Is it even worth trying to invest $15K?
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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.
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More like 100k
So the house would be 1 million USD??????
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20% of the price is typical and horribly out of reach with how expensive housing is
What's the typical price
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Invest it in VTI or VOO
Some of us don't know what those acronyms stand for
These are low fee index funds offered by Vanguard.
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20% of the price is typical and horribly out of reach with how expensive housing is
I put 3.5% down.
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No sense paying off debts early if their interest rate is lower than the profit you would get by investing. This is dependent on timescale though.
Right, so if this 19 year old has a government-backed loan for his furnace at 3%, he should leave it alone.
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as long as there is a functioning economy, the line will inevitably go up.
That gets to be a bigger if every month forward
Very true, however, 15k sitting in a bank account will be equally as worthless as a valueless security if the economy completely imploded.
I've also noticed that the economy is pretty robust in it's ability to weather storms that should theoretically cripple it. It would take an event so catastrophic that all sectors of business are heavily impacted. Barring all-out civil war, I can't see that happening. Even a global pandemic saw certain businesses do better than ever - companies that made PPE, hand sanitizer and toilet paper mostly.
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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.
This.
Investing in VTI or VOO is basically just investing in capitalism, and you'll likely do better in these ETF's or an index fund than trying to pick winners and day trade yourself.
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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.
personally, if I had 15k to spare right now I would wait for the next big crash and buy in at bottom dollar.
This could be a good way to go. I was lucky to have a few thou in March 2020 to invest in oil stocks at a 90% discount. I waited two years, sold them at a huge profit, and paid off my student loans and put a down payment on a home.
But generally, if you don't know what you're doing, it's not the worst idea to just stash it in an index fund and forget about it.
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Still, 15k invested now while OP is 19 could be helpful in a decade.
Oh yeah, absolutely
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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.
wrote last edited by [email protected]Don't forget to include reinvested dividends.
That makes it just under $400k, big difference.
I used this calculator. I took the deinflated $5k starting figure so just use the nominal results, not infusion adjusted.
If the next 40 years performs the same, with reinvested dividends, $15k will get you almost $1.2mm. That's nominal, I wouldn't want to guess about inflation adjusted.
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So the house would be 1 million USD??????
wrote last edited by [email protected]That would be 0.5 million USD (20% down payment), which is about how much a house costs in many parts of the US. In the most popular areas, 1 million USD is how much a modest house costs, and you’d need at least 200k for the down payment.
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So the house would be 1 million USD??????
wrote last edited by [email protected]Take a look around https://www.zillow.com/us/
You can probably get a small house for 200k-300k in “middle of nowhere” parts of the US, but if you want to be in the vicinity of a big city (which is typically where most of the best paying jobs are) you will need more like 500k for a small house, and in the most popular areas (like the areas around Sam Francisco, Los Angeles, Seattle, Washington DC, Boston, or New York City) you might need more than 1 million.
By “small house” I mean like at most 3 bed 2 bath.
Even if you are going for a 200k house, you’ll need at least 40k for the down payment.
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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.
Best advice right here