(Part 2) Top products from r/FinancialPlanning

I understand but here's the thing - you are trying to make a "withdrawal" from the community (by using this forum as a lead gen venue) without making commensurate contributions. It looks like you might have super valuable advice (based on what you say your start-up does). Why not provide your insights as people post their questions? Many may reach out to you in private message, etc. This is what I do - and it has worked out great so far.

I will recommend a great book called "Give and Take" by Prof. Adam Grant. It will help you immensely.

Good luck.

There's a lot of generally good information in there, both about investing and life. When i read them i tend to skip past the more boring number stuff and look for his folksy knowledge -- back in 2006 I was in my final year of college, and an Econ class had us compare Warren's "weapons of mass financial destruction" in 2003 to Alan Greenspan's "Frothy markets" --

the difference helped me decide to sell the condo my parents had bought in 2004 (i was paying them rent, but they said they'd split any profit with me or i could assume the mortgage and eventually pay them back) -- we made a small profit and were lucky to sell near the top. I then later saw the FED was pumping money into the market with QE; and also, Warren's advice from (i believe 2010 letters) "if there were a way i could buy several hundred thousand homes and cheaply manage them, it would be the best investment i could make" -- the $170K condo i bought is now worth about $300k 6 years later.

more generally - he's a contrarian who pushes to be cautious when others are greedy, and greedy when others are cautious. his frame of mind greatly influenced my mom's investing style and mine, and she went from not graduating college to being a multi-millionare through both cheapness and a lazy portfolio that managed to beat the market. I'm a bit more active than her but have been doing well myself, i've got the real estate bets doing well and also, am an early-ish bitcoin investor. and macro-economically, after the markets crashed in 2008 i knew to get fully invested and ignore any fear till the markets went back to where they were before (based on what i saw the FED doing). -- so since markets re-aligned in ~2014, my stock market returns have been just in line with the market instead of outperforming, but if you look at my portfolio as a whole i've been killing it.

here's a good books that (imo) works well to replace the older shareholder letters -- http://www.wiley.com/WileyCDA/WileyTitle/productCd-1118503252,subjectCd-FI00.html

or, another book i just read that Gates calls the best book on business; warren also likes -- https://www.amazon.com/Business-Adventures-Twelve-Classic-Street-ebook/dp/B00L1TPCKW

many similar points of timeless advice that work. I would say though, try to get through his more recent letters, or if it's too dry, they are heavily covered by media and it's worth reviewing what you can. also, Charlie Munger seems to be the more "high IQ" person, he's worth reading anything you can find on. I'd start with page 39 here, it's pretty readable -- http://www.berkshirehathaway.com/letters/2014ltr.pdf

Let me know if there's anything else I can help with!

Deeply sorry for your loss. I received some advice as a young man about windfalls that I’ll share with you.

Forget about the money for a year. Open a separate bank account that you won’t see and live like it isn’t there. The lost income from investments for one year will be insignificant compared to the cost of a hurried misstep.

In a year with a clear head and a strong heart educate yourself about different investment philosophies and see which ones resonate with you. Investing is very personal and there isn’t one right answer.

There isn’t a right answer, but be wary of the salesmen. All the money / wealth managers are well compensated for their advice and there are many ways they hide their fees and take advantage of their clients (even fiduciaries). If you’re considering enlisting a professional, a robotic trader like https://www.wealthfront.com/ or https://intelligent.schwab.com/ will serve you just as well with lower fees. If you do decide to enlist an advisor to help formulate a financial plan for you, find a fee-based advisor who you can pay once every few years to update the plan.

Here are a few books that were helpful to me in developing my investment philosophy that allowed me to retire in my early thirties.

Bogleheads / Vanguard Index Funds
https://www.amazon.com/Little-Book-Common-Sense-Investing/dp/1119404509

The Richest Man in Babylon (investing philosophy)
https://www.amazon.com/Richest-Man-Babylon-George-Clason/dp/1505339111

Dave Ramsey / Personal Finance
https://www.amazon.com/Total-Money-Makeover-Financial-Fitness/dp/159555078X

Tax-Free Wealth - Tom Wheelwright / How investments affect your taxes
https://www.amazon.com/Tax-Free-Wealth-Permanently-Lowering-Advisors/dp/1937832058

Where are the Customer’s Yachts
https://www.amazon.com/Where-Are-Customers-Yachts-Street/dp/0471770892

I use You Need a Budget for budgeting. (www.ynab.com) Really good for budgeting and cashflow management. It's not good for tracking investments etc. though.

As far as what you should do immediately with that $400, I'd pay down that $600 loan. I'm sure the interest on that is insane and you're gonna get the most for your money that way. It will also give you a sense of satisfaction (hopefully) once you pay it off. You'll know you're on your way to financial peace.

You pay for your savings account?! Drop that immediately. Go for a free high-interest savings account that are all over the place nowadays (INGDirect for example is offering 1.1% on savings accounts right now which will go up when interest rates go back up).

Next you should concentrate on paying off those other loans. Some people like to start with the highest-interest loans. Others like to start with the smallest balance loans. I like the idea of starting with the smallest balance loans because of how quickly you can build up speed to pay off all your loans (google debt snowball).

Oh, and buy Dave Ramsey's Financial Peace Revisited book (http://www.amazon.com/Financial-Peace-Revisited-Dave-Ramsey/dp/0670032085/). Whether or not you completely agree with him, he's got great advice, especially if you're just starting out.

I would recommend 2 amazing books for you to first get started:

1. The 5 rules for successful stock investing: Morningstar's Guide to Building Wealth and Winning in the Market - https://www.amazon.com/Five-Rules-Successful-Stock-Investing/dp/0471269654
   
   
2. The Intelligent Investor - https://www.amazon.com/Intelligent-Investor-Definitive-Investing-Essentials/dp/0060555661
   
   These 2 books are touted as the "holy grail" of investment books and emphasizes a huge deal on teaching you how to do due diligence when you stock pick, rather than just picking stocks based on the "crowd".
   
   Hope this helps!

Some people say education is the best long-term investment.

So continue to learn about finance, living frugally, and really concentrating on your education until you can start developing a portfolio of assets. This is knowledge that will make you a lot of money summed over your lifetime. I waited until I was 24 before I started reading up on saving/investing/financial planning/FIRE. I wish I'd learned it all when I was your age (see Investopedia). I'd have focused much more on collecting income-earning assets and experiences, rather than wasting all my money on short-lived liabilities (like new cars or games I didn't really need).

Literally the most important thing to an investment is time. The earlier you start, the better, due to compound interest. As a rule of thumb, very low risk investments should probably be earning you 2%-5% interest per year (e.g. loans and government bonds, introductory savings offers) and riskier investments (e.g. stock market exchange traded funds) should be returning 7% - 8% per annum averaged over 5-10 years. Company-matched pension contributions are amazing, and make you thousands per year. These should be maxed out if you ever get the option. And then you avoid expensive debt (credit cards, payday loans) like the plague. Anything earning less than 2% AER makes you a few euros a year and is essentially pointless.

There's a book called Rich Dad, Poor Dad. The gist of it is that rich people are taught to build assets over their early working life. The first one is education. Then you could be writing a book, getting constant royalties from it forever (did this). Or you could make an online course (doing this), host an online service, get a lodger (doing this), rent your parking space, or rent out property or storage space. Then you can stop trading your time for income (because your time is always finite and so your earnings will always be linked to how much time you forfeit). Instead, rich-thinking people build a portfolio of assets that make them money. There's another book called The Marshmallow Test, which essentially discusses that smart people tend to be able to delay their own gratification in order to be richer in the future (although a bit of an oversimplification). Anyone can retire early and live out their hobbies; they just need to start saving and investing early and diligently.

It also really helps to really learn how to deal with windfalls of money that you weren't expecting. Most people tend to splurge on unnecessary things, then it becomes a habit. To start, here is the UK Personal Finance flowchart. I'm not sure if there is one for Germany.

No one will care more about your money than you. "Only 12 percent of active U.S. large-cap growth funds, for example, beat passive peers over the last decade, according to Morningstar's latest Active-Passive barometer.".

I suggest that you either read "The Smartest Investment Book You'll Ever Read" or listen to the audio book. The author is a financial expert who believes that proper choice of index funds is best, not hiring anyone to manage your money for you. This is also assurance that you don't give your money to another Bernie Madoff.

I've read about half of these. Pretty dry reading. I would recommend the following:

The Wealthy Barber

I Will Teach You to be Rich

Bogleheads' Guide to Investing

All About Asset Allocation

The basic point of all of the books above and in the article is that you aren't going to beat the pros in investing, in fact the pros can't even keep up the same record from year to year. Index funds are the way to go. Other books above go over what the asset allocation looks like and also goes over insurance and other things to make your finances sound.


As an aside, I never could stick with a budget until using the software YNAB and now that I'm doing a monthly budget I am seeing massive benefits.

One word: Vanguard (www.vanguard.com)

Resources I've found helpful for learning purposes:

Bogleheads (www.bogleheads.org)

The Boglehead's Guide to Investing (http://www.amazon.com/gp/aw/d/0470067365)

Good luck.

Tip: first thing, do a google search on the power of compound interest and tax-free growth. That should keep you motivated to get going and start saving now.

I suggest Laws of Wealth. It is a great insight into human beings managing money and how it can best be done.

https://www.amazon.com/Laws-Wealth-Psychology-investing-success/dp/0857195247

I just read this recently and I really enjoyed it and took a lot away from it.

I had the same issue for a long time

I suggest reading "The Richest Man in Babylon" - It's changed my perspective on savings, and wealth in general. you can find it here; (https://www.amazon.com/Richest-Man-Babylon-George-Clason/dp/0451205367/ref=sr_1_1?ie=UTF8&qid=1496006456&sr=8-1&keywords=richest+man+in+babylon)

Before you can truly save money you have to be in the right mindset, this'll help with that.

Doesn’t directly answer your question but check out “Educated” by Tara Westover. Great read, she also left home to pursue education and could be a source of inspiration for you

The only investment guide you'll ever need by Andrew Tobias
https://www.amazon.com/Only-Investment-Guide-Youll-Ever/dp/0544781937
I was in your position and read this 15 years ago and retired early using his advice to invest. He updates it regularly. It tells you what you need to know in easy to understand terms and gives a good reading list if you want to go further to understand the theories supporting his advice . Read the reviews on amazon for other opinions

Thanks for the book recommendation! I'm guessing you meant the Author is Andrew Tobias, if so here is the link to the book on Amazon:

The Only Investment Guide You'll Ever Need https://www.amazon.com/dp/B011H55NBM/ref=cm_sw_r_cp_apa_i_NrS8AbS7AG81Z

If this is not the book, then please let me know. Thanks.

A couple useful resources:

Get Rich Slowly

All Your Worth: The Ultimate Lifetime Money Plan

The first thing that you need to do is go to the library and read books on stock market investing. Personally I like this book.

http://www.amazon.com/Neatest-Little-Guide-Market-Investing/dp/0452298628

Given your take home of $4000 per month, $1000 on housing isn't terrible, but you have not stated estimated utilities. Are you including them in rent?

I am a big fan of cutting expenses if I can. Have you considered taking on a roommate? They will help with rent and utilities.

You should be trying to put away 10-15% of your income per year for retirement. I would suggest that you try to max your roth to $5,500 for the year.

Finally, have you fully funded your emergency account? You should aim to have 3-6 months of living expenses (6-12k for you) in an easily accessible account to cover you just in case you need to change jobs or something happens.

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Hi, extremely well move to start so early.
Put everything in a high yield savings/money market account while you start reading in ways how to invest your savings to get even higher yields.
Perhaps real estate, perhaps mutual funds, perhaps CD’s...

I personally started digging into the stock market with the focus on dividend paying companies.

Here is an easy read on dividend investing. I have no financial education and was able to read it very smooth.
https://www.amazon.com/All-About-Dividend-Investing-Second/dp/0071637133/ref=nodl_