Personal Finance Advice and Education! (2 Viewers)

[ConstruxBoy]

What I always learned (although can't always follow) is to try to only take on lower risk with debt. Mortgages, car loans, HELOC - Sure. Of course you can get overextended, but generally that's what you want to use debt for.
Running up a CC debt on a Vegas vacation? Not great. Borrowing money so you can buy more of that hot new stock on margin? Very bad.

 

[Orange&Blue]

What I always learned (although can't always follow) is to try to only take on lower risk with debt. Mortgages, car loans, HELOC - Sure. Of course you can get overextended, but generally that's what you want to use debt for.
Running up a CC debt on a Vegas vacation? Not great. Borrowing money so you can buy more of that hot new stock on margin? Very bad.

but what if that stock has a cure for COVID!!!

 

[Chadstroma]

Like with pretty much anything in personal finance, there is no one size fits all "always"/"never" answer to debt. Each situation is different and needs to be reviewed accordingly.

Yes, the very wealthy, almost always carry debt but they carry smart debt. Their debt is lower interest and provides them tax benefits in income or write offs while allowing them to gain larger returns on capital than they are paying in the interest. Dumb debt is credit cards or whatever other financing that is done towards consumer activities and has no benefit in tax or returns. It is simply an added liability. In other words, the very wealthy use debt as an asset that adds to their wealth.

As with most things in personal finance, it can get much more complicated but the general approach to whether you should pay cash or finance is "when this is all said and done- which way will my net worth increase the most with?" and then being honest about the risk involved- what is the best case scenario and what is the worst case. You may aim for that best case but are you willing to live with case and not go into a depression? Work through it that way and it should inform you of what you should or should not do.

 

[Nugget]

I created an investment plan to help clarify my goals and plans for short/medium/long term. I hope it will remind me to stick to my playbook as markets change and life happens.

Top of the page as my reminder - “Lower Stress- Lower Complexity”

 

[ConstruxBoy]

What I always learned (although can't always follow) is to try to only take on lower risk with debt. Mortgages, car loans, HELOC - Sure. Of course you can get overextended, but generally that's what you want to use debt for.
Running up a CC debt on a Vegas vacation? Not great. Borrowing money so you can buy more of that hot new stock on margin? Very bad.

but what if that stock has a cure for COVID!!!

LOL, sure. And what if you get struck by lightning?

 

[Orange&Blue]

What I always learned (although can't always follow) is to try to only take on lower risk with debt. Mortgages, car loans, HELOC - Sure. Of course you can get overextended, but generally that's what you want to use debt for.
Running up a CC debt on a Vegas vacation? Not great. Borrowing money so you can buy more of that hot new stock on margin? Very bad.

but what if that stock has a cure for COVID!!!

LOL, sure. And what if you get struck by lightning?

life insurance!!

 

[-OZ-]

I bought $10k of i-bonds in November of 2021. it's now valued at $11.1k with an interest rate of 3.38%. when is the best time to sell?

I think you can sell in august. Unless I’m mistaken you started getting the 3.38% in May. So May, June, July’s penalty would be the lower rate. Actually I know if you buy in a month you get that month counted, I only assume you’d need to keep it through the end of the month to get that month’s counted.

I've got some May 2021 vintage bonds that I am planning to redeem in August after their three months at 3.38%

When To Sell Off Our I-Bonds - Doctor Of Credit

We covered extensively the saga of excellent returns on I Bonds during 2021 and 2022. The most recent rate is 3.40%, which is lower than most high-yield

www.doctorofcredit.com

 

[Juxtatarot]

Even before this recent wave of high inflation years, I-Bonds, on average, have paid higher than high yield savings accounts. Plus there is the tax deferred interest. If you’ve bought the max in I-bonds multiple years, you may eventually regret cashing out now.

 

[-OZ-]

Even before this recent wave of high inflation years, I-Bonds, on average, have paid higher than high yield savings accounts. Plus there is the tax deferred interest. If you’ve bought the max in I-bonds multiple years, you may eventually regret cashing out now.

I’m somewhat on the fence but probably selling $20k worth to rebuy while the fixed rate is 0.9%

 

[Desert_Power]

I bought $10k of i-bonds in November of 2021. it's now valued at $11.1k with an interest rate of 3.38%. when is the best time to sell?

I think you can sell in august. Unless I’m mistaken you started getting the 3.38% in May. So May, June, July’s penalty would be the lower rate. Actually I know if you buy in a month you get that month counted, I only assume you’d need to keep it through the end of the month to get that month’s counted.

I've got some May 2021 vintage bonds that I am planning to redeem in August after their three months at 3.38%

When To Sell Off Our I-Bonds - Doctor Of Credit

We covered extensively the saga of excellent returns on I Bonds during 2021 and 2022. The most recent rate is 3.40%, which is lower than most high-yield

www.doctorofcredit.com

DoC is a great resource for sure, but not sure why you quoted it to me.

 

[Mitchie]

Even before this recent wave of high inflation years, I-Bonds, on average, have paid higher than high yield savings accounts. Plus there is the tax deferred interest. If you’ve bought the max in I-bonds multiple years, you may eventually regret cashing out now.

Other thing is it's a bit of insurance against inflation, so it's not just a rate v. rate comparison. But everyone's situation is different so what may make sense for one person may not for another.

 

[-OZ-]

I bought $10k of i-bonds in November of 2021. it's now valued at $11.1k with an interest rate of 3.38%. when is the best time to sell?

I think you can sell in august. Unless I’m mistaken you started getting the 3.38% in May. So May, June, July’s penalty would be the lower rate. Actually I know if you buy in a month you get that month counted, I only assume you’d need to keep it through the end of the month to get that month’s counted.

I've got some May 2021 vintage bonds that I am planning to redeem in August after their three months at 3.38%

When To Sell Off Our I-Bonds - Doctor Of Credit

We covered extensively the saga of excellent returns on I Bonds during 2021 and 2022. The most recent rate is 3.40%, which is lower than most high-yield

www.doctorofcredit.com

DoC is a great resource for sure, but not sure why you quoted it to me.

No real reason, just the most recent mention of cashing in.

Monthly roll up - finally higher than we were in total at the end of 2021

 

[matttyl]

Wife has been working for government agency with access to 401a and a 457b (as well as a defined benefit deal that I’m not quite sure what it technically is, other than a “pension” with the state of Virginia). My biggest complaint was her contributions were limited by % of income rather than dollar amount.

She was required to have 4% of income put in defined benefit, and 1% put in a 401a (which was matched dollar for dollar). She could then put up to 4% into a 457b, which would have a 2.5% match (matched placed in 401a). She hasn’t been there long enough to vest any match.

Accepted new job with 401k ability. Am I right that her max contribution in 401k is 22,500 minus what she put in her 457b herself? The 401a contributions by her or by employer don’t matter? She’s under 50.

 

[Juxtatarot]

With the market up, I’m calculating that I can make my current salary with 5% annual interest/dividends/capital gains. Besides, I don’t spend much. It’s difficult to decide how long I want to keep working.

 

[matttyl]

With the market up, I’m calculating that I can make my current salary with 5% annual interest/dividends/capital gains. Besides, I don’t spend much. It’s difficult to decide how long I want to keep working.

Do you enjoy it?

 

[-OZ-]

With the market up, I’m calculating that I can make my current salary with 5% annual interest/dividends/capital gains. Besides, I don’t spend much. It’s difficult to decide how long I want to keep working.

Do you enjoy it?

That’s the key question at some point.
J - any idea what your withdrawal rate would be to cover expenses?

 

[Juxtatarot]

With the market up, I’m calculating that I can make my current salary with 5% annual interest/dividends/capital gains. Besides, I don’t spend much. It’s difficult to decide how long I want to keep working.

Do you enjoy it?

That’s the key question at some point.
J - any idea what your withdrawal rate would be to cover expenses?

Less than 2%. I’m naturally frugal.

Do I enjoy working? Sometimes I guess but every day I feel like I’d rather not work.

 

[Sand]

With the market up, I’m calculating that I can make my current salary with 5% annual interest/dividends/capital gains. Besides, I don’t spend much. It’s difficult to decide how long I want to keep working.

Salary is the wrong metric - expenses is the critical one. You allude to a 5% withdrawal rate to get to your salary, which historically is probably ok, but is far from a slam dunk. What you need is a good assessment of your expenses after retirement - add in healthcare costs, subtract some taxes, contributions to retirement, commuting, etc.

I'd recommend you head over to firecalc.com and play with that a bit. It can give you some ideas of where you are in the ballpark for hanging it up.

ETA: This one is also a pretty neat look at retirement age: https://engaging-data.com/fire-calculator/
Rich, broke, or dead? https://engaging-data.com/will-money-last-retire-early/

 

[Sand]

Do I enjoy working? Sometimes I guess but every day I feel like I’d rather not work.

Can you go part time? That may be a nice middle ground.

 

[-OZ-]

With the market up, I’m calculating that I can make my current salary with 5% annual interest/dividends/capital gains. Besides, I don’t spend much. It’s difficult to decide how long I want to keep working.

Do you enjoy it?

That’s the key question at some point.
J - any idea what your withdrawal rate would be to cover expenses?

Less than 2%. I’m naturally frugal.

Do I enjoy working? Sometimes I guess but every day I feel like I’d rather not work.

Consider doing something else? Maybe work at your local running store.
Your withdrawal rate looks like you could retire whenever you feel like.

 

[Yo Mama]

So I’ve got some money in stocks and mutual funds that I plan on putting toward my kids college expenses.

With student loan rates low pre-graduation, does it make sense to hold off selling these funds for a couple years (we have 3 years of college left)?

A good amount of my stock is in one blue-chip that is up considerably from where I bought it, so I’ll have some large long-term tax exposure to deal with. Does it make sense to cash in these funds all in the same year for tax purposes versus doing things in installments? I can do some harvesting of losses, but not nearly enough to offset the gains.

I’ll definitely be talking to a professional, but curious what our resident experts think.

 

[humpback]

So I’ve got some money in stocks and mutual funds that I plan on putting toward my kids college expenses.

With student loan rates low pre-graduation, does it make sense to hold off selling these funds for a couple years (we have 3 years of college left)?

A good amount of my stock is in one blue-chip that is up considerably from where I bought it, so I’ll have some large long-term tax exposure to deal with. Does it make sense to cash in these funds all in the same year for tax purposes versus doing things in installments? I can do some harvesting of losses, but not nearly enough to offset the gains.

I’ll definitely be talking to a professional, but curious what our resident experts think.

There's no way of knowing if the market (and more specifically your investments) will outperform whatever the interest rate is on the loans so it all comes down to your personal risk tolerance. If your timeline is a maximum of 3 years I think most advisors would suggest lowering your risk a bit (maybe by selling some), but again, if you want to gamble it's up to you, it could pay off to stay fully invested.

The tax question will depend on your situation, this article covers the bands- https://www.cnbc.com/2023/06/23/heres-how-you-can-make-for-zero-percent-capital-gains-taxes-for-2023.html. If you can time them to fall just below the next band that would be beneficial, but the 15% band is pretty wide so it may fall in there either way. Also check with your state rates to see if you can strategize there a bit.

 

[Yo Mama]

So I’ve got some money in stocks and mutual funds that I plan on putting toward my kids college expenses.

With student loan rates low pre-graduation, does it make sense to hold off selling these funds for a couple years (we have 3 years of college left)?

A good amount of my stock is in one blue-chip that is up considerably from where I bought it, so I’ll have some large long-term tax exposure to deal with. Does it make sense to cash in these funds all in the same year for tax purposes versus doing things in installments? I can do some harvesting of losses, but not nearly enough to offset the gains.

I’ll definitely be talking to a professional, but curious what our resident experts think.

There's no way of knowing if the market (and more specifically your investments) will outperform whatever the interest rate is on the loans so it all comes down to your personal risk tolerance. If your timeline is a maximum of 3 years I think most advisors would suggest lowering your risk a bit (maybe by selling some), but again, if you want to gamble it's up to you, it could pay off to stay fully invested.

The tax question will depend on your situation, this article covers the bands- https://www.cnbc.com/2023/06/23/heres-how-you-can-make-for-zero-percent-capital-gains-taxes-for-2023.html. If you can time them to fall just below the next band that would be beneficial, but the 15% band is pretty wide so it may fall in there either way. Also check with your state rates to see if you can strategize there a bit.

Thanks - this is helpful.

 

[pecorino]

Which ones? Intermediate bonds went down ~5%, Long bonds didn't budge. Munis, corporates, and sovereign bonds got hammered.

A mix of the first three would have gotten one out of 2008 relatively unscathed.

I don’t know bonds well so I used the FTBFX Fidelity total bond fund as an example. The chart is hard to read over 20 years since the true bottoms/tops are smoothed a bit but it looks like it went down 15-20%.

I'm bond shopping so searched this thread. On my own, I've looked at / bought TIPX, USIG, BSCU, VGSH, and SHY. They all seem very correlated; I'm having a hard time finding one that appears superior to the others. So anyway, this search led me to FTBFX and this post from two years ago. Again, quite correlated but this Fidelity bond fund charges a whopping 1.52% expense ratio which caused me to do a double-take. Most others are in the ballpark of 0.10%. So anyways, does anyone have a suggestion for a bond fund for a long-term hold? I'm looking for yields in the 4% range with low costs and steady performance. TIPX and USIG were two that I bought recently--got anything better?

 

[pecorino]

Interesting article and definitely highlights some of the lesser known risks but wouldn't a fund like PFF, with over 300 holdings, be distributed and diluted enough to make the risk worth the increased yield?

If we crash pff will dive hard. If interest rates spike, it dives. Otherwise pretty safe. I have used it before

I've got some cash to deploy in a long term account. Buying some index funds, a splash of bonds (just posted a moment ago) and also looking at PFF. It is down about 20% since a high in December 2021 (movement in interest rates did drive it down but also the skittishness in financials which are major holdings), pays almost 7%, and returns about 3% gains on average over the years. I like the preferred status and also, like I said, that it is down considerably over the past 18 months.

 

[-OZ-]

Which ones? Intermediate bonds went down ~5%, Long bonds didn't budge. Munis, corporates, and sovereign bonds got hammered.

A mix of the first three would have gotten one out of 2008 relatively unscathed.

I don’t know bonds well so I used the FTBFX Fidelity total bond fund as an example. The chart is hard to read over 20 years since the true bottoms/tops are smoothed a bit but it looks like it went down 15-20%.

I'm bond shopping so searched this thread. On my own, I've looked at / bought TIPX, USIG, BSCU, VGSH, and SHY. They all seem very correlated; I'm having a hard time finding one that appears superior to the others. So anyway, this search led me to FTBFX and this post from two years ago. Again, quite correlated but this Fidelity bond fund charges a whopping 1.52% expense ratio which caused me to do a double-take. Most others are in the ballpark of 0.10%. So anyways, does anyone have a suggestion for a bond fund for a long-term hold? I'm looking for yields in the 4% range with low costs and steady performance. TIPX and USIG were two that I bought recently--got anything better?

I’ve had BND before but not now, currently only have a small amount of TIP. 4.3% yield and 0.19% expense ratio.

 

[Sand]

Interesting article and definitely highlights some of the lesser known risks but wouldn't a fund like PFF, with over 300 holdings, be distributed and diluted enough to make the risk worth the increased yield?

If we crash pff will dive hard. If interest rates spike, it dives. Otherwise pretty safe. I have used it before

I've got some cash to deploy in a long term account. Buying some index funds, a splash of bonds (just posted a moment ago) and also looking at PFF. It is down about 20% since a high in December 2021 (movement in interest rates did drive it down but also the skittishness in financials which are major holdings), pays almost 7%, and returns about 3% gains on average over the years. I like the preferred status and also, like I said, that it is down considerably over the past 18 months.

Bonds are beaten up, for sure. You're timing the market, but now seems to be a pretty good time to buy low. I own a decent bit of GVI and IEF (ouch). Other than that I've been buying CDs and investment grade bonds (fixed rate single bonds) I've just been holding. CDs are up to 5.2%, some investment grade bonds are up at 5.8%.

 

[Nugget]

Which ones? Intermediate bonds went down ~5%, Long bonds didn't budge. Munis, corporates, and sovereign bonds got hammered.

A mix of the first three would have gotten one out of 2008 relatively unscathed.

I don’t know bonds well so I used the FTBFX Fidelity total bond fund as an example. The chart is hard to read over 20 years since the true bottoms/tops are smoothed a bit but it looks like it went down 15-20%.

I'm bond shopping so searched this thread. On my own, I've looked at / bought TIPX, USIG, BSCU, VGSH, and SHY. They all seem very correlated; I'm having a hard time finding one that appears superior to the others. So anyway, this search led me to FTBFX and this post from two years ago. Again, quite correlated but this Fidelity bond fund charges a whopping 1.52% expense ratio which caused me to do a double-take. Most others are in the ballpark of 0.10%. So anyways, does anyone have a suggestion for a bond fund for a long-term hold? I'm looking for yields in the 4% range with low costs and steady performance. TIPX and USIG were two that I bought recently--got anything better?

LTPZ looking real attractive here. Over 2% real yield.

 

[Andrew74]

Which ones? Intermediate bonds went down ~5%, Long bonds didn't budge. Munis, corporates, and sovereign bonds got hammered.

A mix of the first three would have gotten one out of 2008 relatively unscathed.

I don’t know bonds well so I used the FTBFX Fidelity total bond fund as an example. The chart is hard to read over 20 years since the true bottoms/tops are smoothed a bit but it looks like it went down 15-20%.

I'm bond shopping so searched this thread. On my own, I've looked at / bought TIPX, USIG, BSCU, VGSH, and SHY. They all seem very correlated; I'm having a hard time finding one that appears superior to the others. So anyway, this search led me to FTBFX and this post from two years ago. Again, quite correlated but this Fidelity bond fund charges a whopping 1.52% expense ratio which caused me to do a double-take. Most others are in the ballpark of 0.10%. So anyways, does anyone have a suggestion for a bond fund for a long-term hold? I'm looking for yields in the 4% range with low costs and steady performance. TIPX and USIG were two that I bought recently--got anything better?

I like GIBIX as a long-term fund. That’s an institutional share class and I’m not sure what a retail class costs. It also isn’t a steady performer. You may wonder why i am bringing this up, but it has some extremely good long-term performance. The fund is not afraid to make big bets. Some years it does not pay off. But so far the long-term performance speaks for itself. It holds a good deal of non-benchmark bonds. So it’s probably different than quite a few funds out there.

ETA - The CIO, Scott Minerd, unexpectedly died earlier this year. So that’s something to keep in mind. It’s a deep shop but you never know how much one person influenced the past return stream.

 

[skol asylum]

Hey smart $ guys. College is starting this month for my oldest and in 4 years will be here for my youngest. Unfortunately didn't have any sort of 529 or other setup ready to go to help pay for it so am playing a little catch up. Doing loans for this first year with a goal to pay off by the time they graduate in some fashion.

Have also shifted some budget finances around and are going to start saving monthly going forward so that beginning next year our piece of the pie will be paid for each year, leaving their scholarship and smaller loans to cover the rest.

Was looking to open a high yield savings account to save the money in as we build it for each school year. Because of the short term nature of when the money is needed and not wanting to risk any of it on investments I was thinking a savings account was the way to go. Was wondering if anyone had a recommendation for which to use. I see a bunch out there advertising with 4.4 to 5.4 percent interest claims. Thanks!

 

[stbugs]

Hey smart $ guys. College is starting this month for my oldest and in 4 years will be here for my youngest. Unfortunately didn't have any sort of 529 or other setup ready to go to help pay for it so am playing a little catch up. Doing loans for this first year with a goal to pay off by the time they graduate in some fashion.

Have also shifted some budget finances around and are going to start saving monthly going forward so that beginning next year our piece of the pie will be paid for each year, leaving their scholarship and smaller loans to cover the rest.

Was looking to open a high yield savings account to save the money in as we build it for each school year. Because of the short term nature of when the money is needed and not wanting to risk any of it on investments I was thinking a savings account was the way to go. Was wondering if anyone had a recommendation for which to use. I see a bunch out there advertising with 4.4 to 5.4 percent interest claims. Thanks!

I just use my brokerage account at Fidelity. Right now it’s 4.97% and I can write checks, pay bills, invest in stocks, etc. with 0 inconveniences or delays. Personally, at that rate I have no interest in creating another account or lock money up for any period of time.

I’d recommend starting there and work on building up long term investments from there as well. Another benefit is that many people use Fidelity for 401ks or could transfer/rollover other accounts easily.

 

[matttyl]

Hey smart $ guys. College is starting this month for my oldest and in 4 years will be here for my youngest. Unfortunately didn't have any sort of 529 or other setup ready to go to help pay for it so am playing a little catch up. Doing loans for this first year with a goal to pay off by the time they graduate in some fashion.

Have also shifted some budget finances around and are going to start saving monthly going forward so that beginning next year our piece of the pie will be paid for each year, leaving their scholarship and smaller loans to cover the rest.

Was looking to open a high yield savings account to save the money in as we build it for each school year. Because of the short term nature of when the money is needed and not wanting to risk any of it on investments I was thinking a savings account was the way to go. Was wondering if anyone had a recommendation for which to use. I see a bunch out there advertising with 4.4 to 5.4 percent interest claims. Thanks!

You can still do 529 now and get tax break. For the next 8 years actually.

 

[gianmarco]

What's the go to high yield savings account these days? I'm at My Savings Direct at like 4.25%. Gotta be FDIC insured that's better than that.

I've posted here about it, I think, but look at CIT bank. Been there a few years now. 4.95%, no fees, super easy. FDIC insured.

Here you go.

Hey smart $ guys. College is starting this month for my oldest and in 4 years will be here for my youngest. Unfortunately didn't have any sort of 529 or other setup ready to go to help pay for it so am playing a little catch up. Doing loans for this first year with a goal to pay off by the time they graduate in some fashion.

Have also shifted some budget finances around and are going to start saving monthly going forward so that beginning next year our piece of the pie will be paid for each year, leaving their scholarship and smaller loans to cover the rest.

Was looking to open a high yield savings account to save the money in as we build it for each school year. Because of the short term nature of when the money is needed and not wanting to risk any of it on investments I was thinking a savings account was the way to go. Was wondering if anyone had a recommendation for which to use. I see a bunch out there advertising with 4.4 to 5.4 percent interest claims. Thanks!

 

[skol asylum]

Thanks guys. You gave me some different options to explore. I do have a fidelity 401K thru work with investments in a brokerage link account. I assume the account you mentioned above is something set up outside of that account.

 

[humpback]

Hey smart $ guys. College is starting this month for my oldest and in 4 years will be here for my youngest. Unfortunately didn't have any sort of 529 or other setup ready to go to help pay for it so am playing a little catch up. Doing loans for this first year with a goal to pay off by the time they graduate in some fashion.

Have also shifted some budget finances around and are going to start saving monthly going forward so that beginning next year our piece of the pie will be paid for each year, leaving their scholarship and smaller loans to cover the rest.

Was looking to open a high yield savings account to save the money in as we build it for each school year. Because of the short term nature of when the money is needed and not wanting to risk any of it on investments I was thinking a savings account was the way to go. Was wondering if anyone had a recommendation for which to use. I see a bunch out there advertising with 4.4 to 5.4 percent interest claims. Thanks!

You can still do 529 now and get tax break. For the next 8 years actually.

Assuming his state gives a tax deduction, some do not.

 

[NutterButter]

Hey smart $ guys. College is starting this month for my oldest and in 4 years will be here for my youngest. Unfortunately didn't have any sort of 529 or other setup ready to go to help pay for it so am playing a little catch up. Doing loans for this first year with a goal to pay off by the time they graduate in some fashion.

Have also shifted some budget finances around and are going to start saving monthly going forward so that beginning next year our piece of the pie will be paid for each year, leaving their scholarship and smaller loans to cover the rest.

Was looking to open a high yield savings account to save the money in as we build it for each school year. Because of the short term nature of when the money is needed and not wanting to risk any of it on investments I was thinking a savings account was the way to go. Was wondering if anyone had a recommendation for which to use. I see a bunch out there advertising with 4.4 to 5.4 percent interest claims. Thanks!

I just use my brokerage account at Fidelity. Right now it’s 4.97% and I can write checks, pay bills, invest in stocks, etc. with 0 inconveniences or delays. Personally, at that rate I have no interest in creating another account or lock money up for any period of time.

I’d recommend starting there and work on building up long term investments from there as well. Another benefit is that many people use Fidelity for 401ks or could transfer/rollover other accounts easily.

Woah, moving my ibonds into a money market and didn't even consider this. I see vanguard has one at 5.25% and I already have an account with them. Thank you for the info.

 

[matttyl]

Thanks guys. You gave me some different options to explore. I do have a fidelity 401K thru work with investments in a brokerage link account. I assume the account you mentioned above is something set up outside of that account.

A 529? Yes, what state are you in?

 

[skol asylum]

Thanks guys. You gave me some different options to explore. I do have a fidelity 401K thru work with investments in a brokerage link account. I assume the account you mentioned above is something set up outside of that account.

A 529? Yes, what state are you in?

I meant the brokerage account at Fidelity.

But yeah for 529s I'm in Arizona.

 

[Mitchie]

Thanks guys. You gave me some different options to explore. I do have a fidelity 401K thru work with investments in a brokerage link account. I assume the account you mentioned above is something set up outside of that account.

Yes it's separate, call their customer service and they can help you

 

[Orange&Blue]

Hey smart $ guys. College is starting this month for my oldest and in 4 years will be here for my youngest. Unfortunately didn't have any sort of 529 or other setup ready to go to help pay for it so am playing a little catch up. Doing loans for this first year with a goal to pay off by the time they graduate in some fashion.

Have also shifted some budget finances around and are going to start saving monthly going forward so that beginning next year our piece of the pie will be paid for each year, leaving their scholarship and smaller loans to cover the rest.

Was looking to open a high yield savings account to save the money in as we build it for each school year. Because of the short term nature of when the money is needed and not wanting to risk any of it on investments I was thinking a savings account was the way to go. Was wondering if anyone had a recommendation for which to use. I see a bunch out there advertising with 4.4 to 5.4 percent interest claims. Thanks!

I just use my brokerage account at Fidelity. Right now it’s 4.97% and I can write checks, pay bills, invest in stocks, etc. with 0 inconveniences or delays. Personally, at that rate I have no interest in creating another account or lock money up for any period of time.

I’d recommend starting there and work on building up long term investments from there as well. Another benefit is that many people use Fidelity for 401ks or could transfer/rollover other accounts easily.

that's a thing?

any fees?

 

[thecatch]

Hey smart $ guys. College is starting this month for my oldest and in 4 years will be here for my youngest. Unfortunately didn't have any sort of 529 or other setup ready to go to help pay for it so am playing a little catch up. Doing loans for this first year with a goal to pay off by the time they graduate in some fashion.

Have also shifted some budget finances around and are going to start saving monthly going forward so that beginning next year our piece of the pie will be paid for each year, leaving their scholarship and smaller loans to cover the rest.

Was looking to open a high yield savings account to save the money in as we build it for each school year. Because of the short term nature of when the money is needed and not wanting to risk any of it on investments I was thinking a savings account was the way to go. Was wondering if anyone had a recommendation for which to use. I see a bunch out there advertising with 4.4 to 5.4 percent interest claims. Thanks!

I just use my brokerage account at Fidelity. Right now it’s 4.97% and I can write checks, pay bills, invest in stocks, etc. with 0 inconveniences or delays. Personally, at that rate I have no interest in creating another account or lock money up for any period of time.

I’d recommend starting there and work on building up long term investments from there as well. Another benefit is that many people use Fidelity for 401ks or could transfer/rollover other accounts easily.

Woah, moving my ibonds into a money market and didn't even consider this. I see vanguard has one at 5.25% and I already have an account with them. Thank you for the info.

I just got done moving some of my iBonds over to this Vanguard fund as well. Seems like a no brainer.

 

[Sand]

Hey smart $ guys. College is starting this month for my oldest and in 4 years will be here for my youngest. Unfortunately didn't have any sort of 529 or other setup ready to go to help pay for it so am playing a little catch up. Doing loans for this first year with a goal to pay off by the time they graduate in some fashion.

Have also shifted some budget finances around and are going to start saving monthly going forward so that beginning next year our piece of the pie will be paid for each year, leaving their scholarship and smaller loans to cover the rest.

Was looking to open a high yield savings account to save the money in as we build it for each school year. Because of the short term nature of when the money is needed and not wanting to risk any of it on investments I was thinking a savings account was the way to go. Was wondering if anyone had a recommendation for which to use. I see a bunch out there advertising with 4.4 to 5.4 percent interest claims. Thanks!

I just use my brokerage account at Fidelity. Right now it’s 4.97% and I can write checks, pay bills, invest in stocks, etc. with 0 inconveniences or delays. Personally, at that rate I have no interest in creating another account or lock money up for any period of time.

I’d recommend starting there and work on building up long term investments from there as well. Another benefit is that many people use Fidelity for 401ks or could transfer/rollover other accounts easily.

Yep, but check on the minimum balance for SPAXX.

 

[Orange&Blue]

Hey smart $ guys. College is starting this month for my oldest and in 4 years will be here for my youngest. Unfortunately didn't have any sort of 529 or other setup ready to go to help pay for it so am playing a little catch up. Doing loans for this first year with a goal to pay off by the time they graduate in some fashion.

Have also shifted some budget finances around and are going to start saving monthly going forward so that beginning next year our piece of the pie will be paid for each year, leaving their scholarship and smaller loans to cover the rest.

Was looking to open a high yield savings account to save the money in as we build it for each school year. Because of the short term nature of when the money is needed and not wanting to risk any of it on investments I was thinking a savings account was the way to go. Was wondering if anyone had a recommendation for which to use. I see a bunch out there advertising with 4.4 to 5.4 percent interest claims. Thanks!

I just use my brokerage account at Fidelity. Right now it’s 4.97% and I can write checks, pay bills, invest in stocks, etc. with 0 inconveniences or delays. Personally, at that rate I have no interest in creating another account or lock money up for any period of time.

I’d recommend starting there and work on building up long term investments from there as well. Another benefit is that many people use Fidelity for 401ks or could transfer/rollover other accounts easily.

Yep, but check on the minimum balance for SPAXX.

$0?

 

[matttyl]

Thanks guys. You gave me some different options to explore. I do have a fidelity 401K thru work with investments in a brokerage link account. I assume the account you mentioned above is something set up outside of that account.

A 529? Yes, what state are you in?

I meant the brokerage account at Fidelity.

But yeah for 529s I'm in Arizona.

Az529.gov you have the ability to deduct $4k a year.

 

[skol asylum]

Thanks guys. You gave me some different options to explore. I do have a fidelity 401K thru work with investments in a brokerage link account. I assume the account you mentioned above is something set up outside of that account.

A 529? Yes, what state are you in?

I meant the brokerage account at Fidelity.

But yeah for 529s I'm in Arizona.

Az529.gov you have the ability to deduct $4k a year.

So if I'm understanding correctly...

529 contributions are like Roths where your contributions are after tax. Disbursement of principal and gains are tax free. For the state portion you also can deduct up to $4k per year. Which in AZ is now a 2.5% flat tax or $100 max on the $4K.

My only concern with a 529 is I can't afford the market to go sideways/down as ill need the funds each year after I put them in. My plan is to put away $750 every two weeks which is $19,500 a year. I'm going to start in the next month or so and will have to pull out roughly $8,500 in August and again in January. Repeating the same process for the next 4 years and probably something similar for the 4 years after. I'm thinking a 4-5% savings account might be the safest/best return I can get given the short term nature and lack of risk because I can't lose any $ that's needed to pay the school bill.

 

[stbugs]

Hey smart $ guys. College is starting this month for my oldest and in 4 years will be here for my youngest. Unfortunately didn't have any sort of 529 or other setup ready to go to help pay for it so am playing a little catch up. Doing loans for this first year with a goal to pay off by the time they graduate in some fashion.

Have also shifted some budget finances around and are going to start saving monthly going forward so that beginning next year our piece of the pie will be paid for each year, leaving their scholarship and smaller loans to cover the rest.

Was looking to open a high yield savings account to save the money in as we build it for each school year. Because of the short term nature of when the money is needed and not wanting to risk any of it on investments I was thinking a savings account was the way to go. Was wondering if anyone had a recommendation for which to use. I see a bunch out there advertising with 4.4 to 5.4 percent interest claims. Thanks!

I just use my brokerage account at Fidelity. Right now it’s 4.97% and I can write checks, pay bills, invest in stocks, etc. with 0 inconveniences or delays. Personally, at that rate I have no interest in creating another account or lock money up for any period of time.

I’d recommend starting there and work on building up long term investments from there as well. Another benefit is that many people use Fidelity for 401ks or could transfer/rollover other accounts easily.

that's a thing?

any fees?

Yep and nope. That rate is for any cash in any stock like account, including our IRAs. I assume there is a money market in the 401ks but we are 100% invested in those. If I am getting 5% for parking money, I see no reason to inconvenience me to chase a 1/4% when I can immediately buy any stock or ETF using that cash. In essence, Fidelity allows your “cash” to be in a core money market fund.

 

[stbugs]

Hey smart $ guys. College is starting this month for my oldest and in 4 years will be here for my youngest. Unfortunately didn't have any sort of 529 or other setup ready to go to help pay for it so am playing a little catch up. Doing loans for this first year with a goal to pay off by the time they graduate in some fashion.

Have also shifted some budget finances around and are going to start saving monthly going forward so that beginning next year our piece of the pie will be paid for each year, leaving their scholarship and smaller loans to cover the rest.

Was looking to open a high yield savings account to save the money in as we build it for each school year. Because of the short term nature of when the money is needed and not wanting to risk any of it on investments I was thinking a savings account was the way to go. Was wondering if anyone had a recommendation for which to use. I see a bunch out there advertising with 4.4 to 5.4 percent interest claims. Thanks!

I just use my brokerage account at Fidelity. Right now it’s 4.97% and I can write checks, pay bills, invest in stocks, etc. with 0 inconveniences or delays. Personally, at that rate I have no interest in creating another account or lock money up for any period of time.

I’d recommend starting there and work on building up long term investments from there as well. Another benefit is that many people use Fidelity for 401ks or could transfer/rollover other accounts easily.

Yep, but check on the minimum balance for SPAXX.

There is no minimum. They allow you to make that (there’s two mm choices, both at 4.97%) your core cash holding. I’ve had as little as a few bucks in there with no fees at times.

 

[McBokonon]

Hey smart $ guys. College is starting this month for my oldest and in 4 years will be here for my youngest. Unfortunately didn't have any sort of 529 or other setup ready to go to help pay for it so am playing a little catch up. Doing loans for this first year with a goal to pay off by the time they graduate in some fashion.

Have also shifted some budget finances around and are going to start saving monthly going forward so that beginning next year our piece of the pie will be paid for each year, leaving their scholarship and smaller loans to cover the rest.

Was looking to open a high yield savings account to save the money in as we build it for each school year. Because of the short term nature of when the money is needed and not wanting to risk any of it on investments I was thinking a savings account was the way to go. Was wondering if anyone had a recommendation for which to use. I see a bunch out there advertising with 4.4 to 5.4 percent interest claims. Thanks!

I just use my brokerage account at Fidelity. Right now it’s 4.97% and I can write checks, pay bills, invest in stocks, etc. with 0 inconveniences or delays. Personally, at that rate I have no interest in creating another account or lock money up for any period of time.

I’d recommend starting there and work on building up long term investments from there as well. Another benefit is that many people use Fidelity for 401ks or could transfer/rollover other accounts easily.

Yep, but check on the minimum balance for SPAXX.

$0?

Yeah, my money is in SPAXX, too, and there was no minimum or anything.

 

[matttyl]

Thanks guys. You gave me some different options to explore. I do have a fidelity 401K thru work with investments in a brokerage link account. I assume the account you mentioned above is something set up outside of that account.

A 529? Yes, what state are you in?

I meant the brokerage account at Fidelity.

But yeah for 529s I'm in Arizona.

Az529.gov you have the ability to deduct $4k a year.

So if I'm understanding correctly...

529 contributions are like Roths where your contributions are after tax. Disbursement of principal and gains are tax free. For the state portion you also can deduct up to $4k per year. Which in AZ is now a 2.5% flat tax or $100 max on the $4K.

My only concern with a 529 is I can't afford the market to go sideways/down as I’ll need the funds each year after I put them in. My plan is to put away $750 every two weeks which is $19,500 a year. I'm going to start in the next month or so and will have to pull out roughly $8,500 in August and again in January. Repeating the same process for the next 4 years and probably something similar for the 4 years after. I'm thinking a 4-5% savings account might be the safest/best return I can get given the short term nature and lack of risk because I can't lose any $ that's needed to pay the school bill.

I’m sure the 529 will have money market type funds. So you’ll save $100 a year (per child/beneficiary), so $200 a year for the next 4, and $100 a year for the next four. All growth will be tax free as well, so long as the money is used for higher education.

 

[skol asylum]

Thanks guys. You gave me some different options to explore. I do have a fidelity 401K thru work with investments in a brokerage link account. I assume the account you mentioned above is something set up outside of that account.

A 529? Yes, what state are you in?

I meant the brokerage account at Fidelity.

But yeah for 529s I'm in Arizona.

Az529.gov you have the ability to deduct $4k a year.

So if I'm understanding correctly...

529 contributions are like Roths where your contributions are after tax. Disbursement of principal and gains are tax free. For the state portion you also can deduct up to $4k per year. Which in AZ is now a 2.5% flat tax or $100 max on the $4K.

My only concern with a 529 is I can't afford the market to go sideways/down as I’ll need the funds each year after I put them in. My plan is to put away $750 every two weeks which is $19,500 a year. I'm going to start in the next month or so and will have to pull out roughly $8,500 in August and again in January. Repeating the same process for the next 4 years and probably something similar for the 4 years after. I'm thinking a 4-5% savings account might be the safest/best return I can get given the short term nature and lack of risk because I can't lose any $ that's needed to pay the school bill.

I’m sure the 529 will have money market type funds. So you’ll save $100 a year (per child/beneficiary), so $200 a year for the next 4, and $100 a year for the next four. All growth will be tax free as well, so long as the money is used for higher education.

Thanks