This is a good principle, but I think 6 months is a bit too much. It probably depends on the size of the purchase: new car? 6 months. TV? Maybe a couple weeks. Clothes? Give it a couple days.
6 months is good for a TV though, because then new tech will be out. Then you will wait 6 more months to be sure you want that one, then new tech will be out. Then you will wait 6 more months to be sure you want that one.
Sort of off-topic: I'm thankful to the TV industry for getting me out of this trap. In 2014, I moved, and bought a larger TV to fit in my larger living room. Not even a year later, I sold it and went back to the previous model (that I thankfully didn't sell; I used it as a secondary PC screen). TV operating systems are total shit nowadays. (Or, at least the one that I got was.) My old TV may be smaller, but when I press the power button, it's fully operational within a few seconds, not minutes. And it reacts to button presses in under a second, not over 10 seconds.
Yes, I hate the fact that when I turn on my TV, it takes a full 5-6 seconds for it to respond to the remote. This can be very bad if the volume was up high, and you turn on the TV late at night and are greeted with blaring sound an no-way to turn it down until you have already woken half the house.
The most outrageous thing was the "Sources" menu (where you switch from HDMI input to TV), which took 1-2 minutes to load (whole going through several different "Loading..." screens). So I always had to remember to put the TV back into TV mode in the evening (after using it as a PC screen to watch internet videos).
Or needing to keep that one TV remote around because the Source or Exit button on the universal remote won't let you exit the "Sources" screen. But it'll control every single other function. Hate that!
When I bought my car I noticed a "Start Up Volume" feature. I could be blaring the stereo on my way home, turn off the truck, then come back out in the morning to go to work. I wouldn't be deafened by the sudden jump in volume. It always starts at an adjustable level for that input source.
I don't understand why everything else that has a speaker doesn't have this feature.
Anything that doesn't spark joy in your heart - read Marie Kondo's “The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing”
What I've spend too much money on: Tech gadgets, DSLRs, LEGO sets, neat things, books I don't read, stuff to put on shelves. Especially if you have too much money. At first you don't think a lot if you need things <$10, when your income grows so does your "don't-think-spending-limit" to $100, then $1000.
Not stupid: Books you really read, long term investing, making experiences.
Today I have a monthly "Make-your-live-lighter-day" where I give away/throw away things.
I buy a lot of books I don't really read, but I will hopefully one day. I still think it is good! Books retain their value. It's not like giving them away is bad at any point.
I have so many books I thought I'd read one day. But the rate of buying is still higher than the rate of reading. Plus there will always be more books coming. So I'm not very confident I'd read those books one day.
It is nice having a "library." These are all "good" books (are there bad books?) so I know I can bring a half-dozen with me on vacation in hopes of reading 3 or so!
This probably doesn't apply to a lot of people, but I got a ton of mileage out of my DSLR and learned a lot about photography in the process. I mean unfortunately the one I bought (and still have) from 2009 is pretty dated now, I wouldn't consider it a waste(unless you count the fact I could've spent those on bitcoin instead and been a millionaire).
Remember, that was worth about $10 at some point (not each, total). I had dozens of bitcoins and sold them when they went up in value by 1000% or so (this was 2011). Still dont regret it, even though I'd be sitting on a quite a bit of hypothetical money if I had kept them.
Saying it as someone who has been buying BTC since 2012 and ETH for the past couple of years: buying cryptocurrencies is as good "financial decision" as buying lottery tickets. Repeat to yourself: even if you made good money, it was more for lucky timing than anything. Past performance is no guarantee of future returns.
Don't forget your Roth IRA (if your AGI is <= $118,000).
In that scenario I would recommend this priority:
1) Put enough into your 401k to get your full company match. If you don't you're throwing away free money
2) Max out your Roth IRA. They have more investment options than 401k plans.
3) Max out your 401k.
Do not go out and buy <sports car> and proceed to spend <stupid amount> of money on it trying to make it cool/fast when you are 22. And then immediately after that do it again with another car. You could almost buy a house.
Uh, well it's the same advice I'd give somebody now:
1. Max out employer's 401k match.
2. Build emergency fund to 3-4 months expenses
3. Max out Roth IRA
4. Pay off low interest loans (if you have high-interest loans, which I don't/haven't then this becomes #1 and pay them off first).
If you want returns from the early 2000s to today you buys Domino's stock. Yes, the pizza chain. Just look at their stock performance and you'll see why.
Good call - I just always remember looking at red hat stock in the gutter and thinking I should buy this... so naturally that is what I'd tell myself to do
Starting mining bitcoin on the other had, is hindsight bias, and may well not be a good recommendation anymore. Depending on where you live, electricity costs makes it hard to break-even, especially after you consider hardware purchase.
Bottom-line: run the number and think hard before joining the hype.
Sure, but there are plenty of great games available for less than $50. And if you can wait a year; you can probably get today's great game for significantly less than $50...
I know some super financially conscious folks who purposely stay one "Game system behind". Nintendo Switch is coming out? Buy a Wii U and collect games for super cheap. Hour of entertainment at a fraction of the cost.
Just don't buy more video games than you can play. Buy it when you actually intend to play it. Don't buy three $60 games on release day all in the same week. Buy one, wait until you have completed it before buying another. The price usually will have gone down for the others by the time you get around to them, if ever.
Poster was probably 25 around 2010 when you could mine bitcoins without custom hardware. I mined dozens around then (and sold them all when the price spiked to ~$5, thinking that was a silly price).
although i think you aren't being serious, this is genuinely poor advice.
> The reader can see my unusual notion of alternative accounting: $ 10 million earned through Russian roulette does not have the same value as $ 10 million earned through the diligent and artful practice of dentistry. They are the same, can buy the same goods, except that one’s dependence on randomness is greater than the other.
> Also, start mining bitcoin.
> although i think you aren't being serious, this is genuinely poor advice.
This is absolutely fantastic advice. If my 25y/o self had started mining bitcoin, and held on to that btc, I would be a millionaire right now.
Remember, this advice is for myself when I was 25, not for people that are currently 25. Obviously, mining btc right now would be a waste of time/energy unless you have a btc mining factory in your back yard.
That's not really in the spirit of the question. If you're going to tell them that, you may as well tell them which stocks to invest in and who won each world series.
Don't leave disposable income hanging around as savings in a no/low interest bank account. Invest it in an index fund with low fees (Vanguard, etc.) or better yet, figure out an asset allocation and invest in a few accumulating funds.
A good piece of advice I picked up from Rami Sethi (when it was still worthwhile reading his blog) was think about how much of your free time per month do you spend on various activities (Facebook, Gaming, etc). How much of that free time is devoted to thinking about your personal finance? If it's less than you think you should be doing, schedule it in.
I disagree with your statement about not having savings in a safe (usually lower-yield) account.
Index funds are usually a good idea in the long term, but right now (June 2017), I would not put a penny in the stock market - it is ridiculously overpriced.
Totally agree. You always need substantial cash on hand. I got caught fully invested during the financial crisis and I was not in a position to invest at all-time lows.
Exactly my point. Everybody was saying they were overvalued, and were about to crash. Yet they went even higher and still going higher almost 7 years later.
Thus you can't time the market.
Don't trust experts telling you to enter and exit.
In my opinion, personal finance should be as automated and mindless as possible. While you can allocate time to read about it as a form of entertainment, a good personal finance strategy is to make as few decisions as possible to avoid biases and emotional decision-making.
218 comments
[ 2.4 ms ] story [ 215 ms ] threadThere, you never need to buy another TV again!
I don't understand why everything else that has a speaker doesn't have this feature.
Not stupid: Books you really read, long term investing, making experiences.
Today I have a monthly "Make-your-live-lighter-day" where I give away/throw away things.
I buy a lot of books I don't really read, but I will hopefully one day. I still think it is good! Books retain their value. It's not like giving them away is bad at any point.
Best financial decision i've made was to buy some ETH (Ethereum) last year.
In that scenario I would recommend this priority: 1) Put enough into your 401k to get your full company match. If you don't you're throwing away free money 2) Max out your Roth IRA. They have more investment options than 401k plans. 3) Max out your 401k.
Also, put some money aside for savings.
Meet and keep in touch with as many people as possible. Switch jobs, travel the world, volunteer and always _always_ make new connections.
The best financial (and personal) gains you will make in life will come from the right connections.
Experiences will turn into knowledge which could possibly turn into opportunities.
1. Max out employer's 401k match. 2. Build emergency fund to 3-4 months expenses 3. Max out Roth IRA 4. Pay off low interest loans (if you have high-interest loans, which I don't/haven't then this becomes #1 and pay them off first).
Also, start mining bitcoin.
Starting mining bitcoin on the other had, is hindsight bias, and may well not be a good recommendation anymore. Depending on where you live, electricity costs makes it hard to break-even, especially after you consider hardware purchase.
Bottom-line: run the number and think hard before joining the hype.
I know some super financially conscious folks who purposely stay one "Game system behind". Nintendo Switch is coming out? Buy a Wii U and collect games for super cheap. Hour of entertainment at a fraction of the cost.
although i think you aren't being serious, this is genuinely poor advice.
> The reader can see my unusual notion of alternative accounting: $ 10 million earned through Russian roulette does not have the same value as $ 10 million earned through the diligent and artful practice of dentistry. They are the same, can buy the same goods, except that one’s dependence on randomness is greater than the other.
- Taleb, Fooled by Randomness
This is absolutely fantastic advice. If my 25y/o self had started mining bitcoin, and held on to that btc, I would be a millionaire right now.
Remember, this advice is for myself when I was 25, not for people that are currently 25. Obviously, mining btc right now would be a waste of time/energy unless you have a btc mining factory in your back yard.
Oh yeah, you don't need to save that internship money, I'm good now. Besides, I make like 5-6 times what you are making.
A good piece of advice I picked up from Rami Sethi (when it was still worthwhile reading his blog) was think about how much of your free time per month do you spend on various activities (Facebook, Gaming, etc). How much of that free time is devoted to thinking about your personal finance? If it's less than you think you should be doing, schedule it in.
Also starting reading https://www.reddit.com/r/personalfinance/ regularly.
Index funds are usually a good idea in the long term, but right now (June 2017), I would not put a penny in the stock market - it is ridiculously overpriced.
Stock markets in the developed world have risen too much, Robert Shiller, economics professor at Yale, told CNBC Thursday.
On Wednesday, the Dow bounced above and below the psychologically-important 12,000 for much of the session. But stocks look expensive, Shiller said.
"I would say the market is overpriced based on fundamentals … I'm talking about the US and probably Europe," he said.
[The market has almost doubled since then.]
Thus you can't time the market.
Don't trust experts telling you to enter and exit.