Is it even worth trying to invest $15K?
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My brother-in-law gave me $15K for my 19th birthday and called it “pocket money.” I’ve never invested before, so I’m not sure if I should put it somewhere or just enjoy spending it.
Definitely save it somehow. That could be a down payment for a house.
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Definitely save it somehow. That could be a down payment for a house.
$15k? In this economy?
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I don't have any big purchases in mind. My sister got me an apartment and car last year for my 18th birthday with her husband's money. We're Swedish (he's Chinese and my sister lives with him in China) - so free university for me; I don’t have any debt or anything like that. Sister has retired our parents and is supporting our family financially. But this is the first time he gave me money directly.
wrote last edited by [email protected]Sweden in particular has a really low income inequality but a really high wealth inequality. Swedes are underestimating how much they should invest, basically.
The universal advice for money you don't need right now is pay debts, then plan for emergencies (your family would help you, sounds like), then invest.
At 19, mathematically, you should invest mostly in equities (aka stocks) - they go up and down but earn like 10% a year on average (compounding), and you don't really have a deadline. The one trick is you can't panic sell when it goes down. You should diversify as much as possible, unless you can predict the future, and possibly nobody can.
Usually managing taxes and taking advantage of government programs is the third ingredient. I have no idea what that would be in Sweden.
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The short answer is: any amount of money is 'worth' investing.
$10k at 6% for 40 years is $100k. That might let you retire a couple years early. Conventional wisdom, among people, let's say 40+ years old, is going to focus on retirement, wishing they'd started saving earlier, and the incredible power of 40 years compound interest.
At 19, though? You've probably got college and the potential for student debt coming up. Your first car. The down payment on a house. All of those things can be considered "investment," too. They might have much better benefit to you, both in the short term and the long term. Or, if your BIL is ready to drop $15k as 'pocket money,' maybe you have enough family support that none of those things will be a concern. Hell, maybe you have enough family support that working a job from which to retire isn't even a concern.
This is a marshmallow problem. Do you want to buy a car, take a fantastic trip somewhere, or just gamble like a big shot right now, or would you rather have less college debt, buy a nicer house, sooner, or retire earlier? Nobody else can tell you what you'll enjoy more.
To be fair, 100k 40 years from now will have the spending power of about 50k. The real power is in continuing to save as it compounds.
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$15k? In this economy?
How much is a typical mortgage downpayment?
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My brother-in-law gave me $15K for my 19th birthday and called it “pocket money.” I’ve never invested before, so I’m not sure if I should put it somewhere or just enjoy spending it.
40 years ago, in 1985, $15,000 was worth $5,000. The S&P 500 was valued at about $185/share. 5000/185 = 27 shares. SP500 today is about $6,664. 27*6664 = $179,928.
Go ahead and ask every 59 year old in your life if they'd feel better about their retirement with another $180k sitting in an S&P 500 ETF.
Open an account on Vanguard or Fidelity or Schwab or whatever, buy an S&P 500 ETF, and leave it the fuck alone.
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How much is a typical mortgage downpayment?
20% of the price is typical and horribly out of reach with how expensive housing is
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The short answer is: any amount of money is 'worth' investing.
$10k at 6% for 40 years is $100k. That might let you retire a couple years early. Conventional wisdom, among people, let's say 40+ years old, is going to focus on retirement, wishing they'd started saving earlier, and the incredible power of 40 years compound interest.
At 19, though? You've probably got college and the potential for student debt coming up. Your first car. The down payment on a house. All of those things can be considered "investment," too. They might have much better benefit to you, both in the short term and the long term. Or, if your BIL is ready to drop $15k as 'pocket money,' maybe you have enough family support that none of those things will be a concern. Hell, maybe you have enough family support that working a job from which to retire isn't even a concern.
This is a marshmallow problem. Do you want to buy a car, take a fantastic trip somewhere, or just gamble like a big shot right now, or would you rather have less college debt, buy a nicer house, sooner, or retire earlier? Nobody else can tell you what you'll enjoy more.
wrote last edited by [email protected]The short answer is: any amount of money is ‘worth’ investing.
Well, there's usually an upfront cost to investing, and always a cost in time and thought. Opening an investment account just for the change you found in your sofa would be dumb.
That's a nitpick, though. Unless OP was in China themselves (where there's tons of rules and barriers) it would be worth it for 15 grand.
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Buy bitcoin, write down the private keys, and mail it to yourself in 20 years like doc brown in BTTF2
I dont think Bitcoin will survive the next 20 years as its becoming more and more unprofitable for miners as the reccource costs double every few years.
I dont say it will crash this year or something but 20 is a bit much -
How much is a typical mortgage downpayment?
More like 100k
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20% of the price is typical and horribly out of reach with how expensive housing is
Still, 15k invested now while OP is 19 could be helpful in a decade.
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How much is a typical mortgage downpayment?
It depends on whether people actually want to live where you are buying the house.
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My brother-in-law gave me $15K for my 19th birthday and called it “pocket money.” I’ve never invested before, so I’m not sure if I should put it somewhere or just enjoy spending it.
Coming from someone who wishes they invested earlier rather than shoving my savings away in a checking account - if you can't think of something off the top of your head that you would need that money for in the next year or two, invest it in an index fund. It's braindead easy, does not require you to manage it, and will steadily grow 6-10% each year which beats any high yield savings account by a fair bit. So you just set it and forget it and then maybe in 10 years you remember you invested 15k in VTI or VOO and now you have around 30k or more depending on how well the market did.
There will be market booms and busts, and you might end up losing money in the short term, but as long as there is a functioning economy, the line will inevitably go up.
I prefer index funds over bonds because you can always sell your position if you need a quick infusion of cash.
Again, this is just if you don't already have designs on how to spend the cash. If your bro gave it to you to enjoy it as you see fit, you shouldn't feel obligated to save it. Do what you think is right for yourself.
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I don't have any big purchases in mind. My sister got me an apartment and car last year for my 18th birthday with her husband's money. We're Swedish (he's Chinese and my sister lives with him in China) - so free university for me; I don’t have any debt or anything like that. Sister has retired our parents and is supporting our family financially. But this is the first time he gave me money directly.
Sounds like this is a good opportunity to learn something about yourself. It sounds like you don't have any immediate needs for this windfall and it sounds like you don't have strong desire to spend it frivolously. That's good. Maybe you're looking for an excuse to spend it frivolously. A lot of young people, given a big wad of cash, will rush out and spend it on some aspirational thing or experience - generally something that's been all over media, or that their favorite influencers have raved about - then be left with the thing, which isn't as cool after a few weeks or months as it seemed, or the memories. That pile of money came easy, left easy, so it doesn't feel any different to be without it. That's a trap known as the hedonic treadmill.
You can do this experiment on yourself: take some of that gift - enough to feel like "a lot" to you - and get yourself a nice bit of bling. Something you've had your eye on for a while, but never thought was realistic. Write down why you chose that thing and maybe a 1-10 scale of how much you think you're going to enjoy it. Come back to that page in six months.
But I would definitely put most of it into some broad-market index/mutual fund, whatever's available in Sweden. Making saving/investing part of your money habit early in life is a hell of a lot easier than trying to change bad habits later. And I don't think your sis/BIL will offer you retirement the way they did your parents.
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Coming from someone who wishes they invested earlier rather than shoving my savings away in a checking account - if you can't think of something off the top of your head that you would need that money for in the next year or two, invest it in an index fund. It's braindead easy, does not require you to manage it, and will steadily grow 6-10% each year which beats any high yield savings account by a fair bit. So you just set it and forget it and then maybe in 10 years you remember you invested 15k in VTI or VOO and now you have around 30k or more depending on how well the market did.
There will be market booms and busts, and you might end up losing money in the short term, but as long as there is a functioning economy, the line will inevitably go up.
I prefer index funds over bonds because you can always sell your position if you need a quick infusion of cash.
Again, this is just if you don't already have designs on how to spend the cash. If your bro gave it to you to enjoy it as you see fit, you shouldn't feel obligated to save it. Do what you think is right for yourself.
as long as there is a functioning economy, the line will inevitably go up.
That gets to be a bigger if every month forward
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My brother-in-law gave me $15K for my 19th birthday and called it “pocket money.” I’ve never invested before, so I’m not sure if I should put it somewhere or just enjoy spending it.
Absolutely. Invest it in VTI or VOO, and leave it there (and reinvesting dividends) until you are ready to buy a home in your 30's.
Or, spend $5K, and invest the rest. You'll thank yourself later.
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Absolutely. Invest it in VTI or VOO, and leave it there (and reinvesting dividends) until you are ready to buy a home in your 30's.
Or, spend $5K, and invest the rest. You'll thank yourself later.
Invest it in VTI or VOO
Some of us don't know what those acronyms stand for
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My brother-in-law gave me $15K for my 19th birthday and called it “pocket money.” I’ve never invested before, so I’m not sure if I should put it somewhere or just enjoy spending it.
these are unpredictable times we live in. lots of uncertainty and volatile market swings.
nobody that has experience from the last 40 years in the markets could tell you it's a good or bad idea right now, and anyone telling you otherwise is a fool.
you must identify if it's a good idea to invest right now based on information that you have vetted.
personally, if I had 15k to spare right now I would wait for the next big crash and buy in at bottom dollar. until then I would have a 15k buffer on top of my emergency fund.
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My brother-in-law gave me $15K for my 19th birthday and called it “pocket money.” I’ve never invested before, so I’m not sure if I should put it somewhere or just enjoy spending it.
You will not regret investing it if you invest wisely (like an index funds or something like that). Do your research.
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Invest it in VTI or VOO
Some of us don't know what those acronyms stand for
Probably a vanguard fund of some sort. Basically a generic retirement fund. Though there's probably different kinds, vanguard is usually what the default is when I get offered retirement plans.
