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Raimundus posted:My student loan interest rate is 6.55%. the current principal. if, after throwing a gob of money at it, you continue to make the same payment every month as you do now, you will pay it off much sooner. e: and yeah if your student loan rate is that high i would definitely tackle that before the auto loan.
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Nov 26, 2014 18:47
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Mr. Glass posted:the current principal. if, after throwing a gob of money at it, you continue to make the same payment every month as you do now, you will pay it off much sooner. Raimundus, there is nothing wrong with knocking out lower interest lower balance first if it helps you mentally. Personally, I like to see that my wasted outflows (interest) decreases so I would prioritize highest interest first.
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Nov 26, 2014 21:19
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My company is changing their 401k servicer(or some such). I have a financial advisor(let's not discuss that right now, as I know I need to get rid of him, and I will but that's at some point in the new year...). He said the new funds are much better then the old ones and gave me the following advice regarding reallocation. Do you guys have any thoughts/suggestions? I am 30 years old with about 50k in the 401k currently. I am contributing max to it as well as maxxing out a RothIRA(Ameriprise). Current available: Franklin Strategic Income Fund - Class R 20% Prudential High Yield Fund - Class R 5% BlackRock Equity Dividend Fund - Class R 10% T. Rowe Price Growth Stock Fund - Class R 10% Principal MidCap Fund - Class R2 7% Franklin Rising Dividends Fund - Class R 10% Victory Small Company Opportunity Fund - Class R 9% AllianceBernstein Small Cap Growth Portfolio - Class R 9% Oppenheimer International Growth Fund - Class R 13% Oppenheimer Developing Markets Fund - Class R 7% Future Available: AllianceBern Discovery Growth Z AllianceBern High Income Z ClearBridge Aggressive Growth IS DFA Emerging Markets I DFA Large Cap International I DFA Real Estate Securities I DFA US Large Company I DFA US Small Cap I Franklin Small Cap Growth R6 Goldman Sachs Strategic Income Instl Ivy Asset Strategy I JHancock Disciplined Value R6 JPMorgan SmartRetirement Blend 2015 R6 JPMorgan SmartRetirement Blend 2020 R6 JPMorgan SmartRetirement Blend 2025 R6 JPMorgan SmartRetirement Blend 2030 R6 JPMorgan SmartRetirement Blend 2035 R6 JPMorgan SmartRetirement Blend 2040 R6 JPMorgan SmartRetirement Blend 2045 R6 JPMorgan SmartRetirement Blend 2050 R6 JPMorgan SmartRetirement Blend 2055 R6 JPMorgan SmartRetirement Blend Inc R6 Oppenheimer Developing Markets I Oppenheimer International Growth I Prudential Short-Term Corporate Bd Q Prudential Total Return Bond Q SSgA Cash Series U.S. Government Fund - Class L Future plan: 15% John Hancock Discipline Value 10% DFA Large Company Portfolio 10% DFA US Small Cap 10% Franklin Small Cap Growth 10% DFA Large Cap International 10% Oppenheimer Developing Markets 10% Alliance Bernstein High Income 10% Prudential Shrot Term Corporate 10% Prudential Total Return 5% IV Asset Strategy
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Nov 26, 2014 23:47
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You should go through the same thing with your IRA. slap me silly fucked around with this message at 00:12 on Nov 27, 2014 |
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Nov 27, 2014 00:09
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The DFA funds should be index funds. Honestly, it's probably not the worst allocation in the world, though I think a combination of: DFA Emerging Markets I DFA Large Cap International I DFA US Large Company I DFA US Small Cap I, Together with some combination of bond funds would be better.
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Nov 27, 2014 00:15
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Mr. Glass posted:the current principal. if, after throwing a gob of money at it, you continue to make the same payment every month as you do now, you will pay it off much sooner. He should just make sure that his overpayments are going toward the principal of the loan and not just pushing back the due date of his next regular payment by x months. loving Sallie Mae defaulted to the latter with me. I can't remember if I caught it before posting or not, but it didn't matter because the risk balance was small and I was able to knock it all out within a few months of graduating due to savings I'd built up while still in school. If I'd remembered that loan earlier and not confused it with a small loan my parents took out to help me through my first year (<$3k), I would have paid it off before I even graduated and it accumulated any notable interest.
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Nov 27, 2014 00:20
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SpelledBackwards posted:He should just make sure that his overpayments are going toward the principal of the loan and not just pushing back the due date of his next regular payment by x months. loving Sallie Mae defaulted to the latter with me. this only matters if you have automatic payments set up with the lender, right?
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Nov 27, 2014 00:38
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Mr. Glass posted:this only matters if you have automatic payments set up with the lender, right? I believe you can get an interest deduction by setting up automatic payments, so if you aren't, you might want to look into that.
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Nov 27, 2014 00:41
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Mr. Glass posted:this only matters if you have automatic payments set up with the lender, right? Nope! If you're making a single payment in excess of the minimum, they will happily default you to prepaying future payments, show you a bunch of text about how that's really the best option, and hide the "no, really, I want to pay down the principal" button in the small print. Basically, if you can imagine a way for Sallie Mae to be a bunch of bottom feeding shitheads, they've already done it. (E: Beaten soundly below) Raimundus posted:My student loan interest rate is 6.55%. Current principal. That's why compound interest works. The earlier you can get money into paying off your loans, the better. Be careful, though - Sallie Mae (and probably a lot of other loan companies) will default prepayments to "we'll just hold that for you and use it to prepay next month's bill" instead of applying it against the principal. This, of course, means that you rack up the same amount of interest, and they make more money. Space Gopher fucked around with this message at 01:34 on Nov 27, 2014 |
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Nov 27, 2014 01:30
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Space Gopher posted:Nope! If you're making a single payment in excess of the minimum, they will happily default you to prepaying future payments, show you a bunch of text about how that's really the best option, and hide the "no, really, I want to pay down the principal" button in the small print. Basically, if you can imagine a way for Sallie Mae to be a bunch of bottom feeding shitheads, they've already done it. goddammit that probably means i'm gonna have to sit on hold for several hours to get them to fix this for me. I just sent in a $14k payment by check with the intent of paying off the whole thing. what a garbage organization
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Nov 27, 2014 01:40
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My employer offers a 401k with a 0% contribution. Is there any point in enrolling in this over signing up for Wealthfront or Betterment? On the topic of Wealthfront and Betterment is there any point to enrolling in them outside of not having to ever touch a trading account?
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Nov 27, 2014 01:41
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First Time Caller posted:My employer offers a 401k with a 0% contribution. Is there any point in enrolling in this over signing up for Wealthfront or Betterment? On the topic of Wealthfront and Betterment is there any point to enrolling in them outside of not having to ever touch a trading account? Because you can contribute pre-tax dollars to the 401k but it does blow that you don't having 401k matching for your benefits. 401ks are a good deal due to being able to put in pre-tax dollars and also getting free retirement money from your employer.
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Nov 27, 2014 01:43
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First Time Caller posted:My employer offers a 401k with a 0% contribution. Is there any point in enrolling in this over signing up for Wealthfront or Betterment? Tax advantages would be the obvious one.
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Nov 27, 2014 01:50
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Should I be maxing out the annual contribution of the 401k before investing my remaining spare income elsewhere?
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Nov 27, 2014 01:55
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First Time Caller posted:Should I be maxing out the annual contribution of the 401k before investing my remaining spare income elsewhere? Yes, just read the OP, a 401k shields your retirement contribution from uncle sam's taxes in the present, while a roth gives you future tax free retirement money.
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Nov 27, 2014 01:57
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Space Gopher posted:Be careful, though - Sallie Mae (and probably a lot of other loan companies) will default prepayments to "we'll just hold that for you and use it to prepay next month's bill" instead of applying it against the principal. This, of course, means that you rack up the same amount of interest, and they make more money. I'm not paying Sallie Mae directly. They delegated my loan to Great Lakes. I'm looking at payment options now, and I don't see the "pay to principal" option that Sallie Mae had (which, yes, I've used before). I'll have to call them to make sure they don't gently caress me. Raimundus fucked around with this message at 02:25 on Nov 27, 2014 |
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Nov 27, 2014 02:18
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I've always wondered how workplaces even pick their menagerie of horrible high expense ratio funds. Meanwhile in the dumb government they get funds with a 0.02% expense ratio, even for the foreign stock funds.
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Nov 27, 2014 04:05
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etalian posted:I've always wondered how workplaces even pick their menagerie of horrible high expense ratio funds. Because that way the 401(k) provider pays their overhead from the expense ratios instead of charging the company.
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Nov 27, 2014 04:19
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etalian posted:I've always wondered how workplaces even pick their menagerie of horrible high expense ratio funds. They mostly don't pick them, they get sold bundles by 401k custodians. Most HR people, especially in small and medium businesses, just go with whatever terrible default options get pushed on them. They don't know any better and it's easy. Another reason why tying retirement plans, like healthcare, to employment is terrible. I'm actually on the 401k committee at my company (~75 people), and we've been able to get HR/Fidelity to get us some low-cost Spartan index funds now. Our HR person, while a totally nice person who means well, doesn't know anything about investing or retirement plans. The Fidelity representative (read: salesman) pushed back so hard against it, but because we had a couple employees who knew what we wanted we could cut through the bullshit. Guinness fucked around with this message at 04:26 on Nov 27, 2014 |
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Nov 27, 2014 04:21
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etalian posted:I've always wondered how workplaces even pick their menagerie of horrible high expense ratio funds. Buying power, basically. Small companies can't gain the interest (or afford the costs) for the big-name high-quality 401(k) plans. The larger the pool of participants an employer has, however, the more the various companies will want to be the one to own that plan (and collect all the fees and deposits for it). Nobody has more buying power than the government.
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Nov 27, 2014 04:22
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Raimundus posted:I'm not paying Sallie Mae directly. They delegated my loan to Great Lakes. If it's for the entire outstanding loan balance, I don't think it will matter - it should get applied and zero out the loan like you're hoping. But it would be best to get confirmation on that, because if you're a few pennies short due to a recent interest actual, they may also fail to send you a statement with the amount remaining if it did that whole prepay the monthly expense bullshit since they could be waiting to apply the payment 3 years from now. I guess the ultimate question is whether they're required to mail you a statement regardless of asking status. Edit: upon payoff they will send you a notice in writing that the balance is cleared. Keeps this in case some unscrupulous debt collection agency (or simply one with bad records) try and claim you owe anything on it. SpelledBackwards fucked around with this message at 04:26 on Nov 27, 2014 |
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Nov 27, 2014 04:24
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My wife's student loans are through Great Lakes and I believe there is a link which will calculate the total payoff amount for any particular date so you know exactly how much to send if you want to pay the remaining off entirely in one go. Also I believe hers defaulted to early payments going to the principle.
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Nov 27, 2014 05:04
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etalian posted:I've always wondered how workplaces even pick their menagerie of horrible high expense ratio funds. A variety of reasons, but frequently it is because the 401k committee responsibilities will fall to people in HR who don't really know what they are doing. They take advice from people and the advice will be terrible, even if its a 3rd party adviser they are paying for help. If you can find out who is on the committee and talk to them, frequently you can impact what they are doing. Vilgan fucked around with this message at 06:00 on Nov 27, 2014 |
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Nov 27, 2014 05:21
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Guinness posted:They mostly don't pick them, they get sold bundles by 401k custodians. Most HR people, especially in small and medium businesses, just go with whatever terrible default options get pushed on them. They don't know any better and it's easy. I sort of lucked out since my workplace offers SP500 and mid-cap spartan funds along with a vanguard small cap fund in the 401k plan. It also has a extra option called brokerage link which allows you to move 90% of your 401k account over brokerage account with more investment options, even though only fidelity and ishares are commission free. In a more sane world the government would run the 401k plan giving everyone low expense ratio funds since it already has no problem skimming off state and federal tax payments.
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Nov 27, 2014 05:25
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etalian posted:I sort of lucked out since my workplace offers SP500 and mid-cap spartan funds along with a vanguard small cap fund in the 401k plan. My 401k is through my employer. As in, my employer is the custodian for many billions of dollars of thousands of companies 401k's, including ours. They charge us a management fee on top of the ER for the cheap plans, and credit us for the really expensive funds. Why? Because. I asked HR to add in the other good Vanguard funds that I want (total index, bond index, intl index) and I was told to ask the retirement division via email. So I did. And got an email back - canned response I've gotten for ANY emailed request - saying please call. FFS I JUST WANT TO TELL YOU I WANT MORE OPTIONS!! I am going to call Monday. And then email the HR rep who does the investment lessons, maybe he can help more than general HR... *I am kidding. I'm not sure if the govt would be best to do this due to corruption that seems unavoidable, but I wish it was the right answer... SiGmA_X fucked around with this message at 05:38 on Nov 27, 2014 |
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Nov 27, 2014 05:31
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Raimundus posted:My student loan interest rate is 6.55%.
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Nov 27, 2014 05:41
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SiGmA_X posted:WOW there, socialism alert!! It is good for no one if the govt helps us get ahead! BOOTSTRAP!* It ties into the nice bit in Four Pillars on how the whole financial industry is incredibility crooked, basically through high expense ratio active funds they have skimmed off millions of dollars in retirement money over the years.
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Nov 27, 2014 05:46
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etalian posted:It ties into the nice bit in Four Pillars on how the whole financial industry is incredibility crooked, basically through high expense ratio active funds they have skimmed off millions of dollars in retirement money over the years. For funsies, the difference in weighted ER is only 0.75% - but that 0.75% eats FIFTEEN percent of the return! I knew this going in (thanks Thread + books!) but my buddy was very shocked.
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Nov 27, 2014 05:55
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SiGmA_X posted:I was looking at my buddies holdings, and he pays ~15% of the annual return to the management company via ER, over that of equal Vanguard funds. AND the funds return ~0.2% less per year, than the mirror of funds in at Vanguard! Yeah Four Pillars does a good job in poking holes at the concept because the fund cost more money, it can somehow produce a better return than a low cost index fund and how those mutual funds usually have the big load/commission fee cost. Vanguard funds also tend to perform slightly better than base index too from my experience due to things such fine tuning the holdings or making sure to include small cap stocks.
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Nov 27, 2014 06:00
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etalian posted:Vanguard funds also tend to perform slightly better than base index too from my experience due to things such fine tuning the holdings or making sure to include small cap stocks. No they don't. That would be awful fund management for an index fund's mandate. They overperform likely due to securities lending.
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Nov 27, 2014 06:39
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Is there a good writeup comparing index fund investing vs. (or in complement to) dividend stock-investing, and whether the income generated by the latter without a selloff of assets could or should be a notable portion of your portfolio as you near retirement? Since someone in either this thread of the FI thread mentioned the Radical Personal Finance podcast recently, I have been listening to it while on vacation and find it very interesting. The host had a guest on there who was trying to construct a portfolio from the age of 27 until 40 (I think he's around 31 now?) that would provide enough fixed income to cover 100% of his current expenses, inflation adjusted, to where he was never in a sell-off situation. After all, in order to use the safe 4% drawdown rate in retirement (or whatever number you choose), you have to be willing to find someone to buy your stocks that you need to sell off in order to generate your regular income. I understand that there is higher risk in dividend investing as far as picking individual companies go re: diversification, and MUCH greater time involvement to do research and attempt as a layman to try and judge value of various companies' stocks. I just wan to treat it as a thought experiment while I continue to ride my 4-fund(ish) portfolio that's been working well so far.
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Nov 27, 2014 10:14
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I want to get an opinion of "how I'm doing". I want to know if (maybe by your standards) am I currently saving enough and will I have enough money to last me in the long run. I worry about this consistently because I work retail and the landscape for retail has always been super rocky. I'm getting older (29) and if everything does go belly up, I'm worried it will take me a very long time to find a job. I take home about ~$1,200-$1,400 a month depending on if I bonus or not, apparently this take home amount is abysmal for where I live (San Francisco). I currently have the following 401k ~44k Vanguard ~37k Liquid ~29k Emergency Fund ~5k I currently contribute 12% of my paycheck to my 401k (3%@100%, 2%@50% employer match). I've been thinking about maxing out my 401k, but 30% of the stocks are pointed directly at the company. Which is nice now but if things go south, it's rough. My Vanguard is just set to a target retirement fund which I max out every January 1st. Aside from all of that, I *think* I'm doing decent. But with all of that said, what you would guys suggest I do differently? Should I be doing with my liquid cash?
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Nov 27, 2014 10:35
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obi_ant posted:I currently contribute 12% of my paycheck to my 401k (3%@100%, 2%@50% employer match). I've been thinking about maxing out my 401k, but 30% of the stocks are pointed directly at the company. Which is nice now but if things go south, it's rough. My Vanguard is just set to a target retirement fund which I max out every January 1st. So you can't change your 401k investments? SpelledBackwards posted:Is there a good writeup comparing index fund investing vs. (or in complement to) dividend stock-investing, and whether the income generated by the latter without a selloff of assets could or should be a notable portion of your portfolio as you near retirement? Picking individual stocks for dividend reasons is pretty silly IMO since there are plenty of dividend ETFs like VYM out there which at least give you 100 to 250 companies with better diversification across multiple industries. For retirement you want to focus on investments which have good long term appreciation, as well as being adequately broad and diversified. Most broad market ETFs like VTI/VEU also pay a small dividend of around 1.5 to 3.5 percent for foreign stock ETFs. I still put a small portion of my 401k into dividend growth ETFs (iShares DGRO) etalian fucked around with this message at 17:57 on Nov 27, 2014 |
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Nov 27, 2014 16:37
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obi_ant posted:I want to get an opinion of "how I'm doing". I want to know if (maybe by your standards) am I currently saving enough and will I have enough money to last me in the long run. I worry about this consistently because I work retail and the landscape for retail has always been super rocky. I'm getting older (29) and if everything does go belly up, I'm worried it will take me a very long time to find a job. I take home about ~$1,200-$1,400 a month depending on if I bonus or not, apparently this take home amount is abysmal for where I live (San Francisco). 17k a year is pretty abysmal anywhere. Do you have a degree? Perhaps certifications? I think investing in education/skills is the way to go here. You're still very young, work part-time and use those liquid assets to build a more attractive resume.
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Nov 27, 2014 18:02
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etalian posted:So you can't change your 401k investments? All of the funds have 30% of the company stock in them. I don't really blame them, but anything I change it to *will* have 30% of the company stock in it. onemillionzombies posted:17k a year is pretty abysmal anywhere. Do you have a degree? Perhaps certifications? I think investing in education/skills is the way to go here. You're still very young, work part-time and use those liquid assets to build a more attractive resume. I mistyped it, I get two paychecks a month, so its actually double that. I get roughly $2,500 a month after my 401k, taxes, health, dental and vision. I looked at my 2013 tax statement, it looks like I only made 40k net. I don't know if that includes my medical, dental and vision expenses.
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Nov 27, 2014 20:53
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That's a hilariously bad concept forcing employees to buy company stock through a retirement plan.
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Nov 27, 2014 21:48
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etalian posted:That's a hilariously bad concept forcing employees to buy company stock through a retirement plan. Imagine what that does to the stock price, and consequently, executive options compensation! Personally, in that situation, I would utilize a traditional or Roth IRA and use the 401(k) only up to the 5% match. At least, you're gambling the company stock with house money.
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Nov 27, 2014 23:16
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Missing Donut posted:Imagine what that does to the stock price, and consequently, executive options compensation! Yeah company stock only makes sense if they make it worth your while with a good ESPP or even getting free stock grants at the end of the year.
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Nov 27, 2014 23:40
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I've always bought Schwab funds in my 401k because they have no trading costs as long as you don't sell within 30 days and generally are low fee. I decided to check to see how much it would cost to buy a Vanguard target fund and the commission for a purchase is $79. Are all brokerages that bad?
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Nov 28, 2014 01:05
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Christ Pseudoscientist posted:I've always bought Schwab funds in my 401k because they have no trading costs as long as you don't sell within 30 days and generally are low fee. I decided to check to see how much it would cost to buy a Vanguard target fund and the commission for a purchase is $79. Are all brokerages that bad? Yes most 401k companies give you a big incentive not to buy from their competition. Being able to buy iShares or Schwab stocks beats getting stuck with high ER options, I consider them to be pretty decent options even though Vanguard is king in terms of quality/price point. etalian fucked around with this message at 18:07 on Nov 28, 2014 |
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Nov 28, 2014 01:59
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