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I jut have to brag my new job uses Vanguard for 401k and its great. I rolled my old Fidelity 403b into it. My ER for the target date fund is 0.06. I’m sure I could do better with my own mix but that’s good enough for me.
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Jun 1, 2018 23:34
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baquerd posted:I've never seen a 401k worth keeping if you're not using it to help backdoor. I've seen 2bps index funds and I've seen no fees, but never together. Sobriquet posted:I jut have to brag my new job uses Vanguard for 401k and its great. I rolled my old Fidelity 403b into it. My ER for the target date fund is 0.06. I’m sure I could do better with my own mix but that’s good enough for me.
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Jun 2, 2018 00:23
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SiGmA_X posted:Can't you roll an IRA back into a 401k down the road? I never looked at the regs around it but I know I have seen some CFA/CFP's mention in it articles.
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Jun 2, 2018 03:58
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How should I be thinking about my ESPP that is coming up? I joined the program for the first time over the last six months and maxed out, so I’m going to be getting a bunch of stock this summer. My original plan was to sell it immediately, because holding it wouldn’t be very diverse, and putting it into my Vanguard Brokerage account. But then someone reminded me about short term capital gains tax. What would you guys recommend?
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Jun 2, 2018 19:02
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Don't let gaming tax efficiency cloud your judgement. I'd just try to think of cashing out as a bonus.
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Jun 2, 2018 21:14
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dexter6 posted:How should I be thinking about my ESPP that is coming up? I joined the program for the first time over the last six months and maxed out, so I’m going to be getting a bunch of stock this summer. Keep 5-15% if you really want, cashless sell the rest.
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Jun 2, 2018 21:52
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This is kind of a dumb question but I'm making it a point to not look at my investments until tax season, just so I'm not constantly fretting over every dip and rise of the market. Is there any reason why I should check on them every so often? Anything Vanguard wouldn't email or write me about?
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Jun 2, 2018 22:24
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Continue not looking. And if you can avoid looking at tax time too, do that.
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Jun 2, 2018 22:27
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You can get away with just checking once a year. But since I'm human I check about once a week.
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Jun 2, 2018 22:31
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Ur Getting Fatter posted:Is there any reason why I should check on them every so often? Anything Vanguard wouldn't email or write me about? The main reason I can think of to check in once in awhile is to make sure nobody has stolen your identity (and with it, your savings).
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Jun 2, 2018 22:35
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nelson posted:The main reason I can think of to check in once in awhile is to make sure nobody has stolen your identity (and with it, your savings).
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Jun 2, 2018 22:37
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Hoodwinker posted:I do it for this and because my wife and I are saving so much that the number still crawls up as the market goes down so I still get the feeling of "number go up." yeah same, and I’m waaayyy more paranoid about my contribution or my employer matching not going through than the market going down, so I need to check it at least every two weeks. The market going down means my next contribution is gonna have a bigger bang for the buck!
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Jun 3, 2018 01:25
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Hello friends. Here's my situation. Single, no kids, recently changed jobs. 401k with old job (low match), HSA with old job, ESPP with old job (had been selling ASAP at the cost of paying short-term capital gains). New 401k plan does NOT include a match. New job has an HSA. New job has no ESPP. New income something like 150k, expenses something like 50k / year. High-interest savings available (~2%) for up to ~$20k as a super liquid emergency fund. Current plan is basically: Max new HSA. Max new 401k (front-loaded now since I don't have to worry about a match). Max normal backdoor Roth. That seems like the easy stuff. Other considerations are something like: A) Mega backdoor Roth to the cap. This seems like a strong contender. B) Do I now start holding my remaining old job ESPP stock to the long-term capital gain timeframe now that I'm no longer relying on that company for employment income? C) Throw excess money into a taxable investment account at Vanguard/Fidelity and keep buying more indexes? D) How should the high-interest savings account play into this if it competes with capping the mega Roth? E) If my overall target allocation is something like 90/10 equities/bonds, where's the best place to hold the bond fund? I haven't done any tax loss/gain harvesting before, but I'm planning on figuring that out this year, if that makes a difference. For D, my thought is that with so much in my Roth, I could use that in a pinch since withdrawing contributions is free, but I'm not sure how that works if I backdoor (are those locked for 5 years similar to if I slowly convert a regular 401k?).
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Jun 3, 2018 15:08
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My employer has a stock auto-sell program which automatically sells company stock when it vests and puts the money into Schwab Intelligent Portfolios. Is this a bad idea? I'm saving pretty well already in pre-tax vehicles, and it feels like an easy way to diversify without much manual work on my part. I guess my alternative would be to open a standard Vanguard account.
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Jun 3, 2018 15:38
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Hello thread! My wife and I have combined 100k annual income, no debt, and 50k annual expenses. We have 60k sitting in a crummy savings account and need to get started investing. We mostly max our 401k and Roth IRA contributions so that takes care of most of our excess income. This is 20% Vanguard Total Domestic Stock Index, 10% Total International Stock, and 70% Target 2055 Blend mutual funds. Very stock heavy. My question is, where should we put our excess savings? I like Vanguard mutual funds for the low fees. Should I balance my retirement portfolio by getting a bond fund with my savings? Liquidity requirements: I don’t think our expenses will catch up to our income for decades, so this money is for retirement I guess. We may want to buy a house in 3-5 years, but the clock doesn’t start ticking on that until I find a job where I want to stay forever which hasn’t happened yet. We’ll have 3 years to prepare. With today’s mortgages will we even need much of a down payment?
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Jun 3, 2018 16:23
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I replied to your other post but congratulations on being in "good problem to have" territory.
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Jun 3, 2018 16:45
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EAT FASTER!!!!!! posted:I replied to your other post but congratulations on being in "good problem to have" territory. Thank you. My secret is being cheap as hell mostly. And having no kids. But back to my question, yes I will max my HSA thank you but I don’t have access to a 457. So what should I do with excess savings now that I’ve done the tax advantaged stuff? Over the next few years maxing the HSA, RIRA and 401k might be able to eat up some savings, but as of right now I feel like I have about $30k too much in savings. Should I take this as a sign that I am living too cheaply and get a bigger apartment and cleaning service? Seriously, should I add a Vanguard investment account? Maybe a bond fund or something short term, with the idea that I might be selling from it over time as the maxed tax-advantaged accounts slightly exceed my after-expenses income?
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Jun 3, 2018 19:11
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teardrop posted:Thank you. My secret is being cheap as hell mostly. And having no kids. But back to my question, yes I will max my HSA thank you but I don’t have access to a 457. So what should I do with excess savings now that I’ve done the tax advantaged stuff? Honestly, we are in your position and I just put it into taxable brokerage in a structure that's going to let me buy and hold. Our emergency fund is bigger than yours (because we've got higher expenses) but once you've done everything on that list you're likely looking at ways to put your money to work that boil down to 1) spending on things you want or 2) working for you in a tax inefficient manner (although LTCG is still a loving blessing compared to my marginal income tax rate). So buy blue chips or index funds and hold on to them for > 1 calendar year.
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Jun 3, 2018 19:20
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teardrop posted:Thank you. My secret is being cheap as hell mostly. And having no kids. But back to my question, yes I will max my HSA thank you but I don’t have access to a 457. So what should I do with excess savings now that I’ve done the tax advantaged stuff? dude go buy some poo poo, enjoy having a ton of money
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Jun 4, 2018 06:47
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AndrewP posted:dude go buy some poo poo, enjoy having a ton of money  I don't want to get all MMM about this but stuff doesn't make people happy. Experiences might make you happy, for some amount of time, but it's very infrequently related to stuff. The accumulation of stuff, especially if you're a frugal person by nature, is actually pretty stressful and anxiety provoking. You've got to take care of it, you've got to spend money to maintain it, you've got to worry about it getting broken or destroyed. If that's not your bag, and you also don't enjoy spending a lot of money on experiences, then just keep min/maxing and live your life on your terms.
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Jun 4, 2018 14:19
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EAT FASTER!!!!!! posted:
You know what I learned makes me happy recently? My wife bought a bunch of perler beads so she can make crafts with them and I've been helping her sort the tubs of assorted colors into individual containers, and the brainlessness of it combined with us being able to hang out and chat is the most delightful feeling. I'm going to go out and buy a jigsaw puzzle at some point to get the same experience. No gadget or night out on the town would bring me nearly as much joy. I know I'm definitely a weirdo in that regard, but the point I'm trying to make is that the things that will make you happy are deeply personal, and at no point should you feel you have to look to anybody for guidance as to what those things are. The phrase, "money doesn't buy happiness" is more applicable if you consider it to mean instead, "money does not convert proportionally into happiness." Use your money to express the appropriate amount of freedom you desire.
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Jun 4, 2018 14:33
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When he posted I was gonna tell him to take a well earned vacation, but some people don’t actually enjoy time abroad, and it’s none of my business. I make 50% more than he does and am not nearly halfway into such a good financial position, so I thought I had nothing to contribute.
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Jun 4, 2018 15:44
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You should convert your money into happiness, especially once everything is paid. People in that situation are in a unique position to live a little. I would say if you wanted to travel start while you are young. You could be 62 with severe rheomatoid arthritis and can't sit for more than an hour without being in severe pain, makes it hard to take all those trips 30-something you was saving for 60-something you. Don't stop what you are doing, but do have some fun/make your life easier because you can.
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Jun 4, 2018 16:04
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Without moralizing about what's the right use for anyone's spare money* I think it's important to keep in mind that the guy has apparently been perfectly happy being frugal so far so bucking the status quo just because he can is not necessarily the best idea. *donate to environmental causes, progressive political candidates and properly vetted charities, in that order, because if you're making a lot of money it's because you're loving over the planet and poor people even if you don't think you are dpkg chopra fucked around with this message at 16:32 on Jun 4, 2018 |
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Jun 4, 2018 16:30
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I’m going to go against the tide and say save in a regular (non tax advantaged) brokerage account. Someday you might want to do something big like start your own business and having money around with no strings attached will come in handy.
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Jun 4, 2018 16:38
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I just bought a house, and need some broad advice on long-term planning. I've got a 30yr note for $200k at about 4.8% interest. My wife is also going to get access to a trust in a couple of years that we were entirely unaware of, which is both cool and a little terrifying. I'm actually not clear on the amount in the trust, or the terms, or what form it takes, or how much is in it, for that matter. But the cryptic information I was given about it is that it's theoretically enough for us to just pay off the house in one go. So with that in mind... I get that at my percentage rate on the mortgage, the conventional wisdom is that if I just keep making payments as normal and invest any other money coming in, I should theoretically make more money over 30 years than I would if I paid down the mortgage early. (this is all assuming any investments I have average at least ~7% real return, I think). But is there any time at which it makes more sense to pay off that debt early? Or re-amortize the loan? I'm okay at math and usually can puzzle out any financial questions I have, but when it comes to this long a time-scale I have a hard time figuring out the best option, especially if you get re-amortization in the mix. Also, a lot of the math I've seen for the advantage of not paying down a mortgage early and investing it instead usually deals with situations where you'd overpay monthly and pay off the mortgage in 25 years instead of 30 or whatever... but how drastically does it change the calculation if I'm paying off the house in, say, 7 years instead of 30? If somebody could even just point me to a set of examples or formulas I could probably math this out myself but since we're talking substantial amounts of money I don't want to just wing a back-of-the-napkin calculation for it.
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Jun 4, 2018 20:57
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Ur Getting Fatter posted:
Incredibly true and relevant
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Jun 4, 2018 20:59
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MockingQuantum posted:(pay off mortgage early vs. invest) The only things that matter are interest rates, stock market growth (or decline), liquidity and peace of mind. Don’t worry so much about timing because nobody can reliably predict where the stock market and interest rates will be in the future.
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Jun 4, 2018 21:13
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nelson posted:The only things that matter are interest rates, stock market growth (or decline), liquidity and peace of mind. Don’t worry so much about timing because nobody can reliably predict where the stock market and interest rates will be in the future. I'm not at all concerned about market timing, I'm more wondering the impact of paying it off really early. It's pretty clear that if I knew I could pay it off in 25 years or 30 years, the better option is to pay it off as normal and invest the extra money I could have used to pay it off early. I just need to do the math to see whether I want to pay off the house in ~5 years vs 30, to figure out what the best long-term strategy is.
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Jun 4, 2018 21:19
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MockingQuantum posted:I'm not at all concerned about market timing, I'm more wondering the impact of paying it off really early. It's pretty clear that if I knew I could pay it off in 25 years or 30 years, the better option is to pay it off as normal and invest the extra money I could have used to pay it off early. I just need to do the math to see whether I want to pay off the house in ~5 years vs 30, to figure out what the best long-term strategy is. *has always so far Here, this post literally answers your question directly.
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Jun 4, 2018 21:20
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What about never paying it off? Well until I sell it anyway. I just got a 1.28% mortgage (and I get 30% of that refunded.  ) and there's no requirement to amortise. So in theory I can just invest everything rather than touch the capital debt, but it does feel weird. Or is that a terrible idea?
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Jun 4, 2018 23:40
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Hoodwinker posted:The math always* works out that you earn more money paying it down in 30 and investing the difference. By paying it down in 5, you're making a bet that the investment growth earned over 30 years will be less than 4.8% annually. Not that simple because you need to take into account retiring within the 30 year note period (sequence of returns risk) and the likelihood of not staying 30 years.
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Jun 5, 2018 00:03
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Darkrenown posted:What about never paying it off? Well until I sell it anyway. I just got a 1.28% mortgage (and I get 30% of that refunded. At 1.28%... this is one of those euro loans that resets every 5 years, right?
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Jun 5, 2018 00:05
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What do you mean by resets? The interest rate is floating, but there's no time limit on it.
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Jun 5, 2018 00:30
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baquerd posted:Not that simple because you need to take into account retiring within the 30 year note period (sequence of returns risk) and the likelihood of not staying 30 years.
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Jun 5, 2018 01:04
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He probably means if your retirement income doesn’t cover the mortgage payment you’ll be in trouble if the house isn’t paid off.
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Jun 5, 2018 01:38
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Sure, but I was always under the impression that this was in regards to new income coming in where you have the choice of either directing it to investments or to principal. Under a system like that, it's assumed you are already capable of making the regular mortgage payment, so the question is about should you provide additional money towards your principal. If you're retired/retiring, kill the note in my opinion.
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Jun 5, 2018 01:41
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Darkrenown posted:1.28% mortgage (and I get 30% of that refunded. That is pretty drat nice, is that available to all citizens?
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Jun 5, 2018 03:32
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Hoodwinker posted:Please explain in greater detail what you mean. Sequence of returns risk is a problem that happens when short-term returns in the range of 2-15 years jeopardize the long-term survival of portfolios. This happens in a situation where assets are being withdrawn(e.g. retirement) and these withdrawals happen at a time when the portfolio is relatively low. See also: https://earlyretirementnow.com/2017/05/17/the-ultimate-guide-to-safe-withdrawal-rates-part-14-sequence-of-return-risk/ If you retire during a time when your expenses are less flexible, such as when you have a mortgage or rent payment, your required expenses will be higher by that amount. Eliminating this typically core expense will reduce your retirement number in cases when you are planning for worst case scenarios in early retirement. To my other point, if you don't stay the full 30 year mortgage term, you don't get to compare the experience to statistics about 30 years of equity returns. The vast majority of home owners do not stay for the term of their mortgage. If you leave after 5 years, you might see an equity market with strongly negative returns while your real estate retains value. This is the risk component to the risk-return equation. Darkrenown posted:What do you mean by resets? The interest rate is floating, but there's no time limit on it. The interest rate is floating, so unless you have strong limits on how much it can fluctuate, if Sweden had a particularly bad interest rate event you might wake up next year and find your rate has gone much higher as well as your required payments. Even if it is limited year by year, a half percentage interest rate increase a year could result in a 6-7% rate in a decade, and that will not be refinanceable on especially favorable terms given the interest rate environment such a floating rate demands.
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Jun 5, 2018 05:04
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Darkrenown posted:What about never paying it off? Well until I sell it anyway. I just got a 1.28% mortgage (and I get 30% of that refunded. That would be exactly how our interest-only mortgages work here in  . You’re basically betting that house prices increase above the interest rate.The downside is that, especially if you’re on a variable-rate loan, you risk the interest rate going up and pinching your cashflow/eliminating any gains in price, or your housing price dropping and being out the difference/having the bank foreclose you because you owe more than the asset value. We’ve currently got a bit of media coverage about this specifically because a review into our “responsible lending” practices revealed that heaps of people are set up to spectacularly fail the moment the house price decreases or rates increase even a little, as they borrow against their primary residence at interest only rates, buy a second, etc etc. and become leveraged to the hilt. Edit: I’m getting off the origins point a little, but the petrol that our tax system douses all over this tinderbox of an arrangement to encourage this insane leverage is that we have a concept called negative gearing, wherein any costs of borrowing for investment purposes attract a tax deduction towards income generated. So for example if I borrow $100k at 10% and then invest it, i can reduce my taxable income by $10k (including off salary, income off those investments such as dividends, etc.). Where this gels with housing is that we’ve had a truly insane property boom/bubble, so a generation of people are wired on ever-increasing property gains even after the GFC. Therefore, they buy properties with investment loans, rent them out, deduct all the loan interest expenses against the rental income to pay no tax on it, then rely on the capital growth when they sell to be rich. Houses also provide an attractive way to securitise the loan, reducing interest. Thus, they chain together investment property after investment property with each securitising the next loan. I’ll leave it as an exercise to the reader to identify where this goes spectacularly wrong, noting that we are just seeing the first signs of a property price slump in the last month or two. Nam Taf fucked around with this message at 05:45 on Jun 5, 2018 |
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Jun 5, 2018 05:33
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