Personal Finance Advice and Education! (3 Viewers)

[GDogg]

wow, some awful postings up here.

first off, never keep a c/c balance. if you can afford to pay it off do it, and anyone who tells you otherwise is WRONG (ALL CAPS).

Second, if you're car is financed at 1.9% don't pay it off early.

Let's say you have $25K liquid. Start a brokerage account, invest.

If you don't feel comfortable picking individual stocks, pick funds.

I can find hundreds of funds/stocks in a quick search that should comfortably yield me 4-5% in relatively safe returns.

keeping a c/c balance is about the worst advice I've ever heard.

just posting what my hired consultant guy told me. Not trying to be a know it all.

I pay all of my credit cards for the total amount shown on the statement the day before they are due. Since I use credit cards to pay for everything so that I maximize rewards/miles, I always show a balance on my credit reports. I think your consultant might have explained it to you poorly. Paying the amount that is due on your statement every month (the amount subject to interest) will not hurt your credit score as you will still have a balance unless you don't use your credit card for three weeks between the date your statement period ends and the date your payment is due.

I agree with the above. Carrying a balance month to month is a very bad idea.

 

[No. 16]

I charge everything and pay in full each month and have a credit score in the 700s. That's also without any type of loans.

 

[Tiger Fan]

well i threw 50K out there because that's what i had at the time i started the thread.You didn't look at the website closely enough if you thought it was all individual stocks and MLP's though.there are a lot of good dividend yielding ETF's out there that don't fluctuate much in price... LIKE PFF, or PGF (diversified preferred stock funds) Or municipal bond funds in your state (look at Nuveen's website).These are completely diversified funds in and of themselves.I'm not saying their the right choice for you... I'm not advising you to buy them... i'm just saying if that was all you took away from the website that you didn't read it hard enough.

That site looks pretty informative....how often is it updated?

guy works pretty damn hard on it, i'd say every week.not all of his ideas are great, but the information logs he has are fantastic.That guy and this message board (the FBG's of yield) http://www.siliconinvestor.com/subject.aspx?subjectid=58607&LastNum=730&NumMsgs=10have made me Thousands of dollars off of their ideas with fairly minimal risk.Username on here: ArbyMelt will tell you the same thing, he's made boatloads off of following these guys leads

very interesting...do you have a set formula on pulling the trigger on anything (I only took a quick glance, but will look more in depth later)

no, i don't have a formula.i generally read about the IPO of the debt sale, make sure the company looks ok to me, then I watch very carefully for when the IPO comes out ON THE OTC exchange so i can buy it at or below par.. if I can get it at or below par then i'm almost a lock to make some money on it because i will get it before the preferred stock mutual funds, closed end funds, and ETF's buy it and take the price well above par.Then i hold until either the capital gain on the share price is equal to 2 years worth of interest payments, or until i see a better offer.

gotcha. Will have to file this away for future reference

 

[Buddy Ball 2K3]

.

 

[FUBAR]

wow, some awful postings up here.

first off, never keep a c/c balance. if you can afford to pay it off do it, and anyone who tells you otherwise is WRONG (ALL CAPS).

Second, if you're car is financed at 1.9% don't pay it off early.

Let's say you have $25K liquid. Start a brokerage account, invest.

If you don't feel comfortable picking individual stocks, pick funds.

I can find hundreds of funds/stocks in a quick search that should comfortably yield me 4-5% in relatively safe returns.

keeping a c/c balance is about the worst advice I've ever heard.

just posting what my hired consultant guy told me. Not trying to be a know it all.

I pay all of my credit cards for the total amount shown on the statement the day before they are due. Since I use credit cards to pay for everything so that I maximize rewards/miles, I always show a balance on my credit reports. I think your consultant might have explained it to you poorly. Paying the amount that is due on your statement every month (the amount subject to interest) will not hurt your credit score as you will still have a balance unless you don't use your credit card for three weeks between the date your statement period ends and the date your payment is due.

I agree with the above. Carrying a balance month to month is a very bad idea.

I have my account set to automatically withdraw the full amount from my checking account every month. It's worked perfectly for the past few years and I've NEVER carried a balance.

 

[GDogg]

wow, some awful postings up here.

first off, never keep a c/c balance. if you can afford to pay it off do it, and anyone who tells you otherwise is WRONG (ALL CAPS).

Second, if you're car is financed at 1.9% don't pay it off early.

Let's say you have $25K liquid. Start a brokerage account, invest.

If you don't feel comfortable picking individual stocks, pick funds.

I can find hundreds of funds/stocks in a quick search that should comfortably yield me 4-5% in relatively safe returns.

keeping a c/c balance is about the worst advice I've ever heard.

just posting what my hired consultant guy told me. Not trying to be a know it all.

I pay all of my credit cards for the total amount shown on the statement the day before they are due. Since I use credit cards to pay for everything so that I maximize rewards/miles, I always show a balance on my credit reports. I think your consultant might have explained it to you poorly. Paying the amount that is due on your statement every month (the amount subject to interest) will not hurt your credit score as you will still have a balance unless you don't use your credit card for three weeks between the date your statement period ends and the date your payment is due.

I agree with the above. Carrying a balance month to month is a very bad idea.

I have my account set to automatically withdraw the full amount from my checking account every month. It's worked perfectly for the past few years and I've NEVER carried a balance.

The full balance of the card on the day it withdraws from your checking account or the full amount of the statement balance?

 

[Dentist]

well i threw 50K out there because that's what i had at the time i started the thread.You didn't look at the website closely enough if you thought it was all individual stocks and MLP's though.there are a lot of good dividend yielding ETF's out there that don't fluctuate much in price... LIKE PFF, or PGF (diversified preferred stock funds) Or municipal bond funds in your state (look at Nuveen's website).These are completely diversified funds in and of themselves.I'm not saying their the right choice for you... I'm not advising you to buy them... i'm just saying if that was all you took away from the website that you didn't read it hard enough.

That site looks pretty informative....how often is it updated?

guy works pretty damn hard on it, i'd say every week.not all of his ideas are great, but the information logs he has are fantastic.That guy and this message board (the FBG's of yield) http://www.siliconinvestor.com/subject.aspx?subjectid=58607&LastNum=730&NumMsgs=10have made me Thousands of dollars off of their ideas with fairly minimal risk.Username on here: ArbyMelt will tell you the same thing, he's made boatloads off of following these guys leads

very interesting...do you have a set formula on pulling the trigger on anything (I only took a quick glance, but will look more in depth later)

no, i don't have a formula.i generally read about the IPO of the debt sale, make sure the company looks ok to me, then I watch very carefully for when the IPO comes out ON THE OTC exchange so i can buy it at or below par.. if I can get it at or below par then i'm almost a lock to make some money on it because i will get it before the preferred stock mutual funds, closed end funds, and ETF's buy it and take the price well above par.Then i hold until either the capital gain on the share price is equal to 2 years worth of interest payments, or until i see a better offer.

gotcha. Will have to file this away for future reference

yes, definitely file it away... as the board readily admits... the hot time for these income preferred stocks was like '09 to mid '12... there haven't been any can't miss IPO's in several months now. I haven't bought anything in a long time.

 

[Tuco]

Quick general question... what are most of you paying to your financial advisor/wealth manager (assuming you use one)? I just opened an account and rolled over some old 401k's. I'm now funding a 529 and opening an investment portfolio with this company.I got a statement just before New Year's that said anything below 1mm was at 1.5% and anything over 1mm was 1%. I always thought the industry standard was 1% so I called him on it and he honored it. Just curious what else is going on out there.

 

[Dentist]

Quick general question... what are most of you paying to your financial advisor/wealth manager (assuming you use one)? I just opened an account and rolled over some old 401k's. I'm now funding a 529 and opening an investment portfolio with this company.I got a statement just before New Year's that said anything below 1mm was at 1.5% and anything over 1mm was 1%. I always thought the industry standard was 1% so I called him on it and he honored it. Just curious what else is going on out there.

1% doesn't sound like much if you have less than 100K invested (just $1000 a year).. but as your money continues to (hopefully) grow, you'd sure be better off to just read a book or two on personal finance and do it yourself.You'll pay this guy literally tens of thousands of dollars over the course of your relationship, and I'd be pretty impressed if he out-performed the s&P 500 over any time frame over 10 years.

 

[siffoin]

well i threw 50K out there because that's what i had at the time i started the thread.You didn't look at the website closely enough if you thought it was all individual stocks and MLP's though.there are a lot of good dividend yielding ETF's out there that don't fluctuate much in price... LIKE PFF, or PGF (diversified preferred stock funds) Or municipal bond funds in your state (look at Nuveen's website).These are completely diversified funds in and of themselves.I'm not saying their the right choice for you... I'm not advising you to buy them... i'm just saying if that was all you took away from the website that you didn't read it hard enough.

That site looks pretty informative....how often is it updated?

guy works pretty damn hard on it, i'd say every week.not all of his ideas are great, but the information logs he has are fantastic.That guy and this message board (the FBG's of yield) http://www.siliconinvestor.com/subject.aspx?subjectid=58607&LastNum=730&NumMsgs=10have made me Thousands of dollars off of their ideas with fairly minimal risk.Username on here: ArbyMelt will tell you the same thing, he's made boatloads off of following these guys leads

very interesting...do you have a set formula on pulling the trigger on anything (I only took a quick glance, but will look more in depth later)

no, i don't have a formula.i generally read about the IPO of the debt sale, make sure the company looks ok to me, then I watch very carefully for when the IPO comes out ON THE OTC exchange so i can buy it at or below par.. if I can get it at or below par then i'm almost a lock to make some money on it because i will get it before the preferred stock mutual funds, closed end funds, and ETF's buy it and take the price well above par.Then i hold until either the capital gain on the share price is equal to 2 years worth of interest payments, or until i see a better offer.

gotcha. Will have to file this away for future reference

yes, definitely file it away... as the board readily admits... the hot time for these income preferred stocks was like '09 to mid '12... there haven't been any can't miss IPO's in several months now. I haven't bought anything in a long time.

Now hold on here Dentist. You're telling me that you've regularly been able to capture 2 years of interest payments on an IPO'd Prefered Stock. That's downright impressive. I've done a few Prefered IPOs- CHSP/PA; AFSD; MITT/PA, and have seen 2 of the three run $1.50 or so above par (so $26.50 or so) but never $3.00+. What were the ones you were buying that did that?In addition I take a different approach. I follow the Preferred underlying stock side by side...and as long as the corresponding stock is doing ok...I'm fine to collect the quarterly distribution. The reason is that the preferred portion of my portfolio is really just a a placeholder for cash...and better to be making something off it. The AFSD return is 5.5%, but the other 5 I own return 7%+...I don't get the idea of flipping out as long as the company is paying those quarterly distributions. I think these things can be a portion of one's portfolio, but unless you are an old man, not much more than 20% of ones portfolio.If I could offer one sliver of advice it is this:Think of investing like a game, and game that unfolds over your adult life. There will be times when it is not only appropriate but necessary to take chances- take on risk...and there will be times when you need to be more conservative. And that can fluctuate year to year. A football team probably wouldn't be too successful if all they did is throw bombs (like the guy who goes all in on risky investment after risky investment). But neither will the team that runs up the middle every single play. When the trend is bullish it's like you're coaching an offensive team. First thing you want to do is make sure you move those chains. If opportunity presents take some chances too. If you do that...focus on that...you'll score. The goal must be on every single bull trend I must score points. When the trend is bearish it's like you're coaching the defensive team. The goal is to prevent your portfolio from taking losses.If your life were a football game- think of age 25-40 like being in the 1st quarter. The goal is to score points, take more chances, get a big lead, be very aggressive when on offense. The second and third quarters of your game are from age 40-60. Here you want to continue to add to the score but you'd rather have the QB throw the ball away and punt than you would to throw a pick 6. This stage of life it is critical to keep your portfolio growing, with a leaning focus towards minimizing losses in bear markets. At 60 years+ it's like the 4th quarter. By now you should have an insurmountable lead...you go conservative and run off the clock. Scoring is great if the opportunity presents, but that is no longer the primary focus...the focus is getting into that "V" formation and "going to Disneyland". Just like a football team cannot eexpect every single play to be for positive yards. Neither should you expect to have every single investment be a winner. Sometimes you just miss. Sometimes you make a mistake. It's how you bounce back that is most important. Investing is not a game of perfect. But is is a game, and the strategic decisions you make over the course of your life will determine the outcome. I don't think most people consider the strategy aspect. I also think there is a lot of intentional deception to keep most folks from succeeding too. I like PFXF as a Preferred ETF as a side note.

 

[Dentist]

well i threw 50K out there because that's what i had at the time i started the thread.You didn't look at the website closely enough if you thought it was all individual stocks and MLP's though.there are a lot of good dividend yielding ETF's out there that don't fluctuate much in price... LIKE PFF, or PGF (diversified preferred stock funds) Or municipal bond funds in your state (look at Nuveen's website).These are completely diversified funds in and of themselves.I'm not saying their the right choice for you... I'm not advising you to buy them... i'm just saying if that was all you took away from the website that you didn't read it hard enough.

That site looks pretty informative....how often is it updated?

guy works pretty damn hard on it, i'd say every week.not all of his ideas are great, but the information logs he has are fantastic.That guy and this message board (the FBG's of yield) http://www.siliconinvestor.com/subject.aspx?subjectid=58607&LastNum=730&NumMsgs=10have made me Thousands of dollars off of their ideas with fairly minimal risk.Username on here: ArbyMelt will tell you the same thing, he's made boatloads off of following these guys leads

very interesting...do you have a set formula on pulling the trigger on anything (I only took a quick glance, but will look more in depth later)

no, i don't have a formula.i generally read about the IPO of the debt sale, make sure the company looks ok to me, then I watch very carefully for when the IPO comes out ON THE OTC exchange so i can buy it at or below par.. if I can get it at or below par then i'm almost a lock to make some money on it because i will get it before the preferred stock mutual funds, closed end funds, and ETF's buy it and take the price well above par.Then i hold until either the capital gain on the share price is equal to 2 years worth of interest payments, or until i see a better offer.

gotcha. Will have to file this away for future reference

yes, definitely file it away... as the board readily admits... the hot time for these income preferred stocks was like '09 to mid '12... there haven't been any can't miss IPO's in several months now. I haven't bought anything in a long time.

Now hold on here Dentist. You're telling me that you've regularly been able to capture 2 years of interest payments on an IPO'd Prefered Stock. That's downright impressive. I've done a few Prefered IPOs- CHSP/PA; AFSD; MITT/PA, and have seen 2 of the three run $1.50 or so above par (so $26.50 or so) but never $3.00+. What were the ones you were buying that did that?In addition I take a different approach. I follow the Preferred underlying stock side by side...and as long as the corresponding stock is doing ok...I'm fine to collect the quarterly distribution. The reason is that the preferred portion of my portfolio is really just a a placeholder for cash...and better to be making something off it. The AFSD return is 5.5%, but the other 5 I own return 7%+...I don't get the idea of flipping out as long as the company is paying those quarterly distributions. I think these things can be a portion of one's portfolio, but unless you are an old man, not much more than 20% of ones portfolio.If I could offer one sliver of advice it is this:Think of investing like a game, and game that unfolds over your adult life. There will be times when it is not only appropriate but necessary to take chances- take on risk...and there will be times when you need to be more conservative. And that can fluctuate year to year. A football team probably wouldn't be too successful if all they did is throw bombs (like the guy who goes all in on risky investment after risky investment). But neither will the team that runs up the middle every single play. When the trend is bullish it's like you're coaching an offensive team. First thing you want to do is make sure you move those chains. If opportunity presents take some chances too. If you do that...focus on that...you'll score. The goal must be on every single bull trend I must score points. When the trend is bearish it's like you're coaching the defensive team. The goal is to prevent your portfolio from taking losses.If your life were a football game- think of age 25-40 like being in the 1st quarter. The goal is to score points, take more chances, get a big lead, be very aggressive when on offense. The second and third quarters of your game are from age 40-60. Here you want to continue to add to the score but you'd rather have the QB throw the ball away and punt than you would to throw a pick 6. This stage of life it is critical to keep your portfolio growing, with a leaning focus towards minimizing losses in bear markets. At 60 years+ it's like the 4th quarter. By now you should have an insurmountable lead...you go conservative and run off the clock. Scoring is great if the opportunity presents, but that is no longer the primary focus...the focus is getting into that "V" formation and "going to Disneyland". Just like a football team cannot eexpect every single play to be for positive yards. Neither should you expect to have every single investment be a winner. Sometimes you just miss. Sometimes you make a mistake. It's how you bounce back that is most important. Investing is not a game of perfect. But is is a game, and the strategic decisions you make over the course of your life will determine the outcome. I don't think most people consider the strategy aspect. I also think there is a lot of intentional deception to keep most folks from succeeding too. I like PFXF as a Preferred ETF as a side note.

No, i said IF one of them appreciates to 2 years of income, then i would sell, capture the gains and re-invest.I've only accomplished this once with USB.MI have several of these issues that have appreciated 1 year of income though... in fact most of the one i've purchased have moved up 5-8%, exceeding or meeting 1 year of income.I'm sorry my post was confusing.The poster asked if i had a formula. I don't. But my system is that if i like the issue, I buy at or below par, if it appreciates heavily, i'd sell. As i mentioned, i haven't seen anything i loved or even liked in awhile.

 

[Tuco]

Quick general question... what are most of you paying to your financial advisor/wealth manager (assuming you use one)? I just opened an account and rolled over some old 401k's. I'm now funding a 529 and opening an investment portfolio with this company.I got a statement just before New Year's that said anything below 1mm was at 1.5% and anything over 1mm was 1%. I always thought the industry standard was 1% so I called him on it and he honored it. Just curious what else is going on out there.

1% doesn't sound like much if you have less than 100K invested (just $1000 a year).. but as your money continues to (hopefully) grow, you'd sure be better off to just read a book or two on personal finance and do it yourself.You'll pay this guy literally tens of thousands of dollars over the course of your relationship, and I'd be pretty impressed if he out-performed the s&P 500 over any time frame over 10 years.

My line of thinking is similar, but I also look at it from a different way. Shouldn't this guy be able to make more than 1% better of a return than me, a guy not in finance? If I invest and get say a 7% return, I'm hoping a professional could get 8%.

 

[Dentist]

Quick general question... what are most of you paying to your financial advisor/wealth manager (assuming you use one)? I just opened an account and rolled over some old 401k's. I'm now funding a 529 and opening an investment portfolio with this company.I got a statement just before New Year's that said anything below 1mm was at 1.5% and anything over 1mm was 1%. I always thought the industry standard was 1% so I called him on it and he honored it. Just curious what else is going on out there.

1% doesn't sound like much if you have less than 100K invested (just $1000 a year).. but as your money continues to (hopefully) grow, you'd sure be better off to just read a book or two on personal finance and do it yourself.You'll pay this guy literally tens of thousands of dollars over the course of your relationship, and I'd be pretty impressed if he out-performed the s&P 500 over any time frame over 10 years.

My line of thinking is similar, but I also look at it from a different way. Shouldn't this guy be able to make more than 1% better of a return than me, a guy not in finance? If I invest and get say a 7% return, I'm hoping a professional could get 8%.

i guess it just depends on your school of thought on passive management vs. active management and what types of funds this "guy" puts you in.The way I look at it.. he charges 1%, the funds you are in probably have expense ratios of 1% or so.... so now this guy has to beat the s&P 500 or whatever benchmark you want to compare yourself to by 2% every year.If your "guy" can do that, then please give me his contact information.Almost no one does that in the world of wall street, which is why unless you are Dodds or Siffoin, that you're probably just as well off in a cheap index fund with an expense ratio around 0.2% rather than 2%.Check out the Lazy portfolio thread.I'm of the school of thought that the average wealth management guy isn't worth crap. There's so damn much money in the financial services industry... those guys get so filthy rich because people lack the self confidence to just read a couple decent books on Personal Finance and Investing (like the Bogleheads guide to investing) and then execute a plan to meet their goals.

 

[Wooderson]

Could use some financial advice. I have a few things I think might be beneficial for me to take care of before April 15th. I want to do something with it is because our AGI is going to double in 2013. And will increase at a steady rate for at least 3 years. So I guess i'm thinking this is the lowest by a good margin our tax rate will be.Investments:IRA- $2,000Roth IRA - $10,000401- $22,000403b- $42,000I trying to learn more about investments but don't feel comfortable yet and feel like I need to make some decisions on these soon. Non of these are getting in contributions at this time.So my question is what would be a good plan to do with these investments? Knowing our tax rate is going to to go up next year. Also this is the last year we will qualify in opening a Roth IRA. Wife and I are in our low to mid 30's if that matters. Thanks

 

[Buck Bradcanon]

 

[Dentist]

Could use some financial advice. I have a few things I think might be beneficial for me to take care of before April 15th. I want to do something with it is because our AGI is going to double in 2013. And will increase at a steady rate for at least 3 years. So I guess i'm thinking this is the lowest by a good margin our tax rate will be.Investments:IRA- $2,000Roth IRA - $10,000401- $22,000403b- $42,000I trying to learn more about investments but don't feel comfortable yet and feel like I need to make some decisions on these soon. Non of these are getting in contributions at this time.So my question is what would be a good plan to do with these investments? Knowing our tax rate is going to to go up next year. Also this is the last year we will qualify in opening a Roth IRA. Wife and I are in our low to mid 30's if that matters. Thanks

dump the full 10K into the roth, there's almost no downside there

 

[Wooderson]

Could use some financial advice. I have a few things I think might be beneficial for me to take care of before April 15th. I want to do something with it is because our AGI is going to double in 2013. And will increase at a steady rate for at least 3 years. So I guess i'm thinking this is the lowest by a good margin our tax rate will be.Investments:IRA- $2,000Roth IRA - $10,000401- $22,000403b- $42,000I trying to learn more about investments but don't feel comfortable yet and feel like I need to make some decisions on these soon. Non of these are getting in contributions at this time.So my question is what would be a good plan to do with these investments? Knowing our tax rate is going to to go up next year. Also this is the last year we will qualify in opening a Roth IRA. Wife and I are in our low to mid 30's if that matters. Thanks

dump the full 10K into the roth, there's almost no downside there

Thanks for answering Dentist I hoped you would see this. So lets say I contribute the full 10k to the roth. Now next year we can't open a new roth but can we again contribute another 10k?Also thinking strictly tax purposes is there anything I should do with the other investments?

 

[humpback]

Could use some financial advice. I have a few things I think might be beneficial for me to take care of before April 15th. I want to do something with it is because our AGI is going to double in 2013. And will increase at a steady rate for at least 3 years. So I guess i'm thinking this is the lowest by a good margin our tax rate will be.Investments:IRA- $2,000Roth IRA - $10,000401- $22,000403b- $42,000I trying to learn more about investments but don't feel comfortable yet and feel like I need to make some decisions on these soon. Non of these are getting in contributions at this time.So my question is what would be a good plan to do with these investments? Knowing our tax rate is going to to go up next year. Also this is the last year we will qualify in opening a Roth IRA. Wife and I are in our low to mid 30's if that matters. Thanks

I'm not sure what the question is. These are all tax advantaged accounts- any transactions (buys/sells) in them won't trigger a taxable event, so the fact that your tax rate is going up is irrelevant. Given what you've said, I'd definitely put this years (and 2012 if you haven't yet) contributions in a Roth.

 

[Wooderson]

Could use some financial advice. I have a few things I think might be beneficial for me to take care of before April 15th. I want to do something with it is because our AGI is going to double in 2013. And will increase at a steady rate for at least 3 years. So I guess i'm thinking this is the lowest by a good margin our tax rate will be.Investments:IRA- $2,000Roth IRA - $10,000401- $22,000403b- $42,000I trying to learn more about investments but don't feel comfortable yet and feel like I need to make some decisions on these soon. Non of these are getting in contributions at this time.So my question is what would be a good plan to do with these investments? Knowing our tax rate is going to to go up next year. Also this is the last year we will qualify in opening a Roth IRA. Wife and I are in our low to mid 30's if that matters. Thanks

I'm not sure what the question is. These are all tax advantaged accounts- any transactions (buys/sells) in them won't trigger a taxable event, so the fact that your tax rate is going up is irrelevant. Given what you've said, I'd definitely put this years (and 2012 if you haven't yet) contributions in a Roth.

I guess I'm just scared I'm going to miss out on my last chance to convert something at a lower tax rate. Don't want to put it off and regret not taking advantage of the tax bracket we are in.

 

[humpback]

Could use some financial advice. I have a few things I think might be beneficial for me to take care of before April 15th. I want to do something with it is because our AGI is going to double in 2013. And will increase at a steady rate for at least 3 years. So I guess i'm thinking this is the lowest by a good margin our tax rate will be.Investments:IRA- $2,000Roth IRA - $10,000401- $22,000403b- $42,000I trying to learn more about investments but don't feel comfortable yet and feel like I need to make some decisions on these soon. Non of these are getting in contributions at this time.So my question is what would be a good plan to do with these investments? Knowing our tax rate is going to to go up next year. Also this is the last year we will qualify in opening a Roth IRA. Wife and I are in our low to mid 30's if that matters. Thanks

I'm not sure what the question is. These are all tax advantaged accounts- any transactions (buys/sells) in them won't trigger a taxable event, so the fact that your tax rate is going up is irrelevant. Given what you've said, I'd definitely put this years (and 2012 if you haven't yet) contributions in a Roth.

I guess I'm just scared I'm going to miss out on my last chance to convert something at a lower tax rate. Don't want to put it off and regret not taking advantage of the tax bracket we are in.

Gotcha. Hate to break it to you, but you already missed out by a month!If you and/or your wife aren't are no longer employed with the companies holding those plans, you could roll them over and convert to a Roth. That will count as income in 2013 however, so you're already going to be paying a higher rate. However, if you have the cash available to pay the extra tax and you think your bracket will move even higher in the future, it still may make sense. If you have an accountant, talk to them about it.

 

[Wooderson]

Could use some financial advice. I have a few things I think might be beneficial for me to take care of before April 15th. I want to do something with it is because our AGI is going to double in 2013. And will increase at a steady rate for at least 3 years. So I guess i'm thinking this is the lowest by a good margin our tax rate will be.Investments:IRA- $2,000Roth IRA - $10,000401- $22,000403b- $42,000I trying to learn more about investments but don't feel comfortable yet and feel like I need to make some decisions on these soon. Non of these are getting in contributions at this time.So my question is what would be a good plan to do with these investments? Knowing our tax rate is going to to go up next year. Also this is the last year we will qualify in opening a Roth IRA. Wife and I are in our low to mid 30's if that matters. Thanks

I'm not sure what the question is. These are all tax advantaged accounts- any transactions (buys/sells) in them won't trigger a taxable event, so the fact that your tax rate is going up is irrelevant. Given what you've said, I'd definitely put this years (and 2012 if you haven't yet) contributions in a Roth.

I guess I'm just scared I'm going to miss out on my last chance to convert something at a lower tax rate. Don't want to put it off and regret not taking advantage of the tax bracket we are in.

Gotcha. Hate to break it to you, but you already missed out by a month!If you and/or your wife aren't are no longer employed with the companies holding those plans, you could roll them over and convert to a Roth. That will count as income in 2013 however, so you're already going to be paying a higher rate. However, if you have the cash available to pay the extra tax and you think your bracket will move even higher in the future, it still may make sense. If you have an accountant, talk to them about it.

Ah crap. I thought you could still consider investments for the 2012 year as long as done before April 15th? At one time I was thinking I should get as much into a roth as I can. Meaning converting and such. Is that a good idea or just leaving the money in the 401 and 403 be just fine?We just moved and will be meeting with a new tax accountant soon.

 

[humpback]

Ah crap. I thought you could still consider investments for the 2012 year as long as done before April 15th? At one time I was thinking I should get as much into a roth as I can. Meaning converting and such. Is that a good idea or just leaving the money in the 401 and 403 be just fine?We just moved and will be meeting with a new tax accountant soon.

You have until then to make contributions to your IRA's for 2012, but Roth conversions count as income in the year they occur.Based on what you've said, I'd suggest converting at least some of your traditional to a Roth (especially if you can pay the taxes out of saving). However, it's all going to come down to your individual circumstances, and you're going to have to make some assumptions about the future that no one can really predict (no one knows what tax rates will be 30-40 years from now, for instance). There are a bunch of free roth conversion calculators out there that you can use to compare- here's one. Again, these are using a lot of assumptions that you can adjust, but they can give you an idea.

 

[Dentist]

Could use some financial advice. I have a few things I think might be beneficial for me to take care of before April 15th. I want to do something with it is because our AGI is going to double in 2013. And will increase at a steady rate for at least 3 years. So I guess i'm thinking this is the lowest by a good margin our tax rate will be.Investments:IRA- $2,000Roth IRA - $10,000401- $22,000403b- $42,000I trying to learn more about investments but don't feel comfortable yet and feel like I need to make some decisions on these soon. Non of these are getting in contributions at this time.So my question is what would be a good plan to do with these investments? Knowing our tax rate is going to to go up next year. Also this is the last year we will qualify in opening a Roth IRA. Wife and I are in our low to mid 30's if that matters. Thanks

dump the full 10K into the roth, there's almost no downside there

Thanks for answering Dentist I hoped you would see this. So lets say I contribute the full 10k to the roth. Now next year we can't open a new roth but can we again contribute another 10k?Also thinking strictly tax purposes is there anything I should do with the other investments?

You can contribute 10K to your roth IRA for calendar year 2012 as long as you do so by April 15th.Are you sure you're going to be ineligible for the Roth IRA next year, have you studied the rules?The basis for eligibility is $178,000... but that's Modified Adjusted Income.so for instance if you and your wife both contributed the max to your 401k/403b (total of 35K) and then let's say you have access to a Health Savings account because you both have high deductible ($6400) and maybe your health insurance premiums are taken out pre-tax...I mean you can have a family income at nearly 225,000 and still quality for the Roth IRA if you want to assuming you are married filing jointly.That's basically what I do to still qualify for the Roth... you take our incomes... subtract 35K for the 401k's, 6400 for the HSA, health insurance premiums paid pre-tax (take those out), wife has a pension and they take out 15% for that... there's another few thousand taken out pre-tax..All of these things will lower your final tax bracket possibly as well... there are a lot of ways to defer taxation.

 

[Wooderson]

Could use some financial advice. I have a few things I think might be beneficial for me to take care of before April 15th. I want to do something with it is because our AGI is going to double in 2013. And will increase at a steady rate for at least 3 years. So I guess i'm thinking this is the lowest by a good margin our tax rate will be.Investments:IRA- $2,000Roth IRA - $10,000401- $22,000403b- $42,000I trying to learn more about investments but don't feel comfortable yet and feel like I need to make some decisions on these soon. Non of these are getting in contributions at this time.So my question is what would be a good plan to do with these investments? Knowing our tax rate is going to to go up next year. Also this is the last year we will qualify in opening a Roth IRA. Wife and I are in our low to mid 30's if that matters. Thanks

dump the full 10K into the roth, there's almost no downside there

Thanks for answering Dentist I hoped you would see this. So lets say I contribute the full 10k to the roth. Now next year we can't open a new roth but can we again contribute another 10k?Also thinking strictly tax purposes is there anything I should do with the other investments?

You can contribute 10K to your roth IRA for calendar year 2012 as long as you do so by April 15th.Are you sure you're going to be ineligible for the Roth IRA next year, have you studied the rules?The basis for eligibility is $178,000... but that's Modified Adjusted Income.so for instance if you and your wife both contributed the max to your 401k/403b (total of 35K) and then let's say you have access to a Health Savings account because you both have high deductible ($6400) and maybe your health insurance premiums are taken out pre-tax...I mean you can have a family income at nearly 225,000 and still quality for the Roth IRA if you want to assuming you are married filing jointly.That's basically what I do to still qualify for the Roth... you take our incomes... subtract 35K for the 401k's, 6400 for the HSA, health insurance premiums paid pre-tax (take those out), wife has a pension and they take out 15% for that... there's another few thousand taken out pre-tax..All of these things will lower your final tax bracket possibly as well... there are a lot of ways to defer taxation.

Good information. I think I'm out of luck as we will be at $240,000 or so next year. I don't see us having enough places to dump money to get under the limit.Now for 2012 we are under the limit of $178,000.

 

[Wooderson]

Ah crap. I thought you could still consider investments for the 2012 year as long as done before April 15th? At one time I was thinking I should get as much into a roth as I can. Meaning converting and such. Is that a good idea or just leaving the money in the 401 and 403 be just fine?We just moved and will be meeting with a new tax accountant soon.

You have until then to make contributions to your IRA's for 2012, but Roth conversions count as income in the year they occur.Based on what you've said, I'd suggest converting at least some of your traditional to a Roth (especially if you can pay the taxes out of saving). However, it's all going to come down to your individual circumstances, and you're going to have to make some assumptions about the future that no one can really predict (no one knows what tax rates will be 30-40 years from now, for instance). There are a bunch of free roth conversion calculators out there that you can use to compare- here's one. Again, these are using a lot of assumptions that you can adjust, but they can give you an idea.

I think we will contribute the max to the one Roth we have setup. Now I've been reading about a way to convert IRA to Roth IRA doing something like this My linkHas anyone tried that?

 

[Dentist]

Could use some financial advice. I have a few things I think might be beneficial for me to take care of before April 15th. I want to do something with it is because our AGI is going to double in 2013. And will increase at a steady rate for at least 3 years. So I guess i'm thinking this is the lowest by a good margin our tax rate will be.Investments:IRA- $2,000Roth IRA - $10,000401- $22,000403b- $42,000I trying to learn more about investments but don't feel comfortable yet and feel like I need to make some decisions on these soon. Non of these are getting in contributions at this time.So my question is what would be a good plan to do with these investments? Knowing our tax rate is going to to go up next year. Also this is the last year we will qualify in opening a Roth IRA. Wife and I are in our low to mid 30's if that matters. Thanks

dump the full 10K into the roth, there's almost no downside there

Thanks for answering Dentist I hoped you would see this. So lets say I contribute the full 10k to the roth. Now next year we can't open a new roth but can we again contribute another 10k?Also thinking strictly tax purposes is there anything I should do with the other investments?

You can contribute 10K to your roth IRA for calendar year 2012 as long as you do so by April 15th.Are you sure you're going to be ineligible for the Roth IRA next year, have you studied the rules?The basis for eligibility is $178,000... but that's Modified Adjusted Income.so for instance if you and your wife both contributed the max to your 401k/403b (total of 35K) and then let's say you have access to a Health Savings account because you both have high deductible ($6400) and maybe your health insurance premiums are taken out pre-tax...I mean you can have a family income at nearly 225,000 and still quality for the Roth IRA if you want to assuming you are married filing jointly.That's basically what I do to still qualify for the Roth... you take our incomes... subtract 35K for the 401k's, 6400 for the HSA, health insurance premiums paid pre-tax (take those out), wife has a pension and they take out 15% for that... there's another few thousand taken out pre-tax..All of these things will lower your final tax bracket possibly as well... there are a lot of ways to defer taxation.

Good information. I think I'm out of luck as we will be at $240,000 or so next year. I don't see us having enough places to dump money to get under the limit.Now for 2012 we are under the limit of $178,000.

the 2012 limit is less than that, but not by much... i think like 169,000.Good for you big baller with the 240! You're right.. you're not going to be able to get that under 178.I haven't even determined if i'm going to get under 169 this year or not.. i haven't put in my roth contribution for '12... it's going to come down to a few grand here or there....

 

[Grahamburn]

How's the investing environment this year fellas?

I have a friend (insurance salesman ) who is really pushing me to get into a whole life policy. Recently married, just had a baby, contribute the max to a Roth, and 10% of my income to my company's 401k. I've been telling him to pound sand for two years, but I've done a little research, and the benefits are starting to intrigue me. Reinvested dividends of 4-6%+, tax shelters, etc.

Does anyone have experience with whole life?

 

[SpurrierisisGod]

How's the investing environment this year fellas?

I have a friend (insurance salesman ) who is really pushing me to get into a whole life policy. Recently married, just had a baby, contribute the max to a Roth, and 10% of my income to my company's 401k. I've been telling him to pound sand for two years, but I've done a little research, and the benefits are starting to intrigue me. Reinvested dividends of 4-6%+, tax shelters, etc.

Does anyone have experience with whole life?

In case you didn't know, insurance salesmen get a much larger comission on whole life than they do term. Not saying this is this case, but how good of a friend is he?

If you need insurance, term is almost always the better option. Not generally a good idea to look at whole life as an "investment".

Others here might disagree, but the majority will say "buy term and invest the difference".

 

[Slapdash]

How's the investing environment this year fellas?

I have a friend (insurance salesman ) who is really pushing me to get into a whole life policy. Recently married, just had a baby, contribute the max to a Roth, and 10% of my income to my company's 401k. I've been telling him to pound sand for two years, but I've done a little research, and the benefits are starting to intrigue me. Reinvested dividends of 4-6%+, tax shelters, etc.

Does anyone have experience with whole life?

It's a trap

 

[Grahamburn]

How's the investing environment this year fellas?

I have a friend (insurance salesman ) who is really pushing me to get into a whole life policy. Recently married, just had a baby, contribute the max to a Roth, and 10% of my income to my company's 401k. I've been telling him to pound sand for two years, but I've done a little research, and the benefits are starting to intrigue me. Reinvested dividends of 4-6%+, tax shelters, etc.

Does anyone have experience with whole life?

It's a trap

Care to explain why? It definitely seems to good to be true, especially the way this guy describes it.

 

[Dentist]

How's the investing environment this year fellas?

I have a friend (insurance salesman ) who is really pushing me to get into a whole life policy. Recently married, just had a baby, contribute the max to a Roth, and 10% of my income to my company's 401k. I've been telling him to pound sand for two years, but I've done a little research, and the benefits are starting to intrigue me. Reinvested dividends of 4-6%+, tax shelters, etc.

Does anyone have experience with whole life?

if there is only one thing ive learned from all my personal finance reading it is to never mix investing and insurance

 

[Banger]

How's the investing environment this year fellas?

I have a friend (insurance salesman ) who is really pushing me to get into a whole life policy. Recently married, just had a baby, contribute the max to a Roth, and 10% of my income to my company's 401k. I've been telling him to pound sand for two years, but I've done a little research, and the benefits are starting to intrigue me. Reinvested dividends of 4-6%+, tax shelters, etc.

Does anyone have experience with whole life?

It's a trap

Care to explain why? It definitely seems to good to be true, especially the way this guy describes it.

http://momanddadmoney.com/why-whole-life-insurance-is-a-bad-investment/

This should explain why it's a bad idea. If you want insurance just get term at a fraction of the price and invest the premium difference in Roth/Ira and you'll be much better off.

 

[NajehHejan]

Dentist - figured this is a good place to ask you - assuming you maxed out your work 401k, which of the below options would you choose for your wife who doesn't have a 401k?

1) Contribute $5,500 to a traditional IRA in her name. Pay Uncle Sam $1,400 in federal taxes

2) Contribute $5,500 to a Roth IRA in her name. Pay Uncle Sam $3,300 in federal taxes

I know you love you some Roth and the favorable low tax retirement living (assuming you make it to 59 1/2) but I have to choose door #1, right? I don't have an extra $1,900 just laying around.

 

[Grahamburn]

Thanks all.

 

[Dentist]

Dentist - figured this is a good place to ask you - assuming you maxed out your work 401k, which of the below options would you choose for your wife who doesn't have a 401k?

1) Contribute $5,500 to a traditional IRA in her name. Pay Uncle Sam $1,400 in federal taxes

2) Contribute $5,500 to a Roth IRA in her name. Pay Uncle Sam $3,300 in federal taxes

I know you love you some Roth and the favorable low tax retirement living (assuming you make it to 59 1/2) but I have to choose door #1, right? I don't have an extra $1,900 just laying around.

why would you be paying taxes doing either one of these?

are you suggesting that you've done your taxes and that if you do #1 the amount you owe uncle sam is $1400 but if you don't do #1 and do #2 instead (or neither) that you would owe $3300?

why don't you have an extra $1900 laying around if you can afford to max your 401k out at 17,500?

You're going to pay that $1900 at some point if you do option #1... it's your choice whether you do so now or later... the part i'm encouraged about is that you are investing and are maxing out your 401k, which is awesome... you are way ahead of the game.

 

[NajehHejan]

Dentist - figured this is a good place to ask you - assuming you maxed out your work 401k, which of the below options would you choose for your wife who doesn't have a 401k?

1) Contribute $5,500 to a traditional IRA in her name. Pay Uncle Sam $1,400 in federal taxes

2) Contribute $5,500 to a Roth IRA in her name. Pay Uncle Sam $3,300 in federal taxes

I know you love you some Roth and the favorable low tax retirement living (assuming you make it to 59 1/2) but I have to choose door #1, right? I don't have an extra $1,900 just laying around.

why would you be paying taxes doing either one of these?

are you suggesting that you've done your taxes and that if you do #1 the amount you owe uncle sam is $1400 but if you don't do #1 and do #2 instead (or neither) that you would owe $3300?

why don't you have an extra $1900 laying around if you can afford to max your 401k out at 17,500?

You're going to pay that $1900 at some point if you do option #1... it's your choice whether you do so now or later... the part i'm encouraged about is that you are investing and are maxing out your 401k, which is awesome... you are way ahead of the game.

Yes, I've done my taxes both ways on Turbo Tax for 2013 and those are my options. I think I'm going to do the Traditional IRA route for her and do better tax planning for next year and in the meantime set up a Roth for myself so I can diversify the pre/post retirement tax implications. [SIZE=medium]For future years for her I may divvy up her $5,500 to do half traditional and half Roth - that is allowed, right?[/SIZE]

 

[saintfool]

i posted this in a different thread related to finances and retirement. thought i might have better luck here:

so i have recently switched jobs. i left a pretty good gig with an established education-technology company for a great opportunity with a start-up. i like this new gig quite a bit with the exception of one thing: no 401k. are there any good options for me here?

i have already rolled a 401k from a previous job into an IRA. i will likely do the same with the most recent 401k too. but limiting my contributions to $5500/year kind of blows when i could plan for up to the $17,500 with the employer 401k.

any advice here?

 

[NewlyRetired]

i posted this in a different thread related to finances and retirement. thought i might have better luck here:

so i have recently switched jobs. i left a pretty good gig with an established education-technology company for a great opportunity with a start-up. i like this new gig quite a bit with the exception of one thing: no 401k. are there any good options for me here?

i have already rolled a 401k from a previous job into an IRA. i will likely do the same with the most recent 401k too. but limiting my contributions to $5500/year kind of blows when i could plan for up to the $17,500 with the employer 401k.

any advice here?

If you don't have a 401k, invest in a Roth or Traditional and then invest the rest in an after tax brokerage account (assuming you have taken care of the normal financial steps as listed in the first post of this thread)

http://forums.footballguys.com/forum/index.php?showtopic=318298&hl=

 

[Sarnoff]

Through work I have an HSA health plan. It's like an FSA, but, the money can roll-over year-to-year, that is, I do not have to "use it or lose it". Pretax money from my paycheck and an employer match fund the account. I can withdraw from it, tax-free, from qualified medical expenses, or, for any reason at all after 65/retirement. Until it's needed, the money sits in the account and grows.

Anyway, I'm allowed to invest this money any way I want while it's within the account. Anyone know how that works? If I choose to invest some $, say I buy some stock and hold it for a few months, then sell, is there short-term cap. gains tax to be assessed? Or is it a tax-free zone for as long as I don't withdraw it?

TIA.

 

[Sarnoff]

Through work I have an HSA health plan. It's like an FSA, but, the money can roll-over year-to-year, that is, I do not have to "use it or lose it". Pretax money from my paycheck and an employer match fund the account. I can withdraw from it, tax-free, from qualified medical expenses, or, for any reason at all after 65/retirement. Until it's needed, the money sits in the account and grows.

Anyway, I'm allowed to invest this money any way I want while it's within the account. Anyone know how that works? If I choose to invest some $, say I buy some stock and hold it for a few months, then sell, is there short-term cap. gains tax to be assessed? Or is it a tax-free zone for as long as I don't withdraw it?

TIA.

Pity bump for the day crew

 

[fourd]

Through work I have an HSA health plan. It's like an FSA, but, the money can roll-over year-to-year, that is, I do not have to "use it or lose it". Pretax money from my paycheck and an employer match fund the account. I can withdraw from it, tax-free, from qualified medical expenses, or, for any reason at all after 65/retirement. Until it's needed, the money sits in the account and grows.

Anyway, I'm allowed to invest this money any way I want while it's within the account. Anyone know how that works? If I choose to invest some $, say I buy some stock and hold it for a few months, then sell, is there short-term cap. gains tax to be assessed? Or is it a tax-free zone for as long as I don't withdraw it?

TIA.

No, as long as you withdraw it only for qualified medical expenses there would be no tax. Of course the flip side is you can't use losses to write off gains.

Think of it just like a traditional IRA in that regard.

 

[fourd]

Not sure if there is a better place for this, but not doing it right could end up being VERY expensive.

http://www.marketwatch.com/story/ira-rollover-ruling-stuns-advisers-and-savers-2014-04-04?siteid=yhoof2

 

[ghostguy123]

ANyone with Fidelity?

I invest with them for my 403-B. I am 34 now, and most of what I have in there is in the Freedom Fund 2040, plus a couple other random things with the remaining 20% or so.

Any suggestions on the best investments here? I am not the type to mess around with this all too much, so I would classify myself as the "set it and forget it" type.

Does it just make sense to put it all in one of the freedom funds and forget about it till retirement? If so which one? I would think age 60 is pretty realistic for me for retirement at the rate I am going, which of course will be in the year 2040.

 

[xulf]

ANyone with Fidelity?

I invest with them for my 403-B. I am 34 now, and most of what I have in there is in the Freedom Fund 2040, plus a couple other random things with the remaining 20% or so.

Any suggestions on the best investments here? I am not the type to mess around with this all too much, so I would classify myself as the "set it and forget it" type.

Does it just make sense to put it all in one of the freedom funds and forget about it till retirement? If so which one? I would think age 60 is pretty realistic for me for retirement at the rate I am going, which of course will be in the year 2040.

I'm 33 so we are in the same boat. I had most of mine in a similar 2040 type account but about 6 months ago I moved over 75% into an index fund and a couple others. The expense ratios on the retirement year funds tend to be really high and they really aren't outperforming the market on a consistent basis.

 

[ghostguy123]

I don't particularly know a whole heck of a lot about how the market works. Not even really sure what expense ratios are.

I am sure I can look this up, but are index funds something that has risk, or is it something where you get a predetermined interest rate?

 

[ghostguy123]

Ok, just saw the expense ratio is a fee you pay to have them manage a mutual fund. I can see why that would be bad over the course of the next 25 years. Lot of fees add up.

Problem is, I don't know what to put it in, and I also don't want to keep up with it all the time to make changes.

 

[Steve Tasker]

I don't particularly know a whole heck of a lot about how the market works. Not even really sure what expense ratios are.

I am sure I can look this up, but are index funds something that has risk, or is it something where you get a predetermined interest rate?

Index funds do not have a guaranteed interest rate. You're subject to the whims of the market, particularly whatever index your fund is trying to mimic.

 

[Binky The Doormat]

Ok, just saw the expense ratio is a fee you pay to have them manage a mutual fund. I can see why that would be bad over the course of the next 25 years. Lot of fees add up.

Problem is, I don't know what to put it in, and I also don't want to keep up with it all the time to make changes.

Not hard. Go to Vanguard and get a total market fund. PM me if you need more help.

 

[Miscellaneous]

Ok, just saw the expense ratio is a fee you pay to have them manage a mutual fund. I can see why that would be bad over the course of the next 25 years. Lot of fees add up.

Problem is, I don't know what to put it in, and I also don't want to keep up with it all the time to make changes.

My wife's 401k is with them, so I just did this research:Investing in FXSIX gives you an S&P index at a very low fee; FSIVX is a low-fee international index; VBTIX is a low-fee bond index. I added LMOIX at higher fees to get some small-cap diversification. Combine those in any percentage you want, and you'll get a similar result with lower fees.

Look at the makeup of the 2040 or 2050 fund to give you an idea about percentages.

 

[ghostguy123]

Ok, just saw the expense ratio is a fee you pay to have them manage a mutual fund. I can see why that would be bad over the course of the next 25 years. Lot of fees add up.

Problem is, I don't know what to put it in, and I also don't want to keep up with it all the time to make changes.

Not hard. Go to Vanguard and get a total market fund. PM me if you need more help.

Is this something that Fidelity has?

If I get a chance at work tonight going to look around a bit at options.