Personal Finance Advice and Education! (6 Viewers)

[KGB]

You can use it for anything and pay taxes on gains, or you can hold it until 65(?) and it’s tax free for anything. So triple tax advantaged (going in, gains and coming out) if you don’t use for health care and keep until retirement age.

Holy smokes.  Just started maxing it out (only 46) and now im psyched.

 

[BroadwayG]

Holy smokes.  Just started maxing it out (only 46) and now im psyched.

Withdrawals for non-medical has to be claimed as income. Before 65 has an extra 20% penalty.

 

[dino259]

For the first time I will hit the max 401k contribution this year (sometime in November).

• Do I lower my 401k contribution -1% and contribute 1% in an IRA starting now?
  
• Do I do nothing until November and then contribute something to an IRA in December?
  
• Do I just leave everything alone and keep contributing what I do to 401k?
  

Depends on if your match is each pay period or a safe harbor match end of year. If each pay period, make sure you have a contribution each period. If safe harbor, option 2. 

Company match is 4% each pay period. So basically I will miss out on that match in December if I hit the limit early. Makes sense and I didnt even think about that. Thanks!

I believe it is generally thought that you contribute to the 401k enough to get the full match then contribute to max out your IRA and then go back to add any additional to your 401k. Awesome if you can max both.

The thought is that the match is free money.  You switch to the IRA because you have more control over your investment.  You can choose really anything.  The biggest benefit is almost always lower fees than your options in the 401k.

 

[KGB]

Generally yes, but:

You don't have to spend it on health expenses now. And I bet a bunch of FSA/HSA eligible items you pay for out of pocket without thinking about it. Contact lens solution. Sunscreen. Prescriptions. Copays. Birth control. Tests. Prescription sunglasses. Sleep aids. Lab fees. If you're married, tampons and feminine hygiene products. Over-the-counter cold medicines, allergy medicines, and vitamins are also eligible if you get a doctor's note/prescription. Just ask your doctor and he'll usually write one or a letter of medical necessity for your files. Some stuff I didn't even know was FSA/HSA eligible until I looked at my CVS or Amazon receipt. I bought a TENS machine, one of those electric muscle zappers, from CVS once on a doctor's recommendation, and the CVS receipt said it was FSA eligible. Mileage for driving to medical appointments.

Save those receipts and reimburse yourself later. Yes, you're using the HSA money to pay for a broken water heater 10 years from now, but, really, you're just reimbursing yourself for 10 years of expenses and depositing the reimbursement into your checking account and the government doesn't care where it goes after that. All you need is a receipt or proof of purchase. An amazon invoice. A credit card bill. Something like that. For anything health-related that you spent money on starting the day you opened the HSA account.

And with the high cost of elderly care, I don't think it'd be any problem emptying that HSA account in retirement on legit medical expenses, tests, caregivers, etc. 

You're not paying taxes on the money going in*, you're not paying taxes on the growth*, and you're not paying taxes on spending it or reimbursing yourself. Go hog wild. You can only deposit like $3500 a year so it's not like it's going to be that big when you retire... maybe if you put 20 years into and get really lucky you'll end up with half a million in there and by 2050 that'll pay for 2 years of nursing care.

(*except in California and New Jersey, those bastages)

WOw, nice post.  thank you!

I knew about condoms, but thats about it.

 

[jm192]

Trying to fund backdoor Roth IRA on Fidelity.  

I converted my small amount of roll-over IRA from a previous employer to a Roth back in January.  I've never put money on Fidelity myself.  Been researching/studying how to do the backdoor Roth IRA.  Started trying to link bank account almost 2 weeks ago.  The first bank statement I uploaded wasn't acceptable for some reason.  Uploaded second bank statement this past Wednesday.  Account is officially linked today.  Submitted the contribution to find out:  it will take 1-3 days for the money to show come through.  What a process.

 

[NutterButter]

Generally yes, but:

You don't have to spend it on health expenses now. And I bet a bunch of FSA/HSA eligible items you pay for out of pocket without thinking about it. Contact lens solution. Sunscreen. Prescriptions. Copays. Birth control. Tests. Prescription sunglasses. Sleep aids. Lab fees. If you're married, tampons and feminine hygiene products. Over-the-counter cold medicines, allergy medicines, and vitamins are also eligible if you get a doctor's note/prescription. Just ask your doctor and he'll usually write one or a letter of medical necessity for your files. Some stuff I didn't even know was FSA/HSA eligible until I looked at my CVS or Amazon receipt. I bought a TENS machine, one of those electric muscle zappers, from CVS once on a doctor's recommendation, and the CVS receipt said it was FSA eligible. Mileage for driving to medical appointments.

Save those receipts and reimburse yourself later. Yes, you're using the HSA money to pay for a broken water heater 10 years from now, but, really, you're just reimbursing yourself for 10 years of expenses and depositing the reimbursement into your checking account and the government doesn't care where it goes after that. All you need is a receipt or proof of purchase. An amazon invoice. A credit card bill. Something like that. For anything health-related that you spent money on starting the day you opened the HSA account.

And with the high cost of elderly care, I don't think it'd be any problem emptying that HSA account in retirement on legit medical expenses, tests, caregivers, etc. 

You're not paying taxes on the money going in*, you're not paying taxes on the growth*, and you're not paying taxes on spending it or reimbursing yourself. Go hog wild. You can only deposit like $3500 a year so it's not like it's going to be that big when you retire... maybe if you put 20 years into and get really lucky you'll end up with half a million in there and by 2050 that'll pay for 2 years of nursing care.

(*except in California and New Jersey, those bastages)

What's this about California and New Jersey?

 

[NutterButter]

HSAs are not tax-exempt in those states. You have to calculate your own short- and long-term capital gains, dividends, interest, etc. and pay state taxes on them every year.

• This can be especially tricky if you hit a home run... imagine if you're daytrading or speculating in your HSA because it's triple-tax-advantaged, and figure if you are going to get rich, there's no better account to do it in than an HSA. So you take your $3500 annual contribution and in 2019 buy 350 shares of Gamestop at $10. You sell those 350 shares in 2021 at $420.69 for $147,241.50.

You now have a long-term capital gain of $143,741.50 which your state considers regular income. Your marginal state tax rate might be about ~9.5% in California, for example, so you owe $13,655.44 in state taxes.

However, you cannot withdraw the profits from your HSA to pay those state taxes... HSA withdraws can only be for medical reasons. You're going to have to come up with $13,655 of your own money out of pocket to pay the bill on April 15th.

• This is also difficult at tax time because most HSA providers (like Fidelity) do not provide 1099-DIV or 1099-B statements for HSA accounts. They figure they're tax-free accounts so why bother. This means you have to manually track all your ins & outs, dividends, and interest and report them yourself to the state. Sure, that also means the state is not getting a copy of your brokerage info, so, all this must be self-reported, and you could duck out on the state taxes... but... you're running the risk that they find out someday and start hitting you hard for avoiding back taxes.

• You might also figure you'll only buy things in your HSA that are long term holds and not sell until you retire, and then retire out of state to avoid the taxes on the gains. California thought of that... if/when you move out of state, you're supposed to tally up your HSA gains from before you left and cut them a check for their portion of the taxes as of the date you move out. 

There are proposals in place, at least in California, to bring HSA treatment in line with federal rules, but, for now, the state really wants that income and those proposals are going nowhere.

great write up.   I'm more of a long term hold guy.   i'm in nj but don't have access to an hsa.   if i did, i wouldn't report anything if they can't at least give me a 1099-div.    screw that.   it reminds me of how you're supposed to report your internet purchases to calculate sales tax owed.   

 

[NutterButter]

Totally fair opinion. It just runs the risk of the state waking up one day and going... "Hey, we know Nutter Butter has an HSA because the contributions are listed on his W2 that we have a copy of. He's taking the deduction on his federal 1040 too, which we have a copy of. But we've never seen him self-report any gains, interest, or dividends in that account. Let's pass a law that says that the brokerages have to send us copies of his transactions just like they already do for 401ks, Roth IRAs, and standard taxable brokerage accounts. And... let's make them give us the last 5-10 years too while they're at it." 

Its kind of surprising that they don't already do what you're saying already.   Just have the brokerages send everyone the requisite forms so they have what they need to enforce it and people have what they need to submit it.   

 

[SFBayDuck]

• You might also figure you'll only buy things in your HSA that are long term holds and not sell until you retire, and then retire out of state to avoid the taxes on the gains. California thought of that... if/when you move out of state, you're supposed to tally up your HSA gains from before you left and cut them a check for their portion of the taxes as of the date you move out. 

Getting ready to do just that.  I just took some losses in one of my HSAs swinging for the fences, so hopefully not really any true net gain as after 25 years I leave the state that tries to take all your money.

 

[SFBayDuck]

Hurry up before they pass the Hotel California Tax (as in, "you can check out, but you can never leave"). This new proposed tax says anyone who spends 60 days in the state in a year must file and pay California state income taxes for the next 10 years after. So, live in CA and leave and the first 10 years of your out-of-state retirement you're taxed as if you still live there. Grow up in California, leave for Gonzaga on a basketball scholarship at age 18, go pro and get picked by the Celtics at 21 and move to Massachusetts, guess what, California wants to tax your signing bonus and pro income until age 28. Spend a summer here as a teenager for a camp, California wants to watch your next decade. Get treated in-patient at a California hospital, watch out. Visit, decide you don't like it, move to Texas and four years later you write a novel about a rancher? California wants a cut. Work for a startup, get burned out, move to Alaska and after a couple of years to live in nature and invent some new technology for cold-water salmon fishing to keep the dolphins out of the nets? California's gonna ask for a share. 

Right now the proposal is to only apply this to those with a $30mil net worth or more, but, no reason to think that they won't lower the threshold over time as they search for more money, down to 25, 20, 15, 10, maybe even 5-8... where you start to hit a lot of retirement accounts that were intended for out-of-state retirees. 

I don't doubt they'll try to pass something like this, right out of the all tax all the time CA playbook.  But no way that holds up in the courts.

 

[Rodrigo Duterte]

For the life of me I can't find the real estate thread.  And since this is on the front page I figured I'd ask here for the link.  Thanks.

What is wrong with the search engine???

 

[Gawain]

Just a vent.

My wife became a full time mom in 2020. Our AGI in 2019 was about 175, so our stimulus was roughly 50% of the maximum, but she wasn't working at all in 2020, so our AGI went down to about 105. With three kids, that meant there was a fair amount of cash that was going to come back on my 2020 return, so I filed on 2/15/21, the earliest I've ever filed.

Of course, the new stimulus is also announced, which only gives me more incentive to get a lower AGI in. 4 weeks later, return is still under review, so my 2019 AGI is used for the 2021 stimulus calculation. With 160 the new ceiling, that's 7K left on the table.

I feel guilty for being peeved, as we don't really need the cash and there are a lot of people who do. There's no real reason why the government is giving me money. If my wife made 60K, it'd just go to child care and our quality of life would probably go down while not being stimulus eligible anyway.

I think that I can claim this on my 2021 taxes in a year, but I'm feeling like JG Wentworth over here.

 

[-OZ-]

I don't doubt they'll try to pass something like this, right out of the all tax all the time CA playbook.  But no way that holds up in the courts.

Right. Now, if the intent is to discourage people from ever moving to California, that could be accomplished here.

 

[Sand]

I think that I can claim this on my 2021 taxes in a year, but I'm feeling like JG Wentworth over here.

You'll be made whole here.  I just did this for the first two for my kid.  He got his back on his taxes.

 

[Sand]

Right now the proposal is to only apply this to those with a $30mil net worth or more

What a logistical nightmare - how will they ever know this?  Wealth is not the same as income.  Looks like a bonanza for hiring at the tax department and an impossible mandate.  

 

[bcat01]

Right. Now, if the intent is to discourage people from ever moving to California, that could be accomplished here.

Weren't they supposed to fall into the ocean by now?

 

[Judge Smails]

When we get ticks, chiggers, cicadas and the need to shovel driveways or sweep roofs I’ll leave California. 

 

[Tom Hagen]

Just a vent.

My wife became a full time mom in 2020. Our AGI in 2019 was about 175, so our stimulus was roughly 50% of the maximum, but she wasn't working at all in 2020, so our AGI went down to about 105. With three kids, that meant there was a fair amount of cash that was going to come back on my 2020 return, so I filed on 2/15/21, the earliest I've ever filed.

Of course, the new stimulus is also announced, which only gives me more incentive to get a lower AGI in. 4 weeks later, return is still under review, so my 2019 AGI is used for the 2021 stimulus calculation. With 160 the new ceiling, that's 7K left on the table.

I feel guilty for being peeved, as we don't really need the cash and there are a lot of people who do. There's no real reason why the government is giving me money. If my wife made 60K, it'd just go to child care and our quality of life would probably go down while not being stimulus eligible anyway.

I think that I can claim this on my 2021 taxes in a year, but I'm feeling like JG Wentworth over here.

You may not even need to wait until the end of the year.  The new act provides for the IRS to calculate if the amount of EIP3 received based on 2019 is less than the amount you would be eligible for based on 2020 and send you the difference as long as you file your 2020 return within 90 days of the due date (currently August 17ish). 

 

[Sand]

When we get ticks, chiggers, cicadas and the need to shovel driveways or sweep roofs I’ll leave California. 

Whoa, where does the cicada hate come from?  They're pretty awesome as far as insects go.

 

[jm192]

FINALLY able to get the money into my fidelity IRA and do the Roth conversion.  

Trying to nail down portfolio ratios.  

Schwab has been running my 401K and has it at like 30% bonds.  With the other accounts, including my wife's--we're not at ~15 bonds.  I don't really want to add anymore until interest rates change and bonds improve their yield.  

Right now we're at:

15% bonds

25% foreign stocks

40% US Large cap/total index

15% small/mid cap with a predominance of small.  

5% specialty index fund that Schwab picked.  

Would appreciate any feedback.

 

[D_House]

FINALLY able to get the money into my fidelity IRA and do the Roth conversion.  

Trying to nail down portfolio ratios.  

Schwab has been running my 401K and has it at like 30% bonds.  With the other accounts, including my wife's--we're not at ~15 bonds.  I don't really want to add anymore until interest rates change and bonds improve their yield.  

Right now we're at:

15% bonds

25% foreign stocks

40% US Large cap/total index

15% small/mid cap with a predominance of small.  

5% specialty index fund that Schwab picked.  

Would appreciate any feedback.

Looks great! Are you paying Schwab extra (beyond the expense ratio) for them to pick the specialty index fund?

 

[jm192]

Looks great! Are you paying Schwab extra (beyond the expense ratio) for them to pick the specialty index fund?

Nah.  Something they just picked.  

 

[Warrior]

You may not even need to wait until the end of the year.  The new act provides for the IRS to calculate if the amount of EIP3 received based on 2019 is less than the amount you would be eligible for based on 2020 and send you the difference as long as you file your 2020 return within 90 days of the due date (currently August 17ish). 

Can you tell me more about this? Any links? I'm in a similar boat where my 2019 income was above the limit, 2020 was below, and 2021 will be above. I fear that if I filed after they looked at my income and used 2019's to determine my stimulus, I'll have to wait until I file 2021 taxes, at which point I again will not qualify because of my 2021 income. 

What you're describing would be great! My wife took a big pay cut in 2020 and switched jobs this year so we'll be back over the income limit. 

 

[BassNBrew]

So I am just signing onto a new Financial advisor since I wasn't too happy with the other one.

They are charging 1% AUM fee and then it goes down from there based on the amount of $ you have with them. They will be providing other services and not just managing my money.

My question is they asked about whether my 401K has a self directed brokerage window. Looks like they would like to help manage this as well. I am assuming this gets them more $ as well. They are a fiduciary (not really sure if it means much).

Does this seem like a good idea or should I just keep it out of their hands. FYI, it is right now in a target date fund.

Thx!

Hop into the FBG stock thread and manage it yourself.

 

[Tom Hagen]

Can you tell me more about this? Any links? I'm in a similar boat where my 2019 income was above the limit, 2020 was below, and 2021 will be above. I fear that if I filed after they looked at my income and used 2019's to determine my stimulus, I'll have to wait until I file 2021 taxes, at which point I again will not qualify because of my 2021 income. 

What you're describing would be great! My wife took a big pay cut in 2020 and switched jobs this year so we'll be back over the income limit. 

It's hard to find details in plain english but here is an explanation from Kiplinger

Under the law, if your 2020 tax return isn't filed and processed by the time the IRS starts processing your third stimulus check, the tax agency will use your 2019 tax return to get the information it needs to calculate your payment. If your 2020 return is already filed and processed, then your stimulus check will be based on your 2020 return. If your 2020 return is filed and/or processed after the IRS sends you a stimulus check, but before July 15, 2021 (or September 1 if the April 15 filing deadline is pushed back), the IRS will send you a second payment for the difference between what your payment should have been if based on your 2020 return and any payment actually sent based on your 2019 return.

Currently your 2020 return would need to be filed and processed by 8/15 to qualify. 

 

[-OZ-]

FINALLY able to get the money into my fidelity IRA and do the Roth conversion.  

Trying to nail down portfolio ratios.  

Schwab has been running my 401K and has it at like 30% bonds.  With the other accounts, including my wife's--we're not at ~15 bonds.  I don't really want to add anymore until interest rates change and bonds improve their yield.  

Right now we're at:

15% bonds

25% foreign stocks

40% US Large cap/total index

15% small/mid cap with a predominance of small.  

5% specialty index fund that Schwab picked.  

Would appreciate any feedback.

It's a fine and reasonable portfolio. Too much in bonds for me, but that's totally up to your risk tolerance. Also, I'd rather pick my own specialty fund but whatever you prefer. 

Hop into the FBG stock thread and manage it yourself.

Maybe for a small amount.

But for the bulk, set and "forget". 

 

[BassNBrew]

It's a fine and reasonable portfolio. Too much in bonds for me, but that's totally up to your risk tolerance. Also, I'd rather pick my own specialty fund but whatever you prefer. 

Maybe for that 5% "specialty" fund. 

But for the bulk, set and "forget". 

Strongly disagree with not actively managing 95% of your funds if you have that option. Did the set it and forget it target funds for years and will be working two extra years because of it

 

[Instinctive]

Strongly disagree with not actively managing 95% of your funds if you have that option. Did the set it and forget it target funds for years and will be working two extra years because of it

How can you possibly know that? It's more likely you'd have tried to actively manage it and be working 10 extra years because of that lol.

 

[BassNBrew]

How can you possibly know that? It's more likely you'd have tried to actively manage it and be working 10 extra years because of that lol.

Lost ground to the market with the set it and forget it target funds. This far I’m seeing opposite results in my managed account. Also managing a portion of my MILs account and handily beating her Schwab advisor. Results in dfs and ff have been better than average. My theory is that most reasonably intelligent people posting here that want to put the time in can do well in most things. 

 

[-OZ-]

Strongly disagree with not actively managing 95% of your funds if you have that option. Did the set it and forget it target funds for years and will be working two extra years because of it

If you went just with TDF, maybe.

But a whole lot of experts disagree with your stance of active management beating passive. 

 

[-OZ-]

Lost ground to the market with the set it and forget it target funds. This far I’m seeing opposite results in my managed account. Also managing a portion of my MILs account and handily beating her Schwab advisor. Results in dfs and ff have been better than average. My theory is that most reasonably intelligent people posting here that want to put the time in can do well in most things. 

In 2020 you've done very well. But we'll reengage in a decade. 

 

[CR69]

In 2020 you've done very well. But we'll reengage in a decade. 

It's easy to make money in a bull market...

 

[BassNBrew]

It's easy to make money in a bull market...

Actually it’s easier to gain ground in a down market or choppy market 

 

[CR69]

Actually it’s easier to gain ground in a down market or choppy market 

I like you but do you really think you've figured out the market where nobody else has? There's a reason Warren Buffet made his index fund bet and won. Nobody can consistently beat the market. 

https://www.investopedia.com/articles/investing/030916/buffetts-bet-hedge-funds-year-eight-brka-brkb.asp

 

[-OZ-]

Actually it’s easier to gain ground in a down market or choppy market 

I'm not sure how you'd define it but many would consider 2020 to be choppy.

 

[BassNBrew]

I like you but do you really think you've figured out the market where nobody else has? There's a reason Warren Buffet made his index fund bet and won. Nobody can consistently beat the market. 

https://www.investopedia.com/articles/investing/030916/buffetts-bet-hedge-funds-year-eight-brka-brkb.asp

Unfortunately most retirement options don’t offer a plain Jane sp500. I could totally buy into that for the passive investor. Instead we get these target year 2050 funds

 

[BassNBrew]

I like you but do you really think you've figured out the market where nobody else has? There's a reason Warren Buffet made his index fund bet and won. Nobody can consistently beat the market. 

https://www.investopedia.com/articles/investing/030916/buffetts-bet-hedge-funds-year-eight-brka-brkb.asp

Good read. Thanks for posting. Buffet won in the bull markets and active investment won in the down years. 

 

[-OZ-]

Unfortunately most retirement options don’t offer a plain Jane sp500. I could totally buy into that for the passive investor. Instead we get these target year 2050 funds

A lot of options are crappy. It's a big reason I chose to use coverdell ESAs instead of 529s (these might have gotten better over the years, I haven't kept track). But if you're using an IRA, there's no excuse for not using the best passive funds.. IMO (presuming you don't want to trade stocks actively)

 

[jm192]

It's a fine and reasonable portfolio. Too much in bonds for me, but that's totally up to your risk tolerance. Also, I'd rather pick my own specialty fund but whatever you prefer. 

Maybe for a small amount.

But for the bulk, set and "forget". 

I think you're right.  I don't feel good about bonds at this point.  Maybe as interest rates change, but I'm certainly not excited about them right now.  

In my present situation:  Schwab set it at ~30% bonds.  After investing for HSA, my Roth and my wife's roth--we've dropped it from 30% to 15%.  

At some point, I probably need to manage the 401K and re-do some of it to lower the amount in bonds.  I've considered getting into REITs for some more fixed income positions, but don't feel great about real estate stuff with COVID. 

 

[CR69]

Unfortunately most retirement options don’t offer a plain Jane sp500. I could totally buy into that for the passive investor. Instead we get these target year 2050 funds

That is a good point. A lot of employers allow plan administrators to push crappy, high fee funds on their employees. I have access to almost all of the Vanguard funds in my 401k so it's easy for me to forget that's not the case for everyone. 

 

[Instinctive]

Lost ground to the market with the set it and forget it target funds. This far I’m seeing opposite results in my managed account. Also managing a portion of my MILs account and handily beating her Schwab advisor. Results in dfs and ff have been better than average. My theory is that most reasonably intelligent people posting here that want to put the time in can do well in most things. 

You should probably change careers then. If you're beating the market you could make a lot more money doing it professionally.

 

[-OZ-]

.  I've considered getting into REITs for some more fixed income positions, but don't feel great about real estate stuff with COVID. 

Fwiw, I have a bit less than 5% bonds, 5% REIT, and some utilities. 

 

[ConstruxBoy]

I think you're right.  I don't feel good about bonds at this point.  Maybe as interest rates change, but I'm certainly not excited about them right now.  

In my present situation:  Schwab set it at ~30% bonds.  After investing for HSA, my Roth and my wife's roth--we've dropped it from 30% to 15%.  

At some point, I probably need to manage the 401K and re-do some of it to lower the amount in bonds.  I've considered getting into REITs for some more fixed income positions, but don't feel great about real estate stuff with COVID. 

Really depends on the REITs. Stuff that focuses on Tech, Supply Chain, warehousing should continue to be great, IMO. Office Space should trend down (although an excellent movie) and Retail and Rentals is likely more even going forward. 

 

[BigJim®]

Hop into the FBG stock thread and manage it yourself.

This may be fine for some people, but certainly not a general rule. I've been set it and forget it for 25 years. My sister OTOH fancied herself as more shrewd/"internet group informed" and has become broke twice. She actually had one situation where she had gains in the range of $250K which she lost nearly overnight re-investing the gain toward another hyped stock that tanked... resulting in a monumental tax consequence, and a bankruptcy. We each subsequently received a $110K roll over IRA that I put into a basic fund and she, of course, wanted it in a fund she could manage herself as an active day trader. I sometimes wonder how that has panned out for her while my set/forget fund steadily increased to $161K.

 

[ConstruxBoy]

Yeah, there are really very few people who can do better long term than a diversified set it and forget it approach. The reason is that so many personal and psychological biases exist when it comes to money and investing. The risk is higher if you are tracking individual stocks versus funds. Of course the returns could be higher if you hit some. There are some more people that can do better when managing for other, non-family members because some of those biases and worries are gone when it's not "your" money. But it's still a small subset of people that can successfully do that in the long or even medium term. BNB may be one of those small group of people. But the question to ask is whether you want to risk your money, or how much of your money do you want to risk, to find out if you are in that small minority of people? Your sister found out the hard way that she is not good at it. 

So the advice for most people is to save the time and risk and just set up an easy, diversified market fund approach. 

 

[stbugs]

This may be fine for some people, but certainly not a general rule. I've been set it and forget it for 25 years. My sister OTOH fancied herself as more shrewd/"internet group informed" and has become broke twice. She actually had one situation where she had gains in the range of $250K which she lost nearly overnight re-investing the gain toward another hyped stock that tanked... resulting in a monumental tax consequence, and a bankruptcy. We each subsequently received a $110K roll over IRA that I put into a basic fund and she, of course, wanted it in a fund she could manage herself as an active day trader. I sometimes wonder how that has panned out for her while my set/forget fund steadily increased to $161K.

Definitely a big difference between hot stock tips and managing investments yourself. I am self directed for most of my money but I use some services to give me recommendations not Reddit. It doesn’t sound like your sister does that, more of a penny stocks mentioned on Twitter. Not that hot tips can’t pan out, but most times those are crappy companies you are hoping to get out of before the rest of the people who hopped in do. Had a great 2020, been meh so far this year but long term I like my odds but again it’s not “me” picking stocks. It’s like when I used to play fantasy and used FBGs. I absolutely did way better than average and made some good choices but clearly I wasn’t doing my own stats and spreadsheets. 
 

 

[BigJim®]

Your sister found out the hard way that she is not good at it.

Sadly, I don’t think she has come to that realization yet at all, based on her subsequent insistence to have our roll overs placed somewhere she could keep her mitts all over it. 

 

[BassNBrew]

Definitely a big difference between hot stock tips and managing investments yourself. I am self directed for most of my money but I use some services to give me recommendations not Reddit. It doesn’t sound like your sister does that, more of a penny stocks mentioned on Twitter. Not that hot tips can’t pan out, but most times those are crappy companies you are hoping to get out of before the rest of the people who hopped in do. Had a great 2020, been meh so far this year but long term I like my odds but again it’s not “me” picking stocks. It’s like when I used to play fantasy and used FBGs. I absolutely did way better than average and made some good choices but clearly I wasn’t doing my own stats and spreadsheets. 
 

Good posting. 

 

[BigJim®]

Definitely a big difference between hot stock tips and managing investments yourself. I am self directed for most of my money but I use some services to give me recommendations not Reddit. It doesn’t sound like your sister does that, more of a penny stocks mentioned on Twitter. Not that hot tips can’t pan out, but most times those are crappy companies you are hoping to get out of before the rest of the people who hopped in do. Had a great 2020, been meh so far this year but long term I like my odds but again it’s not “me” picking stocks. It’s like when I used to play fantasy and used FBGs. I absolutely did way better than average and made some good choices but clearly I wasn’t doing my own stats and spreadsheets. 
 

I’m not sure what her ‘internet groups’ are exactly. She claims algorithm based. In recent years she mentioned programming bots to do her actions, and I just pictured her money going poof. I’ve told her it’s far more likely she’s mixed up akin to the old poker adage, ‘if you look around the table and can’t spot the mark, it’s you’ - but she’s too proud to accept that. Certainly her groups appeared to be great when she reaped the $250k gain. 

 

[BigJim®]

I absolutely did way better than average and made some good choices but clearly I wasn’t doing my own stats and spreadsheets. 
 

I get it, but there’s a big difference between placement of trust re: fantasy football and retirement funds. I know I can’t do it on my own. I also know my ignorance makes it impossible to identify whether a virtual I-stranger is giving great or horrific advice. And I don’t mean that as a slight to anyone, including BNB. I could never feel confident doing anything but set/forget in a basic fund.