Discussion Topic |
|
This thread has been locked |
Ken M
Mountain climber
Los Angeles, Ca
|
|
|
Nov 22, 2015 - 11:11pm PT
|
Good on you for giving this serious thought at your ages. Very important, so that you can take advantage of compounding.
With what you are doing, you can seriously consider early retirement, if the job just gets to be a job.
For me, I prefer a strategy that allows me to "set it and forget it". I own a lot of stock mutual funds, and it took a hell of a dip in the recession---I guess, because I didn't bother looking----and it all came back up and kept going.
my forays into individual stocks has been mixed. I would say that it requires a lot more attention.
At some point, it may be worthwhile looking at dividend paying stocks, when you want to generate cash.
But simple S&P500 type stock funds are hard to beat.
You may find the book "Liar's Poker" worth reading before individual stock investing.
|
|
originalpmac
Mountain climber
Anywhere I like
|
|
|
Nov 23, 2015 - 01:10am PT
|
The title of this thread is everything that is wrong with climbing.
|
|
ecflau
Gym climber
CA
|
|
|
Nov 23, 2015 - 09:28am PT
|
Hey Dapper Dan, have you heard of Wealthfront before? There are pro's/con's to every avenue you take. I mention Wealthfront because one thing you listed was low management fee's.
I believe the market goes up an average of ~10% per year over the long term... i.e. if a monkey throws 10 darts, that is what you reach. Some mutual funds perform worse then a monkey throwing darts because they have to meet quarterlys. The advantage a MF manager has is they get information you don't always get (easily)... so whats your competitive advantage? (For me, its time... I don't have to meet quarterly numbers). If you are a hands off investor, something like Wealthfront is a very useful tool, I believe the San Francisco 49's have Wealthfront setup for their players. I believe a lot of big tech companies do too. First $10k invested for free.
Here is a link to a referral : http://wlth.fr/1nLLHgA
(I know it benefits me, I get an extra $5k managed for free for every invitee.... I think it might benefit you too)
The most important thing... invest in your circle of confidence. If you are outside of it, thats when mistakes happen. No need to go chasing unicorns.
PM if you wish any have any questions.
|
|
Dapper Dan
Trad climber
Redwood City
|
|
|
Topic Author's Reply - Nov 23, 2015 - 12:03pm PT
|
Thanks ecflau , I had not heard of them , I'll do a little digging and let you know ...
|
|
slabbo
Trad climber
colo south
|
|
|
Nov 23, 2015 - 01:00pm PT
|
#1 you don't lose or gain anything until you sell..period
#2 diversify
#3 HSA account if you qualify a no brainer for health costs
You said you wanted "no look " stuff..autopilot if you will. Sounds like you have some already. Don't panic when thinks go up OR down
Annuities ? not in my book
commodities ? if you have a huge risk taking binge, then maybe a bit
Personally i like Vanguard
|
|
sempervirens
climber
|
|
|
Nov 23, 2015 - 02:26pm PT
|
What about deciding how much of your portfolio to put in Trad IRA vs. Roth IRA? How do you figure that? I have both but I probably made a big mistake by putting the majority into Trad IRA.
Some very good info on the thread. Thanks.
Thanks Bargainhunter for the bolglehead link. I watched all 10 lessons and they are very good.
|
|
ecflau
Gym climber
CA
|
|
|
Nov 23, 2015 - 02:31pm PT
|
sempervirens - have you tried using a online calculator (a good, 30 second check to give you a ballpark; a more accurate one if you are a nuts and bolts guy is you can go into TurboTax and extrapolate your financial life) to calculate Roth vs Traditional? That would be a good first step.
___
Dapper Dan - cool yeah just LMK.
In addition in your research, there is one key guy on their BOD named Burton Makiel. Look into him and his background... that was what personally swayed me. Not because he is a "genius" (though some may be given his resume) but because of how he sets his margins. You can get a glance into his thought process in one of his books, possibly the 2nd most famous investment book there is, "A random walk down wallstreet".
One other thing to note, since you mentioned "real estate" - you can actually take out a loan from your 401k where you can grow your investments tax free - something only avail for 1st time home buyers. Be warned though, we're at pretty much the 3rd longest bull run in history, and a lot turbulence is going on; you have to wonder if the Fed is just trying to keep their heads above water until Obama leaves office. Still, lots of undervalued equities out there with (IMO) low risk that have more than enough cash on hand to survive the next economic downturn. Not trying to be Nostradamus or anything but economics are inherently cyclical. Even bons/REITs will feel the effect of a rise in interest rates that many expect in the next month.
Best of luck.
|
|
Reilly
Mountain climber
The Other Monrovia- CA
|
|
|
Nov 23, 2015 - 02:52pm PT
|
Even bons/REITs will feel the effect of a rise in interest rates that many expect in the next month.
REITs more so as bonds have already priced the rate hike in, short term
bonds anyway. Who's into intermediate or long term now anyway?
|
|
ecflau
Gym climber
CA
|
|
|
Nov 23, 2015 - 03:00pm PT
|
Ha perhaps I was too assuming in my statement. "May affect" ... many dividend stocks like T, VZ and O haven't really seen much of an effect. Though I'm nto sure they would even really see much affect if any; I haven't sold but I'm probably going to wait out the year to see what happens with interest rates before I put any more money in dividend stocks at the moment.
|
|
rick sumner
Trad climber
reno, nevada/ wasilla alaska
|
|
|
Nov 23, 2015 - 03:06pm PT
|
Wow, I'm impressed with the quality of free advise handed out to Dapper Dan.
Question: I'm 60, without a current job and only have 65,000 in my IRA. WTF do I do?
|
|
JLP
Social climber
The internet
|
|
|
Nov 23, 2015 - 03:44pm PT
|
In general, suggest maxing out 401k, Roth, both, and anything else you might qualify for, such as HSA, first, before you start adding a bunch of lifestyle "disposable income" materialistic garbage to your life - that new car, the home upgrade, etc. Stay lean until you can truly afford the increases in your lifestyle. Embrace your apartment, your old car, whatever. Retirement savings first. Nothing in this thread works without the capital.
But above all - the best financial advice ever is - stay employed. Be useful, get sh#t done for your employer or customers, be the best there is at what you do.
Don't be the guy in the above post. Sorry dude.
|
|
rockgymnast
Trad climber
Virginia
|
|
|
Nov 23, 2015 - 03:49pm PT
|
Like most things in life, the answer is "it depends."
Funding a 401K vs. ROTH IRA - many (most) corporate 401K plans offer matching money. If one funds a ROTH instead of a 401 plan, you are forfeiting free money. Because of this free money, a 401 K will grow faster and accumulate more money that your ROTH IRA alone.
Deciding between a ROTH vs. a traditional IRA is betting you know what tax rates will be in the future (10,20 or 30 years in the future). If one has a crystal ball, and you know you will be in a higher tax bracket than you are now, then the ROTH looks attractive. If you will be in a lower tax bracket in retirement, the traditional IRA looks better.
To compare "apples to apples", if you are going to be in the same tax bracket in retirement as you are now, then it is a wash, the ROTH and the traditional come out the same.
To make the math easy, assume you are in the 25% tax bracket now, and the 25% in retirement (it works for any tax rate).
At year's end, you have 'x' amount of money to put in an IRA account. If you put it in a ROTH account, you will pay 25% tax now, so you have .75x$ invested. Let's say you invest wisely so that when you retire it has grown 4 fold - 4 times .75x = 3x tax free
If you invest the same x amount in a traditional IRA and it grows 4 fold, you would have 4 times x = 4x at 25% tax rate = 3x after tax.
Both accounts work out to the same amount.
The game is, "do you know what your tax rate will be when you retire?", "Is having all your money/income in retirement tax free a good idea? In retirement, you might want to have reportable/taxable income so that you can offset it by using your deductions (i.e. mortgage/state taxes/etc.) These deductions would be lost/minimized if all your income was tax free.
And who knows what the gov't is going to do in the next 10,20 or 30 years when it comes to our tax system. Maybe we go to a flat tax system (i.e. lower future tax rates). Perhaps Bernie Sanders gets elected and we go to a more socialist tax system (i.e. higher tax rates). Or the gov't in their infinite wisdom decides because of the extremely high and growing federal deficit, reneges on its promise and decides to partially or fully tax ROTH IRA's.
A traditional IRA now is a sure thing, a ROTH IRA is only a promise for something in the future (a bird in the hand ....).
Whatever you decide to do, don't do it because of advise here. Talk to a financial advisor who does not work on commission and will look at your total financial picture (life ins./college saving/emergency funds/estate planning and any other factor that might be applicable.)
|
|
Reilly
Mountain climber
The Other Monrovia- CA
|
|
|
Nov 23, 2015 - 03:59pm PT
|
I'm 60, without a current job and only have 65,000 in my IRA. WTF do I do?
The short answer: read John Dillinger's book.
The long answer: make sure yer money is SAFELY invested. To be honest, I
would say put it into a CD for at least 6 months. If you must do something
more dynamic then put it in the Vanguard Wellington Admiral shares fund.
It couldn't be safer there and it will appreciate. The 'Wellie' is one of
the oldest funds in existence and its track record is superb. The current
allocations are :60%–70% stocks, 30%–40% bonds. With as unsettled as things
are right now that bond allocation is not a bad thing. Sure it won't go up
a lot but it shouldn't go down much either.
|
|
rick sumner
Trad climber
reno, nevada/ wasilla alaska
|
|
|
Nov 23, 2015 - 04:16pm PT
|
Oh sorry JLP, I forgot to mention my income property and private mortgage income. On a cost basis off the above mentioned debt free assets I'm netting 181 k this year, or 6.93% of my cost basis. My equity funds apportionment is comparatively light, slightly less than half the income props, and since I cashed out virtually all equities by 2007 I have enjoyed the bull run with my current funds having a low cost basis. The over valuation of the 2015 market and fed manipulation has had me spooked. So, my question to you guys is: after taking a large percentage of profit off the equities table, where can i reliably make better than my current 6.93% R.E. income with the same level of security I feel in owning hard assets?
|
|
ecflau
Gym climber
CA
|
|
|
Nov 23, 2015 - 04:22pm PT
|
I wanted to say "blow the rest of your IRA on hookers and blow, then take off your pants and walk into the middle of a intersection... you'll be taken care of well by a mental institution"
Guess I'm too late for that suggestion though.
|
|
ms55401
Trad climber
minneapolis, mn
|
|
|
Nov 23, 2015 - 04:38pm PT
|
Question: I'm 60, without a current job and only have 65,000 in my IRA. WTF do I do?
Um, cultivate a taste for cat food?
Kidding!!!
The good news is that you're not appreciably worse-off than the typical American at age 60. I don't know if you're looking for work, but suppose that you no longer are in the hunt. I probably would look to live on about $10,000 per year until you can claim full Social Security benefits at age 70. So maybe put that $65,000 in a money market fund bearing, if you're lucky, 1% of interest, and have that sixty-five grand bridge your living until 70.
|
|
sempervirens
climber
|
|
|
Nov 23, 2015 - 05:32pm PT
|
Thanks Ragetta,
In your opinion then, is there any reason to have a Trad IRA rather than Roth IRA? You're suggesting 100% of retirement investment in the Roth, eh?
edit: I just realized, that is a dumb question, 'cause it kinda depends on how much one needs the tax break now. Which I do need and it will be annoying to see my taxes increased if I put more into the Roth. I gotta sharpen my pencil...
|
|
rick sumner
Trad climber
reno, nevada/ wasilla alaska
|
|
|
Nov 23, 2015 - 05:43pm PT
|
You posters above missed my second post I guess.
A lot of people here seem to be pushing vanguard. We found better value with T.Rowe Price funds. Our parameters in choosing were: low or no loads in and out, low management fees, a proven manager with at least a 15 year record of reliable growth and nor near retirement. The small and Midcap value and capital appreciation products fit our bill.
Now, to my question; is it soon time to get off the bull and look for new opportunities and if so where, how?
And Dan, as a man who has inhabited all economic stations in life from dirt bag poor to very wealthy the best advise I can offer is to stay as debt free as possible, save, and buy in when everyone else is running for the exits. You do this with little or no leverage and you'll have no problems later.
|
|
Contractor
Boulder climber
CA
|
|
|
Nov 23, 2015 - 06:38pm PT
|
Perhaps a few novel ideas:
save money for a down payment
Buy used cars
Stay-cations
Eat in
Limit the toys
JC for the kids
Stay fit
Attempt to stay married
Warning: These activities may be harmful to one's movie star/social media persona.
|
|
|
SuperTopo on the Web
|
Let us know!