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Mykroft posted:I think a lot of other people in here will have more specific advice, but if you really aren't sure VTI is spiritually similar. My understanding, which hopefully I'll be quickly corrected on, is FZROX can't be easily transferred to another broker if you ever needed to do that, but otherwise tracks the same stocks something like VTI does. (edit: normal "I 'm a schlub and have no idea what I'm talking about and this is not financial advice disclaimer here") Transferability isn't really a concern in an IRA since there are no tax consequences to making allocation changes. As far as general recommendations, one can start with a 3 fund portfolio: https://www.bogleheads.org/wiki/Three-fund_portfolio
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Jan 18, 2024 04:39
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GoGoGadgetChris posted:Any product or financial instrument marketed as "uniquely available to the wealthy" is going to be poo poo, 99% of the time It’s a job opportunity that I’m interested in - they do a 401k match and pay well, the opportunity to invest in the fund was mentioned by a friend who works there. FWIW it’s one of the major hedge fund groups. I just don’t know what to make of this particular aspect of the potential career shift.
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Jan 18, 2024 04:46
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Hughmoris posted:I need some simple advice. is the issue the volatility of an all equity fund? if you want something "middle-of-the-road" fbalx is a 60/40 stock to bond fund, which is often put forward as a rule of thumb conservative allocation. it still has the risk of significant drawdowns for years at a time, but it'll generally be less than fzrox. the target date fund mentioned up thread will probably be better choice for maximizing long term results, but in the initial years it'll carry more equities than fbalx
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Jan 18, 2024 05:56
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Hughmoris posted:I have a personal Fidelity Roth IRA with $6500 invested in FZROX. I picked that because I read it was good (I know). Other people have chimed in with recommendations for what to move it in, but honestly you picked a solid choice for your first investment. It may be 100% equities, but it's the entire US stock market and that sucker is a pretty decent place to be, and probably will remain so for the next 25 years. It's even got a 0.0% expense ratio (for as long as Fidelity wants to keep it that way). This is a perfectly fine thing to have done with retirement 25 years away. You did good. As others have said, it's worth looking at adding some other types of investments to moderate your risk, but you have not harmed your financial position by picking what you picked. The absolute simplest thing you can do is buy FIPFX (Fidelity's 2050 target index fund), which will include everything in FZROX but add some international stocks and some bonds. Its expense ratio isn't 0%, but at 0.12% it's comparable to most target date index funds. It will adjust over time to fit the average investor's needs, and that's about as middle-of-the-road as you can get. You've started, and that's outstanding.
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Jan 18, 2024 06:40
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GhostofJohnMuir posted:details of the exact conditions of the access matter a lot. things like can you contribute before tax, do they give you a preferential carry rate, is it an open end fund and if not are you alright with a significant portion of your investments being extra-illiquid? I appreciate the advice here, thank you! This gives me a lot of good questions to ask if I end up negotiating for this position.
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Jan 18, 2024 17:34
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Serious_Cyclone posted:It’s a job opportunity that I’m interested in - they do a 401k match and pay well, the opportunity to invest in the fund was mentioned by a friend who works there. FWIW it’s one of the major hedge fund groups. I just don’t know what to make of this particular aspect of the potential career shift. Do not invest in a hedge fund. Hth. Look at their fees - 2 and 20; the hedge fund space is way too full now, there’s simply not enough room in the market for a lot of the strategies they use anymore because they are forced to compete with so many other hedge funds.
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Jan 18, 2024 18:51
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pseudanonymous posted:Do not invest in a hedge fund. Hth. This is very useful information, I appreciate it. I'll ignore any salesmanship involved with investing in the fund and evaluate the job on its other merits.
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Jan 18, 2024 18:59
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TraderStav posted:Is it possible to rollover a traditional Ira into a solo 401k? I have both at Schwab and would love to get my traditional Ira's flattened for future back doors. I can't get a straight answer from my local Schwab branch or find a definitive answer online. Can I fund a Schwab Solo 401k by dropping off a check and paperwork at my local branch? How do you fund your Solo 401k at Schwab? My spouse had a 403b and we successfully rolled it into a traditional IRA at Schwab. Had to jump through a lot of hoops with the 403b custodian though.
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Jan 19, 2024 01:12
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jfff posted:I can't get a straight answer from my local Schwab branch or find a definitive answer online. Can I fund a Schwab Solo 401k by dropping off a check and paperwork at my local branch? How do you fund your Solo 401k at Schwab? There's a form that you fill out that specifies the Employee v Employer contributions. I fill that out and drop it in the mail.
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Jan 19, 2024 02:01
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Hi thread, I’ve really benefitted from reading through yall’s advice recently, and I have an index fund question. I’ve had an Etrade post-tax account for 7-8 years, occasionally throwing small sums into index fund ETFs as I was able. Mostly VTI and QQQ. In the past 2 months or so I’ve “awakened” to the standard financial planning/retirement strategies (HYSA, maxing out 401k, starting a Roth IRA conversion soon, all extra into low fee index funds in post-tax brokerage). I’m 35, hoping to be able to transition to part-time in 10 years and full retirement 5-10 years beyond that. Obviously life can be messy and unexpected events are to be expected, but that’s the general plan at this point. I currently hold all my VTI and a small amount now of VTSAX in my Etrade account. I’m not seeing any overt additional fees for holding or selling that via Etrade in the main fees part of their website or on their page for VTSAX specifically, but am seeing concern from various people online about transaction fees for Vanguard funds held in places other than vanguard. Are their concerns outdated, or am I missing something? I’m also open to any other general planning advice. Thanks all!
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Jan 19, 2024 19:34
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Usually you'll see a transaction fee to purchase Vanguard mutual funds at non-Vanguard brokerages. Looking at Etrade's page for VTSAX admiral shares (initial buy-in of $3,000) as long as you hold the fund for at least 90 days there do not appear to be any additional fees. Seems legit! The ETF version, VTI, generally has no additional fees anywhere it is offered.
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Jan 19, 2024 21:19
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I have a 30 year mortgage that I signed in 2014, of which only the first 10 years are fixed. I recently received the notice from my lender about the fact that the fixed portion of my loan period is ending, and my interest rate is about to go from 3.25 to 7.75% in July! Luckily, we have way, way overpaid over the course of this loan such that on this $160k house we purchased in 2014, we owe only $14k after 9.5 years. I also owe $12k on a vehicle, interest rate there is around 3%. We have the money and I don't feel like continuing to pay interest, so I am planning on paying both of these off this month in their entirety so I wll no longer have any debt. Hooray! We are suddenly going to be having a much higher net income - for reference, my suggested mortgage payment has been roughly $950 and I've been paying anywhere between $2k-$2500 monthly for a long time. Car payment is $560 but I've been paying $900-$1200 at it just to pay it down. With both of those obligations mostly gone (I will still have to budget for property taxes & insurance of course so the whole monthly amount doesn't totally go away), what's my best option moving forward? Between my wife and I we currently have:
My current plan for 2024 is:
Basically I don't just want to be sitting on a giant pile of cash and am wondering what kind of mix of investments I should be looking at - go whole hog into vanguard ETFs, roll some CDs every X months, some combination of both?? Thanks friends!!
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Jan 20, 2024 20:42
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kumba posted:Words. Check out this flowchart! HSA & FSA - from what I've read there are some exceptions that allow for an HSA & FSA for a family, but generally this is a no-no. You may want to consult a tax pro unless you're positive you and the spouse can contribute to HSA & FSA. If you're allowed to contribute to a HSA you should max it out (see flowchart above) every year. Put your emergency fund into a HYSA if you haven't already. Make sure you're making use of all your tax-advantaged savings options before putting extra cash into something like a 3-fund portfolio with Vanguard ETFs. Do either of your employers offer an employee stock purchase program? You're doing great, keep it up!
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Jan 20, 2024 21:36
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kumba posted:Person in great shape Follow the flowchart. Max HSA, max IRA, max 401k. You're in great shape!
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Jan 20, 2024 22:07
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jfff posted:HSA & FSA - from what I've read there are some exceptions that allow for an HSA & FSA for a family, but generally this is a no-no. You may want to consult a tax pro unless you're positive you and the spouse can contribute to HSA & FSA. i recently looked into this with my wife and apparently if you are using an HDHP and an HSA you cannot use an FSA, but you CAN use a Limited Purpose FSA (vision and dental expenses, anything not covered by the HSA) and a Dependent Care FSA (childcare expenses) the opm has a nice faq on the topic: https://www.opm.gov/healthcare-insurance/healthcare/health-savings-accounts/frequently-asked-questions/ anyways we max the hsa, and since we track all our expenses we cover our known "floor" of vision and dental expenses with the Limited Purpose FSA, and of course daycare costs way more then the limit of the Dependent Care FSA but we try to maximize our tax advantaged space
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Jan 20, 2024 23:45
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I eventually got to the point where the limited FSA wasn't worth loving around with for me (single person) to save let's say ~$50 in taxes per year but have to use it all up, file reports to justify reimbursement, etc. I used to have very frequent and previously dentist's visits and would fill it up based on that, but one year due to scheduling issues my last cleaning of the year got moved back to January and made me unable to fill the last of the allotted dollars from it, basically negating my expected tax savings or even costing me more money. That said, this was before the pandemic and before they started allowing for some rollover on FSAs, so maybe it's worth it again now. Or maybe it always was worth it for a multi-person household.
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Jan 21, 2024 07:01
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The fact that FSA’s have any timeline of use or lose it just makes me refuse to get one on principle. We don’t have a lot of med bills but I’m sure enough standard stuff that it would save us, but I just hate the idea of having to manage it or it goes to waste. And my plan is low deductible (good) so I can’t get a HSA (bummer).
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Jan 21, 2024 14:14
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I did a limited FSA to get Invisalign this year but I wouldn’t bother with it without a one-time expense that I know will use it all up.
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Jan 21, 2024 15:27
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Re: long term capital gains tax brackets Am I missing something obvious here? The high end of the 0% bracket for MFJ is like 94k this year. Our annual spending is only about 2/3 of that. For the possibility of early retirement, is there any incentive to max out my Roth 401k rather than just put more into my taxable brokerage account and have the flexibility? I’m not about to dramatically rearrange things, this is (for now) a largely theoretical question. I could switch around my 401k to only contribute to the pre-tax bucket but if I can avoid the complication of a Roth conversion ladder I’d like that.
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Jan 21, 2024 16:57
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Saharan Fiend posted:For the possibility of early retirement, is there any incentive to max out my Roth 401k rather than just put more into my taxable brokerage account and have the flexibility? Capital gains taxes could change at any time, changing the law to tax Roth accounts seems far less likely. Also, keep in mind you can take out Roth contributions at any time, penalty free. drk fucked around with this message at 17:16 on Jan 21, 2024 |
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Jan 21, 2024 17:12
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Another thing is that many states give capital gains the same state tax rate as normal income tax (or in the case of NH, which doesn't have an income tax, an actually higher taxation rate). So Roths give you the flexibility to not get state taxed when you move. I'll also add that, for early retirement, beyond withdrawing Roth IRA contributions: 1) For 401ks and 403bs, you only need to be 55, and not 59.5, to withdraw money penalty free so long as you are no longer employed by your employer. But this only works for your most recent employer's 401k, for some strange reason. Also, there is a fixed 20% withholding for this, so you probably want to be doing this with traditional instead of Roths. For Roth 401ks/403bs, see below. 2) For Roth 401ks/403bs, you can rollover to a Roth IRA, which can also be withdrawn (and despite a common misconception, for rollovers, as opposed the the conversions, so long as you have had any Roth IRA for over 5 years, you can withdraw the amount from contributions immediately). Note that you do still have to know how much of the rolled over amount comes from contributions and how much from gains. The contribution amount is the amount you contributed to the Roth 401k (or the amount you converted when turning it from traditional to Roth) 3) Also so long as you are no longer employed by your employer, there are also SEPPs, which, while annoyingly restricted to awkward withdrawal rates, can also let you avoid the penalty for early retirement. MegaZeroX fucked around with this message at 17:57 on Jan 21, 2024 |
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Jan 21, 2024 17:20
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401ks are protected from judgements and bankruptcy which is nice if you ever have that.
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Jan 21, 2024 17:22
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Mons Hubris posted:I did a limited FSA to get Invisalign this year but I wouldn’t bother with it without a one-time expense that I know will use it all up. Yep same. I had a couple years with planned, known dental expenses so I used it for that. Without that I skip it.
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Jan 21, 2024 17:25
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Fair points, thanks all!
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Jan 21, 2024 19:30
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Serious_Cyclone posted:Considering a career shift that would provide, among other things, the opportunity to invest directly in a major hedge fund. Apparently this isn't an option for most people. Any particular up/down sides to this to be aware of? The odds of any given hedge fund beating the S&P500 over a 15+ year period are super low. In my experience any investment marketed as "exclusive" or "only for sophisticated people like you" or whatever is just a compilated plan to part rich idiots from their money. Its amazing how many investment sales pitches are designed to go after people's egos and make them think they are special in some way. Its really no different than designer clothes, the numbers are just bigger. Personally I stick to the everyman's investment solutions, things like VTI, VXUS, ect... Not only are they easier to deal with, but they generally perform better over the long term. Antillie fucked around with this message at 19:41 on Jan 22, 2024 |
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Jan 22, 2024 19:38
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jfff posted:Check out this flowchart! I think we're okay because the HSA is specifically for me, and she has her own non-high deductible health plan with an FSA on the side for monthly expenses. We also work for the same company using the same benefits system and haven't changed anything for at least 2 years so presumably if we were doing something disallowed we would have been flagged for it, but I think I will be double checking with our benefits person to be on the safe side  And thanks for the recommendations y'all. Sounds like we're on the right track!
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Jan 22, 2024 19:57
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Antillie posted:The odds of any given hedge fund beating the S&P500 over a 15+ year period are super low. In my experience any investment marketed as "exclusive" or "only for sophisticated people like you" or whatever is just a compilated plan to part rich idiots from their money. Its amazing how many investment sales pitches are designed to go after people's egos and make them think they are special in some way. Its really no different than designer clothes, the numbers are just bigger. I worked as a programmer at a hedge fund as a summer intern and our premier fund's main selling point was its large negative beta over the long term, this is to say it was violate and negatively correlated with the stock market. Even simpler, it mostly lost money. The fund itself was controlled by an algorithm that was basically technical trading. I didn't go back since turns out the whole industry are parasites.
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Jan 22, 2024 20:21
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Antillie posted:The odds of any given hedge fund beating the S&P500 over a 15+ year period are super low. In my experience any investment marketed as "exclusive" or "only for sophisticated people like you" or whatever is just a compilated plan to part rich idiots from their money. Its amazing how many investment sales pitches are designed to go after people's egos and make them think they are special in some way. Its really no different than designer clothes, the numbers are just bigger. Yeah I'm not sure if it's the same phenomenon, but the pitch was included as part of the benefits of working for the fund - so not so much parting a rich idiot from their money as parting a potential idiot-employee from it. The vibe I'm getting itt is that this isn't actually a benefit, just a bullet point they can add to a job offer that comes at no cost to them. If I were to take this job, I would exercise the 401K benefit and then backdoor Roth the max into my existing 3-bucket portfolio and just leave the "you can invest in the fund!" thing alone entirely. All things that are good to know, and I appreciate the sanity-check on it. Truth be told, I wouldn't have been able to give a good explanation of what a hedge fund actually is before this job opp conversation happened.
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Jan 22, 2024 20:22
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Antillie posted:The odds of any given hedge fund beating the S&P500 over a 15+ year period are super low. In my experience any investment marketed as "exclusive" or "only for sophisticated people like you" or whatever is just a compilated plan to part rich idiots from their money. Its amazing how many investment sales pitches are designed to go after people's egos and make them think they are special in some way. Its really no different than designer clothes, the numbers are just bigger. There's a part of me that wants to believe that there is some sort of investment with extra return above the S&P for being willing to lock away your money for 1-5 years.
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Jan 22, 2024 20:31
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Serious_Cyclone posted:Yeah I'm not sure if it's the same phenomenon, but the pitch was included as part of the benefits of working for the fund - so not so much parting a rich idiot from their money as parting a potential idiot-employee from it. The vibe I'm getting itt is that this isn't actually a benefit, just a bullet point they can add to a job offer that comes at no cost to them. If I were to take this job, I would exercise the 401K benefit and then backdoor Roth the max into my existing 3-bucket portfolio and just leave the "you can invest in the fund!" thing alone entirely. Are they letting you invest into the fund at a discount? Are you allowed to sell your discounted shares right away?
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Jan 22, 2024 21:50
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Boris Galerkin posted:Are they letting you invest into the fund at a discount? Are you allowed to sell your discounted shares right away? These are all definitely questions I would have to ask if an offer were to come my way, I appreciate getting this kind of input.
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Jan 22, 2024 22:24
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One thing to remember is that the people who run hedge funds absolutely think that investing in hedge funds is worthwhile. (The pitch isn't always that it can beat the market; sometimes it's that the fund is less correlated with the market, so it's valuable to have it as part of a portfolio.) So they're probably not trying to fleece you, although they could very well just be wrong.
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Jan 22, 2024 22:38
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raminasi posted:One thing to remember is that the people who run hedge funds absolutely think that investing in hedge funds is worthwhile. (The pitch isn't always that it can beat the market; sometimes it's that the fund is less correlated with the market, so it's valuable to have it as part of a portfolio.) So they're probably not trying to fleece you, although they could very well just be wrong. Are there simple ways to objectively determine if that (lower correlation with my other investments) is actually true? Or is this generally not even worth looking into? I carry some total market international equities in my 3-fund in-part because they have lower correlation with US total market equities during periods of growth, but often correlates strongly with US during downturns. It seems like mixing in an option that departs from US total market during downturns would be useful.
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Jan 22, 2024 23:22
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Serious_Cyclone posted:Are there simple ways to objectively determine if that (lower correlation with my other investments) is actually true? Or is this generally not even worth looking into? I carry some total market international equities in my 3-fund in-part because they have lower correlation with US total market equities during periods of growth, but often correlates strongly with US during downturns. It seems like mixing in an option that departs from US total market during downturns would be useful. I mean, sure, easy to objectively determine. Example here at one of many sites that will do this sort of calc for major asset classes: https://www.portfoliovisualizer.com/asset-class-correlations you can see at that page how the three treasury ETFs in the list (SHY, IEF, TLT) are negatively correlated with the S&P (IVV) over the past 15 years. that sort of historical anticorrelation has been one of the arguments for holdings bonds (or more specifically, treasuries) in addition to stocks in some sort of balanced fund or target date fund. maybe not worth worrying about for people far from retirement though unless you enjoy this sort of thing
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Jan 22, 2024 23:25
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I'm just getting started at 34. I'm lucky to have a job I don't ever want to retire from completely, but I still want to get serious about building wealth. In 2023 I maxed a Roth and put the rest into my employer's 403(b). I did the lowest effort options -- for the 403(b) that was the default Vanguard target date fund, and for the Roth.... I did the Fidelity robo-investor. I kinda regret that and I'm moving that into a self-directed account now so I can set up a three fund portfolio. I've got two questions, and if this gigantic thread has already addressed them, feel free to point me back that way: 1) Will there be a real, meaningful advantage to taking my 403(b) investment out of VFFVX and making a three fund portfolio out of Fidelity funds? I feel like I'd basically be replicating the asset allocation of the Vanguard fund anyways. 2) I'm trying to decide between Fidelity ZERO funds vs their regular index funds. I see that the ZERO funds are weighted slightly differently than the benchmark indexes -- insignificantly so, as far as I can tell, since they seem to have performed basically the same -- and I'm aware that I'd have to liquidate them if I ever were moving away from Fidelity. I think both of those things would work for me, so it seems like I should pick the one with zero expenses. Am I missing anything? Really appreciate you guys sharing your knowledge. Wish I would have spent a li'l more time here and a little less in GBS in my 20s...
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Jan 23, 2024 02:28
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pyknosis posted:1) Will there be a real, meaningful advantage to taking my 403(b) investment out of VFFVX and making a three fund portfolio out of Fidelity funds? I feel like I'd basically be replicating the asset allocation of the Vanguard fund anyways. Depends on your perspective and opinion about how much you agree with the VGGVX allocation glide path, and how well you will actually do balancing your own ratio. My own perspective is 100% in equities until retirement, then a 75%/25% stock/bond split, but there are certainly many places that would disagree with my "pure aggression until retirement, then a moderate balance and an ultra conservative withdrawal rate" philosophy, but many here don't love the latter half of my philosophy, at least. Generally speaking, I would say target date funds are probably the best if you are planning for a late 60's retirement, and the worst if you are planning very early retirement. Basically, it depends on how good your balance is I suppose. pyknosis posted:2) I'm trying to decide between Fidelity ZERO funds vs their regular index funds. I see that the ZERO funds are weighted slightly differently than the benchmark indexes -- insignificantly so, as far as I can tell, since they seem to have performed basically the same -- and I'm aware that I'd have to liquidate them if I ever were moving away from Fidelity. I think both of those things would work for me, so it seems like I should pick the one with zero expenses. Am I missing anything? There really isn't much difference, and either is fine. The only time the zeroes it could be a problem is if you were in a taxable account, and thus have to pay capital gains taxes when you sell to move brokerage. I personally use the zero funds in my IRA, since if I assume the balance is a coin flip, than in expectation it might net me a few bucks, which is better than nothing I suppose.
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Jan 23, 2024 02:41
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pyknosis posted:2) I'm trying to decide between Fidelity ZERO funds vs their regular index funds. I see that the ZERO funds are weighted slightly differently than the benchmark indexes -- insignificantly so, as far as I can tell, since they seem to have performed basically the same -- and I'm aware that I'd have to liquidate them if I ever were moving away from Fidelity. I think both of those things would work for me, so it seems like I should pick the one with zero expenses. Am I missing anything? FZROX is fine and good. They're relatively new (only a few years) and so might have slightly different/worse tracking error, which may or may not lead to marginally better/worse performance against say VTI/ITOT. And since it's a retirement account you don't have any issues if you eventually have to liquidate/swap ahead of switching brokerages.
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Jan 23, 2024 03:43
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Oops, just realized that if you have a monthly auto contribution to a mutual fund, you can’t really sell lots of that fund for tax loss harvesting without triggering wash sales.
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Jan 23, 2024 20:41
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smackfu posted:Oops, just realized that if you have a monthly auto contribution to a mutual fund, you can’t really sell lots of that fund for tax loss harvesting without triggering wash sales. You can swap to another fund with your auto-contributions for a bit.
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Jan 23, 2024 20:47
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Help me understand why mutual funds are ever the better option over ETFs. I posted in here awhile back about my partner who has a sizeable account invested into mutual funds that was setup by her parents. I helped her start doing her taxes on her own for the first time and she ended up owing a large amount in taxes from this mutual fund account and after double checking that we entered everything right she ended up paying the bill. Best I could tell it was triggered by the mutual fund selling/buying shares in her account causing her to owe capital gains taxes from them shuffling investments around. I have only index funds in my personal account and I've never had that happen. Presumably because I'm not selling them and since it's an ETF and I don't own the actual individual stocks it's composed of thus I don't owe taxes when the ETF shuffles investments around. So why would anyone want to hold mutual funds if it routinely hits you with large tax bills even if you're not withdrawing money?
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Jan 24, 2024 01:08
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