[gonehome]

The r/personalfinance and r/financialindependence subreddits are quite good and even cover more exotic details like the “mega back door roth” otherwise known as “after tax 401k contribution in plan conversions to roth” (which can let you add an additional 36k to a Roth IRA over the 6k limit each year in addition to the normal 19.5k for a traditional 401k).

They’re mostly bogleheads so are a little risk averse, but for most that’s probably the right move anyway.

[ASinclair]

> The r/personalfinance and r/financialindependence subreddits are quite good and even cover more exotic details

The great thing is you can read the subreddits casually for ~3 months and learn everything you need to know to autopilot your financial plan for decades if you go the boglehead route. After that you mostly need to pay attention to major changes in tax law and entitlements.

I still read them all the time but I haven't learned anything new in years.

[opportune]

That also makes them less useful than they could be because they don't cover many advanced financial topics, like managing taxes, investments besides "VTSAX and chill". Everything is geared towards newbies.

There's much better advice on /r/fatfire in terms of more advanced investing and tax stuff, but you have to sift through a lot of not-so-humblebragging posts. There is so much to learn outside of the "make a 100k-200k income and put everything into three securities" even if you don't use it. Real estate investing, entrepreneurship, angel investing, trusts, different corp-types, estate planning, etc.

[tsjq]

well said. fully agree with that.

[sokoloff]

In the overall distribution of risk-aversion, bogleheads are more comfortable with risk than far too many savers. I’ve seen too many of my parents’ generation squander decades of investment returns because of the idea that stocks are risky.

[lodonnell9213]

Not just parents generation, our generation. I don’t play the stock market, I’m not skilled enough for it, but I do have a stocks/share ISA, but I’m also not against spending money to make it. Many people I know will happily continue to pay interest on an item, but have savings which is less than the interest on credit. They have a 20% credit card vs a 0.5% interest savings.

And little things like that can help in the long run.

[paulpauper]

You don't have to be skilled. Just simple indexing will beat most of thepros anyway. Most active managers lag the market anyway.

[andrepd]

Buying a mutual fund is precisely not "playing the stock market"

[Spivak]

I mean once you reach a certain age you really can’t afford to just hold on to your investments for a few decades because of a financial downturn. That retirement money is also most people’s emergency medical fund which can and does hit people in their 40s.

[sokoloff]

I’m not saying to put 100% of every liquid dollar you have into the market, but in your 40s, I think it should be the majority of your investment funds.

Boglehead advice agrees, with an explicit principle of “Never bear too much or too little risk”, suggesting 30-40% bonds in your 40s and the rest in stocks.

I think more people underperform from being too risk-averse than under-perform from having too much equity exposure and having an unfortunate overlap of a large expense and a downturn in the market.

[spekcular]

The book "Lifecycle Investing," by Yale professors Nalebuff and Ayres, argues that a young person ought to invest 100% or even more (via leverage) in stocks. (More specifically, a young person with high future earning potential, which probably includes many people here with a career in tech.)

I'm fairly risk averse and don't totally believe their leverage calculations. But it did convince me that any non-negligible bond allocation is probably suboptimal.

[ghaff]

Even just a few years back, some top-rated corporate bonds (e.g. Microsoft) weren't a bad investment--although equities of course ended up doing much better. These days? I'm not sure there's anything that's not one step away from putting money under the mattress that makes sense outside of equities.

[giantg2]

$61.5k in yearly contributions is out of reach for most people. I can't even max out my 401k due to high cost of living (with a family) and mediocre income.

[gonehome]

Totally - it was more of an example of the quality of the subreddits. If they’re willing to get those details right then they have the earlier steps really well established.

[giantg2]

It's definitely high quality. I guess I'm just jaded about being a loser.

[topkai22]

You are contributing to a 401k and have a family. The two data points you’ve revealed contra-indicate loser status.

[foogazi]

TC?

You talk about maxing out your 401k, but have looked into you maximizing your income to the be able to save more?

(Of course money is not the only important thing in your life)

[waynesonfire]

i agree, mega backdoor seems to be a perk for staff / VP level employees.

[pbourke]

No, those are called deferred comp plans and they’re a whole separate ballgame. MBDR is much more accessible to your average six-figure earning employee.

[giantg2]

There's also 403(b)