personal finance resources

I wanted to say a tiny bit about personal finance stuff, as I feel like I have gotten a fairly good feel for it.

Some great resources to start getting up to speed include:

• r/personalfinance, especially
  • the common topics
  • the wiki

index investments

Ideally you want to own a lot of different companies, so you’ve diversified your asset ownership. One of the easiest ways to do this is through index investing, where the index “tracks” a broad swath of the market, like “All S&P 500 Companies” or “All stock market companies”.

My preferred way to do this these days is via the Vanguard funds through E*Trade, like:

• VOO Vanguard S&P 500 ETF
• VTI Vanguard Total Stock Market ETF
• BND Vanguard Total Bond Market ETF

These are a great funds because of their really low expense ratios (0.04%, 0.04%, 0.05%, respectively) and lack of brokerage fees (so you don’t pay E*Trade to put them on!).

E*Trade does have a bit of a learning curve though, even when you’re just trading index ETFs: you have to pick the asset allocations by buying and selling individual stocks, you have to do stuff (like buy more stocks!) with your dividends, you need to watch out that you’re not buying ETFs with commissions, and soforth. You also need to be making big enough deposits to buy entire shares of the ETFs you want to buy; a single share of VOO, for example, will set you back about $230 as I write this!

All of that is a bit simpler with a “robo-advisor” like Betterment. (Forgive me, this is a referral link! This one is a non-referral link if you’d prefer that.) Here, you simply pick the ratio of stocks vs bonds and a risk tolerance and then Betterment balances your portfolio toward that target, reinvesting dividends in more shares, and efficiently rebalancing and even harvesting tax losses!

side investments

Once you’ve got a bit of a grasp on the “basics”, you can also branch out a bit into some more exotic investments.

LendingClub is one interesting example. They allow borrowers to apply for loans and investors to those loans, where a single loan is funded by potentially many investors.

And of course, Coinbase remains a solid bet for your cryptocurrency investment/gambling needs.

final thoughts

My parting advice is to seek out a VERY strong understanding of the tax implications of your trading activity before doing it for real. I did a lot of paper trading that neglected the impact of taxes on the overall return of the strategy or trade; you really need to understand those impacts to make the correct investment decisions for you!

I should also disclose that I hold some long positions in everything I’ve mentioned here, and that you should consult a paid professional before taking any of the above advice!