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I read that elon musk started out with $30k and that Peter thiel gives people $100k to drop out of college and now I want to save $100k and then quit my job and start something. This should take me a couple years (I'm already maxing my 401k, though I'm not yet funding an IRA and I'm not yet sure if the mega backdoor Roth, which seems doable with my employer, might be worthwhile) but does it sound insane to hold this money in my checking account instead of investing it with a standard 70/30 stocks/bonds ratio? Tbh I'm not sure I even need to save so much, since I want to build an app or video games or something and I'd be doing most things myself. I'd need to pay people to create art and music but that's about it. Edit: I could probably save less if I just work on weekends and don't quit my day job till I have worthwhile money coming in. Working 80% of a full week in exchange for 80% of the pay is also an option, I guess. Maybe I should stop being dumb and impatient and just store everything in the stock market except an actual emergency fund. oliveoil fucked around with this message at 19:55 on Mar 16, 2017 |
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Mar 16, 2017 19:52
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DNK posted:Ok, granted: if you have losses or the net "gain" is close to zero then short-term selling is an option. Yeah, I'm going to go with the LTGs
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Mar 16, 2017 20:14
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oliveoil posted:I read that elon musk started out with $30k and that Peter thiel gives people $100k to drop out of college and now I want to save $100k and then quit my job and start something. This should take me a couple years (I'm already maxing my 401k, though I'm not yet funding an IRA and I'm not yet sure if the mega backdoor Roth, which seems doable with my employer, might be worthwhile) but does it sound insane to hold this money in my checking account instead of investing it with a standard 70/30 stocks/bonds ratio?
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Mar 16, 2017 20:23
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Running a business is a shitload of work and if you think you can start one with just a couple of years of moderate salary saved up while you "figure it out" you're going to loving fail.
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Mar 16, 2017 20:43
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I could build something like flappy bird in a weekend (and I bet art assets for it would cost less than $5k) and I've read a couple books on marketing and growth hacking and I've come up with a few novel marketing ideas that seem like they could work once or twice before anyone else notices them and starts using them too.
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Mar 16, 2017 20:46
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oliveoil posted:I could build something like flappy bird in a weekend (and I bet art assets for it would cost less than $5k) and I've read a couple books on marketing and growth hacking and I've come up with a few novel marketing ideas that seem like they could work once or twice before anyone else notices them and starts using them too. This is reading like a troll, so either you're Poe's law-ing us or...
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Mar 16, 2017 20:49
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oliveoil posted:I could build something like flappy bird in a weekend (and I bet art assets for it would cost less than $5k) and I've read a couple books on marketing and growth hacking and I've come up with a few novel marketing ideas that seem like they could work once or twice before anyone else notices them and starts using them too.
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Mar 16, 2017 20:52
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Why invent Flappy Bird when you already know last week's winning Powerball numbers?
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Mar 16, 2017 20:56
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Let me make it clear: there's a lot of value in working on and completing a project like that. You should do it. But what you shouldn't do is assume the risk of dropping your job to spend 2-4 years working on it. Do it in your spare time and figure out what all the bumps in the road are before you go barreling down it. Seriously. I've spent the last 5 years jumping between side projects trying to figure something out that works and each one has been a valuable lesson but I'm really glad I kept my day job while doing them. I tried (in no particular order) novel writing, tabletop game design, producing a youtube show, and making a rogue-like video game. Right now it seems like finance is the side project I'm going to succeed in. Dream big, but take the right chances.
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Mar 16, 2017 21:07
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I could code craigslist so clearly I can be rich as gently caress. Except everyone could code it pretty much, the novel idea's the valuable part.
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Mar 16, 2017 21:29
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I wonder how many failures there are for every Elon Musk? And Peter Theil is some sort of weird vampire so don't try to emulate him.
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Mar 16, 2017 21:31
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Hoodwinker posted:Let me make it clear: there's a lot of value in working on and completing a project like that. You should do it. But what you shouldn't do is assume the risk of dropping your job to spend 2-4 years working on it. Do it in your spare time and figure out what all the bumps in the road are before you go barreling down it. Seriously. I've spent the last 5 years jumping between side projects trying to figure something out that works and each one has been a valuable lesson but I'm really glad I kept my day job while doing them. I tried (in no particular order) novel writing, tabletop game design, producing a youtube show, and making a rogue-like video game. Right now it seems like finance is the side project I'm going to succeed in. If you want a partner for your finance side gig, count me in. I'm also trying to cook something up.
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Mar 16, 2017 21:45
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Michael Scott posted:If you want a partner for your finance side gig, count me in. I'm also trying to cook something up.
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Mar 16, 2017 22:15
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oliveoil posted:I could build something like flappy bird in a weekend (and I bet art assets for it would cost less than $5k) and I've read a couple books on marketing and growth hacking and I've come up with a few novel marketing ideas that seem like they could work once or twice before anyone else notices them and starts using them too. https://forums.somethingawful.com/showthread.php?threadid=3506853 Bhodi fucked around with this message at 22:25 on Mar 16, 2017 |
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Mar 16, 2017 22:22
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Hoodwinker posted:I'm not cooking anything up. I'm handling the finances for my brother's already successful s-corp, since he's reaching the point of success where he doesn't have the time or attention to devote to it over the logistics of the business. I loving love dealing with financial efficiency and he's starting to get in over his head so it's a win-win. Nice! Sounds like a win-win for both of you :-)
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Mar 16, 2017 22:39
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GoGoGadgetChris posted:SIMPLE IRA's are like a 401k for teeny tiny companies. They have lower expenses to your employer, and a lower contribution limit for you. The tiny company I work for (that contracts with a Fortune 500) has a SIMPLE IRA run through Scottrade. My company deposits my contribution and their match every week to a cash account on Scottrade, and then I can invest from there as I see fit at the cost of 7 or 8 bucks a trade. I let the balance build for a month or two and then slam pick The SIMPLE IRA is funded with pre-tax contributions, so I have a Roth IRA and taxable accounts at Vanguard to balance out the VOO.
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Mar 17, 2017 21:25
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So, I started out last year making $37,000 a year. I was fired, spent a few months unemployed, and as of a week from Monday will start making ~$53,000 a year. I have $28,000 in a 401(k), about $5,000 of it Roth, and the rest traditional. I'm rolling that money over into Vanguard. Obviously, I'm rolling the Roth over into a Roth IRA; should I roll the rest into a traditional IRA, or should I pay the tax and get it into a Roth now? Or is this going to be a question of "what do I think is happening in tax policy over the next few years?"
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Mar 19, 2017 19:20
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Thanatosian posted:So, I started out last year making $37,000 a year. I was fired, spent a few months unemployed, and as of a week from Monday will start making ~$53,000 a year. I have $28,000 in a 401(k), about $5,000 of it Roth, and the rest traditional. I'm rolling that money over into Vanguard. Obviously, I'm rolling the Roth over into a Roth IRA; should I roll the rest into a traditional IRA, or should I pay the tax and get it into a Roth now? Or is this going to be a question of "what do I think is happening in tax policy over the next few years?" For now I would just put it into a traditional IRA. You might consider converting it (or at least part of it) later this year if you have some money on hand to pay the taxes on the conversion out of your own pocket. The advantage would be that if you have spent the first 3 months of the year unemployed, then you would expect your earnings this year (and thus taxes) to be lower. Assuming the 53k/yr that you quoted above is what you would earn if you worked the entire year, then your actual pay this year will only be ... what around 39k? There's a good chance that after deductions and exemptions you will have some headroom in the 15% bracket and it would be a nice opportunity to take advantage of that to do the conversion for at least as much to fill up that bracket.
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Mar 19, 2017 19:40
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flowinprose posted:For now I would just put it into a traditional IRA. You might consider converting it (or at least part of it) later this year if you have some money on hand to pay the taxes on the conversion out of your own pocket. The advantage would be that if you have spent the first 3 months of the year unemployed, then you would expect your earnings this year (and thus taxes) to be lower. Assuming the 53k/yr that you quoted above is what you would earn if you worked the entire year, then your actual pay this year will only be ... what around 39k? There's a good chance that after deductions and exemptions you will have some headroom in the 15% bracket and it would be a nice opportunity to take advantage of that to do the conversion for at least as much to fill up that bracket. I actually started a job in August of last year that was at $42k, so I was pulling that in since the beginning of the year, I just got a promotion up to $53k.
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Mar 19, 2017 19:57
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Thanatosian posted:I actually started a job in August of last year that was at $42k, so I was pulling that in since the beginning of the year, I just got a promotion up to $53k. Ah, okay, in that case you're almost guaranteed to be in the 25% bracket unless you have a ton of deductions. I would still just roll it into a traditional IRA, and you have the rest of this year to decide whether you want to convert any of it to Roth or wait until a later year.
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Mar 19, 2017 20:08
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I've recently become more interested in figuring out my 401k investments. I've read some on here and r/personalfinance. This thread begins in 2008. Would it be advantageous to read the entire thing, or should I start within the past year or so? I'm still new to this and trying to soak in what I can. My wife is on board too. Both of our 401ks are set at 10% of salary plus 3% match each. She's got an IRA and we'll be opening one for me this year as well and trying to max both. When I signed up for my employer's 401k, I didn't know anything about investing and they suggested the fidelity freedom 2045 plan. I have the current allocations: MFS total return fund R4 @ 31% (Balanced 50-70% equity) American Funds EuroPacific R6 @ 22% (Global/Int'l) JPMorgan Small Cap Equity R5 @ 19% (US Stock) JPMorgan Core Bond R6 @ 15% (Bond) Vanguard Institutional Index @ 13% (US Stock) Am I being too conservative (37yo, planned retirement ~65)? From what I can tell, my allocations are 32% US Stock, 15% bond, 22% int'l and 31% equity. Is that correct? Would it make more sense to change any of that? The equivalent vanguard funds all seem to have about the same performance as the ones I'm currently allocated into, but at lower ER, so it would make sense to re-allocate to them, right? For example: JPMorgan Core Bond R6 to Vanguard Tot Bond Mkt Index-ADM JPMorgan Small Cap Equity R5 to Vanguard EXT Market Index-ADM - this would be a small blend going to a mid-cap blend, which I don't quite understand MFS total return fund R4 to ?? - there is nothing else listed as a "balanced" fund in my options. I don't know what would work best. If any of that doesn't make sense, or if the consensus is to change allocation %'s, please let me know.
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Mar 21, 2017 16:07
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The "Equity" fund is a mix of stocks and bonds. I think based on a cursory google of your MFS fund that it's about 60% stocks and 40% bonds, putting you at ~27% bonds. That seems bond-heavy to me, and I think you're a little international heavy considering most US large cap companies have heavy international exposure. Market cap is the size of the company. Small blend to mid cap blend basically means that you're going from investing in a very long list of small companies to a similarly long list of midsized companies. Post your ERs, everything is basically meaningless without. Generally reallocating in to similar funds with lower ERs is a no-brainer.
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Mar 21, 2017 16:19
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KYOON GRIFFEY JR posted:The "Equity" fund is a mix of stocks and bonds. I think based on a cursory google of your MFS fund that it's about 60% stocks and 40% bonds, putting you at ~27% bonds. That seems bond-heavy to me, and I think you're a little international heavy considering most US large cap companies have heavy international exposure. Gotcha, thanks for the info. I thought I posted ERs, but here you go: MFS total return fund R4 - ER 0.49% American Funds EuroPacific R6 - ER 0.50% JPMorgan Small Cap Equity R5 - ER 0.87% JPMorgan Core Bond R6 - ER 0.42% Vanguard Institutional Index - ER 0.04% Vanguard Tot Bond Mkt Index-ADM - ER 0.06% Vanguard EXT Market Index-ADM - ER 0.09% e: How about bringing down international to 15%, lowering the bond fund to 5% and the balanced fund to 20% and increasing percentage in stocks with the remainder, splitting between Vanguard Institutional Index and Vanguard EXT Market Index-ADM. This would give me about 11% bonds, 15% int'l and remainder in US stocks. Cacafuego fucked around with this message at 17:03 on Mar 21, 2017 |
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Mar 21, 2017 16:57
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VINIX 100% no I'm not kidding, you have 35 freaking years until you retire.
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Mar 21, 2017 17:41
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Cacafuego posted:Gotcha, thanks for the info. I thought I posted ERs, but here you go: Definitely drop the JPMorgan funds entirely along with that balanced fund, the expense ratio is too high for what you can replicate with the Vanguard funds. 4:1 ratio of Institutional Index and Extended Market would replicate the makeup of the US stock market. So you just need to decide your ratio of US stock to international to bonds. You can decide to forgo international in your 401k since the expense ratio is high and buy international stock funds in your IRA instead and only worry about US stocks to bond ratio in your 401k.
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Mar 21, 2017 18:04
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Ancillary Character posted:Definitely drop the JPMorgan funds entirely along with that balanced fund, the expense ratio is too high for what you can replicate with the Vanguard funds. 4:1 ratio of Institutional Index and Extended Market would replicate the makeup of the US stock market. So you just need to decide your ratio of US stock to international to bonds. You can decide to forgo international in your 401k since the expense ratio is high and buy international stock funds in your IRA instead and only worry about US stocks to bond ratio in your 401k. Do exactly this.
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Mar 21, 2017 21:12
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Ancillary Character posted:Definitely drop the JPMorgan funds entirely along with that balanced fund, the expense ratio is too high for what you can replicate with the Vanguard funds. 4:1 ratio of Institutional Index and Extended Market would replicate the makeup of the US stock market. So you just need to decide your ratio of US stock to international to bonds. You can decide to forgo international in your 401k since the expense ratio is high and buy international stock funds in your IRA instead and only worry about US stocks to bond ratio in your 401k. baquerd posted:Do exactly this. Thanks for the info. How about the 4:1 ratio you mention with 15% bonds and I'll keep the int'l to the IRA. Dropping bonds to 10% would be a little riskier, correct? But if it's over 25 years or so, I would think 15% would be ok.
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Mar 21, 2017 23:08
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Cacafuego posted:Thanks for the info. How about the 4:1 ratio you mention with 15% bonds and I'll keep the int'l to the IRA. Dropping bonds to 10% would be a little riskier, correct? But if it's over 25 years or so, I would think 15% would be ok. Sounds reasonable, that would put you at: Vanguard Institutional Index - 68% Vanguard Extended Market - 17% Vanguard Total Bond - 15% How much you have in bonds is mostly related to your appetite for risk and how well you handle volatility. You could mimic Vanguard's Target Retirement Funds, which would still have bonds at 10% for a 37-year old (Target Year 2045), but they start ramping up to ~15% for 39-43 year olds (Target Year 2040), so either is reasonable if it fits your risk profile. EDIT: Forgot that you should consider your IRA holdings as well when doing your calculations. The amount you put into international funds in your IRA would dilute the amount of bonds you're holding in your 401k when looking at your retirement accounts holistically. For example, if the size of your IRA was only one-tenth of your 401k and it was all in an international stock fund, your actual bond holdings would then only be 13.5% and your US stock holdings would be 76.5% of your retirement savings. Ancillary Character fucked around with this message at 01:22 on Mar 22, 2017 |
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Mar 22, 2017 01:16
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That seems reasonable to me for now.
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Mar 22, 2017 13:18
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Thanks for all the info and help. I've made the changes above. I'll keep an eye on it and re-allocate to keep it in that ratio. I got a late start to saving thanks to an ex-wife who way overspent and left us in lots of debt with no retirement savings. It's all paid off now and she's gone, but I still have a lot of student loans that I'm trying to knock down while saving. Fortunately, my current wife is very smart and has been saving well for a long time. Are there any sites out there that have a reputable retirement calculator? I've read in general to shoot for saving 20x your annual expected spending for 20 years of retirement and increase based on how long you plan on living post retirement. I know returns arent' guaranteed, but each one I use gives me wildly varying numbers with the exact same entries for savings, income, current savings, expected return, age and age of retirement, etc. I get any where between 450,000 and 1.2million. I figured there'd be some variation, but not a spread of 750k.
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Mar 22, 2017 16:08
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Cacafuego posted:Are there any sites out there that have a reputable retirement calculator? I've read in general to shoot for saving 20x your annual expected spending for 20 years of retirement and increase based on how long you plan on living post retirement. I know returns arent' guaranteed, but each one I use gives me wildly varying numbers with the exact same entries for savings, income, current savings, expected return, age and age of retirement, etc. I get any where between 450,000 and 1.2million. I figured there'd be some variation, but not a spread of 750k. The core of it starts at figuring out what age you plan to retire, then developing a plan for how long you expect to be alive after that point, how much money you'll need invested for a safe withdrawal rate that you think will fit your needs using investments you calculate to roughly deliver the amount you're after. Then you do the math on how much money you'll need to earn and invest each year to get the growth needed to hit that number. At this point you may be noticing it's easier to just crunch the drat numbers yourself than to try to use any specific retirement calculator.
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Mar 22, 2017 16:14
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Hoodwinker posted:At this point you may be noticing it's easier to just crunch the drat numbers yourself than to try to use any specific retirement calculator. Good point. Ok, thanks, I'll do it myself and see what I come up with.
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Mar 22, 2017 17:06
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If you want a stupid number I think having your intended income x25 is ultra safe income x20 is safe income x18 is dangerous You can decrease those multipliers by factoring other sources of retirement income: Social security Pensions Property Income For example: I'd like a retirement income of around $50000 2017 dollars. That means I should have around 1 million in savings. However, I know I'll be getting around $25000 of social security benefits, so I actually need around 500k in savings. Worst case and saving all on my own, in order to get 1 million in savings (assuming an annual 6% inflation-adjusted asset growth), I'll need to put away 10k per year for 33 years 15k for 26yr 20k for 23yr 25k for 20yr DNK fucked around with this message at 22:29 on Mar 22, 2017 |
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Mar 22, 2017 21:49
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Cacafuego posted:Thanks for all the info and help. I've made the changes above. I'll keep an eye on it and re-allocate to keep it in that ratio. Firecalc does a good job at allowing you to theorycraft with some degree of complexity and transparency around uncertainty.
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Mar 23, 2017 06:40
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hahah
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Mar 24, 2017 15:07
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poo poo, did I miss the 100 million % return train? drat it, I could have retired.
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Mar 24, 2017 15:10
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Is there any info from people who rode out the market in their retirement accounts over the 2008 recession and kept everything in place? After everything bottomed out, did it all climb back up with the recent stock market highs? I know everyone says stay in, just leave your retirement account alone. Does anyone do that, or do they bounce back and forth between risky/safe based on the market? Just interested in the historical perspective.
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Mar 24, 2017 15:25
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Phil Moscowitz posted:hahah totalnewbie posted:poo poo, did I miss the 100 million % return train? drat it, I could have retired. Suckers, I bought in just in time and now you're posting in the presence of the world's newest billionaire 
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Mar 24, 2017 15:40
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What do you mean, like in this forum? Obviously, the much louder stories are the people who freaked out because they were heavy into stock funds late in their lives, and sold everything only to watch it come back up in a few years.
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Mar 24, 2017 15:40
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alnilam posted:Suckers, I bought in just in time and now you're posting in the presence of the world's newest billionaire Must have been nice to buy infinity shares at $0.00 then enjoy infinity % gainz in one day...
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Mar 24, 2017 15:41
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