nkyguy1988 t1_jegnf6r wrote on March 31, 2023 at 9:43 PM

Just say no to crypto.

Real estate requires significant up front capital.

Trading options and stocks is major losing proposition for most (read, nearly all). Investing in ETFs/mutual funds is a winning proposition.

unnaturalgenius t1_jegpjk7 wrote on March 31, 2023 at 9:58 PM

currently investing in the s&p 500, but trading caught my eye especially because of the returns but I am aware of the immense risks.

nkyguy1988 t1_jegpsrg wrote on March 31, 2023 at 10:00 PM

Most people who get paid to manage funds fail to beat the average about 80% of the time. The longer the time frame, the worse the failure rate. You aren't better than them. Good investing is extremely boring in practice.

TyrconnellFL t1_jegruaa wrote on March 31, 2023 at 10:15 PM

The problem isn’t the risk (100% loss) but the average. On average, day traders lose money. 80-90% of them do. Of those who come out ahead, for all the effort the majority still don’t keep even with boring S&P 500 investing. You would be spending time and effort and taking on risk in order to, in most cases, lose, and in better cases still lose compared to just not.

unnaturalgenius t1_jegux0a wrote on March 31, 2023 at 10:38 PM

it seems all the odds are stacked against one

Fenderstratguy t1_jegns9k wrote on March 31, 2023 at 9:46 PM

Kudos for learning about investing as a 17 year old. Read this - it was geared for new investors like you! It will also tell you what NOT to do so you don't lose your money: - If You Can: How Millennials Can Get Rich Slowly – an excellent free 15 page PDF by William Bernstein: DOWNLOAD LINK

Also since you are looking at trading/picking stocks - this book really explains how hard it is to outperform the market. Many people claim to do so - but it is pretty rare - the book is a classic and explains why: - A Random Walk Down Wall Street by Burton Malkiel LINK

unnaturalgenius t1_jegp8vy wrote on March 31, 2023 at 9:56 PM

I am willing to test my skill lol, and thank you for the links, they will be useful.

Fenderstratguy t1_jegpvn4 wrote on March 31, 2023 at 10:01 PM

If you go the crypto/options/daytrading route - I've heard many many wise people (how have learned from experience) to limit your fun money or gambling portion of your portfolio to no more than 5% of your portfolio. This is because the odds are stacked against you for coming out ahead.

micha8st t1_jegrzvx wrote on March 31, 2023 at 10:16 PM

Think about this for a minute.

Investing vs. Gambling.

I only invest. And I even call some of my investing "gambling".

Options are buying a bet on where a stock will be trading on a certain day. That's gambling.

crypto is just another form of currency trading. And you're trading currency that's not backed by any government. That's also gambling.

In general, real estate always goes up. There are exceptions. Slums in particular.

In general, the stock market always goes up. Again, there are exceptions. Look at GE. It's been beaten up and is being broken apart.

So I invest in mutual funds. Inside a mutual fund, GE stinks just as bad as outside, but its effect is tempered by the 99 other stocks the mutual fund has bought.

I have a brokerage account where I hold maybe 50 stocks. Some of them I bought. Some I was given. Some are decendents of what I bought. I bought GE, and out spun GE Healthcare and Wabtec. I was given AT&T, and out spun Warner Brothers Discover and Lucent and a few others. Stock are fun and interesting, but certainly NOT for serious wealth building.

I also bought BP 3 months before the Deepwater Horizon Disaster. It's never recovered.

unnaturalgenius t1_jegu91t wrote on March 31, 2023 at 10:33 PM

I understand, everything comes with risk. Currently investing in VOO and SCHD. What would you recommend for serious wealth building? besides real state.

unnaturalgenius t1_jegt8xe wrote on March 31, 2023 at 10:26 PM

5% is a small but efficient amount to practice and learn trading. Would keep that in mind.

Kaz2329 t1_jego1bc wrote on March 31, 2023 at 9:48 PM

Throw out trading options, cryptocurrency, and individual stocks. Mutual and index funds are where you should focus most of your effort. Real estate is good but often requires a lot of capital to get into so might not be until later in life.

In order of importance in my book 401k up to match, Roth IRA, max 401k, long term savings like a house and car down payments, and brokerage.

There are other accounts like has/hra but that depends on what kind of health insurance you have.

unnaturalgenius t1_jegqgsb wrote on March 31, 2023 at 10:05 PM

investing currently in the s&p 500, any books, websites or places that talk about real state?

Kaz2329 t1_jegvxwl wrote on March 31, 2023 at 10:46 PM

rich dad poor dad (personal finance), costar for real estate (commercial real estate news), intelligent investor (can be a bit of hard read without much financial knowledge), richest man in Babylon, changing world orders & big debt crises by ray dalio, physiology of money, why nations fail, barbarians at the gate (LBO).

Those are the finance books/websites I can remember I liked off the top of my head. I would also recommend finding a way to get Bloomberg to just keep up date on thing. I managed to get around the pay wall.

unnaturalgenius t1_jegwc16 wrote on March 31, 2023 at 10:49 PM

appreciate it, thank you.

texas_asic t1_jegoyjj wrote on March 31, 2023 at 9:54 PM

Good job learning about this stuff. I'd recommend reading "The Little book of common sense investing" by John Bogle. A Random Walk Down Wall Street by Malkiel is also excellent.

Investing should be different from gambling, but there are a lot of trading options that are effectively just gambling. After spending decades thinking and researching this stuff, I strongly believe that Bogle and Malkiel are correct -- your best bet as an individual is to buy the entire market via a low cost index fund/ETF. Don't try to beat the market, as it's too hard to have a sustainable edge over the competition. Spend your time working on obtaining valuable skills and increasing your income potential.

It's interesting to learn about investing in individual stocks, options, futures, financial analysis, but the risk is that you delude yourself into thinking that you can pick the winners and beat the overall market average. Settle for average, and you'll be ahead of most people.

unnaturalgenius t1_jegsmfd wrote on March 31, 2023 at 10:21 PM

thank you, what are some valuable skills you recommend learning? and yes, already investing in ETF such as VOO and SCHD.

texas_asic t1_jegxf55 wrote on March 31, 2023 at 10:57 PM

I think that depends entirely on your interests, existing skills, and location. What skills are in demand locally (or do you anticipate relocating?). What do you have aptitude in?

If you like to be hands-on, learn trade-related skills like welding, soldering, and/or plumbing. With a little more math background, electrician skills are good to pursue.

If you're more academic, get the skills that fewer people have (which often means STEM). Learn to communicate well, learn people skills (Dale Carnegie's "How to win friends and influence people" is surprisingly relevant and excellent).

It's really hard to become the best in the city/state/country at something. It's much easier and lucrative to get really good at a few things and then be one of the few people who possess that niche set of skills.

At your age, one of the more attainable skills is to learn how to use a spreadsheet really well. See youtube/coursera/etc. Think about how to use it not just to calculate, but to plan projects, track tasks, and to view/slice data (it can be used, for example, to sort sales by date, product type, time of day, location etc -- can you see the possible relevance and value?)

tactical808 t1_jegpqgp wrote on March 31, 2023 at 10:00 PM

Crypto, real estate, and options…

Make sure you learn to crawl before you walk/run. These three assets can provide crazy returns but come with many risks and/or capable of 100% loss.

Do your due diligence before throwing money at these assets with an understanding that you could lose it all.

In the meantime, build a diversified portfolio of ETF’s and cash (for rebalancing and opportunities).

Be cautious chasing the quick money!

unnaturalgenius t1_jegrerb wrote on March 31, 2023 at 10:12 PM

Currently investing in s&p 500 and SCHD. I am aware of the immense risks, but no risk no reward. I would definitely do my research before anything, thank you for the advice.

pf_burner_acct t1_jegsu8m wrote on March 31, 2023 at 10:23 PM

Proper long-term investing is boring. It should not be exciting.

Real estate is proven.

Crypto seems extremely speculative.

[deleted] OP t1_jegncaz wrote on March 31, 2023 at 9:43 PM

[deleted]

IndexBot t1_jegv0pn wrote on March 31, 2023 at 10:39 PM

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