
Ask HN: How do you manage money? - illbeanon
I've worked hard and I live frugally, and I've managed to sock away a small but non-trivial amount of money. (Mid six figures) It's not enough to become a professional investor, but it seems like too much to be sitting in a bank account+index fund. I like my job, have no ambitions of quitting, but I'd like my money do more than sit in a mutual fund. I'm willing to spend some time&#38;effort on it, I'm always tempted to try and build an automated trading system,  but I realize I'd likely loose money rapidly.<p>So, how do you mange your money? Once folks sell their startups, what do they do with the money? Everyone always says 'manging money is a skill', where do people learn it?
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patio11
Read a Random Walk Down Wall Street, give up, and put it in an index fund.

You would naively assume that actively managed money has a higher return than
passively managed money. This is pretty much the exact opposite of the truth,
especially for small investors (and if you're at mid six figures, you're
small). Your transaction costs and all the time you spend managing your money
come straight out of the profits, and there aren't guaranteed to be any
profits for them to come out of. (Many people might spend, say, two hours a
week managing their investments. That is probably in excess of $10k at your
implied wages, or like 2 ~ 4% of your portfolio. Throw in another 2% for
transaction costs and you have to _clobber_ the market average to do as well
as just putting it in a low-fee Vanguard total market index fund and
forgetting about it.)

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joshu
Find someone who you can hire to help decide what to do (typically a CFA, I
guess) -- someone who isn't paid by commissions on your decisions.

The typical thing to do is allocate money to stocks (us, emerging, europe,
etc) and bonds (govvies, soverign debt, corporate,) mostly via funds. You want
to have a variety of uncorrelated assets.

Algorithmic portfolio trading is /hard/. You're not building an automated
trading system by yourself.

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andrewljohnson
Don't hire someone unless you have tons of money. If you have less than a
million dollars, the following advice will suffice.

Buy some geographically diverse index funds.

Keep some money in CDs if you want guaranteed returns that give up some
liquidity, and some money in a high-yield savings account.

Keep the rest in checking.

Buying a house is also a good investment if you know where you want to live
for a while.

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iterationx
I recommend Peter Schiff for investing ideas, here's a famous video, he's got
some bestselling books too.

[http://www.youtube.com/watch?v=jj8rMwdQf6k&feature=playe...](http://www.youtube.com/watch?v=jj8rMwdQf6k&feature=player_embedded)

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nearestneighbor
My take on trading is that it's a zero-sum game, and some people have inside
information or particularly good insights into the market. If you are average
Joe, or are trading randomly, you would be losing money on every trade.

