Financial advice/things men should know

LandsurveyorDawg

Redshirt
Mar 3, 2008
315
0
0
This may not be the best advise, but in my opinion, money isn't everything. My wife doesn't work, so I am the sole provider right now. We have 4 boys aged 3-17. If she worked we would not have all those kids. Or at least she wouldn't have the chance to stay home with them. Can you put a pricetag on that? If she worked for the past 18 years or so and we saved every penny she made that would be 600k or more (not counting interest earned). That sounds sexy.

She is doing the Elementary Education degree online at MSU right now and has 3 semesters left. So when the youngest Caboose goes to kindergarten she can stay at school and bring me home a meager paycheck. This will help us catch up to all you Warren Buffetts out there.
 

MSUCE99

Redshirt
Nov 15, 2005
1,005
1
36
Where would you suggest I put this money to grow and potentially seen decent returns in 3 years?

I hope you realize that high returns are necessary only to offset high risks... i.e., any investment that you think you will get 6-9% off of pays a premium due to increased risk over a lower-returning investment. FDIC-insured savings, money markets, and CDs are very low-risk, thus their low returns. A little farther up the risk ladder is bonds, so they pay a slight premium via a higher rate of return.

Stocks (or the stock market in general, via a S&P 500 index fund or a Total Stock Market fund) *historically* return a long-run average of higher returns but the higher returns are necessary to attract investors who can endure the roller-coaster ride of bull and bear markets. The best play in the stock market is to buy and hold for the long term, not jumping in and out within 3 years. Due to the volatility of the market, you very well may end up in 2-3 years with less money than you put it.
 

coach66

Junior
Mar 5, 2009
12,710
332
83
Invest some time to learn about Closed End Funds. I wish I had known about them

when I was younger. You have to be careful and now is not the time to be getting into them as most are trading at
large premiums. Cefconnect.com
 

jb1020

Freshman
Jun 7, 2009
1,866
88
48
If you don't care for people in general, like Kurt,

a metal building, and then spec it out yourself.

You can get the same square footage, for 1/2 the price. Of course this is assuming you can turn a wrench, and you don't let your wife tell you what to do.

this is a fine option. But if you like interacting with people, property values, kid friendly neighborhood in a good school district then this is probably bad advice.
 

aTotal360

Heisman
Nov 12, 2009
22,577
16,402
113
IMO the biggest trap I see young people fall into is owning $50,000 trucks and SUVs. Especially when they are only making $40k/year. I also see too many young people spending $4k-6k on Disney trips for the family when they can't afford that either. Other advice...always put in the % that you employers matches for your 401k. Set up a Roth IRA too and put a little bit of money in it as well. It might help you avoid some taxes way down the road if you get in a bind. Avoid PMI like the plague. When buying a house, shop for a mortgage. 1/4-1/2 a percent is a lot of money down the road.
 

kired

All-Conference
Aug 22, 2008
7,144
2,576
113
What financial advice have you gotten or wish you had gotten years ago? 30 y/r old male btw. Currently rent.

While most of this has been about saving money (which is great --- I've been building my 401k since I was in my mid-20s, own three vehicles that average ~15 years old, and have a smaller house than I want), but don't be afraid to spend a little. Be sure to enjoy life along the way. I've seen too many people retire and die before they reach 70 (or never even reach retirement). Recent example: the guy that hired me at my current job retired in late 2015. He put a ton of focus on saving for his retirement - has more money than I'll ever have. But he was diagnosed with cancer a few months ago and is fighting for his life.

I guess my advice is find something that makes you happy and don't worry about splurging a little on that. For me personally I follow the idea of spending money on experiences rather than possessions. My kids are still young, but I love to travel with them. My plan for the next ~15 years is to try and visit one place in the US each year that none of us have been. I've also been taking them to the MSU bowl games recently - so they've been to Miami, Charlotte, and Tampa. I don't get to watch much of the games, but those are fun trips during the holidays that I'll never forget. I know that by the time they reach college, and certainly by the time I retire, there will be fewer chances to do things like this so I don't mind spending the money now. I plan for this in my budget each year and save money specifically for it.
 

J-Dawg

Junior
Mar 4, 2009
2,233
327
83
Dont ever pay PMI. It's a racket.

This. Do whatever you can to avoid it. Unless you are willing to flush an extra 300+ bucks down the drain every month.

As far as buying a house, and I know you didn't ask advice on this, but don't get suckered into the trap that alot of young adults do. Dave Ramsey can be ultra conservative with his financial views, but I believe his home buying advice is on par, and has proved to be for my wife and I. Keep you total note (PITI) below 25% of your NET income. Not gross. Closer to 20% would be even better. Don't fall for all the "what you can afford" calculators online. I have good friends who have fallen for that and now are in a world of hurt trying to pay the note every month. I would suggest going ahead and estimating this amount and start saving it now to go towards your down payment, if possible.
 

UpTheMiddlex3Punt

All-Conference
May 28, 2007
18,103
4,177
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One other piece of advice: do not buy a house unless it makes absolute sense to do so. Renting costs more because it's often worth it.
 
Feb 14, 2017
648
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whoever said to buy a bond fund... absolutely do not do that... Fed is supposed to raise rates another time this year and 3 times next year. Unless the duration of the fund is a year you could very well lose money... rates keep rising a money market is a good place... my current bank is paying 0.69. If you can tolerate some risk take half put it in a money market. take the other half put it in 3 ETFs. Like someone else said if the market tanks so will home prices. Then you have 5k in cash and say 2.5k (cause stock market crashed). You can bet that home prices will decrease 25-30% as well so the net effect is likely zero but you have some upside. do a little research you can open an E-trade account and buy 3 ETFs for 10 commission a pop... Most have programs that will match up to 500 bucks if you leave it there for 2 years or so. So that is free money.
 

J-Dawg

Junior
Mar 4, 2009
2,233
327
83
Good advice on the dollar cost averaging. Also, your money is made dependent on when you buy, not when you sell. Warren Buffet made alot of money picking up investments when everyone else was running for the hills.
 

MaroonNation

Redshirt
Jun 9, 2015
3,729
0
0
Here's my advice on engagement rings. Marry a sensible woman who could care less how many karots she is going to flash in front of her friends.
 

WAdawg

Redshirt
Dec 18, 2013
19
0
1
When my wife and I bought our first house we only had enough to put 10% down. Rather than pay PMI our mortgage broker advised us to take a slightly higher interest rate and buy the mortgage insurance out up front. You end up paying more over the course of 30 years, but the chances of you living in your first house for 30 years is pretty low. So our monthly payment was slightly higher than it would have been at a lower rate, but much less than what it would have been with PMI. Three years later in 2016 we refinanced at a much lower rate and got a little bit of money out to cover child birth costs. After that refinancing the original deal was off the books. We never had to pay PMI and we still don't own 20% of our house.

With interest rates going up you chances to refinance might not be as much anymore, but chances are you will move before you get up to 20% of your house value anyways and remove the PMI.
 

UpTheMiddlex3Punt

All-Conference
May 28, 2007
18,103
4,177
113
If you can't understand what a specific company, ETF, mutual fund, investment opportunity, etc. does or how it works in five minutes, you shouldn't invest in it. This is good because (1) you'll avoid investments that require fast movement and detailed knowledge (e.g. highly leveraged ETFs) and (2) avoid investments that no one understands (e.g. the CDOs that took down huge parts of our financial sector a decade ago).

If you believe in what a company is doing and think they have a good management team and business plan, it might be worth investing in that company directly. Conversely, if you think the company is selling snake oil, avoid it and watch out for mutual funds that invest in that company (your mutual funds in your 401k publish their holdings). Instincts are often right in investing (e.g. I think Uber is going to hit the ******* and be out of business in 5 years), but desires can destroy you (e.g. I want everyone to quit using oil and drive electric cars, so I'll buy Tesla stock).

If you want a hands off long-term retirement fund strategy, plow most of your 401k into an index fund as they have the lowest fees by far.
 

TrueMaroonGrind

All-Conference
Jan 6, 2017
4,131
1,702
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I had a buddy who took a $12,000 loan from Kay's to buy the ring his girlfriend wanted. He had to get a second job and had to make a ton of sacrifices to pay it off. He drove around on tires balder than Samuel L Jacksons head, but she got her ring. Not worth it to me for a useless rock but some people "have" to have that status symbol.
 

johnson86-1

All-American
Aug 22, 2012
15,208
5,756
113
15-year mortgage, don't borrow money on something unless it makes you money (houses and cars make you money, motorcycles, boats and other type toys do not).

Houses possibly make you money (I'm skeptical of that in most locations). Unless you are a truck driver or delivery guy or something or just really good at buying and selling classic cars, I'm not sure how cars make you money (except in the same sense that clothes make you money, in that most people will need them to have a job).
 

DerHntr

All-Conference
Sep 18, 2007
16,180
3,645
113
My financial advice:

1. Budget
2. Balance your checkbook every month
3. Talk about the budget once a month with the wife
4. Let her manage the budget and pay the bills

If you make the money and control the money, it's too easy to keep her out of the loop and spend frivolously. She will be in a big bind if something ever happens to you as well because she won't know the family's finances at all. Also, it's too easy to get into the trap of her asking you to spend. She's not your kid. She's your wife. If it's in the budget that you both agree on, she can spend it. For big ticket items you make the decisions as the need arises.

If you don't feel like you can trust her with the money, you shouldn't be getting married to her. If you don't think you can control yourself transparently enough to give up control of the money, you shouldn't be getting married.
 
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johnson86-1

All-American
Aug 22, 2012
15,208
5,756
113
What financial advice have you gotten or wish you had gotten years ago? 30 y/r old male btw. Currently rent.

Answered a similar question from somebody else as far as what advice I wish I had gotten/listed to when I was younger, so slightly modified to focus more on financial (but not completely financial):

(1) With the exception of traveling, keep your college lifestyle as long as possible. College was a blast and spending more doesn't really improve much. Really, whatever you are spending money on you won't get as much happiness as you will from the peace of mind of not being reliant on a paycheck. I consider myself very blessed right now, but if you had shown college me my earnings up to this point, he would have expected to be able to retire by now, and his expectations would have been completely reasonable. But I let lifestyle inflation get me, and it's much harder to cut back than to just avoid the inflation to begin with. So now I'll probably have to work until my mid to late 50's even if I don't have any significant setbacks.

(2) Spend money on experiences, not things. There's plenty of research to back this up.

(3) Tied in with #1, you should really max out your 401k and roth each year. If you keep your college lifestyle, you could probably do that if you make at least $50k without major sacrifices.

(4) More specific, go use a home loan to buy a duplex or preferably a fourplex that could breakeven cashflow wise on a 15 year note if you just rented it out, but live in it and put it on a 30 year note. As quickly as you can get another loan, go do it again and rent out the previous one. Repeat until you can no longer get a 30 year loan with a fixed interest rate. They likely won't be great investments, but the leverage will get you a pretty good return on investment while being relatively passive and be pretty low risk if you finance them on a 30 year note, and if you manage them yourself, you'll end up learning a lot that will be helpful. You could very easily have 20 paid for doors 20 years out of school without doing much. If you're not going to buy stuff that you can convert to rentals, don't be in a hurry to buy a house. Renting is not throwing your money away.

(5) Use Mint and track all your spending. It will clarify what you spend your money on versus what you get enjoyment from spending money on.

(6) Set up a spreadsheet calculating how long until you will be financially independent. It will keep you balanced between the now and future.

For the less financially related topics:

(7) Stop worrying. Unless you have a health event (which you can't control anyway, so no sense in worrying about it), you're worst case scenario is pretty good, so live in the moment a little more without worrying about the future.
(8) Stay in shape. It's so easy, just don't put on the extra weight to begin with and always exercise. Don't spend 10 years out of shape and then get in shape with three months of pretty moderate exercise and dieting. You could have just eat and drink reasonably to begin with and exercise a little and be in better shape the entire time and be in much healtheir at 45 without those ten years of wear and tear.
(9) Be way more open to moving for your career. Don't be locked into an area with very few large employers that can pay you.
(10) Spend more time thinking about what makes you happy. Don't dive into your career and think that a prestigious career and money is the goal. Figure out what you want the money for and what the best way to get it is.
(11) Take more risks. The top 5% of pay for most professions is plenty good enough, and easy enough to get if you like what you do, so don't think you have to pick a high paying profession. You have more options than CPA/LLM/MD/PE etc.
(12) Travel. This is the only thing you should probably spend more money on than you did. You can take ten days off for real travel. Don't rush over seas trips in order to only take five days off of work.
 

horshack.sixpack

All-American
Oct 30, 2012
12,188
9,556
113
Give. Save. Live. In that order. You'll do some good for yourself and others and learn how to manage money.
 
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