Even if you follow all that advice, it isn't necessarily sufficient. Probably not even close. If you figure you need roughly $1.5 million to retire without drawing down principle, then that means you're by definition in the top 5% of the United States by wealth.<p>And in order to get $1.5 million from $0 by age 65, well there are a lot of ways to get there assuming unrealistic stock market returns. But over twenty years, the S&P 500's returns vary wildly [1].<p>If you start at age 25 and aim for retirement at 65 then that's 40 years. If median return after inflation is 4%, you still have to save over $1000 / month, and that's banking you'd hit median returns. If you figure 3%, then that's around $1500 / month. If it dips into negative returns like it did for a few 20-year periods in the S&P-500 history, then good luck, you'd need to save over $4000 / month.<p>(Rough numbers based off of monthly interest)<p>[1] <a href="http://www.nytimes.com/interactive/2011/01/02/business/20110102-metrics-graphic.html" rel="nofollow">http://www.nytimes.com/interactive/2011/01/02/business/20110...</a>
The limit to greater financial literacy isn't in the lack of availability of short "tip lists" like this. It's in the willingness of people to research, learn, and change behaviors.<p>It doesn't help that you'd be lucky to encounter any financial literacy education in public schools (in the US).
I disagree with the statement that you should not buy individual stocks because others know more than you. This is only true if you buy stocks for companies outside of your area of expertise. If you work in tech you know more than the average wall street trader about tech companies especially the one you work at. If you work in medicine you know which medical insures are shit and which are great, etc.<p>Now this does not mean you should buy multiple stocks all in one sector but it does mean if you know a company well and you know they are doing great and will be doing great in the next year you should buy their stock. You should never have more than 20% of your portfolio in a single sector but it is perfectly safe to have 80% of your portfolio in vanguard funds and 20% you invest in one or two companies you truly believe in.
It can help but it doesn't even begin to cover it.<p>I didn't realise how big the gap was until my sister (liberal arts major) asked me (finance) for guidance on her personal finances.<p>Now she is bright & got a high end education - probably more so than me in both regards but dear god entirely ignorant about personal finances (budgeting, investments, retirement etc).<p>Its a pretty basic failing in the schooling system globally as far as I'm concerned. This is a make or break skillset for +- all people out there yet people walk into life having zero clue what their doing. Predictably a decent chunk get caught in debt traps etc.
Maxing out retirement accounts is the common piece of wisdom thrown around. However, instead I try to put as much money into a liquid fund for entrepreneurial reasons. For the YC crowd, I'm surprised this isn't a more suggested route.
Quote: "That said, both Pollack and Olen say a good, reasonably priced financial adviser can sometimes be helpful — especially when life gets too complicated to fit on an index card."<p>But the long-running WSJ dartboard contest proved repeatedly that financial advisers cost more than their advice's value. Maybe that fact should be on the metaphorical index card.<p>Here's my index card:<p>1. Don't borrow money.<p>2. Don't be in debt to anyone for anything.<p>3. Learn about compound interest, then either burn your credit cards or learn how to use them.<p>4. Invest only in no-fee or small-fee market index funds -- in the long term they outperform the majority of fee-based mutual funds.<p>5. Never engage the services of a financial adviser.<p>More here: <a href="http://arachnoid.com/equities_myths/index.html" rel="nofollow">http://arachnoid.com/equities_myths/index.html</a>
The New York Times has 8 more index cards. You can even create your own and submit it.<p><a href="http://www.nytimes.com/2016/01/09/your-money/how-should-you-manage-your-money-and-keep-it-short.html" rel="nofollow">http://www.nytimes.com/2016/01/09/your-money/how-should-you-...</a>
I would add: develop a philosophy of life that enables you to enjoy the simple things so you don't get caught on the hedonic treadmill, and try to save even more than 20% of your income. Sites like Mr. Money Mustache explain how it's done.
Yes, all it needs to say is this:<p>Step 1. Take 5-10% of your liquid networth<p>Step 2. Buy Ethereum now<p>Step 3. Try to understand it (optional step)<p>Step 4. Wait 3 years<p>Step 5. Sell & retire<p>You can thank me in 2019.