

Ask HN: How to invest? - csomar

22 Years old. Doing freelancing and have passive income. I spent the first year income in travel, gears, some stuff and a car. I have more earnings than I need to spend. I'm thinking about travelling around each year (2-3 times) and investing the remaining of the money.<p>Now, the big question: How to invest? I'm looking for stable 6-8% per year over the course of the next 12-15 years. What do I need to achieve that?
======
tomfakes
If anyone tells you that they can get you a stable 6-8% per year over the next
12 to 15 years, you should run away immediately.

Interest rates all go down as stability goes up. Typically, buying government
bonds gives the best stability, but current 10 year US bond rates are paying
under 2%.

The more risk you are willing to take, the more you may earn, but then the
more you could lose.

Only you know how much risk you are willing to take, but younger people tend
to be able to take more risks, because, over time, the ups and downs of the
market flatten out. And if you have 40+ years to leave the money, then the
better chance you have of being in the market for good times as well as bad
(Oh yeah, timing the markets - to only get the good times - never works over
time either).

One absolute certainty though is to make sure you pay as little to the people
managing the money as possible. If you buy a mutual fund, the difference
between 0.2% annual fee and 1.2% annual fee is astronomical over time.

I have a bunch of money tied up in the Vanguard Total Stock Market Index Fund
which tracks the total stock market and charges 0.17% per year. This type of
fund, again, over time, beats out almost all actively managed funds. Managed
funds will try and bamboozle you with how they beat the market last year, but
if you didn't invest the year before, that doesn't matter.

One technique I also use with extra cash is to buy shares of companies I
personally have good experience with - e.g. Apple, Starbucks, Amazon. This is
much riskier, but can payoff quite well.

I am not a financial advisor!

(Oh yeh, in the US, you could setup a Self Employed Pension plan to save your
money tax free, but this has restrictions on when you get access to the money,
but it's something to think about to turbo charge your savings)

Good Luck

------
nicholas73
Take it from someone who has lost a lot of money in the market - unless you
love trading, do not trade. It's like playing poker or any other game of risk:
you will pay to learn. That said, there are two ways to play. Buy and hold, or
the poker game. The trouble is, unlike poker, you don't have an easy way to
calculate the odds, and you are surely wrong as a beginner. Thus, unless you
want to be a student of the game, you will lose (even if completely random
choices, you will lose from psychological and transactional factors).

My advice for someone who defines his goals to be a fixed stable income is to
buy blue chip dividend payers when valuations are reasonable (do research on
this... ps it's not now). Then hold forever. Do not buy stocks you have to
spend mental energy on (all but blue chips).

------
erik14th
I'd go buy and hold. You don't need to know that much, you just need the
discipline not to try to know too much.

If you try to beat the market you'll most likely spend too much time that
would be better spent in something else or end up beaten.

A good company to invest in, for me, is just a company with consistent profit
growth, doesn't need to be a lot.

You can buy as many good companies as you want, and you should buy different
stocks from different sectors, so you won't be greatly affected unless the
whole economy collapses.

You can, and should, check those companies only like once a trimester or even
a year. Cause prices go up and down, but value in good companies tend to rise
in the long run.

I'm 24 and those are things I learned by having the same question.

------
cosmc
If you don't no much about investing, index funds (mutual funds which track a
stock market index) are a good option. They allow for good diversification and
generally have low fees. Probably best to stay away from trading stocks IMO,
unless you are committed to learning about the subject.

------
cdvonstinkpot
If you're in NY state try this crowdfunding platform, although they try to say
they're not an investing mechanism, it's pretty darn close. 9 month loans to
small businesses, but it's only for NY state.

<https://www.fundingcommunity.com>

~~~
FCAlex
Thanks for mentioning us! Lenders can be from almost any state. Borrowers are
limited to NY right now (though we will have some announcements on that front
soon). Alex

------
dezinelife
Invest in my start up! Just joking.If you are looking for getting money by
lying in bed,good luck with that but if you want to get sweaty, there are a
million and one ways.Someone who is unsure about his/her future is not likely
to do well.Do what you can do best,maybe forming a band!

------
gesman
You have passive income? That's your answer. Invest in ability to keep this
source of passive income active [and growing even] for the next 12-15 years.

That's more fun than investing in some other corporation's crap for "promise"
of return.

------
jlengrand
Invest in real estate, and rent.

Good thing with houses is that they will always be essential to anyone, and
their value won't crush form one day to the other. On top of that, your renter
will pay the mortgage for you with their rent.

------
logn
I'm following this: <http://www.dividendgrowthinvestor.com/>

Hopefully it works. As I don't really have 2 chances at this.

------
jkaykin
Invest in Tesla, that should get you your 6-8%.

~~~
mansigandhi
Totally. My stocks went up 150% in just a few months!

