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Comment by bluetwo | Hacker News Reader

Hey new developers:

A fully funded retirement = Freedom

I know it doesn't seem important now, but if you focus on this early in your career, you'll have a lot of flexibility later in your career.

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Truth. I was looking for a new job a few months ago and I have always used the terms and % match for 401k as a kind of dipstick to see how well the company treats its employees. I was shocked when I talked to some startups and some didn't even have a 401k, and I was blunt with the HR recruiter and said that is a big red flag to me. He said the younger employees don't care and offered to show me results of a survey they did a few years back. I believed him, because they also had a generous vacation policy and also paid for 100% of the cost of health benefits- which is what younger workers look for these days. I joked with the recruiter that if I accept their offer, my first week I will offer a lunch and learn on the benefits of saving for retirement and why its so advantageous to start when you are young!

Its unfortunate how little people coming out of college understand about personal finance. In my previous job, I was constantly giving mini personal finance lessons and advice to my team.

I didn't end up accepting at that startup for somewhat related reasons- another company made me a monster offer, that to come back full circle on, would allow me to be comfortably financially independent in roughly 4 years- and at that point I will have my "F you" money and can do what I want.

The problem is that many investment products in 401ks under perform. At my last company the best fund netted on 4%. Since I now manage my own IRA, I get 15-20%.

All the 401ks I've had in my career (mostly at 'startups'), even relatively poor ones, have offered at least one Vanguard index fund and/or target date fund-of-funds.

It is not possible for everyone to get this return. Managing your own IRA may be a good idea for some but it isn't for everyone. And a 15%-20% return s not realistic for more than a small percentage of people.

Most 401(k)s have at least one S&P 500 or US total market fund with low expense ratios. If anyone out there reading this doesn't know what that looks like, feel free to email me with the options your company provides and I can help you choose the right one. Like the GP says, this stuff is important, and if you set it up now you'll thank yourself later.

Re: getting 15-20%: there will be years that you can do this (heck, the S&P 500 returned 32% in 2014) but I certainly wouldn't count on getting those returns long-term. Consider that if you have $500k today and are able to successfully invest it at 20% returns, you'll be a billionaire in under 40 years. There are people who have done it (Warren Buffett and perhaps a few others), but if you're one of them you probably have better things to be doing with your time than posting on Hacker News. :)

Buffet is interesting. He's an actual investor. Not a stock purchaser like most people. He buys companies and then has enough power to control the business. Under his firm, the company then becomes more valuable through leadership. As a result he can make billions.

> Since I now manage my own IRA, I get 15-20%.

I hear this a lot from people who invest and I simply don't believe it. If you are able to consistently get 15-20% you should stop your normal career and just become a investment advisor/broker as for you'll make WAY more money in life.

Don't have the money. Also, a reasonable index fund like XLS has had 13% on its own. Add to the trading oil ETNs. Those can have 10% moves on their own in a few weeks. They are also 1099.

It's irrelevant whether you have the money.

If you can consistently guarantee above average market returns to your clients, you'll be swimming in their money (and the fees/percentage they pay you to manage it)

Realistically, nobody is going to trust a relevant amount of money to what amounts to "some guy on the street from outside the profession."

This would be so easy to prove though, do it for a couple years with friends and family to prove you can really get 15-20% every year and the money will pour in.

Well, not really; given enough fools who think they can successfully beat the marker, even in the absence of any actual ability to do so, some number of them will manage to for a few years by making riskier bets than would be optimal. So if someone tries to get you to invest based on their past performance, you have to consider how many people there are out there trying to beat the market to determine whether this person has any actual skill or just got lucky (and will proceed to lose a bunch of your money by making said overly risky bets).

>you should stop your normal career and just become a investment advisor/broker as for you'll make WAY more money in life.

I don't think you can just walk into a respectable brokerage firm and just apply to be an investment adviser or broker based on how well your personal portfolio does. It's probably gated by a 4 year math/science/finance degree and other extra-academic examinations.

If you can, I'd like to know how. I'd much prefer finance over healthcare.

Just start small, do this for 1 or 2 friends for a few thousand dollars. If you can show this kind of return consistently you'll be managing a billion dollars in no time. 15-20% is a really good return, I still dont believe it, but if you can do this it'd be easy to take 1.5% and earn for clients.

I guess the onus is on the length of time he means by consistent, because yeah, that could be 10 months or 10 years.

The most likely explanation is that virmundi is confusing profiting off the bull run of the last couple of years that's made everyone a bunch of money with actually being able to beat the market.

Is it possible to get an employer to match your personally managed IRA?

Sure. If your employer is doing a matching program that doesn't involve granting you their stock as the matching part, money is deposited and whatever you direct is purchased.

"Meh, I'll work until I die! Cause I love what I do!"

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