Yes, the employee matching is “free money.” But transferring my money out of this to do a Roth IRA rollover was really annoying and I may have accidentally done it wrong and now I need to talk to a CPA. All this work for just for a matched $6000. Bureaucracy, friction, and poor UI are bad because it makes my adhd brain procrastinating on actually investing. (Incidentally this is also a reason to be wary of crypto as an investment—annoying to get on/off chain)
Retirement accounts are also often not able to invest in non-traditional assets like crypto or startup equity. They are less liquid.
I’ve reduced my “necessary” possessions to only what fits in a single tiny backpack. I’ve also cut my expenses substantially. I’ve saved so much money, I could retire very soon and travel the world in low cost-of-living countries, just living off the 4% of the principal. So by keeping my money in “retirement” accounts I am delaying the age at which I can retire because of the tax penalty! (I love working at manifold tho, and even if I left I’d probably just start my own startup, or something else ambitious, while being a nomad.)
maybe you don’t earn very much, but the future is coming fast so who knows when financial escape velocity will come for you
index funds
diversification has diminishing marginal returns.
if instead you just hand-pick a dozen of stocks of companies you think are underrated, spread out across industries, you’ve got most of the benefit of diversification already, but at higher EV
if you’re young, you should be taking on more risk for higher EV
the lesswrong zeitgeist in particular was ahead on crypto, covid, and AI. I have made money listening to it. what else will this community be ahead on?
if everyone buys the top 500 companies in the S&P, because “they’re supposed to,” then the top 500 are overvalued and you should buy the 501st company. (some mutual funds do this trade, and my rationalist friend who I think is smart, but who also lives in his mom’s basement, swears there’s still alpha in this. I don’t bother.)
The future will be weird
Markets are anti-inductive
Of course, you probably should not be thinking too much about optimal investments if you have very little to invest, or if you are in debt. Weigh the value of your time. If you are young the most important thing to invest in is in yourself—your skills, equipment, knowledge, etc.
(Splitting into multiple comments)
Yes, the employee matching is “free money.” But transferring my money out of this to do a Roth IRA rollover was really annoying and I may have accidentally done it wrong and now I need to talk to a CPA. All this work for just for a matched $6000. Bureaucracy, friction, and poor UI are bad because it makes my adhd brain procrastinating on actually investing. (Incidentally this is also a reason to be wary of crypto as an investment—annoying to get on/off chain)
Retirement accounts are also often not able to invest in non-traditional assets like crypto or startup equity. They are less liquid.
I’ve reduced my “necessary” possessions to only what fits in a single tiny backpack. I’ve also cut my expenses substantially. I’ve saved so much money, I could retire very soon and travel the world in low cost-of-living countries, just living off the 4% of the principal. So by keeping my money in “retirement” accounts I am delaying the age at which I can retire because of the tax penalty!
(I love working at manifold tho, and even if I left I’d probably just start my own startup, or something else ambitious, while being a nomad.)
maybe you don’t earn very much, but the future is coming fast so who knows when financial escape velocity will come for you
diversification has diminishing marginal returns.
if instead you just hand-pick a dozen of stocks of companies you think are underrated, spread out across industries, you’ve got most of the benefit of diversification already, but at higher EV
if you’re young, you should be taking on more risk for higher EV
the lesswrong zeitgeist in particular was ahead on crypto, covid, and AI. I have made money listening to it. what else will this community be ahead on?
if everyone buys the top 500 companies in the S&P, because “they’re supposed to,” then the top 500 are overvalued and you should buy the 501st company. (some mutual funds do this trade, and my rationalist friend who I think is smart, but who also lives in his mom’s basement, swears there’s still alpha in this. I don’t bother.)
The future will be weird
Markets are anti-inductive
Of course, you probably should not be thinking too much about optimal investments if you have very little to invest, or if you are in debt. Weigh the value of your time. If you are young the most important thing to invest in is in yourself—your skills, equipment, knowledge, etc.