How do you invest your disposable income as a tech worker?
I've put 50% my money on amazon and netflix.
50% in us treasury bills.
Plus, 6 month expense kept as cash.
What about you?
50% in us treasury bills.
Plus, 6 month expense kept as cash.
What about you?
72 comments
[ 2.5 ms ] story [ 189 ms ] threadwaiting for trade wars to blow up the economy. Maybe trump's a genuis, but probably not. Then, I will move the money probably to S&P 500. might put part of it in one of those double or triple leveraged indexes.
My pension and stocks picks are 90% equity/bond split (between Vanguard FTSE Global All Cap and their Lifestyle 80% fund).
I would comment that for me 6 months sitting in a savings account is unnecessary as long as I have enough in a liquid wtf after maybe a 20% haircut. Selling the etf, settling and transferring would take only ~3 days so it's not so much having that money not doing anything but having it liquid.
As for tech and finance specific exposure, I definitely try to remove exposure since my personal career is already correlated with that segment.
Its called the Permanent Portfolio and it has a great long term track record: https://portfoliocharts.com/portfolio/permanent-portfolio/
After plummeting due to the financial crisis and a long period of quantitive easing.
If you put all of your money into the S&P500 only at the absolute, single worst possible day (the market top on May 16th, 2008 at $1,425) you would still be up about 100% today, 10 years later at $2,779 (So about 2X, just checked).
If you put money in "after the plummet," as you suggest, which is the best case scenario, (buying at the low of $735 in January of 2009) would put you up approximately 300% (4X).
The average investor would get somewhere between these two just by ignoring the market and investing biweekly.
I'm not even advising to go 100% for the S&P500 Index Funds. However that's an infinitely better idea than a portfolio that is 75% of Gold (Dumb), T Bills + Cash (Losing money everyday), and Bonds (Which are paying at near-historic lows). It's just bad advice.
Do you think the quantitive easing had no affect then?
How does that have anything to do with my comments about portfolio selection and results?
http://www.crsp.com/resources/investments-illustrated-charts
I created my own portfolio which consists primarily of stocks and index funds I picked. I have at least 20 different securities because, you know, diversification. What I like about it so far is the amount of time I don't have to spend on the platform, plus the fact they're free (they used to charge a fee but they got rid of it a while ago). Fractional shares is nice as well.
I scheduled a recurring deposit and they will invest it for me in the stocks I want without having to do it myself. If you don't want to pick your own stocks you can use one of their professional made portfolios.
I still own an account in Robinhood because trading can be fun from time to time.
Myself, I like investing in close-ended funds (CEF) or otherwise known as investment trusts. I can overlay some active management whilst having a fairly diversified portfolio. I tend to try and buy the CEF when their discounts are wider than usual i.e. a 5% discount widened to 15% to 20% of NAV. Then I sometimes sell when the discount narrows. I switch between different CEF in the same sector if I find one with a better discount i.e. US small cap.
There are a bunch of gotachs so be careful. Some have wide discounts because they are managed by bad managers or they have expensive debt or preferred equity in the capital structure. So do your own research.
If you're in the US, check out: https://www.cefconnect.com/closed-end-funds-screener
In the UK, I use: https://www.theaic.co.uk/aic/find-compare-investment-compani...
I would also say that this market can be inefficient. Investment advisers don't like it because it doesn't scale well.
Consider the scenario where you are invested in 100% indexes and get hit by some black swan event resulting in >70% drawdown. Odds are that you will lose your job during such an event and therefore could not feasibly continue investing at the same pace (there goes DCA as risk-neutralizing strategy). The more likely occurrence in this scenario is that you actually NEED your invested cash to stay in illiquid assets (i.e. house, college tuition etc) and are forced to draw out money at the bottom of the market.
Index investing without any hedging for fat tails doesn't seem that smart.
Others keep their portfolio completely hedged so when there is a dip they can buy the swing.
I however only buy options based on my sentiment of the market, bear or bull. Currently it's a bull market, S&P going to $300.
Edit: Fixed buy calls and puts.
Some of us living and working in less "privileged" countries (I'm from Greece) don't have the luxury of having disposable income to invest, especially tech workers that are paid way less than tech managers.
I don't know exactly how things are in the first world countries, but the only disposable income goes as spare cash for emergencies, health problems and other similar activities.
If your wage as tech worker relatively sucks compared to local wages, whatever country you're in, you're probably doing it wrong.
Perhaps you would need to find remote work or learn another language. Or simply work hard(er). Whatever it takes.
Also, it's trivial to move there for you since you are a EU citizen.
https://data.oecd.org/chart/5cbS
No doubt there are some savers in Greece although if I was one of them I'd probably keep my savings in a German bank account.
Was the point of your comment to just complain about being a dev in Greece?
Having someone asking general questions as this one on a big tech news site read by a lot of people, it’s expected to get many different (controversial) answers.
Does it mean that in order to comment/reply under a Tesla thread I need to own a Tesla?
Stock picks but options only.
https://news.ycombinator.com/item?id=17270396
One of the best decisions a high-earner can make to secure their financial future is to never get married. Have a partner yes but never marry.
Economists would say that you should try to diversify your labor income with investments.
I always want to be overinvested in what the future brings. Unless valuations have gotten way out of hand.
For short term, I have about 30 stocks I play around with... I'm up about 20% so far this year.
I was really thinking of creating a service to tell you when to buy and maybe sell, or when I sell.
I use volume patterns, chart patterns to get in and out. The big thing is time. Being able to get in and out of options requires time and being at the screen. Hard to do when you are not there.
One thing I have noticed, chasing dips is hard, look for breakouts it's easier.
Suppose you have $10,000 in AAPL for 52 shares.
You can buy AAPL Jan 2019 195.000 call for $1170 for 1 contract.
Now suppose you plug this option in here, http://www.optionsprofitcalculator.com/calculator/long-call.... and you will see if AAPL goes to $200 for July 28th you would be 30% in profits whereas your shares would only return $8/$192. You can also buy puts when you think it's too high instead of selling the contracts so this way you can arbitrage.
This might work for you as well, http://www.theoptionsguide.com/long-straddle.aspx
Edit:
You can also sell puts every week for the shares you hold and just collect premiums instead of holding dividend paying stocks.
https://news.ycombinator.com/item?id=17270396
So the result is I have far too much money as cash in the bank.
If you don't want to learn a ton or spend a lot of effort, the easiest thing to do is open an account at Wealthfront or Betterment and drop in everything except your emergency fund. (An hour or two of effort.)
The next level of complexity would be to open an account somewhere like Schwab and put your money (minus emergency fund) in a Vanguard target retirement index fund for your estimated year of retirement. (Less than a day of effort.)
The next level of complexity would be to open an IRA, contribute to it annually (to get the tax benefits), and invest that in Vanguard target funds.
I've sprinkled the majority in a selection of Vanguard's ETFs 80/20 stock/bonds, heavy on tech stocks and the rest in a 70/20/10 split on large-cap, mid-cap, small-cap.
A little (more than) play money is in crypto. I've been successfully algo trading crypto for fun, largely through triangular arbitrage, and investing in some of the projects that I think will have an impact. The "investment" part is in a basket of 20 or so coins weighted by what I expect their chances are to succeed in their sector within the next 2 years, rebalanced monthly. I built the strategy with a tool I've been working on with friends in our spare time: https://nazcabot.io
I'm keeping a fair bit in cash right now (ready for the next crash). In terms of "stash" I guess overall I'm about 40% gilts and bonds, 30% equities, 30% cash. Not too spicy, but I sleep well. They reckon should should hold you age in bonds and gilts (55% for me). Total stash is equivalent to about 33.33 years of expenses.
Then there's property which I don't include in stash.
I would think seriously about the fact you have very little diversification in your portfolio.
You also are holding the typical amount in cash that is recommended for an emergency fund. I'm slightly more contrarian on that issue - I like to keep one to three years of expenses as cash - it varies depending on various issues.
Of course everyone has their own thoughts on investment and there is no "one size fits all".
All the best!
Maximal 401k contribution in a Vanguard Target Date fund.
A slow trickle towards taxable investment in VTI while aggressively paying off my car.
But had I any, Vanguard's Target Retirement 21XX funds would be very hard to beat. (Source: lots of reading, and am a Registered Representative)
AKAO Sep 21 2018 12.50 Calls
The rest are shorter term.