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Klauser posted:Federal Income Tax: It's already been mentioned, but I wanted to pile on: under-withholding penalties will get you eventually. Theoretically you have the right approach, because you're earning money on that $4k instead of giving Uncle Sam a free loan. But they don't let you go TOO far with that. They're just like everyone else; they work better with regular income as opposed to being given a lump sum and having to ration it over the year. I just did some quick math and at 2% APY, you're earning an extra $39/year towards your taxes by saving that $300/mo instead of having it already deducted from your paycheck. Note also that that $39 is basically taxed at your marginal rate, so take 22% or whatever away from that. Up to you if that's really worth it. Personally I prefer to have the number as close to $0 as possible, whether it's a refund or amount owed (without stressing too much about getting it perfect, because you won't). It just makes things simpler instead of having to worry about what the IRS may or may not do to me.
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Feb 26, 2020 19:00
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Fhqwhgads posted:Aside from the fact that you can do like 99% of an FAs work yourself, what are the basics you look for in an FA when you've got all your savings/retirement basics covered and are looking for other investments? Fiduciary, of course. Fee for service and not commission? I'm studying to pass the CFP this July, there are not many good advisors but there are a few who aren't just salespeople. If you want to post your friend's location I can probably help narrow down their choices so they don't get raked though the coals. Honestly most of the value from my work comes in reviewing insurance policies, lighting a fire under people's asses to get estate planning done, tax planning, and telling them they should move their investments from Morgan Stanley to Vanguard. If they just want an investment advisor they should probably use the Vanguard CFP service which I think is only 30 bps.
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Feb 26, 2020 19:04
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MJP posted:Tell your parents that unless they are going to match the funds that you yourself are investing for your future, or directly funds that they have given to you to invest for your future, with the stipulation that it's a separate account in your name that you run explicitly according to their direct instructions, they can pound sand. Pretty much. I tell them “I’m really not comfortable with this weird real estate plan” and their response is “you just don’t get it” and I don’t have to get it to not like it. Also I don’t want any of “my” investments in a concentrated and expensive thing like a single property. I’ll tell them that whatever funds they want to pass in, they can invest long-term, or they can give it to me and I’ll handle it. I predict they’ll complain about taxes or some poo poo.
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Feb 26, 2020 19:29
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moana posted:I'm studying to pass the CFP this July, there are not many good advisors but there are a few who aren't just salespeople. If you want to post your friend's location I can probably help narrow down their choices so they don't get raked though the coals. Not OP but Providence RI advice would be welcome.
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Feb 26, 2020 19:37
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moana posted:Fee ONLY, not "fee-based". CFP or CPA/PFS credentials. Check their expense ratios if they're going to be doing the investment management. The napfa.org site has a good questionnaire and a search tool they can use to find a cfp. It's funny you say that because I work at Morgan Stanley (not an advisor) and had to get special permission to move all my stuff to Vanguard. We're in NYC so there's no shortage of advisors. Edit: And I just found out that she's asking because her friend reached out to her and he's an FA....who works at Morgan Stanley. This is not gong to go how she thinks this is going to go... Fhqwhgads fucked around with this message at 20:29 on Feb 26, 2020 |
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Feb 26, 2020 19:43
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Residency Evil posted:Welp, my "I haven't even lost enough to TLH" post aged well! As I understand it, it's very broadly defined and includes a 30-day lookback+forward, and includes your spouse. So you need to either pause or switch what you are buying and where. They basically don't want any loopholes in this one. https://www.fool.com/investing/general/2015/11/21/7-things-you-need-to-know-about-tax-loss-harvestin.aspx https://www.irs.gov/irb/2008-03_IRB KillHour posted:I will give you a 6 pack of your favorite beer and a really nice thank-you letter for them. This would ironically kill me. Something in beer, but not other alcohols or bread etc, makes me wheeze, extreme nausea, and my throat inflame. 
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Feb 26, 2020 20:25
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Okay, I watched that one video. Stocks are good in the long term because although they are volatile, that volatility can be mitigated by diversifying and waiting a long time to withdraw, ideally by buying index funds like a total stock market index fund. Bonds are good in the short term because although they have low volatility (and also low returns), historically they have a lower long-term return than stocks due to inflation. That’s why if you’re retiring in 2055, your portfolio is mostly stocks, and if you’re retiring in 2025, your portfolio is mostly bonds. Is that right? Does that mean that for growing money meant to be used in the short term (i.e. in the next 3 years), you should invest in bonds instead? Is it even possible or advisable to grow short term funds like you would long term funds?
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Feb 26, 2020 20:31
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Pollyanna posted:Okay, I watched that one video. Stocks are good in the long term because although they are volatile, that volatility can be mitigated by diversifying and waiting a long time to withdraw, ideally by buying index funds like a total stock market index fund. Bonds are good in the short term because although they have low volatility (and also low returns), historically they have a lower long-term return than stocks due to inflation. One thing I haven't seen in your novel of posting, as I recall - and I'm on a lot of drugs right now so who knows, is a concise statement of budget, goals (long, mid, and short term), savings rates, etc. It's all been shooting from the hip and half questions which are resulting in half answers. It seems like you're trending in the right direction reading how things work, and like you have rich parents who have misguided ways of trying to help you out. Can you spell that stuff out? Also you should accept their money. Why not right?
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Feb 26, 2020 20:41
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Seconding "take the free money," it's an option not a lot of people have. The caveat is that you should not take the money if taking it will give you a sense of guilt that will allow your parents to run your life. Unfortunately, some people wield money like a whip in terms of familial power. If they want you to invest in poo poo with their money, they are perfectly free to buy those things for you and give them to you. The burden is therefore on them to ensure it's a good idea, and it will not be your responsibility to profit off of a makeshift enterprise you are thoroughly untrained in.
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Feb 26, 2020 20:52
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Pollyanna posted:Okay, I watched that one video. Stocks are good in the long term because although they are volatile, that volatility can be mitigated by diversifying and waiting a long time to withdraw, ideally by buying index funds like a total stock market index fund. Bonds are good in the short term because although they have low volatility (and also low returns), historically they have a lower long-term return than stocks due to inflation. Stock market indexes are good long term because over time the stock market has consistently seen HUGE gains (historically). There is short/medium term volatility, but long term depressions and recessions end up being tiny blips on an overall upward movement. Investing money you want to use short term in stocks is extremely high risk, as if a down turn does come during that time frame, you could be significantly down at the time you wanted to spend that money. Yes, that is why retirement allocation starts moving more towards bonds as you approach retirement. One thing to consider though is if you are retiring at 60, you still potentially have 30+ years you'll be retired for. So at your retirement date, some of your money still has a long term horizon and can therefore remain in stock indexes longer without huge risk. Your portfolio will continue to move more towards bonds the longer you stay retired.
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Feb 26, 2020 20:53
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1. Only invest in index funds. 2. Determine your allocation % based on timeline 3. If you want to spend the money in the next 10 years, it should not be in index funds for stocks or bonds. It should be in savings or money market or CDs. Only money for 10 years or longer should be in Stocks/Bonds
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Feb 26, 2020 20:56
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Oh I’ll accept their money, it just has to be done intelligently and in a manner that doesn’t gently caress me over somehow. Examples of loving me over are giving me a building that I didn’t ask for and then saying “here you go, quit your job and manage this building”.H110Hawk posted:One thing I haven't seen in your novel of posting, as I recall - and I'm on a lot of drugs right now so who knows, is a concise statement of budget, goals (long, mid, and short term), savings rates, etc. It's all been shooting from the hip and half questions which are resulting in half answers. It seems like you're trending in the right direction reading how things work, and like you have rich parents who have misguided ways of trying to help you out. Can you spell that stuff out? Goals: messy and poorly defined. But I can tell you that I want to be financially stable, I want a house or a condo in a decent area someday, and working sucks especially with a bad commute. Short term: keep paying rent and utilities and don’t starve. Mid term: have enough money to not continue working if I don’t have to (likely an unrealistic goal but I can try dammit). Long term: short term goals + if retiring in 2055, have a house if my own where I can own cats and not worry about idiot rear end in a top hat landlords and be left to my own devices and everyone else fucks off. If able to live on savings somehow past the age of 35, above + have enough to support my friends if necessary. No kids ever btw. Can’t have ‘em. Also Dingle cuz goon. Don’t know what a savings rate is. Do you mean 401k contributions? I recently adjusted my 401k to max out during the year (I will still have enough to comfortably pay rent, rent ends up being almost exactly one paycheck post-401k maxout), and I contributed to my 2019 and 2020 IRAs last week since I had a lot of money just sitting in my savings acct. Emergency money is about 6 months expenses, in BofA. The rest I put in Vanguard, specifically VFIAX (used to be $60k, then VFIAX dropped  ).Budget, heh, uh...no official budget. I tend to live cheaply though and I felt comfortable enough to max out my 401k contributions recently. I mostly cook at home and don’t spend on cars or houses or anything.
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Feb 26, 2020 21:06
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dexter6 posted:1. Only invest in index funds. Sounds good to me. The question then is whether the stuff I have in my 401k and IRAs will be enough for retirement, or if I should move my VFIAX funds to 2055 retirement like my IRAs are. I...don’t know. I don’t really HAVE a strict goal aside from “work sucks less work = better” and “house good but gotta be in the right place”.
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Feb 26, 2020 21:11
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Pollyanna posted:Oh I’ll accept their money, it just has to be done intelligently and in a manner that doesn’t gently caress me over somehow. Examples of loving me over are giving me a building that I didn’t ask for and then saying “here you go, quit your job and manage this building”. At the point you seem to be at "budget" is a short way of asking "how much money is coming in and how much is going out". We've gathered you don't have a formal budget. What is your pay - even just your take home pay? How much are you spending on living expenses, how much on fun, and how much is left over and going to savings? You are intentionally or unintentionally being coy about hard numbers and that's making it difficult to give you any kind of detailed advice. You say you want to retire early if possible, save for a house if possible, help your friends if possible but you have no clear picture of where your money is going now. How can you know how much money to save for retirement if you don't know what you're spending every month while you have a steady paycheck? Without a clear picture of your current financial ingoings and outgoings there is no information for you or us to use to determine if you can ever complete your goals in the future. KitConstantine fucked around with this message at 21:22 on Feb 26, 2020 |
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Feb 26, 2020 21:19
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If it's for retirement, you do not want to be 100% invested in VFIAX. It should be split between that and some other less risky things, or really you should just convert it all to a 2055 target date fund until you have a better handle on how to build your own portfolio. If it's for a shorter-term goal, then you REALLY don't want it all in VFIAX (and you now know exactly why that is; hope you didn't need that $60k!). You need a budget; that is step 0 for retirement planning. Without one, you don't honestly know if you really are meeting all your expenses or not, and whether or not you can afford to max out your retirement contributions. Having one will also allow you to plan for other things, like a down payment for a house, or a car, or whatever else you may want to buy. It's great that you seem to be able to generally throw money around to no apparent ill effect, but without a budget you could be screwing yourself pretty hard and not even know it.
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Feb 26, 2020 21:22
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Pollyanna posted:Short term: keep paying rent and utilities and don’t starve. Those are not goals, they are aspirations. Goals are concrete and achievable milestones. An important distinction is that having concrete goals means attaching actual numerical values. Not asking you to share this with strangers on the internet, but if you can't determine your savings rate ($ saved divided by $ earned), you're kinda just flopping in the breeze and saying "well, it feels like I have money to spare, maybe, I guess?" An example of a good short-term goal is putting 3-6 months of your expenses into an emergency fund so you don't have to tap your retirement fund if you lose your job next week. You've done the emergency fund; if you have other short term goals (like saving for an indulgence like a vacation or somesuch), it is a good idea to have a concrete dollar goal in mind that you can chisel out a portion of your income for. An example of a medium term goal is to contribute $X toward your retirement this and/or next year, where $X is a reasonable number based on your income An example of a long-term goal is to save $Y towards, say, a down-payment over the next 5 years, or to consistently max out your retirement accounts year after year. Long-term goals can be more abstract since nobody knows what life will throw at you and how your values/goals may change, but nevertheless require financial discipline to maintain over the months and years. If you don't have a budget it's essentially impossible to know whether your savings level is appropriate. Humans are generally really, really bad at dealing with numbers intuitively, which is why quite a lot of people end up living in poverty in old age. Pollyanna posted:Sounds good to me. The question then is whether the stuff I have in my 401k and IRAs will be enough for retirement, or if I should move my VFIAX funds to 2055 retirement like my IRAs are. I...don’t know. I don’t really HAVE a strict goal aside from “work sucks less work = better” and “house good but gotta be in the right place”. Generally if you're maxing your 401k and your IRA you'll be decently set, but it really is a factor of how (and how long!) you expect to live during your retirement. If you plan on stopping work at 35, you drat well better be prepared to stretch those savings for ~50+ years!
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Feb 26, 2020 21:23
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This whole running conversation is amazing. Big props to the posters for their good work. Big props to Pollyanna for taking the advice and working to improve.
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Feb 26, 2020 21:24
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Xguard86 posted:This whole running conversation is amazing. Is Pollyanna the anti-Zaurg?
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Feb 26, 2020 21:32
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Jows posted:Is Pollyanna the anti-Zaurg? did i do this right?
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Feb 26, 2020 21:37
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In the BFC Justice System, all posters are assumed Zaurg until they post results
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Feb 26, 2020 21:38
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Pollyanna posted:No kids ever btw. Can’t have ‘em. Also Dingle cuz goon. Not to stray into E/N territory, and you don't have to answer this question, just think about it yourself, but: adoption is an option for people who can't bear or sire a child for medical etc. reasons. When planning your financial future, seriously consider whether you might at some point want to support children, even if you can't (or don't want to) participate in a pregnancy. Regarding budgets: one reason to document your current and estimate your future living expenses, is that retirement planning is partly an exercise of projecting "I will live X years and spend Y money each of those years." Most people want to live at least as comfortably in retirement as they do now, and that sets a floor for estimated (inflation-adjusted) Y. If you assume you'll probably live to, say, 85 years old, and intend to retire at, say, 60, that tells you a decent value for X; and then you can use some math to determine how much money you need to have saved on the day you retire in order to draw down at (say) a 2.5% or 3% or 4% rate and have that drawdown equal at least your minimum living expenses. These are of course all estimates but it can help to set a back-of-the-envelope figure for how much money you probably need in order to retire comfortably; which in turn can tell you whether you're saving enough right now to hit, comfortably exceed, or uncomfortably fall short of that number. Hence: even if you don't really need a tightly-controlled monthly budget because you make much more than you spend, it's very good to document how much you spend. Do this for several months or ideally a year or two, so that you capture not only your normal weekly and monthly expenses (rent, food, etc.) but also your periodic but regular annual expenses (clothes, xmas presents, travel, etc.) You don't have to slavisly account for every penny you spend, but you can figure out that you spend (say) $35k a year over a period of three years, and then extrapolate from that how much you need to be saving in order to retire with a sufficient nest egg at any specified age you'd care to pick. Having those numbers is super useful for all of these conversations.
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Feb 26, 2020 21:38
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GoGoGadgetChris posted:In the BFC Justice System, all posters are assumed Zaurg until they post results I submit to this August body my entire trade history and my last 12 months of cash flow.
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Feb 26, 2020 21:50
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The 15 vs 30 year amortization debate also shows up in investment property. Assuming 75% ltv, 3.75% for the 30 year/3.5% for the 15 year, a 6.5% cap rate and 2% value/income/expense inflation and a 5-year hold period, you get a levered IRR of 18.4% on the 15 year, but 19.8% on the 30 year, plus a lot better debt service coverage along the way if a big repair needs to happen. Edit: wrong thread crazypeltast52 fucked around with this message at 22:13 on Feb 26, 2020 |
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Feb 26, 2020 22:08
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GoGoGadgetChris posted:In the BFC Justice System, all posters are assumed Zaurg until they post results
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Feb 26, 2020 22:22
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s/Dingle/single, thanks phoneKitConstantine posted:You are intentionally or unintentionally being coy about hard numbers and that's making it difficult to give you any kind of detailed advice. You say you want to retire early if possible, save for a house if possible, help your friends if possible but you have no clear picture of where your money is going now. How can you know how much money to save for retirement if you don't know what you're spending every month while you have a steady paycheck? If you want hard numbers, fine. I make $105,000 pre-tax per year. After the 401k contribution, I receive about $3,580 monthly. Rent is currently $1750 per month, but I expect that to go up at some point. That leaves $1830 non-rent. That goes to groceries, pet supplies, medicine, medical bills (oh the medical bills), credit card bills, monthly donations (e.g. Planned Parenthood, DSA), insurance payments, one-off expenses like parking tickets or event tickets, etc. i don’t really do much for fun other than stupid internet videos, video games, and hanging with friends. I have no debt whatsoever (thank god). Total Vanguard wealth is $90k right now, $56.7k of which is currently VFIAX and the rest is 2055 Target. Not sure whether to immediately move VFIAX to VFFVX or not, but hesitating sounds like timing the market, right? I used to use YNAB years back, but the fact that a lot of it was manual (constantly fiddling with it and adding expenses whenever I did something) and my poor understanding of finances meant that I got sick of the pain of doing it and gave up. DaveSauce posted:If it's for retirement, you do not want to be 100% invested in VFIAX. It should be split between that and some other less risky things, or really you should just convert it all to a 2055 target date fund until you have a better handle on how to build your own portfolio. Welp, I know now. It totally makes sense why investing in VFIAX wasn’t my best option for either retirement or not-retirement. quote:You need a budget; that is step 0 for retirement planning. Without one, you don't honestly know if you really are meeting all your expenses or not, and whether or not you can afford to max out your retirement contributions. Having one will also allow you to plan for other things, like a down payment for a house, or a car, or whatever else you may want to buy. I’ve been budgetless for a while and I’m not in the poorhouse  which is why I just never got around to it.Not a Children posted:Those are not goals, they are aspirations. Based on this post, my current goals are: Long term: contribute X to IRA per year where X is yearly individual contribution limit for that year; contribute X to 401k pretax where X is yearly individual contribution limit for that year and that’s it. quote:
Yeah that’s gonna take some math to figure out then. I see why budgeting is necessary for that  Leperflesh posted:Having those numbers is super useful for all of these conversations. I see the use of those numbers then, yeah. poo poo, I guess I should figure out an explicit budget then. Is YNAB better these days, or should I use something else?
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Feb 26, 2020 22:28
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Pollyanna posted:Sounds good to me. The question then is whether the stuff I have in my 401k and IRAs will be enough for retirement, or if I should move my VFIAX funds to 2055 retirement like my IRAs are. I...don’t know. I don’t really HAVE a strict goal aside from “work sucks less work = better” and “house good but gotta be in the right place”. How do you manage to have been posting in this thread since 2013 and still post like this?  I think you're still not understanding what a target date fund is. It's not a special "If I put money into this, I can retire at this date" fund. It simply is a mixture of equities and bonds that shifts from predominately equities to predominately bonds as it gets closer to its target date. Its growth rate will slow as it approaches its target date but its volatility will also shrink, due to the lower returns but higher stability of bonds. Having a target-date fund in a taxable brokerage account is not optimal. It is going to be subjected to some tax drag that will slightly reduce its growth compared to the exact same fund in a tax-advantaged account. It's far from the worst choice in the world but I would recommend sticking with equity index funds as your core holdings in a taxable brokerage. VFIAX is a perfectly reasonable core holding in a taxable account. VTSAX would arguably be slightly better but the correlation between the two is very, very close. Leave your VFIAX alone. Also, your savings rate is the percentage of your annual income that you are able to save or invest. For example, if you have an annual salary of $100,000 and manage to save/invest $10,000 over the course of the year, you have a savings rate of 10%. This is a very important number for you to have a concept of.
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Feb 26, 2020 22:32
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Pollyanna posted:
 You still don't understand what you're reading or what you're saying. VFIAX is a great investment in a taxable brokerage account, especially if it is part of your intended retirement money for someone like you who is far away from their retirement date. DO NOT SELL IT. It is not a good choice as your only investment but it is a perfectly reasonable choice as a core holding of your portfolio. DO NOT SELL IT. I'm saying this again to make it really clear. You don't want to be holding only VFIAX but you do want to be holding VFIAX (or VTSAX, which would be my recommendation but they're very close to each other in longterm performance). I'm going to edit some more into this post, give me a minute. Edited to add: If you look at what the target date retirement funds are holding, they are composed of 4 components: a total U.S. equity index, a total international equity index, a total U.S. bond index, and a total international bond index. This is known as a four-fund portfolio and you can replicate it in the same ratios by buying the underlying funds (VTSAX for total U.S. equities, VTIAX for total international equities, VTBLX for total U.S. bond, and VTABX for total international bond). You can make your own exact copy of the target date fund by buying these funds, all the target date fund does is rebalance from equities into bonds over time. This rebalancing is a taxable event and in a taxable brokerage account it is not optimal - you are better off rebalancing by changing the proportion of funds that you buy over time rather than by selling to buy. The four-fund portfolio covers everything you need, and most people argue that there's no benefit to holding international bonds, instead preferring a three-fund portfolio of U.S. equities, international equities, and U.S. bonds. By the time you retire, you want to have an adequate amount of bond holdings, but in your taxable account those are something that you can add over time, purchasing equities more heavily in your early years, since bonds do result in additional tax drag (bond returns are taxed as regular income, which is significant). In short, you absolutely should be holding VFIAX (or VTSAX), but over time you should direct more and more of your incoming money to bonds, to raise the proportion of bonds in your account, as equities are inherently unstable. But I would not recommend holding a target date fund in a taxable account because they have inherent tax inefficiencies. Kylaer fucked around with this message at 22:48 on Feb 26, 2020 |
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Feb 26, 2020 22:38
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Well, our finance person sent me a ton of NDA'd financial documents that I have no hope of ever understanding and asked me to look over them and let him know how much stock I want to exercise so he can write up the paperwork. How do I know if I'm going to owe something to the IRS after this? Will my company send me some sort of form with that information or do I need to pay an accountant thousands of dollars to go over all of this so I can buy a piddling amount of stock?
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Feb 26, 2020 22:39
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Kylaer posted:
I’ll admit I brain farted on the “it’s not ok for retirement” part, but I’m more speaking about going for all VFIAX instead of just doing Target instead as was suggested in that post. Also, originally it wasn’t “part of your intended retirement money” - I put it there on coworker advice that non-retirement excess should go to VFIAX, not quite understanding the interplay between long-term investment and risk/reward. Hence the mistake, they weren’t necessarily SUPPOSED to be retirement funds, just a place to keep my money that wasn’t a BofA savings account. ...but I guess that ship has sailed and they are retirement funds now, therefore: quote:If you look at what the target date retirement funds are holding, they are composed of 4 components: a total U.S. equity index, a total international equity index, a total U.S. bond index, and a total international bond index. This is known as a four-fund portfolio and you can replicate it in the same ratios by buying the underlying funds (VTSAX for total U.S. equities, VTIAX for total international equities, VTBLX for total U.S. bond, and VTABX for total international bond). You can make your own exact copy of the target date fund by buying these funds, all the target date fund does is rebalance from equities into bonds over time. This rebalancing is a taxable event and in a taxable brokerage account it is not optimal - you are better off rebalancing by changing the proportion of funds that you buy over time rather than by selling to buy. The four-fund portfolio covers everything you need, and most people argue that there's no benefit to holding international bonds, instead preferring a three-fund portfolio of U.S. equities, international equities, and U.S. bonds. By the time you retire, you want to have an adequate amount of bond holdings, but in your taxable account those are something that you can add over time, purchasing equities more heavily in your early years, since bonds do result in additional tax drag (bond returns are taxed as regular income, which is significant). I understand the diverse portfolio of target date funds. It sounds like my best bet is to from this point start buying VTIAX, VTBLX, and VTABX, specifically trying to hit a particular ratio I am not aware of yet. Does that sound correct?
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Feb 26, 2020 22:50
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KillHour posted:Well, our finance person sent me a ton of NDA'd financial documents that I have no hope of ever understanding and asked me to look over them and let him know how much stock I want to exercise so he can write up the paperwork. How do I know if I'm going to owe something to the IRS after this? Will my company send me some sort of form with that information or do I need to pay an accountant thousands of dollars to go over all of this so I can buy a piddling amount of stock? https://github.com/jlevy/og-equity-compensation look at all the AMT parts.
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Feb 26, 2020 22:52
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Pollyanna posted:I understand the diverse portfolio of target date funds. It sounds like my best bet is to from this point start buying VTIAX, VTBLX, and VTABX, specifically trying to hit a particular ratio I am not aware of yet. Does that sound correct? In addition to producing a real budget - doing the reading, doing some planning, and understanding how and why you want to set your asset allocation to a particular ratio is a particularly valuable process. The reading you do will help guide you on this. It'll take time, but the few months you spend figuring all of this out pays actual dividends across your lifetime. I've used my time working this stuff out to build myself a spreadsheet I use to track all of my accounts and make sure I'm staying within my asset allocation. Since you're a computer-toucher, doing something like that for yourself can be a valuable exercise.
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Feb 26, 2020 23:05
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Pollyanna posted:I’ll admit I brain farted on the “it’s not ok for retirement” part, but I’m more speaking about going for all VFIAX instead of just doing Target instead as was suggested in that post. Also, originally it wasn’t “part of your intended retirement money” - I put it there on coworker advice that non-retirement excess should go to VFIAX, not quite understanding the interplay between long-term investment and risk/reward. Hence the mistake, they weren’t necessarily SUPPOSED to be retirement funds, just a place to keep my money that wasn’t a BofA savings account. You still don't understand what you're talking about. If you want to withdraw a lump of money from your account in 5 years, you may find that your VFIAX holding is doing great - it may be up 25% from its current value, maybe even more. But that is not something you can say with any confidence. That's the important thing. It's not that equities can't go up in the short term, they can and frequently do, it's that they can't be counted on to go up, or even retain the value that you paid for them, in the short term. That's why people do not recommend equities for short term investments. Also, get your money out of the BofA savings account where it's no doubt earning close to zero interest, and put it in a high yield online savings account such as Marcus, Ally, or (my own choice) CIT. You still won't make any money off of it but it is FDIC insured and should lose much less to inflation than you're currently losing with BofA. quote:I understand the diverse portfolio of target date funds. It sounds like my best bet is to from this point start buying VTIAX, VTBLX, and VTABX, specifically trying to hit a particular ratio I am not aware of yet. Does that sound correct? Have you looked at the fund profile for the Target 2055 fund that you have purchased? Did you do any research whatsoever before purchasing it? If you haven't, it's right here: https://investor.vanguard.com/mutual-funds/profile/VFFVX Here is the relevant bit: quote:Portfolio composition These are what your target date fund is holding. This is your ratio. Many people disregard international bonds and would just hold 10.4% of total U.S. bonds instead of the 7.4%+3% mix but that can be talked about later.
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Feb 26, 2020 23:05
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I know it sounds dismissive, but truly, honestly, just sitting down and doing a bunch of reading through those texts (even though it's going to take some time) will give you a really solid foundation on all of this. Don't feel rushed to get all of this taken care of now. It's not going anywhere. Taking the time to really understand the mechanisms at work is going to be more valuable than any money potentially gained or lost in the market in the next few months by trying to do something different from just dumping money into whatever funds you're doing right now.
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Feb 26, 2020 23:09
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Pardot posted:https://github.com/jlevy/og-equity-compensation look at all the AMT parts. Thanks for the link, but this doesn't tell me how to figure out what I'll owe, just what the definitions are.
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Feb 26, 2020 23:20
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Yes, don’t worry, I’ve got the reading! Read books, learn budget, don’t touch it.Kylaer posted:You still don't understand what you're talking about. If you want to withdraw a lump of money from your account in 5 years, you may find that your VFIAX holding is doing great - it may be up 25% from its current value, maybe even more. But that is not something you can say with any confidence. That's the important thing. It's not that equities can't go up in the short term, they can and frequently do, it's that they can't be counted on to go up, or even retain the value that you paid for them, in the short term. That's why people do not recommend equities for short term investments. I never said they can’t grow! I meant that if I wanted short term investments equities were not recommended, and I wish I understood that earlier. quote:Also, get your money out of the BofA savings account where it's no doubt earning close to zero interest, and put it in a high yield online savings account such as Marcus, Ally, or (my own choice) CIT. You still won't make any money off of it but it is FDIC insured and should lose much less to inflation than you're currently losing with BofA. That’s what I was trying to do with putting that money into VFIAX. I see now that there are better options, but on this advice, I will not touch what I currently have in VFIAX. quote:
Genuinely forgot it listed the ratios there. Thanks for the reminder.
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Feb 26, 2020 23:20
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Pollyanna posted:That’s what I was trying to do with putting that money into VFIAX. I see now that there are better options, but on this advice, I will not touch what I currently have in VFIAX.
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Feb 26, 2020 23:28
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Hoodwinker posted:For shorter term (<5 years) goals, dump it into a high-yield savings account like Ally or Marcus. Very well, I will leave my current VFIAX funds well enough alone and use one of those two for short-term savings going forward. fpillarz posted:The interest rate bottom of 4% reached in Rome is particularly relevant to the modern audience. Never before, and perhaps not since, have the citizens of any nation had the sense of cultural and political permanence experienced in Rome at its apex. So the 4% return at Rome’s height may represent a kind of natural lower limit of investment returns, experienced only by the most confident (or perhaps overconfident) nations at the top of their game.  img-sideeye-monkey Pollyanna fucked around with this message at 23:33 on Feb 26, 2020 |
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Feb 26, 2020 23:29
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Ok, I think I figured it out. Fake numbers because NDAs and such: If the "fair value of underlying common stock" according to the paperwork is $10.20 and my option exercise price is $9.70, I'll have $0.50 of AMT income per share I exercise come tax filing time? So if I buy 100 shares of that at $1020, that's $50 of "income" that needs to get added to my normal income for AMT purposes. Let's say my regular W2 income is $150k. I would add the $50 to that and subtract the $71,700 exemption amount ($78,350) and take 26% of that ($20,371) and if that's higher than my normal federal tax rate (which last year was about $27k), I have to pay that instead. Do I have that right?
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Feb 26, 2020 23:46
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I mostly lurk this thread because the US IRA/401k/etc info doesn't apply directly to me, but I appreciate everyone responding to Pollyanna because they have exposed more gaps in my own knowledge. Alternatively: yikes
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Feb 27, 2020 00:24
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uvar posted:I appreciate everyone responding to Pollyanna because they have exposed more gaps in my own knowledge. Alternatively: yikes Same. The If You Can booklet was great.
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Feb 27, 2020 00:30
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