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Laopooh posted:Hello thread! My girlfriend sold her house and has like 100k she wants to invest. Maybe something in the 5-10 year range? Any suggestions would be great though, we're unsure where to start. I read the op but it seems a bit out of date. the op hasn't been updated in a number of years, but long-term investing philosophy and the tools to carry them haven't had any real changes since circa 2000. reading through the op, the only thing that needs to be changed is the assumption that something awful users are early on in their careers, now everyone is approaching middle age. buying and holding a portfolio of low-cost index funds while maximizing saving and minimizing emotion is still all you need. even the book recommendations don't really need to be updated Laopooh posted:She said "I have maxed out employer sponsored 401ks and my goal would be to save up enough for a house (in the Bay Area) in 5-10 years, so maybe 30% return? Or enough to supplement my retirement income. I'm saving for it but not enough (according to my dad)" i don't know the qualifications of whoever made this, so take it with a grain of salt (the failure to capture longer rolling periods ending in the '70s is kind of suspect, my guess is that including more of the lead up to the nifty fifty crash would produce a more sobering result), but here is a breakdown of annualized stock market returns over various rolling periods http://www.lazyportfolioetf.com/allocation/us-stocks-rolling-returns/ so historically the stock market has tended to return well over 30% total returns over a 5 to 10-year period, however there is a significant number of rolling periods where stocks have failed to meet that goal, and a non-negligible number of periods that produced losses, even in the longer duration rolling periods. i hesitate to call this "low-medium risk", there are almost guaranteed to be single years in the holding period where the markets will end the year down significantly, and there will be tons of intra-year volatility. i think a lot of people would find their risk tolerance sorely tested in that circumstance. you may want to consider including some amount of bonds or other fixed income assets which have historically helped to reduce volatility and smooth out returns. 60% percent stocks and 40% bonds is a common weighting for something closer to "medium risk". leperflesh's advice to take risk off the table as you approach the end of the holding period is important and since she also mentioned retirement, she should make sure she's think about her retirement contributions as a percentage of her gross income rather than in relation to maxing out tax-sheltered accounts. this is especially true if she's a high earner, which it seems like she might be if buying a bay area home is a realistic goal. if she's earning more than $137k a year gross, than her contributions to her employer sponsored 401k plan will be less than 15% of her gross income, which is a rule of thumb target that gets tossed around. it's good to remember that the higher your earnings, the less social security will act as income replacement in retirement
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Jul 6, 2022 09:45
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Morningstar looks like they're killing their free portfolio manager, are there any other free sites/programs I can use to plug in all my separate trading/retirement accounts information to get similar return graphs?
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Jul 6, 2022 15:07
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GhostofJohnMuir posted:so historically the stock market has tended to return well over 30% total returns over a 5 to 10-year period, however there is a significant number of rolling periods where stocks have failed to meet that goal, and a non-negligible number of periods that produced losses, even in the longer duration rolling periods. i hesitate to call this "low-medium risk", there are almost guaranteed to be single years in the holding period where the markets will end the year down significantly, and there will be tons of intra-year volatility. i think a lot of people would find their risk tolerance sorely tested in that circumstance. you may want to consider including some amount of bonds or other fixed income assets which have historically helped to reduce volatility and smooth out returns. 60% percent stocks and 40% bonds is a common weighting for something closer to "medium risk". leperflesh's advice to take risk off the table as you approach the end of the holding period is important
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Jul 6, 2022 15:48
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Fhqwhgads posted:Morningstar looks like they're killing their free portfolio manager, are there any other free sites/programs I can use to plug in all my separate trading/retirement accounts information to get similar return graphs?
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Jul 6, 2022 15:49
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Thanks so much for the advice goons, I really appreciate it. I'll pass it along to her and see if she has any qs.
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Jul 6, 2022 16:56
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moana posted:Yeah, this would be the way I'd do it. A 5-10 year holding period is hard because there is always going to be the real possibility of losses over that time if you want decent returns. Buying something like a Target 2030 retirement fund will move the allocation for you into more conservative ratios as time goes on. It doesn't sound like she would want to manage the allocation herself. Rebalances will generate tax drag in a taxable brokerage account, that's really the main downside with carrying a target date fund.
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Jul 6, 2022 18:22
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GoGoGadgetChris posted:Taxes empower the US Government so it's actually a moral imperative to dodge as many of them as possible, OP Rich people actually believe this
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Jul 6, 2022 18:44
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I mean taxes sure as hell arent going towards funding social programs or to provide healthcare sooooo but that's a derail better saved for cspam
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Jul 6, 2022 18:53
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 More than half, actually. But don't let facts get in the way of your strong feelings.
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Jul 6, 2022 18:58
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it's true, which is why nobody in America has student loan or medical debt and everyone retires with dignity but perhaps I should have clarified by saying "taxes that go towards the necessary social improvements and programs to be living in a modern society in 2022, in which the citizens of the richest country on earth still have 11 million children in poverty"  I'll take it up with my fellow filthies, but ty for the advice to this point, sincerely (USER WAS PUT ON PROBATION FOR THIS POST) ex post facho fucked around with this message at 19:15 on Jul 6, 2022 |
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Jul 6, 2022 19:13
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It is, actually, absurd that taxpayers have so many options and are supposed to somehow decide for themselves how much tax they should pay. Probably a lot of folks have already seen this, and it's in the context of British tax policy, but David Mitchell's summation of the absurdity is excellent: https://www.youtube.com/watch?v=m2q-Csk-ktc The more income, investments, and wealth you have, the more options you have to avoid taxes. Some of the tax-minimization strategies we advocate in this thread, such as the backdoor Roth, are clearly not "intended" in that they weren't intentionally created by lawmakers, even though they are clearly "legal" in that lawmakers have had the option to address them for literally decades and have opted not to. Sometimes we call these things "loopholes" to show they're different from outright cheating and lawbreaking. Ultimately I think it's probably best as you said to avoid having fights about government spending in this thread. It's a derail and I shouldn't be contributing to it - but what could be kinda on-topic I guess (I'm not a mod in this forum so I'm not declaring it so, Moana might disagree) is the notion that, as investors, we're always advised to seek the most tax-efficient investment options including loopholes. As citizens, doing so may or may not be philosophically or ethically aligned with our beliefs. If you actually think you're not paying enough taxes, there's an option to make a gift to the federal government: https://fiscal.treasury.gov/public/gifts-to-government.html. I suspect even the wealthy advocates of higher taxes on the rich, such as Buffett and Gates (https://www.cnbc.com/2019/02/25/warren-buffett-and-bill-gates-the-rich-should-pay-higher-taxes.html) don't avail themselves of this option, and in fact their accountants and tax attorneys probably still do their best to take advantage of every legal option to reduce their taxes paid. I'm interested in the topic, anyway, although I'm not super interested in how it intersects with stereotypical C-SPAM tenets and arguments.
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Jul 6, 2022 19:37
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KYOON GRIFFEY JR posted:Rebalances will generate tax drag in a taxable brokerage account, that's really the main downside with carrying a target date fund.
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Jul 6, 2022 19:42
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ex post facho posted:it's true, which is why nobody in America has student loan or medical debt and everyone retires with dignity whether or not there is a sufficient result is definitely uh a matter for discussion for sure but yeah the federal budget mostly goes to things that lefties (incl myself) think are good moana posted:Yeah, agreed, but this doesn't seem like someone who wants to handle rebalancing on their own so ehhh Sure, point taken. the TD fund for 2030 seems very heavily weighted towards international and pretty light on things that aren't equities for a 8-year time horizon. My other argument here would be that if a person is expecting to get 100k to a "buy a house in the Bay" number (even as just a downpayment) they probably need to take on more risk, manage the money more actively, and try to time the housing market and interest rate market and get lucky on those things. Growing that number to 130k in five years ain't gonna do poo poo.
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Jul 6, 2022 19:53
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KYOON GRIFFEY JR posted:Sure, point taken. the TD fund for 2030 seems very heavily weighted towards international and pretty light on things that aren't equities for a 8-year time horizon. My other argument here would be that if a person is expecting to get 100k to a "buy a house in the Bay" number (even as just a downpayment) they probably need to take on more risk, manage the money more actively, and try to time the housing market and interest rate market and get lucky on those things. Growing that number to 130k in five years ain't gonna do poo poo. this was something i was considering addressing in my post, but it was already running long. anyway, i think sitting down and calculating what the minimum acceptable down payment actually is (looking at current prices, figuring out what level of mortgage payment+taxes+insurance+pmi+upkeep is sustainable on expected income, add a safety factor for future price and rate increases, and then work out the minimum down payment necessary), and then consider what time horizons, additional savings, and level of risk taking are really acceptable and practicable would be a good step to take. laopooh's girlfriend had a brief aside of possibly using that money to supplement her retirement instead, which maybe means she would be okay with leaving the down payment funds in the market longer than 10 years? in general, i really think most people should consider delaying their purchase or increasing their savings rate if it seems like they won't make their goal. for the average investor, taking on extra risk to try to catchup is creating the conditions for behavioral errors that will leave them worse off than if they had stuck with riskless fixed income
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Jul 7, 2022 00:45
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GhostofJohnMuir posted:in general, i really think most people should consider delaying their purchase or increasing their savings rate if it seems like they won't make their goal. for the average investor, taking on extra risk to try to catchup is creating the conditions for behavioral errors that will leave them worse off than if they had stuck with riskless fixed income There are a lot of people who simply can't conceive of the fact that they are very likely priced out of the housing market they want to buy in. It's usually one of the expensive markets, where the person makes good money for the rest of the country, but not really good money for that market. So there must be some trick they are missing, because other people they know are buying houses there! (the trick is those people have money money, whether from savings, investing, or....the big one...family)
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Jul 7, 2022 01:27
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I got an email to schedule a call with a Personal Capital Wealth Advisor in exchange for $200. I think I remember folks talking about this like a year or two ago - has anyone had any experience with this? How painful is the process and everything that comes afterwards in terms of ongoing solicitation for PC services? If it's just sitting through a couple calls I can do that for $200. Thanks!
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Jul 7, 2022 17:27
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If it’s anything like sitting through a time share thing for $200. I’d rather not have the $200.
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Jul 7, 2022 19:33
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obi_ant posted:If it’s anything like sitting through a time share thing for $200. I’d rather not have the $200. Same. I read through what's required for the $200 and decided no thanks.
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Jul 7, 2022 19:38
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I sat through a call and they never gave me the $200
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Jul 7, 2022 19:54
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Fireside Nut posted:I got an email to schedule a call with a Personal Capital Wealth Advisor in exchange for $200. I think I remember folks talking about this like a year or two ago - has anyone had any experience with this? How painful is the process and everything that comes afterwards in terms of ongoing solicitation for PC services? I can't imagine why anyone serious about wealth planning would give the time of day to a company scamming people with ads like this
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Jul 7, 2022 21:49
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I’m sure it’s a $200 deposit if you set up an actively managed account with them with a certain deposit threshold.
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Jul 7, 2022 22:40
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daslog posted:I can't imagine why anyone serious about wealth planning would give the time of day to a company scamming people with ads like this Yeah it seems incredibly unlikely that if you are actually wealthy (not me), you’d be swayed to trust a boat load of money to someone luring you with a $200 carrot lol I just want to grab the $200 to use it as fun money Velius posted:I’m sure it’s a $200 deposit if you set up an actively managed account with them with a certain deposit threshold. I’ll check it out again tomorrow but I think the catch is that PC is offering a checking account now and they require you to open an account to deposit the reward. It was advertised as “no fees/no minimum balance”. Of course, I’ll read the fine print on that
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Jul 8, 2022 00:45
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Skip it, no such thing as a truly free lunch
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Jul 8, 2022 03:40
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Agronox posted:Skip it, no such thing as a truly free lunch Churning credit card bonuses is pretty darn close if you have the spend capacity and are organized. Same goes for checking/savings bonuses if you have the cash lying around and don't mind shifting your direct deposit often.
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Jul 8, 2022 14:18
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laxbro posted:Churning credit card bonuses is pretty darn close if you have the spend capacity and are organized. Same goes for checking/savings bonuses if you have the cash lying around and don't mind shifting your direct deposit often. I think I’ve made about 2k so far this year.
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Jul 8, 2022 14:34
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laxbro posted:Churning credit card bonuses is pretty darn close if you have the spend capacity and are organized. Same goes for checking/savings bonuses if you have the cash lying around and don't mind shifting your direct deposit often. It's your free lunch but vendors are paying. And you might pay as well in overall higher prices but it's hard to tell.
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Jul 8, 2022 14:48
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Xguard86 posted:It's your free lunch but vendors are paying. And you might pay as well in overall higher prices but it's hard to tell. Prices are going up anyway. Might as well get as much cash back as you can. This does hurt people with low credit scores who don't qualify for the bonuses or good rewards cards.
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Jul 8, 2022 14:58
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laxbro posted:Churning credit card bonuses is pretty darn close if you have the spend capacity and are organized. Same goes for checking/savings bonuses if you have the cash lying around and don't mind shifting your direct deposit often. Just your time which as we know is worthless so hey free lunch!
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Jul 8, 2022 15:23
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StormDrain posted:Just your time which as we know is worthless so hey free lunch! Yep, I used to play that game a bit but had too many cards to manage. Switching to a flat 2% rewards card for everything and not spending any more mental energy on it was a relief. The gain you might get beyond that is just not material.
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Jul 8, 2022 18:00
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The category churning is way too much mental effort for me, but sign up bonuses is maybe the easiest thing ever. An hour of my time for $500? Yes please.
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Jul 8, 2022 18:09
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ranbo das posted:The category churning is way too much mental effort for me, but sign up bonuses is maybe the easiest thing ever. An hour of my time for $500? Yes please. I do like the Citi Custom Cash thing, 5% in your top spend, so if you just use that card always for 1 thing it's not so bad. Just write groceries on it. I think I don't have the bandwidth for a card that switches categories each quarter (and you have to activate it).
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Jul 8, 2022 18:29
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SmuglyDismissed posted:Yep, I used to play that game a bit but had too many cards to manage. Switching to a flat 2% rewards card for everything and not spending any more mental energy on it was a relief. The gain you might get beyond that is just not material. Yep. I have a flat 2% that deposits the proceeds even month to my cash management account. Much easier.
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Jul 8, 2022 19:20
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laxbro posted:Same goes for checking/savings bonuses if you have the cash lying around and don't mind shifting your direct deposit often. Agreed! I'm currently doing the SoFi checking account promotion. Easy $300 for switching over my DD for a month and a half. I like the checking/savings bonuses as I don't have to worry about the effect opening/closing credit cards has on my credit score. I figured the Personal Capital reward is pretty close to churning checking account rewards except I have to sit through a couple of phone calls. I guess I'm not sure if I'll do it, but what is nice is it doesn't require DD so I can do it concurrently with the SoFi churn.
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Jul 8, 2022 19:28
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Is there a thread or other good resource on these savings account bonuses?
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Jul 8, 2022 20:11
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Fancy_Lad posted:Is there a thread or other good resource on these savings account bonuses? doctorofcredit.com is probably the best one I've found, they lay out and mostly keep up-to-date savings/checking account bonuses as well as credit cards and also have some documentation of how to avoid fees and things.
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Jul 8, 2022 20:20
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Fancy_Lad posted:Is there a thread or other good resource on these savings account bonuses? https://www.doctorofcredit.com/best-bank-account-bonuses/ https://www.doctorofcredit.com/best-current-credit-card-sign-bonuses/ Fireside Nut posted:Agreed! I'm currently doing the SoFi checking account promotion. Easy $300 for switching over my DD for a month and a half. Nice I just signed up for the SoFi checking account promotion today. They actually have a pretty good rate so I might end up keeping some money there. With inflation, a possible recession, and an expected promotion being delayed I've decided it's time to spin up sidehustles again. My new landlord will be using a payment portal that provides the option to pay rent via credit card for a 3.5% fee ($122.5) which might be helpful for some of the super high spend rewards.
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Jul 8, 2022 20:26
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laxbro posted:With inflation, a possible recession, and an expected promotion being delayed I've decided it's time to spin up sidehustles again. My new landlord will be using a payment portal that provides the option to pay rent via credit card for a 3.5% fee ($122.5) which might be helpful for some of the super high spend rewards. The math might work out here, but be wary of it because a lot of research shows that people tend to spend more money trying to get these rewards.
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Jul 8, 2022 20:30
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Sigh so my parents had all their money in cash and I put them all in a target date fund in September last year. I *know* I did the right thing but I'm still wincing.
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Jul 8, 2022 21:04
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Yeah definitely never take "ownership" of family's financial planning. Educate and let them make their decisions, but if you directly tell them to invest, they're gonna feel like it's your Fault if it goes down Hopefully they're not being weird about it?
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Jul 8, 2022 21:06
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pseudanonymous posted:I do like the Citi Custom Cash thing, 5% in your top spend, so if you just use that card always for 1 thing it's not so bad. Just write groceries on it. Wow, 5% back is a lot. I wonder what the typical required credit score is for those cards?
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Jul 9, 2022 17:57
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