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PSA for funding simchos: don’t just save, invest!
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amother
Babypink


 

Post Fri, May 17 2024, 1:00 pm
This is great for young couples. I wish someone told me this when I was newly married. We saved aggressively for a house and by then the expenses piled up and we built a very small savings account that we've been able to maintain more or less. I had no idea about investing and here we are in our early 40s never been in debt (TYH) but we cannot afford to put away a few hundred a month and we're already in the simcha season of our life.
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small bean




 
 
    
 

Post Fri, May 17 2024, 1:09 pm
amother Cyan wrote:
I completely disagree with this. Budgeting for future expenses is part of living within your means. You never know what unexpected expense might come up a month before you make a simcha and suddenly you have to go into debt for just the basics. Relying that in the future you'll be able to just work it in to your monthly expenses is dangerous.


Saving for later is extremely important, I agree with that.

I don't know how old you are and how many simchos you made. Or your financial situation.

But...

I know too many people who did this and then lost their jobs or whatever and needed to dip in to these funds and didn't really end up having what they needed.

I know too many people who got to a certain point, working their max and were not making it.

I think creating passive income when you're young and not needing it at all. And putting that money away, instead of $50 a month, is safer because as you get older and your family grows, you really need that passive income.

You need to be building wealth as you go and that doesn't mean 250k in savings because that's not wealth.

I'm still relatively young, 9 kids, my oldest is 17. I'm not up to weddings. But I've never dipped into savings for any reason and BH never had debt - thank you Hashem. That being said my husband prioritizes monthly expenses, building wealth, savings. My savings can BH marry my kids off, but I'm not saving it for that specifically. When it comes to their weddings, I hope to do it like my bar mitzvahs, within our means and without having to dip. I hope my income will be sufficient.
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amother
Ultramarine


 

Post Fri, May 17 2024, 1:11 pm
What does passive income mean?
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small bean




 
 
    
 

Post Fri, May 17 2024, 1:12 pm
I want to give an example. Your daughter doesn't get into high school and you feel you must bribe your way. Where's your 30k coming from? And that's why it's not always the way to go....
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small bean




 
 
    
 

Post Fri, May 17 2024, 1:14 pm
amother Ultramarine wrote:
What does passive income mean?



Income that you're not working for. It can come from many ways, like dividends.
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amother
Chestnut


 

Post Fri, May 17 2024, 1:17 pm
amother Ultramarine wrote:
Where can I invest my money at 8.3%?

That’s the average return of the S&P over the last 50 years.
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amother
Sapphire


 

Post Fri, May 17 2024, 1:17 pm
So

1) where can I get 8.3% returns?

2) 10K on a fancy vacation and lease is not as much as it sounds.
If you need a car, and you don’t have someone to buy you a car and you are not knowledgeable about buying a used car and need something reliable and don’t have the skill set or bandwidth to whatever you want to call it to risk being tricked into buying a lemon, a car lease will easily cost 4k a year. (I googled lease rates for a Toyota Corolla, a Honda Civic and a Toyota Camry are significantly more. I doubt anyone is calling those fancy or high end) [My DD is a Kallah. If she is driving at night or a significant distance, I always make sure she takes the newer/good car. Do you really want your pregnant 22 yo DD, or DD with a toddler driving a car with questionable brakes, no air conditioning, or that could overheat? Do you want her alone, stuck on the side of the road needing assistance?]
Vacations are important for a young couple to bond and create memories and shared experiences. Also, when and how are they going after they have kids? My parents were married a long time before they were blessed with children. It has been more then 40 years and they still talk and lay about they trip they took in the 70’s. A non-fancy trip is costing money as well.

So you realize you are comparing, if you are being frugal, at most 5K, probably 3K. Not so mind blowing anymore, is it?
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Busybee5




 
 
    
 

Post Fri, May 17 2024, 1:19 pm
small bean wrote:
I agree but I know many who saved and then fell on hard times and it was either dip in or lose your home etc.

The truth is you need to make a simcha within your financial means. Anything besides a wedding shouldn't need savings, imo.

Regarding wedding that to should be within your means and you shouldnt need to pull all of it from savings.

Hashem should give us all enough money to not worry around simchos.


Bar Mitzvah's also cost a lot of money. By the time we have older kids, we can't just come up with a few thousand pounds so imo these 'little' Simchas need to be saved for as well. We've been saving since our last son's bar Mitzvah for the one we'll be making next year iyH.
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amother
OP


 

Post Fri, May 17 2024, 1:31 pm
small bean wrote:
I want to give an example. Your daughter doesn't get into high school and you feel you must bribe your way. Where's your 30k coming from? And that's why it's not always the way to go....



The 30k can technically come from the same place bar mitzvahs and wedding money comes from. I really hope that’s not a real thing that happened bec I have a lot to say…


Investing IS creating passive income.
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small bean




 
 
    
 

Post Fri, May 17 2024, 1:44 pm
amother OP wrote:
The 30k can technically come from the same place bar mitzvahs and wedding money comes from. I really hope that’s not a real thing that happened bec I have a lot to say…


Investing IS creating passive income.


Didn't happen to me.

It's not passive income a savings account. Its a passive investment. Unless you leave the principal in and take out the interest. Some investments can create an income, like real estate or shares in a non-public company.

Right so if you took 30k for your daughter's needed expense, where's your wedding fund for said daughter up to?

That's why the focus needs to be on building wealth and saving for future expenses. Saving on its own is good but not really the best use of funds when you're starting out.
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small bean




 
 
    
 

Post Fri, May 17 2024, 1:46 pm
My point is really a net worth when you're 50 of 500k, is really not that great in the frum world.
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amother
OP


 

Post Fri, May 17 2024, 2:02 pm
small bean wrote:
My point is really a net worth when you're 50 of 500k, is really not that great in the frum world.


. It’s not all or nothing.

We try to max out our IRAs as well.
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amother
OP


 

Post Fri, May 17 2024, 2:03 pm
small bean wrote:
Didn't happen to me.

It's not passive income a savings account. Its a passive investment. Unless you leave the principal in and take out the interest. Some investments can create an income, like real estate or shares in a non-public company.

Right so if you took 30k for your daughter's needed expense, where's your wedding fund for said daughter up to?

That's why the focus needs to be on building wealth and saving for future expenses. Saving on its own is good but not really the best use of funds when you're starting out.


I keep saying not to save but to invest. Let the money grow.
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bestme




 
 
    
 

Post Fri, May 17 2024, 2:17 pm
I opened a vanguard account and I invest in the stock market at vanguard. I think that it is the safest and cheapest way. I invest in VOO.
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bestme




 
 
    
 

Post Fri, May 17 2024, 2:19 pm
My money does grow in my vanguard account. It has much more money then what I put in there.
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small bean




 
 
    
 

Post Fri, May 17 2024, 4:07 pm
amother OP wrote:
I keep saying not to save but to invest. Let the money grow.


Ì understand and I agree with you.

I was just pointing out that the whole way you live should be with the concept of building wealth not just saving for simchos.
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amother
Snapdragon


 

Post Fri, May 17 2024, 4:53 pm
I took a dave Ramsey course many years ago which helped us with perspective on spending. We were pretty frugal already then. He talks and talks about investing but how to do it properly? Never figured it out. I've dabbled with day trading and hated it. Long term is different but I feel clueless. We for sure could have accrued well . We have put away $ into vanguard yet it's not invested into anything, just sitting. Making nothing.
Need handholding with this.

Any quick courses out there?
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amother
OP


 

Post Fri, May 17 2024, 4:54 pm
amother Snapdragon wrote:
I took a dave Ramsey course many years ago which helped us with perspective on spending. We were pretty frugal already then. He talks and talks about investing but how to do it properly? Never figured it out. I've dabbled with day trading and hated it. Long term is different but I feel clueless. We for sure could have accrued well . We have put away $ into vanguard yet it's not invested into anything, just sitting. Making nothing.
Need handholding with this.

Any quick courses out there?



I saw that Eli fried is going to be offering a course
But really, read his blog Gelt Guide
Listen to the kosher money podcasts that I mentioned above
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amother
Lawngreen


 

Post Fri, May 17 2024, 5:09 pm
amother Snapdragon wrote:
I took a dave Ramsey course many years ago which helped us with perspective on spending. We were pretty frugal already then. He talks and talks about investing but how to do it properly? Never figured it out. I've dabbled with day trading and hated it. Long term is different but I feel clueless. We for sure could have accrued well . We have put away $ into vanguard yet it's not invested into anything, just sitting. Making nothing.
Need handholding with this.

Any quick courses out there?


Book: I will teach you to be rich by Ramit Sethi
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amother
Linen


 

Post Sat, May 18 2024, 11:14 pm
I did this with 25$ a month per child and its enough invested to prevent you having to borrow for weddings. I made simple inexpensive bar mitzvahs.

No matter how tight put something every single month and you will thank yourself later.
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