Assuming I have a time horizon >10 years.
Edit: thanks for all the replies!!
It’s worth saving - investing (I assume you mean in the stock market/index/mutual fund) probably wouldn’t yield very significant growth but it is worth saving what you can.
Investing accidently helped me save. If I have money in an account, and I need to use it, I will, but by buying stocks and bitcoin, I don’t have that money, I have things that will increase in value that I can sell for money. And there have been a few desperate times that I had to do that, but my brain is far more unlikely to take a hypothetical future loss, than spend all my money today.
Why would the absolute amount of money matter for investing vs. saving cash? Assuming he finds a broker for which absolute transaction fees are negligible, the only important factors should be time window and risk tolerance, both of which are independent of the absolute saving rate.
Yes. I started with 50/month using Autopilot to get in on the Pelosi investment portfolio. I am up 18% for the year.
It’s honestly probably better putting that amount of money into trying to get a better job over that time period via education, or taking time off to apply for new positions, or something similar.
$6000 total investment over 10 years even with decent interest on top would be made up in less than 2 years with a $5k raise.
I just put extra money in a 5% high yield savings account. It’s not exciting, but there’s no risk and it will pay off over time
There’s also hardly any reward (comparatively speaking). Yields are crazy high right now on savings accounts, but they’re going to continue to drop, vs investing in the stock market (over the long term) is much more likely to maintain a much higher rate of return. Even at 5%, you’re really only getting about 2% growth since inflation is stuck at 3% right now. That compares to a long term average in the stock market of 7-9% after inflation.
Not to say that OP should do that, necessarily. Especially if they haven’t built their emergency fund which is far more important than investing, until you have a safe amount.
You’re probably right, as I’m not an expert, so thanks for your input. I am still worried of how the stock market will change with the upcoming trainwreck
You gotta remember the time horizon, even with historically bad presidents in office, if you smooth the line of the stock market returns over 10, 20, or 30 years, it ends up looking like a really, really good as an investment opportunity. Especially if you’re into dollar cost averaging.
Basically, if Trump tanks the stock market by going way overboard with things like tariffs, that would (at least looking at historical trends, I’m no financial expert or anything) make for a killer time to buy into the stock market because you’re getting stocks at a “discount.” Then when a different president / legislature comes into office, and if they turn around the economy, your investment would rise faster than otherwise expected.
Again, you gotta do what’s right for you, this isn’t me saying you should absolutely invest or anything, especially if your basic needs aren’t met or your emergency savings aren’t at a good enough level to last 6–12 months unemployed. This is just how it has been for the last ~100 years.
