Author Topic: The money-game  (Read 1648 times)

Offline hOMEr_jAy

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The money-game
« on: 05-04-2016, 21:04:16 »
I know it´s not very popular, but I´d like to talk about....money.

Now that I graduated from university, found myself a steady, well-paying job with good future career opportunities I´ve come to the point where I save more than I spend. Unfortunately the old "save it, put it in the bank account, enjoy high interest rates"-scheme doesn´t work anymore. Even fixed-term deposits only give meagre interest rates that barely beat inflation.

Alternative investment schemes are highly popular these days: real property, gold, natural resources, "ethical investments", crowd financing and what-not: all try to entice people with high interest rates and supposedly low risks.

Now my question is: how do you guys, from different countries, all walks of live and from varying age groups, handle your finances: your inccome, your expenses, any investments?

I´m currently running a giro account which covers my monthly expenses and contains one months worth of net income. Another savings account, which pays just enough interest to cover the current, very low inflation rate, contains my "iron reserve" of three months worth of net income incase some larger expenses arrive.

Now since these basic necessities are organised I´m struggling with how to turn the rest of my (future) savings into something more profitable which would enable me to create a nice bonus for my later years. So therefore I´m looking forward to hear about your money strategies and how you plan your finances (or how and why you don´t) and would like to talk about your experiences, plans and ideas, whatever they are.
And so he spoke, and so he spoke, that lord of Castamere,
But now the rains weep o'er his hall, with no one there to hear.
Yes now the rains weep o'er his hall,
and not a soul to hear.

Offline Kalkalash

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Re: The money-game
« Reply #1 on: 05-04-2016, 21:04:47 »
I put all my extra money (keep my bank account at 500-1000€) into investment funds run by my other bank. All extra money you have should be put back to circulation (as consumption or to make more money). Savings accounts, deposits and all that shit is just dead money and doesn't contribute anything to you or the society you live in.
“Think of how stupid the average person is, and realize half of them are stupider than that.” - George Carlin

Offline FORGOTTENKEVINOHOPE

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Re: The money-game
« Reply #2 on: 06-04-2016, 01:04:30 »
I know it´s not very popular, but I´d like to talk about....money.

Now that I graduated from university, found myself a steady, well-paying job with good future career opportunities I´ve come to the point where I save more than I spend. Unfortunately the old "save it, put it in the bank account, enjoy high interest rates"-scheme doesn´t work anymore. Even fixed-term deposits only give meagre interest rates that barely beat inflation.

Alternative investment schemes are highly popular these days: real property, gold, natural resources, "ethical investments", crowd financing and what-not: all try to entice people with high interest rates and supposedly low risks.

Now my question is: how do you guys, from different countries, all walks of live and from varying age groups, handle your finances: your inccome, your expenses, any investments?

I´m currently running a giro account which covers my monthly expenses and contains one months worth of net income. Another savings account, which pays just enough interest to cover the current, very low inflation rate, contains my "iron reserve" of three months worth of net income incase some larger expenses arrive.

Now since these basic necessities are organised I´m struggling with how to turn the rest of my (future) savings into something more profitable which would enable me to create a nice bonus for my later years. So therefore I´m looking forward to hear about your money strategies and how you plan your finances (or how and why you don´t) and would like to talk about your experiences, plans and ideas, whatever they are.

so your saying you are not married with kids yet.... correct?

rental properties!

Offline GIJordncc1701d

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Re: The money-game
« Reply #3 on: 06-04-2016, 04:04:53 »
I'm 22, I'm a welder, and I work a ton. So far I've just been saving up a big chunk of change, because I have several hobbies that I don't want to give up when I move out (I'm still living at home, for the time being, which is part of what allows me to save a good portion of what I make).

My plan is to mostly invest in lower risk things, and just keep saving, until I have enough that I'm comfortable to put some in higher risk investments. I haven't figured out any of the details yet.

Although the future has a lot of unknowns for me. My girlfriend lives in the UK (I'm from Texas), and when she gets out of university we've thought about getting married. That would add a second income, but also need for a larger place to live, and we haven't exactly figured all that stuff out yet.

So, I'd say play it safe and save yourself a big ol' chunk, and then start investing slowly. But, I have a feeling you're going to do fine whatever you do, as you're actually putting effort into planning. Most of the people I know can't even hold a part time job.....

Offline hOMEr_jAy

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Re: The money-game
« Reply #4 on: 06-04-2016, 06:04:33 »
I put all my extra money (keep my bank account at 500-1000€) into investment funds run by my other bank. All extra money you have should be put back to circulation (as consumption or to make more money). Savings accounts, deposits and all that shit is just dead money and doesn't contribute anything to you or the society you live in.
I´ve been reading up on investment funds lately and what´s bothering me most are the costs of actively managed funds. Costs of atleast 1,5 perccent eat up a large part of your return and I´m kinda hesitant of feeding my money to some fund manager who tries to "beat the market".
The strategy of passive investment into exchange traded funds sounds like a better option to me as the net return seems to be just as good as with active funds.

so your saying you are not married with kids yet.... correct?

rental properties!

Correct, not married, no kids, no debt. And to be honest, I´d like to keep it that way. Rental property is in my eyes more of a cluster risk of expenses instead of an investment. The prices of real estates are constantly rising which is a good sign of an impending crash. And if that happens I´d rather not own worthless real estates AND repay an expensive debt credit.


I'm 22, I'm a welder, and I work a ton. So far I've just been saving up a big chunk of change, because I have several hobbies that I don't want to give up when I move out (I'm still living at home, for the time being, which is part of what allows me to save a good portion of what I make).

My plan is to mostly invest in lower risk things, and just keep saving, until I have enough that I'm comfortable to put some in higher risk investments. I haven't figured out any of the details yet.

Although the future has a lot of unknowns for me. My girlfriend lives in the UK (I'm from Texas), and when she gets out of university we've thought about getting married. That would add a second income, but also need for a larger place to live, and we haven't exactly figured all that stuff out yet.

So, I'd say play it safe and save yourself a big ol' chunk, and then start investing slowly. But, I have a feeling you're going to do fine whatever you do, as you're actually putting effort into planning. Most of the people I know can't even hold a part time job.....

Sounds like a good plan. I know a lot of people of your age who just spend what they earn without ever saving anything, constantly consuming their income. Living at home is a good way of saving money and planning ahead means that your having smaller problems once your on your own. Fiscal discipline is an important personal trait and not everyone has the strength to resists the temptation of spending.
And so he spoke, and so he spoke, that lord of Castamere,
But now the rains weep o'er his hall, with no one there to hear.
Yes now the rains weep o'er his hall,
and not a soul to hear.

Offline Zoologic

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Re: The money-game
« Reply #5 on: 06-04-2016, 18:04:00 »
I also saved a ton by using GIJordncc1701d's method. While young, work really hard, save, and live at home.

6 years later, here I am and left with some cash about 10 months worth of salary, that I don't know what to do with it. That's already half of the money gone for my first car, and a quarter went to some managed fund investments. I also tried time-deposit accounts, which is not much, but still returns more than the mere savings account.

For my daily savings account, I kept a separate account that I maintain at 25% of monthly salary.

Why big savings you may ask, because we don't have universal healthcare yet (already on going), no free education with decent quality, no social security net, no childcare, etc. They are all still work in progress, but might be disabled when a new government comes in.

Offline Slayer

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Re: The money-game
« Reply #6 on: 06-04-2016, 21:04:16 »
The strategy of passive investment into exchange traded funds sounds like a better option to me as the net return seems to be just as good as with active funds.
Atm I don't have enough "spare" money, I need it all for childcare, mortgage, healthcare, etc. When the kids are going into school, I will be able to save some more and then I'm gonna do passive investment too. Net return about 6% with low risk, the bank guy said (and this may sound low, but it is about 12 times the interest on my bankaccount, lol)

The prices of real estates are constantly rising which is a good sign of an impending crash. And if that happens I´d rather not own worthless real estates AND repay an expensive debt credit.
I'm no financial hotshot, but the bottom of real estate prices was about 1,5-2 years ago (at least, in my country). Since then they have been rising, which is quite a normal economic thing to happen. It's a bit like nature: it flows up and down in a constant wave pattern. But unless you are thinking really long term, "impending crash" is by far not the case. Maybe in 25-30 years, yes. But until then? Wouldn't count on it.

Offline Kelmola

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Re: The money-game
« Reply #7 on: 06-04-2016, 22:04:58 »
Investment funds are basically a good source of income for the banks, not for you. The costs of direct share trading are so much lower and that doesn't require much expertise either.

You don't really have to be an in-depth knowledgeable investor: in the LONG term (10+ years), the one thing that matters the most (some would say it's the only thing) is diversification of your portfolio. Spread your investments over different companies, different industries, different geographical areas, different currencies. If you aren't a professional, don't try to over-analyze: even of the professional "fundamental analysts" that try to second-guess the market by looking at things other than just the share price, 60% perform WORSE than the market average (with pure guesswork, 50% would do better and 50% worse).

Be patient. Keep your cool and don't sell even if everyone else panics - always after a market crash, more billionaires are made than at any other time, because smart investors know to buy when stocks are cheap when sheepies throw away their stocks. "Only buy, don't sell." (Old Swedish Finnish proverb, and they still own a disproportionate amount of Finnish share market, so they must have done something right.)

Don't invest into anything you don't understand. If it sounds too good to be true it most certainly is. If you absolutely must insist on looking at the figures, look for companies with consistently high dividend percentage, or alternatively, companies with low P/B ratio (share Price versus Book value of company assets in accounting) - usually, these "value shares" are undervalued by the market and/or about to make a turnaround so in the long run will give a better yield. (So sayeth Warren Buffet and look where it got him.)

Nowadays, them banks try to sell you all these "ethical investment funds" or "welfare funds" because those are in fashion right now. Bah humbug. If you - like me - are not looking to make a world a better place, then go for a "malfare fund" (not available, so build your own portfolio). Weapons. Security services. Alcohol. Tobacco may be a bit high-risk investment, but then again, if the legalization of marijuana proceeds as it seems, tobacco companies will be the first to jump onto the bandwagon. Porn may be a sunset business due to the Internet, but sex shops, strip clubs, and the like, they are not. There is actual, scientifically accepted proof that this kind of portfolio makes profit far in excess of any "ethical" fund. But this may sound kinda narrow in scope, so how to diversify? Ah-ha! Company doing business unethically or protested against has most likely its shares undervalued, so investing in one is again more profitable than in an "ethical" company.

But all these are long-term strategies. Seeking for short-term profits? Buy lottery tickets instead. Short-term return of a stock is pure chance, no matter how may times you would have seen the classic Wall Street and its awful sequel. The best example is an investor contest a reputable Finnish economy magazine held a little while back. Several analysts and fund managers tried to outdo each other.... but a "mystery investor" led the competition until the last week, when a high-risk portfolio barely managed to pass him (and next week, he would have been in the lead again). The mystery investor was none else than Repe, the alpha male of the pack of baboons in the nearest zoo, who had been "choosing" investments from pieces of paper given to him. OOK-OOK-OOK!
« Last Edit: 06-04-2016, 22:04:29 by Kelmola »

Offline Jimi Hendrix

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Re: The money-game
« Reply #8 on: 06-04-2016, 23:04:03 »
A diversified portfolio is a good start.

Mutual Funds

Real Estsate.

Money Market Accounts

 ;)



Offline MaJ.P.Bouras

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Re: The money-game
« Reply #9 on: 07-04-2016, 01:04:04 »
Couple thousant Euros on saving in bank, just in case and the rest goes to trips around the world. Since i still live with my parents imma take full advantage of it and do the things i would regret not doing.

Offline Zoologic

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Re: The money-game
« Reply #10 on: 07-04-2016, 06:04:18 »
My experience with:

Mutual Fund (2 years)
As of today: loss
Our money market is dominated by foreign investors with big money. Moreover, it is not as sophisticated as most of Europe, Singapore, heck... Malaysia, and The Philippines, let alone UK or US markets. It is still extremely traditional.
Last year, for unknown reasons, our currency stalled and the value plummeted despite economic indicators showing good sign. They say, this is because the US Federal Reserve or "the fed" is signalling a decrease in interest rate. But it has not happen yet, people buy on rumours instead. As a result, the stock market and other funds collapsed. It is still recovering steadily.

Stock Market (3 years)
as of today: profit at 11%, beat the market already
Yes, as you read, I outperformed the market by meager 3%. Nevertheless, my brother (who is an analyst) say, don't get too greedy, if you beat the market no matter how small it is, it is already very well done. Don't buy the "get-rich-quick" nonsense you often heard from other people when they talk about playing stocks.

Quote
Don't invest into anything you don't understand. If it sounds too good to be true it most certainly is. If you absolutely must insist on looking at the figures, look for companies with consistently high dividend percentage, or alternatively, companies with low P/B ratio (share Price versus Book value of company assets in accounting) - usually, these "value shares" are undervalued by the market and/or about to make a turnaround so in the long run will give a better yield. (So sayeth Warren Buffet and look where it got him.)

That's the golden rule. You can get rich quick, but only very few real lucky bastards did. Don't push your luck if you can't afford it. Some of you are in the military. This is like charging into MG crossfire defensive line. Yes, some of the attackers will eventually managed to slip through and throw a grenade or two into the MG emplacements. But most will die, for sure.

Offline Alubat

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Re: The money-game
« Reply #11 on: 07-04-2016, 10:04:53 »
the way of making money is about avoid paying tax. Been in the newz last couple of days :-)

.If you are good looking. Not drinking/smoking = sell your spearm = get money for wanking

.Dont buy the new smartphone every year

.Dont buy a car. Use a bicycle

.Dont pay for tv channels. Use internet.

.Move into cheapest flat in the getto

Invest your money a in better internet connection & gamer pc  ;D

Offline hOMEr_jAy

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Re: The money-game
« Reply #12 on: 07-04-2016, 16:04:12 »
Kelmola, what do you think about ETFs? I´m planning on doing a monthly investment plan where I invest a certain amount of my income into two ETFs. I plan to invest 70 % into an MSCI World Funds which includes around 1600 different companies from the "developed" world, whereas another 30 % goes into an MSCI Emerging Markets Funds. It´s a passive investment plan with a long scope of atleast 15 years. Being a passive investement means no administration costs and a smaller chance of some coked-up banking guy diddling too much with it.

Mutual funds are a very dangerous game indeed. In Germany we had different scandals that involve Black Pool Funds and other "exotic" (one might even say "criminal") investement schemes.

Slayer, the reason I´m sceptical about "concrete investments" aka real estate is that for many "normal" people they mean a very dangerous risk. Most people need a loan to finance their houses but underestimate the running costs, red tape and changing circumstances. For example, what happens if you buy a house in a top location and some years later the local council decides to build an interstate next to your backyard? Other dangers might be social or economic changes that influence the value of your area. In my eyes it´s not just about the current prices or price hikes (which also exist at the stock market), but the risk of tieing oneself to one big investment which can also suffer from a high volatility.

Btw: what about gold and cash reserves, you know, just in case there´s a bank run or other unforseen consequences?
And so he spoke, and so he spoke, that lord of Castamere,
But now the rains weep o'er his hall, with no one there to hear.
Yes now the rains weep o'er his hall,
and not a soul to hear.

Offline LuckyOne

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Re: The money-game
« Reply #13 on: 07-04-2016, 18:04:10 »
I'm basically a young and often strapped for cash student so I can't have much valuable advice but my guess would be:

- real estate if you can get something near the sea, preferably not in an already overcrowded country (unless it's Monaco, xD). Buying cheap land that might get urbanized some day is also a good bet, but don't underestimate the cost of bureaucracy for doing it. And don't forget that these schemes might always backfire (as we have seen in the last real estate crisis). If you don't need a fixed property right now (e.g. you can stay with your parents for a few years, a real estate savings account might be a good idea - it can make your future  loan interest for a property quite smaller)
- if you're in a progressive industry (tech etc.) you might have heard of a few promising products/startups. These can be hit or miss (mostly miss), but the opportunity for nice big fat returns is definitively there
- blue chip stocks - most of these guys are almost too big to fail nowadays (of course nothing is guaranteed, and usually after a decade or two they will be gone, so plan accordingly). You can always reinvest the dividend into more diversification though.

- my personal opinion is that if you have extra funds, the best investment you can do is to invest in yourself. If you can, work less, and learn more. Extra education, courses, useful books are the most foolproof way of securing a decent future income. Especially now with all the fancy tech advancements and disappearing of the middle class. Not to mention the economy could spin into another bust and you might be left facing the job market with an outdated skillset. Also make sure you eat quality stuff, it's not worth it to save a few bucks now just to pay tens of thousands a couple decades later just to try and get back your health.
This sentence is intentionally left unfinished...

Offline Alubat

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Re: The money-game
« Reply #14 on: 07-04-2016, 20:04:16 »
If you have room enough
buy classic sport cars from the 50-80ies . porsche, ferrari, jaguar etc.
buy classic furniture

If you have little space or always on run
buy expensive watches like rolex. Does not take up a lot of space :-)

I understand why people put money in real estate appartments, buildings etc. fixing it up
But this is what is destroying the city culture in every big city in europe. No more room for small specialized shops only commercial shit shops all over the place
If you own 51% of a street = you are the boss