Personal Finance Advice and Education! (3 Viewers)

[BeTheMatch]

Opened a custodial Roth IRA at Vanguard for my 13-year-old son today. He had around $500 of earned income for various odd jobs this year, so I'm putting that amount in for him. Only option will be ETFs for a while thanks to Vanguard's minimum purchase amounts on their mutual funds, but that's fine. Wish my dad would've done (and taught me about) this for me when I was young so I would've learned how important this is to start early.

 

[-OZ-]

Quick term life question.

I recently took out a 30 year term LI, for $80/month, $750k. I'm considering changing that to a 20 year term at $58/month for the same amount. 20 years has our kids out of the house and in our 60s. We'll have a nice nest egg,  with the home paid off. So she and the kids shouldn't need the $750. 

If the purpose of life insurance is mostly to protect those who depend on your income and you're not all that interested in giving it as inheritance, is there any reason to keep the 30 year plan at almost $30 more per month?

 

[-OZ-]

Let's try this a different way.

How long is all your term life insurance? To what age and planned circumstance?

I'm reluctant to pull the trigger to lower ours to 20 but I don't see a true need to be insured in my 60s. I suppose at that point it would just be a tax free gift to our kids as they'll be getting started, $150k each in their 20s and 30s would help with grad school, down payment on a house, etc.  It's not like we need the $22/month that badly. 

 

[Tiger Fan]

Quick term life question.

I recently took out a 30 year term LI, for $80/month, $750k. I'm considering changing that to a 20 year term at $58/month for the same amount. 20 years has our kids out of the house and in our 60s. We'll have a nice nest egg,  with the home paid off. So she and the kids shouldn't need the $750. 

If the purpose of life insurance is mostly to protect those who depend on your income and you're not all that interested in giving it as inheritance, is there any reason to keep the 30 year plan at almost $30 more per month?

Let's try this a different way.

How long is all your term life insurance? To what age and planned circumstance?

I'm reluctant to pull the trigger to lower ours to 20 but I don't see a true need to be insured in my 60s. I suppose at that point it would just be a tax free gift to our kids as they'll be getting started, $150k each in their 20s and 30s would help with grad school, down payment on a house, etc.  It's not like we need the $22/month that badly. 

Some more questions to answer.  How much debt do you have right now?  How much do you anticipate having in 20 years?  What does your other retirement accounts look like.  

In other words, if you (assuming you're the primary breadwinner) died in 20 years + 1 day.  Would your wife/kids be able to live they want to live without the $750k?

 

[Brony]

Let's try this a different way.

How long is all your term life insurance? To what age and planned circumstance?

I'm reluctant to pull the trigger to lower ours to 20 but I don't see a true need to be insured in my 60s. I suppose at that point it would just be a tax free gift to our kids as they'll be getting started, $150k each in their 20s and 30s would help with grad school, down payment on a house, etc.  It's not like we need the $22/month that badly. 

Got a 30 year policy when I was 35. Fixed term for 750K.  Same rationale as you.  I don't know if it's the perfect solution, but seemed to make intuitive sense to me.  Policy is on me only. 

 

[-OZ-]

Some more questions to answer.  How much debt do you have right now?  How much do you anticipate having in 20 years?  What does your other retirement accounts look like.  

In other words, if you (assuming you're the primary breadwinner) died in 20 years + 1 day.  Would your wife/kids be able to live they want to live without the $750k?

Debt - currently just the house, about $300k. Will be paid off before we're 60 (20 years)

Other retirement accounts will be between 2 and 3 million assuming 5% returns. 

So yes. They'd be fine. 

 

[-OZ-]

Got a 30 year policy when I was 35. Fixed term for 750K.  Same rationale as you.  I don't know if it's the perfect solution, but seemed to make intuitive sense to me.  Policy is on me only. 

Same. Thinking we need to take a 10 year policy on her. Gets our youngest to 13 and the others over 16. Financially I'm only relying on her to take care of the kids, cook, clean, etc. 

 

[eoMMan]

Debt - currently just the house, about $300k. Will be paid off before we're 60 (20 years)

Other retirement accounts will be between 2 and 3 million assuming 5% returns. 

So yes. They'd be fine. 

Just remember to "ball out" before you die. Enjoy it. Kids shouldn't expect an inheritance, imo. In fact, I wouldn't mention a word on how much or how little they are getting.

 

[-OZ-]

Just remember to "ball out" before you die. Enjoy it. Kids shouldn't expect an inheritance, imo. In fact, I wouldn't mention a word on how much or how little they are getting.

agreed on all. Only thing I'm doing with regards to that is our best to make sure they know how to handle money responsibly. 

 

[NutterButter]

Do they offer 25 year policy?   We went with 30 years which is too much but 20 years wasn't enough to see the kids through college.   If you have a nice retirement plan, 20 years would probably be ok and if I had to do it again, would go that route.   

 

[Tiger Fan]

Debt - currently just the house, about $300k. Will be paid off before we're 60 (20 years)

Other retirement accounts will be between 2 and 3 million assuming 5% returns. 

So yes. They'd be fine. 

Same. Thinking we need to take a 10 year policy on her. Gets our youngest to 13 and the others over 16. Financially I'm only relying on her to take care of the kids, cook, clean, etc. 

  Was going to mention not to underestimate getting a policy on the wife with the $22/month difference.....Even if she doesn't work, you can't underestimate the cost of what she actually does if you had to pay out of pocket.

Also, morbid question...but if any of you or your wives parents have passed away....how old were they when they did (assuming it was natural/medical related....not a tragedy type situation)

 

[wilked]

Another point is that if you drop down from 30 to 20 they may require another medical checkup. Even if your health is unchanged they may find something they didn’t before or their standards changed or ....  it introduces risk to you. Just be aware of that. 

My my wife and I have term through about 22 yrs old for our youngest. Basic idea was to get the kids out of college

 

[-OZ-]

  Was going to mention not to underestimate getting a policy on the wife with the $22/month difference.....Even if she doesn't work, you can't underestimate the cost of what she actually does if you had to pay out of pocket.

Also, morbid question...but if any of you or your wives parents have passed away....how old were they when they did (assuming it was natural/medical related....not a tragedy type situation)

All our parents are alive, mine are in their 70s in moderate health, hers in their 60s in great health. Her grandparents (3/4) lived well into their 80s with one still alive. 

 

[Tiger Fan]

All our parents are alive, mine are in their 70s in moderate health, hers in their 60s in great health. Her grandparents (3/4) lived well into their 80s with one still alive. 

 

[PinkydaPimp]

  Was going to mention not to underestimate getting a policy on the wife with the $22/month difference.....Even if she doesn't work, you can't underestimate the cost of what she actually does if you had to pay out of pocket.

Also, morbid question...but if any of you or your wives parents have passed away....how old were they when they did (assuming it was natural/medical related....not a tragedy type situation)

do they take this into consideration when quoting?   i need to get term soon for me and my wife.  whats the best process for getting quotes here?  what factors go into how much you pay?

 

[-OZ-]

do they take this into consideration when quoting?   i need to get term soon for me and my wife.  whats the best process for getting quotes here?  what factors go into how much you pay?

Lots of factors including family history. 

http://www.investopedia.com/articles/investing/102914/7-factors-affect-your-life-insurance-quote.asp

"Go to Zander insurance..."

I ended up using the same company as my bank and investment accounts, USAA. most of the time that's not ideal but we trust them and it was only a dollar more per month than a company we got through Zander but didn't recognize.

 

[PinkydaPimp]

Lots of factors including family history. 

http://www.investopedia.com/articles/investing/102914/7-factors-affect-your-life-insurance-quote.asp

"Go to Zander insurance..."

I ended up using the same company as my bank and investment accounts, USAA. most of the time that's not ideal but we trust them and it was only a dollar more per month than a company we got through Zander but didn't recognize.

thanks.  let me ask you this.  should i be trying to get in better shape or lose a few lbs before getting quotes?  would that help? 

 

[-OZ-]

thanks.  let me ask you this.  should i be trying to get in better shape or lose a few lbs before getting quotes?  would that help? 

don't know but I suspect it depends on your current status. I didn't do anything but I don't have any health problems I can control. Was just getting diagnosed with sleep apnea when I was starting coverage.

 

[eoMMan]

thanks.  let me ask you this.  should i be trying to get in better shape or lose a few lbs before getting quotes?  would that help? 

Yes, if possible. Also, if you are a smoker....even occasionally, try to cut back. I got term insurance a few years back and was honest about the 1 or 2 cigars I have each month. I think it increased my premium. Who knows if it would actually show up in my bloodwork though. 

 

[Tiger Fan]

thanks.  let me ask you this.  should i be trying to get in better shape or lose a few lbs before getting quotes?  would that help? 

Can't hurt.  You do have to take a blood test, so they'll look for all of the appropriate leading indicators

 

[Tiger Fan]

I've smoked maybe less than 10 cigarettes in my life.  I was honest in one of the questionnaires. When I got the quote, they sited that I had some sort of a premium for smoking.  They wouldn't remove it so I told them to #### off and went with another company and just said I've never smoked.

 

[mquinnjr]

I've smoked maybe less than 10 cigarettes in my life.  I was honest in one of the questionnaires. When I got the quote, they sited that I had some sort of a premium for smoking.  They wouldn't remove it so I told them to #### off and went with another company and just said I've never smoked.

Yeah I mean even if you did smoke, if you've quit long enough where nicotine wouldn't come up in a blood draw, I wouldn't admit it when pricing out life insurance.

 

[kutta]

Weight definitely matters for LI, so if you can drop some lbs, do it.

Also, regarding 20 or 30 years, keep in mind that if you go with 20 and later decide to get more, it’s going to cost you a lot more to add that 10 years. Now is the cheapest it will ever be, so if you can afford it, you may want the longer term because you never know what might happen down the road.

 

[Fruitbat]

I'm sure this has been discussed, but don't really want to search through 1000's of posts.

Looking for easiest way to track spending by categories that I define, budget by same categories etc.

Right now I do that in excel manually its becoming too burdensome.

Does Mint do this?  something similar?

my requirements:

1. Pull in purchase data from 2-3 major credit card sites (Chase, Capital One, etc)
   
2. import data from my own excel document that has purchasing directly from bank account (handful of checks each month, auto withdrawls, etc)
   
3. be able to easily assign these records to spending categories
   
4. report on all above
   
5. Some sort of budgeting/savings function.  Not only just tracking spend by category (perhaps compared to pre-determined soft budget number) -- but we also allocate money to cash savings, and other spending categories. Categories that we dont spend on consistently, but allocated money toward so its there when needed
   
   For example, we set aside money "virtually" each month in excel for our vacation fund.  But only "draw" from it a couple times a year.  Other examples are car repair, holiday spending, etc.   Ultimately, this allows us to calculate how much UNallocated "spending money" we have -- equal to the amount we have in our accounts minus what we have already allocated to these virtual "buckets".
   

Not concerned about something tracking retirement accounts.  Also not concerned with any sort of bill pay functions, etc.

I'm excel and data transfer savvy so not worried if the solution is somewhat complicated to the average user.  I'm just trying to get away from my excel solution which is not pretty, cumbersome to populated,  and getting bloated with a billion formulas.

 

[Tiger Fan]

I'm sure this has been discussed, but don't really want to search through 1000's of posts.

Looking for easiest way to track spending by categories that I define, budget by same categories etc.

Right now I do that in excel manually its becoming too burdensome.

Does Mint do this?  something similar?

my requirements:

1. Pull in purchase data from 2-3 major credit card sites (Chase, Capital One, etc)
   
2. import data from my own excel document that has purchasing directly from bank account (handful of checks each month, auto withdrawls, etc)
   
3. be able to easily assign these records to spending categories
   
4. report on all above
   
5. Some sort of budgeting/savings function.  Not only just tracking spend by category (perhaps compared to pre-determined soft budget number) -- but we also allocate money to cash savings, and other spending categories. Categories that we dont spend on consistently, but allocated money toward so its there when needed
   
   For example, we set aside money "virtually" each month in excel for our vacation fund.  But only "draw" from it a couple times a year.  Other examples are car repair, holiday spending, etc.   Ultimately, this allows us to calculate how much UNallocated "spending money" we have -- equal to the amount we have in our accounts minus what we have already allocated to these virtual "buckets".
   

Not concerned about something tracking retirement accounts.  Also not concerned with any sort of bill pay functions, etc.

I'm excel and data transfer savvy so not worried if the solution is somewhat complicated to the average user.  I'm just trying to get away from my excel solution which is not pretty, cumbersome to populated,  and getting bloated with a billion formulas.

If you don't mind paying a few $ a month, it sounds like mvelopes.com would be perfect for you.  We've used it for 10+ years and can't live without it.

https://www.mvelopes.com/plans/

 

[-OZ-]

If you don't mind paying a few $ a month, it sounds like mvelopes.com would be perfect for you.  We've used it for 10+ years and can't live without it.

https://www.mvelopes.com/plans/

Hmmm... I've been doing it manually but for $4/month if it saves an hour it would be worth it.

How accurate are the categories? 

If you buy clothes, food, and a toy at Walmart will it separate the items or just show the total amount and guess a category?

 

[Tiger Fan]

Hmmm... I've been doing it manually but for $4/month if it saves an hour it would be worth it.

How accurate are the categories? 

If you buy clothes, food, and a toy at Walmart will it separate the items or just show the total amount and guess a category?

It shows a total amount, but you can manually split and drag them into whatever envelope you need to.   But you can automate things like recurring payments aso they automatically go into the appropriate envelope.  It's wonderful for budgeting.  I just spent a few hours this morning doing my annual review and making some tweaks to our various budgets.

 

[wilked]

Does anyone use YNAB?

 

[Tiger Fan]

FWIW - an email that I was sent from our company's retirement administrator:

The Tax Cut and Jobs Act, signed into law late last month, makes many changes to the tax code. You'll probably be affected financially by it in some way at some point. At more than 500 pages, however, the legislation is anything but a quick or easy read. That's why we're giving you a simple overview of some of the bill's major points that may affect you

• Most of the seven marginal income tax brackets (10%, 15%, 25%, 28%, 33%, 35%, and 39.6%) have been replaced by corresponding lower rates (10%, 12%, 22%, 24%, 32%, 35%, and 37%).
  
• The child tax credit has been doubled and the income level at which the credit begins to phase out has been significantly increased. Also, a new $500 nonrefundable credit is available for qualifying dependents who are not qualifying children under age 17.
  
• Existing "kiddie tax" provisions are replaced by taxing a child's unearned income using the estate and trust rates (instead of the parents' tax rate).
  
• Existing standard deduction amounts have been roughly doubled, which generally means fewer taxpayers will benefit from itemizing deductions in the future.
  
• Individuals can now only itemize deductions of up to $10,000 ($5,000 if married filing a separate return) for state and local property taxes and state and local income taxes.
  
• The individual deduction limit on home mortgage interest has been lowered to $750,000 ($375,000 for married individuals filing separately) of qualifying new mortgage debt.
  
• Roth conversions can no longer be reversed by recharacterizing the conversion as a traditional IRA contribution by the return due date. (TF note - the backdoor roth is still good to go)
  
• New marginal income tax brackets have been set for estates and trusts.
  
• The estate and gift tax exemption amount has been doubled for 2018.
  

 

[Peak]

Sorry if it's been brought up before in this thread - I haven't been further back than the last couple of pages.

Has anyone tried the Stash app before, and if so, any thoughts/opinions?  I work as a contractor and don't have any company sponsored retirement plans.  I try to save on the side, but sometimes life gets in the way.  I was looking for something small to start out with for now.  I don't know much about stocks, funds, IRAs, etc - and this seems like it's built for someone of my speed to get things started.  I've tried working with a broker in the past (Edward Jones, for one) - but felt they took advantage of my lack of knowledge/understanding.  I only fault myself for that, so I'm trying to learn new things now and move forward.  Open to any suggestions/advice for this newbie.  

I'll take some time digging through this thread as well.

 

[Buck Bradcanon]

• The child tax credit has been doubled and the income level at which the credit begins to phase out has been significantly increased. Also, a new $500 nonrefundable credit is available for qualifying dependents who are not qualifying children under age 17.
  

Child tax credit is doubled from $1,000 to $2,000, and phases out at $400,000(!!) now vs $110,000.

This means after all else, multiply $2k times number of kids and deduct from tax bill right?

https://www.fool.com/taxes/2018/01/18/your-complete-guide-to-the-2018-tax-changes.aspx

 

[Buck Bradcanon]

The counter to that being that there is no personal exemption.  Goes to zero.

 

[Sand]

Sorry if it's been brought up before in this thread - I haven't been further back than the last couple of pages.

Has anyone tried the Stash app before, and if so, any thoughts/opinions?  I work as a contractor and don't have any company sponsored retirement plans.  I try to save on the side, but sometimes life gets in the way.  I was looking for something small to start out with for now.  I don't know much about stocks, funds, IRAs, etc - and this seems like it's built for someone of my speed to get things started.  I've tried working with a broker in the past (Edward Jones, for one) - but felt they took advantage of my lack of knowledge/understanding.  I only fault myself for that, so I'm trying to learn new things now and move forward.  Open to any suggestions/advice for this newbie.  

EJ is horrid.  Their fees are off the charts.  They all try to tell you how complicated investing is.  It isn't.  It can be super easy and inexpensive.

First off - if you have the opportunity to fund a tax deferred vehicle (and IRA) and you don't need to touch that money, then do that.  Those accounts just put money away before taxes and over the long term generate significantly more wealth than money not sheltered.  I'd recommend a low cost broker - Fidelity (my choice), Vanguard, TDAmeritrade, etc.  They're all real close in cost.  Pick one that you like the website and maybe have a physical office to go to to open the account, etc.

As far as what to buy with that money, just stick to the simplest of forms that's known to work well.  Read this about a 3 fund portfolio.  I'd stick to buying ETFs instead of funds since funds in taxable accounts (not IRAs) can have higher costs come tax time.  With this your expense on your funds will be something ridiculously low, like .1%.  EJ was likely charging you 5% up front and 2% per year.  You'll never save anything that way.  On the subject of how aggressive you should be (they give 5 examples of aggressiveness in that page), it has a lot to do with age and your tolerance for loss.  The younger you are the more total market you should have.  

Looked at the Stash app.  It doesn't do anything for you that the free page above won't do for you. The truth is that the secret sauce is a bit of diversification and that that diversification doesn't have to be perfect.  Even roughly constructed it provides big benefits in smoothing out returns.  The cost of these things really add up over time.  There was a study done a number of years ago that showed, by far, the biggest differentiator in mutual fund performance was the fees that they charged (not who ran then, what they were invested in, etc.).  That's in your control to minimize.

 

[CR69]

I'm sure this has been discussed, but don't really want to search through 1000's of posts.

Looking for easiest way to track spending by categories that I define, budget by same categories etc.

Right now I do that in excel manually its becoming too burdensome.

Does Mint do this?  something similar?

my requirements:

1. Pull in purchase data from 2-3 major credit card sites (Chase, Capital One, etc)
   
2. import data from my own excel document that has purchasing directly from bank account (handful of checks each month, auto withdrawls, etc)
   
3. be able to easily assign these records to spending categories
   
4. report on all above
   
5. Some sort of budgeting/savings function.  Not only just tracking spend by category (perhaps compared to pre-determined soft budget number) -- but we also allocate money to cash savings, and other spending categories. Categories that we dont spend on consistently, but allocated money toward so its there when needed
   
   For example, we set aside money "virtually" each month in excel for our vacation fund.  But only "draw" from it a couple times a year.  Other examples are car repair, holiday spending, etc.   Ultimately, this allows us to calculate how much UNallocated "spending money" we have -- equal to the amount we have in our accounts minus what we have already allocated to these virtual "buckets".
   

Not concerned about something tracking retirement accounts.  Also not concerned with any sort of bill pay functions, etc.

I'm excel and data transfer savvy so not worried if the solution is somewhat complicated to the average user.  I'm just trying to get away from my excel solution which is not pretty, cumbersome to populated,  and getting bloated with a billion formulas.

Mint is pretty good but I had an issue with it not pulling in data correctly for a chase credit card account that I had an authorized card for my wife. I switched to personal capital and it works great. It does track your personal net worth but you can just not sync investment accounts and ignore that feature if you want. Mint may have fixed it's issues, I haven't installed it again to check though.

 

[CR69]

Does anyone use YNAB?

I've heard good things about it but didn't see the need to pay for it when personal capital works just fine for me. I also track our income and expenses with a spreadsheet.

I did read recently that you get the first year free if you're in school or have children in school so it might be worth checking out if that's the case for you.

 

[matuski]

Mint is pretty good but I had an issue with it not pulling in data correctly for a chase credit card account that I had an authorized card for my wife. I switched to personal capital and it works great. It does track your personal net worth but you can just not sync investment accounts and ignore that feature if you want. Mint may have fixed it's issues, I haven't installed it again to check though.

Yep .  chase does not work for me with mint.

 

[Chadstroma]

Sorry if it's been brought up before in this thread - I haven't been further back than the last couple of pages.

Has anyone tried the Stash app before, and if so, any thoughts/opinions?  I work as a contractor and don't have any company sponsored retirement plans.  I try to save on the side, but sometimes life gets in the way.  I was looking for something small to start out with for now.  I don't know much about stocks, funds, IRAs, etc - and this seems like it's built for someone of my speed to get things started.  I've tried working with a broker in the past (Edward Jones, for one) - but felt they took advantage of my lack of knowledge/understanding.  I only fault myself for that, so I'm trying to learn new things now and move forward.  Open to any suggestions/advice for this newbie.  

I'll take some time digging through this thread as well.

How much do you have in investible assets?

For those that have a good chunk of change saved up- going to a good Private Bank/Wealth Management is a good option. Typically flat fees and they are under a fiduciary duty to look out for your best interests and not sell products. A place like Edward Jones does not have an fiduciary duty. Plus, they bring to bear a team of experts that if you 'lack knowledge/understanding' can be a HUGE help. Lawyers, CPA, MBA, SWAT teams members.... I mean, they can have it all. And help you manage the full financial picture for you.

Each organization has it's own $$$ requirements. My bank will work with as little as $75K in investible assets. I have seen some that required as much as a million though (typically, the bigger the bank the bigger their requirement because otherwise you are too small for their time and effort).

 

[-OZ-]

How much do you have in investible assets?

For those that have a good chunk of change saved up- going to a good Private Bank/Wealth Management is a good option. Typically flat fees and they are under a fiduciary duty to look out for your best interests and not sell products. A place like Edward Jones does not have an fiduciary duty. Plus, they bring to bear a team of experts that if you 'lack knowledge/understanding' can be a HUGE help. Lawyers, CPA, MBA, SWAT teams members.... I mean, they can have it all. And help you manage the full financial picture for you.

Each organization has it's own $$$ requirements. My bank will work with as little as $75K in investible assets. I have seen some that required as much as a million though (typically, the bigger the bank the bigger their requirement because otherwise you are too small for their time and effort).

That's the only rub I have with usaa. I talked with one of their advisors recently. Frankly I'm better off ignoring him and continuing to do this myself.

For those of us who have done it for 20 years on our own and feel fairly confident, do you still think going to someone at a flat fee with fiduciary duty is worth the price? How much would you pay? Over half our assets are in the TSP.

 

[Chadstroma]

That's the only rub I have with usaa. I talked with one of their advisors recently. Frankly I'm better off ignoring him and continuing to do this myself.

For those of us who have done it for 20 years on our own and feel fairly confident, do you still think going to someone at a flat fee with fiduciary duty is worth the price? How much would you pay? Over half our assets are in the TSP.

There is no one size fits all. And again, a big difference from a financial advisor to private banking/wealth management beyond the fiduciary duty is the financial advisor, even the best of the best, is helping you with a portion of your financial pie. The private banking/wealth management is taking care of the whole pie.

The more complex your financial situation the more I would urge towards talking to a private banker/wealth manager to explore it. Complexity usually comes into play with larger wealth, business ownership, etc. Or if you are a busy professional such as a lawyer or doctor or business owner etc and you don't have the time to manage your wealth because your time is how you build your wealth then it would also make sense to bring in professionals to manage your wealth for you.

If your financial situation is not very complex, you have the time, energy, understanding and willingness to manage it. Know enough to know where you need to bring in an expert (e.g. getting a lawyer for estate planning or insurance agent to properly adjust insurance coverage) and all we are talking about is managing your investments. Then, no, I don't see a need. As of now, I manage my own investments. I have the experts for areas I am not to fill in on the other areas of the pie and with my background have a good view of the full picture to where I have no blind spots. As I build more wealth- I will revisit this and utilize a private banker myself.

 

[Judge Smails]

Where are you guys putting cash? I've seen online banks up to 1.5% and now AMEX has offered 1.35% with no fees and direct link to bank accounts for easy access.  No minimum. Have too much earning next to nothing at B of A.

 

[-OZ-]

Does anyone avoid escrow? We paid over $5k in escrow last year which only paid out about $3k, leaving $2k to carry over but we don't get it refunded. I guess it just stays with the bank in case it's needed? Haven't seen if they reduce the amount this year yet. 

 

[wilked]

Where are you guys putting cash? I've seen online banks up to 1.5% and now AMEX has offered 1.35% with no fees and direct link to bank accounts for easy access.  No minimum. Have too much earning next to nothing at B of A.

How much money we talking? 

Let’s just say it’s $20k...chasing banks to get an extra 0.5% nets me $100/yr.   in the end that’s not enough to get my #### hard. 

 

[-OZ-]

How much money we talking? 

Let’s just say it’s $20k...chasing banks to get an extra 0.5% nets me $100/yr.   in the end that’s not enough to get my #### hard. 

I'm only getting 0.2% but free ATMs (bank reimburses us), easy transfers, and everything is in one place. So I keep enough in savings to cover emergencies and monthly expenses, put the rest in the vanguard bond fund which yields 2.5%, in a non tax benefited account I can easily sell and transfer into our checking account.

 

[jamny]

I'm only getting 0.2% but free ATMs (bank reimburses us), easy transfers, and everything is in one place. So I keep enough in savings to cover emergencies and monthly expenses, put the rest in the vanguard bond fund which yields 2.5%, in a non tax benefited account I can easily sell and transfer into our checking account.

Why go with a bond fund over a preferred stock fund?

 

[Dentist]

Where are you guys putting cash? I've seen online banks up to 1.5% and now AMEX has offered 1.35% with no fees and direct link to bank accounts for easy access.  No minimum. Have too much earning next to nothing at B of A.

I've used Amex bank for about 4 years.  Works great.  They have a lot of my money rightnow

 

[-OZ-]

Why go with a bond fund over a preferred stock fund?

Mostly because I have a much smaller allocation in bonds in my retirement accounts than recommended and this gives some diversification. I'd say less risk but I'm not sure that's entirely true, could just be perception. 

What preferred stock funds would you recommend? Just looking at PFF, 5.58% yield is nice,  the fund is selling at it's 52 week low, and the price really hasn't moved much in 5 years. Maybe it is a safer bet than I thought.

 

[jamny]

Mostly because I have a much smaller allocation in bonds in my retirement accounts than recommended and this gives some diversification. I'd say less risk but I'm not sure that's entirely true, could just be perception. 

What preferred stock funds would you recommend? Just looking at PFF, 5.58% yield is nice,  the fund is selling at it's 52 week low, and the price really hasn't moved much in 5 years. Maybe it is a safer bet than I thought.

I'm only just looking into it and was considering a preferred stock etf. Just curious why you went with bonds. There is a slightly higher risk as bonds hold a higher spot on the totem pole if a company goes bankrupt but in a fund it's less of a concern over an individual company bond/preferred stock. Practically double the yield seems like it's worth the slightly higher risk.

 

[-OZ-]

I'm only just looking into it and was considering a preferred stock etf. Just curious why you went with bonds. There is a slightly higher risk as bonds hold a higher spot on the totem pole if a company goes bankrupt but in a fund it's less of a concern over an individual company bond/preferred stock. Practically double the yield seems like it's worth the slightly higher risk.

You're convincing me. Honestly I never really thought about preferred stock funds. This is such a small amount of our assets thanks it doesn't make a huge difference overall, but this is our month 4-6 emergency fund (first 3 months are in savings earning the paltry 0.2% but it's safe) so I'm not looking to take on much risk.

 

[guru_007]

Where are you guys putting cash? I've seen online banks up to 1.5% and now AMEX has offered 1.35% with no fees and direct link to bank accounts for easy access.  No minimum. Have too much earning next to nothing at B of A.

How much risk are you willing to take?  How liquid do you need to be?  My checking account only has enough to cover 1 full months expenses.  All the rest is in a brokerage account.  It's kind of on auto-pilot for me as I automatically transfer a set amount from check to brokerage account each month.  Within brokerage account I have different investments, some tax free, some equities, etc...  BofA has hooked up with Merrill Lynch for something if you don't want to use an outside brokerage.  If you have a lot of cash (over 50K) I'd suggest speaking with someone there tbh if you don't want to mess with it.  They don't want to lose your cash.  If you become an accredited investor there are other assets/offerings available to you too that may be of interest.

In short, get your money working for you, the sooner the better while you are still working (IMHO).

Does anyone avoid escrow? We paid over $5k in escrow last year which only paid out about $3k, leaving $2k to carry over but we don't get it refunded. I guess it just stays with the bank in case it's needed? Haven't seen if they reduce the amount this year yet. 

YES.  Do not escrow.  Let's see, you are giving your lender an interest free loan to hold your cash.  Oh, and you are giving them more than you need?   When I bought my home, I had PMI.  First thing I did was get rid of that bad boy ASAP.  Took about a year or two.  Refinanced at a lower rate.  Then I got rid of escrow.  The straw that broke the camels back for me was the constant escrow 'analysis' they ran which was always run by the lender and always wrong.  Oh, you paid too little, next year you're paying extra.  Oh, you paid too much?  I guess this is a good analysis then.  Why give your lender an extra few hundred bucks per month unless you are unable to budget effectively yourself?  I'll be honest, the first year I didn't escrow kinda sucked because in January I have all my Christmas bills due, homeowners insurance, hoa fees, car insurance and property taxes due.  And this was a BIG chunk of change (for me as all things are relative I suppose).  Anyway, I had saved all year but life sometimes gets in the way and when all the bills came raining down at once it was a little overwhelming.  But, took care of that and every year since it's been smooth sailing.

 

[jamny]

What type of fees does a bank like Chase charge to deposit and withdraw from an online bank?