ITT: /biz/ness / Finance memes we've fallen for in the past
>You need (overly inflated number) amount of money to invest in the stockmarket!
>Cryptocurrency has a future and will become very big
>You need a minimum of $10,000 in liquid cash at all times in case of a rainy day
>The stock market is too high right now, wait for it to down and buy the dip!
>The stock market is too low and volatile right now, wait for it to rise before you invest!
>Daytrading and stock picking is a legitimate way to make money and is not almost entirely luck with a very high failure rate statistically
>Do what u love and the money will come to you
I've fallen for the meme for far too long.
It doesn't make sense to have so much cash on hand in a "rainyday fund" when $3k is entirely sufficient, especially when most people either live with their parents or can move in with them for a while if something bad happens.
Even if they couldn't, in what sort of scenario could you POSSIBLY be that $3k is not enough to get back on your feet, in which you could not liquidate your stocks or whatever in time?
Most people have a mortgage, car financing, and student debt to pay off, so they need $10k on hand to support themselves for a couple months in the event that they lose their job. If you live with your mom then you don't really need any "rainy day fund"
>skilled and knowledgeable
>Implying there's any sort of evidence that any sort of "practice" or "skill" has any effect on the returns of daytrading
Is that why the vast majority of daytraders do not beat the market?
Same with FOREX? Oh but you'll be the special 0.1% who makes a ton of money, right? Exactly as all those other people thought before they lost a ton of money and gave up realizing it was a meme.
Good thing I don't have any of those 3 because I'm not retarded.
I guess the rainy day fund meme was more getting at when I was in school and had a few thousand which I could have had earning (not much) but some money instead of having them eaten away by inflation for so long because I fell for the internet memes of "What if ur parents die and then you get hit by a car and then your landlord evicts you all in the span of one week" - or some ridiculous madeup scenario like that.
In what world is $3k not enough to sustain yourself for 1-2 months until you find a new job, liquidate your investments partly or at least figure something else out?
But it's true that there is no proof that anything can significantly effect the outcomes of stockpicking. It's essentially just luck.
And I'm sure you know very well that the vast majority of people do not make much, if any money from daytrading/FOREX.
The 10k is just a safety net so your life remains the same when you're in between jobs. It's a lot nicer to just stay put in your house while looking for a new job than to move all of your belongings to a cheap apartment or back to mom and dad's house.
It's also not just for if you lose your job. If your roof caves in unexpectedly you're going to have a big bill to pay, and paying with cash is always better than racking up debt. Not sure why you're so livid about a concept as simple as "keep $x amount of cash on hand in case you run into unforeseen expenses"
>Same for index funds yes??
That has been proven, with numerous studies to show that over what is it, like 80 or 90 years that the market returns 8% or so p/a returns.
Whereas daytrading is just trying to get lucky which the majority of people lose money on.
>i buy s&p 500 on march 24, 2000. BAD LUCK, i buy s&p 500 in 1876, GOOD LUCK
If you bought an index tracking the s&p500 in 2000 you'd have made a lot of money if you held it until now.
>i buy s&p 500 on march 24, 2000. BAD LUCK, i buy s&p 500 in 1876, GOOD LUCK
Its sucks to have bad timing with your portfolio, but it's still better than day trading, commodities, FOREX, and any of the other get rich schemes out there.
>8% or so p/a returns
chump change. id rather suck dick in glory holes than be so boring with my money
i buy mazda motor corp for 2k each on friday, i sell less than 24h later for profit of 11% profit each
why waste my tiem with ltitle chump change index? sounds like you are afraid of taking risks because other people fail? you sound like a sheep, follow the herd do what the majority do. majority fail because they are stupid, and you are stupid just liek the majority.
>chump change. id rather suck dick in glory holes than be so boring with my money
There is a heap of evidence to show that it is unlikely that you will beat that average in the longrun. You might beat it a few times but you will not come out on top.
>sounds like you are afraid of taking risks because other people fail? you sound like a sheep, follow the herd do what the majority do
But the majority think exactly like you do, thinking they are "big and brave", will "prove all those dumb idiots wrong", that they are "top 1% intelligence" and they don't care about that "chump change".
Matching the market is actually above the majority and not what "the herd" does by any means. - "The herd" buys into penny stock email spam, FOREX/daytrading courses by people who repeatedly REFUSE to prove their success or success of their students and similar bullshit.
Didn't you "filter" the thread like 4 posts ago?
And no I do not have insider information, I doubt you do either.
Even IF YOU DID, how does that not prove what I said correct when you need illegal insider knowledge in order to profit from daytrading? L O L.
Pic related is literally my face right now.
But that's not the point. You don't need liquid assets to pay mortgages
You can easily sell stocks in that time and most money lenders have financial hardship grace periods if you get layed off or something
>You can easily sell stocks in that time
>being forced to sell stocks at an inopportune time
>being forced to incur CG taxes
>being forced to make any financial decision due to imminent hardship
These are *exactly* the reasons why we have emergency funds in the first place. You should always be the one in control of your financial decisions, not at the mercy of misfortunate events.
Selling stocks isn't as reliable as just having a few thousand on hand. If your stocks were down on the day you need to withdraw, then you're losing more money than you need to. Anyway, I'm not saying it's compulsory that you have $10k sitting in an account, but like lots of others have said in this thread, it's stupid not to have a "rainy day fund".
It was just a random example. If your fridge dies and it's not covered by a warranty, you'll have to drop $1,000 without any time to prepare. I could list hundreds of random expenses that could show up, but the point is, it's better to have cash on hand that can solve them as soon as possible, without racking up any debt.
If nothing happens in a few years the money you lose not investing that money would be more than the risk-adjusted costs even if you're selling at an inopportune time and incur CG taxes.
No you can't, but as long as you haven't done something stupid and invested at the peak of a bubble and then an emergency happened right after then it just seems like you'd be better off investing that money. Honestly the main risk is having invested right at the peak of a bubble, nothing to do with emergencies.
>If nothing happens in a few years the money you lose not investing that money would be more than the risk-adjusted costs even if you're selling at an inopportune time and incur CG taxes.
If your house never burns down, then you wasted money on that insurance you paid for.
It's called risk management. It's a basic tool of financial literates.
>But it's true that there is no proof that anything can significantly effect the outcomes of stockpicking. It's essentially just luck.
What isn't luck then, in terms of trading stocks? From what I know, the "proper" way is to build a diverse portfolio carefully, analyzing every stock, putting a part of your money in riskless assets and making sure your investments aren't heavily correlated.
Am I on the right track? I am only learning about this stuff now as I'm still in the process of earning enough money to invest.
having circa $10,000 available in liquid savings is pretty useful - especially if you lose your job for some reason or need to carry out some repairs for your home
>$3k is entirely sufficient, especially when most people either live with their parents or can move in with them for a while if something bad happens.
assuming you're a renter - for people who've bought property it isn't so simple
>why waste my tiem with ltitle chump change index? sounds like you are afraid of taking risks because other people fail? you sound like a sheep, follow the herd do what the majority do
...said literally every day trader I've ever spoken to.
nah that is fine, spunking your cash on forex will likely mean you'll lose money very quickly - value investing on the other hand can be quite effective... it is a long term strategy though. You'll find that, conversely, investing in a lot of actively managed funds is a bad idea - this is often the result of constraints due to the size of the funds managed and the pressure for managers to demonstrate short term performance.
You're generally better off with an index than with a managed fund... though strangely enough picking stocks at random is likely to beat the index!
You're unlikely to go too far wrong if you take a long term value investing approach with your individual portfolio.
Thanks. I'm trying to be thorough about this.
>spunking your cash on forex will likely mean you'll lose money very quickly
I actually did this a few years ago, albeit with a very small sum of money. I came in with about $1000, got up to $1600 as I recall, and then lost $1400 of that in a day. Got very drunk on the remaining $200 and gave up cowboy finance for good.
Re the $10k argument, obviously everyone should hold a buffer, but you can't just slap a generic number on it, as it depends greatly on lots of factors:
>place of residence
Cryptocurrency is huge and it will be massive in the future.
For the love of god this is the most important thing you will ever do. With the greatest financial impact you will ever have on your life
Understand that crypto currencies have no inherent worth. They aren't backed by shit and can vanish into thin air at any moment.
The only value they have is demand and scarcity. Their scarcity is taken care of by the blockchain but demand is the hard part. Since there is nothing you can do with ETH you can't do with bitcoins, and bitcoins are more accepted, you have to shill the fuck out of ETH to try and increase demand.
The rainy day fund needs to be in months as opposed to absolute value, in $.
>Some fucking shitposter from Thailand saving 10k USD.
I see that. We agree. My point was that no grown man who makes a decent living can possibly find it worthwhile to spend their time shilling ETH on 4chan. The best he can hope for is that a few other NEETS will put in like $167 total into the market, and that's it.
It's practically a complete waste of time, thus a waste of money, implying they had any to begin with.
Keep telling yourself that wagecuck.
Im obviously better than you because it seems you consider my lifestyle an impossible fairy tale. Well that says more about you than it says about me.
>not answering the question
>responding with a retarded question
>inb4 "what is money backed by"
>"what is finance"
>"lol wagecuck i maed $7 shilling imaginary coins today lol u loser"
That is literally you.
So unless you can show us proof that you make good money with what you do, and do so consistently, you're a worthless NEET loser who will never amount to anything because you're wasting precious time on get-rich-quick schemes.
You're better off simply gambling the little money you have, you will still lose but at least it's not so time consuming.
>you dont understand the nature and substance of money.
We should be allowed to publicly shame retards like you.
Make you run a gauntlet of people wielding economics books or something. At the end someone with a bar of gold can just crush your skull with it.
Are you 12? Jesus Christ.
Let me help you with your gold question so at least we will have done some good here today:
bfy dot tw/41o9
tl;dr Gold is what backs the major currencies of the world, you literal imbecile.
Not anymore, no. I was merely illustrating how utterly retarded your comparison of gold and your kekcoin of 2016 is.
"What is gold backed by" is the equivalent of challenging the entire history of finance in virtually all civilizations.
>. If your fridge dies and it's not covered by a warranty, you'll have to drop $1,000 without any time to prepare
eh, with the way most companies are now, it's probably better to finance it than pay cash anyways. Last time I was looking at appliance I was going to pay cash but they offered me 15% off and 0% interest for 12 months if I financed it, so I did and then payed it off after a couple of months. The point though is that most people don't need a ton of cash because they can finance most large purchases, especially in today's low interest environment where financing is incredibly cheap if you have good credit.
>What does financing have to do with anything?
Okay, we are discussing how much in cash you should have in hand for emergencies like repairs right? If you can finance most of the largest possible expenses for little cost then you can hold less cash and invest more of it for a greater return. I personally feel that $10k is too much, even most expensive house repairs can be financed if needed, I would stick with the $3k number like others in this thread.
And as if to prove OPs point, a day trader (professional gambler) and a shitcoin shill both enter the thread.
All we need to for biz bingo is an "I quit my job to sell anime sex dolls" entrepreneur to arrive.
I guess it depends on the fridge, the style, features, etc, $500 seems pretty cheap, this one looks like the one I ended up getting, but for maybe $3-400 cheaper.
And OP is right, you don't need $10,000 or any other arbitrary number in emergency cash.
But any financial planner will tell you to keep 6 months worth of non-discretionary expenditure in accessible savings before you start investing.
A good question to ask yourself is - if I lost my job tomorrow, how long would it take to find a new one at the same salary?
If you work in a niche or highly skilled profession it could take 12 months or longer. Having a financial buffer allows you to hold out for the best opportunities.
>If you can finance most of the largest possible expenses for little cost
Your aggregate outlays from financing are going to be more than the out-of-pocket cost. So you're paying for the "benefit" of holding onto to more cash, temporarily. I don't really see the incremental benefit here.
At the same time, you're increasing your average living costs, which means you're increasing the amount you'll need to hold in your emergency fund in order to avoid life disruptions. By financing something like appliances, you now have another source of debt to account for in case of financial hardship ... or they repossess your stuff. That's a headache most people would rather not face.
Some of us prefer (and can afford) higher end appliances. We could debate their merits all day, but that would be a bit boring. But a good refrigerator costs between $2000-$3500.
>A good question to ask yourself is - if I lost my job tomorrow, how long would it take to find a new one at the same salary?
Way oversimplified. When are all your bills do? Even if ypur in a hogh demand field do you have enpugh money not to permascar your credit score? Etc
You're over thinking it.
Let's say you work in retail and so it would take you a couple of months max to get a new job.
As a minimum, you will need cash to cover two months of expenses that HAVE to be paid. This includes all monthly bills and the minimum repayments on credit cards and loans. Otherwise your financial problems will be getting worse quickly.
Essentially you're asking yourself "what's the worst that is likely to happen" and then preparing accordingly.
Like somebody else said above, it's why people buy insurance. Only this time you're insuring yourself.
>Live in the Netherlands
>people buying expensive iphones, cars because everyone does it and they think they
>Be in the high income bracket of 50k/year, it would be 95k/year if it wasn't for income tax
>People don't save because if they lose a job they can apply for welfare instead
>nobody I know invests
>Government tries to cut welfare a bit, says the welfare state won't last another 15 years because of gas resevers emptying
>All these poor people complaining, can't handle the amount of responsibility they're suddenly given
>Socialist Party protesting with plates saying ''grab the money, where it is at''
Such is life in Dutchland
>when day traders try to crash meme threads