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Strong Sauce posted:writings been on the wall for hashicorp. hashicorp has been slowly eroding away things already like changing licenses that have annoyed developers. not sure when you bought it but now that ibm is taking it over i would sell it off as i can. ibm coming in means a worse product at more cost. and a ton of their code is opensourced and people have gone to fork their own versions, including the linux foundation w/ "opentofu" I saw a few articles about how apparently OpenTofu is either outright stealing Terraform's stuff or just using it in a not-fully-license-compliant manner. Given that OpenTofu actually put in the #1 feature that people have asked for - "please, please, for the love of God, let us just run Terraform against specific things that we want to run it against" - I do hope they end up succeeding, but for their sake I hope they don't steal from IBM. IBM probably has as many lawyers in one wing of one office than HCP has employees. It's kinda sad. Hashicorp gave my cat a Terraform certification because I found an Easter egg in their cert program rules that allowed pets to get certified. IBM would probably send whoever wrote that Easter egg to a firing squad.
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Apr 25, 2024 20:09
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drk posted:For those still thinking about buying I Bonds at the current rate, now is the time. The fixed rate will likely remain similar, but the variable inflation rate is going down.
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Apr 25, 2024 20:17
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Josh Lyman posted:Is there a reason to go with I Bonds over SGOV or USFR? yeah they do totally different things. SGOV holds (almost entirely) short term US treasury securities with fixed rates. USFR holds (almost entirely) short term US Treasury Floating Rate Notes Series I Bonds are US treasury securities with variable rates designed to protect principle against inflation
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Apr 25, 2024 20:25
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Josh Lyman posted:Is there a reason to go with I Bonds over SGOV or USFR? As a general rule inflation protected bonds like IBonds and TIPS are the better choice if inflation turns out to be above what the market is expecting going forward. While nominal bonds (things like BND, SPBO, GOVT, ect...) are generally the better choice if inflation turns out to be below what the market is expecting. Obviously its impossible to know which will be the case before hand. So the usual "the future is unknowable so just diversify" argument applies here. Its worth noting that if you are going to hold TIPS (or a TIPS fund/ETF) you *really* want to hold them in some kind of tax deferred account (IRA, 401k, 403b, ect...) due to the unique way they are taxed. Personally I would *never* hold TIPS in a taxable brokerage account. IBonds don't have this specific issue but unlike TIPS they have a yearly purchase limit and some other unique fiddly restrictions. Equities tend to be a much better hedge against inflation than bonds over longer periods of time but they do this at the cost of much higher volatility. I see SGOV and USFR as being roughly equivalent to a high yield savings account. I wouldn't expect them to keep pace with inflation over the long term. Antillie fucked around with this message at 20:48 on Apr 25, 2024 |
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Apr 25, 2024 20:28
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I'll be slightly less annoying and maybe describe the differences more accurately here: I Bonds have a fixed rate and a variable rate. The variable rate is set and adjusted by the Treasury to reflect inflation on a semi-annual basis. The bond yields the sum of the fixed and variable rate; interest accrues monthly and is compounded to the principle when the rate changes. They are a good deal for a store of value, and as a result have some restrictions: You can only buy $10K of them*, you must hold them directly, and you must hold them for at minimum 12 months. There is a penalty of 3 months interest if not held for more than 60 months. There is no secondary market; you redeem your I Bonds directly to the Treasury. SGOV holds treasury bills. The interest rates of treasury bills are determined at auction. The fund pays out dividends roughly equal to the trailing 13 week T-Bill yield on a monthly basis. T-Bills are zero coupon bonds so they are sold at a discount to face. USFR holds treasury floating rate notes. The interest rates of FRNS are determined by the most recent 13 week T-Bill yield plus a spread, which can be negative or positive but is constant over the duration of the FRN. USFR pays out a monthly dividend based on the yield of its FRN holdings. Practically speaking there is not much difference between SGOV and USFR over a moderate time horizon since the underlying mechanism is the current 13 week T-Bill, but most current FRN issuances have a positive spread so they will yield slightly more than the 13 week T-Bill. The risk profile of all of these investments is functionally identical in that they are all based on treasury securities of different types.
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Apr 25, 2024 20:41
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jfff posted:I may not fully understand what you're asking, but IIRC you can only contribute to a solo 401k as an employER based on your profit from self-employment. Yup, agreed. So my question is regarding the total 69k limit. Say i contribute 6k as the employER contribution. Theoretically, that leaves me with 69-23-6k=40k of space still. Can I use that additional 40 k of space to make post tax contributions to my 401k up to the 40k limit? And then convert that to Roth? Even though that 40k is coming from my W2 job?
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Apr 25, 2024 21:01
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I just realized I have about 5.84% of my taxable portfolio in SGOV, and it's money I don't need in the short term (like, more than a decade) at all. Would it be better for me to sell it and buy different ETFs with it?
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Apr 25, 2024 21:01
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ETF just means exchange traded fund - it doesn't imply anything about the actual underlying securities and their risk profiles. So it's very hard to tell you if you should buy "a different ETF" - it depends on what that ETF actually is, and how well it aligns with your money goals. SGOV sounds like it doesn't align with your goals for this money so I think it's a good idea for you to sell and invest in something else - but to determine the "something else" you need to figure out what your goals actually are and when you will need the money. You could buy an ETF that only invested in companies that start with the letter A. You could buy an ETF that invested in nothing but junk grade corporate paper. You could buy an ETF run by Cathie Wood. You could buy an ETF that tracks the performance of the Nikkei 225. All of these would meet different goals (comedy, income stream at high risk, bagholding, you really like Japan).
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Apr 25, 2024 21:10
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KYOON GRIFFEY JR posted:ETF just means exchange traded fund - it doesn't imply anything about the actual underlying securities and their risk profiles. So it's very hard to tell you if you should buy "a different ETF" - it depends on what that ETF actually is, and how well it aligns with your money goals. SGOV sounds like it doesn't align with your goals for this money so I think it's a good idea for you to sell and invest in something else - but to determine the "something else" you need to figure out what your goals actually are and when you will need the money. All in on DJT, got it  Meant more of sell SGOV and put it in to a general IVV/ITOT/IEMG/QQQ/SCHD kind of deal, general wider market ETFs with the goal of growing over decades.
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Apr 25, 2024 21:21
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Antillie posted:As a general rule inflation protected bonds like IBonds and TIPS are the better choice if inflation turns out to be above what the market is expecting going forward. While nominal bonds (things like BND, SPBO, GOVT, ect...) are generally the better choice if inflation turns out to be below what the market is expecting. Obviously its impossible to know which will be the case before hand. So the usual "the future is unknowable so just diversify" argument applies here. Its worth noting that if you are going to hold TIPS (or a TIPS fund/ETF) you *really* want to hold them in some kind of tax deferred account (IRA, 401k, 403b, ect...) due to the unique way they are taxed. Personally I would *never* hold TIPS in a taxable brokerage account. IBonds don't have this specific issue but unlike TIPS they have a yearly purchase limit and some other unique fiddly restrictions. As a way to stash money that you don’t want to put into a VTI/VOO type vehicle, they feel about the same to me, with the benefit of SGOV/USFR being liquidity in case you do decide to move the funds to VTI/VOO. But the returns on I Bonds, SGOV, and USFR seem pretty similar. I haven’t really thought about the tax implications but from what I can tell, the interest on all 3 are subject to federal taxes as ordinary income and exempt from state taxes.
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Apr 25, 2024 21:29
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Josh Lyman posted:Why do you recommend holding SGOV/USFR in a tax deferred account? Because of the monthly dividend? I would hold TIPS in a tax deferred account. SGOV and USFR are not TIPS funds so I don't see any problem with holding them in a taxable account. In fact I keep my emergency fund in SGOV. Yes the interest on SGOV/USFR/IBonds would be taxed in the same way at the federal level as far as I know. TIPS have their principal value adjusted for inflation instead of their interest rate. When this happens the increase in value (assuming the value went up due to inflation) is counted as taxable income immediately, even if you don't sell the bond. In a taxable account this can create some major tax liability for gains you haven't actually realized yet. In a deflationary situation (very rare but not unheard of) the principal value would go down. I'm not sure what the tax implications of that would be. IBonds aren't taxed like TIPs are because they vary their interest rate based on inflation instead of the principal value. But as Kyoon described, they have their own special restrictions and rules. Note: I am not a tax pro. I could be wrong. State taxes may complicate the matter significantly. Please consult a CPA for actual tax answers. Antillie fucked around with this message at 22:39 on Apr 25, 2024 |
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Apr 25, 2024 22:34
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Residency Evil posted:Yup, agreed. So my question is regarding the total 69k limit. Say i contribute 6k as the employER contribution. Theoretically, that leaves me with 69-23-6k=40k of space still. The 23k of employee contributions to your W2 work-related 401k don't count against the employER contributions to your solo 401k. You'd have 69-6=63k of theoretical space leftover in your solo 401k if your self-employment earnings are 30k. Assuming you mean, '... additional 40 k of space ... my solo 401k' No, solo 401k contributions are calculated based on the net earnings of the business. You can't use that additional space unless your self-employed business has the earnings/profit that allow for it. You'd need to have ~$360k in profit from self-employment to take advantage of the full 69k of space the solo 401k offers.
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Apr 25, 2024 23:04
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You can get your regular employment money into your self-employed bucket by becoming a contractor and doing your work as a contract for your employer instead of on a W-2 basis.
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Apr 25, 2024 23:21
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jfff posted:Short answer, no. Gotcha. I was mistaken and thought the 69k limit would have gone down due to the 23k employEE limit. It sounds like I'm limited to my primary 401k/mega backdoor roth. I guess that makes sense since my total i401k contributions would show up on a schedule C and be greater than 20% of my consulting income. Leperflesh posted:You can get your regular employment money into your self-employed bucket by becoming a contractor and doing your work as a contract for your employer instead of on a W-2 basis. I wish, although this would eliminate my employer's mega backdoor roth.
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Apr 26, 2024 00:36
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Leperflesh posted:You can get your regular employment money into your self-employed bucket by becoming a contractor and doing your work as a contract for your employer instead of on a W-2 basis. Do not do this. I’m assuming it’s facetious but… The tax implications alone almost certainly outweigh any additional 401k contributions you can make.
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Apr 26, 2024 21:50
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Going independent contractor is a significant change, yes. You typically charge your employer a lot more on a per-hour basis, because you are taking over the burden of the employer payroll tax (and health insurance and workers comp etc. etc.). However, if your employer's 401k match was a measly 6% and you would prefer to shove forty grand in instead, and if you are a high earner making 300k and can actually earn enough to do that, then it's such a great idea that tons of highly compensated fields have become dominated by contractors. Including, for example, financial advisors. The tax implications only outweigh the mega backdoor roth option if you don't increase your hourly rate to compensate. But of course, that would be very silly. Nobody does that. Especially not taxi drivers and pizza delivery and personal shoppers. Why, what a weird world it would be, if people went indie and then still only got paid like minimum wage.
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Apr 26, 2024 22:40
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You'd also have to find a new job as a "consultant" right? I thought you can't just tell your current employer that you want to be an independent contractor and take a 200% hourly wage bump. E: and then you'd have to actually work all 8 hours that you bill them for instead of just being on salary and working for "8 hours" which is actually like 5-6. Boris Galerkin fucked around with this message at 22:49 on Apr 26, 2024 |
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Apr 26, 2024 22:46
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Doctors seem to have a bunch more of that flexibility than most other professions, so I imagine RE is in a more plausible scenario vs most here.
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Apr 26, 2024 22:51
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Boris Galerkin posted:You'd also have to find a new job as a "consultant" right? I thought you can't just tell your current employer that you want to be an independent contractor and take a 200% hourly wage bump. oh absolutely some employers are into it because it gives them simpler paperwork and shifts an expense from the employee column to... well, some other column, consulting or whatever, and also reduces their long-term liability and gives more flexibility (ending a contract is cheaper than terminating employees if those employees customarily get severance, have their accrued vacation paid out, etc.) in some professions, it's very common for there to be contractors as well as employees. That includes my own, but technical writers don't get paid enough to afford to shove $50k into savings annually lol quote:E: and then you'd have to actually work all 8 hours that you bill them for instead of just being on salary and working for "8 hours" which is actually like 5-6. do you think a lawyer whose minimum fee is 1 hour of work always does 1 hour for each client
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Apr 26, 2024 23:11
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I’m setting my already-retired mom up with an IRA so she can move her savings from a checking account, and I was looking at a Roth. (She’s on disability now, will start taking social security in a few years.) Fidelity and Vanguard are essentially the same for this right? She’s very hands-off. Is there a better global fund than VT that I should be looking at for her ~$40k? She has $30k in I Bonds already, most past the one-year mark.
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Apr 27, 2024 00:15
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Antillie posted:I would hold TIPS in a tax deferred account. The taxes on TIPS are a little weird, but I hold them in a taxable account and its not a problem. They have two types of income, the inflation adjustment (reported as 1099 OID), and a coupon payment. Depending on what the coupon payment is and what the inflation adjustments are, the former can often easily cover taxes on the latter.
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Apr 27, 2024 00:21
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Valicious posted:I’m setting my already-retired mom up with an IRA so she can move her savings from a checking account, and I was looking at a Roth. (She’s on disability now, will start taking social security in a few years.) Fidelity and Vanguard are essentially the same for this right? She’s very hands-off. Why VT over VTI? Fidelity is marginally easier to use, which could be a pro or a con. Fidelity has better phone support.
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Apr 27, 2024 00:22
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CubicalSucrose posted:Why VT over VTI? I figured VT diversifying globally was better than putting all her eggs in the US economy basket. Am I wrong?
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Apr 27, 2024 00:27
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VT is a perfectly fine choice if you want to hold US and International at market weight (currently about 60% US). When is she planning on using this money? Are there other assets aside from the I Bonds? Vanguard's life strategy funds might also be worth considering, since they contain a mix of bonds and stocks.
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Apr 27, 2024 01:10
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Valicious posted:I’m setting my already-retired mom up with an IRA so she can move her savings from a checking account, and I was looking at a Roth. (She’s on disability now, will start taking social security in a few years.) Fidelity and Vanguard are essentially the same for this right? She’s very hands-off. doesn't an IRA require earned income? Disability payments don't count. If she's retired and not working, I don't see how you can take advantage of an IRA.
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Apr 27, 2024 01:18
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CubicalSucrose posted:Doctors seem to have a bunch more of that flexibility than most other professions, so I imagine RE is in a more plausible scenario vs most here. Unfortunately this is less and less true. As healthcare consolidation has decreased competition and driven up costs, most doctors are employed these days. Very few are in true private practice/business owners. Thanks, uh, Obama. 
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Apr 27, 2024 01:19
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drk posted:VT is a perfectly fine choice if you want to hold US and International at market weight (currently about 60% US). She has about $130k tied up in annuities based on some less-than-stellar advice she got years ago. She lives pretty frugally, but her savings aren’t going to last forever.
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Apr 27, 2024 01:29
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If shes going to use any of the money in the next five years or so, it might be worth considering adding some short term treasuries (such as via VGSH) to the VT. Asset allocation is inherently personal, but it is important to decide on and write down.
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Apr 27, 2024 01:46
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