How do you divide your income?

[waddy41]

Tapioca: You're so right about health and fitness

OP: Just do whatever makes you happy. I know people who spend 110% of their income and they're happy.
But for me I like to live a simple life, eat quality food and remain physically active. Saving and seeing my bank account go up makes me happy and I enjoy investing my money.

To the people who say, "what are you saving for?" I want to ask them, "what are you buying all that superficial shit for?"

[Marioo1991]

Originally Posted by waddy41

Tapioca: You're so right about health and fitness

OP: Just do whatever makes you happy. I know people who spend 110% of their income and they're happy.
But for me I like to live a simple life, eat quality food and remain physically active. Saving and seeing my bank account go up makes me happy and I enjoy investing my money.

To the people who say, "what are you saving for?" I want to ask them, "what are you buying all that superficial shit for?"

so your'e advice to the OP is if spending 110% of his income will make him happy, than he sould just do that?

[Marioo1991]

Originally Posted by waddy41

Tapioca: You're so right about health and fitness

Being healthy is also a good way to save money. Most people who exercise generally spend less money because they dont eat out as much, and it costs next to nothing to exercise..

[Marioo1991]

Originally Posted by mo_bettah

Everybody has goals. When i said save i didn't mean stash in a checking account and forget about it, obviously saving would include investing it with a plan.

Don't you think it's a little ironic you cited the fact that your financial obligations play a large part in preventing you from leading the life you want to be leading(and your still in your 20s)? You think that those obligations lessen into your 30s and 40s?

Saving as much as you can in your early 20s is ideal because even for people "without goals" by the time you near 30 theres alot of unexpected expenses and financial obligations. It's simply the power of compounding, the more you save to invest early on, the less and less you have to contribute later to achieve that snowball effect.

I absolutely agree with you when it comes to health though, it should be the number one priority and there should be no expenses spared when it comes to that.

Your Financial Obligations probably won't lessen when you're in your 30s and 40s, but when you're older most people usually make much more money. I know a lot of people in their 40s who make 2-3 times more than they did in their 20s

[waddy41]

Originally Posted by mikeivb

so your'e advice to the OP is if spending 110% of his income will make him happy, than he sould just do that?

Obviously not...but those people are hard to save. They have no self control over their spending and usually learn their lesson the hard way..

However, from what the OP has said, it seems like he's very disciplined. So my advice to him is to do whatever makes him happy. If he enjoys living a simple life and saving the majority of his earnings then that's what he should do.

[taylor192]

Originally Posted by mo_bettah

Everybody has goals. When i said save i didn't mean stash in a checking account and forget about it, obviously saving would include investing it with a plan.

You'd be surprised how many people have no goals.
Even those that do have goals have no plan.
Even those with goals and a plan have no reasonable idea if it is achievable.

Originally Posted by mo_bettah

Saving as much as you can in your early 20s is ideal because even for people "without goals" by the time you near 30 theres alot of unexpected expenses and financial obligations. It's simply the power of compounding, the more you save to invest early on, the less and less you have to contribute later to achieve that snowball effect.

That is not exactly true, and I hate general advice that can lead people down the wrong path. You'll notice much of my advice gives examples.

If sacrificing savings will get you more education and significantly more pay, then not saving early and saving later might work out better.
If you sacrifice too much fun while young, you might be more inclined to make a large stupid expense later on to make up for it, negating the advantage of savings.

That's why goals are important, and a plan with reasonable expectations better to track your progress.

[waddy41]

Originally Posted by taylor192

If you sacrifice too much fun while young, you might be more inclined to make a large stupid expense later on to make up for it, negating the advantage of savings.

Do you see that a lot?
IMO frugal people will always be frugal. But I don't know, I'm only 24 so I might change as I get older.

[taylor192]

Originally Posted by waddy41

But for me I like to live a simple life, eat quality food and remain physically active. Saving and seeing my bank account go up makes me happy and I enjoy investing my money.

To the people who say, "what are you saving for?" I want to ask them, "what are you buying all that superficial shit for?"

Answer: Cause I can buy superficial shit, and it makes me happy.

My motorcycle is a complete waste of money, and a death trap on wheels. Yet it is FUN! $2000K wasted on a single hockey game is DUMB, yet I'll never get a chance to top that experience in my lifetime.

Like you, having enough money in my account makes me happy, yet there's a limit to that happiness and I have reached it. The excess can buy other types of happiness.

Plus I don't enjoy investing cause I associate it with gambling. Most don't know enough about the markets to make educated decisions, so they are essentially gambling not investing. This is why investing has never really interested me and I'd prefer to leave it to the pros who are more knowledgeable than I.

[taylor192]

Originally Posted by waddy41

Do you see that a lot?
IMO frugal people will always be frugal. But I don't know, I'm only 24 so I might change as I get older.

As you get older you get more conservative, so frugal young people would probably become more frugal.

Yet what happens when you, bring frugal, meets nice girl with a shopping habit who rocks your bedposts every night? You have all this extra money, no plan for it, yet now you could use it to continue hitting that...

A better, yet less funny, example would be a friend that spent too much on a wedding to satisfy their partner, despite themselves being frugal. Why? Cause they had the money to spend, and eventually, its hard to say no if you have no good reason not to.

[Tapioca]

Originally Posted by mo_bettah

Don't you think it's a little ironic you cited the fact that your financial obligations play a large part in preventing you from leading the life you want to be leading(and your still in your 20s)? You think that those obligations lessen into your 30s and 40s?

No, those obligations do not lessen in your 30s and 40s, but your ability to cope with them, both financially and mentally (i.e. smarter decision-making), improve. But, your health slowly declines (maintaining your health can stem it) as well as your patience and tolerance.

The window of time in which to do things is quite narrow. I can't go travelling around the world in my 30s and 40s because it's hard on the body and is testing on my patience. Nor is it really feasible to go to bars every weekend, get hammered, and pick-up random women because by then I will either be bald, have a bit of a gut, or will be laughed at because of the social stigma. Know what I'm sayin'?

[Marioo1991]

Originally Posted by Tapioca

No, those obligations do not lessen in your 30s and 40s, but your ability to cope with them, both financially and mentally (i.e. smarter decision-making), improve. But, your health slowly declines (maintaining your health can stem it) as well as your patience and tolerance.

The window of time in which to do things is quite narrow. I can't go travelling around the world in my 30s and 40s because it's hard on the body and is testing on my patience. Nor is it really feasible to go to bars every weekend, get hammered, and pick-up random women because by then I will either be bald, have a bit of a gut, or will be laughed at because of the social stigma. Know what I'm sayin'?

Usually peoples ability to cope with financial obligations improve, although financial obligations can lessen in your 30s and 40s, it all depends on the lifestyle you want to live. I know someone in their 40s who used to have a house, 2 kids to raise, cars, etc... now he lives at home with his mom.

[taylor192]

Originally Posted by Tapioca

No, those obligations do not lessen in your 30s and 40s, but your ability to cope with them, both financially and mentally (i.e. smarter decision-making), improve. But, your health slowly declines (maintaining your health can stem it) as well as your patience and tolerance.

The window of time in which to do things is quite narrow. I can't go travelling around the world in my 30s and 40s because it's hard on the body and is testing on my patience. Nor is it really feasible to go to bars every weekend, get hammered, and pick-up random women because by then I will either be bald, have a bit of a gut, or will be laughed at because of the social stigma. Know what I'm sayin'?

LOL I think you're taking it a bit too seriously!

I'm 31yo with many friends who are mid-30s. It is not that bad. My aunts and uncles in their 50s travel more than I ever had - all on their motorcycles!

[Marioo1991]

Originally Posted by taylor192

LOL I think you're taking it a bit too seriously!

I'm 31yo with many friends who are mid-30s. It is not that bad. My aunts and uncles in their 50s travel more than I ever had - all on their motorcycles!

I think his point is that the average 40 year old cant handle much abuse and recover as easily than when you're in your 20s.

There are a number of 40 year olds who are in better physical condition than people in there 20s, but the average 40 year old would have a hard time keeping up with the average 25 year old when it comes to travelling, partying, etc...

[BeefCake4000]

Originally Posted by taylor192

The one thing that is missing is: Why are you saving? Knowing your goals will get you better advice of where/how to invest your money.

First of all I would like to thank all the members who contributed to this thread. I found a lot of useful investment/lifestyle advices.

As for goals, I gave this question some serious thought. Here is the breakdown of my goals:

0-5: None, I don't believe in fast/easy money. In my opinion this is more like gambling than investing. (correct me if I am wrong)

6-15: I would like to pay off 1/2 to 2/3 of my mortgage for a $350K apartment.

16-25: I hope to pay off that apartment by this point. After 25 years, I would be getting full pension from my job. At this point I hope I can afford a nice automobile as a reward for all the hard work I put in.

Are my goals too ambitious/ not ambitious enough? Please feel free to comment if my goals are unrealistic. I won't be offend by it. I am here to learn.

[waddy41]

So at the end of all that, all you want is a nice car?
I say not ambitious enough..

However, it's good that your goals are realistic and achievable

[taylor192]

Originally Posted by BeefCake4000

First of all I would like to thank all the members who contributed to this thread. I found a lot of useful investment/lifestyle advices.

As for goals, I gave this question some serious thought. Here is the breakdown of my goals:

0-5: None, I don't believe in fast/easy money. In my opinion this is more like gambling than investing. (correct me if I am wrong)

6-15: I would like to pay off 1/2 to 2/3 of my mortgage for a $350K apartment.

16-25: I hope to pay off that apartment by this point. After 25 years, I would be getting full pension from my job. At this point I hope I can afford a nice automobile as a reward for all the hard work I put in.

Are my goals too ambitious/ not ambitious enough? Please feel free to comment if my goals are unrealistic. I won't be offend by it. I am here to learn.

Your goals sound pretty normal. You could put $25K down on a condo now, take a 25yr mortgage and just pay it down normally and achieve those goals.

Do you already own? are you saving for a downpayment? Do you see yourself doing this all on your own, or with the help of a wife?

I have a coworker who paid off his condo in < 10yrs with his wife. They valued living with no debt more than making a lot of money by investing. I think this is awesome, they have very little living costs, and can do virtually anything they want.

They could've done better investing rather than paying down the mortgage, or they could take a HELOC against the paid down mortgage and invest now - yet they are < 35yo with no debt and little living costs. Hard to argue with that goal, even if they could've done better.

Let me ask: why do you want to own and pay down a condo? what do you do for work? do you always want to live here? do you see yourself setttling for 25 years in the neighbourhood you buy in? ... owning is nice, yet shouldn't come at a sacrifice of mobility for your job, or flexibility for a future family. This is why I detest 30yos buying small condos at the peak of the market - little flexibility when they finally marry and start a family.

[no_clue]

if it takes 16-25 years to pay off a $350 000 condo.....
maybe go to school to further improve your skills therefore higher pay?

also a lot of variables, what if you get a wife, kids. you gotta move to a bigger space. what if your condo home declines in value
what if another recession happens and your portfolio gets wiped out?
etc etc

I saw some guy in his late 30/early 40 driving a new amg, he has like 2 kids and still lives in a condo where the maximum size of a unit is 1300sq. Always remember your priorities.

[Marioo1991]

Originally Posted by no_clue

if it takes 16-25 years to pay off a $350 000 condo.....
maybe go to school to further improve your skills therefore higher pay?

also a lot of variables, what if you get a wife, kids. you gotta move to a bigger space. what if your condo home declines in value
what if another recession happens and your portfolio gets wiped out?
etc etc

I saw some guy in his late 30/early 40 driving a new amg, he has like 2 kids and still lives in a condo where the maximum size of a unit is 1300sq. Always remember your priorities.

There is nothing wrong with taking 16-25 years to pay off a 350k condo. Instead of paying off your mortgage faster when you're paying 4-5% interest, why not put that money into an investment where you get a better return?

you dont have to move to a bigger space, some families can manage fine with a condo thats 1300 sq/ft. Theres also nothing wrong with a decline in home value, too many people worry about the value of their home, mine has gone down, but it also gone up over the years, but none of that matters unless i'm planning on selling, which i'm not. If you have your investments well diversified theres a much lower chance that your portfolio will get "wiped out"

[BeefCake4000]

I appreciate everyone's input. I think the rest is up to me to put what I learn into action. I am going to open up an investment account and speak to an adviser. Before I wrap up this thread, I have a question to ask: What separates a good investment adviser from an average/mediocre adviser? What questions should I ask him/her? What questions should a good adviser ask me? In addition, if RS members have dealt with some good advisers, please feel free to private message me their names and location. Thank you.

[waddy41]

^ are you already investing your own money? what did you go to school for?

For me, I'd rather manage my own investment account to avoid fees...
but i did go to school for accounting/finance and have the time to monitor during the day..

[BeefCake4000]

Originally Posted by waddy41

^ are you already investing your own money? what did you go to school for?

For me, I'd rather manage my own investment account to avoid fees...
but i did go to school for accounting/finance and have the time to monitor during the day..

Not yet, but I would like to talk to an investment adviser soon. I got a degree in Criminology and I don't have time to monitor during the day. For my situation, I think it's best to leave that to the pros.

Edit: I asked this question in another thread but I got no respond. Is it advantageous to open an E-trade account in Hong Kong instead of opening an account here. Or should I do both?

[impactX]

What markets do you plan to trade in?

[BeefCake4000]

Originally Posted by impactX

What markets do you plan to trade in?

I am more incline to just open an account here. I am looking at the natural resource field since I have knowledge about it.