# How do You Invest Your Money? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [June 6, 2018, 4:52pm UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553 "2018-06-06T16:52:41Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![octopus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/octopus/32/3716_2.png) [@octopus](https://boards.straightdope.com/u/octopus)\ **Post date:** [June 10, 2018, 3:20am UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553/21 "2018-06-10T03:20:43Z")
> [@jtur88](#): > > Mainly because they have secure vaults, and there is a certain guarantee of the safety of the money in a bank. But I don’t mind keeping large amounts in the house, either. > > “Why do you let them” is because we are locked into a system that enables them, and there is never a name on a ballot of someone who questions the myth of free enterprise. Which ensures that we are the loser and they are the winner. > > -Rothschild Brothers’ of London communiqué to associates in New York June 25, 1863 > “The few who understand the system, will either be so interested in its profits, or so dependent on its favors that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantages…will bear its burden without complaint, and perhaps without suspecting that the system is inimical to their best interests.” Investing in the overall growth of a stable and productive nation is better than letting it sit in a bank, imho. ---
**Author:** ![kambuckta](https://avatars.discourse-cdn.com/v4/letter/k/53a042/32.png) [@kambuckta](https://boards.straightdope.com/u/kambuckta)\ **Post date:** [June 10, 2018, 4:13am UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553/22 "2018-06-10T04:13:51Z")
I have a money-box. It is full to the brim of coins and bank-notes left over from travels in SE Asia. I think my net-wealth might be up to around $7.23 by now. 😃 ---
**Author:** ![Dereknocue67](https://avatars.discourse-cdn.com/v4/letter/d/6de8d8/32.png) [@Dereknocue67](https://boards.straightdope.com/u/Dereknocue67)\ **Post date:** [June 10, 2018, 8:44am UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553/23 "2018-06-10T08:44:15Z")
My entire portfolio is heavily invested in debt. ---
**Author:** ![jz78817](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jz78817/32/1028_2.png) [@jz78817](https://boards.straightdope.com/u/jz78817)\ **Post date:** [June 10, 2018, 8:45am UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553/24 "2018-06-10T08:45:38Z")
Apart from IRA\401k I don’t. ---
**Author:** ![Tired\_and\_Cranky](https://avatars.discourse-cdn.com/v4/letter/t/a87d85/32.png) [@Tired\_and\_Cranky](https://boards.straightdope.com/u/Tired_and_Cranky)\ **Post date:** [June 10, 2018, 11:36am UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553/25 "2018-06-10T11:36:22Z")
My retirement plan options are very good, so I max out contributions to that. It’s invested about 60% U.S. equities (running the gamut on size), 35% international equities, and 5% bonds. I max out my IRA contribution each year and convert it to a Roth IRA. That is in a Vanguard Target date retirement fund dated about five years after i plan to retire. That means it will stay tilted towards equities for longer than it would with a shorter date. I don’t know if I’ll ever need to draw from it so i can take a little extra risk. I estimate my spending, look at my after-tax income, and put everything else into Vanguard Total Stock Market through regular monthly purchases. When my income goes up, i increase the amount of my monthly contribution. I have a cash reserve in a savings account that is a combination of my intended cash reserve, money that I budgeted to spend but haven’t, and funds left over from my house down payment fund. It’s been essentially dead money for several years but I keep it around because I’ve also been shopping for an investment property or business. I’ve missed out on a couple good ones and rejected lots of others. I plan to invest this in a Treasury portfolio soon. Municipal bonds would make more sense but my job, for reasons I won’t explain, makes it very inconvenient for me to invest in munis. What makes it safe? Safety isn’t my only concern. I want sufficient returns to accomplish my financial objectives and i believe this approximates the portfolio that will accomplish them. It does rely on my fundamental faith that companies will continue to innovate and profit in the long run despite continuous changes in the economy. That’s been a great bet since World War II. I also have enough liquid reserves to withstand pretty severe market turbulence so I don’t worry about short-term fluctuations. Mrs. Charming and Rested shares my belief that we should live below our means and plan for our financial independence. A lot of safety comes from the two of us working towards the same goal. Her portfolio is very similar to mine. I have a house but that’s a consumption item, not an investment. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [June 10, 2018, 11:43am UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553/26 "2018-06-10T11:43:42Z")
> [@jtur88](#): > > I put it in the bank. Ah yes, I’ve heard of this “bank”. They tell me it is an extremely convenient place for poor people to put their money that hasn’t been invested properly. ---
**Author:** ![jasg](https://avatars.discourse-cdn.com/v4/letter/j/f0a364/32.png) [@jasg](https://boards.straightdope.com/u/jasg)\ **Post date:** [June 10, 2018, 4:47pm UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553/27 "2018-06-10T16:47:42Z")
**Tired and Cranky** , that sounds close to what I did and am pleased to report that it has worked well so far. I too invested salary increases and bonuses before spending them. Good scheme. RMDs start next year after 10 years of retirement - that will be the first significant withdrawals from retirement accounts - have been living on taxable savings. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [June 10, 2018, 8:50pm UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553/28 "2018-06-10T20:50:47Z")
> [@jasg](#): > > **Tired and Cranky** , that sounds close to what I did and am pleased to report that it has worked well so far. I too invested salary increases and bonuses before spending them. Good scheme. > > RMDs start next year after 10 years of retirement - that will be the first significant withdrawals from retirement accounts - have been living on taxable savings. Since I’d guess you have almost no taxable income now, why didn’t you take just enough out of the pre-tax savings so that you could keep your taxes low? I’ve converted mine into a Roth so they’ll grow tax free from now on. That will reduce my RMD in four years. ---
**Author:** ![jasg](https://avatars.discourse-cdn.com/v4/letter/j/f0a364/32.png) [@jasg](https://boards.straightdope.com/u/jasg)\ **Post date:** [June 10, 2018, 9:32pm UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553/29 "2018-06-10T21:32:47Z")
> [@Voyager](#): > > Since I’d guess you have almost no taxable income now, why didn’t you take just enough out of the pre-tax savings so that you could keep your taxes low? I’ve converted mine into a Roth so they’ll grow tax free from now on. That will reduce my RMD in four years. I have been doing just that. I have shifted pre-tax money to HSA accounts and to a Roth IRA, up to my estimated RMD tax rate. ---
**Author:** ![jtur88](https://avatars.discourse-cdn.com/v4/letter/j/e9c0ed/32.png) [@jtur88](https://boards.straightdope.com/u/jtur88)\ **Post date:** [June 11, 2018, 1:43am UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553/30 "2018-06-11T01:43:20Z")
> [@msmith537](#): > > Ah yes, I’ve heard of this “bank”. They tell me it is an extremely convenient place for poor people to put their money that hasn’t been invested properly. By “invested properly”, you mean invested in a market that crashes every two or three decades, wiping out the savings of “poor people”, but leaving you rich people happy and afloat. Like when everybody’s pensions were stolen (with impunity), or when they discovered that owning your own home is the American Nightmare. Meanwhile, heard about any uncompensated bank failures in your lifetime? ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [June 11, 2018, 5:39am UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553/31 "2018-06-11T05:39:15Z")
> [@jasg](#): > > I have been doing just that. > > I have shifted pre-tax money to HSA accounts and to a Roth IRA, up to my estimated RMD tax rate. Okay, cool. It sounded like you were forced to do it already. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [June 11, 2018, 5:43am UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553/32 "2018-06-11T05:43:35Z")
> [@jtur88](#): > > By “invested properly”, you mean invested in a market that crashes every two or three decades, wiping out the savings of “poor people”, but leaving you rich people happy and afloat. Like when everybody’s pensions were stolen (with impunity), or when they discovered that owning your own home is the American Nightmare. > > Meanwhile, heard about any uncompensated bank failures in your lifetime? Truly poor people don’t have money in the market. They suffer because of the job loss that comes with a crash, but they’d suffer no matter where they put their money. People who got wiped out in the last recession are those who panicked and sold at the bottom. Those lucky enough to have kept our jobs and kept investing did pretty well. And if you really want safety, why not invest in T-bills or something like that, which pay better than banks and are just as safe. ---
**Author:** ![jtur88](https://avatars.discourse-cdn.com/v4/letter/j/e9c0ed/32.png) [@jtur88](https://boards.straightdope.com/u/jtur88)\ **Post date:** [June 11, 2018, 3:12pm UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553/33 "2018-06-11T15:12:17Z")
A lot of people who have only a few thousand in savings don’t like to put it where they can’t get it immediately. Like, if their beater car goes up in smoke and they need a couple thousand right away to buy a replacement. Or they are hit with a big copay when they thought they had health insurance. Of they have to buy a new fridge before the frozen contents thaw without warning. High interest comes at the price of accessibility when you need it, which for the non-rich, is the only point of having it. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [June 11, 2018, 3:21pm UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553/34 "2018-06-11T15:21:21Z")
> [@jtur88](#): > > A lot of people who have only a few thousand in savings don’t like to put it where they can’t get it immediately. Like, if their beater car goes up in smoke and they need a couple thousand right away to buy a replacement. Or they are hit with a big copay when they thought they had health insurance. Of they have to buy a new fridge before the frozen contents thaw without warning. High interest comes at the price of accessibility when you need it, which for the non-rich, is the only point of having it. Pretty much everyone says that you should have a reserve to use as a cushion, so if all you have is a few thousand in savings, that’s not really available for investment. ---
**Author:** ![jtur88](https://avatars.discourse-cdn.com/v4/letter/j/e9c0ed/32.png) [@jtur88](https://boards.straightdope.com/u/jtur88)\ **Post date:** [June 11, 2018, 3:23pm UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553/35 "2018-06-11T15:23:46Z")
> [@octopus](#): > > Investing in the overall growth of a stable and productive nation is better than letting it sit in a bank, imho. It’s not my responsibility to grow a stable and productive nation. ---
**Author:** ![Icarus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/icarus/32/72_2.png) [@Icarus](https://boards.straightdope.com/u/Icarus)\ **Post date:** [June 11, 2018, 3:24pm UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553/36 "2018-06-11T15:24:56Z")
> [@Voyager](#): > > Pretty much everyone says that you should have a reserve to use as a cushion, so if all you have is a few thousand in savings, that’s not really available for investment. Yah, **jtur88** , you’re talking about emergency savings. That is distinct from investing. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [June 11, 2018, 3:32pm UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553/37 "2018-06-11T15:32:56Z")
> [@molten](#): > > With US inflation today at around ~2-3%, you can expect x dollars today to lose 10% of their value over the next 5 years. > > What have you invested in for 3 years or longer? > What is the return % over time? > What makes the overall strategy safe to you? Mostly index funds. Some stock picks. Some dividend stocks. Some bonds. Some cash. 529s for college. 401ks and IRAs for retirement. Two businesses. between 10-12% annual over lifetime, last I checked on the non-earmarked stock/bond portfolio Lots of money and investment over time. The second is how you start. Eventually, you hope to get to the first where its “oh, I lost $20k on the stock market today…oh well, its a virtual loss - hopefully it will come back before I need to sell it…and that means stocks are likely on sale - is there anything I’ve had my eye on?” ---
**Author:** ![Yllaria](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/yllaria/32/3452_2.png) [@Yllaria](https://boards.straightdope.com/u/Yllaria)\ **Post date:** [June 11, 2018, 4:02pm UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553/38 "2018-06-11T16:02:58Z")
What have you invested in for 3 years or longer? - 457 (like a 401 for non-profits and municipalities) - Most is in funds, but a bit is in a money market fund because I’m close to retiring and I need to do at least one cautious thing. What is the return % over time? - I don’t look. It’s going to go up and down. The money market fund has a guaranteed return of about 4%, I think. What makes the overall strategy safe to you? - I don’t think of it as safe so much as my best shot. I’ve made sure to keep on good terms with my grown children. And the house isn’t under water any more. There’s some in savings, too. ---
**Author:** ![Surreal](https://avatars.discourse-cdn.com/v4/letter/s/eada6e/32.png) [@Surreal](https://boards.straightdope.com/u/Surreal)\ **Post date:** [June 11, 2018, 6:15pm UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553/39 "2018-06-11T18:15:26Z")
Heavily tilted towards value and small cap using index funds and ETFs on the equities side, but overall I have a relatively small allocation to equities for someone my age. Valuation levels are extraordinarily high at the moment so I think it’s wise to avoid growth stocks altogether. ---
**Author:** ![CurtC](https://avatars.discourse-cdn.com/v4/letter/c/ce73a5/32.png) [@CurtC](https://boards.straightdope.com/u/CurtC)\ **Post date:** [June 11, 2018, 7:26pm UTC](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553/40 "2018-06-11T19:26:04Z")
At 57, I’m maybe two years away from retirement. The typical investment advice for people my age is to be more into bonds and less stocks, but my wife and I have been saving aggressively for 35 years, and even though we’re pretty much all stocks, we have enough that we can weather a drop in values without limiting our lifestyle, so I’m staying in stocks. We have a lot in ETFs based on the S&P500, too much in Apple and Google, and we own our house and a lake house free and clear, plus own a lake lot that we may build on. I can’t sell off the Apple and Google because I can only take so much capital gains each year without being catapulted into a high tax bracket. From my simulations, the stock market can drop 50% next year and then grow at only 2% above inflation from here on out, and we still have more than we can spend. In my opinion, the advice to be more into bonds is to protect you from the risk of a stock market drop, but if you have enough, it’s not an issue. [Previous page](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553.md?page=1) [Next page](https://boards.straightdope.com/t/how-do-you-invest-your-money/815553.md?page=3)