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    11. What are your financial goals? What habits, practices, and strategies do you use to reach them?

      Ask (survey)
      How do you spend your money? How do you want to spend it? How do you save? I'm curious what strategies my fellow Tildenizens use to spend efficiently, build savings for retirement and other...

      How do you spend your money? How do you want to spend it? How do you save?

      I'm curious what strategies my fellow Tildenizens use to spend efficiently, build savings for retirement and other purchases, and otherwise maximize their financial lives. How do you use your money to maximize your happiness?

      Here's me: I'm young, single, thankfully debt-free, and my annual salary is about $70,000. I'm able to save approximately 35% of that by living relatively frugally:

      All My Stuff
      • I live in a big city, but not an expensive one. I pay rent, but it's pretty low for the amenities I have access to.
      • I live with a roommate to reduce expenses. We're on the same wavelength about minimizing spending.
      • I don't own a car and rely on public transit and carpooling to get places. I also work from home.
      • I go out of my way to shop at the cheapest grocery stores in the area to cut my weekly bill in half (or more).
      • I have three credit cards, but I always keep my utilization low and never miss a minimum payment.
      • I have a separate bank account (checking) for bills than for general spending. I set up my direct deposit to automatically put in all necessary funds for bills into the bill account. Then I set up autopay with all my providers so I don't miss payments. I have one month's buffer in this account in case there's some issue with my paycheck.
      • I contribute as much as I can to my employer-provided 401(k) savings account every month and invest in index funds. I can get to about 65% of the IRS max contribution limit with my income.
      • I contribute to a Roth Individual Retirement Account (IRA) every month to reach the IRS max contribution limit for the year, and invest in index funds.
      • I have a high-deductible healthcare plan (HDHP) which lets me use a Health Savings Account (HSA). My company pays a little into my HSA each month, and I contribute a similar amount to reach the IRS max contribution limit. Instead of using the HSA to pay for medical expenses, my strategy is to pay out of pocket for all expenses and simply invest the funds in my HSA in index funds to maximize their growth potential. Since this account is so tax-advantaged, investments here are more efficient (as far as I can tell) than in any other account I know of.
      • I have a taxable brokerage account that I contribute a small amount to each month. I know this isn't technically as efficient as putting more into my 401(k), but I figure I might want to use some of this money before I retire. I also kind of like betting on random stocks. Irresponsible, I know, but it's like $20 at a time. Gotta have fun?
      • I set up my TreasuryDirect.gov account to automatically buy I-Bonds while inflation is high, but only on the order of $100/mo. I don't know when I should stop exactly... we'll see what the interest rates are in May?

      I'm not really sure what I'm saving for here. I know you're not supposed to make financial decisions without a plan, but I honestly don't know what I want to do in the next 5 years, let alone 50. People tell me that I should buy a house to build equity instead of throwing away money in rent, but I'm enjoying not dealing with maintenance, and I don't know if I want to stay in this city for more than a few years. It's cute, and I have friends here, but city hall is full of goobers and there are too many highways nearby messing with the feng shui.

      Someone also suggested that I buy a small property and rent it out through a property management company, even if I'm still renting myself. Besides landlords being the scum of the earth and the moral quandaries that might present if I were to become one (even a tolerable one), that also feels like a lot of work. Possibly also financially unrealistic considering I'd need a 20% down payment on a house I don't intend to live in, and... I don't have that.

      I also might switch careers soon-ish, possibly to software engineering, which has a better earnings potential. I've avoided it in the past because I feel like I'm just not good enough at programming. I don't know how I would properly improve those skills now that I'm out of school.

      My pipe dream is that I want to build a really fricking big building. That's my goal. I want it to be really sick and have big Gothic spires and gargoyles and stained glass windows and cool stone carvings everywhere (but also be ADA accessible and not full of asbestos, because it's 2023). And people would come from miles around and say, "Wow, that's a cool building." All the non-racist secret societies could meet in its various hidden chambers and do whatever they do. I would hire whoever builds concert halls to design the acoustics so I could have some bomb choirs going in there, and make the floor sprung so they could do those crazy ballet dances too. Maybe at the same time. Also there would be a moat full of lava. And a robot dragon to guard it all just in case. I think this would cost upward of $500 million in total. Unfortunately that's slightly out of budget, even at my abnormal savings rate.

      But priorities change, right? I figure that if I can save enough to make myself think I might be able to build my big-ass building one day, when I eventually realize, "Wait a second, my kid needs to go to college," I'll accidentally have enough to make that happen.

      How does this compare to your life? What tips, tricks, and ideas would you like to share to help each other out? What are your financial dreams? I'm really interested in chatting with everyone about this.

      6 votes

    35. Are billionaires a market failure? And if not market, are they social failure?

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      I was reading this text from the Washington Post (sorry for the maybe paywall): https://www.washingtonpost.com/opinions/2022/10/06/xi-jinping-crackdown-china-economy-change/ The opinion asserts...

      I was reading this text from the Washington Post (sorry for the maybe paywall):

      https://www.washingtonpost.com/opinions/2022/10/06/xi-jinping-crackdown-china-economy-change/

      The opinion asserts that in response to liberalization of Chinese life, driven by capitalistic economic growth, is the reason that Xi Pinjing "cracked down in every sphere imaginable — attacking the private sector, humiliating billionaires, reviving Communist ideology, purging the party of corrupt officials and ramping up nationalism (mostly anti-Western) in both word and deed."

      My conspiratorial brain latched on to the humiliating billionaires line, and started thinking about a between the lines message along the lines that billionaires are good and should not be humiliated, a subtle warning-response to the progressive grumblings here in the U.S. that a failure to support capitalism will result in totalitarianism.

      Then I started thinking about the questions, are billionaires good for society? I had always held the position that a billionaire is a market failure (in my econ 101 understanding of the term), much like pollution. It is improper hoarding and unfair leveraging of capital into disproportionate and un-earned degree of pesonal privilege.

      It is certainly a by-product of euro-american capitalism, whereby the desires and welfare of the many are trodden on by those with the ability to fight and to shape the regulatory machine meant to protect the interests of the common-wealth.

      I see a few possibilities. One, is that my understanding of economics is wrong, and producing as many billionaires as possible is the ultimate goal of capitalism and in fact good for everyone, even in theory.

      Two, it is indeed as I suspect, a market failure. And the failure here is one of degree, it is not, in fact problematic to have some individuals with significantly greater wealth among us, and is, in fact, beneficial overall, but to have some with so much more than the rest of us (wealth inequaility) is a result of getting in the way of a clean functioning marketplace.

      Three, economic theory is working as described, and economic theory/activity is an insufficient foundation for the maintenance and success of a whole society, and we need to find a way to constrain it to its own sphere, so that it provides us with what we need to be healthy and happy, but no more.

      I turn to the bright minds of tildes: am I looking at this right?

      16 votes