Personal Finance Advice and Education! (1 Viewer)

[Dentist]

Definitely a great read and a heartbreaking story, but how many of the elderly were truly financially smart with their money?

Also, if I never have enough money to live in America when I retire, I'll just live somewhere in Latin America or the Philippines. Someplace where the exchange rate is good when you're spending US dollars.

this will be the tough part.When we get some type of sad story about someone being broke is the media going to dig back into their finances to see that when they should have been saving they had a premium cable package and an i-phone that were much better than I allow myself to have?

Are we going to find out that they did a lot of stupid things with student loans, credit card debt, and moved a lot from house to house?

See that's what is not going to happen. We aren't going to find out if they were smart about their money... only the depressing sad parts of the story.

But will America allow these millions of people that are fiscally terrible with their money to suffer when it really is their own fault?

Nope... they'll get lumped in with the millions of others that may have been ok with money, but they were bad beated by the job crisis or medical bills.

so who's going to pay that? Me... the top 5% er who lived like a bottom halfer so that i could afford my own retirement.

this is going to be serious headlines moving forward.. and it's going to be tough to fight off the temptation to bail the financially irresponsible out.

 

[No. 16]

Definitely a great read and a heartbreaking story, but how many of the elderly were truly financially smart with their money?

Also, if I never have enough money to live in America when I retire, I'll just live somewhere in Latin America or the Philippines. Someplace where the exchange rate is good when you're spending US dollars.

this will be the tough part.When we get some type of sad story about someone being broke is the media going to dig back into their finances to see that when they should have been saving they had a premium cable package and an i-phone that were much better than I allow myself to have?

Are we going to find out that they did a lot of stupid things with student loans, credit card debt, and moved a lot from house to house?

See that's what is not going to happen. We aren't going to find out if they were smart about their money... only the depressing sad parts of the story.

But will America allow these millions of people that are fiscally terrible with their money to suffer when it really is their own fault?

Nope... they'll get lumped in with the millions of others that may have been ok with money, but they were bad beated by the job crisis or medical bills.

so who's going to pay that? Me... the top 5% er who lived like a bottom halfer so that i could afford my own retirement.

this is going to be serious headlines moving forward.. and it's going to be tough to fight off the temptation to bail the financially irresponsible out.

Ah gotcha. Didn't think about it that way and now I can see why that is truly scary.

 

[Tiger Fan]

dot

 

[No. 16]

Ok so update.

Since tax time is around the corner.

The roughly 10k in my savings has stayed in my savings since I'd like to build my bankroll a bit more before I get more risky with it.

I was looking through my finances at MINT.com and they showed a Federal Tax Return estimate calculator. This is the first year I'm filing independent from my parents so while I did my own taxes before it was simply just plug my W2 and be done with it. Now I have a few more options since I'm independent.

Some stats:

- 26 years old

- 11k savings (~11 months of expenses)

- Current employment has 401k or retirement vehicles since I am a "per diem" employee.

So I did the Federal Tax Return estimate and it showed with the standard deduction I would get back about 2.8k as part of the 25% tax bracket(?).

When I played around with opening up a Traditional IRA with 5k it moved up my standard deduction return to 4k. Which looks pretty awesome to me since for only 1k hit to my cash savings, I get 5k to start for retirement (it is my money to start with but you get the point). However, I know ROTH IRA are pretty attractive because they are taxed now instead of in the future.

Basically, would the recommendation still be to go with a ROTH IRA vs a Traditional one?

Also, I played around with the "charitable donations" and while I don't have any this year in future years how does this work towards tax returns? I'd rather give my money to charities I believe in than give it to Uncle Sam.

How do gambling losses work?

Also any other tips for things to track/do this year to help increase my tax return for next year?

 

[rick6668]

Not sure what your AGI is for this year, but for single if it falls below $28,250 you might be able to get the Retirement Savings Contribution Credit (Form 8880). I had my sister in law who just started working last year contribute to an IRA to get her AGI just below this amount, she got the credit and reduced her taxable income as well. It was something like a extra $500 refund for putting $1000 in an IRA. A no brainer.

For your donations, you'll have to itemize to get those and it's not likely that you will even come close to the standard deduction. You'll need mortgage interest to even make it worthwhile. Gambling losses also apply only if you itemize and only up to the amount you've claimed as income

 

[No. 16]

Not sure what your AGI is for this year, but for single if it falls below $28,250 you might be able to get the Retirement Savings Contribution Credit (Form 8880). I had my sister in law who just started working last year contribute to an IRA to get her AGI just below this amount, she got the credit and reduced her taxable income as well. It was something like a extra $500 refund for putting $1000 in an IRA. A no brainer.For your donations, you'll have to itemize to get those and it's not likely that you will even come close to the standard deduction. You'll need mortgage interest to even make it worthwhile. Gambling losses also apply only if you itemize and only up to the amount you've claimed as income

AGI is > 29k so I guess I can't use that stuff. Yah no big jackpots that resulted in filing a W2, so I guess I'm SOL.

 

[rick6668]

Not sure what your AGI is for this year, but for single if it falls below $28,250 you might be able to get the Retirement Savings Contribution Credit (Form 8880). I had my sister in law who just started working last year contribute to an IRA to get her AGI just below this amount, she got the credit and reduced her taxable income as well. It was something like a extra $500 refund for putting $1000 in an IRA. A no brainer.For your donations, you'll have to itemize to get those and it's not likely that you will even come close to the standard deduction. You'll need mortgage interest to even make it worthwhile. Gambling losses also apply only if you itemize and only up to the amount you've claimed as income

AGI is > 29k so I guess I can't use that stuff. Yah no big jackpots that resulted in filing a W2, so I guess I'm SOL.

It depends on how close you are to $28,250. A contribution to an IRA will reduce your AGI by that amount and could bring you below the upper level. I belive the Max IRA this year for you is $5,000.

 

[No. 16]

Not sure what your AGI is for this year, but for single if it falls below $28,250 you might be able to get the Retirement Savings Contribution Credit (Form 8880). I had my sister in law who just started working last year contribute to an IRA to get her AGI just below this amount, she got the credit and reduced her taxable income as well. It was something like a extra $500 refund for putting $1000 in an IRA. A no brainer.For your donations, you'll have to itemize to get those and it's not likely that you will even come close to the standard deduction. You'll need mortgage interest to even make it worthwhile. Gambling losses also apply only if you itemize and only up to the amount you've claimed as income

AGI is > 29k so I guess I can't use that stuff. Yah no big jackpots that resulted in filing a W2, so I guess I'm SOL.

It depends on how close you are to $28,250. A contribution to an IRA will reduce your AGI by that amount and could bring you below the upper level. I belive the Max IRA this year for you is $5,000.

More than 5k over the $28,250.

 

[No. 16]

Just want to clear up a quick question regarding Roth and Traditional IRA?

You can convert Traditional IRA into a ROTH later on, but you cannot convert a ROTH into a Traditional IRA?

Also, if I start a Traditional IRA this year and it helps to increase my tax return, would I have to payback the tax return if I turn the Traditional IRA into the ROTH in the future?

 

[Cliff Clavin]

When buying mutual funds, are you better to do weekly, bi-weekly, monthly, yearly, etc. purchases? What is the best way to go about doing it? Saving up for the entire year then buying all at once or breaking it up into weekly installments. Assuming no transaction fees. Does it matter?

 

[Dentist]

When buying mutual funds, are you better to do weekly, bi-weekly, monthly, yearly, etc. purchases? What is the best way to go about doing it? Saving up for the entire year then buying all at once or breaking it up into weekly installments. Assuming no transaction fees. Does it matter?

2 schools of thought. one is that dollar cost averaging is a good way to not worry about timing the market.the other is that a lump sum purchase is the way to go since on average the market tends to rise more than it falls.

 

[Cliff Clavin]

When buying mutual funds, are you better to do weekly, bi-weekly, monthly, yearly, etc. purchases? What is the best way to go about doing it? Saving up for the entire year then buying all at once or breaking it up into weekly installments. Assuming no transaction fees. Does it matter?

2 schools of thought. one is that dollar cost averaging is a good way to not worry about timing the market.the other is that a lump sum purchase is the way to go since on average the market tends to rise more than it falls.

So for the vast majority of people who have little to no knowledge of the markets, dollar cost averaging would be best? Under that assumption, is there any advantage of weekly vs monthly?

 

[tommyGunZ]

Those of you who actively trade in your 401k accounts - do you do anything for tax purposes? If you're just buying/selling but not taking any of the money out, are there any reporting requirements?

 

[Dentist]

When buying mutual funds, are you better to do weekly, bi-weekly, monthly, yearly, etc. purchases? What is the best way to go about doing it? Saving up for the entire year then buying all at once or breaking it up into weekly installments. Assuming no transaction fees. Does it matter?

2 schools of thought. one is that dollar cost averaging is a good way to not worry about timing the market.the other is that a lump sum purchase is the way to go since on average the market tends to rise more than it falls.

So for the vast majority of people who have little to no knowledge of the markets, dollar cost averaging would be best? Under that assumption, is there any advantage of weekly vs monthly?

yes DCA is a fine strategy.Weekly vs. monthly seems to be splitting hairs, i'd just do what is convenient.

 

[Dentist]

Those of you who actively trade in your 401k accounts - do you do anything for tax purposes? If you're just buying/selling but not taking any of the money out, are there any reporting requirements?

i actively trade in my roth iRA but not 401k (although i do switch funds around from time to time). i've never generated any type of tax statement in either account.you don't really have to do anything except in rare scenarios where you invest in weird things

 

[tommyGunZ]

Those of you who actively trade in your 401k accounts - do you do anything for tax purposes? If you're just buying/selling but not taking any of the money out, are there any reporting requirements?

i actively trade in my roth iRA but not 401k (although i do switch funds around from time to time). i've never generated any type of tax statement in either account.you don't really have to do anything except in rare scenarios where you invest in weird things

Thanks Dentist. What about the 1 yr holding requirement for designating the profits as capital gains? Does that matter when it comes to 401k trades?

 

[Mystery Achiever]

So for the vast majority of people who have little to no knowledge of the markets, dollar cost averaging would be best? Under that assumption, is there any advantage of weekly vs monthly?

Keep in mind that, for anything other than mutual funds (i.e. ETFs), more frequent trading means more commissions. I know some funds have commissions (I've never bought those), but I believe those commissions are based on amount of purchase, so frequency still not an issue. Also, frequent buys make tracking cost basis a pain, but I guess that is not really an issue these days because the brokers track it.

 

[Dentist]

Those of you who actively trade in your 401k accounts - do you do anything for tax purposes? If you're just buying/selling but not taking any of the money out, are there any reporting requirements?

i actively trade in my roth iRA but not 401k (although i do switch funds around from time to time). i've never generated any type of tax statement in either account.you don't really have to do anything except in rare scenarios where you invest in weird things

Thanks Dentist. What about the 1 yr holding requirement for designating the profits as capital gains? Does that matter when it comes to 401k trades?

no, that's only for taxable accounts

 

[Mystery Achiever]

[ What about the 1 yr holding requirement for designating the profits as capital gains? Does that matter when it comes to 401k trades?

Gains are irrelevant in retirement accounts. The total balance is treated as income (and taxed at your ordinary rate)when you withdraw. That is actually something to keep in mind when you make decisions about what to hold in retirement vs. non-retirement account.

 

[tommyGunZ]

Sweet! thx guys.

 

[Tiger Fan]

When buying mutual funds, are you better to do weekly, bi-weekly, monthly, yearly, etc. purchases? What is the best way to go about doing it? Saving up for the entire year then buying all at once or breaking it up into weekly installments. Assuming no transaction fees. Does it matter?

definitly not lump sum. i would go monthly

 

[Steve Tasker]

I guess I will bump this thread rather than starting a new one. I know we have a ton of personal finance threads here. Just looking for some advice from our more investing-savvy folks.

Situation: Without giving specific numbers, as I'm sure I don't earn/have as much as some people here, I have significant liquid cash savings for my personal situation. Most people recommend 6-12 months of cash savings as an emergency fund. I crunched the numbers this afternoon, and using what I'd consider to be a very conservative estimate of my monthly expenses, I believe I have 26-28 months worth of liquid cash. While I don't make a killing, I do pretty well for my age and I live a very cheap life (I watch my finances like a hawk). 25 years old, not married, no kids, renter.

Question: What should I do with this cash? I would like to keep it in a liquid investment as I anticipate some fairly large purchases in the coming years - a ring , potential wedding costs, downpayment on a home. I am comfortable with my retirement (401k + Roth) contributions at this time and don't want to contribute more right now (I do not max my 401k contributions). But right now, I'm just chilling with this cash making ~1% in my savings account and not beating inflation. I need to do something here; I've been kicking this can down the road for like a year now. It's not a ton of money in the grand scheme, so I've been hesitant to get into the market with it, but I'm thinking maybe just getting into the mutual fund game is the way to go. I've had good experiences with Vanguard with my Roth, so I'm thinking about maybe investing in some of their low-expense funds. Another option is to pay down debt - I owe on my car at 1.9% (so I'm not beating this interest expense either with my money in the bank). I have more than enough in my extra liquid cash to pay off the car today; that would bring me down to ~19 months liquid savings.

I guess I'm sorta just talking this out to myself. Is this a horrible time to get into the market with the fiscal cliff and all that? Would I be better off just paying off my car straight up? I gotta think most funds would beat at 1.9%. I don't anticipate being an active trader, though I do closely monitor my investments.

 

[Dentist]

I guess I will bump this thread rather than starting a new one. I know we have a ton of personal finance threads here. Just looking for some advice from our more investing-savvy folks.Situation: Without giving specific numbers, as I'm sure I don't earn/have as much as some people here, I have significant liquid cash savings for my personal situation. Most people recommend 6-12 months of cash savings as an emergency fund. I crunched the numbers this afternoon, and using what I'd consider to be a very conservative estimate of my monthly expenses, I believe I have 26-28 months worth of liquid cash. While I don't make a killing, I do pretty well for my age and I live a very cheap life (I watch my finances like a hawk). 25 years old, not married, no kids, renter.Question: What should I do with this cash? I would like to keep it in a liquid investment as I anticipate some fairly large purchases in the coming years - a ring , potential wedding costs, downpayment on a home. I am comfortable with my retirement (401k + Roth) contributions at this time and don't want to contribute more right now (I do not max my 401k contributions). But right now, I'm just chilling with this cash making ~1% in my savings account and not beating inflation. I need to do something here; I've been kicking this can down the road for like a year now. It's not a ton of money in the grand scheme, so I've been hesitant to get into the market with it, but I'm thinking maybe just getting into the mutual fund game is the way to go. I've had good experiences with Vanguard with my Roth, so I'm thinking about maybe investing in some of their low-expense funds. Another option is to pay down debt - I owe on my car at 1.9% (so I'm not beating this interest expense either with my money in the bank). I have more than enough in my extra liquid cash to pay off the car today; that would bring me down to ~19 months liquid savings. I guess I'm sorta just talking this out to myself. Is this a horrible time to get into the market with the fiscal cliff and all that? Would I be better off just paying off my car straight up? I gotta think most funds would beat at 1.9%. I don't anticipate being an active trader, though I do closely monitor my investments.

I have had the same "problem"I started this thread:http://forums.footballguys.com/forum/index.php?showtopic=628482&st=0&p=14144251&hl=dentist%20bonds&fromsearch=1entry14144251Entering the market could be great or horrible... it'll be results oriented.Most experts say that you should be taking almost no risk with your emergency assets or money you might need in 3-5 years (meaning no stocks or stock based mutual funds).I would probably pay the car off even with the low rate though since there's no interest deduction for car loans... and sadly you can't beat 1.9% right now without taking on something with some degree of risk.if that doesn't sound good to you then i'd invite you to check this website and see if anything there appeals to you.. i'm using a lot of these income generating assets to preserve my money from inflation:http://www.dividendyieldhunter.com/

 

[Steve Tasker]

I have had the same "problem"I started this thread:http://forums.footballguys.com/forum/index.php?showtopic=628482&st=0&p=14144251&hl=dentist%20bonds&fromsearch=1entry14144251Entering the market could be great or horrible... it'll be results oriented.Most experts say that you should be taking almost no risk with your emergency assets or money you might need in 3-5 years (meaning no stocks or stock based mutual funds).I would probably pay the car off even with the low rate though since there's no interest deduction for car loans... and sadly you can't beat 1.9% right now without taking on something with some degree of risk.if that doesn't sound good to you then i'd invite you to check this website and see if anything there appeals to you.. i'm using a lot of these income generating assets to preserve my money from inflation:http://www.dividendyieldhunter.com/

Thanks for this. I remember that thread but I'm not talking anywhere near $50k here (which is why I've been hesitant to take it to the market). I took a look at that website but I'm not comfortable picking individual stocks or investing in anything that's going to fire off a K-1. I'm an accountant, so I see a lot of PTP K-1s and they're all a nightmare and I'd rather not deal with the tax hassles.Maybe I will just pay down the debt. Silly question, but it won't hurt my credit score to pay something off way early, right? I bought the car new in March 2012. Put ~35% down and financed the rest 3 years @ 1.9%.

 

[Abraham]

Won't hurt a bit. Just keep your revolving below 8% and make sure all your installment accounts show you on time. It wouldn't hurt to keep the car note if its the only installment you have though.

 

[Slapdash]

I'd pay off the car.

 

[Steve Tasker]

Won't hurt a bit. Just keep your revolving below 8% and make sure all your installment accounts show you on time. It wouldn't hurt to keep the car note if its the only installment you have though.

I pay my 1 CC bill in full every month. My credit limit is pretty low (product of being a younger guy with minimal credit history, I guess). CC bill gets to about 15-22% monthly. I try to keep it below 20%.I have no other debt. Had student loans but they're paid off.

 

[eoMMan]

I'd pay off the car.

This.After that, I'd just sit tight with the money. Like you said, you'll have the expense of a ring, wedding, house downpayment, etc. in a few years. Also, didn't you post a thread awhile back asking about another location in the US to live? It's always good to have a chunk of cash for moving expenses and if you are in between jobs for a little while.Nice job, regardless.(side note....I'm getting back into public accounting with a new job later this month after a few years in private accounting. If my notebook is right, you are a CPA and do public accounting. I might need to shoot you a PM or two in the next few months.)

 

[Steve Tasker]

I'd pay off the car.

This.After that, I'd just sit tight with the money. Like you said, you'll have the expense of a ring, wedding, house downpayment, etc. in a few years. Also, didn't you post a thread awhile back asking about another location in the US to live? It's always good to have a chunk of cash for moving expenses and if you are in between jobs for a little while.Nice job, regardless.(side note....I'm getting back into public accounting with a new job later this month after a few years in private accounting. If my notebook is right, you are a CPA and do public accounting. I might need to shoot you a PM or two in the next few months.)

Thanks for this.I did post that thread about potentially moving. She and I were both promoted at our current jobs within the past few months after starting that thread, so moving has been put on the backburner recently. With tax season upcoming, I won't really want to deal with anything, so I guess it's being put off until at least the end of April. I'll have to bump that thread sometime soon.I am a CPA in public accounting. Our firm only has 1 office and isn't huge (40-50 employees based on time of year, 30-35 accountants), so I'm not sure what I could really help you with, but I'd be glad to answer any questions. Let me know.

 

[Dentist]

I have had the same "problem"I started this thread:http://forums.footballguys.com/forum/index.php?showtopic=628482&st=0&p=14144251&hl=dentist%20bonds&fromsearch=1entry14144251Entering the market could be great or horrible... it'll be results oriented.Most experts say that you should be taking almost no risk with your emergency assets or money you might need in 3-5 years (meaning no stocks or stock based mutual funds).I would probably pay the car off even with the low rate though since there's no interest deduction for car loans... and sadly you can't beat 1.9% right now without taking on something with some degree of risk.if that doesn't sound good to you then i'd invite you to check this website and see if anything there appeals to you.. i'm using a lot of these income generating assets to preserve my money from inflation:http://www.dividendyieldhunter.com/

Thanks for this. I remember that thread but I'm not talking anywhere near $50k here (which is why I've been hesitant to take it to the market). I took a look at that website but I'm not comfortable picking individual stocks or investing in anything that's going to fire off a K-1. I'm an accountant, so I see a lot of PTP K-1s and they're all a nightmare and I'd rather not deal with the tax hassles.Maybe I will just pay down the debt. Silly question, but it won't hurt my credit score to pay something off way early, right? I bought the car new in March 2012. Put ~35% down and financed the rest 3 years @ 1.9%.

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.

 

[Steve Tasker]

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?

 

[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=10

have 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

 

[Abraham]

Won't hurt a bit. Just keep your revolving below 8% and make sure all your installment accounts show you on time. It wouldn't hurt to keep the car note if its the only installment you have though.

I pay my 1 CC bill in full every month. My credit limit is pretty low (product of being a younger guy with minimal credit history, I guess). CC bill gets to about 15-22% monthly. I try to keep it below 20%.I have no other debt. Had student loans but they're paid off.

Don't pay it in full. You need to let it show some balance. If you pay it in full every month than it looks like 0% utilization, which means you aren't showing that you are using credit wisely - you are showing that you aren't using it at all.

 

[Slapdash]

Won't hurt a bit. Just keep your revolving below 8% and make sure all your installment accounts show you on time. It wouldn't hurt to keep the car note if its the only installment you have though.

I pay my 1 CC bill in full every month. My credit limit is pretty low (product of being a younger guy with minimal credit history, I guess). CC bill gets to about 15-22% monthly. I try to keep it below 20%.I have no other debt. Had student loans but they're paid off.

Don't pay it in full. You need to let it show some balance. If you pay it in full every month than it looks like 0% utilization, which means you aren't showing that you are using credit wisely - you are showing that you aren't using it at all.

You're saying to keep a CC balance?

 

[Dentist]

Won't hurt a bit. Just keep your revolving below 8% and make sure all your installment accounts show you on time. It wouldn't hurt to keep the car note if its the only installment you have though.

I pay my 1 CC bill in full every month. My credit limit is pretty low (product of being a younger guy with minimal credit history, I guess). CC bill gets to about 15-22% monthly. I try to keep it below 20%.I have no other debt. Had student loans but they're paid off.

Don't pay it in full. You need to let it show some balance. If you pay it in full every month than it looks like 0% utilization, which means you aren't showing that you are using credit wisely - you are showing that you aren't using it at all.

You're saying to keep a CC balance?

Whoa. I would never recommend that. No benefit. None

 

[Steve Tasker]

Won't hurt a bit. Just keep your revolving below 8% and make sure all your installment accounts show you on time. It wouldn't hurt to keep the car note if its the only installment you have though.

I pay my 1 CC bill in full every month. My credit limit is pretty low (product of being a younger guy with minimal credit history, I guess). CC bill gets to about 15-22% monthly. I try to keep it below 20%.I have no other debt. Had student loans but they're paid off.

Don't pay it in full. You need to let it show some balance. If you pay it in full every month than it looks like 0% utilization, which means you aren't showing that you are using credit wisely - you are showing that you aren't using it at all.

Really? I had to spend like 15 minutes trying to find my rate, it appears to be 19.99%. You're saying it'd be better for my credit score to keep a balance? I've never had a balance on it. My credit score is in the 730-770 range as it is.

 

[Abraham]

Yes, that is what I am saying. My credit is poor because of some risks I took earlier in life as well as some carelessness. I hired a credit analyst to help me rebuild. He was very thorough and honest with me in telling me that on time payments of whatever credit I could get would be the greatest benefit to my profile. However, he did detail that one mistake many people make is thinking that paying off the balance of a card every month is a good idea. It isn't "bad" in any way, but to receive the points benefit for your credit score you need to participate in the credit issuers game a little and let them record a balance on your account. Paying it off in month n+1 is better for your score than paying in month n.

 

[guru_007]

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.

 

[Abraham]

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.

 

[metoo]

Yes, that is what I am saying. My credit is poor because of some risks I took earlier in life as well as some carelessness. I hired a credit analyst to help me rebuild. He was very thorough and honest with me in telling me that on time payments of whatever credit I could get would be the greatest benefit to my profile. However, he did detail that one mistake many people make is thinking that paying off the balance of a card every month is a good idea. It isn't "bad" in any way, but to receive the points benefit for your credit score you need to participate in the credit issuers game a little and let them record a balance on your account. Paying it off in month n+1 is better for your score than paying in month n.

To maximize your score you should pay off all credit cards each month except one, leaving a small balance. You should also rotate the card which you leave a small balance each month. Also, even if you payoff your credit card each month it may not be what's reported to the bureaus.

 

[Britney Spears]

(pod)

 

[NewlyRetired]

Do not leave a balance on your credit card. The tiny amount it may help your credit score can never out weigh the interest.

Credit scores are made up of a ton of different variables. If you are interested in the nitty gritty of what makes up your credit score, this link does a nice job of breaking it down including the ton of low level formulas.

How my FICO Score is calculated

 

[Steve Tasker]

Do not leave a balance on your credit card. The tiny amount it may help your credit score can never out weigh the interest.

Credit scores are made up of a ton of different variables. If you are interested in the nitty gritty of what makes up your credit score, this link does a nice job of breaking it down including the ton of low level formulas.

How my FICO Score is calculated

I'm not planning on leavong a balance on there; I was just surprised to see that advice. Interesting stuff.

 

[metoo]

I’m anal about my credit score and I should have gone into greater detail above. To maximize my score here is what I do:

1. I pay my credit cards in full when I receive the bill.

2. I leave a small balance on 1 card and I let that report to the bureaus. Credit card companies report your current balance on that day to the bureaus so even if you pay in full on your due date a balance could still be reported. I use a credit monitoring service and I know when my credit cards report. I rotate each month which card reports a balance.

3. This is not for everyone, I’m anal like that.

 

[Steeler]

I’m anal about my credit score and I should have gone into greater detail above. To maximize my score here is what I do:1. I pay my credit cards in full when I receive the bill.2. I leave a small balance on 1 card and I let that report to the bureaus. Credit card companies report your current balance on that day to the bureaus so even if you pay in full on your due date a balance could still be reported. I use a credit monitoring service and I know when my credit cards report. I rotate each month which card reports a balance.3. This is not for everyone, I’m anal like that.

How high is your credit score? I'm not knocking you, and you already said it's not for everyone... but I can't see how this would be worth the effort for me.

 

[rascal]

So should we try to pay off our student loans faster (3.125%, last payment in 2027), my house faster (3.5%, last payment in 2042), or maximize our roth ira contributions?

 

[Tiger Fan]

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.

Agree with you on the CC balance, however for the bolded, I disagree. Tasker said that he will need access to the cash for larger purchases in the future and wants minimal risk. You have a guaranteed 1.9% locked in by paying down the car.There is inherent risk in the brokerage account...assuming much more than he wants to take. Please share more on what relatively safe returns are yielding 4-5%...I hope you're right!

 

[Tiger Fan]

So should we try to pay off our student loans faster (3.125%, last payment in 2027), my house faster (3.5%, last payment in 2042), or maximize our roth ira contributions?

The answer is always "it depends on your personal situation"...but I would assume that the answer for most people is:1. Maximize roth IRA (it's widely agreed that over the long term taxes will increase, so maximize your roth now...especially if you're still in the income bracket to do so)2. Student Loan3. House (You need to factor in the mtg interest on the 3.5% which will put it a bit closer to the 3.125%...also, what are the chances that you will actually stay in that house until 2027? If you think you'll sell it at some point, you'll "forgo" the future interest...however that student loan will always be there.

 

[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)

 

[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.