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+--- Thread: Madison MoneySports - Personal Finance Thread (/showthread.php?tid=11501)
Re: Madison MoneySports - Personal Finance Thread - Jewels - 08-02-2017
This is all such really good advice. I wish I made the kind of money some of you do, so I could squirrel away some money. I have a 401k, but I was 30 before I worked for a company that offered it. I'm in a decent place with my mortgage, no student loans, and my car is paid off. After having lived my 20s in a 2 income househould, the transition to 1 income left me without a back up plan. I've since been trying to rectify that. While I've always been decent with my money, this thread definitely leaves me feeling a little panicked about my debt. I just took a serious step to fix that, and luckily my credit has always been great, so this step saved me from ruining that. This has all given me a lot to chew on. So thanks to everyone who's contributed.
Re: Madison MoneySports - Personal Finance Thread - D_Eclipse9916 - 08-02-2017
Deleted, got drawn into Apoc's pissing match.
Re: Madison MoneySports - Personal Finance Thread - Apoc - 08-02-2017
![[Image: 1a830b78df3aa11a509527bd0183b9f91e604575...a228d8.jpg]](http://s2.quickmeme.com/img/1a/1a830b78df3aa11a509527bd0183b9f91e604575c609acb7cdf23708f6a228d8.jpg)
Re: Madison MoneySports - Personal Finance Thread - V1GiLaNtE - 08-02-2017
Let's try to keep the pissing to a minimum (even if it tastes so sweet). I'd like this thread to remain a source of information for current students and others who have questions or looking for guidance.
Re: Madison MoneySports - Personal Finance Thread - Apoc - 08-02-2017
I am not a financial advisor and my list should not be taken as a guaranteed way of saving, but here are my holdings. I am providing this as a starting point for people to research the countless funds out there. Your investment goals and/or risk avoidance may be very different than mine. Whatever you do, pay attention to the expense ratio. High expenses will bleed you of potential growth and you're not really getting any value for that expense.
My goal is to retire when my kid graduates HS; I'll be 57.
![[Image: 20596962_10154596381696744_1413128223576...e=5A00D102]](https://scontent-sea1-1.xx.fbcdn.net/v/t1.0-9/20596962_10154596381696744_1413128223576085353_n.jpg?oh=1d19f2d586a10a910e2da21bb6fed80e&oe=5A00D102)
Re: Madison MoneySports - Personal Finance Thread - V1GiLaNtE - 08-02-2017
Is anyone investing in taxable accounts (ETFs, Mutual Funds)? When does that make the most sense as opposed to having cash in the bank?
Re: Madison MoneySports - Personal Finance Thread - Apoc - 08-02-2017
The entire top section of my image above are taxable accounts. The answer to your second question is "nearly all the time." Cash in the bank is well behind inflation, so you're actually losing money by leaving cash in there. The only downsides are how quickly you can access the money and the possibility that it could lose cash. As long as you're decently diversified, that risk can be mitigated... assuming there isn't a massive market collapse.
edit: 2/3 of assets are retirement; 1/3 is taxable
I keep a larger amount in taxable than most because 50% of my compensation is awarded only twice per year (need access to it) AND I want to be able to do things like buy a new home without penalty.
Re: Madison MoneySports - Personal Finance Thread - V1GiLaNtE - 08-02-2017
So my situation is as this:
12% Traditional 401k Contribution
Will fully fund Roth IRA for 2018 (2017 is already funded)
Easily 6 months Emergency fund
I owe about $6k on the 4Runner @ 3.25% (I'll probably ride this out since the interest is so low)
No other debt
The excess I'm saving every month is going straight to my primary online savings account. My Emergency fund is there, but a separate account I don't touch. I'm not desperate for instant liquidity on money so is it better to start transitioning that primary savings into taxable funds every month?
Ideally I should continue to go back and increase the 401k until it hurts and then back off (I think I'm very close to that point right now), but I feel at this stage I should diversify and hit some sort of index fund that covers the broader market.
IDK I feel I'm in a weird in between place about continuing to maximize tax sheltered accounts vs. trying to grow taxable investments.
Re: Madison MoneySports - Personal Finance Thread - WRXtranceformed - 08-02-2017
V1GiLaNtE Wrote:Is anyone investing in taxable accounts (ETFs, Mutual Funds)? When does that make the most sense as opposed to having cash in the bank?Yes on both, for the reasons Apoc mentioned. Both have performed extremely well. To me, it makes very little sense to keep more than your decided upon X number of months reserves + emergency funds in your checking / savings accounts. If you don't need to touch the money, invest it in something that has the potential to grow significantly
Re: Madison MoneySports - Personal Finance Thread - Apoc - 08-02-2017
Personally, I would put everything you don't think you'll need TODAY into a taxable account. Even more if you can write checks against it or withdrawal from an ATM/branch. For example, if you get laid off and need to pay for rent. I don't have checks for Vanguard, but I can transfer from Vanguard to Wells Fargo in one business day so I'm not too worried about liquidity. If you're considering buying a house at some point the future, you're going to want to put that money in a taxable account. My taxable accounts serve as all these things.
Some help: <!-- m --><a class="postlink" href="https://www.thebalance.com/taxable-accounts-vs-iras-2466429">https://www.thebalance.com/taxable-acco ... as-2466429</a><!-- m -->
I would highly suggest talking to a financial advisor over trusting me, though. What works for me may not be what works for you. As I mentioned before, an advisor can help you tailor investments to your specific situation.
Re: Madison MoneySports - Personal Finance Thread - V1GiLaNtE - 08-02-2017
Apoc Wrote:If you're considering buying a house at some point the future, you're going to want to put that money in a taxable account. My taxable accounts serve as all these things.
I would highly suggest talking to a financial advisor over trusting me, though.
That's sorta exactly the thoughts I had in my mind and wasn't sure how certain people were on those things. A house is certainly a future goal. I just wasn't sure how many people work it with either traditional savings or taxable accounts. I do have plans to talk to an advisor.
Re: Madison MoneySports - Personal Finance Thread - V1GiLaNtE - 08-02-2017
WRXtranceformed Wrote:V1GiLaNtE Wrote:Is anyone investing in taxable accounts (ETFs, Mutual Funds)? When does that make the most sense as opposed to having cash in the bank?Yes on both, for the reasons Apoc mentioned. Both have performed extremely well. To me, it makes very little sense to keep more than your decided upon X number of months reserves + emergency funds in your checking / savings accounts. If you don't need to touch the money, invest it in something that has the potential to grow significantly
Another vote. Thanks for the wisdom.
Re: Madison MoneySports - Personal Finance Thread - V1GiLaNtE - 08-02-2017
Apoc Wrote:Personally, I would put everything you don't think you'll need TODAY into a taxable account. Even more if you can write checks against it or withdrawal from an ATM/branch. For example, if you get laid off and need to pay for rent. I don't have checks for Vanguard, but I can transfer from Vanguard to Wells Fargo in one business day so I'm not too worried about liquidity. If you're considering buying a house at some point the future, you're going to want to put that money in a taxable account. My taxable accounts serve as all these things.
Some help: <!-- m --><a class="postlink" href="https://www.thebalance.com/taxable-accounts-vs-iras-2466429">https://www.thebalance.com/taxable-acco ... as-2466429</a><!-- m -->
I would highly suggest talking to a financial advisor over trusting me, though. What works for me may not be what works for you. As I mentioned before, an advisor can help you tailor investments to your specific situation.
So I also have Vanguard. Can I use the funds from my taxable account to eventually fund my Roth IRA for 2018? AKA transfer from the taxable account over the IRA? (let's ignore all the income rules since they don't apply to me yet).
Re: Madison MoneySports - Personal Finance Thread - JustinG - 08-02-2017
Apoc Wrote:My goal is to retire when my kid graduates HS; I'll be 57
Damn you are old.
Re: Madison MoneySports - Personal Finance Thread - WRXtranceformed - 08-02-2017
Another vehicle you can use for semi-quick access to funds while still earning slightly higher interest rates than your checking account is a CD. I did a CD ladder strategy over the last year and a half or so because I knew that I may need quickish access to funds due to the impending house purchase. I would basically have different CDs mature every three months or so and if I didn't immediately need the money for anything I would roll it into another CD with as high of interest as we could find or dump it into the mutual funds. The interest you earn still isn't much but it's better than a couple cents if it was sitting in my savings account.
Re: Madison MoneySports - Personal Finance Thread - D_Eclipse9916 - 08-02-2017
You can fund a "taxable account" and pull it out the next day.
Yes if you have more than 3-6 months of expenses in savings or checkings it should be in something. Hence why I don't understand a savings account since the amount of interest on 10-20k is negligible. Might as well just have checking and anything not used in the next month or emergency fund be invested.
Makes tax time fun, I use to do my taxes by hand and spent lots of time writing out each holding. Turbotax does it all for you and you just have to print out some of your investment details for backup in case of audit.
Those 20XX funds are great but be aware of timing of investments. You are not going to need all of your retirement money on retirement day 1. Stage your investments so they are still working hard while others rotate to "cash holdings". (that's why it states a date) for retirement day 1. So don't pour it all into 2055 when you don't plan on needing it till 2065.
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Re: Madison MoneySports - Personal Finance Thread - V1GiLaNtE - 08-02-2017
WRXtranceformed Wrote:Another vehicle you can use for semi-quick access to funds while still earning slightly higher interest rates than your checking account is a CD. I did a CD ladder strategy over the last year and a half or so because I knew that I may need quickish access to funds due to the impending house purchase. I would basically have different CDs mature every three months or so and if I didn't immediately need the money for anything I would roll it into another CD with as high of interest as we could find or dump it into the mutual funds. The interest you earn still isn't much but it's better than a couple cents if it was sitting in my savings account.
I tend to shy away from CD's. I haven't found their interest rates all that appealing. :dunno:
I don't keep more than my monthly expenses + some available in checking and savings sits with Barclays paying about 1.2% which is pretty darn close to a 12 month CD.
D_Eclipse9916 Wrote:Yes if you have more than 3-6 months of expenses in savings or checkings it should be in something. Hence why I don't understand a savings account since the amount of interest on 10-20k is negligible. Might as well just have checking and anything not used in the next month or emergency fund be invested.
This is something I have struggled with for awhile as to "what to do". It seems if it's not in checking or my E-fund I should be trying to maximize the gains on it.
Those 20XX funds are great but be aware of timing of investments. You are not going to need all of your retirement money on retirement day 1. Stage your investments so they are still working hard while others rotate to "cash holdings". (that's why it states a date) for retirement day 1. So don't pour it all into 2055 when you don't plan on needing it till 2065.
This is a great point DJ. Thanks for the tip.
Re: Madison MoneySports - Personal Finance Thread - Apoc - 08-02-2017
JustinG Wrote:Apoc Wrote:My goal is to retire when my kid graduates HS; I'll be 57
Damn you are old.
The downside to having a kid at 38. Of course, the upside is I have the ability to buy things that make life with a toddler at 40 easier.
...and I agree with DJ {gasp} on the target year funds. One other thing to note is targets with earlier dates are usually more conservative, so they can grow slower but also have less risk. They do this to protect your assets because if you're aggressive and lose a bunch of money 10 years before retirement, it's a lot harder to make that up. If you don't like risk, pick a fund that's lower than your retirement year. If you are okay with higher than average risk, pick a fund that's higher than your retirement year. Regardless of what you do, you should have them spread over at least 10 years because statistics say you'll live at least that long in retirement.
Re: Madison MoneySports - Personal Finance Thread - D_Eclipse9916 - 08-02-2017
Btw Taylor, flipping cars for extra income is a false economy. You might as well flip burgers for the amount of time, expense and lost income from investing it.
I don't buy cars to flip, I buy to enjoy. The difference is I try to avoid anything I can't sell 2-3 years down the line for breaking even before personal property taxes and insurance. Buying the LR gave me a heartache but every other thing my wife wanted (cue every small SUV) had the same hard depreciation. If I'm going to lose my ass I might as well enjoy it.
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Re: Madison MoneySports - Personal Finance Thread - G.Irish - 08-02-2017
D_Eclipse9916 Wrote:Btw Taylor, flipping cars for extra income is a false economy. You might as well flip burgers for the amount of time, expense and lost income from investing it.
I don't buy cars to flip, I buy to enjoy. The difference is I try to avoid anything I can't sell 2-3 years down the line for breaking even before personal property taxes and insurance. Buying the LR gave me a heartache but every other thing my wife wanted (cue every small SUV) had the same hard depreciation. If I'm going to lose my ass I might as well enjoy it.
Sage advice. There may be cars that you can flip for profit but that is not easy to do consistently and as DJ said it requires a lot of work. From the jump you have to figure in 4% lost to tax, then title, tags, annual car tax, and any repairs/maintenance/improvements.
Just use resale value as a factor in what you buy (and when you sell) so you lose less money when you switch.
Now, you can flip for money with bikes fairly easily by buying in the winter and selling in the summer. A lot of people have bikes that only need a little bit of work to be sellable for a profit. RJ made a few thousand this way back in the day.