth. You still need to manage money no different to when you were accumulating, it's just now you're not earning.
To me the freedom I'm referring to is similar to that of childhood - where you're not worried/concerned about "the system". You're just doing your own thing in your own world. That kind of purity no amount of money can resolve, even in an early retirement scenario.
The other issue is that a lot of stuff only makes sense when you're younger. Like it's a lot difficult for example to become a travelling musician or even to travel etc.
Now of course, early retirement provides it's own kind of freedom. But I would say that it's not equivalent to the kind of "freedom" that I'm referring to, which is basically being carefree.
> To me the freedom I'm referring to is similar to that of childhood - where you're not worried/concerned about "the system". You're just doing your own thing in your own world. That kind of purity no amount of money can resolve, even in an early retirement scenario.
The only ways you can live as an adult unconcerned about the system is 1. if you actually have a substantial financial backstop (trust fund, wealthy parents, etc.) and just pretend you don't, or 2. if you don't have a financial backstop, at which point "doing your own thing in the world" just means being a vagrant, drifter or bum.
Oh, the FIRE community. If you trained yourself to live looking at the money you need to save to retire, your brain will most likely be wired to that behavior, and breaking free from that will be utterly difficult. On top of that, people with the FIRE mindset have probably by default already a strong (innate? taught?) bias towards enjoying optimizing their life and making it the end goal.
> Oh, the FIRE community.
I think you may be confused, I'm not part of the FIRE community. I'm only taking the statement that "doing meaningful things is not financially sensible" to its logical conclusion, not endorsing any position.
> If you trained yourself to live looking at the money you need to save to retire, your brain will most likely be wired to that behavior, and breaking free from that will be utterly difficult. On top of that, people with the FIRE mindset have probably by default already a strong (innate? taught?) bias towards enjoying optimizing their life and making it the end goal.
So many assumptions and claims without any supporting evidence:
- "FIRE people" train themselves to live looking at money only.
- This wires their brain to that behaviour (left unclear what this actually means in terms of concrete behaviour).
- Breaking free from this behaviour is difficult.
- People with this mindset have a bias towards enjoying optimizing their life, to the point this is their end goal.
- (Implied) This makes their life some combination of sad/bad/meaningless.
I don't really want to even argue against this because the burden of proof for providing any supporting evidence is yours, not mine. I'm not particularly interested in constructing some overarching psychoanalytic theories for a large category of people who I've never even interacted with, but you do you.
Sorry, I wasn't addressing directly at you, even if I was technically answering to you. It was more of an unsolicited rambling about the general topic.
Sorry for that.
> One of the things I hate about my 30s is that I'm focused on money now and it feels like I'm not living the life that I want. It just feels like I'm preparing for death.
FAANG job at 22. Save up 25k a year for 4 years, that is 100k. You'll already retire at 56 with over 1.5M in the bank. It isn't perfect but it is a lot better than what most people do.
Really all you need to do as a programmer is max out 401k and maybe throw another 10k a year into savings on top of that.
I worked at MSFT for a decade and I would have retired at 40 if I hadn't spent 3 years trying to run a startup after my time at Microsoft.
This includes international travel every year, and 2 domestic vacations.
> You'll already retire at 56 with over 1.5M in the bank
That 1.5M isn't inflation adjusted. If there is 0 inflation between now and when you die 1.5M is plenty. However the more inflation there is between now and when you die the more money you will need, the later you need to retire, or the less spending money you have. (of course we need to asking how things like social security fits into your plans as well, but this is already complex enough).
If you 22 and used to a FAANG income even with saving $25k/year every year you need more than 3M to retire retire without losing quality of life (even though most of that is luxury).
Are you willing to live on less, or will you discover with your free time you want to spend more money (hobby supplies? Now you have time to travel - maybe first class). I can't answer this question for you, but you need to think about it. Worse, your answer is likely to change over time.
>Investing for retirement at 17 is a bad idea! At 17 you should still be thinking about investing in education
Why would you assume they are mutually exclusive? You can just do both.
And poor people just should eat cake, I know..
For real, I believe most 17 year olds on this earth do not have the funds to invest in education AND in a retirement fond, so there are choices to be made. (there are also the choices of creating social bonds and investing into activities together, ...)
The root comment was talking about investing 5% of their earnings. If you're making any kind of income at 17 (which admittedly is not everybody) then learning to save+invest a small portion of that can have incredible positive snowball effects beyond the compounding itself.
I can't imagine a scenario where at 55 years old, you would miss the 5% of your summer income you invested back in high school. But I can totally see a scenario where investing those 5% led you to increasing it to 10% in college, 20% on your first job, and being financially independent way before you hit the age of 55.
"I can't imagine a scenario where at 55 years old, you would miss the 5% of your summer income you invested back in high school."
If those 5% were the question of whether to go with the group on a adventure together or not - and you end up alone at 55 years and not invited .. you might have rather invested different back then. But on the other hand I don't think those 5% of earnings with 17 make a difference later.
The only real difference they can make, if they made you start a habit of saving income for important purchases. (But not really fore retirement at that age. But each to his own)
I think this really comes down to how a teenager is wired and life circumstances. Some of us made all our close friends in college and dont even live near our hometowns anymore. My high school friendships are all “dead” so to speak.
I think if a teenager is the social type, or they have a positive (non-toxic) friend group, then absolutely - spend the money! It’s an investment in your friends that may or more not pay off.
But some teenagers don’t have much in common with their peers, are bullied in high school, or just want to move on to the “real world” and graduate already. For those kids, invest!
"or just want to move on to the “real world” and graduate already. For those kids, invest!"
In general sure, it really depends .. so invest in what? It can mean many things, like also saving for the drivers licence/first car to make that move away into a nicer worlds with better opportunities.
absolutely! It’s always a good idea to write down your life goals and major planned expenses. Then you can prioritize them as needed.
That usually helps answer questions like “if i invest X% of each paycheck into an S&P500 index fund, and put the remainder toward saving for my 1st car, i’ll have money for the car by date Y.”
And this skill translates to adult life really well. I find myself doing just that a couple times a year! Of course for some teenagers investing a substantial amount is simply not realistic…not every family is middle class after all.
One important reminder: inflation is no joke these days. I’d only recommend a savings account to a teenager for short term goals. Even if they are poor.
Most 17 year olds have very low income and education goals. They will miss that 5% in a retirement fund because they are forced to take a student loan to cover that.
Forgive my puzzlement, as I come from a country where you would not consider taking a student loan (if this even existed) to cover the $50 you put into an ETF from your summer job.
Eventually you just don't have enough. If are short $50 where does it come from?
> I believe most 17 year olds on this earth do not have the funds to invest in education AND in a retirement fond
There is also a huge overlap between "kids who have wealthy parents" and "kids who can afford to invest".
Im not claiming everyone can do it. Im saying they are not mutually exclusive. If they were mutually exclusive that would imply no one could do both. For those that have to chose one or the other I agree they should choose education, but thats a subset of cases.
It seems like learning about personal finance is itself educational, and there are a lot of jobs where you deal with money. So this isn't entirely separate from investing in education, depending on which kind of education you mean.
As with many times when we use the word "should" (and you've used it a lot), the perspective you're sharing is deeply influenced by your own cultural background and might not apply to many people reading.
A few examples: school loans, considering a house purchase to be a sound investment, purchasing once-in-a-lifetime household items, saving for a wedding (from the age of 17!?) or marriage (not sure what you even mean by that if you don't mean the wedding itself?).
The details matter and are personal I agree.
Even if a house isn't right for you, you still need to save for the deposit on an apartment. You still need to buy furnishings for your apartment. You won't even know if a house is right for you until you are mid 20s to 30, so it is probably best to save for a house and if you decide at 30 it isn't right for you roll that money into retirement savings (if a house isn't right for you that means you need more retirement savings)
Relationships - even if you don't have a wedding or kids - come at the time you have those starting to get out on your own expenses. You will need to figure those out.
You just replaced "buying a house" with "buying an apartment", proving my point about cultural bias :-)
I meant, for many people (especially young ones), taking that same deposit to purchase an investment property (which could be a house or apartment, but has a tenant who lives there rather than being for oneself) can be a better deal than buying for themselves.
In the end, buying a place to live in is very much an emotional choice, which is totally valid. But in some locales and for some lifestyles, being a landlord who pays rent elsewhere can be a better financial decision.
This kind of advice was gospel in the 90s.
[should, shouldn't, supposed to, never, always]
These are key words to mentally breakpoint on and more carefully consider what is being said.
What educational path is safe to invest in right now?
What kind of job will be in high demand in a few years and will remain in demand for at least 20 years?
I'd offer learning skills, personal finance and other life skills, (more or less public) speaking, potentially languages and (modest) mathematics as some examples of skills that will probably be useful for any foreseeable future including most dystopias. Particularly they are things that many 17 year olds will be lacking.
> At 17 you should still be thinking about investing in education
I mean, sure, in a perfect world you can postpone retirement savings. But if we're doing perfect world, you shouldn't have to think about "investing in education", your government should have the basic cognitive skills that would let it recognize that they should invest in education - ROI is pretty spectacular.
Realistically, both, because... otherwise you just pick how screwed you'll be later in life.
Sometimes I feel like I started investing late at 26. Already, six years into the best decade for compounding in your life. But such was the power of compounding that I had reached a substantial net worth by age 35. So even just nine years can make such a tremendous difference even into later ages. It's never too late to sock money away.
It remains to be seen what's going to happen over the next few decades. It's entirely possible that it'll all get wiped out (the substantial gains, not all value).
While the market was a very good bet for the last 50yrs, its not a guarantee.
Especially in the current climate you should be fully aware that it's significantly more risky to start investing today vs 10 yrs ago.
(Riskier doesn't mean it's necessarily a bad idea. It should just be a conscious decision under the acknowledgement that the upward trajectory is not certain. Especially in current political climate - and that "hodl"-ing doesn't necessarily mean you'll eventually get back what you invested, if a downturn manifests)
>> Especially in the current climate you should be fully aware that it's significantly more risky to start investing today vs 10 yrs ago.
First, I don't think this absolute statement is true; I think you need to look at it from the alternatives perspective. If not investing then what? bury gold? spend it all?
Second, are we at a much riskier time than past history, both short & long term? I made significant contributions in 2014, saw 30%+ wiped out within 6 months and seen it all come back and more with the power of long timeframes.
Third, investment can take a lot of forms, not just today's hot tech stocks. I won't get into it beyond the standard think long term and avoid leverage, which seems to be completely inline with start early; start now.
Your money has to go somewhere or it will rot to inflation. If you're ultrabearish on stocks, snap up bonds. If you're bearish on stocks and bonds alike, snap up gold. Either way, bare minimum of what to do with your money long term is to preserve its value across inflation.
But really I would recommend nonetheless staying the course with investment advice on a stocks/bonds balance relative to your age. Increasingly, the economy distributes not through labour but through capital and holding stocks is essential even with their inherent risks. Even in light of that CNN article about meme stock and crypto investors having the last laugh over the past decade, indices of ordinary large-cap stocks bring you exposure to these things.
> Your money has to go somewhere or it will rot to inflation.
Inflation is mainly created by this act of "putting your money somewhere". For most people, this "somewhere" means loans. Money is being loaned out to people, spent, deposited back into the bank, and loaned out again, on and on it goes until $1,000 turns into $100,000 in circulation, not a cent of it real until all loans are paid back.
You are very confidently incorrect. So incorrect, it is hard to even start correcting you.
* Inflation is not caused by "putting your money somewhere" What on earth. * At a high level, inflation is caused by either "too much money chasing too few goods" and/or the cost of producing the goods rising. Money supply can increase without causing inflation if the supply of goods can also increase. In short, the supply of money can increase without causing inflation if productivity rises to match it. * Most people do not "put money" in loans what are you even talking about there? * Bank loans do not automatically increase the supply of money. When a loan is taken out, it is (mostly) deposited to another bank, resulting in a net-zero change in money. Increasing the supply of money requires the federal reserve to take steps.
> In short, the supply of money can increase without causing inflation if productivity rises to match it.
You're actually agreeing with me. Money supply must be backed up by real wealth and production.
That's not how things work in current times. We have nearly zero interest rates, and currencies are backed up by literally nothing.
> Most people do not "put money" in loans what are you even talking about there?
Fractional reserve banking. Banks loan out the cash you deposit. They "efficiently allocate" the money in their custody.
> Inflation is not caused by "putting your money somewhere" What on earth.
It absolutely is. Banks can easily turn thousands of dollars into hundreds of thousands of dollars by repeatedly loaning out the exact same dollars numerous times.
It's some kind of society wide financial call stack. Too many defaults and everything starts unwinding.
> Bank loans do not automatically increase the supply of money.
Obviously they do.
Imagine you deposit $100 at your bank. It takes your $100 and loans out $90 of it to someone else. There are now $190 dollars in circulation.
Whoever took the loan goes off and spends it. Eventually it gets deposited back into a bank. Then the bank loans out $81 out of that $90. There are now $271 dollars in circulation.
And it keeps going.
You can inflate bitcoin via this algorithm.
> When a loan is taken out, it is (mostly) deposited to another bank
Irrelevant. Banks form interconnected systems. They all settle debts and accounts with each other.
> Increasing the supply of money requires the federal reserve to take steps.
The physical supply of money is irrelevant. It contributes only a small fraction of the circulating money supply. Money is numbers in bank databases now. They could run the money printers 24/7 and they'd never even come close to catching up to the inflation caused by banks.
There is never a guarantee, but all I can say is that there have been people claiming we're in a bubble for over a decade now. Maybe we are, but that doesn't mean you shouldn't be investing instead of spending all of your money.
Saving is follows the same advice as for planting a tree.
The best time to plant a tree is ten years ago.
The second best time is now.
Historically, it takes about 7-10 years to double your money in the stock market. So between doubling your money and incremental saving, yeah you should see a pretty significant difference from 26-35. And that's before it skyrockets :)
I didn't start til 35 so don't feel too bad.
I started my daughter investing with a custodial account at 13. She put a few hundred dollars of her money in and I convinced her by matching her investment and told her if the amount ever went below the original investment I would backstop any loss.
Investing is all about that long term gain and slow growth. Having 10 years of experience after finishing college will do so much more than Robinhood for refrigerators.
I've made a similar deal with my kids: Around 7 years ago I set up a "kid retirement" plan for them, where they couldn't touch the money until they were 18, but any money they put in I would match, and I'd also give them 10% APY with monthly compounding. My daughter aged out of it a couple years ago, she got something in the $100 range. Her brother still has a 18 months left, and I just recently rolled his over into the custodial account, he's got over a grand in there currently.
My daughter I just recently set up a ROTH for her and told her I'd match anything she puts into it, and stressed she should put something into it now from her savings, and then put some of her paycheck into it, anything is better than nothing. So far she's declined the free money. I'm going to set one up for my son, once he's at the point of having an income to justify it. She's very smart, but in some ways she's very stupid.
That young you should be investing in a 527 education account not a ROTH retirement account. Education is a much better ROI when you are young than anything else. As you get older the value of education decreases. In generally the cross over is sometime in your early/mid 20s (Could be as young as 16 if you don't do well in school, or as old as 35 for things like medical doctor)
If you don't live in the US you will have different options, but the idea still applies
I'm doing a 529 as well as wanting to set up the ROTH Note that you can also just take money from your other investments, deposit it into a 529, and then immediately pay yourself back for educational expenses you've paid for off the 529.
My kids have some 529 buffer, and we are paying for my daughter's school right now (though she's paid us back for the class she got an F in). My son, it's not clear that the typical school track is going to be the right thing for him, but we also have a 529 for him that I've been contributing to.
You mean a 529 account right? 527 seems to be associated with political contributions. I looked it up to ensure I wasn't missing out on something I did not know about...
Too late to edit, but I stand corrected
The spiraling price of college in the US today has been questioning the assumption that education has a better ROI.
There are a lot of it depends. If you are going to be a retail worker all your life there is no reason to go to college. A music degree has questionable value on its own, but many people get them understanding that "any degree" is needed for some good jobs and those that find those do well enough (your generals and non-major electives are important). The school matters - Harvard is expensive but the networking can be worth it if you network well in school. State schools tend to be a lot cheaper than private or out of state as well, and generally pretty good. Scholarships enter in as well. Degrees like Engineering or Medical doctor tend to have a much better ROI long term, but only if you pick the right one and pass.
But you need to make your own decisions. For some your best ROI is dropping out of school at 16 - but for the vast majority more school will be worth it.
This would be fun to model. Lifetime earnings are higher for those who have more education, but there's potentially decades of servicing a potential mountain of non-dischargeable debt to consider (potentially decreasing post-college investment ability) too.
I don't know the first thing about student loans (interest rates, amortization periods). I never had one. I just search-engined 2025 federal student loan rates and I'm blown away by the interest rates. It looks like avoiding student loans at all costs is the way to go.
I wonder if spending a few years working (especially if your parents are able to continue to house you and pay for health insurance) and contributing to a 529 plan might meaningfully decrease the overall cost, albeit at the "penalty" of starting college later in life (at, say, 22 instead of 18).
I take that even a little farther. Whatever my kids make (up to the Roth limit), I give them money to put into a Roth IRA [and they can keep what they earned].
That maximizes what they (as teenagers) can put into retirement accounts, their tax rate is 0% now, and though it doesn't teach them the deferred gratification aspect, it gets their retirement savings started.
We can talk about the deferred gratification aspect in other ways and/or later, but I'd rather they get 40-60 years of tax-free growth.
Is your daughter feasibly going to make “real money” in the future? I personally look back on working a job in college as a waste of time and attempting to save money then as a waste of effort. Should have just taken more debt, the amount I did take turned out to be trivial to pay off and double or triple wouldn’t have been that bad. I feel like there are two worlds employment wise, and some advice leaks between them which ends up being maladaptive in its new environment.
I hope that @roberdam reads this and implements those into his PWA.
OP, enabling: - deposits (and withdrawals) - a matching logic (which we can do manually I guess, by doubling the deposit amount) - and correct calculation of compounding (if I had $100 for 11 months and add $100 in december, I shouldn't see the value compound $200 for the whole year)
would be great.
Bonus points if there was some kind of password (even hardcoded) so that the kids can't just click the gear icon and write themselves a blank check of $1,000,000
Excellent suggestions! For now, what I do is update the amount every time there's a deposit or withdrawal, and I set the initial date to the day of the withdrawal or deposit.
Ah, she's barely out of her teens, give her a break :) Better things to spend one's life on in those years than worrying over a few hundred bucks in a bank account. She'll come back around in a few years.
My dad made a deal with me that, of doubling what I would save during the week.
You say that now but as a young person with a decent income and no family or many responsibilities it's hard to even know where to start.
And I'm not even talking about what to invest in, I'm already confused at which platform/bank/whatever to do it through. The "meta", if you will. I just want to invest the 70% of my salary I don't need every month and not think about it for 40 years but how? Maybe an important detail, I'm from Switzerland, perhaps it's easier in the US with things like Vanguard.
Don't know about Switzerland, but most US brokers offer some kind of "target retirement date" fund, which automatically shifts from higher-risk assets to lower-risk as you approach retirement. VFIFX is one from Vanguard, for example. Pick one you like (just ask a coworker what they use, if you pick a big-name brokerage it really doesn't matter which one), shove your extra cash into it regularly, and forget about it. Then cross your fingers the market isn't actively crashing when you plan to retire (this is unlikely, but it does happen a couple times per century).
If you start to get into truly high wealth amounts (USD$500K+) you might consider hiring a wealth advisor, who can probably do better even after accounting for their fees.
> If you start to get into truly high wealth amounts (USD$500K+) you might consider hiring a wealth advisor
That's not nearly high enough for a "wealth advisor". Maybe a fee-only financial planner, but even then it's borderline.
Even when it crashes it's like 20% no? It's not actually that big of a deal.
The idea is that over a 40 year window that 20% (or more) crash is eventually going to rebound, so just sitting on the target retirement fund is going to do well over it's lifetime. As you get closer to retirement, and don't have the time to recover from the crash, the plan moves to safer investments.
Crashes can be a lot bigger than just 20%.
I’m sorry but 20% of a retirement fund is a lot of money.
It may be a lot of money but it shouldn't matter because you don't need all of it right away.
My understanding is that, if the market generally continues on the rate of return it's averaged throughout its history (that is, if you're not a doomer), then the single most important thing is showing up to play.
People who try to time the market or wait for a perfect time or pick the exact right blend of stocks, on average, don't do as well as people who pick a boring index or mutual fund and forget about it for 40 years.
> People who try to time the market
If you have doubts about the long-term __existence__ of the market, then investing in the first place necessitates "timing the market" since you'll need to determine when to sell before the panic sell-off which inevitably comes before the global minimum is reached.
Mind you, I'm not talking about figuring out whether or not to "hodl" through local minima. I'm talking about rolling into a different store of value (e.g., cattle, crops, ammunition) before the whole thing goes up in smoke.
If it goes up in smoke, you personally can't ever buy enough ammunition to matter. Who's gonna man all those guns?
This depends heavily on geolocation. Experiencing economic collapse in the Montana wildnerness would be very different from experiencing it in Washington DC.
I wasn't thinking of fighting off hordes or anything like that.
Ammunition can be used for barter, hunting, and self-defense. It can also be used as a tool to break locks, start fires, and send signals.
Yes, however: My father in law gave me some great advice: Pick a stock or two and put some small amount of your investments into it, like 1-5%. This makes the investing more fun. And he was very right, not the least of which because the stock I put $7K in exploded and ended up worth over $200K. ;-)
My BIL put money into Underarmor (he's an outdoors guy) and Electronic Arts (he's also a gamer), both of which have done good for him. My son put some money into Roblox (he's a gamer), and that's done well also.
Read "The Four Pillars of Investing". Basically index funds, diverse whole markets, leave it alone and watch it grow.
I did this at 22, and that seed money has grown a ton.
All the choices you have to make can be very daunting. I was very lucky to have a colleague at work who gave a talk at the right time in my life with some plausibly right choices.
In the UK I started out using https://www.charles-stanley-direct.co.uk/ and later moved to https://www.ii.co.uk/. I initially invested in https://www.vanguardinvestor.co.uk/investments/vanguard-life... which is a fund which is available on a bunch of platforms. These days I recommend https://www.vanguardinvestor.co.uk/ to some people as an easy and low fee way of getting started with Vanguard funds in the UK.
I don't know what the best trading platform options are in Switzerland - it looks like all of the ones I'm familiar with are not relevant to you.
The key thing is you want to minimise two types of fees: * Platform fees * Product fees
For example Charles Stanley Direct charge 0.3% platform fees, and https://www.vanguardinvestor.co.uk/ charges 0.15% platform fees.
Vanguard LifeStrategy® 100% Equity Fund charges 0.22%.
The bottom line is that there are lots of good choices, and the main thing is to make a choice and get started. You can always optimise/improve your choices later.
I'm also in Switzerland, currently my approach is to invest in Vanguard VOO (tracks the S&P500) via Interactive Brokers. There is a way to setup auto transfer and invest every month
As a caveat your money will be in dollars and in American companies, which might not be what you want, but it's worked for me well so far
Are you saving for retirement or buying property? Then start filling your 3rd pillar (Säule 3a) first because of the tax cut. Ideally in a low cost provider (viac/finpension), but the bank you already have probably has an offer too. It might be a bit more expensive than viac, but still much better than not investing. Stay away from 3rd pillar at insurance companies, they might be hard to cancel. Do yourself a favor and do this just for the tax cut.
If you max out the 3a, you can start of thinking investing elsewhere. IBKR is the cheapest to buy a US domiciled world ETF. But the UX is not super easy and you will have to fill all transactions manually in the tax report.
Neon with investments is another option I can recommend if you prefer a swiss company and a simple user interface. Fees are low if you set up a savings plan and pick one of the 0% ETFs
Thank you, that seems like reasonable advice!
Your bank probably has an investment platform, you can just use it, it doesn't matter. My portfolio is 70% XEQT 30% CASH.TO—don't bother with anything else.
Oh, that can be bad advice. It does matter a lot if the bank asks for high fees, which would be the case with all(?) German banks, and I'd be surprised if that's different in Switzerland.
Banks don't typically charge any fees for a self-directed account that holds primarily ETFs, beyond maybe a small trade fee or account fee(?) - which we would never pay in North America. Active management of either your account or the products you hold is where they stick it to you. Each product will have a management fee which you should check, but you'll likely avoid the big bank and insurance company products because they do no better than the market funds and take more in fees so the returns suck.
My bank also charges a trade fee which I think is bullshit, but at least it's a major bank. It's like $10 so doesn't matter all that much, not sure how much it would be for Switzerland, but you could just buy the stocks in larger batches if trades are expensive.
With the amount people usually trade $10 is a huge percentage. When you factor that in with the missed compound interest of that money you usually lose tens of thousands of dollars until retirement, likely more.
There is no need for a big bank here, in Europe. If one of those regulated companies goes bankrupt the etf is still yours and transferable to a different institution.
War in Europe is the remaining risk factor, but if that happens it won't matter anyway.
Not sure how it's like over in EU, but in Canada, at this point, I assume all fin tech startups are scam. Neo financial and wealth simple are definitely fucking scam. Major banks may suck but at least you get what you pay for.
Curious about your opinions on WealthSimple, if you can share. I got introduced to them when they bought out SimpleTax, and so far they've been pretty reasonable for investments.
They require a paid subscription to use USD. They claim to have customer support, but the button isn't actually working, it does nothing. At least they respond by email. That's all I found so far, but I haven't actually made any trades yet.
$10 may not feel like much, but it's the proportional costs that you have to figure out.
If that's e.g. for a monthly $1000 investment, it means 1% of your savings is lost in fees each time. That'll be 1% that's not going into savings. If you end up with a million by some time, that small fee will have cost you 1% of that, which is $10k.
"It's just a cup of coffee" -> "that's a 10 000$ cup of coffee". But if you only save 200 a month, that 5% is 200k you've lost by the end.
One percent is often considered a reasonable cost ratio, but it's definitely worth considering what the real numbers are for a given option.
- Your bank's platform will cost an arm and a leg; Interactive Brokers or Degiro are both available in Switzerland and you will save so much on fees (especially if you only buy and hold ETFs of which Degiro offers many with 0% fees) that it's the equivalent of faster returns on your money.
- There are many "getting started" guides available, I found Mister Money Mustache the most straightforward to my liking, but you're golden as long as you understand a couple of basics: 1. investing a high% of your income is more important than chasing returns (you seem to be there already), 2. don't trade, just buy the whole market (you mentioned Vanguard, they offer a "total market" ETF), 3. look for the lowest fees as long as you hold title to your shares (IB and Degiro do this ; eToro does not so if they sink, you're SOL), 4. don't time the market, just buy now and sit on it as it grows
For the plattforms, that also blocked me for a while. But it is easy now. You just get one account at a platform that offers a free broker account and supports buying the etf you want without extra fees.
Typical options in Europe: Trade Republic, scalable, Consors Bank.
Then the usual: Around 10K where you can access it directly, a small amount in an investment with percentage (scalable and trade republic both offer that, limit there is or was 50k), rest in one broad ETF like one that follows the FTSE all world (vanguard or invesco offer that, one is bigger, the other asks for less fees).
No affiliation, and I dont know whether being outside of the EU changes things. And yes, there is the risk that we are in a huge bubble now and it popping would at first significantly lower the money put into the etf. But you certainly do have access to vanguard etc.
Have a look now and at the latest this weekend you have this solved, hopefully forever.
Same. But is same for most people. Average American retirement savings is like $200k. I've done better that that but not by orders of magnitude.
About six years ago I was hired to make an investment simulator. I wish someone had show the results to me when I was a teen. I did show it to my daughter at the time (she was in college), and used it to explain the power of compounding interest.
I found they still an old preview online (sorry not https)
http://simulators.gibsoncapital.com/new-preview-for-total-si...
That's why you shouldn't leave it up to a kid with very little money who quite literally cannot understand the long term impacts of their decisions to invest or not. Instead, put aside something for them. You can even start well before they are 17.
Naw, dawg, Imma try and try to encourage them to get started early and put a little bit away, because it's good for them. I'm acutely afraid of a scenario where they have bad habits and anything I leave them they flush down the toilet because of those bad habits. I'm hoping to leave them plenty, but they need to be in a position to not waste that for it to be worth anything.
Yeah you can do that. Doesn't prevent you from setting something aside for them and giving it to them if and when there is a good time.
With the way housing prices are, it doesn't seem like I have an option NOT to. ;-/
> There's an awful lot of negativity here, but as someone who's 55 and has earned a good wage since I was 17, I really wish I had taken investing more seriously from the very beginning. While I knew of compound interest, I really didn't understand it until like a decade ago. If I'd started putting 5% of my money into a target retirement plan from 17, I'd be retired now. As it is I'm not doing badly, but I really wish I'd started earlier.
I'm 55, too. If I'd started studying HTML, CSS, JavaScript, Python, and Rust at 17, I'd be retired now. Waitaminnit....
Sarcasm aside, target retirement plans wouldn't come along for decades. Investing was very, very different when we were 17. And many of the people who were 55 when we were 17 had just lost a terrifying amount of their life's savings in a stock market crash that made Taleb rich because he'd bet against the market.
It seems extraordinarily unlikely that a 17-year-old today should do exactly what we wish we could have done when we were 17. About the best they can do is follow advice that's now centuries old: make friends, learn skills, live below their means, and, maybe, earn credentials.
Thanks for your encouragement!. I started investing in my mid-30s, and compound interest really works wonders after a while. I hope my kids do better than me, though.
Please share https://www.bogleheads.org/wiki/Getting_started with your son.
great resource, thanks for sharing!
> and let him pick a couple stocks to put some money into
And yet we complain that corps today are too focused on their market valuation over everything else; customer experience, longevity, worker conditions, R&D are all being neglected in order to make the needle go up.
'Investing' in stocks in order to flip them when the price goes up is feeding this insanity. Teaching kids that this is perfectly rational seems selfish and short-sighted.
Our children should be encouraged to invest into something like bonds which actually help promote economic growth.
Teaching children to invest in bonds is spectacularly bad asset allocation. Investing in stocks or bonds both help promote economic growth.
For me, the notion of teaching kids to invest in some company they know (Disney, McDonalds, Coke, Apple, or whatever) and telling them that they are buying a tiny, tiny share of the company is an important mental model to help shape in them.
Stock picking and speculation especially with a single company is indeed a spectacularly bad strategy, but it can be a motivating start.
A well diversified fund would be the better alternative if you need to aim at a single thing. But it's hard to say what's the better first step if you're trying to teach personal finance management.
Investing in stocks and bonds both helps promote economic growth.
Corps have always been focused on their market valuation. It's up to society, and the laws it passes, to change their incentives.
Bonds returns don't match inflation so long term you're loosing money to inflation, it might be better to spend it
Actively invested retirement funds throughout 30+ years can also catch more concentrated moves if you are educated on a sector. For example, choosing the mag7 in the early 2010s vs just the SPY. Following the market could also let you pull out during serious world events.
There is definitely money left on the table when you ignore the market, even in a retirement fund.
And be the richest man in the cemetery?
Retirement is not mentioned in the post
It is one of the most common reasons people invest though so it's entirely relevant
I don't think you need a reason to invest. You should be making more money than you spend, so you might as well put the surplus to work.
Be careful here. You should have some "rainy day" savings. You should have some retirement plans. You can save for big items like a vacation.
However you don't know how long you will live. Don't be a miser who spends nothing. If you have surplus after the above you should either spend it or donate to charity.
Okay
I said that because I find it puzzling when asked the reason why I invest. They're like, are you saving for a house? No, I'm saving in general, and then I buy whatever I want.
Nobody here asked you anything
I put my thoughts out here for others to see and comment if they wish.
Financial literacy is a gift, and absolutely omitted from standard education, which is unfortunate.
That said, I don't think knowledge of investment gets you very far if your job pays subsistence wages. I worked for a popular fintech focused on personal investment and their narrative was essentially "financial freedom through investment". I think it's important to understand that even the most sophisticated knowledge of investment and personal finance does nothing substantial if you aren't making surplus money to begin with.
I don't know what you mean by that. They teach compound interest in every school. Basic economics too. Anything more advanced is going to be lost on most kids, because that's most adults' level of financial literacy too.
The problem is many kids don't have much money to save or invest. Or if they do, real banks kinda suck when you only have a kid amount of money ("Here's the 0.2% interest on your $37 balance"). So they can't apply what they learned. An app like this, backed by the Bank of Mom and Dad, is great for practice.
While I certainly had the _concept_ of compound interest taught to me at some abstract mathematical level, the application to real life practical financial scenarios was definitely not done [1]. Economics as a whole was an optional subject.
I think schools and curriculums could do a whole lot better in representing this important facet of life. More broadly, I often feel that "applying all that math you've learned to real things" is a subject that could be taught.
[1] Seriously, having applied math questions like "Johnny earns X per year, with a cost of living of Y. Assuming inflation of Z and average yearly returns of R, what percentage should he be putting away, starting at age 25, so that at age 50 he essentially gets the equivalent of his own salary each month?" would likely cause some lightbulbs to go off in the kids' heads.
> the application to real life practical financial scenarios was definitely not done
Of course it was. You can't teach compound interest without referring to money or banks. That's the whole point of it. Otherwise it's just multiplication.
It... is just multiplication. And can't talk about GP's experience, but I can tell you that going through scientific schooling and engineering schools in the French system you'll learn exactly how to calculate the math and never have a single example such as mentioned above.
We're here to build bridges, not count stashes of money after all!
You'd probably get those if you went through "economic studies" (which is a different track and where math includes a lot more statistics even in high school).
Not only you can, I still don't see how the financial "magic of compounding" isn't bullshit for vast majority of people - you can't really make significant money this way in reasonable time spans (5 years rather than 50).
5 years is "get rich quick!" scam territory. The real aim is to manage finances for the rest of your life which may or may not be 50+ years, but will definitely be in double digits if you're of an age for thinking of managing your savings. If your horizon is shorter than that, you're essentially on your deathbed already.
5 years isn't a reasonable timespan. Compounding over the course of a 35 year career, earning a modest wage, will fund a comfortable 20 year retirement. If that's "bullshit" for most people then too bad. Good things come to those who wait etc.
A 20 year retirement on the back of 35 years of working means dying before you're 80?
Given current life expectancy, and particularly if you find a life partner, the chances of at least one of you surviving through at least 85 are pretty high (like above 60% for the US).
I assumed that a "real" career and substantial savings, after paying off debt, begin at age 30. And the 20 year retirement was me being conservative. In truth, saving only 20% of your take-home for 35 years will be more than enough for 40 years.
I wonder where it will go when Y>X. Maybe open question what is the solution. A) Violent revolution and Johnny taking over means of production. B) Death.
The problem is that the financial industry is, like, capitalism-maxxing.
How do you teach "financial literacy" in a practical way without referring to specific products, offerings, or corporations? You really can't.
If you talk to people about investing or retirement, they're gonna talk about Fidelity, Vanguard, whatever. Which is very practical. But I'm not so sure we need our government and education system to basically directly endorse these corporations.
My statement was intentionally under specified, and as usual my word choice was not great. My primary intention with the comment was to indicate that knowledge of investment alone is not very useful without surplus money. There is a narrative that investment alone can alleviate poverty or provide financial independence. I don't believe that's true and that was my main point.
Where do you send your money to invest? What is a stock? This is the type of information missing.
> Where do you send your money to invest?
If they had taught you that in high school 10 or 20 years years ago, it would be outdated by now. People used to save in savings accounts. Then 401ks. Then individual brokerage accounts with index funds. Now crypto or whatever is hot using some fintech app.
> What is a stock?
That's fair. It can come up in basic economics but not always.
> If they had taught you that in high school 10 or 20 years years ago, it would be outdated by now.
That's a fair criticism, but I don't think it's enough to outweigh the benefits. I think I learned how to write a check in second grade. It was useful information.
I think an understanding of why those systemic changes happened would go a long way in preparing for what’s next.
> it would be outdated by now.
It's way easier to update the tail end of knowledge you have and practices you've learnt than to start from scratch when you have no time.
Likewise, if the only stuff we could teach in grade school was stuff that would never become outdated, then we wouldn't even be able to teach more than the highest level of recent history, math foundations, super basic geology and physics, which is a pathetically low bar. Things change, it's the way it is, we should have a higher standard.
Kids won't otherwise get early exposure to learning how to start a business unless their parents did so, or investing unless their parents did, which means they probably had a surplus of resources at home and the cycle of a widening class divide continues.
The most powerful type of compound interest is early exposure to anything; an idea, a sport, money, business, computers, art. If your parents did it, you're off to a great start, but if they didn't, you're automatically set back at least a decade if not two for any of those, and public school should aim to smooth out those bumps.
> that's most adults' level of financial literacy too.
The vicious cycle! We have to start somewhere..
Economics was optional in high school. It was also extremely basic. It was quite basic in college and also never covered this.
I give my kids a copy of their 529 accounts I opened and contribute to in their name. This is real money and they can see a return on investment and growth happening.
> Financial literacy is a gift, and absolutely omitted from standard education, which is unfortunate.
With my tinfoil hat on, I feel like that is by design.
I don't think you even need to wear a tinfoil hat to reach this conclusion. Knowing about the origins of the modern outcome-based education systems in the West (we borrowed from the Prussian education system which replaced the classical education system based on the Trivium and Quadrivium) I would assert that your claim is spot on.
you should know haha :)
I wear it proudly!
Probably, because everything would collapse if everyone was an "investor" and fewer people did actual work to keep the world going.
This type of investing isn't about day trading following the latest hype. It's about putting some surplus money to better use for when you need it in 10-20 years.
That's even worse, because the entire point of the stock market is supposed to be that investors choose where to put their money based on how the company is performing and what they're saying. I.e., you vote with your wallet, and the market therefore punishes bad behavior and rewards good behavior.
If everyone is passively investing, that no longer works. Then it's not even a market. We don't even know, for sure, if that works.
It's gambling and we're already there. Hardly anyone cares about what any company does when investing in it; all that matters is whether it grows and whether you can time a jump elsewhere before it drops.
Investors are obviously bad a choosing where to invest. See any widely overvalued company
Right but those wildly overvalued companies become that way because millions of passive investors just mindlessly dump their money into them.
If you use big index funds, you're the primary people contributing to Nvidia, Tesla, and openAI. You didn't start it, no, but you certainly propelled that ball forward like a bullet.
And, well, that's fine, because we cant expect anyone really to actively invest. The problem is we don't know if this works. This definitely has the potential to blow up. You have to realize that what we're doing here is undermining the stock market at a conceptual level.
There are people who don't invest? Do they just keep their retirement savings in cash? I imagine for most people either the government or their employer invests for them.
For most people it’s “what retirement savings?”
Most of my family and extended American family doesn’t really invest. I think probably 10% of us “believe” in the stock market. The rest sometimes buy houses (which I encourage because it’s better than nothing), but otherwise are planning on social security, pensions, and lump-sum savings to cover their retirement
> Most of my family and extended American family doesn’t really invest. I think probably 10% of us “believe” in the stock market.
~62% of US adults own stocks: https://news.gallup.com/poll/266807/percentage-americans-own...
Most of my family is farmers or missionaries, and I bet those groups are less likely than most to own stocks.
Also, 'owning stocks' vs 'investing' feels different to me. My brother will go all in on tesla for one year, and then pull out and just sit there until he has another somewhat-random impulse. Likewise, my dad used to put all his money into some index funds for the 30 days leading up to Christmas, because 'the government always makes the stocks go up during the holidays, to keep everybody happy'. They count as 'owning stocks' (at least sometimes), but I don't feel they count as 'investing'.
> social security, pensions, and lump-sum savings
Isn't that very little money?
In short, yes, but my family is very cheap, so it is doable with sacrifice. I think I'm middle class (or maybe upper-middle?) now, but I think I'm the first generation that can say that. And even I rented closets, garages, and spaces behind TV's until about 4 years ago, lol.
Congrats on making it!
While defined-benefit pensions are less and less common, they may not be small.
median emergency savings in the US is $500-600
1 in 5 have $0
50% have enough to cover 3 months of expenses
The math doesn't add up here?
You're saying that $500-600 (the amount you claim 50% of people have saved up, if it's the median) covers 3 months of expenses?
I mean no offense, but your understanding of a median seems flawed. The median is the number/point that separates the upper half from the lower half - it is not what 50% has.
The math does add up. There is no contradiction in your parent’s post.
I'm not sure I catch your explanation, so let's try with some simple numbers and you'll tell me where I'm wrong.
I have a family of 10 people. These people have, respectively,
$0 ; $0 ; $1 ; $5 ; $49 ; $51 ; $190 ; $8,000 ; $150,000 and $1,000,000.
What's the median amount of savings in this group?
And what amount would complete the sentence : "50% of people have ..."?
The median of those ten numbers is 50.
If the count of observations is even, it is usually the arithmetic mean of the two mid-points, so (49+51)/2 in this case.
The median does not have to be in the finite set of values.
Maybe Wikipedia can explain better than I can: https://en.wikipedia.org/wiki/Median
You didn't answer my second question. Yes the median in my example is $50. Thus it would be accurate to say "50% of people in that sample have $50 (or $51)". But not anything further than that middle point.
Back to the original post:
I'm assuming that "three months of expenses" would be roughly $6,000.
The parent post had the median at $500.
1. Given the sheer number of adult Americans (hundreds of millions of observed data points), wouldn't you say it's quite likely that the two mid-points are very close to each other (eg $499.97 and $500.02)? But definitely not (-$5,500) in debt for one mid-point individual vs $6,000 in savings for the next individual (which comes out to $500 in median and "top half has $6k")?
2. In the first scenario (almost continuous curve at the midway point), how likely do you think it is that somewhere right after that $500 mid-point, there is a huge discontinuous jump to $6,000 to accomodate the idea that the rough top half of observed savers has "3 months of expenses" saved?
3. Is there any other scenario I'm not foreseeing, that can reconcile: "the median is $500" with "the top 50% have $6,000+ in savings"?
> You didn't answer my second question
I purposely didn’t because strictly that is not a median. Stupid example: median of 1,2,3 is 2 and 67% >= 2 here. We do agree that as N grows, the difference shrinks (to the point of no meaningful difference).
My point was that mathematically there is no contradiction. Let’s say half the population has $200 monthly expenses (3mo is then $600 saved), the median is $600 and it checks out.
That is a stupid assumption though - because who has such low expenses.
> I'm assuming that "three months of expenses" would be roughly $6,000
You then assume that we must be talking about the upper half, but that isn’t given.
We have to make SOME assumptions though, since the statement is underspecified: the OP didn’t specify what 3 months expenses means. It is unlikely that 50% of the US population have the EXACT same expenses, so I assumed an “on average” was missing somewhere which further relaxes the constraints.
I objected to your statement that the math doesn’t check out. There are many ways it could check out.
We came at this with different assumptions. I don’t think we fundamentally disagree and I didn’t mean to bicker.
Thanks for your response.
I appreciate you taking the time to geek out on some statistics with me (and you even had me look up medians again because I was confused at your reply!)
Incredible HN post. I'm hoping it's because you are from a country where people are generally well taken care of.
Yes, there are people who don't invest. Where do they keep their retirement savings? 40-50% of Americans, at least, simply have no retirement savings! Most people in America aren't earning enough to put away a meaningful amount for retirement. It's going to be grim as boomers and millennials hit retirement age and have to keep working.
More than half of Americans are net debtors, with a negative net worth.
> More than half of Americans are net debtors, with a negative net worth.
Median household net worth is around $193k, not negative. Maybe this is true on an individual basis because there a bunch of, say, young debtors and elderly parents who have transferred their positive assets living in households with working adults with more positive wealth than the youngsters and elders combined have net debt, but...
And it doesn't occur to them that they will need money when they're old and can't work? Incredible.
I am very certain it does occur to them but they simply have no financial means to do anything about it. Which must be soul-crushing to them.
Rest assured it usually isn't their choice.
> Rest assured it usually isn't their choice.
People choose to marry, have kids, and buy a house.
Your comments make me think you've never seen hardships in your life that weren't self-afflicted.
Life can be cruel even if you've made great plans and took all the precautions you could think of. Illnesses, accidents, the lack of a social net because your country was set up that way, crime, the list goes on.
Illnesses and accidents are exactly the things you need savings for, and aren't really relevant here because they don't prevent you from saving until and after they happen. The issue appears to be that 50% of Americans live paycheck-to-paycheck and have no savings? I can't imagine how this could be anything other than them just spending money on shit they don't need.
And yes, I am assuming you live in a developed country. I have Ukranian citizenship and right now the Ukrainian government is abducting men who are over 24 years old and sends them to death. If you live in a country like that, true, you shouldn't worry about investing because you don't even have basic human rights.
> The issue appears to be that 50% of Americans live paycheck-to-paycheck and have no savings? I can't imagine how this could be anything other than them just spending money on shit they don't need.
Or that there's no standard minimum wage, or income protection if something does go wrong. Student debt is crippling to people in itself never mind hospital events.
That's so many people you should think "something must be wrong with the system"
> Illnesses and accidents are exactly the things you need savings for
It shouldn't be though, if you pay taxes, the government should be there for you in an emergency when it comes to health.
> It shouldn't be though, if you pay taxes, the government should be there for you in an emergency when it comes to health.
As far as I know in the US your employer provides health insurance?
Some jobs provide healthcare, many don't.
Many people here, if they are not educated, are forced to work manual labor jobs. Those jobs will always work you under full-time, so they don't have to give you insurance. Usually that means you have to work another job.
People who haven't lived that life just don't get. It just doesn't click in your head.
You can work 60 hours a week and just barely make rent and food. Not only can you do it, I think most people are. And there's nothing you can do. There is no higher paying job waiting for you somewhere, because you don't have a college degree.
How're you gonna get a college degree when you work 60 hours a week? Hm? You're not. You're stuck. Your best shot, really, is to work up through management. That's why you'll see people working at the same restaurant for 20 years.
They must be so stupid, why don't they get a real job? No, actually, that's probably their best bet.
Oh. No. Not in most jobs. Many jobs do provide some health care.
If you are working many jobs in the US you get no health care. You have to pay for it yourself. Even jobs that provide it you still need to pay for it. The employer basically pays a portion of the insurance bill. Good employers pay a lot, bad employers pay none.
Then you have deductibles. The amount you have to pay out of pocket every year before insurance does anything. If you have a ten thousand dollar deductible, insurance only kicks in at $10,001 and beyond.
Shit you don't need like what? Rent is over 40% of pre tax income for most Americans. Health care is 30% of income for lower income Americans.
That's not leaving a lot of space for food, clothing, heating, transportation, education, entertainment, etc.
I.... they are dealing with systemic poverty. Being poor is expensive. They absolutely know they need to save, but if the choice is "starve to death today but save for retirement OR don't die, but don't save for retirement" most people are going to choose the latter.
I just checked and McDonald's pays $15 an hour, no? That's more than enough to not starve.
McDonald’s will not let you work 40 hours a week, or any consistent schedule at all. You will show up when they tell you to and that’s that. Same with grocery stores or most retail jobs.
Also you’re neglecting the cost of transportation (almost certainly a car, with gas and insurance), rent, and medical expenses.
Median rent value in Seattle is $2300/month if you are looking for a one bedroom, a little cheaper if you are looking at a studio. Minimum wage here is $21/hr. The first quartile for rent is $1600.
Assuming you work full time, you are making $3360 a month, less taxes.
That means that even if you get the bottom 25% of rents, over half your take home pay goes to rent. Then we need health care, food, taxes, transportation, clothing, etc.
Not a lot of savings easily available there.
I rent a room. But to be fair when I first came to Canada and was told by a local "of course you won't get to have a whole apartment all to yourself" my mind was blown away.
So people's work shouldn't result in private housing? That's an acceptable outcome? I'm not clear what your insinuation is here. People should live in communal bunks but also be saving for retirement?
They're worried about paying for their next trip to the dentist. Not working when they're old is not in the picture.
This has to be satire at this point.
it does but they don't know how to change it
Wow, you are so out of touch
You’ll be surprised by how many people fear the term investment.
If everyone was an "investor" it means they aren't blowing all their spare cash on goods and services. Demand drops and you need fewer people to work to provide said goods and services. It kinda balances out.
How couldn't it be? If the finance industry made things clearer then more people would benefit from it.
investment for many is more important than ever, because with home ownership out of reach younger people those with any savings are looking for alternatives. I just hope that - much like how you wouldn't buy and sell your house every day - they can resist the urge to be overly active investors.
Sure but if you learn a lot about investing then surely you have learned a lot about other stuff too and maybe have chances at a good job. Not that I disagree
Hi, sorry to be that guys, I just wanted to make some corrections on what you call your app a "plain html file". Your HTML file loads:
- react app - pwa manifest - tailwind css
This is not at all a "plain html" file.
One small html file, and half a megabyte of CSS and Javascript framework... oh and the html file contains 800 lines of additional Javascript.
is plain html different from single HTML? Because it is a single HTML that you can "Save as" and have one html with the working app.
In my opinion this can't even be labeled as a single HTML file, because it loads external files to complete the app. But back to the question, a "plain html" file doesn't load any external resources and is usually semantically described.
Agreed - which is disappointing.
My firewall shows blocked connections to cdn.tailwindcss.com and unpkg.com
Candid question: why do you block those?
One word answer - security.
Any website you visit could have been compromised and serving malicious content. Upon first visit to a website, I block all connections to domains not in the address bar, then go back in and add rules to allow connections as needed. It doesn't address malicious activity by the site directly, like a server compromise, but does limit non-addressed connections, including ones to local addresses.
For example, a compromise of .google.com which leveraged assets/code from .googleusercontent.com wouldn't initially be able to run, unless I added a rule to allow the connection. Likewise, a compromise of *.discord.com that made a connection to localhost:8983, then tried to send that data to someserver.ru would get blocked and logged. Where this can't protect me is if the server sends the mined data back to itself, then forwards that data on using its own connection.
Ad networks sell to anyone. Malicious content can be injected almost anywhere. Its happened before; it'll happen again. This web browsing hygiene has protected me enough times for me to make it my standard practice.
Centralised assets beget cross-domain fingerprinting and tracking. The extension DecentralEyes tackles precisely this problem.
When people talk about a single plain HTML file, it implies that all markup and code is contained in the file and no libraries are being used
No it doesn't
Yes it does
If you can run the app without any other files and without internet then it’s plain and a single file.
I have a "plain Python file" that only imports TensorFlow.
Plain html is just html, no JS or CSS. This is my purist non-web dev take.
No way you get this with plain HTML, post title is deceptive to the core.
I bet $10 that it’s vibecoded, and it’s such a dirt simple calculator that perhaps it was even done with a single prompt.
The AI just picked react because that’s the most common framework.
That's the first thing I thought when opening it. Sure looks like a "make me an app" response that Claude would output.
I mean nothing wrong with that, I needed a silly calculator thingimabob too yesterday (for some CRC checks on a piece of text) and Claude quickly cooked something up for me.
But I'm not writing blog posts about it, releasing the tool in the wild, and claiming I wrote it. Blegh.
There’s definitely nothing wrong with it normally but then like you said it’s got the blog post and the project basically clones every calculator out there that already exists.
This type of calculator is so common you can even find one on an official US government website.
https://www.investor.gov/financial-tools-calculators/calcula...
Why apologize and do it instead of not do it and no apologize?
Pedantry earns upvotes like bread beggars butter. I don't blame them.
You are that guy. It was obvious that he built some interactive app packaged in a single html file. There's going to be javascript and stuff in there...doah.
EDIT: I wouldn't have expected external dependencies, though.
There’s an old story about Rothschild getting a haircut when the barber started giving him stock tips. Rothschild thanked him, left the shop, and immediately sold all his holdings. The reason was: “When even the barber is investing, the market’s gone too far.”
I might be wrong, but reading this, I couldn’t help but think: if we’ve reached the point where we’re building apps to get our kids into investing, maybe we’re living through our own “barber moment.”
The reasonable interpretation of such a project is not to pump the stock market even higher by getting children to invest their savings into it, but to inculcate the habits of investing over time so they can do it properly as adults.
I'm sure Mr. Rothschild would be fine with this learning tool.
Narrative: You are teaching about the intricacies of finance and the stock market.
Reality: Dump everything into Nvidia / S&P 500. Number go up.
The Rothschild bloodline is responsible for helping to orchestrate every modern war since the Napoleonic Wars, by loaning money to both sides of the conflict. Major General Smedley D. Butler wrote about this in War is a Racket. I personally, don't give a damn what Mr. Rothschild would be fine with, or the rest of his disgusting family.
Standard antisemitic trope
Standard bs defense to prevent any legitimate criticism of Jewish people no matter how reprehensible their actions are. Please spare me.
Maybe we should get into what Natalie Rothschild said while being interviewed, about her family's fondness for incest? Or would that be anti-Semtiic as well?
What exactly can you say about the Rothschild bloodline (except for praising them) that isn't considered anti-Semitic? Please do tell!
To your credit, your original comment didn't mention all Jews, just made heavy allusions to stereotypes about them. But now you've removed all possible doubt about what you meant.
Criticize individuals all you want, but don't do it by "bloodline", ethnicity, or whether they're a banker or not. Agency lies with the individual.
I am criticizing individuals - individuals who are members of a bloodline that have historically engaged in war profiteering and have been instrumental in running the international central banking cartel. You're right that I didn't mention all Jews, because that would indeed be anti-Semitic.
Sorry but I'm not going to kowtow to your ridiculous logic. It's perfectly fair to lob criticism at bloodlines, and if you had ever opened a history book you would readily understand that.
Criticizing individuals because they're part of a bloodline / ethnicity is:
- the exact opposite of criticizing individuals; you're really just going after the group
- the definition of prejudice
- the foundation of most (all?) giant human catastrophes like the Holocaust, the various communist land reforms, the crusades, and all sorts of horrible events
I'm a conservative, but I have to say this idea of not being prejudiced is really something great that liberalism brought to the table over the past 100-200 years. I'm gobsmacked to see people rejecting this idea.
So when authors of history-related works criticize or make remarks about bloodlines such as the Hapsburgs or the Medicis or the Colonnas are you equally as outraged as when it involves a bloodline of Jewish people?
If I navigate to - https://en.wikipedia.org/wiki/Genealogy_of_the_Rothschild_fa... - every section of the page mentions the family being involved in banking. Am I stereotyping members of the Rothschild bloodline by saying they're involved in international banking? I don't think so.
I'm equally gobsmacked by people who claim we shouldn't utilize pattern recognition or who want to pretend stereotypes materialize out of thin air.
I think the word "bloodline" has gotten people wrapped around the axle. You could have just said "the Rothschild family" and been in the clear. "Bloodline" veers a little close to smearing an entire ethnicity over the actions of one relatively small family. I'm sure it's not what you meant, but as soon as you start talking about the contents of people's blood, people's ears start perking up and looking for bigotry.
Well I don't really understand the difference between the words family and bloodline, because what is a family besides a lineage of people connected by blood? Just for clarity - I am referring to Mayer Amschel Rothschild and his descendants who have been and continue to be involved in central banking. I am most definitely not referring to all Jewish / Ashkenazi Jewish people, any ethnicity or anyone with the last name Rothschild who isn't or hasn't been involved in central banking and orchestrating wars.
Thank you for pointing this out. I'll try to be more careful in my choice of words moving forward.
"Blood" euphemisms are commonly used by antisemites and racists of all types. Hitler made many reference to "German blood, "Jewish blood," "our blood," and so on, essentially as shorthand meaning ethnicities. The KKK repeatedly emphasizes the importance of "blood purity" to promote its ideology. Which is why Trump's recent claim that immigrants are “poisoning the -blood- of our country” got so many people riled up--it's an obvious dogwhistle, using the preferred terminology of some very, very bad people.
Thank you for shining light on these examples for me. I've been studying quite a bit of history, esoteric spirituality and the occult sciences over the past few years and have fallen into the habit of using this term when talking about lineages of influential people and their families.
I definitely did not mean to sound like I was into eugenics or racial purity - I think these concepts are grotesque and as you said, people that focus on them or use them to excuse atrocities are indeed, very bad people. Thank you for giving me the benefit of doubt and highlighting why my choice of language is problematic.
For what it's worth, my reaction to the word "bloodline" used in this way is exactly what it would have been to the word "dynasty".
"Bloodline", as in, the line of inheritance for an extremely wealthy and powerful family, like Medieval monarchs.
Perhaps we should be a tad more careful about our language use, but I see far too much outright bigotry to be worried about something obviously not used as a dogwhistle.
It's certainly apocryphal and you have the British version, probably. In the US it is usually Joe Kennedy and a shoeshine boy, and also didn't likely happen. These stories are useful parables, and they serve the purpose of explaining why the smart money didn't get cleaned out when the rubes did.
Still, if a 10 year old had started investing 10% in the market in 1920 and stuck through it during the depression, even with no income coming in at the time, they would have done handsomely through the recovery and into old age. In fact, a middle aged person who had been investing until 1929 would have not been fully cleaned out, and that money would have recovered its value by 1943. Margin was what killed fortunes in the day, so the lesson to learn is to avoid margin for your investment portfolio. (Speculation is a different story).
In December 2017 I literally saw shopkeepers and barbers checking Coinbase every few minutes when they weren't with customers. I sold a substantial portion shortly afterwards. Of course I'd be much richer today if I hadn't done that. But I don't really regret it because it's not real investing; it's speculation.
The market's are different now. Everyone's 401K plans are automatically investing in them each month (my theory on why equities are so expensive now).
Different as in much worse? It's not that you're wrong but, just to be clear, the problem with investing as the only place to keep up with inflation means that markets will detach from value, and become a giant Ponzi scheme.
There is no such thing as "growth detached from value" lasting forever.
Sure, I did that in 2018 as I was leaving London. Cabbie was talking about the coins he was buying and this and that. Bitcoin was $10k/coin at the time. I sold my bitcoin as soon as I reached Heathrow. This was a very wise move because I followed the story.
the story is about Joe Kennedy and his shoeshine boy
I think the assumption here is the investment vehicle will be large bundles of diverse stocks, e.g. via a mutual fund or equivalent ETF. That's the standard way to invest 401Ks and other savings, and something for which stock tips are no use.
Greed is at a 21st century high. I am just waiting for the rugpull moment when billionaires decide the show is over (https://seekingalpha.com/news/4464647-deeper-dive-the-wealth...).
Even George Hotz understands this is the symptom of a larger issue and it is going to end bad: https://geohot.github.io/blog/jekyll/update/2025/10/24/gambl...
What is going to happen specifically when billionaires decide the show is over?
I had a very similar idea this summer. But my kids are 6 and 8, so I approached it using the video game approach. It's been an absolute smash hit and entirely altered the habits of doing chores in this home. It's been about 3 months and it's still going stronger than ever. The whole thing is a static page, driven by a Google Spreadsheet that Mom and I edit to adjust goals and track progress.
https://ibb.co/RTw5sCDJ https://ibb.co/ycRB8750 https://ibb.co/gLGQ0tKT
That is very cool! Do you have any details on how it was built or is the source code available?
Also, what happens if one of the daily missions is not completed? Is there a passive income from those?
I wrote it in an evening so it’s disaster code. I might clean it up and make it public this holiday break.
The dailies are a minimum requirement if they want screen time.
I spent a lot of time reflecting on video game incentives and disincentives and was incredibly careful not to teach the wrong thing. The very minimum behaviour we want to enshrine as routines. Everything else is treated as a bonus. Some days they get no coins and that’s fine. Points are never taken away. Coins are spent however they want.
I made a similar thing for my adult flatmates when I was still a student. I was less 8bit and less a game, but the same priciple.
The incentive was a slight rent reduction at the end of each month.
It completely failed to motivate my friends to do more chores, but it landed me my first job.
great!, mobile app?
It’s just a static hosted page they run on the family iPad. There’s no server at all!
I should really clean it up and make a blog post about it. But wanted to share it here because this project reminded me of it :)
This is such a great idea, I would love to implement this for my kids! Could you post a link to your blog or GitHub so people who want to know can follow you when/if you release it?
You should make it an app, I would pay for it
M dashes everywhere, bold text everywhere ... what's next, teaching them to over-rely on LLM's? And if we're teaching them about investing, can we also teach them about the ethics of investing? As in, employing a bunch of people to direct the profit of their work into the hands of investors?
For me, the ethics of investing is a bit more profound. I see stock market investment and share holding to be one of the main drivers of civilisations obsession with endless consumption and growth. To me those things are damaging to our minds and our planet. This is just doing the same retarded shit we’ve been doing since the end of the war. Personally I feel like we need to turn a corner now; ease-off this obsession with accumulating as much money as possible for ourselves and focus on our communities, our families, living in balance with nature, and securing a healthy future together with new values and goals that last. Investing into the stock market is like the opposite of this. Just my opinion.
I run a "Bank of Dad", tracked in a spreadsheet for my kids. They can choose to "invest" their money with me or not. To make investing meaningful for them, I pay 10% interest per month, up to a $50 balance.
To avoid bankrupting myself—and to encourage them to get a real investment account when the time comes—the rate drops as the balance increases, similar to progressive tax brackets. By the time they get to $1000 balance, the annualized rate works out to ~6%, and after that it drops fast enough that it's essentially free for me to operate.
Overall, it's been quite successful. Now whenever the kids get money, they invest it immediately. And they often delay or forego spending so that they can get more interest the next month. They haven't turned into complete misers, but it has encourage a mentality of thinking about saving, and I think the concept of interest has landed quite well. I think things really started to click for them around age 8 or 9.
If you're interested in doing something similar, I made a sanitized version of the spreadsheet. Feel free to copy: https://docs.google.com/spreadsheets/d/1f3FgHUohw26sHuCoO40s...
These kids are going to be so mad at how low interest rates are at actual banks that I wonder if this is ultimately going to teach them to borrow rather than save. I guess it’s the same thing, really: they’re learning the time value of money either way.
I've been very transparent with them that the interest rates they get from me are far more generous than out there in the real world. :)
Alternatively we’ll have hyper inflation and they’ll be even madder that all their nominal scrimping and saving was meaningless.
When I started working at 24, a friend of mine (a few years older than me) asked me if our company had a 401(K) and what was the match.
I was confused. What's this gobbledygook? So I asked around and got him the answers, and he responded with: max out your 401(K). Just do it. And do not ever think about taking money out of it.
So I followed his advice. At that time, the ~$5500 cut in paycheck (my gross was around $35K, IIRC) stung a little. I was single, footloose and fancyfree, and those extra few hundred dollars a month would have been fun to have. But I stuck to his advice.
Today, almost 30 years later, thanks to that, I have a nice nest egg and don't have to worry about retirement (modulo catastrophic illnesses, of course).
So recently my friends' kids started working, and I gave them the same advice: Max out your 401(K), pick a Vanguard Target Retirement fund, and forget about it. If your place offers a "Mega Back Door" option, use it to the fullest extent possible. And if your company has a HDHCP, put funds in your HSA too.
We have a lot of avenues to save these days. Make full use of them.
> We have a lot of avenues to save these days.
Consider investing your time, not just your money. In other words, do careful research, start a business, then put your labor into offering a product or service that fills a need, instead of simply working for someone else. If you fail, you'll still learn a lot for another try. And if you succeed, the payoff can be much larger and faster than anything else you might attempt.
I’m in my 30s. Very very few of my friends have been able to match my tech income (and investment portfolio my tech income gave me) with their startup or local business.
Many of them are realizing how far behind they are with someone that stuck with their tech career for 15 years.
The reality is you'll probably lose a ton of money, then get another job.
I used a lot of the money I could have 'saved for retirement' on a house instead. Given how fast housing prices have risen and the compounding issue of the cost of rents, I'm not sure I'm too far behind. If you look at REITs, which combine the value of housing appreciation with increased values of rents, they are beating stocks in general over the period I've been working.
You might actually be worse off saving for retirement, at early career stages. Of course, some will point out retirement savings are tax protected, but so are modest capital gains on primary residence.
https://i2.wp.com/financialsamurai.com/wp-content/uploads/20...
> You might actually be worse off saving for retirement, at early career stages.
A very well-diversified, international fund usually performs at 8% annually which is far more than you would get holding REITs (or worse, properties themselves). What you invest for (e.g. education, retirement, projects) is irrelevant as long as your time horizon allows for crash recoveries (measured in decades at worst and months at best).
REIT is largely a reflection of property appreciation plus rents, which is the opportunity cost of not owning your own property. The link I posted was showing an 8+% return once accounting for both over the a 20 year period that doesn't even include the recent COVID era price explosions.
> The link I posted was showing an 8+% return
If I'm not mistaken, they usually pay at least 3% dividend which is added to your salary. ETFs don't trigger any tax as long as you don't sell. And I didn't check but REITs probably have higher annual fees.
I was using REITs as a proxy for the value and opportunity cost of buying your housing rather than investing in a retirement account. If you actually buy REITs this breaks down because REIT capital gains are taxable, while residence capital gains on a primary residence of modest value are not.
It was not my intent to convey you should buy REITs instead of a place to live.
After early career this breaks down though, because the tax advantage are only good for primary residence modest value homes, it's not a strategy that can be continually employed.
> 8% annually
Historically, yes - but the last 5 year average has been ~14% (I guess it's like ~9% if you're adjusting for inflation). I think 10% is a bit of a better number these days.
That's not to say I couldn't be eating my words when the market crashes tomorrow, however.
> I act as their investment agent, assigning realistic interest rates
Author then proceeds to put 15% annual interest rate...
Where can I get 15% annualized returns, please?
(I'm told to no longer bet on even averaging 7% annually, over decades, on US stock indexes.)
15% yield would be a hell of an arbitrage opportunity if you could get a sensible loan to go along with that.
Commenter just discovered that there are other countries and economic realities outside the US/Europe
11% is a safe interest rate on my country (py), I just got a 14.5% offer for local bonds BBB+
stay vigilant Lebanon was granting 12% rates and everything was fine and “covered” by central bank until it wasnt
py = Paraguay, for those like me who didn't know
> 11% is a safe interest rate on my country
11% may be the safest bond you have access to, but that doesn't make it _safe_ in absolute terms.
up to 30k, cover 100% by the central bank
So, bonds basically all tend to converge on the same risk adjusted yield. If you're seeing yields that look like this, the market believes the currency will slip or there's repayment risk (relative to USD bonds that are in the 4.75% range.)
Imagine you have a scenario where inflation is 0 in currency A and 10% in currency B. Would you rather have a 2% bond in currency A or a 9% bond in currency B? This is why Euro bonds go negative sometimes, when USD interest rates were very low and the Euro was deflationary relative to the dollar, it could push rates even further lower.
Look, you do you, but rest assured that you don't get 11% for no reason.
I wrote an article (it's in Spanish) in which I took data from the central bank since 1990 and created a tool to simulate various scenarios. The tool includes a column showing the average interest rates on central bank-backed investments. Maybe you might find it interesting. https://roberdam.com/jubilar.html
the issue is your local currency will lose its value over time
Is there a (government-issued) currency that doesn't?
It's not an inherent feature, but they steer it in such a way so, no, there isn't (at least not for long), unless someone would make a good case for it at some point in the future
The interesting question would be what their currency, where this 11% is offered, typically loses year-on-year
Showing siblings' investment performance side-by-side on a fridge-mounted screen.
Author understands child psychology.
You can't motivate kids by filling their heads with theory. Instead, make the outcomes of their actions visible to them - then they -motivate themselves- to learn how to improve those outcomes. Add in some friendly peer-competition and you're golden!
I feel like this is a great way to raise a crypto "line-must-go-up" addict
That's not just crypto :)
That was the idea! I hope it works out that way.
Can they pull money out? I don't see any place to update the balance up or down as the kids want to add money into the piggy bank or withdraw it.
features coming with the next update, meanwhile they can withdraw at any time
> meanwhile they can withdraw at any time
How does the withdraw work? You manually reset the date to today and the amount to what it was last time you saw it minus the withdrawal?
For now it works like this until I add withdrawals and deposits.
I can feel the vibe-coding "vibe" from every vibe-coded websites, somehow.
When 50% of the words are bold you know you're in for a treat
My decade in the making habit of only reading HN comments is finally paying off. Nowadays when I do randomly skim an article it's almost always slop.
Nice! I also created a "virtual bank account" for my kids when they were 7-8yo. They can choose to take the weekly cash or put it in their savings account. My bank gives them a 5% interest rate per month, which isn't bad. Explaining the idea of compound interest this way is easy.
However, I think that's the easier part of being an investor. The more complicated part is risk management. With a savings account, there is basically zero risk. But that's not how you invest these days.
5% per month? Where is this crazy money generator? Assume you meant per year here!
It's not zero risk:
- Your currency may collapse, see Germany 1930s, Argentina, Zimbabwe, Venezula, etc.
- Only a certain figure is protected in savings, though governments will act aggressively to protect that (see 2008 + the Icelandic/UK/Dutch palava)
Yes, it's 5% per month. You wouldn't be able to explain the concept of a yearly compound interest rate to such young children. One year is an eternity in their life. I also don't give them too much pocket money to encourage them to save. They would spend it on junk food if they had too much cash.
A agree, that the currency is not a 100% safe investment. Inflation especially makes it bad for long-term savings. Indeed, money in any savings account is insured only up to a certain amount. However, that's not something you can explain to kids with a "virtual account." I suppose the idea that Daddy's bank will go bankrupt is probably not an ideal way to teach kids financial literacy.
Will they also have periods of a bear market and see their money go down ?
hopefully, “The first national bank of dad” remains solvent.
And can they take loans with negotiated interest rates and lock-in periods? Or invest in more risky products such as derivatives with a corresponding chance to lose all money? So much potential... ;)
First they have to fill in KYC questionnaire and have no risky products if they did not have investing experience.
Just add a $6-7CHICKENJOCKEY memecoin where they can put money in, see a 50% daily return for a random period of time, and suddenly have it go to zero.
Or even worse, in the tradition of these unclickable javascript buttons of the late 1990's, just detect when the finger is approaching the "withdraw" button and have the asset crash right before they can click!
unlimited apps ideas :D
Be careful with comparing real-life things and experiences with a (virtual) number on a screen, especially for children.
I used to know an adult who only cared about that number going up, despite making more than a comfortable amount of money. Live with parents, save on rent/mortgage, number goes up faster. Buy cheapest food, take leftovers from work-catered lunches, number goes up faster. Scam your way into being hired for a position you are severely underqualified for, get terminated after three months, keep the salary and sign-on bonus, number goes up. Invest pretty much everything (because there are almost no expenses), compound interest.
This feels like a severe anecdotal example which I'm not sure applies to most people.
It is definitely a single point, but that is who this post immediately made me think of.
And to be fair, investing does not apply to most people either.
> And to be fair, investing does not apply to most people either.
Why doesn't investing apply to most people?
Because most people are neither properly educated about investing nor have the money to spare to even start.
Most people are living paycheck to paycheck.
Agreed, in 7th grade we did a stock market simulation, it made winning feel too easy.
Ahah but green ticker good red ticker bad. What's the problem sir
Being encouraged to invest is nice but having the ability to is a massive luxury.
I knew I wanted to save a lot for my future and retirement since I was in high school. I didn’t gain any reasonable ability to do so until much later.
A much better life skill in my opinion would be to teach about budgeting, how to cook economical meals, how to avoid debt traps and lifestyle inflation.
HN is a very specific and privileged demographic, very far from an average citizen. (of the US at least)
Not the OC, but yeah I've noticed this myself actually. I read HN because I love science and technology, but I don't work in either area. I work at a dead-end job as a cashier and barely make ends meet. Some of the people on here are exceedingly privileged and really don't realize it.
I'm always bummed when I comment on HN and then scroll down and find another comment which said it better.
You're giving a 15% growth rate with zero volatility? That isn't going to teach many important lessons.
How about offering a range of rates with volatility increasing as rate increases. Then they can think about the benefit of guaranteed return vs the benefit of long-term growth, or a combination of both.
OP: I think introducing volatility (which you can just model with one percentage variable and a sinusoidal multiplier based on this: 100% volatility means if your "real" balance was going to be $100 today, it varies between $0 and $200 ; 10% volatility means you're fluctuating between $90 and $110) is also a good idea in teaching kids to refrain from the impulse of withdrawing the money just because today's daily gain is in the red.
Another add to the feature request list :)
The biggest challenge with pensions is convincing people in their 20s to invest in high risk/high return investments. This is usually the right strategy because of the long time horizon of several decades until they will need to crystallise losses/gains.
However if they see their pension balance fall in a big correction, they can panic and move to less volatile investments, thus reducing their long term gains.
You can theorize all you want but the best way to learn to cope with this is for it to happen to you so it would be great to include it in the simulation!
I think an even better option would be to show diversification. You could have some part in a higher risk volatile thing and another part that shows steadier positive growth. Get people to decided how much of each to mix. One of the most important lessons is that all your eggs don't need to be and usually should not be in one basket.
> I explained to my kids that investing is like having a magic box that generates more money over time.
That is wildly misleading. Investing is super important, but it shouldn't be described in this fairy-tale way. Young people might be misled into trusting investment advisors/counselors/brokers, whose real goal is to enrich themselves at your expense. In fact, there are adults who haven't yet learned this.
An article about investing that doesn't mention the WSJ dartboard contest isn't worth reading -- essentially, over 14 years, random stock picks produced returns equal to those of stockbrokers, before the stockbroker's fees and other costs were subtracted.
An investment counselor's primary goal is to make you think you need his services. His secondary goes is to keep you from performing your own research to discover that is false.
never speak about investment counselors on the article, I will forward the WSJ article to my 7 year old girl so she won't be scammed by her broker (me).
How can you have a localhost reference as canonical? You should fix your jekyll configuration I guess.
<link rel="canonical" href="http://localhost:8080/en/dinversiones" />
Thanks for the tip, should be fixed now !
Not for the same audience but for much the same idea I made a progressive visualization of saving and compound interest in a blog post about pension saving:
https://calcwithdec.dev/posts/pictures-pensions/
I intentionally didn't include numbers at all - they are a bit more effort to interpret.
A visualization might be a nice feature for kids (but it probably depends on the kid!)
Happy to see a PWA. These things need to make a comeback for a variety of reasons.
Though for a PWA JavaScript is required so not a single HTML file.
OP, love the idea, and cool to see a useful PWA!
One note: I noticed when opening the installed PWA in airplane mode, styles didn't load. You might be interested in this article on PWA caching from MDN:
https://developer.mozilla.org/en-US/docs/Web/Progressive_web...
thanks for the comment & tip!, I'm going to try to make the app without external dependencies.
I wouldn’t want kids to grow up chasing a number. It’s just too reductionist. If you want them to be financially secure, teach them skills and the money will follow. TC obsession is a blight.
Am I missing something? When they went to add money, do you go back in and increase the initial investment?
Are they actually investing anything? If so, wouldn’t the app for the brokerage do this with real numbers?
They invest with “The first national bank of dad” as user loloquwowndueo pointed out, I'm their broker, no penalties when they want to make a withdrawal
I think what he's saying is: Given a balance of $50, they "earn" $5/mo. Given a balance of $200, they "earn" $10/mo (or $199*0.10 + $1*0.05). If they don't spend it, I'm assuming it's "rollover", and if they eat into their capital (eg: buy an xbox) then they feel the sting of earning less-per-month.
Tangentially i can't help but notice a pattern. Generation1 says "build more homes", then they build them and convince Generation2 to invest despite ever climbing real estate prices. Then the internet happens and Generation2 says "build more companies". They build them , and proceed to convince Generation3 to invest in those companies despite ever climbing stock values. Seems like these trends run in cycles
> The phone is attached to the fridge and works as a panel or dashboard where my kids can see their money growing each day.
Or alternatively, your kids can see their money going up and down in value randomly, giving them constant anxiety if they're gonna lose it all while the US president uses the stock market as a pump and dump scheme.
The number one thing people fail to truly take advantage of is the triple tax advantage of HSA accounts. So powerful.
Even better is that you can save medical receipts throughout your life and withdraw all that money for any purpose in the future without paying income tax on it.
Found a fun little bug. If you try to type into the date picker, and press backspace, the entire screen blanks out. (MacOS 15.0.1, Safari 18.0.1)
thanks for the bug report!
Teach your kids how life is about getting something for nothing. Great parenting.
Where can I find this 15% annual interest rate?
Become OP's kid.
open to adoptions :P
sample= 14.5% on local currency, https://www.bolsadevalores.com.py/nuevas-emisiones/investiga...
In a country with high inflation
You forgot to add taxes, market crashes, sanctions, asset depreciation, companies goes bankrupt and other fun things.
What's the native version of the opening proverb?
> What comes with the milk, leaves with the soul.
Good. Financial education is sorely needed for everyone in America.
Now if only there’s an app that can teach delayed gratification.
Love this.
Especially the opening line:
"“What comes with the milk, leaves with the soul” — Russian proverb."
I love a good proverb. This one goes hard.
"We're only making plans for Nigel" (XTC, 1979)
But how do you charge the phone?
disabling wifi+data extend a lot the battery
The screen is the biggest consumer imho.
I mean of course I understand that the phone can be removed by the suction mount, but thus also defeats the idle infotainment concept.
Also seen screen burn in...
locked by default, unlock when you want to check your balance.
is 15% realistic?
Not in real-life terms, but for a kid, a larger interest rate will be less slow and boring than a realistic one, and it will be more engaging.
“The first national bank of dad” is a book that suggests a similar approach and I believe it also advocates a 15% interest rate.
I remember watching the statements for my savings account as a kid and getting like 2¢ of interest per statement and thinking… that’s it?? Why bother??
No. Since the late 1920s, US stocks have yielded an average real annual return of about 7%.
Source: "Since 1957, the S&P 500 has delivered an average annual return of 10.54%, but when adjusted for inflation, the real return drops to 6.68%."
https://www.investopedia.com/ask/answers/042415/what-average...
And on top of that there's huuuuuuuuge variance over time. You have to scale in and out of the market over a very long time to actually get the ~7%. Any one time investment is just a straight up gamble. It's only in aggregate over a long time that you get something somewhat reliable. But then the numbers aren't that impressive. I understand why people are so fond of buying bigger or second houses instead. It's a shame because it drives up the price of housing making it less available for our young. We're basically saving for our future by robbing the future of our young. It's pretty dark to be honest.
Yes, the trick with houses is that it’s the only chance most retail can get 5:1 leverage. Your brokerage will never extend that to you to invest in equities.
But without leverage, long run return of residential real estate is like 3% after costs, which is less than equities but above bonds.
At least that’s what I tell myself as I go to sleep in my apartment, a non-homeowner watching people accumulate serious paper gains in their houses ;(
Source: a paper called the real return on everything.
Leverage comes with a cost though through interest rates. It is entirely possible (and even typical) to come out with a loss even on appreciating real estate, since your house must appreciate by more than the interest on your loan. In the UK at-least you can get 1:5 leverage on equities, but you'd be looking at a 20-25% APR, instead of the 5% mortage.
The paper "the real return on everything" notably cuts off in 2010 and is talking about global averages, if you narrow it down to specific countries we can see stark differences. In the USA and UK you get 8.4% and 7.2% returns on equity, but only 6.03% and 5.36% returns on housing, a stark difference. Adding in mortage leverage adds on about a percent or so of return, thus still not bringing housing in-line with equities.
If we narrow our window to post 1980, we see in the UK returns of 9.34, 6.81 and 6.67 % for equity, housing and bonds. If we look at post 2010 in the uk, house prices have only stayed the same or decreased in real terms since then in the uk for instance, whilst equities have soared.
They also in the paper assume bond yields are roughly the same as mortage interest rates, which maybe was true for their data period, but hasn't been true since 2010 (https://www.housepricecrash.co.uk/forum/uploads/monthly_2022...)
Finally you can diversify equities globally, you cannot diversify your housing globally (if using leverage in a mortage).
Good points! And the period since 2010 has been mostly up and to the right.
While the housing market as a whole may go up, the likelihood that any individual house will go up probably varies more.
How do you get that much leverage from a brokerage to invest in equities? In the US we have something called Reg T, which basically says brokerages can only lend at 2:1 against securities in most cases.
Even most leveraged ETFs will generally stop at 3X.
11% is a safe interest rate on my country (py), I just got a 14.5% offer for local bonds BBB+
It's less surprising Paraguay has 14.5% interest rates when you realise there's persistent 4% inflation (spiking to 11% in 2022).
Effective interest rate is something like 7-10%
Yes, in Brasil and South Sudan: https://en.wikipedia.org/wiki/List_of_countries_by_central_b...
Those two aren't similar. Brazil's annual inflation is 4-5%, you get 10% real return. South Sudan is 74% against your 15% return: you lose money.
So, not really.
/me looks at market gains for 2025
87% in Argentina.
you need to add the meta utf8 tag
thanks for the tip!, added.
This is frankly depressing.
> As my eldest son’s birthday was approaching, we suggested that instead of asking for physical gifts, he ask for their equivalent in money. That way, he gathered a decent amount of capital for his first investment adventure.
Yes, why would you want a toy or a book? Why waste time having fun or learning? You could instead watch a number go up slowly while you do nothing. Fun for the whole family, seconds at a time!
> Each day, as they watch their small fund grow, they grasp the magic of compound interest — and that, more than any gift, is a lesson I hope will stay with them for life.
This feels like raising finance dude bros and gambling addicts. There is no “magic” to compound interest, no one should have “watch money accumulate” as a life goal.
Okay thank goodness I’m not the only one who finds this incredibly sad. Especially as someone who is trying to make money less important in my life.
In what way are you doing that? Not that I disagree just curious how
All I mean by that is having an honest job I don’t totally dread, not getting a high-paying job that wrecks my mental health solely because it pays a lot, buying only what I need with minimal wants, trying to live simply without extravagance. I do in fact track budgeting very consistently and have a 401K, among other things, so that I avoid homelessness and stuff. But I do not think about how to make more and more money constantly.
The simple way would be to not "manage" your finances, don't build an investment portfolio. Have an honest work, live happily within your means and save whatever's left in cash.
Sadly, honest work is a dying value.
I don't think you understand. In the US you have to invest, or you simply won't retire before you die.
By earning more.
Kids used to be encouraged to work hard and to learn. Every day I realize that some kids are not raised with this idea. Why work hard when others can, and you'll get even richer? Learning schmearning
Kids are 7 and 10 , this is a mini "Marshmallow Test" and they can use their money whenever they want if they find a book or toy they like while they learn how investments work.
Or they could work for money when they are old enough to
He's teaching them the most important lesson of living in a capitalist system: wealth comes from having money, not from earning money.
If he's not able to also provide them with a sizeable initial capital, this lesson is also completely irrelevant. No one becomes really wealthy by investing savings off their modest salary.
You can, however, get wealthy by investing savings off a good salary.
I mean you can literally do that. And get wealthly. It'll just be a meagre existence up and until retirement.
It's better to invest in assets though than just the stock market. The wealthy build wealth by borrowing and buying assets like real estate. This ways makes it easier to avoid income taxes and capital gains taxes and you also get massive tax deductions for asset deprecation that you can use to offset most or all of what income it does provide.
agreed - he doesn't say the age of the kids but I imagine they're both under 10? Done right this could set them up for life and make them millionaires with virtually no effort by the age of 30 and still give them a childhood filled with toys and fun. But removing birthday gifts entirely from a young child... woah. Kids need physical items and tangible hobbies to share and bond with friends, even if it's just a cool looking stick. Is a child's brain developed enough to understand, enjoy and share a lot of these concepts, could it maybe lead to them becoming isolated?
>Done right this could set them up for life and make them millionaires with virtually no effort by the age of 30
This seems hyperbolic. Given that money doubles in roughly 10 years at a 10% rate of return, if kiddos are 10 years old they get two doublings by 30. To be a millionaire by 30 requires a present value investment of $250k per child.
You should take inflation into consideration, so the million in 20 years won't be the same as now.
It’s been my experience that when people are talking about some future sum of money without specifying real or nominal they are referring to a real sum, based on their current day concept of monetary value.
How is teaching your kids to invest some portion of their money "raising finance due bros and gambling addicts"? Just because modern culture has incentivized these kinds of people doesn't suddenly make investing bad. This is such a wild take.
> How is teaching your kids to invest some portion of their money
That’s not what the article says. I explicitly quoted the relevant part. It’s not “a portion of their money”, this is not money they had lying around in an envelope that grandma gave them. This father is incentivising the kids to not get what they want for their birthday and instead ask for money with which they’ll do nothing but unrealistically watch grow for a period of time. That’s not a good core memory, no one looks fondly on “that birthday I had as a kid where I got nothing but a number on an app stated growing at a snail pace”.
> doesn't suddenly make investing bad.
That’s not the argument. Nowhere in my comment does it say investing is bad.
> This is such a wild take.
Any take is wild when you blatantly misrepresent it. Don’t straw man.
Kids are 7 and 10 , this is a mini "Marshmallow Test" and they can use their money whenever they want if they find a book or toy they like while they learn how investments work.
Seems more like a "mega" Marshmallow Test. Instead of putting off a snack for 15 minutes they're giving up an entire year of birthday gifts for a reward years into the future.
I dunno, while they didn’t tell me to ask for cash, my parents basically made me invest any cash I got as gifts, plus everything I earned at summer jobs. I think that this kind of “investing by default” mindset (plus getting my own desktop computer for Christmas at age 11) extremely significantly impacted my current life in a positive way.
Also, learning to use Excel by playing fantasy stocks during the dot-com bubble, and having a Lycos homepage “Portfolio” widget just like my mom did is a fond memory for me, and zero people on Earth would call me a finance bro today.
The major difference is that in all your examples you were already getting cash. In the article, the poster is incentivising their kids to get cash instead of something else specific. From the article:
> we suggested that instead of asking for physical gifts, he ask for their equivalent in money.
For their equivalent. In other words, the kid has to decide something they want then deliberately choose to not get it so they can “invest” it and see line go up.
It would’ve been different if this had instead been a case of “grandma just gave you an envelope with cash; if you don’t have plans for it, how about investing?”. Which works on many levels, they could’ve also spent some portion of the money on something they wanted then invested the surplus, or a myriad other options.
Investing isn't bad? Sure we all do it but how isn't it bad?
> Why waste time having fun or learning?
yeah definitely no learning happening here
> You could instead watch a number go up slowly while you do nothing.
and then...spend it on something nice?
> This feels like raising finance dude bros and gambling addicts.
This is a super reactive take speaking from no experience whatsoever. My own parents did something like this for us when we were in elementary/middle school and it taught me restraint in spending, not the opposite.
> This is a super reactive take speaking from no experience whatsoever.
You have no idea what my experience is, please don’t assume.
> My own parents did something like this for us when we were in elementary/middle school and it taught me restraint in spending, not the opposite.
I’m glad it worked out for you. Truly. But don’t assume your experience is universal, because I unfortunately know for a fact it’s not. Also, the argument isn’t that it causes unrestrained spending, that’s not what financial dude bros are about. Excessive restraint in spending can also lead to unhappiness and an unhealthy attachment to money.
Wait until they want to divest their portfolio and start hyping meme stocks and shitcoins because number go up faster.
Then orchestrate an artificial bubble and crash
What's the point of this comment? To discourage investing? Reddit-style shitposting? Not sure what you're going for here.
That comment is spot on and in my opinion completely in the spirit of the post. It is all about number go up and competition.
Investing is not a safe piggy bank where you add coin and see green numbers go up.
What is the point of your comment, actually? At least GP is talking about children psychology and is totally on topic. Wanting a faster profit then getting scammed or lose money in a crash market is also part of the learning.
It's for the lolz. I laughed and upvoted, just imagining my kids someday lecturing me on crypto. Then I thought about creating a bubble for them and then saying to their faces "Annnnnd it's gone."
At the point with investment I was lost. Children should learn to be patient (saving money) and prepare for bad situations (saving money). That’s enough.
When older we can teach them what capitalism considers as investment. Capitalism is a longer word for greed. Money doesn’t work. Employees do. Customers pay. Both suffer to make greedy persons rich.
Give them a piggy bank. Teaches the concept of preparation.
Even saving can be seen as greed. Someone can focus too much on accumulating for themselves. Both investing and saving can be seen as preparation.
To avoid things becoming evil, you just need to make sure that your interactions with other are cooperative and not zero sum, and not all investments are zero sum.
You say "when older we can teach them what capitalism considers as investment" but you never specify the age. What exactly counts as older? My mom started telling me about how the new home we just moved into was both a place to live and also an investment at age 8. My dad started telling me about his brokerage account when I was 7. My dad also explained to me why the new car we just bought was not an investment when I was 6.
That's to say, I strongly disagree. It's almost never too early to teach this to children. As soon as children know money could be spent on exchange for things, they should begin to think about how money is made.
I mostly agree but greed is a part of human nature is it not?
I don't know, is it? It seems natural - after all, animals are selfish and will put themselves first to survive.
... but then again, animals also rape and murder each other. Is rape a part of human nature? I don't know, but I know we don't want it.
People keep repeating this. But why is it people’s nature. Maybe it is learned, because everyone keeps repeating this phrase!
Capitalism itself is a rather modern idea around 1800. And greed is maybe rooted in human nature, within the need to keep a buffer of food.
But we’ve brains and are social entities. I don’t think greed is necessity. But greed of other harm our needs. And we need to get greedy to get enough?
Examples: I want a nice bicycle. I need small house or nice flat. I enjoy good food from time to. I’m rather sure I don’t need a super-yacht, no swimming pool and no villa. I think stuff which I cannot keep myself clean is too much. If I cannot keep it clean myself it was greed?
But we’ve big dreams?
For the big dreams I would probably consider a cooperative society. These airliners are so expensive and suffer from not being used. Sharing them would be nice? Like…like owning airline stocks. Without the enforcement to gain money. Maybe some people enjoy flying it around, other maintaining it and others care about safety and passengers. Others maybe want fly to the moon. And others enjoy ships. Maybe sharing them deliberately makes sense?
> Money doesn’t work. Employees do. Customers pay. Both suffer to make greedy persons rich.
I don't want to work until I'm dead. If that makes me greedy, so be it.
[redacted]
That's quite interesting. When do they start to understand that saving is better, if they do? I can imagine kids never wanting to save for later, but also I remember that I enjoyed saving more than spending coins when I was a kid.
Brilliant idea!
Do you deduct short term and long term capital gains taxes?
> One thing that school doesn’t teach you (not even high school) is how to manage your personal finances.
Can we stop with this myth? Most states require financial literacy courses to graduate. The reason it feels like it isn't happening is because it's boring and most just don't pay attention or absorb the lessons.
> Most states require financial literacy courses to graduate.
Prior to 2020 only 8 states required a standalone financial literacy class. So a good percentage of people from the US on here probably didn't have to.
There were also states that had it integrated with another course but I'd question if they were any good. My state was like that and all we did was a 2 week project where we pretended to trade stocks starting with $1k. Which didn't even include things like dividends, short vs long term capital gains tax, etc...
We weren't taught basic things like budgeting, planning for emergencies, how loans and interest work, how taxes work, how credit scores work and affect you, etc...
> Most states require financial literacy courses to graduate
What's a state? Pretty sure we don't have those here.
Even if it was true for America (probably not), it certainly isn't true for the entire rest of the world.
Maybe they should be teaching Geography.
My mistake, it's just such a common trope in the US I didn't realize it was a universal complaint. It is true for US incidentally, people generally don't remember it because a) the learning and real world practice are too far removed b) people often are poor with finances regardless of knowledge.
All good.
I think it's common everywhere to be honest.
Here in the UK there's never been financial literacy taught at a national scale that I'm aware, there certainly wasn't when I was in school, albeit that was some decades ago now, and from what I've seen of my nephews/nieces it still isn't.
My children are still too young to worry about the minutiae, but we're already trying to teach them about income/outgoings and saving even at their middle single-digit ages.
Investing is something I can't say I'm extremely comfortable with the details of even at my advanced age besides the simple things like "I have a pension" and "I have a LISA".
I definitely think there's room for some self-service tools to aid in teaching these things to our kids from an early age.
Have you considered that "people generally don't remember it" because most of them graduated before 2020? People are going to reflect on their own experiences at school, which will often be from decades ago. If they aren't a teacher, they probably aren't going to find out about any changes to the curriculum. Maybe if they have a child, but that potentially takes an 18 year delay between implementation and learning about it if it's about a high school, if the teenager bothers to report that they had a boring finance class to their parent.
It's not true for the US.
https://www.ngpf.org/blog/advocacy/how-many-states-require-s...
It's apparently now 30 states.
Are you from the US? I went to a good high school and even that class was awful. No one wants to teach it and genuinely, you learn more about money in history, english, science, and math. Additionally, you can take it online and over the summer, which kids do so they can take nicer looking classes. Granted, students with a work ethic tend to learn these things on their own.
I graduated high school almost 30 years ago so whether I'm from the US or not isn't particularly relevant. I did live in the US for 25 years though, and up to however many minutes ago, I didn't know these classes were a requirement in any state (let alone 30).
But going from "it's not a requirement" to "the class is awful" would kinda be moving goalposts, no?
The goalposts were that "school doesn’t teach you (not even high school) is how to manage your personal finances." is a myth. It doesn't matter if there's no class or the class is useless, the statement is almost as true in either case. Students don't learn personal finance in school. They particularly don't learn practical investment as a way to manage their savings.
And for many of us, financial education, if there was any, was probably from boomers going "debt bad! credit bad! get a job and make money!".
I guess that depends on how you read up the thread.
Seems pretty clear to me that the comment I was originally replying to was about whether there was a requirement for financial classes in the US, not about the quality of the classes.
So we clearly weren't looking at the same goalposts.
Your point is true in the USA, but the author appears to be from Paraguay.