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So it seems that HealthEquity has added several new investment options for their HSA, comprising mostly Vanguard Admiral and Institutional Class funds but in a kinda odd way. They give you access to these incredibly low ER funds, but then charge a quarterly 0.10% administration fee on the daily average of funds invested. So the total effective annual ER is something like ~0.5%, but that's still a lot better than their selection of actively-managed funds that has gotten worse year over year. It's still a little bit of an odd assortment, but it is an improvement I guess. 
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Mar 16, 2015 22:24
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Leperflesh posted:Evidence suggests that people who try to time the market do worse than people who invest long-term in a diverse portfolio of low-cost indexed mutual funds and leave their money the hell alone no matter what. Well, you're speaking to someone who's in 100% pure index funds and doesn't even believe in DCA, so you're preaching to the choir. However, I think that the long term economic prospects of America should play into how you look to balance your portfolio.
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Mar 16, 2015 22:25
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Yeeeeah but aren't you kinda saying "*right now* isn't a good time to buy too much US Stock"?
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Mar 16, 2015 22:27
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GoGoGadgetChris posted:I don't mean people are just now noticing there's a bull market, I meant to say people have been anticipating the BIG CRASH since 2013/when it began. They've been wrong and they'll keep being wrong until they're right.
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Mar 16, 2015 22:32
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TheFluff posted:Yeah I'm not going anywhere, and the earlier points about how the expensive USD has been boosting returns from the US funds made me start thinking about this, because of course it would also apply the other way around. I really have no idea about how to reason about this though - how do you calculate the risk vs return on something like this? We came out of the last downturn relatively unscathed compared to the rest of Europe but how do you know which way it's gonna work out in the future? Honestly, I don't know. I'm sure it's essentially a considerations of risks vs. opportunities, but I don't know how to account for currency risk in an accurate way. As an American investor, I'm lucky to live in the largest economy on Earth, so I get to keep most of my investments denominated in my domestic currency and still take advantage of a huge economy. Hopefully someone else can give you better guidance.
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Mar 16, 2015 22:37
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GoGoGadgetChris posted:Yeeeeah but aren't you kinda saying "*right now* isn't a good time to buy too much US Stock"? I sure hope it's not a bad time, since I just maxed my 2015 Roth IRA in a Vanguard LifeStrategy fund. Does no one else have that cognitive dissonance between "empirical data consistently shows that market timing is a fools' errand" and "the US economy and to a lesser extent, the world economy, operates in a manner that will likely prove unsustainable by the time I retire in 2050"?
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Mar 16, 2015 23:21
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Leperflesh posted:Honestly, I don't know. I'm sure it's essentially a considerations of risks vs. opportunities, but I don't know how to account for currency risk in an accurate way. As an American investor, I'm lucky to live in the largest economy on Earth, so I get to keep most of my investments denominated in my domestic currency and still take advantage of a huge economy. Hopefully someone else can give you better guidance. Although http://canadiancouchpotato.com/2014/03/06/why-currency-hedging-doesnt-work-in-canada/ cowofwar fucked around with this message at 23:57 on Mar 16, 2015 |
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Mar 16, 2015 23:54
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GoGoGadgetChris posted:Yeeeeah but aren't you kinda saying "*right now* isn't a good time to buy too much US Stock"? I said earlier that the US was "expensive", but of course I continue to buy and own it, and I don't know how it should be valued, or how it will perform in the future. The most common behavioural mistake people make is to over emphasize recent performance and buy the hot asset class. So I don't consider thinking about valuations to be a bad thing to the extent that it helps me avoid that and choose an allocation I can live with in all scenarios.
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Mar 17, 2015 00:23
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cowofwar posted:Most funds tracking large indexes are available with and without currency hedging. If you don't want the currency exposure you can buy the hedged one. Yeah the reasons to include unhedged foreign index funds is in addition to providing diversification, you also diversify the currency side as well.
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Mar 17, 2015 00:39
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I have about $1000 worth of I-Bonds that are around 20-30 years old. I know I can convert them into electronic funds using the Treasury website - is there any reason why I shouldn't do that? Or is holding onto paper bonds the same as keeping gold bars in my basement?
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Mar 17, 2015 01:35
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EugeneJ posted:I have about $1000 worth of I-Bonds that are around 20-30 years old. I know I can convert them into electronic funds using the Treasury website - is there any reason why I shouldn't do that? Or is holding onto paper bonds the same as keeping gold bars in my basement? It depends if you have reached maturity or not, there's no sense not cashing bond at maturity even though some US bills do get interest extensions if you don't turn them in. https://www.treasurydirect.gov/indiv/research/securities/res_securities_stoppedearninginterest.htm
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Mar 17, 2015 03:11
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EugeneJ posted:I have about $1000 worth of I-Bonds that are around 20-30 years old. I know I can convert them into electronic funds using the Treasury website - is there any reason why I shouldn't do that? Or is holding onto paper bonds the same as keeping gold bars in my basement? I Bonds were first issued in 1998. What is the exact issue date of them? Chances are, if they are old, they have a very high fixed rate (over 3%), which you get in addition to the inflation rate, which is also tax deferred. If so, you would be best advised holding onto them... there is not a better risk/return profile out there right now.
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Mar 17, 2015 03:38
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Sorry, I meant EE bonds. Yeah only one of them is close to maturing. And I wasn't necessarily asking if I should cash them - just wondering if anyone has gone through the online conversion process. I like having the paper bonds, but if there's a fire I'm hosed.
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Mar 17, 2015 03:49
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EugeneJ posted:Sorry, I meant EE bonds. Yeah only one of them is close to maturing. You always want to convert, not to mention it prevents paper assets from being forgotten.
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Mar 17, 2015 04:30
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EugeneJ posted:Sorry, I meant EE bonds. Yeah only one of them is close to maturing. Ah, I missed that. Thought you meant redeeming. Yea, either way is fine. The paper bonds can actually be replaced if destroyed, stolen, etc, due to fire or theft or whatever... so it is not like gold bars.
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Mar 17, 2015 04:32
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Still doing the conversion is a good idea since it automates things like direct deposit at maturity.
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Mar 17, 2015 04:33
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Alright so I just recently signed up for my company's 401k plan but in the end I wasn't too happy with the funds offered and just put 12% (10% personal and 2% employer match) towards solely VTSAX. Would I typically be better off just meeting my employer's maximum match percentage and then starting off a personal Roth IRA with a more diverse fund split? From the little I know this would be slightly less efficient due to it coming out post-taxes so I would get less of a break through that, but it would be exempt from taxes when eventually withdrawn. As it is right now I would not be able to put away enough annually to reach the $5500 limit due to school loans and an upcoming auto loan. e: also when I leave this employer I could also roll the 401k funds into a Vanguard IRA if that's where my personal account is, yeah? baram. fucked around with this message at 19:47 on Mar 17, 2015 |
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Mar 17, 2015 19:39
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baram. posted:Alright so I just recently signed up for my company's 401k plan but in the end I wasn't too happy with the funds offered and just put 12% (10% personal and 2% employer match) towards solely VTSAX. I personally would do employer to match and then Vanguard Roth IRA to max (be it 15% of gross income, 5500, or max you can afford currently), and then come back and max your 401k once you're debt free and have more money to toss at retirement. Also, what is this 'upcoming car loan' you speak of? Buy a car you can afford and pay cash for...
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Mar 17, 2015 20:22
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SiGmA_X posted:Also, what is this 'upcoming car loan' you speak of? Buy a car you can afford and pay cash for... My current vehicle has been quickly falling apart lately and I also just got a pretty substantial raise, allowing me to basically triple the amount I've been putting away. I plan on taking a loan for ~$5000 max to put on top of what I've got saved so that I can get into something newer with substantially lower mileage, and paying that off within 6-8 months.
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Mar 17, 2015 20:43
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Why not wait 6 months instead of spending your increased pay before you've earned it?
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Mar 17, 2015 20:47
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I'd slow your savings for retirement and such for 6-8mo and buy the used car with cash.GoGoGadgetChris posted:Why not wait 6 months instead of spending your increased pay before you've earned it?
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Mar 17, 2015 21:05
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GoGoGadgetChris posted:Why not wait 6 months instead of spending your increased pay before you've earned it? It's likely my current vehicle won't last another six months, and after dumping $3000+ into it in the past 4 months only for more issues to crop up I'd much rather just take on a minor loan for something in much better condition for peace of mind. baram. fucked around with this message at 21:43 on Mar 17, 2015 |
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Mar 17, 2015 21:40
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I don't any problem whatsoever with financing the car in your situation, provided that your credit is good enough to secure a low rate.
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Mar 17, 2015 21:44
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You put $3,000 into a car with less than a year to live, and you're planning on spending 8 months of your pay-raise before seeing a penny of it, for a car that's $5,000 over your price range. Why is this conversation happening in the Retirement thread and not the Bad with Money thread. Oh I remember why - you were saying you didn't have enough money to fund an IRA  You are a Poor, my friend, and you don't have enough money for the turbo model. Earmark that $5,000 for an IRA and buy a car you can afford.
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Mar 17, 2015 22:40
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god forbid I answer questions people ask about, and can't foresee the future failure of expensive systems on a vehicle  and not being able to fund the IRA was factoring in the $5000 loan, plus prioritizing paying down school loans over paying into an IRA. baram. fucked around with this message at 23:03 on Mar 17, 2015 |
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Mar 17, 2015 23:00
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Jesus Christ, he's talking about taking out a loan for $5K max and paying it off in under a year. This is not the financial independence, retire by age 35 thread, AND he's already putting away 10% of his money in a 401K. This is much better than most Americans are with money. gently caress. People need vehicles to get places, and there's something to be said for not having a car that you're endlessly dumping unknown amounts of money into, hoping that it lasts a little longer. It sounds like you're relatively early in your career and just got your first raise - that about right baram? Assuming that's the case, your plans sound fine. VTSAX is a great fund to have in your 401k, so that's definitely a good place to put your money. Opening an IRA with Vanguard is a good idea as well - if you don't have good bond funds or international stock index funds in your 401k, then your IRA is where you'd want to have them. Of course, if your 401k has VTSAX, there's a good chance you've got some other good things in there. I would recommend you put money in your IRA if possible, but like I said, you've gotta have a car, and you're doing well in your 401k. One option might be to scale back your 10% 401k contribution and put some in your IRA, UNLESS you need to contribute 10% to get the full employer max. Always get your employer max. Edit - (IRA vs. Roth IRA talk)A Roth IRA isn't really less efficient. Your $5500 yearly max is for Roth OR Traditional. $5500 Roth is worth more money, because you've already taken taxes out of it, while the Traditional would be deducted from your taxes and you'll pay tax when you're taking it out. So basically you're gambling: If you expect your taxes to be less when you need to tap retirement accounts, 401k and traditional IRA will be better options. If you expect taxes to be higher in retirement (either because you're making more, or because the gov't hiked rates), Roth accounts are better. Or you can hedge your bets and have some pretax and some post tax. That's what I do (401k and Roth IRA). Brian Fellows fucked around with this message at 23:50 on Mar 17, 2015 |
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Mar 17, 2015 23:44
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He has a car. It needs to be replaced soon, yes, and he has the money to replace it. He wants to replace it with a car that costs $5,000 more than he has saved up. He's not going to contribute to an IRA this year because he wants the car that requires a loan instead of the car that he has the money for. I know this isn't the retire-by-35 thread. I'm not telling him to eat garbage and reuse toilet paper, I'm telling him that $5,000 to an IRA is more important than $5,000 for the climate control package and the sunroof. Sorry if I'm off base here and you've got $1 saved and you want to buy a $5,001 car. Brian Fellows posted:
Sadly you're still right. EDIT Brian Fellows posted:This is not the financial independence, retire by age 35 thread America. Where "buying a car that doesn't require a loan" is an activity limited to obsessive savers. GoGoGadgetChris fucked around with this message at 00:07 on Mar 18, 2015 |
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Mar 18, 2015 00:04
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Does it not make sense to you that someone starting their career would want to get an auto loan at a low interest rate while they focus additional savings on an emergency fund, getting their 401k match, or paying down student loans that have a higher interest rate than their low rate car loan? I'm not calling anyone right or wrong, but to act like what he's talking about doing is insane is a little much. You don't know anything about his car; how do you have better insight into how serviceable it is than he does? Someone that has done the math on their hypothetical loan payments and believes they can pay it off within a year sounds like they're thinking about it the right way. Brian Fellows fucked around with this message at 00:16 on Mar 18, 2015 |
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Mar 18, 2015 00:12
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Brian Fellows posted:Does it not make sense to you that someone starting their career would want to get an auto loan... No, it doesn't. That's like the worst time to get an auto loan. Brian Fellows posted:...get an auto loan at a low interest rate while they focus additional savings on an emergency fund, getting their 401k match, or paying down student loans that have a higher interest rate than their low rate car loan?
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Mar 18, 2015 00:22
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To the first half of this, yeah basically. The rest of the funds are cruddy so I just went full in on the VTSAX. I'm putting 10% towards that but realistically I only need to do the 2% to meet the employer match. I plan on dropping that down and opening up a Roth IRA and contributing the difference to that monthly. I was mostly curious about the Roth IRA being "less efficient" because it's going to be funded by post-tax income, but it seems I was incorrect about that assumption based on yours and previous posts. GoGoGadgetChris posted:He has a car. It needs to be replaced soon, yes, and he has the money to replace it. He wants to replace it with a car that costs $5,000 more than he has saved up. He's not going to contribute to an IRA this year because he wants the car that requires a loan instead of the car that he has the money for. I've got about $8000 saved up right now. I want to leave ~$3000 of that in savings as an emergency fund. The car market is somewhat lovely in the ~$5000 range so I'd prefer to take out a small loan I can pay off within the year less so about options and features of the car and more because for a little over $10k I could get into a newer vehicle with well under 100k miles. Being able to do that, while not the 100% best idea financially, would ease my mind and get me into a vehicle I could rely on for 10+ years based on my driving habits. Even taking out that loan I'll be able to contribute a couple thousand into an IRA, it's definitely not one or the other. It's just that I wouldn't be able to completely max out the IRA ontop of taking out and paying off the loan by the end of the year.
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Mar 18, 2015 00:22
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baram. posted:
I guess it's just a rough spot to be in. I agree that $5,000 cars are terrible, but a $10,000 car is more than your current net worth. My advice would be to save money (you sound very confident in your ability to save $5,000 within 6 months), but it sounds like waiting isn't an option because the current car is truly about to die?
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Mar 18, 2015 00:27
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I've looked around but I haven't seen anything jump out at me-- what is the thought on doing fund management, like FutureAdvisor or Fidelity's management? I flat-out don't have time or brainpower to regularly manage this stuff myself, and I feel like I may be doing my future-self a disservice by playing with fire with my investment accounts. My 401k was easy because I only had to figure out the investments once every great while. Does a regular investment fund require more management? Am I over thinking this? I'm talking five figure values, if it makes a difference. Alternatively, would it be worth it to let one of these services rebalance my account during the 'free trial' period and then cancel to let them roll?
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Mar 18, 2015 00:28
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cailleask posted:I've looked around but I haven't seen anything jump out at me-- what is the thought on doing fund management, like FutureAdvisor or Fidelity's management? I flat-out don't have time or brainpower to regularly manage this stuff myself, and I feel like I may be doing my future-self a disservice by playing with fire with my investment accounts. My 401k was easy because I only had to figure out the investments once every great while. Does a regular investment fund require more management? Am I over thinking this? I'm talking five figure values, if it makes a difference. You're the kind of person that they make Target Retirement date funds for. You pick a year that is close to when you want to retire and throw money into it. It really doesn't take much time or effort to occasionally rebalance your portfolio though. It's not like your retirement account is something you should be micromanaging anyway. At least check out the OP for reading recommendations. It's something that could affect your future net worth by hundreds of thousands of dollars, it's worth spending a few hours on.
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Mar 18, 2015 00:33
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GoGoGadgetChris posted:I guess it's just a rough spot to be in. I agree that $5,000 cars are terrible, but a $10,000 car is more than your current net worth. My advice would be to save money (you sound very confident in your ability to save $5,000 within 6 months), but it sounds like waiting isn't an option because the current car is truly about to die? Basically. $5000 is what I'd need if it were to poo poo the bed tomorrow.. chances are it'll last a couple more months. This is just the worst case scenario I've laid out here. I work at a car dealership which means I can get a good price on something that just got traded in or came off lease with a full PDI. The immediate plan is to drop down contributions on the 401k, invest in VTSAX through that, and opening up a Vanguard Roth IRA and contributing the difference from the 401k reduction into mostly an International Index and then a bit into bond fund(s). Is the recommended split between US Index/International Index/Bonds still something like 45/40/15 respectively?
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Mar 18, 2015 01:04
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baram. posted:
Easy way to get a baseline is to look at what the various major Target Retirement Funds are holding. Vanguard's 2055 holds 90% stocks and 10% bonds, and the stock allocation is 70%/30% US/International. Domestic/International is a highly subjective, highly debated topic. The US represents 50% of the world's economy, so there's some justification in making the split 50/50. But, there are plenty of reasons to go beyond 50/50 (currency risk, superior USA accounting practices, historical trends that we aren't supposed to use in predicting future performance but we all totally do, etc.). I personally go 80/20 but I may as well have consulted a Ouja board in choosing that.
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Mar 18, 2015 01:16
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GoGoGadgetChris posted:Easy way to get a baseline is to look at what the various major Target Retirement Funds are holding. Vanguard's 2055 holds 90% stocks and 10% bonds, and the stock allocation is 70%/30% US/International.  I should've thought of just looking at one of the Target funds, thanks.
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Mar 18, 2015 01:26
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Inept posted:You're the kind of person that they make Target Retirement date funds for. You pick a year that is close to when you want to retire and throw money into it. I have a target retirement fund for my 401k, but I'm not sure that's what I want for my general long-term investments that are not in a retirement account. I'm actually not sure if that's even available with your standard brokerage account?
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Mar 18, 2015 04:04
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cailleask posted:I have a target retirement fund for my 401k, but I'm not sure that's what I want for my general long-term investments that are not in a retirement account. I'm actually not sure if that's even available with your standard brokerage account? For non-retirement accounts (taxable), Target Retirement funds ARE available, but your instinct is correct that you it may not be the best choice. Basically, once you start investing in taxable accounts, tax efficiency is a big part of longterm investing, and you will want to start breaking up into different funds. For those that really do not want to manage that, some of the Robo-advisor services (Wealthfront, Betterment) may be worth looking into.
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Mar 18, 2015 04:26
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My company is offering both a Regular 401k and Roth 401k, should I put money into the Roth 401k? I will be able to contribute to my Roth IRA and I am already pretty far up in the tax bracket (yay tech). quote:
Where would Roth 401(k) go in this list?
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Mar 18, 2015 04:41
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Dr. Jackal posted:My company is offering both a Regular 401k and Roth 401k, should I put money into the Roth 401k?
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Mar 18, 2015 04:44
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