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moana posted:It's basically a horrible book for financial advice. The entire book just reads like a dude bragging about getting lucky, and there's no practical advice you should take from it. That said, if it inspires you to get your financial house in order, good for that. Do not try to pick stocks or time market trends or start a real estate empire. Just diversify well and let time do the work for you. So the whole "try to get lucky by buying stocks of small companies hoping they get big one day" is horseshit? I mean, I know that's the entire reasoning behind the very safe Bogleheads-style philosophy..
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Feb 16, 2011 05:54
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Synonamess Botch posted:I have a strange (to me) credit question, I'm not sure where else to ask this so if I'm in the wrong place please be gentle. You did the right thing by using the mutual funds to pay off the credit cards. Even if you had a teaser rate and the mutual funds were doing well, still smart to pay them off. But to try to answer your question, anything is possible, and you should go to https://www.annualcreditreport.com and get your credit today. But the most likely possibility by far is that Chase is acting like idiots. Probably they have been nervous about your account for some time because you fit some computer model that told them they should, but they couldn't do too much because you were carrying a balance. When you paid it off, they saw this as their shot to cut you off and make sure you didn't charge everything back up again. This is why I always tell people to avoid big banks, no matter what they are offering. I don't care if you get 15,000 bonus miles and cash back and besides you don't carry a balance and they gave you 0% for a year. They all do crap like this.
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Feb 16, 2011 05:57
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DreadCthulhu posted:So the whole "try to get lucky by buying stocks of small companies hoping they get big one day" is horseshit? I mean, I know that's the entire reasoning behind the very safe Bogleheads-style philosophy.. If someone's investment philosophy rests on getting lucky on a hot pick then yeah, that's pretty much horseshit and you should ignore the hell out of it.
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Feb 16, 2011 06:14
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Is there a reason I should or shouldn't have a sweep account with Etrade? Like is it good for people who do X in the market, and not for others? I vaguely understand what they are, but I'm not certain on the practical applications (aside from "get interest on your uninvested cash with us until you spend it").
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Feb 16, 2011 08:23
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Zeta Taskforce posted:You did the right thing by using the mutual funds to pay off the credit cards. Even if you had a teaser rate and the mutual funds were doing well, still smart to pay them off. OK I checked my credit report and there's nothing out of the ordinary. I guess it's just Chase being dicks. Can't say I'm surprised but gently caress them for making me worry. I like my ducks in a row and I get mad when some rear end in a top hat starts kicking my ducks all over the place.
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Feb 16, 2011 15:05
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I also just used annualcreditreport.com, do I need to buy my credit score from all three agencies? The only agency I can think of off the type of my head is FICO, but I guess I'd like to see all three of the major ones? According to those random credit reports I've got no accounts in negative standing, although there is a Bank of America credit card showing up which has carried a balance and been paid, but I don't have a credit card. The BoA credit card has always had a perfect history, but it showed a balance of roughly $1k on one report, said it had a high of $3k, and then the other report said it's currently at $0. I'm a little confused heh. Lyon fucked around with this message at 16:34 on Feb 16, 2011 |
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Feb 16, 2011 16:24
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k3nn posted:Getting an ISA should be your first step (US goons: ISA = Roth IRA for Brits that we can withdraw from anytime). Whether you go for the Cash or Stocks&Shares variety (or both) depends on what your aims are with the money - are you trying to invest for 15 years down the line or just aiming to boost the interest on savings you might want to use soon? This would be a relatively long term investment. I want to put the money in a place where I won't blow it on holidays, Thinkpads, fine dining, whatever. I'll definitely check out the HSBC Index funds, especially since there's one near where I work. Thanks for the informative post. I knew vaguely about all these things but you've elucidated them in a concise manner. Chas McGill fucked around with this message at 17:11 on Feb 16, 2011 |
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Feb 16, 2011 16:58
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So I've got $3,000 to put in a Vanguard fund. I'm a 21 year old college student, set to graduate next fall and begin working full time. I'm a bit confused as to whether I should try to set up a retirement account, like a 401k; if I did that, when I start working full-time, could I tell my employer about that account and have them contribute into it? Or should I just invest it in, say, the 500 index fund? I'm looking to just put this money in some fund and keep it there.
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Feb 17, 2011 17:50
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I can't answer the rest of your question as I'm no expert on the different kinds of funds, but if your future employer offers 401k benefits, they'll have their own that they contribute to. Retirement accounts and regular investment accounts aren't necessarily interchangable, as many accounts meant for retirement investments defer taxes until you retire, so removing funds from one early can have interesting consequences. If I were you, I'd start a Roth IRA and contribute to that first, assuming your intention is to use that money to start saving for retirement.
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Feb 17, 2011 18:22
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Zacmaniac posted:So I've got $3,000 to put in a Vanguard fund. I'm a 21 year old college student, set to graduate next fall and begin working full time. I'm a bit confused as to whether I should try to set up a retirement account, like a 401k; if I did that, when I start working full-time, could I tell my employer about that account and have them contribute into it? Or should I just invest it in, say, the 500 index fund? I'm looking to just put this money in some fund and keep it there. Any account that you personally open up at Vanguard would be an individual or retirement account separate from your employer. But before you do that, what other savings do you have? As a college student, you’re going to go through some big changes in the next few years maybe, and $3000 sounds like a lot if you don’t have any and you are broke, but it’s not that much money. Assuming this is it, you might be better off not investing it and just keep it in savings. If you take a job half way across the country or even want to get your own apartment and need to come up with first/last/security, there are so many things that become so much easier if you have money.
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Feb 17, 2011 18:38
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Zeta Taskforce posted:Any account that you personally open up at Vanguard would be an individual or retirement account separate from your employer. But before you do that, what other savings do you have? As a college student, you’re going to go through some big changes in the next few years maybe, and $3000 sounds like a lot if you don’t have any and you are broke, but it’s not that much money. Assuming this is it, you might be better off not investing it and just keep it in savings. If you take a job half way across the country or even want to get your own apartment and need to come up with first/last/security, there are so many things that become so much easier if you have money. I've got another couple grand in savings too, and my parents pay for my college/housing/food. Right now, basically my only expenses are entertainment.
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Feb 17, 2011 19:03
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MY GIRLFRIEND just inherited a kind of significant amount of money and doesn't know where to start as far as managing it. She wants to save it for a down payment on a house or somesuch and she is not planning on touching it any time soon. Her current plan is to just stick it into an ING savings account, but are there better options out there that could make the money do a little more? I'm thinking something along the lines of a CD. She is not interested in anything having to do with a retirement account or stocks, as she already has money invested in both.
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Feb 18, 2011 18:48
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How long before she wants to buy a house? When I was saving for a house, I put the money in ING CDs and then a Vanguard money market fund. If the timeline is short, check out high-interest savings account like Smarty Pig. Bankrate.com is a good resource as well for finding the best rates out there.
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Feb 18, 2011 18:51
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moana posted:How long before she wants to buy a house? When I was saving for a house, I put the money in ING CDs and then a Vanguard money market fund. If the timeline is short, check out high-interest savings account like Smarty Pig. Bankrate.com is a good resource as well for finding the best rates out there. The time line is probably 3 to 5 years. Does that affect the recommendation at all?
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Feb 18, 2011 19:03
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She'll probably be able to get a better rate from CDs than with a savings account then, but you'll have to weigh that against the likelihood that interest rates rise during that time period. Rates are just super low right now and it would suck to be stuck in a low-interest CD if they later rise, having to pay penalties to withdraw it early. What are the rates on the CDs you're considering?
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Feb 18, 2011 19:23
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So I was looking at the performance of my "inherited" portfolio which I moved to ETrade from a firm that used to manage it, and that took care of allocation. I compared its progress to that of S&P500 and it seems to be consistently at least like 3-5% behind. Is it time to consider reshuffling poo poo into index funds? Also, given that I'm not cashing out, but simply rearranging things, are there any savings in terms of fees I could be making?
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Feb 18, 2011 20:17
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If you have a good diversification in your allocation (a decent chunk in bonds, for example), then your portfolio will almost always underperform the S&P 500 just because you don't (and shouldn't) have a 100% equity portfolio. The lower performance is because you also have lower risk in the form of non-equity holdings: the lower risk/lower return is why bonds normally underperform stocks in the long run. Is that what is happening here?
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Feb 18, 2011 20:33
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As far as I can tell there are no bonds in there. It's mostly gold, silver, energy, steel, agriculture funds and poo poo like that (ETrade says that ALL of my portfolio belongs to the "Other" category). Isn't that pretty much all equity? I feel I should be getting more out of this, and since I'm not, I need to invest it in some kind of more reasonable funds (some cheapo vanguard funds most likely).
DreadCthulhu fucked around with this message at 20:51 on Feb 18, 2011 |
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Feb 18, 2011 20:46
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Uh, that sounds way hosed up, like your portfolio is 100% commodity funds? Gold commodities, to take just one example, are often used in portfolios as a hedge against inflation, but it's not expected to have the same rate of growth as stocks (in fact, taking into account inflation, gold is expected to have 0 growth in the long term).
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Feb 18, 2011 21:12
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DreadCthulhu posted:As far as I can tell there are no bonds in there. It's mostly gold, silver, energy, steel, agriculture funds and poo poo like that (ETrade says that ALL of my portfolio belongs to the "Other" category). Isn't that pretty much all equity? I feel I should be getting more out of this, and since I'm not, I need to invest it in some kind of more reasonable funds (some cheapo vanguard funds most likely). ok forget what Etrade tells you. How do you know it is categorizing things correctly? First, figure out exactly what you are invested in (list them) and then come back.
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Feb 18, 2011 21:21
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moana posted:She'll probably be able to get a better rate from CDs than with a savings account then, but you'll have to weigh that against the likelihood that interest rates rise during that time period. Rates are just super low right now and it would suck to be stuck in a low-interest CD if they later rise, having to pay penalties to withdraw it early. What are the rates on the CDs you're considering? After doing a bit more research I think that laddering some shorter term CD's would make the best sense and hopefully hedge against rate increases, what do you think? We are thinking divide the amount evenly between a ING savings account for liquidity, and then divide and ladder into an Ally 6 mo (1.05% APY), 1 year (1.29% APY), 18 month (1.37% APY) and 2 year (1.5% APY)
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Feb 18, 2011 21:23
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SmartyPig currently has 1.35% APY and is completely liquid. It's possible that their rates will drop again, but I wouldn't invest in a CD now that has a lower rate than that until it happens.
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Feb 18, 2011 21:31
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Mikey Purp posted:After doing a bit more research I think that laddering some shorter term CD's would make the best sense and hopefully hedge against rate increases, what do you think? At those rates might as well stick it in a online checking account at like 1.1% and just not bother.
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Feb 18, 2011 21:38
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moana posted:SmartyPig currently has 1.35% APY and is completely liquid. It's possible that their rates will drop again, but I wouldn't invest in a CD now that has a lower rate than that until it happens. Ah, great point. I guess we'll do that and then an 18 month, 2 year, and 3 year. ^^^ With the amount of money, .4% is still kinda worth it.
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Feb 18, 2011 21:44
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Mikey Purp posted:Ah, great point. I guess we'll do that and then an 18 month, 2 year, and 3 year. Listen to moana. The difference between smarty pig at 1.35% and a 2 year CD at 1.5% is 0.15%. To give up the liquidity and any upside potential for 0.15%, at no amount of money does that make sense. That is $1.50 per year per $1000. Even if its $1,000,000, if you have that much money, an extra $125 per month will mean nothing to you.
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Feb 18, 2011 22:15
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80k posted:ok forget what Etrade tells you. How do you know it is categorizing things correctly? First, figure out exactly what you are invested in (list them) and then come back. It's currently evenly spready around these: DBA (PowerShares DB Agriculture Fund) FXA (CurrencyShares Australian Dollar Trust) GLD (SPDR Gold Trust (ETF)) SLV (iShares Silver Trust (ETF)) SLX (Market Vectors Steel (ETF)) XLE (Energy Select Sector SPDR (ETF)) I'm thinking it was allocated that way to survive recession a bit better, but now that the market is functional again, it's not nearly as effective.
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Feb 18, 2011 22:38
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Zeta Taskforce posted:Listen to moana. The difference between smarty pig at 1.35% and a 2 year CD at 1.5% is 0.15%. To give up the liquidity and any upside potential for 0.15%, at no amount of money does that make sense. That is $1.50 per year per $1000. Even if its $1,000,000, if you have that much money, an extra $125 per month will mean nothing to you. Just remember that Smarty Pig only gives that rate up to $50,000 so if she really did inherit a whole lot of money, she'll want to put anything about $50,000 in some other account - whether that be a CD or a savings account like Amex with it's 1.3%.
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Feb 18, 2011 22:58
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I'm still wondering my above question about Sweep Accounts: I have an Etrade account, but currently my un-invested cash with Etrade is just sitting in a cash account. Apparently Etrade "recommends" a sweep account, but I'm not certain if it's something I should be looking in to? Are there certain times or thresholds in which they're advantageous to have? Does it depend on how much I work my portfolio and how much un-invested cash I have?
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Feb 18, 2011 23:00
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Xguard86 posted:I am working on getting my first credit card, to build my credit. I intend to only use it for small charges like netflix and gas, then pay it off every month. Is there a consensus recommended card for people like me? I have seen some suggestions but is there a clear top choice? I'm in this position too. I feel the need to go from having no credit at all to having all the credit. I'm about to drop Chase altogether and I'm looking at different banks right now. I'm looking at having a checking & savings account and a credit card. I'm sure this is stupid, but it makes sense to me.
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Feb 21, 2011 03:50
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The A-Team Van posted:I'm in this position too. I feel the need to go from having no credit at all to having all the credit. Same advice I always give. Find a local credit union or community bank. It doesn't matter how small the place is who issued it, if its a Visa or Mastercard, it will still be accepted everywhere. You don't want to fall into the trap of going online, diligently researching which one has the best rate, perks, fee structure, and going with that particular major issuer. If you do, you will be in for surprises of ever shifting rates and terms. The cardholder agreements might as well be made of quick sand and even if you read it you won't understand it. Better to go with some place local that has built a reputation for fairness and trust, who wants to see you succeed and build credit so maybe you will think of them for a car loan or mortgage.
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Feb 22, 2011 01:16
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Hey guys, quick question: I've bought a motorbike ~ the loan is for $7000, it's over 5 years and at 11% interest (a comparable rate in Australia for a loan/financing). It's $161 a month (which my dad is paying half, but thats a moot point really), I'm the co-borrower and my dad is the prime borrower (due to me being 18 and I don't earn enough). If I was to pay the loan out quicker (say 3 years) would this effect my credit in a good/bad way? Also, how will making the minimum monthly payments up my credit (I don't have a credit rating at all yet). I make roughly $1400 a month and don't have any expenses besides car+bike insurance which is only $120 a month (plus a few one offs) and I have $2K in savings, I guess to cut it short and stop rambling, will this loan by itself give me a good credit rating?
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Feb 23, 2011 10:43
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Guni posted:Hey guys, quick question: I assume that credit in Australia works the same or similar to the States, and if so, you will get a credit score after 6 months of the same account reporting. If everything is on time, your score won’t be excellent, but it will certainly be good. The effect of 3 years vs 5 years of reporting is negligible, and whatever minimal, perhaps infinitesimal effect on your credit from the extra reporting is not worth paying 11% for an extra 2 years. It doesnt' matter if 11% is considered a favorable rate. I’m not saying never borrow and all debt is evil 100% of the time, but if you manage your finances responsibly, live below your means, save money, pay cash, come up with healthy down payments for large purchases, your credit will take care of itself.
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Feb 23, 2011 16:25
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Actually credit reporting in Australia is very different from America. Different enough that the American-centric advice you usually see in here really doesn't apply in Australia. In short, credit bureaus in Australia don't provide a score. All they provide is a listing of your negative credit history. Things like late repayments, court proceedings against you, past and current bankruptcies and credit checks performed. For you this means that paying off the loan at full term or paying off the loan a few years early will have no impact on your credit report at all, neither of them is a negative item so neither of them will appear on your report. It also means you really shouldn't be trying to 'build credit' like people have to do in the US because if you're good and pay back everything on time your credit report won't show it at all. (disclaimer: I have heard that there is a push to start including 'positive' items in credit reports at some stage in the future but as far as I know that's still some time off) Individual banks and credit unions will have their own scoring algorithms that combine your credit report data, your stated financial position (assets/liabilities/income/expenses), past history with them and a bunch of other stuff to determine whether to lend to you. It's possible that the particular bank you're borrowing from will penalise you when scoring any future loan applications you make (because they're the only bank that can see that you paid it off early) but in my experience I'd say that's unlikely and even if it did happen the impact would be so small that it wouldn't be worth worrying about. So yeah pay off that thing ASAP.
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Feb 24, 2011 05:03
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edit: posted in Long-term Investment Thread.
gigButt fucked around with this message at 08:44 on Feb 24, 2011 |
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Feb 24, 2011 08:41
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Contra Duck posted:Actually credit reporting in Australia is very different from America. Different enough that the American-centric advice you usually see in here really doesn't apply in Australia. First off thanks Zeta, much appreciated. Is the best way to 'build credit' (I know it's not really like that in Australia, but y'know for convenience sakes) to actually prove that you've had a loan and never missed a payment? I don't actually earn a whole lot but that's cause I'm at university too, so it's to be expected. Is the main way they (banks/financial institutions) determine who gets a loan by your income:debt ratio? Thanks again
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Feb 24, 2011 11:15
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So, as of Monday, I will be free of CC debt. This leaves me: $2000 in unspecified savings $900 in specified savings (next month's rent, bills due before next payday) $2300 in student loans (currently deferred as I am still a student) $1400 in a car loan Thanks to having my credit care paid off, I now have an unbudgeted $1000. Normally, I would paid off the car and increase savings, but my job is only guaranteed until June 1. It's possible that I'll find a temp job during the summer, but I'm pregnant and will not have guaranteed employment again until Jan. 1. Should I go with my gut and stash away as much as I can or is it better to pay off as much debt as I can now? (Income while I'm unemployed will come from my husband: ~2600 a month.)
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Feb 25, 2011 01:34
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Guni posted:First off thanks Zeta, much appreciated. It doesn't hurt to have a history of paying off loans on time but being able to demonstrate a consistent history of building savings over time (which it sounds like you've done) is also going to look good to an assessor so you shouldn't be considering taking out a loan just for the sake of paying it off and 'building credit'. When assessing your loan the key number is your Uncommitted Monthly Income (UMI). They'll calculate your net monthly income, then they'll subtract any expenses you'll have after the loan. Expenses will include repayments on any existing continuing loans, repayments on the new loans (note: for the purposes of this calculation, repayments are calculated off the current interest rate plus a couple of percent to cater for future rate changes) and estimated living expenses. If you have a positive UMI then that means that you're theoretically capable of paying off the loan so you've passed the first test. After that there's still lots of other things they'll check but judging from your comments (guessing you're working part time or casual?) I'd say the biggest red flag would be a short employment history with little job security. Still if you're applying for the loan with your dad and he's in decent shape then you'll almost certainly get approved on the strength of his history and income alone.
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Feb 25, 2011 02:33
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Brennanite posted:So, as of Monday, I will be free of CC debt. This leaves me: For me it would depend on the interest, what my expected expenses were vs. income, when you'd have a job again, etc. Your debt seems to be pretty small, and the interest rates on the student loans are probably pretty modest and the car loan is probably at an average interest rate. How much of the $2600 do you need to LIVE? The whole thing? Will you still be saving even with only one income? Either way I think I would start socking money away. Make minimumish payments on the debt (assuming interest rates aren't bad). If an emergency comes up and you have no cash reserves you'll be racking up debt at much higher interest rates than your student and car loans. Plus you might need that money just to live? That's just my take though.
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Feb 25, 2011 20:23
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Lyon posted:For me it would depend on the interest, what my expected expenses were vs. income, when you'd have a job again, etc. The car loan is 5.3%, the student loans are at 6%. According to my generous budget, we wouldn't be able to save much with a baby and one income. I tried to overestimate as much as possible the unfixed costs to compensate for increased insurance and baby-related costs. I think I'll go with my gut and stash like I'm going to be unemployed tomorrow. On the plus side, we'll save a lot on dining out and movie tickets with a newborn. 
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Feb 25, 2011 22:09
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Brennanite posted:The car loan is 5.3%, the student loans are at 6%. According to my generous budget, we wouldn't be able to save much with a baby and one income. I tried to overestimate as much as possible the unfixed costs to compensate for increased insurance and baby-related costs. I think I'll go with my gut and stash like I'm going to be unemployed tomorrow. I think that’s smart.
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Feb 25, 2011 22:24
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