[Cause]

So with my life experiencing significant changes lately I need to step up my adulating game. These are all things I have always considered I guess but now I need to take them more seriously and also have greater control over my life, time and money to do so. We live all over the world, have different ages and socioeconomic backgrounds so what works for some of us wont work for all of us but I thought I would ask if anyone has any advice to share. Never hurts to learn more.

I know we used to have a thread similar to this, Shinrei IRC was a big investor. I thought starting fresh and in the phoenix inn might get more traffic though

To get started just a few things I have been considering:

Budgeting: I have generally always lived well below my means. I earned money through scholarships and bursaries and they tended to pay in giant lump sums which led me to be overly conservative in how I spend them. Never knew when the next one would come. So I tended to save the majority of each. Its put me in a good financial position but now I earn a monthly salary I have noticed its easier to spend money, their will always be more next month (or so the insidious thought goes). I'm trying to draw up budget to stick to but I'm struggling at the moment because I know their will be big expenses coming up (need a new car) but I'm struggling to plan for them if I don't know exactly what they will be. (Does anyone know a good phone app or something? At the moment I just use excel)

Retirement: I am horrified to learn most of my peers have not really begun to plan for retirement! To me securing enough money to secure my future is pretty much what the game is about. I think I have a sizeable fund already built up (though its not in a specific retirement annuity) already but I have also thought that in my near future as I perhaps by my own house etc I may need to dip into these funds (to help make a deposit etc). Otherwise my minimum goal at the moment is to save at least 10% of my salary each month, currently I am bale to do much better than that but my expenses will likely increase soon. The rule of thumb I have heard is that you need to retire with a sum that generates 60% of your past income through interest. Or that you need to be able to live on 4% of the sum a year. Taking more than that and inflation will overtake you. With our lives potentially heading for 90 years or longer this will become extremely important.

Insurance: After my recent cancer scare I have had to increase my medical aid to a higher tier. I am also contemplating income protection (incase of a long hospital stay for example) and Disability cover. If I went blind tomorrow however unlikely I could never work as a biochemist again. Medical aid, disability cover and insurance protection however would cost 14% of my monthly income. Which is certainly not inconsiderable, still it seems perhaps the smart move. My boss is someone I have not seen essentially since I started working 4 months ago because of his own cancer problems. Its expensive but perhaps worth it over the long term. otherwise I consider car insurance a must have.

Financial Manager: My dad knew his way around money and he essentially managed the entire families money. After his death this was somewhat of a problem, My mother is financially illiterate. So when I was dealing with the estate I got my mom a financial manager. I got him to cover my money too. The problem is that they charge 1% a year. Now my logic is that if they make me 10% and without them I would have made 6% then the 1% fee they charge is acceptable. However I starting to wonder if this is really the case. I strongly believe that no one can predict the market but I figured that someone who is at least aware of the world financially would be an asset. Howver I am not getting the impression that he is too hands on. I can put my money in funds myself and not pay his fee.

Gold: Its the 50th anniversary of the minting of the Kruger rand and its made me aware that on average the gold price has increased 14% year on year for 50 years! That's an incredible investment. 50 years ago they cost 25 rand and today they cost over 16000, whereas due to inflation alone R25 is worth about R600 today. I have never understood the fascination with gold however and swore once to never invest in it. However I realized recently that people don't hoard gold for the zombie apocalypse and the collapse of world wide civilization (though some do). They horde it for the collapse of their countries economy. The gold price is valued internationally so its a store of value that keeps its price regardless of local inflation due to local political upheaval. So I'm now wondering if buying a little gold is not a bad idea. Though it creates the problem of where do you keep it, and if you keep it at the local bank or the mint does it not kinda defeat the purpose. Am I channeling nicodemus here? In fact with peoples current obsession with Bitcoin which iosing its ability to actually act as a cryptocurrency and is instead becoming a store of wealth not tied to any country (plus I'm convinced its a speculative bubble) its made me rethink the value of gold. Similarly Id argue that platinum is currently underpriced and I wonder if the same is not true of silver.

Emergency Fund: I have a 3 month salary emergency fund. Too high or too little? The idea is that you should always have a little bit of money that you can access quickly without delays in case of hospital bills, sudden car repairs, unemployment and who knows what else. The problem is that the more liquid the investment the less the return. A bank account offers almost no interest. Do you have such a fund and how do you keep it?


Investments: I tend to take the long term view. Medium risk investments over the long term, say over 5 years seems to always return inflation or higher than inflation returns. I am generally averse to high risk. If 3 high risk investments fail and 1 quadruples my money I have just broken even. I don't trust myself or anyone to predict the market and call a high risk bet a sure thing.


House: I have always viewed renting as throwing money away. However my view is changing in that I am not sure if I will still be in south Africa in a year or 2 or 3 years time etc. At the same time not sure if I should put my life on hold for the possibility I might leave and go elsewhere. Also wondering if its not worth trying to buy a place and worse case scenario is that if I am gone I rent it while I am away. I have also been wondering if renting low priced homes is perhaps not a great investment to make in general?

If anyone knows of any particular useful resources on the topics please share. Otheriwse your own thoughts, advice or questions welcome.

[D'rek]

Have you tried turning it off and on again?

[QuickTidal]

D, on 29 December 2017 - 04:05 PM, said:

Have you tried turning it off and on again?

Obligatory

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[Macros]

I'm impressed with the 3 months salary emergency fund, not enough people do this.

[Mezla PigDog]

With savings, forget an app. If you are earning more than you need then spend normally for 3 months and see how much you have left at the end of each month. Set that average amount as a standing order straight into your savings account on the day you get paid. You never see the money so you don't miss it and if it is in a savings account that you can't easily withdraw from then it is stuck there. Revise the amount up or down depending on if you really want something or you keep having too much left. I make sure my current account is mostly emptied every month and have 2 savings accounts - one tax free that I can't touch and one that I can access easily if I want a fancy holiday or the car is fucked or something.

For house buying - it's massively over rated. I bought my first place when I was 33 and that was really late compared to my friends but I don't think I lost out. Rent IS money down the drain but you forget the benefits - you are not tied down to a location which is good for a research career, you don't get unexpected bills because your house is shit and you don't have to think about decorating! Rent for as long as your lifestyle benefits and don't let anyone tell you otherwise.

The only advice I have ever had about financial advisors is that if you are not sure you can afford one then you really don't need one.

[worry]

I love these crazy jokers. In all seriousness, though, forget about retirement or any far future planning. It's enough to save for a rainy day and otherwise live your life responsibly but comfortably. In terms of investment, all any of us are really gonna need is a box marked 2050 A.D. with a functioning pistol in it and enough bullets for each of our loved ones. That's about when it's gonna get so bad that nobody should have to live through it if they don't want to.

[Mentalist]

3 months' worth sounds about right. I usually try to have that much floating in my bank account, with another months' or so in cash, which is usually money I'm putting away for vacations - I try to basically skim about 100 bucks of each paycheck to put into this "untouchable" pile.

I'll admit that I have given like 0 though to retirement. But I'm in a white-collar profession, and it's quite common among lawyers to "work till you drop". I'll probably have to re-think my finances once I'm actually made partner and start getting a share of the firm's profits. Ditto with investments and such.

re: housing. my personal experience with real estate is incredibly limited. I bought an apartment this year, and I can't really afford to live in it on my own. So I'm renting it out roughly for what its upkeep is costing me, while I still live with my parents. I can't really complain about that arrangement, because it's paying for itself and my tenants cause me no real headaches. Only reason I really bought was because the prices in Canada have been going insane, and it very much looked like if I didn't buy now, I wouldn't be able to afford it again any time soon.