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It's not for everyone (particularly those with children), but if you want to retire early, consider doing it in Southeast Asia. Living expenses, both rent and food, can be cut down to 10-30% of the western world, depending on how fancy you want it, while still being civilized.
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May 5, 2013 21:50
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Pilsner posted:It's not for everyone (particularly those with children), but if you want to retire early, consider doing it in Southeast Asia. Living expenses, both rent and food, can be cut down to 10-30% of the western world, depending on how fancy you want it, while still being civilized. I think it helps that you also live in loving paradise. Personally, I think building a homestead in Costa Rica is where it's at. The country is literally made out of food all year round. You can just go straight up naked savage.
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May 5, 2013 23:30
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Pilsner posted:It's not for everyone (particularly those with children), but if you want to retire early, consider doing it in Southeast Asia. Living expenses, both rent and food, can be cut down to 10-30% of the western world, depending on how fancy you want it, while still being civilized. This is our plan. The Philippines is our home country. All our friends and most relatives are there so it's gonna be awesome. gently caress buying a house in California
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May 6, 2013 00:23
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Demented Guy posted:This is our plan. The Philippines is our home country. All our friends and most relatives are there so it's gonna be awesome. gently caress buying a house in California 
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May 6, 2013 02:41
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How do married IRA and 401k limits work? My fiancee is a grad student who will have several years of low earnings still, am I able to contribute to my 401k past $17.5k more if she isn't contributing to one? I know that IRAs are individual and we each can only contribute $5500 to our own.
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May 6, 2013 23:02
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Does anyone having any ideas for low risk places to stick some cash for a short term and earn 2%? I'm about 70% exposed to stocks and I've maxed out my 401K contribution for the year. I've been keeping some cash on the sidelines, but I got a rude wakeup call when Bank of America didn't send me a 1099 this year because my savings account earned less than $10 interest (I think it's paying 0.005%). I'm sure you're going to tell me 2% is a pipe dream, but let me tell you what life was like in the 1980's...
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May 6, 2013 23:04
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As far as risk-free options, online savings accounts from places like Ally or Capital One have rates a bit under 1% right now. Much better than any retail bank, but still not great.
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May 6, 2013 23:06
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SmartyPig is at 1.00%.
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May 6, 2013 23:09
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I'm 28, not married, and have no kids. Who should be a beneficiary for my retirement fund? I'll assume there's no problem with changing it later?
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May 7, 2013 01:13
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Put your parents if they're good ones? 
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May 7, 2013 01:30
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Warm und Fuzzy posted:Does anyone having any ideas for low risk places to stick some cash for a short term and earn 2%? I'm about 70% exposed to stocks and I've maxed out my 401K contribution for the year. I've been keeping some cash on the sidelines, but I got a rude wakeup call when Bank of America didn't send me a 1099 this year because my savings account earned less than $10 interest (I think it's paying 0.005%). Money market. Except that you won't get 2% right now because the interest rates are so low. So yes, 2% is a pipe dream unless you are willing to take risk with this money. You can try bonds, which have more risk, but will likely get you larger amounts of money than a money market. What's your definition of short term?
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May 7, 2013 02:05
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ntan1 posted:Money market. Except that you won't get 2% right now because the interest rates are so low. So yes, 2% is a pipe dream unless you are willing to take risk with this money. You can try bonds, which have more risk, but will likely get you larger amounts of money than a money market. Everything I read has me scared of bonds in the long term. Fidelity has some money market funds which return around 0.2%, and it seems insane to me someone could save $50,000 for an entire year and only earn a week's worth of groceries. Watching construction cranes go up last year I got a pretty good sense some sectors in the US economy were building momentum, so I dollar cost averaged into a few life-sciences and technology funds for the second half of the year. That worked out well, and the return I'm getting on those investments ALSO seems insane to me, but in the too-good-to-be-true sense. Now I'm feeling very exposed to stock, and though I don't want to increase my exposure, I have money on the sidelines that's not doing anything. I think I'll check out some of those savings accounts you guys gave me.
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May 7, 2013 03:00
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Warm und Fuzzy posted:Everything I read has me scared of bonds in the long term. Fidelity has some money market funds which return around 0.2%, and it seems insane to me someone could save $50,000 for an entire year and only earn a week's worth of groceries. How much more than the S&P 500 did your stocks make? Would an investment that was diversified over the stock market made less over a long period of time? From a long term investing perspective what you were doing with your stock kind of smells of DANGER DANGER. Again, it's not crazy. Inflation is just simply that low. Again, you will either have to take risk, OR you will not be able to get a good return on your investment portfolio. Also, I don't know why you are so scared of the bond market. Since 1933, the bond market has had long term averages of decent gain, as long as you diversify. This is why any investment portfolio usually consists of a combination of Money Market, Bonds, and Stocks, from least risk to greatest.
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May 7, 2013 04:16
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Does anyone have the infographic showing yearly long term returns on the US share market that shows its when you exit the market thats important not doing 20 years and assuming it'll go up. It had a staircase like of squares on the right side of the infographic and years on the left. I can't remember what its called but basically showed that if you didn't exit at the top of the bull markets you got returns of 2-6% on average. Thanks in advance.
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May 7, 2013 09:24
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Here ya go.
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May 7, 2013 11:07
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For a typical person like me who is making biweekly contributions to a 403b, and will make similarly periodic withdrawals when I retire, the 'timing effect' is largely mitigated, right? Most people don't dump all their money into stocks at one point and then withdraw it all at some later point 20 years down the road. It's still a useful concept, of course.
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May 7, 2013 11:58
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If an employer is offering a discretionary 50% match up to 4% of compensation, does that mean that you have to contribute 8% to your 401k to get the full match or am I misreading it?
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May 7, 2013 13:46
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The company won't contribute any more after 4%. Another way to put it, is that for every $1.00 that you contribute the company will also put in $0.50 for the first 4% of your salary. If you put in more than 4% in to your 401k, the company won't put in anything extra.
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May 7, 2013 14:03
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Samael Jackson posted:I'm 28, not married, and have no kids. Who should be a beneficiary for my retirement fund? I'll assume there's no problem with changing it later? The process is fairly simple. Some companies will even allow you to update your beneficiaries online for instance. I would recommend your parents if they're good ones, maybe some other family members (sisters, brothers) if you also like them and have a good feeling they won't piss away your earnings. Be careful if it's anyone outside of your parents. Some people will get very testy and wonder why you're not choosing them. Once you establish a family of your own, if you even want one that is, you can change your beneficiaries at any time. I personally wish I wasn't paying so much in start-ups. I haven't even hit my IRA cap this year. Ughhhhh starting out a business blows.
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May 7, 2013 16:15
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ntan1 posted:How much more than the S&P 500 did your stocks make? Would an investment that was diversified over the stock market made less over a long period of time? From a long term investing perspective what you were doing with your stock kind of smells of DANGER DANGER. I understand the point you’re making, regardless of whether I one-upped the S&P (I’m not here to beat my chest; I’d rather get dressed down if I’m doing something dumb). But in reality all I was doing was easing money into well-rated, low-fee sector funds. A lot of my money went into a Fidelity Spartan Fund, for example. The bond market has me nervous largely because of the internet. Everyone predicts a drop in bond prices when the fed raises interest rates. So I guess to clarify my question a little bit, I was looking for suggestions to do with an emergency savings account that’s not doing anything for me, but needs to be available for emergencies. Maybe the answer is everybody has money sitting on the sidelines because low risk investments aren’t very compelling.
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May 8, 2013 00:21
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I'm in a similar situation and my cash is slowly building up as I am not comfortable adding more to my long term equities portfolio. I just have it in a "high" interest money market account and accept the low return in exchange for piece of mind that my growing emergency fund will be safe if I end up needing it. My emergency fund is bigger than I need right now and I may end up trying to ~*~time the market~*~ sometime in the next year or just buy more stocks slowly but right now my excess emergency funds are just sitting on the sidelines.
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May 8, 2013 00:59
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Warm und Fuzzy posted:So I guess to clarify my question a little bit, I was looking for suggestions to do with an emergency savings account that’s not doing anything for me, but needs to be available for emergencies. Maybe the answer is everybody has money sitting on the sidelines because low risk investments aren’t very compelling. Yeah, the answer to this question is a Money Market Savings Account. The interest rate is still poo poo, but it's probably twice as much as you'll get from a normal savings account. You need low risk and high availability for an emergency fund, more than you need high interest. You could also set up a CD ladder such that your available funds would match your expenses, but the interest rates on CDs are so low that it's probably not worth it. Really though, don't try to invest your emergency fund. That's not what it's for.
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May 8, 2013 01:04
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What's the goto money market fund on fidelity? is there such a thing?
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May 8, 2013 01:13
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SlightlyMadman posted:Yeah, the answer to this question is a Money Market Savings Account. The interest rate is still poo poo, but it's probably twice as much as you'll get from a normal savings account. You need low risk and high availability for an emergency fund, more than you need high interest. Perfect. That's not what I wanted to hear, but you answered my question perfectly. Thank you.
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May 9, 2013 01:51
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I have a question about the backdoor Roth IRA contributions. Do I simply tell the brokerage firm to open up a traditional IRA for me for the max contribution ($5500), and then immediately tell them to roll that over into my preexisting Roth IRA that I've had for a while now? Do I even need to split these transactions up, or is there some minimum amount of time I need to hold the traditional IRA for before merging it into the Roth account? And do I need to do this surreptitiously, or is this pretty much accepted, legal practice now?
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May 9, 2013 03:17
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BotchedLobotomy posted:What's the goto money market fund on fidelity? is there such a thing? What's your favorite turd? As far as I know, the expense ratio still exceeds the yields on all of their money market funds. Money market funds in general haven't been worth putting much of anything into for a while.
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May 9, 2013 03:22
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BigBobio posted:Do I simply tell the brokerage firm to open up a traditional IRA for me for the max contribution ($5500), and then immediately tell them to roll that over into my preexisting Roth IRA that I've had for a while now? Yes, I did this with Vanguard and it was all online and immediate: https://personal.vanguard.com/us/insights/taxcenter/tips-rothira-conversion quote:Do I even need to split these transactions up, or is there some minimum amount of time I need to hold the traditional IRA for before merging it into the Roth account? Nope, you don't have to wait/split it up. quote:And do I need to do this surreptitiously, or is this pretty much accepted, legal practice now? Turns out that when the law leaves loopholes, you don't have to be sneaky about going through them.
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May 9, 2013 03:37
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Wait, why would you want to add more money into the Roth IRA? Because you missed a year, or didn't contribute enough previous years? Or just because? I max mine out every year, should I take advantage of this loophole as well and add more in?
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May 9, 2013 04:33
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obi_ant posted:Wait, why would you want to add more money into the Roth IRA? Because you missed a year, or didn't contribute enough previous years? Or just because? You can't add more in than the max. It is just a way for people who have incomes over the limits for normal Roth IRA contributions to get around those income limits and still have a way to contribute to a Roth.
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May 9, 2013 04:53
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Demented Guy posted:This is our plan. The Philippines is our home country. All our friends and most relatives are there so it's gonna be awesome. gently caress buying a house in California How much do you think it would cost a year to live in the Phillipines? If I ever owned a house outright here in the states I could probably get by on less than 1200 a month. Sephiroth_IRA fucked around with this message at 17:52 on May 13, 2013 |
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May 13, 2013 17:49
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Orange_Lazarus posted:How much do you think it would cost a year to live in the Phillipines? If I ever owned a house outright here in the states I could probably get by on less than 1200 a month. I know for a fact people do outsourced work there for < $4 per hour. So probably not too much.
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May 13, 2013 18:17
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Apologies if this has been posted, but how common is cost-basis accounting other than average-cost for most investors? Like, I save, I dollar-cost average max a Roth and contribute to employer match in a 401k, and I have some investments/savings in taxable accounts. It's all automatic, and I don't personally keep records. How much money (would you guess) am I potentially losing if I just go with average-cost cost basis because it's simpler, rather than keeping better records and doing smart specific batch cost basis? Do many normal investors do non-average-cost-basis? do YOU, and if so, how much of a hassle is it? Thanks!
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May 13, 2013 19:03
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onefish posted:Apologies if this has been posted, but how common is cost-basis accounting other than average-cost for most investors? Like, I save, I dollar-cost average max a Roth and contribute to employer match in a 401k, and I have some investments/savings in taxable accounts. It's all automatic, and I don't personally keep records. How much money (would you guess) am I potentially losing if I just go with average-cost cost basis because it's simpler, rather than keeping better records and doing smart specific batch cost basis? Do many normal investors do non-average-cost-basis? do YOU, and if so, how much of a hassle is it? For tax advantaged accounts like a Roth or traditional 401k, the gain or loss determined by cost basis doesn't really matter. Generally all of a 401k distribution is taxable, not just the gain. The opposite is true with a Roth, none of the distribution is taxable, including the gain. For non-tax advantaged accounts, different cost basis valuation methods will have the same long term effect (assuming you eventually sell all of the stock). Short term, it depends on the market, the value of the stock, your income tax bracket, and the capital gains tax rate. I generally use first in, first out and recognize the largest gain as early is possible under the assumption that my marginal tax rate (and the capital gains tax rate) will only increase in the future. My brokerage uses FIFO by default, so it's not a hassle at all.
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May 13, 2013 19:23
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|Ziggy| posted:I know for a fact people do outsourced work there for < $4 per hour. So probably not too much. A quick meal at a restaurant can be had for around $2 I believe, or $1 if you take it from a streetside van. I'm afraid I can't give you more precise numbers on the cost of living.
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May 13, 2013 19:25
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MiTEG posted:For tax advantaged accounts like a Roth or traditional 401k, the gain or loss determined by cost basis doesn't really matter. Generally all of a 401k distribution is taxable, not just the gain. The opposite is true with a Roth, none of the distribution is taxable, including the gain. Thank you! This is very helpful, actually. If I had thought about it for a moment, I'd have figured out the retirement stuff :/ But for the others, that helps clarify my thinking. My brokerage uses FIFO default for stocks, but average cost default for index funds, which is where most of my money is.
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May 13, 2013 19:30
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This is a really basic investing question but I'm having trouble wrapping my head around the whole "bonds falling price thing". I have some of my long term savings in a Vanguard bond index fund. I get that if interest rates go up then the bonds would be worth less money because people can get a better rate elsewhere. But if I'm not trying to sell the bonds, does that even matter? Say the bond fund has a bunch of bonds at 3%, then the rate goes up to 6%. Why would I lose money? Shouldn't I just keep getting 3%?
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May 13, 2013 23:24
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OctaviusBeaver posted:This is a really basic investing question but I'm having trouble wrapping my head around the whole "bonds falling price thing". I have some of my long term savings in a Vanguard bond index fund. I get that if interest rates go up then the bonds would be worth less money because people can get a better rate elsewhere. But if I'm not trying to sell the bonds, does that even matter? Say the bond fund has a bunch of bonds at 3%, then the rate goes up to 6%. Why would I lose money? Shouldn't I just keep getting 3%? Yeah, but you COULD be getting 6% if you had just waited until the new bonds went on the market. It's opportunity cost. In your example the shares in your bond index fund would be lose value because the price of the 3% bonds the fund owns are bid down.
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May 13, 2013 23:42
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Bond funds typically don't keep the bonds to maturity. They buy and sell them as you go along resulting in rising or falling return and falling or rising value. That's my understanding anyway.
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May 13, 2013 23:42
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I'm looking for some advice. I already have my Roth IRA maxed out and I'm planning on maxing out my 401k this year. I'm stuck between two choices with my left over money: 1.) Pay off student loans faster. I have around 15k in student loans at 4.25% to 5.75% interest and about 5k at 6.55% interest. 2.) Start a taxable investment account. I would end up buying more index funds similar to what I have in my tax advantaged retirement accounts. I'm thinking #2 will be my best bet due to compounding interest, but I'm hoping to get a second opinion.
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May 13, 2013 23:43
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If it was me I'd get rid of the loans just for the feelgood factor. I know you can write off the interest, but being a debt free person feels pretty good; even if you might come ahead a few % in the market. in a year or w/e.
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May 14, 2013 01:41
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