1. Savings accounts suck. I have an account with Capital One 360 (ne ING Direct), where the interest rate is uncommonly high at 0.75%. The inflation rate, for comparison’s sake, was 1.2% last year. So the *real* interest rate on that savings account is -0.45% per year. I.e., you’re losing money every month.
I realized the other day that it’s actually even worse: your interest is taxable. Suppose your marginal rate is 28%; that means your interest rate drops to (1-.28)*0.75% = 0.54% in nominal terms, or -0.66% in real terms.
2. Somehow the world allowed me to become an adult at some point, which is weird to me. In part because of the realization in 1., I looked around the other day for some basic index funds to put some savings in, while leaving enough in my savings account to cover about six months of expenses. [1] So I just opened up an account on Vanguard and transferred a significant sum of money into it … like I’m some kind of adult who’s capable of handling his own money. Frankly, I think the world got something horribly wrong here, but I won’t tell them.
3. When I created the Vanguard account, I told it to seed the account with money from my bank account. The withdrawal happened with no roadblocks at all. But in order for me to *withdraw* money from Vanguard into the bank account, I need to go through a verification step that involves the standard “deposit two small sums of money into your bank and confirm that you know what the amounts were” trick. Q: does this make any sense at all?
4. I’ve decided for now not to buy a single-family home. a) The housing market here is just insane, b) any number of calculators tell me I shouldn’t buy unless my rent is insane (which it’s not), and c) my partner’s and my geographic location in this world isn’t entirely static for the next few years. I still think the economics of a multi-family home are different, but I need to save up the downpayment on that for a while longer.

Not that anyone asked about my finances. But since I’m off Facebook and Twitter, this is what I’ve got.

[1] – Why an index fund? Because I’m not smart enough to do better than the market. Or if I’m smart enough, I’m too lazy. There are people who get paid many millions of dollars a year to pick stocks as their full-time jobs. It’s hard to believe that I am going to win against them. Granted, there are well-known anomalies. Last I knew, there were even some persistent patterns, owing to people’s reluctance to end a quarter with a loss and so forth, such that there’s predictable non-randomness all over the place. And maybe in time I will get un-lazy enough that I will build a portfolio for myself based around these anomalies. It’s still hard for me to believe that hedge funds and so forth wouldn’t have already exploited these, but you never know.

In the meantime, I follow Daniel Davies’ advice:

> As far as active investment goes, I always put it this way are you prepared to put as much time and effort into managing your investments as you would into running a small business? If you are then go for it playing the market is not a bad hobby, about as interesting as birdwatching or something. And most people on this list actually do have enough intelligence to beat the market and therefore to beat most active-managed funds, in my opinion. The trouble is of course that beating the market doesnt just require intelligence, it requires self-discipline, hard work and the ability to control your emotions. But in many ways so does success in bird-watching.