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Residency Evil posted:I had the same thought about grad school, but then I looked at all of my classmates that were lucky enough to have parents that paid for it (and the ones that even bought them apartments!), and realized that their lives were better and they could focus on more important things than worrying about student loans. I'm not sure that I ended up a better person because I was/am forced to pay back student loans. I'm sure my opinion on this will change over the years. bergeoisie posted:Yeah. I think a ton of this comes down to personal experience, the type of grad school, the world after graduating, etc. This is probably a little too E/N for this forum, so I apologize in advance. When I left undergrad, grad school felt like the default choice which set me back a lot of years. It was a completely paid for STEM PhD (that I washed out of), but the opportunity cost was immense. I worry that dangling a no-questions-asked 529 for grad school makes some of those choices easier rather than smarter for kids and I'm not 100% convinced the majority of 23 year olds can make that choice wisely. I do appreciate the professional school perspective. It's very different from my own (but still probably one I'd fund from brokerage). I feel pretty conflicted on this. Meeting trustafarians in undergrad lead me to believe too much money makes you a worse human. Also at one point I tried to "take a year off," but the school would have cancelled my financial aid, so I buckled down and got it done. On the other hand, I think we've all seen the horrors inflicted by crushing student loan debt.
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Jan 10, 2022 19:06
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moana posted:I think they would be fine for setting up an investment plan in index funds if you say that's what you want. For tricky stuff like estate planning or tax planning, they'll just tell you to go hire an expert. A CFP is supposed to be able to tie all of these things together and give you recommendations/work with your attorneys, cpas, insurance agents,, etc. I doubt vanguard does this. I don't know how hard they push active management vs just using the basic index portfolio though. Nope. Shitposting/crowd sourcing in this thread seems to have worked out fine for us so far. I probably ask too many stupid questions here.  Epitope posted:I feel pretty conflicted on this. Meeting trustafarians in undergrad lead me to believe too much money makes you a worse human. Also at one point I tried to "take a year off," but the school would have cancelled my financial aid, so I buckled down and got it done. On the other hand, I think we've all seen the horrors inflicted by crushing student loan debt. Yup. I have a very close friend from undergrad who came from (reportedly) mid-high 8 figure wealth. He could have done nothing with his life, yet ended up a rockstar researcher at Harvard. His brother stays at home smoking a lot of weed.
Residency Evil fucked around with this message at 19:19 on Jan 10, 2022 |
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Jan 10, 2022 19:15
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For what it's worth, - Students who borrow for college have higher GPAs and take more credits per semester, compared to students who do not borrow - As the amount of debt relative to tuition goes up, GPAs and credits per semester begin to decline (but always remain above the Do Not Borrow's) - Students who get non-loan financial aid tend to have GPAs/more credits per semester than those who do not; but this is a bit worthless because non-loan financial aid tends to be awarded for high academic performance All this data was collected in Montana so it may not apply to the nation at large. But it's interesting to see that "a little skin in the game" increases academic performance and might even be ideal
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Jan 10, 2022 19:26
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Crosby B. Alfred posted:This wasn't a bad conversation, the meat of it is about in the middle and I've slowly persuaded myself that this year I'm going to stop investing in individual stocks. I have the sneaking suspicion it's partially a hobby for a quite a few folks. there is too much bad investing advice to curate your friend is a dumbass; don't touch your 401(k)
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Jan 10, 2022 19:28
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That's fair, Question for the thread, I'm trying to be absolutely serious here. What happens to most people when they are older and want to retire? I'm looking at many of the median retirement savings and the overwhelming majority of people are incredibly behind. Am I correct that these folks just have to keep working and aggressively downsize later in life? The reason I'm asking is because I'm in complete shock how many people are so far behind with their retirement plans. I'm going with a simple 3X Salary by age 40. To me, being old and poor is absolutely scary as hell.
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Jan 10, 2022 20:01
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Crosby B. Alfred posted:That's fair, Americans born after 1959 are expected to retire between 64 and 67, and are expected to die at 79 years old. However, people who retire a few years earlier tend to die earlier by about the same number of years. This is correlation though (unhealthy people have to retire sooner) not a causation (they didn't get sick because they stopped working). If you retire in your 60s, you generally kick the bucket after about 12-17 years. About half of Americans plan to/will have to work until their health fails, and then will need to stretch their savings and SS over about 15 years. Die at 12 years, and you leave your kids a couple bucks. Die at 17 years, and you're asking them for help with your convalescent home fees. Retiring in good health with an expected 20+ year timeframe is unusual but if you're under 40 and know what a Roth IRA is then chances are you'll achieve it.
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Jan 10, 2022 20:14
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My mom works at Target. I save money for her. My siblings and I will take care of her if needed (I paid 1/2 her property taxes last year for example). A lot of people are not so lucky and just try to scrape by on social security.
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Jan 10, 2022 20:16
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Crosby B. Alfred posted:To me, being old and poor is absolutely scary as hell. You can be like my father. My sister and I pay his rent and he lives off of $800 a month in rural Ohio. He has no savings, and his only medical care is through Medicare. If anything major changes he'll have to move in with one of us most likely. I love him, but I hope when his health goes he dies quickly. I know he doesnt want to be any more of a burden and I wonder how much we'd be able to help him if he has major medical costs. Save for retirement and dont be a burden for your children.
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Jan 10, 2022 20:16
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Crosby B. Alfred posted:That's fair, If you're old and really really poor, you'll be ok. It's that hosed up area of too many assets for public assistance, but too broke to handle poo poo that comes up that really sucks. My MIL walked away from her job the week she turned 62. She collects ~1200 a month in social security and has almost no savings at all. She'll inherit about 200K or so when paw dies, but that's it. She's poor enough she qualifies for all sorts of government assistance. Medicaid covered her until she was 65, now she's on some plan that covers most or all of her medicare premiums, and will provide rides to the Dr, money for vitamins and fresh foods, she gets food stamps and commodities, who knows what else. She basically has no medical costs at all which is the big thing when you get old. edit: 3X salary by 40 can be tough. I'm a little bit behind that, but my wife and I are on track to have about 3M in retirement at 65 assuming we keep contributing the way we are, and a 7% return. We have a little over 400K between the two of us, which does make me feel a little behind, but I know a ton of people my age that don't have poo poo saved at all. Anything over 2M and we're going to be fine for our lifestyle (assuming social security is still around). Folks leaving school with huge loans, and increased cost of living can make it hard to focus on retirement savings before the age of 40. I didn't start my professional career until 26, and until the last few years only put in the minimum needed to get the full match from work. I wish I knew more about Roth's and other poo poo back then. skipdogg fucked around with this message at 20:23 on Jan 10, 2022 |
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Jan 10, 2022 20:17
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It is scary as hell. What most folks seem to do is not retire until medically necessary, often long after medically necessary, and then die shortly thereafter. I work in a blue collar field and there are a string of retirees about to leave in February. Two are retiring early due to previous lucrative jobs, retirement funds stacking with those from this one. Another is retiring right at 65. This is because we lose half our pension benefit if you retire 3 years earlier at 62. For as much as people laud pensions, that is one hell of a penalty forcing senior citizens to keep at physically demanding work. I'm already feeling substantial wear and tear from the work. I've been in the industry 7 years and am 33. I have no clue if I could do this for 32 more years. And of course in our society I am one of the lucky ones.
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Jan 10, 2022 20:17
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My stepmom lives in the outskirts of Oklahoma City in a huge apartment complex with no security, bad management, and rent under $1k. She routinely doesn't have enough money for her medication plus rent plus food, as a diabetic cancer-survivor with very very little mobility she needs a lot of help and she mostly gets it from my brother who lives half an hour away. Her social security and medicare etc. is absolutely not enough for her to get by, even in a very low cost area. She is a dependent on others because her ex-husband hosed her over (he pays her $95 in alimony monthly, when he remembers), she was bipolar and could not work to the end of her expected career as a teacher, and she was awful with money her whole life and pissed away any savings she ever managed to accumulate (untreated bipolar). She's been through bankruptcy twice and I found out recently that two years ago she got scammed out of several thousand dollars by grifters of some sort or another, she's too embarrassed to give me the details. Elderly people with no savings become dependents on their families and the state, live poor low-quality lives, are easily victimized, have neglected health problems, and die earlier than they had to.
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Jan 10, 2022 20:22
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3x salary by 40 can be a perfectly decent rule of thumb but you really want to: estimate your retirement lifestyle including health care with some reasonable inflationary figures - this is always going to be unscientific figure out when you think you'll retire and how long you'll live (GGGC's numbers are fairly decent) and use that, coupled with a reasonable rate of return, to figure out how much money you need going in to Year 1 of retirement at Age X I figure 2.5 million should take care of my wife and I if I want to retire at 65 and 4 million is the "you can retire right now at whatever age you are" number
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Jan 10, 2022 20:34
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When you buy I-bonds, do you get physical pieces of paper that you have to safeguard, or is there some way to buy them through a bank? Vanguard doesn't seem to have the option to buy 'em directly, I'm guessing it's paper or nothing.
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Jan 10, 2022 20:44
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You buy them directly from treasurydirect.gov (electronic only) or request your tax refund to be in the form of I Bonds (maybe paper idk). There are no other options.
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Jan 10, 2022 20:46
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MJP posted:When you buy I-bonds, do you get physical pieces of paper that you have to safeguard, or is there some way to buy them through a bank? Vanguard doesn't seem to have the option to buy 'em directly, I'm guessing it's paper or nothing. https://treasurydirect.gov/ Up to $10k per year. No paper.
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Jan 10, 2022 20:46
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MJP posted:When you buy I-bonds, do you get physical pieces of paper that you have to safeguard, or is there some way to buy them through a bank? Vanguard doesn't seem to have the option to buy 'em directly, I'm guessing it's paper or nothing. Let me introduce you to https://www.treasurydirect.gov. Yes it's real. No it's not a scam. edit: So beaten.
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Jan 10, 2022 20:47
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you can buy paper bonds with your tax refund as well, up to an additional $5,000
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Jan 10, 2022 20:47
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How long does it usually take for a brokerage connected to Treasury Direct to reflect a new purchase of I bonds? Still only seeing last year's purchase.
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Jan 10, 2022 20:49
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I am amazed that there are brokerages who can connect to treasurydirect. Do they fax info back and forth?
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Jan 10, 2022 20:52
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It's probably hand couriered printouts in one of those big interdepartmental memo envolopes. It takes 4-6 weeks because, like interdepartmental memos in envelopes, it is hand pushed on a mail cart between the sending instituation and Treasury Dept.
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Jan 10, 2022 21:01
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GoGoGadgetChris posted:Retiring in good health with an expected 20+ year timeframe is unusual but if you're under 40 and know what a Roth IRA is then chances are you'll achieve it. A few years ago, I started maxing out my 401k. Now I'm maxing out my 401k, Roth IRA and HSA with 6-months of emergency savings. I'm even thinking that given the political and economic climate a full year of savings is even better and I can just let it sit accrue interest in a variety of ways anyhow. My only remaining complication is do I buy a house or continue to rent but given the housing thread it's kind of a wash however recent market developments have me thinking otherwise. skipdogg posted:edit: 3X salary by 40 can be tough. I'm a little bit behind that, but my wife and I are on track to have about 3M in retirement at 65 assuming we keep contributing the way we are, and a 7% return. We have a little over 400K between the two of us, which does make me feel a little behind, but I know a ton of people my age that don't have poo poo saved at all. Anything over 2M and we're going to be fine for our lifestyle (assuming social security is still around). Folks leaving school with huge loans, and increased cost of living can make it hard to focus on retirement savings before the age of 40. I didn't start my professional career until 26, and until the last few years only put in the minimum needed to get the full match from work. I wish I knew more about Roth's and other poo poo back then. I didn't start making enough until I was in my 30s for investing and initially spent the majority of my income paying off student loans. If I had known about investing earlier, I would have been pinching pennies as a kid and would have bought a few less computer parts. KYOON GRIFFEY JR posted:3x salary by 40 can be a perfectly decent rule of thumb but you really want to: I've done more than that but that's just the easiest ballpark I've found at least for this discussion. I'm thinking that 1.5M+ should be enough for me but I'd rather not live in a small city even in my golden years and I'm looking for even more than that. How I wish I had started investing earlier 
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Jan 10, 2022 22:24
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Gross income multiples are loving stupid guidelines for a ton of reasons. Beaten and beaten better, but golly they rile me up.
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Jan 10, 2022 23:33
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CubicalSucrose posted:Gross income multiples are loving stupid guidelines for a ton of reasons. you gotta keep in mind that basically everyone's number one goal should be to convince people a) that they need to save money for retirement and b) that if they are saving money for retirement, it's not nearly enough, because for most americans that is true.   gross income multiples allow you to frame that conversation a lot more easily than "first solve for your future expenses and then..." because a shitload of people can't even solve for their current expenses. yes there are lots of problems but it's a fine place to start the discussion.
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Jan 10, 2022 23:54
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Residency Evil posted:Nope. Shitposting/crowd sourcing in this thread seems to have worked out fine for us so far. I probably ask too many stupid questions here.
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Jan 10, 2022 23:56
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So very many people don't save because their retirement plan is some combination of -Dying in USA Civil War and/or WW4 -Dying of climate change -I would never be able to save enough so why bother saving any It is... a difficult conversation to have.
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Jan 10, 2022 23:57
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moana posted:You're probably getting better advice here than 99% of your colleagues with advisors, lol. Between this and White Coat Investor, is that guy still giving good advice or has he sold out? Honestly this thread is fantastic. My one foray in to the stock picking thread with $1000 taught me that I should stay away from the stock picking thread. The only thing I've been somewhat tempted by is getting in to some sort of syndicated real estate. Illiquidity has to mean a better return, right?  As for WCI, it's kind of a mixed bag. The message is still mostly good, but these days he's more of an advertiser for insurance companies/loan refinancing companies/mortgage brokers who happens to have a medical side gig. A lot of the "classic" posts and advice are good, but you have to read all of the advice now with the caveat that he's primarily interested in increasing the click-through rates to his advertisers. Privately refinancing students loans while they've been at 0% for the past 2 years is a bad idea, for example.
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Jan 11, 2022 00:10
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moana posted:You're probably getting better advice here than 99% of your colleagues with advisors, lol. Between this and White Coat Investor, is that guy still giving good advice or has he sold out? This thread nearly matches all of the advice I've received from my Fidelity advisor along with other financial figures like Ramit Sethi, Nick Maggiulli, John Bogle, etc. Residency Evil posted:Honestly this thread is fantastic. My one foray in to the stock picking thread with $1000 taught me that I should stay away from the stock picking thread. The only thing that sucks is FOMO along with the sheer lack of excitement. It's so boring waking up in the morning just working when I could be trading whatever stocks, mashing keys and hoping to hit a big winner. What really sucks is that I bought into Apple, Digital Ocean and few others this year and it's so goddamn annoying to psychological peal myself away with those gains only to put it in boring Roth IRA.
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Jan 11, 2022 00:31
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I thought this thread was very solidly against CFPs who charge a yearly AUM fee unless you are in the very solid 7-8 figure portfolio range and even then not really. Hourly fee only or am I wrong?
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Jan 11, 2022 01:35
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I assume it's okay for newbies to ask dumb questions here? I'm unbelievably stupid with money and reading the OP made my eyes glaze over, so I'm not trying to do anything complicated. My work does a 5% contribution to what I think is a 401(a) pension plan with John Hancock. It's not a matching contribution, so I could lower my own contribution to 0 if I wanted and still get the money. Should I be matching or exceeding that to keep all my retirement savings in one place, or would I be better off opening another account somewhere? Right now everything goes straight to the low-risk fund that was basically the default option when I filled out my new hire paperwork, lmao.
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Jan 11, 2022 01:36
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Inner Light posted:I thought this thread was very solidly against CFPs who charge a yearly AUM fee unless you are in the very solid 7-8 figure portfolio range and even then not really. Hourly fee only or am I wrong? For a doctor making a million a year or whatever, it can make sense to have a fee only cfp who can tell you not to invest in syndicated real estate 
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Jan 11, 2022 01:50
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Everett False posted:I assume it's okay for newbies to ask dumb questions here? I'm unbelievably stupid with money and reading the OP made my eyes glaze over, so I'm not trying to do anything complicated. My work does a 5% contribution to what I think is a 401(a) pension plan with John Hancock. It's not a matching contribution, so I could lower my own contribution to 0 if I wanted and still get the money. Should I be matching or exceeding that to keep all my retirement savings in one place, or would I be better off opening another account somewhere? Right now everything goes straight to the low-risk fund that was basically the default option when I filled out my new hire paperwork, lmao.
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Jan 11, 2022 01:52
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Here’s a question. My wife , as I mentioned, gets a 3% match from her work , but they use Edward Jones which stinks. Of course , we will do the match. Does she have the option to setup a 2nd traditional 401k with vanguard for anything she wants to do over the match?
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Jan 11, 2022 02:41
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Nope.
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Jan 11, 2022 02:42
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https://www.whitecoatinvestor.com/financial-advisors/ Is a list that WCI recommends. They’re presumably his advertisers, but a few end up listing themselves as fee only, so maybe it’s a decent start for someone looking?
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Jan 11, 2022 02:51
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Duckman2008 posted:Here’s a question. No, but she may still qualify to contribute $6,000/year to an IRA or a backdoor Roth IRA depending on her income level.
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Jan 11, 2022 02:59
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So reading about Series I bonds... Pros: -Currently 7% interest for inflation -Can cash it after 1 year -Only leave the interest behind on the last... 3 months (if cashing it before 20 years)? This actually sounds... pretty good? However, on that note. If the base interest rate goes up, what happens? Crosby B. Alfred posted:Question for the thread, I'm trying to be absolutely serious here. What happens to most people when they are older and want to retire? I'm looking at many of the median retirement savings and the overwhelming majority of people are incredibly behind. Am I correct that these folks just have to keep working and aggressively downsize later in life? The reason I'm asking is because I'm in complete shock how many people are so far behind with their retirement plans. I'm going with a simple 3X Salary by age 40. I think one of the larger issues is a multitude of things can happen in your 20s to 30s that can really set you back for future retirement. (Early career changes, having kids, getting married and getting divorced, medical issues, going back to college or learning a new trade.) Then one year goes to another. Then its 5 years.... 10 years.... 2 decades. I agree with you the idea of being old and desitute is scary. However... we work to accumulate assets and money. Only to burn through it as we become enfeebled at old age. SA-Anon fucked around with this message at 06:04 on Jan 11, 2022 |
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Jan 11, 2022 06:02
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SA-Anon posted:So reading about Series I bonds... 3 month interest penalty only applies if you withdraw in the first 5 years. The base (fixed) interest rate is fixed for the life of the bond. You dont get more interest if they raise the rate on newly issued bonds. You can of course sell old bonds and buy new ones if they raise the fixed rate, subject to the annual limits.
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Jan 11, 2022 06:35
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the bond has two rates: base rate - this is fixed for the life of the bond and has in recent times tended to be at most a couple of basis points inflation rate - this is reset twice per year for all issued i bonds the bonds are meant to track inflation so as inflation changes the inflation rate changes, but the base rate never does. therefore, if the base rate changes it's possible that the yield of the bonds would be different based on issuance date - however if you look at a base rate table, rates have been below 100bps since 2008 so for current purposes the base rate is ignorable.
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Jan 11, 2022 14:48
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moana posted:it can make sense to have a fee only cfp who can tell you not to invest in syndicated real estate Any chance you can discuss this a bit more in this thread? You probably see these investments in client’s portfolios. Do they not perform well individually or in aggregate? I would imagine there’s some premium to having illiquidity in an investment. Is it simply the fact that many of the same caveats apply with picking individual stocks? Fwiw, it’s been nice to have some REITs in my account over the past year.
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Jan 11, 2022 14:59
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Residency Evil posted:Any chance you can discuss this a bit more in this thread? You probably see these investments in client’s portfolios. Do they not perform well individually or in aggregate? I would imagine there’s some premium to having illiquidity in an investment. Is it simply the fact that many of the same caveats apply with picking individual stocks? REITs did better than a broad index or nah? SP500 was a 28% gain YOY in 2021.
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Jan 11, 2022 15:06
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