
How do you invest your disposable income as a tech worker? - stealthmodeclan
I&#x27;ve put 50% my money on amazon and netflix.<p>50% in us treasury bills.<p>Plus, 6 month expense kept as cash.<p>What about you?
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Blackstone4
I'm a Chartered Financial Analyst (CFA) and in my opinion that's a very
concentrated portfolio. You're taking on a material amount of company specific
risk. I would consider diversifying your stock investments.

Myself, I like investing in close-ended funds (CEF) or otherwise known as
investment trusts. I can overlay some active management whilst having a fairly
diversified portfolio. I tend to try and buy the CEF when their discounts are
wider than usual i.e. a 5% discount widened to 15% to 20% of NAV. Then I
sometimes sell when the discount narrows. I switch between different CEF in
the same sector if I find one with a better discount i.e. US small cap.

There are a bunch of gotachs so be careful. Some have wide discounts because
they are managed by bad managers or they have expensive debt or preferred
equity in the capital structure. So do your own research.

If you're in the US, check out: [https://www.cefconnect.com/closed-end-funds-
screener](https://www.cefconnect.com/closed-end-funds-screener)

In the UK, I use: [https://www.theaic.co.uk/aic/find-compare-investment-
compani...](https://www.theaic.co.uk/aic/find-compare-investment-companies)

I would also say that this market can be inefficient. Investment advisers
don't like it because it doesn't scale well.

~~~
poster123
I'm also a CFA and a closed-end fund investor and agree with this advice.
People interested in CEFs should check out the Morningstar CEF forum
[https://socialize.morningstar.com/NewSocialize/forums/100000...](https://socialize.morningstar.com/NewSocialize/forums/100000006.aspx)
.

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Spoom
That big a percentage in two stocks would freak me out a bit. My money is in
indexes, roughly 90% stocks, 10% bonds. Boring, but it's worked well so far
and it's more of a long-term thing.

~~~
EADGBE
Agreed on two stocks and such a large percentage. It's an easy way to lose
money, quick. Same indexed fund strategy here. It's not sexy, but it
consistently has a positive net.

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sharemywin
I have kids so much of my disposable income goes to living in a decent school
district. and food, lots and lots of food. I used to put a lot in 401k. It's
sitting 50% in bonds and a 50% USD account in my 401k.

waiting for trade wars to blow up the economy. Maybe trump's a genuis, but
probably not. Then, I will move the money probably to S&P 500. might put part
of it in one of those double or triple leveraged indexes.

~~~
cimmanom
What are you referring to as "double or triple leveraged indexes"?

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marssaxman
I've put most of it into sound system equipment, burning man art projects,
starting a makerspace, organizing festivals and dance parties, and that
general sort of thing. Any delusions I might have once had about the
possibility of accumulating enough money to retire ended after I got divorced,
so I'm not particularly concerned about long term finances anymore. Might as
well enjoy my life here and now, and use whatever surplus money comes my way
for the benefit of my friends and my community.

~~~
ed_at_work
any delusions I had about retiring disappeared when I spent my 20's chasing
women, drugs, booze & abusing credit.

~~~
marketgod
I did the same but it's not too late. I can turn a $40K account into $100k
easily.

~~~
vba
how? tax advantaged accounts, individual stock picks or building a business ?

~~~
marketgod
I just posted a thread, Ask HN. If you have any more questions.

Stock picks but options only.

[https://news.ycombinator.com/item?id=17270396](https://news.ycombinator.com/item?id=17270396)

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bigpicture
Great set of long-term charts here:

[http://www.crsp.com/resources/investments-illustrated-
charts](http://www.crsp.com/resources/investments-illustrated-charts)

~~~
IpV8
Very powerful. Would be useful to see more explanation on some of them though.
Exe what the heck does the last one mean?

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toomuchtodo
Vanguard 2055 Target Date Fund (tax advantaged retirement accounts), VTSAX
(Vanguard Total Stock Market Index Fund) and BND (Vanguard Total Bond Market
Fund) in taxable accounts, real estate that I expect to appreciate or that
cash flows well, and small businesses that aren’t asking for a large premium
on ARR.

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dev_north_east
You're not very diversified... Why only two stocks?

My pension and stocks picks are 90% equity/bond split (between Vanguard FTSE
Global All Cap and their Lifestyle 80% fund).

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poster123
Arguably a tech worker should be _underinvested_ in tech stocks, because if
there is a tech bust, as in the early 2000s, both his income and his portfolio
could plummet.

Economists would say that you should try to diversify your labor income with
investments.

~~~
charlesdm
Maybe. But then again, technology is disrupting pretty much every industry. Do
you want to be underinvested in that?

I always want to be overinvested in what the future brings. Unless valuations
have gotten way out of hand.

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NKosmatos
The what? LOL

Some of us living and working in less "privileged" countries (I'm from Greece)
don't have the luxury of having disposable income to invest, especially tech
workers that are paid way less than tech managers.

I don't know exactly how things are in the first world countries, but the only
disposable income goes as spare cash for emergencies, health problems and
other similar activities.

~~~
sotojuan
Then why comment on this thread at all? This is like someone making a thread
saying "How do I do X in Swift?" and I come in and say "I only know Python, so
I have no idea LOL!".

Was the point of your comment to just complain about being a dev in Greece?

~~~
NKosmatos
If someone wants to make a specific question it needs to find the correct
place/forum to ask it.

Having someone asking general questions as this one on a big tech news site
read by a lot of people, it’s expected to get many different (controversial)
answers.

Does it mean that in order to comment/reply under a Tesla thread I need to own
a Tesla?

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afinemonkey
Over the past year I've decided to do something with my savings, rather than
have it sit in a Dutch bank, getting far less than inflation in the country I
live in now.

I've sprinkled the majority in a selection of Vanguard's ETFs 80/20
stock/bonds, heavy on tech stocks and the rest in a 70/20/10 split on large-
cap, mid-cap, small-cap.

A little (more than) play money is in crypto. I've been successfully algo
trading crypto for fun, largely through triangular arbitrage, and investing in
some of the projects that I think will have an impact. The "investment" part
is in a basket of 20 or so coins weighted by what I expect their chances are
to succeed in their sector within the next 2 years, rebalanced monthly. I
built the strategy with a tool I've been working on with friends in our spare
time: [https://nazcabot.io](https://nazcabot.io)

------
zapperdapper
My savings rate is 74.95%. Yes, I am that anal about it.

I'm keeping a fair bit in cash right now (ready for the next crash). In terms
of "stash" I guess overall I'm about 40% gilts and bonds, 30% equities, 30%
cash. Not too spicy, but I sleep well. They reckon should should hold you age
in bonds and gilts (55% for me). Total stash is equivalent to about 33.33
years of expenses.

Then there's property which I don't include in stash.

I would think seriously about the fact you have very little diversification in
your portfolio.

You also are holding the typical amount in cash that is recommended for an
emergency fund. I'm slightly more contrarian on that issue - I like to keep
one to three years of expenses as cash - it varies depending on various
issues.

Of course everyone has their own thoughts on investment and there is no "one
size fits all".

All the best!

~~~
cimmanom
What are "gilts"?

~~~
zapperdapper
Gilt-edged securities. Basically UK government bonds. Equivalent of US
treasury bonds.

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mataya
I have used pretty much all investing apps out there but I've recently settled
on M1 Finance.

I created my own portfolio which consists primarily of stocks and index funds
I picked. I have at least 20 different securities because, you know,
diversification. What I like about it so far is the amount of time I don't
have to spend on the platform, plus the fact they're free (they used to charge
a fee but they got rid of it a while ago). Fractional shares is nice as well.

I scheduled a recurring deposit and they will invest it for me in the stocks I
want without having to do it myself. If you don't want to pick your own stocks
you can use one of their professional made portfolios.

I still own an account in Robinhood because trading can be fun from time to
time.

~~~
sandrot
Mataya, thanks for mentioning M1. I haven't heard of it before. What's your
referral code?

~~~
mataya
You're welcome! [https://mbsy.co/lHSCs](https://mbsy.co/lHSCs)

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icedchai
For long term: I put $500/week into a total international stock fund (VTIAX.)
I put another $500/week into a growth index fund (VIGAX.)

For short term, I have about 30 stocks I play around with... I'm up about 20%
so far this year.

~~~
marketgod
Stocks returns are low, look into options if you have risk tolerance.

~~~
icedchai
Any strategies you recommend? I'm open to putting a small percentage towards
riskier stuff.

~~~
marketgod
I just re-read your message and thought of something with regards to the 30
stocks you are playing with.

Suppose you have $10,000 in AAPL for 52 shares.

You can buy AAPL Jan 2019 195.000 call for $1170 for 1 contract.

Now suppose you plug this option in here,
[http://www.optionsprofitcalculator.com/calculator/long-
call....](http://www.optionsprofitcalculator.com/calculator/long-call.html)
and you will see if AAPL goes to $200 for July 28th you would be 30% in
profits whereas your shares would only return $8/$192. You can also buy puts
when you think it's too high instead of selling the contracts so this way you
can arbitrage.

This might work for you as well, [http://www.theoptionsguide.com/long-
straddle.aspx](http://www.theoptionsguide.com/long-straddle.aspx)

Edit:

You can also sell puts every week for the shares you hold and just collect
premiums instead of holding dividend paying stocks.

~~~
icedchai
Cool! Thanks! I will look into this more. I know there is big $$$ in options
but it has always struck me as risky... I know, risk vs reward...

~~~
marketgod
I just posted a thread, maybe you have some insight, not sure if this is
allowed on here:

[https://news.ycombinator.com/item?id=17270396](https://news.ycombinator.com/item?id=17270396)

------
bko
I keep maybe 2 months cash and the rest 50/50 in VTI and SCHF, a very
diversified low cost us and international etc, respectively. I'm early 30s so
I don't anticipate needing it for a long time.

I would comment that for me 6 months sitting in a savings account is
unnecessary as long as I have enough in a liquid wtf after maybe a 20%
haircut. Selling the etf, settling and transferring would take only ~3 days so
it's not so much having that money not doing anything but having it liquid.

As for tech and finance specific exposure, I definitely try to remove exposure
since my personal career is already correlated with that segment.

------
closeparen
6 months expenses in a “high yield” savings account.

Maximal 401k contribution in a Vanguard Target Date fund.

A slow trickle towards taxable investment in VTI while aggressively paying off
my car.

------
schmidty
25% in each: gold/stocks(index fund)/30 year US bonds/cash

Its called the Permanent Portfolio and it has a great long term track record:
[https://portfoliocharts.com/portfolio/permanent-
portfolio/](https://portfoliocharts.com/portfolio/permanent-portfolio/)

~~~
et2o
This is going to sound harsh, but that bad investment advice for most people.
US Bonds and Cash appreciate less than inflation, so you're actually losing
money. The same is true for gold, which has historically underperformed vs.
S&P500 (for example) by thousands of percent
([http://www.longtermtrends.net/stocks-vs-gold-
comparison/](http://www.longtermtrends.net/stocks-vs-gold-comparison/)).
Meanwhile the stock market has more than doubled in the past 10 years. 25% is
almost definitely not enough equity exposure unless you are in your golden
years. If you're investing for the long term (which you should be), it is much
better to use a simple index funds or Robo-manager which will buy a variety of
index funds with broad exposure according to modern portfolio theory.

~~~
tonyedgecombe
_Meanwhile the stock market has more than doubled in the past 10 years._

After plummeting due to the financial crisis and a long period of quantitive
easing.

~~~
et2o
No, you are wrong.

If you put all of your money into the S&P500 only at the absolute, single
worst possible day (the market top on May 16th, 2008 at $1,425) you would
still be up about 100% today, 10 years later at $2,779 (So about 2X, just
checked).

If you put money in "after the plummet," as you suggest, which is the best
case scenario, (buying at the low of $735 in January of 2009) would put you up
approximately 300% (4X).

The average investor would get somewhere between these two just by ignoring
the market and investing biweekly.

I'm not even advising to go 100% for the S&P500 Index Funds. However that's an
infinitely better idea than a portfolio that is 75% of Gold (Dumb), T Bills +
Cash (Losing money everyday), and Bonds (Which are paying at near-historic
lows). It's just bad advice.

~~~
tonyedgecombe
_No, you are wrong._

Do you think the quantitive easing had no affect then?

~~~
et2o
Quite a non-sequitor

~~~
tonyedgecombe
Read the original post, you will see the word 'and' in it.

~~~
et2o
I'm quite aware.

How does that have anything to do with my comments about portfolio selection
and results?

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Symbiote
I'm partly lazy, partly uninterested, and the rest completely uninformed about
what I ought to do — most people I know either don't have any money to spare,
or work for the public sector where the salary is lower but the eventual
pension very good.

So the result is I have far too much money as cash in the bank.

~~~
cimmanom
Unlike a generation ago, there are now plenty of options for smart investment
without a ton of knowledge.

If you don't want to learn a ton or spend a lot of effort, the easiest thing
to do is open an account at Wealthfront or Betterment and drop in everything
except your emergency fund. (An hour or two of effort.)

The next level of complexity would be to open an account somewhere like Schwab
and put your money (minus emergency fund) in a Vanguard target retirement
index fund for your estimated year of retirement. (Less than a day of effort.)

The next level of complexity would be to open an IRA, contribute to it
annually (to get the tax benefits), and invest _that_ in Vanguard target
funds.

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StriverGuy
Seems to be a lot of indexers here. I am always curious if/how people plan for
the volatility risk (and implied personal financial risk when vol spikes) from
being purely indexed in their portfolios...

~~~
marketgod
If you bought the S&P with 50% and held the rest of your money in assets that
don't fluctuate alongside the market or hedged, you can buy the S&P at the low
and it always recovers.

Others keep their portfolio completely hedged so when there is a dip they can
buy the swing.

~~~
StriverGuy
I agree with the sentiment but you have to be careful about just assuming
assets that are uncorrelated will remain uncorrelated in a black swan event.
Additionally, you have to assume that your hedge is liquid enough that it can
be rolled off in times of need.

~~~
marketgod
I am not a mathematician or I would be able to do this better. Basically you
can buy calls and puts to simplify it. This way a shift upwards/downwards will
cause your options to shift inversely. You end up being liquid in that event
and can continue to switch your position to the short side or long side.

I however only buy options based on my sentiment of the market, bear or bull.
Currently it's a bull market, S&P going to $300.

Edit: Fixed buy calls and puts.

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marketgod
I buy options. Way better returns than anything else.

------
marketgod
100% options.

AKAO Sep 21 2018 12.50 Calls

The rest are shorter term.

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pards
Wealthsimple. Done.

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andrewmcwatters
vtsax 15.1% yoy

