>I'm afraid to make investments fearing that the market could crash the second I enter, and erase my money, leaving me vulnerable to being homeless or dependent on doing shitty jobs I hate just to stay afloat, so I just hoard cash like an idiot as that makes me feels safe and lets me sleep well at night.
I am terrified I won't have money when I need it, worried it won't be there or accessible. I've learned over time that there is no amount of money in my savings account that can alleviate this.
When I was a kid there was never enough money and disaster was one unexpected bill away. As an adult I know that's not true of my situation now, but I am incapable of getting out of that mindset.
Then consider things as "one time purchases" instead of monthly obligations - buy Disney+ for a year, once, and immediately cancel. Then if something goes wrong, there's no upcoming bill to pay.
A friend of mine worked on superyachts which were £400k a week to rent. He said that without fail the owners would be penny pinching at the end over a few £ here and there (on food, drink, suncream etc.) Same with upper-class Brits who had hundreds of years of intergenerational wealth but won't turn their heating on until November.
Not sure what to make of this; I've often wondered if it is a form of bell curve.
Poor penny pinching is often about doing what's necessary to survive, even if it's a terrible outcome in the medium term.
"Wealth does not last beyond three generations"
https://www.nasdaq.com/articles/generational-wealth%3A-why-d...
Now if by "owners" you mean the owners of the yacht, then it makes more sense as it's a business and they're controlling costs, especially the ones they see as "variable".
Maybe. Actual cost savings are observable now, with very high probability. Maybe that book or skill is useless; in other words, there's a broad distribution on possible outcomes. Who actually measures this stuff to assess ROI? It's not obvious that most people get a good ROI out of university degree, or at least at the same levels as in the past. At best I've seen some average measures, but not bottom 10 percentile measures, you know, essentially guarantees that one's time and energy and money isn't wasted. It should be of significant concern that even a CS degree isn't an effective guarantee of a job offer that requires the knowledge gained from that CS degree. It's as if a lot of the actual skill an employer requires is learned outside school, which is insane and conflicts with the broad everyone-must-graduate-college narrative in the US and Canada.
The US has has the privilege($$$) to import the minds and workforce it needs, thereby skipping the need to invest in local education, and offshoring this burden to brain-drain countries in the process.
So, the US is actually doing both: doing its best to brain-drain other developed countries while also spending more than anyone else on education. Is college the best place to train people to function better in teams? Or would Amazon be better served in funding lots of youth sports teams and recruiting from those?
If you haven't already, look into Certificates of Deposit ("CD") at your local bank. They're FDIC insured (so if the bank goes under, you're covered, up to something like $250k) and you don't have to worry about losing the principal amount you put in. If you ever need to withdraw that money in case of an emergency, you only risk losing out on the interest. Instead of dumping a ton of money into a single CD, look into CD laddering wherein you setup multiple CDs that expire in 3 months, 6 months, etc or some other cadence that you're comfortable with.
You can only buy $10k per person per year, but as a married couple, you could build up 100K in savings over 5 years, and even faster if you hold them in a trust.
One limitation of buying I Bonds is the annual purchase limit. Each person can buy a maximum of $10,000 per calendar year as the primary owner.
In addition, if you have a trust, you can buy another $10,000 per year under the name of the trust. A lawyer created a revocable living trust for us back in 2018. It was surprisingly easy when I opened an account for the trust at TreasuryDirect last month. It took only 15 minutes to open a new trust account and buy another $10,000 of I Bonds.
So it lets you double the amount you can buy.
The main benefit of cash recently is losing less value each day than stocks!
Interesting, I've always hated shopping for food, but I happily waste money on takeaways/restaurants. I think for me it is more about food waste and the mental energy wasted planning all my ingredients to make sure nothing goes to waste rather than saving money. I spend money now to not have to worry about it as much.
> I'm afraid to make investments fearing that the market crash or something like that would erase them leaving me vulnerable to being homeless or dependent on doing jobs I hate.
Yeah, I'm pretty risk averse when it comes to investments, which is screwing me right now with inflation as high as it is :(.
In India at least, this is a time tested way to escape poverty. Doing well in academics and get into STEM you will greatly increase your odds. Not for nothing India has millions of coaching centres and some of the most valued ed-tech startups. The poor can and do mortgage their house, land etc., to send their kids to good school and college.
That's a feeling I know well. It's even more irrational when it's a habit inherited from parents who weren't particularly poor, so you grow up living in quite a nice house that a lot of time and money has been spent extending, but a 50p ice cream is considered decadent. And after you've made a whole bunch of career choices not optimising for income, saved loads without investing it well, you still find yourself avoiding buying icecreams or coffees when out unless you've got company and comparing cheese prices per kg in a cheap supermarket, not because it's necessary or because you aren't aware that negotiating the price of your next house will save you more than three lifetimes of cheese price comparisons, but simply because doing anything else feels like being ripped off.
Of course it pales in comparison to cashing out your overpriced McMansion in some Karen infested suburb of a major metro with nice schools and moving to rural Idaho or switching jobs for a new one with "senior" in the title. But have you ever actually run the numbers? Cheaping out and/or reducing consumption has a huge impact on weekly or monthly finances if it is applied with any breadth. Monthly finances have a huge impact on money available for savings/investment.
This just isn't true for me. Comparing pennies on flour is extremely stressful. At one time - a time when I couldn't pay for natural gas for proper heat nor hot water - I cried because I spent 25 cents more on a product I liked a whole heck of a lot better. That quarter might have been the difference between going to the laundry or washing clothing in the sink (with water heated on a hotplate). Or at least, this was what was in my head.
I generally don't count pennies for flour as much anymore, but it took years, divce, remarriage, and a move to another country to even get to that position. I still get pretty panicked about spending money. Usually it happens on things more than approximately $50-$100 (after exchange rate). Occasionally I just go without a haircut or don't buy new clothes despite a few holes/being a bit threadbare, though.
Maybe! It all depends on whether or not you would actually do something more productive with the time. If you were to write a book or work on your company or take an extra job with those hours, sure, pay the professional. But if, instead, you were going to be watching TV instead, then you are way ahead. You have learned a skill, which can save you in the long run, even if you pay (you know if you are getting a good service and not being gouged, etc).
Having a cheap car – as long as it's not a lemon – is a good thing.
> I'm afraid to make investments fearing that the market could crash the second I enter it
Ok, that is a problem. Keep hoarding cash if it makes you feel better but take a portion and invest. Once you have managed to save enough to have 3-6 months expenses covered, you should be investing the rest. That's how you get out of shitty jobs, specially later in life. Markets generally recover and have for a century. If this stops we'll have bigger problems (and not investing doesn't shield you from them).
I basically agree with everything else you said.
Blended funds! You can choose what % of your money is invested at various risk levels. Choose a fund that puts only a fraction of your money in stocks, money markets, CDs, etc., and finally cash.
Sure.
I realize I waste a lot of time in supermarkets, shops or online stores, browsing/walking around and comparing prices just to penny pinch on low value things, when the savings I would make would have no meaningful impact on my yearly net worth, but the time and mental energy wasted browsing/walking around comparing prices could have better return on investment if used on other things like learning a new skill, reading a book, etc.
I avoid any kind of subscription services (Netflix, Spotify, cloud-storage, phone contract, etc.) to the disbelief of my friends ("But it's only 10 Euros a month!, Why don't you have it?"), preffering instead to spend my time building my own self-hosted solutions for cheap, which probably explains how I got into tech in the first place.
I own a cheap old car and prefer to fix it myself if I can, rather than paying someone to do it, even though the time I spend learning how to fix it, buying the parts, then actually fixing it, is probably worth more than a professional would have cost.
I'm afraid to make investments fearing that the market could crash the second I enter it, and erase my money, leaving me vulnerable to being homeless or dependent on doing shitty jobs I hate just to stay afloat, so I just hoard cash like an idiot as that makes me feels safe and lets me sleep well at night.
I think I might not be good enough for some bold career steps, like giving up my tech job and risking everything to start my own business of a coffee cart in the city center or pivoting to something other than tech that's less well paid, like being a teacher.
I spent too much of my youth studying hard at useless subjects on the pressure from my parents that "education will get you far in life, so beat those books and get good grades", only to realize far too late in life that I could have gotten in the same spot with 20% of the effort, leaving me time to actually enjoy my youth.
Sure, I'm working my way out of these habits slowly, but the Pavlovian impulses are still in my brain. Complex things these minds of ours.