I understand your point but it's funny to use AI as an example since a big benefit is it's generality. It's mediocre at many things but the fact that you can just use one tool and get passable results across many domains makes it so useful.
Lol. You don't even need AI for that 99% boiler plate. Save 6-12 months of expenses in cash, DCA the rest into total market stock index funds. But people still pay expensive advisors to get worse results.
The problem with giving financial advice to people is that many struggle to pay their rent. Telling them to invest in index funds from an ivory tower is laughably misguided of the realistic situation they live in.
After they pay their rent and feed themselves, they may have a little left over which they will simply spend on basic pleasures, or simply rack up debt to get by.
The financial advice ignores the fact that we have people like Musk with a net worth of 600M while the rest struggle to afford necessities.
The wealth inequality gap is simply too much to ignore and I worry that it will reach a breaking point.
> This isn't a wealth inequality issue, it's a "you're overspending" issue.
Just so that I understand your position, you think the reason a cashier at McDonald struggles is because he is overspending on his rent? and not due to wealth inequality which causes low wages ?
I can assure you, in most places you will not be fined or put in prison for not having a home. In most places the local council, or charities will help provide you shelter even if only on a temporary basis.
Many people go through a “homeless” period of not having a permanent address. Couch surfing. Motels etc.
It’s not fun. It’s very stressful. Our systems have a positive feedback loop against financial instability.
However there is another category of homeless which is a person pushing a shopping cart on the side of the road. And this is an exteme level of dysfunction and despair.
I saw a tweet that summarized this issue as “you’re as likely to become a CEO or NBA player as you are to become homeless.” Meaning that it’s a track of genetics and behavior resulting in dysfunction several standard deviations away from normal.
If you took an average person and then forced them to stop paying rent or anything more expensive than their current rent (so no motels)—the scenario being discussed here—which category of homeless would they likely end up in?
What are you talking about? What is “rent”? You can rent an individual room. You can rent a double-wide trailer. You can move to Kentucky. You can work 40 hours (guaranteed 40-50k year).
> stop responding to all incentives and deliberately go against the grain of every system and form of aid.
Saves money by not renting? This sounds like an Upper class 20 year old activity. Are they not renting a trailer so they can put $200/month in Tesla?
The level of discipline and focus to be that kind of super saver doesn’t sound like the origin story of a guy with a shopping cart.
Another aspect that gives ms pause is living in ann unmaintained apartment where you don’t have insurance etc is miserable. And that’s the reality of being poor. I’m not sure why we need to pretend we can all become homeless when the actual danger is already real and bleak.
I also haven't been a millionaire, but that doesn't mean i don't know how to earn money.
Sorry, your appeals to emotion aren't effective, and your arguments do not agree with reality.
There is no able bodied person in the US who is unable to save and invest enough of their income to have a decent life. Anyone who tells you otherwise is either lying or ignorant about reality.
Thank you for ignoring the request and not providing the simple link i requested.
Also, from your own link:
>Is It Illegal to Be Homeless
>No US law makes the status of being homeless a crime. You cannot face arrest simply for not having a permanent address or for being unable to afford rent.
Yes if you’re poor you are not in the market for a financial advisor. You’re also not in the market for a dentist or family doctor. These are services for middle class people.
The tricky part is which total market index funds? The S&P based ones are too AI focused, and don't give you the diversification they once did. You also don't want to invest in just one countries stock market. And bonds, should be a mix of maturity, governments (not just the US), corporate, etc.
Total market is total market. Investing in a “total market minus X” fund means you lose exposure to X (whatever that is) for good or bad. That’s your judgment call, but not really an edict. Same problem with “you can’t just invest with US stocks” - US stocks are global at this point, and have significant exposure to the international market. By investing in specific international funds you’re more or less saying “international minus the US”.
You can change your weighting if you want to, that’s your prerogative, but don’t be surprised if it doesn’t lead to nearly as good of average returns.
It's more complicated than that. You probably don't want all your equity in stock, unless you're young and you're confident you can keep your strategy when the AI bubble crashes. And what do you do with the part that isn't in stock? bonds? what are they? which ones to buy? Even the 6-12 months of expenses in cash doesn't apply to all people.
That being said, I agree with the bad and expensive advisors, but I think financial planning is hard, and you really need to educate yourself.
DCA is not unreasonable advice given that most people's greatest enemy is themselves. DCA helps avoid the very emotionally upsetting feeling of you throwing money into a fund and it dropping 5% the next day. This emotional volatility can push people to make bad decisions (pull all their money out, try to time the market, stop investing, etc.). Scheduling your investment into smaller sums lets you diffuse the highs and lows in order to keep you steadfast.
That's not really DCA, at least how I understand it. DCA is something like "I have $520,000 in cash right now today sitting in checking, I'm going to buy $10,000 a week of VTSAX for the next 52 weeks" which on average is a bad strategy.
What you're describing is better analyzed as a continuing series of lump sum investments. You're investing as soon as you have cash available, not unnecessarily holding onto cash.
BTW, you are correct technically that if the expected return of the investment is positive, then you maximise the expected return by putting in everything now all at once. However, maybe you want to reduce the variance. Or you want to trade off return and risk. Or you want to minimise regret.
If you put all in at a certain price, and later the market moves down, you'll regret that you didn't buy cheaper, and think you timed it badly.
If, however, you commit to a strategy of putting in say 5% per month over the next months, then a) you just automate it, and don't think about it anymore, and b) you don't really have a reference price at which you bought (sure, you can determine your actual cost basis, but who does that...) and thus avoid regret when the market tanks. Plus you reduce variance (by reducing the variance of your cost basis).
> DCA is something like "I have $520,000 in cash right now today sitting in checking, I'm going to buy $10,000 a week of VTSAX for the next 52 weeks" which on average is a bad strategy.
Yeah for a start if you're really planning to buy $10 K of a world fund pick one with stock options. Sell a PUT secured by the $10 K with a 7 DTE. This is already guaranteed better returns (but still a bad strategy) than this dumb way of DCAing.
But when people say they DCA what they mean is basically: "I make $10 K net per month, I spent $6 K, I keep $1 K in cash and I invest the $3 K that are left". Which is actually not a bad strategy at all.
Oh come on, level 4 / Waymo is a joke. That’s a good weather system…everything under level 5 is not really self driving cause you can’t really rely on it. It’s just a nice hobby research project of some billionaires :D.
At self driving system I’m think about bmw which drives automatically at 230km/h on a German highway and races at aggressive as I am at the high way cause I don’t want to be more slow that the train at the distance from Berlin to Munich ;)
Also the reason we fund science publicly is because we can't count on the incentives from the free market. I mean why would they share information with competitors?
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