July Financial Challenge Thread

[Kiyora999]

I have the same worries too

I planned to invest 400000 this month, 400000 end of august and 400000 in october but I'm wondering if I shouldn't just invest the whole thing this month or next month now to benefit (or not...) the raise of the funds value...
Maybe because I started to buy a little of the 1550 ETF 2 days ago and that I see its prices going higher so I can buy less of it now :/

On an other topic someone told me to not buy the 1348 ETF before the distribution of the dividend (next week) because it'll become cheaper, but it's the same, I see it rising so I wonder if it'll still be a LOT cheaper after that (since we don't pay taxes on dividends, I didn't thought I would eventually make a loss if I buy now).

Timing seems so difficult but I also feel like my mind would be at ease if I just spend the money (using a little of my emergency fund)... Because I'm looking too much right now :/

It's the good old risk/reward balance problem.

If you invest everything now, you can potentially reap more benefits since your money will be working for longer, but can also lose more in case of a crash (and lose the opportunity to buy at a lower price).

What dollar cost averaging (DCA) really does is smoothing the risk. But doing so means the rewards are smoothed as well.

My personal experience is that when I started managing my stuff myself ~2 years ago, I was quite risk-averse and DCA'd the hell out of it despite having a lot of cash on the side. In hindsight, I have missed lots of capital gains. But confronted with the same situation today (as I am still 100% in the market), I would still not put everything at once out of fear of buying the top.

Note that my reasoning for NISA is different. NISA's tax-advantage has limited in time, thus I want to maximize the time in market. If you invest in december, your investment remains tax-free four years instead of five. So as far as I am concerned, NISA will be maxed every January. And if I buy the top, there's always next year.

This excellent article (which was on Ben's weekly reading list I believe?) also puts some perspective to the fear of buying the top. What is really important is staying in the course, and letting time do its thing.

Thank you for sharing your experience!

Yes it's the NISA tax-advantage thing that pushes me that much to try to invest faster... I don't want to take the risk to "lose" the benefits I could have :/
Because at the end, like the guy in your article, I'm willing to buy and hold... so if something bad happens now, I should at some point recover from it since I'm only 29.
I don't know if I'm too optimistic and if history will always repeat itself though ahah...

[Jansen]

I decided I wanted to have a 50% savings rates on my gross income this year. Only problem was that I had decided too late. So to hit my goal of 50% SR, I'll have to target a 70% SR for the remaining 6 months, starting this month.

[RetireJapan]

I think goals are good, but habits are better

Be careful not to aim too high, as this could lead to burn out or unhappiness (and subsequent abandonment of goal).

Good luck!

[adamu]

I decided I wanted to have a 50% savings rates on my gross income this year. Only problem was that I had decided too late. So to hit my goal of 50% SR, I'll have to target a 70% SR for the remaining 6 months, starting this month.

I think goals are good, but habits are better

Be careful not to aim too high, as this could lead to burn out or unhappiness (and subsequent abandonment of goal).

Especially as you're calculating from gross income. That's tough. It could even be the case that there's nothing left after taxes, haha. You could just do 50% going forward, instead of raking yourself over the coals for past decisions. I do 50%, but net. And I add back in an allowance for citizen tax on income from last year that I don't get this year.