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What do you guys think about real estate securities? Looks to me like a good long term buy right now.
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Jun 12, 2009 08:43
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filo posted:I'd be happy to hear your thoughts. I recommend only buying securities with a single letter, like QQQQ or AA, or maybe try C for a while.
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Jun 15, 2009 21:05
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dancehall posted:Quick question. I have about $15k worth of outstanding student loans at 1.625% interest. Apart from my Roth IRA I have about $20k in savings kicking around. Having just redeemed a CD I'm looking at my options. The interest rate for my loans is low but then so is the rate for most savings options right now. I have no other debt. Should I pay off the loans? Suppose you can find a guaranteed rate for your $20k above 1.625%. This won't be that hard to do even in today's economy. Then, assuming no penalties for delaying payment on the loans, you would be a fool to not invest and pocket the difference.
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Jul 27, 2009 11:35
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Edit: I am retarded.
baquerd fucked around with this message at 15:19 on Aug 6, 2009 |
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Aug 6, 2009 15:12
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Unormal posted:I would suggest remaining in a target retirement fund and doing background reading (I'd start with four pillars from the OP). Bonds? Those sound like something for old people. My take is that if you're over 10 years from retirement, there's no call for them. I like venture capital partnerships myself.
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Aug 11, 2009 05:28
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SecretFire posted:Hey maybe we can keep fakeposts out of the investing megathread. It's not a fakepost, my risk tolerance is just super high. Unless you can source me some (well protected) bonds that hit 10% (not inflation adjusted) returns?
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Aug 11, 2009 07:24
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Hobologist posted:As recent events show, there are very few well protected stocks that produce that kind of return either. That's why I go for much higher returns on very risky ventures. The bonus of getting to hear a full business proposal and have the business plan laid out for you when you're a member of a group serving as the principal investor in a project beats the hell out of mutual funds if you can pick the right projects. Like recently, I helped fund exploratory oil drilling in Texas on a 2 year contract and make 120% returns on my investment. However, I've also funded similar projects that lost everything.
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Aug 11, 2009 08:53
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Don Wrigley posted:This is the long-term investing thread, not the venture capital thread. And you're quoting someone who said he has $10,000. I guess it all depends on what you want to call long term. I've seen 5-10 year deals for new building developments, for example.
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Aug 11, 2009 14:39
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ZeldaLeft posted:more questions edit: There is a limit partially because the government loves your tax money and does not want to give richer people a tax sheltered investment vehicle. Money market accounts will offer rate that vary substantially depending on the overall market. Google "high yield money market", there are a number of aggregators that track rates. Also check savings accounts, occasionally you can find some that offer even better rates than money markets. 401k limits are entirely separate to IRA limits is my understanding.
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Aug 26, 2009 19:18
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LurkingAsian posted:Not sure if this is the right thread for this, but what would be a good place to dump ~$50K for a year or 2 and obtain fairly safe returns? I'm looking to avoid stocks and index funds. Nowhere is really good right now. High yield savings or some exceptional CDs will get you 1%, maybe 1.5%? Bond funds are no good right now due to interest rate risk, stocks are too volatile. You might consider directly owning short term bonds to maturity I suppose. If you had millions and millions of dollars, I know some institutional class funds that can get you 1.7-2% more or less safely. If you can move your span out to 3 years you could do p2p loans and migrate returns to high yield savings and probably end up with ~5% returns over the whole period while ending up fully liquid.
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Aug 31, 2013 14:04
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Grand Theft Autobot posted:At the moment I'm leaning towards the second option, because the money gained by maxing the employer match would probably be far more than enough to cover medical costs in her retirement, if/when they arise. She is 27, so she's got at least 40 years to build that 457. I guess the first option would make more sense if she were starting this job closer to retirement age. One thought is that the supplemental health insurance benefits may go away at some point, if for example, the company fails? I would lean the same way though regardless.
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Sep 19, 2013 01:12
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Kilo India posted:Right now I'm making about twice as much as I actually need to survive, so is there anything stopping me from just funneling all my money into an independent 401(k)? Or would I be better off in other investments? If I should open an independent 401(k), is vanguard the place to do it? Unless you will need access to the money before retirement (and even then there's a Roth IRA rollover loophole), you're not going to beat a Vanguard 401k. Your regular IRA is a Roth IRA right? Since you have no employer match, you should be maxing Roth IRA first, then putting everything else into your 401k. Because the contribution limits for independent 401k's are so much higher than a regular business one, you almost certainly won't max them out, so just make sure to keep enough cash around.
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Sep 19, 2013 16:11
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wukkar posted:Actual content: Well, if you are maxing out your 401k, you should be upset about this. Even if you aren't, you shouldn't be too happy because you may want to max out your 401k in the future and now your total contributions will be limited to the IRS individual contributions (currently $17.5k) instead of being able to exceed that with the employer match up to roughly $55k. If you weren't contributing that much to the 401k, increase your contributions by the amount they are no longer matching and you'll come out the same in the end.
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Sep 19, 2013 16:15
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LurkingAsian posted:What is the Roth IRA rollover loophole and how does one use it? http://www.investopedia.com/articles/retirement/08/convert-401k-roth.asp
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Sep 19, 2013 19:09
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antisocial86 posted:I'm a complete idiot so could someone explain this to me? I'm going to be quitting my oilfield job soon and have 60k in a fidelity 401k that I was just gonna cash out since I'm an idiot but this sounds uhh better. In simplest terms, you can roll that over to a traditional IRA under your control and continue to manage it. Alternatively, you can roll it over to a Roth IRA and pay taxes on it. Most financial institutions will have easy ways to do this for you for free, all you need to do is mail in some forms.
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Sep 23, 2013 03:36
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Gold and a Pager posted:Speaking of converting to an IRA, if I have money in taxable funds, what's the easiest way to convert them to a Roth IRA? (I live abroad and had been taking the Foreign Earned Income Exclusion just because it was easier, but I think for this year, it should be just as easy to get a tax credit for the foreign taxes I've paid which would let me have earned income in the US). You can't really take taxable funds and re-characterize them as an IRA, Roth IRA, or 401k - that's just a normal contribution, which is limited in amount by year. So, you would open a new IRA account and put your money in there directly, probably cashing out the needed amount from your taxable account first. As you noted, you need to have earned income in the US tax system in order to be able to contribute.
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Sep 23, 2013 13:51
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Wade Wilson posted:A 120 mile round-trip daily commute This is an insane commute. What if you lived within really, really, easy biking distance (<4 miles) from work? Would your rent/mortgage go up more than $800/month? That's what you're spending on gas assuming you stay in on the weekends and never go anywhere else. If you were making $50k a year, 20% of your pre-tax income is gas! I'll just mention the stress and hassle of 3-4 hours in the car every day and leave that there too.
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Oct 2, 2013 00:56
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J4Gently posted:You would think Opp, like Fidelity who has managed funds, would offer a low cost index option to keep people in their family of funds. Kind of crazy that is this day and age they are able to survive. Next you will be telling me people still buy funds with loads!! Funds with loads aren't *always* bad, just almost all funds that only consist of regular market instruments. 99% of people probably have no business investing in any fund with a load, but with sufficient assets esoteric funds that do things like direct venture capital or direct student loans can have some desirable characteristics for a portfolio.
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Oct 3, 2013 23:11
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Huttan posted:I strongly recommend that you never take the lump sum payout from a pension. You will only get ahead if you are a better investor than people with full time jobs investing in Wall Street. And if you really are that good you need to be working on Wall Street taking all their money. On the other hand, a typical pension strategy is to drop the money in hedge funds and other high fee vehicles. When you take that into account, investing the lump sum yourself makes sense.
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Oct 5, 2013 17:51
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Huttan posted:Nope. It still doesn't. The pension plan is on the hook to pay you $X per month. If they burn lots of it on hookers, blow and hedge funds, they still owe you $X/month. If they go tits up, then PBGC is on the hook for for the first $4600/month. For defined benefit plans, the investment risk is all on the side of the company. When you take the payout, the risk becomes all yours, plus they never pay out the full value of what your benefits are. I recently helped my dad evaluate his pension, lump sum versus lifetime payouts. The present value of the payments equaled the lump sum if he lived to be 98, assuming 3% inflation. So, if he can beat 3% returns himself, the lump sum was going to be the winner. Maybe some pensions are worth taking, but you don't need to be some investment superstar to beat the periodic payments.
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Oct 6, 2013 19:39
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Cranbe posted:But if you're collecting your pension, you're at the period in your life (i.e. retirement) when you would want to limit your portfolio to especially conservative investments--i.e. investments that won't have very good returns. Also, as has been mentioned, the company that owes you the pension has (nearly) all the risk if they don't get the returns. You're still owed your money, regardless of whether they're losing or making money on the investments. When you go into withdrawing from your retirement, you don't switch your entire portfolio into highly conservative investments. You still use diversification to lower overall risk while maintaining decent returns, but your portfolio as a whole becomes more conservative. Look at target retirement funds - not many are all bonds and money markets. Look, for example, at the current Vanguard target retirement fund meant to preserve income: https://personal.vanguard.com/us/funds/snapshot?FundId=0308&FundIntExt=INT When you then run your own diversification, you can cash out investments that are high as a form of rebalancing. 3% returns are absolute poo poo and should only be considered if you're really confused about this "finance" thing and shouldn't have agency over your nest egg any more (which does unfortunately happen to some people as they get older). Does it have more risk? Yes, but it's not much of a risk to say that someone trying to preserve income can do better than 3%. When you have family willing to help you out to manage it or you're happy to do it yourself (retirees tend to have some spare time for hobbies like that), it's not a great decision to leave a lot of money on the table.
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Oct 6, 2013 20:06
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dreesemonkey posted:The numbers are definitely right, it was $32xx with zero lump sum payment up front and $28xx with the full $90k withdrawn. They'd make some of their money back because with the full $90k withdrawn there is no spouse benefit, so if my mom died my dad wouldn't get anything vs. taking no lump sum, he'd get X number of years until that $90k was drained I think. Take the lump sum. I don't know why people have such a hard-on for not taking it, probably because some pensions have really lovely lump sum options I guess, and yours is quite good. You have to actually take the present value of the payments too to compare it. There's no tax hit rolling it over as Folly noted. Present value of $400 payments at 3% inflation means that $90k present dollars are worth ~27.5 years of $400 payments. If you can beat 3% investing the lump sum, it's worth more.
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Oct 8, 2013 01:13
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USSMICHELLEBACHMAN posted:I'm currently putting 4% (my employers match rate) into my 401k. I'm dumping another 20% of my income (pretax) into a bank account. Obviously, I'd like to do something better with that money. How are you putting pretax income into a bank account? Have you somehow characterized it as an IRA? I would suggest just putting your money into a Roth up to the max for now, and increasing your contributions to the 401k too. You can withdraw all of your contributions from the Roth at any time without penalty.
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Oct 24, 2013 18:23
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Edit: nevermind, more information is needed - are the stock shares pre-tax?
baquerd fucked around with this message at 17:49 on Nov 1, 2013 |
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Nov 1, 2013 17:35
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Tony Montana posted:Right. Perfect, that answers the question of 'won't the professionals make significantly better returns at lower risk, so that it offsets their fees?'. Not for the money I'm talking about. You're not really talking about all that much money, it sounds like less than a few million. If you break into the tens to hundreds of millions, there are unique partnerships and private equity offerings that open up to you, and because of the increased information and ability to provide input into the running of said companies you can achieve your lower risk, higher benefit. Until you're ready to take that sort of very active approach to investing large amounts of capital, the advice for your $500k-5mm isn't going to be substantially different to someone with $50k or assets.
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Nov 1, 2013 21:49
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oye como va posted:There's no holding period for my employer's ESPP and I have enough liquid cash to do this each month. Since you (wisely) did not mention the company, there is a caveat here. If you're working for a relatively small or growth-focused company, you may not want to just flip your shares because the idea behind a stock purchase plan is to get employees personally invested in the future of the company. Think of early Amazon or Google employees selling their stock as soon as they got it - they'd want to eat a bullet these days over their decision.
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Nov 2, 2013 20:09
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kaishek posted:I am doing some things that rely on the fact that even with the conversions above I will still be in the 15% bracket (so pay 0% capital gains) This worries me. I think that any capital gains are effectively realized in the Traditional IRA/403(b) during rollover, meaning that all capital gains there will be taxed as income. If you're not relying on that, you're good.
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Nov 12, 2013 18:33
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Where are bonds going? If held to maturity, a 2% real return on a diversified direct bond portfolio would be very optimistic. Is this the same reality that the historical relation of diversifying into bonds for stability without harm to returns is working in? Clinging to financial advice about big picture investments is no better in the very big picture than following penny stocks is for medium term investments. Tulips make sense until they don't, and the standard rallying cry of "past performance does not guarantee future returns" cuts in every way possible. Timing the market doesn't always mean you're day trading on the S&P, but rather you have some awareness of your assumptions and the ramifications and likelihood of the consequences that will happen if you're wrong. For my money, if you want fixed income it's all about consumer credit instrument (P2P lending) and private equity. Only fools or those who capital appreciation is no longer a primary concern would look seriously at government or corp bonds.
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Nov 18, 2013 05:02
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cowofwar posted:During bull markets favoring one sector it's always tempting to load your portfolio in that direction. Who are you talking to? I don't see anyone talking about sector allocations here.
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Nov 19, 2013 01:01
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ntan1 posted:Probably referring to Ignoranceisbliss88's comment. The issue is that the most dangerous influence on poor decision-making is yourself. Hence, it is usually dangerous to load a portfolio in a specific direction. I agree that can happen, and chasing white whale investments or frantically rebalancing on any little piece of news tends to produce poor results. But not looking at the markets and thinking "what's the worst, and best that could happen here?" is just as bad in the opposite direction. There is no practical scenario in the next few years where US (govt, corp, muni) bond funds will return anywhere near their historical mean. They can lose relatively big or gain relatively little, a losing proposition. Bonds just aren't a great place to be entering right now for long term investors. In a few years, when rates rebound a bit the situation will have changed and they will perhaps again be a good place to mitigate risk without impacting return. For my money, if you're in US bonds you don't need to sell them off, but rebalance into them if they start heading down and don't put more into them right now. It's not about market timing, it's about the financial realities of interest rate risk.
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Nov 19, 2013 05:20
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My wife just got a new 401k plan. It's literally the worst plan I have ever seen. Lowest expense ratio: 1.76% for Vanguard Small Cap Index, or Vanguard Mid Cap Index is 1.84%. Obviously, it needs to be 18 times more expensive than the option directly from Vanguard! Highest expense ratio: 2.56% For Neuberger Berman Genesis. They do offer a stable value option without expenses, which offers a *guaranteed* 0.01% return. The expense ratios are poo poo, of course, but I think I've heard of worse, so let's throw in a 5% back-end load for everything in the first three years. That would be a truly awful 401k, sure, but why stop there? Obviously they need a 0.5% administration fee for managing the 401k plan, a 0.1% trustee fee for trusteeing stuff, a 1.25% fee for getting these awesome investments under contract, and a floating "expenses" charge that depends on actual expenses. Hahaha, you think they're done? That's only a guaranteed minimum drag of 3.52-4.32%, you can make that up in the stock market... theoretically. Don't mind the guaranteed negative 1.75% returns if you go with the stable value. Add $6.50 a month for a recordkeeping fee because their hate burns deep in their gut, and a $100 fee for any payouts or rollovers to punish you for any disloyalty. This plan is only slightly better than investing in defaulted bonds, but still there's the employer match, right? About that, the match is done annually and is entirely discretionary, so who knows? You need at least 1000 hours worked in a year to qualify for this potentially real and not imaginary match, so the first match won't be done until 2015. That doesn't matter though, because the vesting schedule is 0% for three years, so maybe in 2017 you might see some of those rock solid guaranteed returns. It says something about the power of the 401k that we're still going to invest for the tax savings. We'll roll that poo poo over and eat the $100 fee while hating every minute, but eat it we shall.
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Nov 20, 2013 03:37
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balancedbias posted:Why not contribute to an IRA first? That 401k sounds pathetic even with the We're maxing out both 401k's, both Roth IRAs, and saving 30k/year in taxable accounts, with a plan for early retirement. Deferring the taxes until then is worth it. Not sure if we'll still max hers out because I hate the idea of paying such ridiculous fees, but it makes fiscal sense and we're ineligible for traditional IRAs and almost ineligible for Roth contributions.
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Nov 20, 2013 04:34
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J4Gently posted:That is a (edit: not a literal crime but a real injustice) crime , is it a Small Co or a Big Co ? Very small company, 2 years out from fresh startup. They're not managing the 401k themselves, but going through a one-stop shop for all their benefits. They may honestly not know they're getting hosed hard on the 401k, or they just had to go with the highest cost option because they didn't want to subsidize it. I'll look at contacting the DOL about possible ERISA violations, and go from there. Other than the 401k, the benefits are actually pretty decent, and there's no employee contribution.
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Nov 20, 2013 18:27
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J4Gently posted:Do that homework then set a time to talk to the right person in management and lay out how the plan is way out of whack with industry norms. Our all in fee right now is X industry avg is .25X and in broad strokes talking with Vanguard and Fidelity for firms of our size the fees they would charge are around .3X. I can't really take direct action with her employer, and she's not willing to do so (she hates dealing with both finance and authority). Don't want to make this E/N, so let's leave that there. Eyes Only posted:For a tax-advantaged account with an expense load of 2% or 2.5% you need to maintain nominal returns of 8% or 10% for it to even be worth it instead of putting the money into a taxable low fee account. And that's generously assuming that all interest in the taxable account would be taxed as income, not capital gains. It's more complicated than that. We need to put some money in it to keep MAGI low enough to continue fully Roth contributions, we're in the 28% tax bracket, and anticipate being in the 15% tax bracket on retirement. I need to model out a timeline to see exactly when to do it since there's the $100 rollover fees, but the idea is to do in-service rollovers to a traditional IRA. She's also looking for another job, so if she leaves before the first in-service rollover it's problem solved.
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Nov 20, 2013 19:26
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flowinprose posted:Are you sure the plan allows this? My understanding is that most plans do not allow in-service rollovers for employees younger than retirement age. In any case the law doesn't allow pretax employee contributions to have in-service rollovers. At best you could only roll-over their matchings and any earnings you have (which doesn't look like you'll have very much with that plan!) It does allow it, or rather I can't find any prohibitions against it, albeit with the $100 fee attached. It looks like you're right though and we couldn't roll over the most important part until she leaves, thanks for alerting me to that. Ugh. edit: flowinprose posted:Also, you still have the option of back-door Roth contributions even if your MAGI is too high. Unless that loophole was closed without me hearing about it. This works, but we both have traditional IRAs from when we were younger so it's not as awesome as it could be. I recently read about a cool strategy where you roll over your traditional IRA into your 401k, then do the backdoor Roth, but in her case obviously that won't fly with the terrible 401k. baquerd fucked around with this message at 05:36 on Nov 21, 2013 |
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Nov 20, 2013 20:25
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It seems to me that in any major city, a pretty darn good life can be had for less than $50k after tax. If you remove the super-high outliers like NYC and SF, $40k is really on the high end. In low cost of living areas, $30k is more than enough. This is assuming no kids and no crazy medical expenses. There may be other assumptions I don't even realize I'm assuming. I'm able to live in a really nice apartment in Chicago with my wife for roughly $36k a year, and that's buying plenty of miscellaneous stuff a month, having fancy meat every night, eating out at a nice restaurant once a week, fast food once a week. Our rough budget: 200 - transportation 320 - utilities, including internet/cable/cell/gas/electric 60 - alcohol 50 - fast food 350 - groceries 180 - restaurants 1300 - rent 600 - everything else If we had to, we could cut our expenses instantly down another $500 a month, or $800 if we wanted to make it hurt. We're saving $6k a month and looking to increase that. If you're a professional making $50k or more, and can find another similar person to share expenses with, there's no reason you can't max out your 401k's and IRAs, and start looking at post-tax investments.
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Nov 28, 2013 03:23
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three posted:How do people feel about TIAA-CREF? They're OK, I had them years ago. Switched to Vanguard and never looked back because why pay more for indexes?
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Dec 12, 2013 04:32
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Dazzo posted:Does anyone have any thoughts about doing future contributions to a portfolio in a way to sort of rebalance it? So theoretically say my ideal portfolio was 60% domestic and 40% international and at the end of the year the actual portfolio was 70% and 30%. Would it be better to just continue to do contributions at a 60/40 split and then rebalance or does it make sense to contribute a bit more heavily to international in order to get it back to a 60/40? Rebalancing via weighted contributions is perfectly valid. Personal Capital does a thorough breakdown of funds you're actually invested in, you have to give them your info a la Mint.com though.
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Dec 18, 2013 22:42
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Harry posted:I'm going to be starting a job in 2014 that doesn't offer a 401k and I'll be making pretty close to the upper level phase out deduction. They're planning on starting one in 2014, or possibly 2015. From what I can tell, if they start up the plan in 2014 at any point I will be counted as being covered and will pretty much not be able to deduct the IRA contribution. Does anyone have more concrete info that says otherwise? I like to do an automatic transfer every month, but don't want to do it if there's a chance I'll lose the deduction. Your traditional IRA deductibility will not be affected unless you or your employer actually deposits money in the 401k: http://www.irs.gov/Retirement-Plans/Are-You-Covered-by-an-Employer%27s-Retirement-Plan%3F
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Dec 27, 2013 05:19
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razz posted:Thank you for the info about the Roth IRA. I just found a Roth IRA calculator and if I put the $5000 in and contributed only $100 per month until age 65, I would have ~160,000. Whaaa? Is that for real? Yeah, that's about right. It will probably only have roughly $115k worth of today's money in purchasing power though. If you'd like a more thorough primer than the MMM one Chris posted above, follow the links at the bottom of this other post of his: http://www.mrmoneymustache.com/2013/03/07/how-about-that-stock-market/
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Dec 27, 2013 23:02
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