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I guess I'm just more comfortable with the line of thought that 100% foreclosures happen to people with mortgages.
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Jun 29, 2017 17:17
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Leon Trotsky 2012 posted:You might be "fine" for retirement at 15%, but dollars invested earlier are worth more and if he is in his first year of a mortgage, then almost all of his payments will be interest. If you get to the 17.5k max or whatever 401k is, and the 5500 max for IRA, and still have money left over, the choice between "pay off mortgage faster -> guaranteed return and psychological feeling of no debt" vs "invest and probably make more than the interest but not guaranteed and definitely no no-debt feeling" is a good choice to have to make, because you have lots of money. I chose the former, many people choose the latter, it's not a huge enough difference that you'll regret it either way, to be perfectly honest.
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Jun 29, 2017 17:17
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I would choose the pay the mortgage option too, also for psychological reasons. It really is less stressful when your house is paid off and you don't have a mortgage payment every month.
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Jun 29, 2017 18:48
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Can't you do both? Invest half and pay down with half? You get the best of both worlds - higher returns than just dumping it into the mortgage and psychological security.
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Jun 29, 2017 18:56
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Hoodwinker posted:Can't you do both? Invest half and pay down with half? You get the best of both worlds - higher returns than just dumping it into the mortgage and psychological security. Yep, and that's halfway between the two choices that are both reasonable.
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Jun 29, 2017 18:59
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Thanks for the responses. We've made a lot of good progress/changes the last few years in our financial situation, but with the kid coming all of a sudden we're trying to make sure we're still on track for retirement, but also in the context of paying for day care and also trying to save something for college. We definitely see both arguments, which is why I was asking the question. That's pretty much the conclusion we came to...there's security to paying down the mortgage, but we're getting that security in exchange for a potentially higher (but not guaranteed) return in the future, which is on the order of thousands, possibly tens of thousands, of dollars. I wanted to make sure I wasn't missing some critical on either side.
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Jun 29, 2017 19:25
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Thank you for your help everyone! You've given me a lot to consider. I'm actually in the 25% tax bracket but I understand what you're saying--I need to take the tax hit now instead of when I'm older and making more money. Just going to address a few things--For my 401k and roth, I have my money in the retirement target fund accounts. Because of my age/target retirement date being quite some time from now, both target funds seem to mostly have high-risk investments such as stocks (which I understand is the correct thing for someone my age). This is my one question about stopping my contributions into my traditional 401k. Back when I only had my traditional 401k at Charles Schwab and my Bank of America/Merrill Lynch roth IRA (this was before I rolled those funds over into my Vanguard roth IRA), the BoA/ML financial adviser told me to put money in the Schwab traditional 401k because it "would earn interest faster" than the BoA/ML roth IRA. The adviser said that since the 401k had more money (probably about $40k back then) than the IRA (which only had $7.5k back then), the 401k would earn more compound interest more quickly if I kept contributing. I know financial advisers aren't generally trustworthy, but it gave me pause that he told me to invest in my 401k at a different bank instead of trying to sell me investments in the roth IRA that I had at his bank, where he would earn commission. I also read something online about how people in their 50s need at least $400k in their 401k so their money will grow with the compound interest on top of the continued contributions, and then they can retire at age 65 without having to contribute as much as someone who started saving in their 40s and didn't have time to wait for their 401k to grow from the interest on top of the growth of their investments. I'm getting the impression that I shouldn't worry about the compound interest and I should focus on saving as much as I can into investments that are wise for my age, not so much growing one account so it can start earning compound interest on top of growth from the investments. rotaryfun posted:Because you're so young, roth is definitely going to be the way to go. You have so much growth potential that you don't want to end up losing a lot of that growth to taxes. I would just stop putting money into your current traditional 401k and start your roth 401k. If you employer has a match, their match will go into the traditional. I have an incredibly depressing story. At my very first job, I had a roth 401k. After three years, I got my new job, which only offered the traditional 401k. My parents told me over and over again I needed to roll over the 401k from my previous employer into my new employer's 401k. I stupidly didn't research this and I rolled over my roth 401k from the first job into the current job's traditional 401k, even though I'm pretty sure this was probably around the same time I opened my roth IRA since I figured I was going through the trouble of dealing with the banks anyway. Due to my failure to research, I'm pretty sure this means I'm going to get taxed twice on at the contributions I made to my first roth 401k--at least once on the initial deposits made into the first roth 401k that I rolled over into my traditional 401k, then a second time after I retire and begin taking withdrawals from the traditional 401k since all withdrawals from a traditional 401k are taxed. And I'm pretty sure my contribution rates with the roth 401k were the highest I've ever had for any of my retirement accounts. I was aware at this point that I had a severe problem with impulse spending and that I would just waste whatever money I could access, so I think I was putting 10-20% of my paychecks into my roth 401k to protect myself from my lack of impulse control. Looks like I ended up blowing more than I should have on a stupid decision anyway lol. I tried to google more information on this but I only get results about rolling over 401ks into IRAs, or google results about rolling a traditional 401k into a roth 401k, not rolling a roth 401k into a traditional 401k. legsarerequired fucked around with this message at 22:39 on Jun 29, 2017 |
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Jun 29, 2017 22:08
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Ally just bumped interest on its savings accounts to 1.15%
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Jul 1, 2017 14:43
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EugeneJ posted:Ally just bumped interest on its savings accounts to 1.15% Awesome. I opened a savings account with them back in the early spring because I was sick of getting 0.03% at my CU and this is the second time they've upped their savings account rate since then.
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Jul 2, 2017 01:17
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EugeneJ posted:Ally just bumped interest on its savings accounts to 1.15% Can any thread denizens offer information about Ally, or branchless online banks in general? I kinda want to dump my bank, but didn't see much in the OP and I don't really want to get my information from their website what with all the marketing speak.
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Jul 2, 2017 17:23
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Magnetic North posted:Can any thread denizens offer information about Ally, or branchless online banks in general? I kinda want to dump my bank, but didn't see much in the OP and I don't really want to get my information from their website what with all the marketing speak. Do you have any specific concerns? Consider how much you work with cash and look up their specific ATM policies, but otherwise online banks are great. Star War Sex Parrot fucked around with this message at 18:08 on Jul 2, 2017 |
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Jul 2, 2017 17:38
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Magnetic North posted:Can any thread denizens offer information about Ally, or branchless online banks in general? I kinda want to dump my bank, but didn't see much in the OP and I don't really want to get my information from their website what with all the marketing speak. I've been with Capital One 360 for the last 8 years or so, been pretty happy with them. No major fees, good overdraft options, easy to transfer to and from savings, mobile deposit is simple enough and Allpoint ATMs are in most Targets and Walgreens.
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Jul 2, 2017 17:39
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Magnetic North posted:Can any thread denizens offer information about Ally, or branchless online banks in general? I kinda want to dump my bank, but didn't see much in the OP and I don't really want to get my information from their website what with all the marketing speak. As long as they are FDIC insured they are legit. The main drawbacks for them are you can't go in person to complain if there's a problem and it's usually a pain to deposit cash. I keep a tiny account open with a traditional brick and mortar bank solely to use if I need to deposit cash but otherwise use online only banks. Savings account features don't matter much, but if you want an online only checking account I would look for one that refunds ATM fees. This lets you use any ATM you want without worrying if it's from your bank or part of a specific network. Ally specifically will refund $10 in ATM fees a month. A few other accounts I like to recommend looking into besides Ally are Alliant Credit Union, Discover, Capital One 360 and Charles Schwab (Their savings sucks but their checking account is arguably the best available).
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Jul 2, 2017 17:46
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Star War Sex Parrot posted:What do you want to know? I use USAA (effectively branchless since I'm not close to any of the bases where they have branches) for my everyday banking and Ally for my short-term savings and can't say it was a big adjustment from Wells Fargo. The only thing I can't really do is deposit cash, but that's a rare challenge for me. The solution is usually just to give the cash to a coworker in exchange for PayPal or Venmo. Withdrawing cash is actually more convenient now because I can use any ATM and USAA reimburses the fees. Mobile depositing checks is about the same as with any modern bank's app, and is really convenient. If I ever need a cashier's check I'll need to order it to be mailed in advance, but I can't imagine that'll be too difficult. THF13 posted:As long as they are FDIC insured they are legit. The main drawbacks for them are you can't go in person to complain if there's a problem and it's usually a pain to deposit cash. I keep a tiny account open with a traditional brick and mortar bank solely to use if I need to deposit cash but otherwise use online only banks. I'm not happy or unhappy with my checking account, but I have a fair bit of dosh in it, and it would be nice if it was doing more work for me in the form of a decent interest rate. Like, 1 percent isn't much, but it's way better than what I have. I don't want to put it into a CD or something because I intend to pay off student loans relatively soon, but before then I don't want to leave myself without the savings because right now it is also my emergency fund. How does it work to transfer funds between the two? Like, if I accrued 5k in the bank, and wanted to send 4 to Ally, how does that actually happen? This is the only actual bank account I've ever had, so I don't know if there are fees or if you just cut a check or something.
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Jul 2, 2017 23:16
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Magnetic North posted:How does it work to transfer funds between the two? Like, if I accrued 5k in the bank, and wanted to send 4 to Ally, how does that actually happen? This is the only actual bank account I've ever had, so I don't know if there are fees or if you just cut a check or something. You put your account information into Ally's website/app, it gets saved, and then whenever you want to transfer money you just go to the Ally site and click "Transfer" and type in the amount you want to pull from that account- usually takes a few business days Costs nothing to pull money from an outside account into an Ally account
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Jul 2, 2017 23:27
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I've also written myself checks. That works too
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Jul 3, 2017 02:22
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The Slack Lagoon posted:I've also written myself checks. That works too The downfall to this, for me at least, is that USAA keeps a hold on anything over a certain amount based on my average daily balance, and I don't keep much in my checking account at one time because I've had my banking info stolen twice (one time causing me to be late with rent) and now I'm paranoid.
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Jul 3, 2017 12:34
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Doesn't every decent institution do free electronic ACH transfers between checking/savings accounts these days? Across all my accounts from big banks to credit unions to brokerages, all of them have some form of free electronic transfer that takes 2-3 days max. I've transferred money between accounts electronically hundreds if not thousands of times and never had an issue. Just do that.
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Jul 3, 2017 20:04
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Magnetic North posted:Can any thread denizens offer information about Ally, or branchless online banks in general? I kinda want to dump my bank, but didn't see much in the OP and I don't really want to get my information from their website what with all the marketing speak. I use a regular brick-and-mortar bank for my checking (which usually has less than $500 in it) and my liquid savings (~$3k) and Ally for my longer-term savings. Ally recently lowered the amount of time it takes to transfer money between accounts which has made it even more attractive. It used to be like 5 business days, now it's 1 or 2. I've had zero issues sending or receiving money, it gets decent interest (I think they've raised the savings rate twice since I've been a customer) and customer service is fine. Can't ask for anything more!
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Jul 3, 2017 20:14
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Ally savings just went up to 1.15% over the weekend.
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Jul 3, 2017 22:07
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Why should I choose Ally over GS Bank for savings? https://www.gsbank.com/savings-products/online-savings.html?cmpid=ps-GSB-GGLcmpSAV8382756 Genuinely curious since I've seen Ally suggested so much, but GS offers a slightly higher interest (1.20% compared to 1.15%).
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Jul 3, 2017 22:24
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TBeats posted:Why should I choose Ally over GS Bank for savings? Ally has a great app and great customer service - Goldman only got into online savings a year or so ago (they bought out the former GE Capital Bank)
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Jul 3, 2017 22:58
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TBeats posted:Why should I choose Ally over GS Bank for savings? Ally is kind of the default when it comes to online banking, even if they aren't always the best option there's very few people for who it's a bad choice. There's almost always another bank with a slightly higher rate but Ally has done a good job consistently keeping their savings accounts very close to the top. There are very few fees and I think what few ones they do have are pretty reasonable and where you expect. Their website and mobile app are both fully featured and pretty good and I haven't ever seen a wait for their chat support line, though I haven't really needed it either. I think the main reason they are easy to recommend is that they have an excellent checking and savings account. Even if you only want a savings account having a free Ally checking account is handy in case you need to get access to your money without waiting the 2-3 days for it to transfer. Savings accounts are boring though, so keeping it at the bank with the highest interest rate makes sense. But which bank has the highest rate changes every couple of months.
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Jul 3, 2017 23:03
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TBeats posted:Why should I choose Ally over GS Bank for savings? GS Bank doesn't offer checking accounts or an ATM card like Ally does, which means the only way you can get your money is to first transfer it to another bank account you have. This added inconvenience is probably not worth the extra 0.05% interest rate for a lot of people. Though for a problem spender, the added hurdle might be a blessing in disguise. EDIT: I just saw that they apparently don't have a mobile app either which means the only way to deposit checks is to mail it to them or deposit them with another bank and then transferring the funds over.
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Jul 4, 2017 02:50
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Magnetic North posted:Can any thread denizens offer information about Ally, or branchless online banks in general? I kinda want to dump my bank, but didn't see much in the OP and I don't really want to get my information from their website what with all the marketing speak. I have used Ally for both checking and savings since early 2014. I also have a savings account with a credit union and a checking account with both Chase and Wells Fargo. Ally, to me, is the easiest and most straightforward and the higher interest rates compared to my other accounts is icing on the cake. The website does everything I need in a simple way and transferring money around these accounts is free and super easy. The phone app is useful for depositing checks. My few interactions with customer service (maybe 3 times in 3 years) were brief and resolved any issue I had so there's been no problem that stands out to me there. I like being free to use any ATM. It used to be truly unlimited which was great, but now it's limited to $10/mo fee reimbursement and honestly that has never been a problem for me. I rarely use cash so at most I need an ATM once a week. Worst case scenario that's like $12 in ATM fees but only costs me $2 and ease of use from popping into any nearby ATM makes that worthwhile. Cash back at a grocery store is free and avoids this. One of the few theoretical downsides to a branchless bank is the lack of a cash deposit option but that's rarely an issue unless you're in the service industry and working for tips. In the rare occasions that you do need to deposit cash then buy a money order or retain an account elsewhere to deposit there before transferring.
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Jul 4, 2017 22:57
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It looks like it is, but I want to check here first: Are Ally checking accounts free? I don't need another checking account (I use my local credit union), but I was thinking of opening one just to have easier access to my Ally savings account. It's what I keep my emergency fund in, and having to wait a few business days for the funds to transfer into my CU account could be annoying in the case of a true emergency. Is there a minimum balance to keep in the checking account for it to be free? Then again, I have like 8 CCs with a combined credit limit well above my emergency fund, so maybe this is unnecessary?
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Jul 5, 2017 00:57
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Ally checking accounts have no annual or monthly fee and don't have a minimum deposit, so you can leave it empty if you want. I'm not sure if they would close it for inactivity, probably not if you're using the attached savings.
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Jul 5, 2017 06:27
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That is exactly why I opened an Ally checking to go with my savings. If there’s some event where I need instant access to savings, I can just transfer to Ally checking and use the Ally checking debit card.
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Jul 5, 2017 14:11
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THF13 posted:Ally checking accounts have no annual or monthly fee and don't have a minimum deposit, so you can leave it empty if you want. I'm not sure if they would close it for inactivity, probably not if you're using the attached savings. I can verify that one. I had something like $1 in mine for a good period of time and they kept it open. Now, it's going to be my 2nd Savings account. Mostly for long term emergency as I build that up.
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Jul 5, 2017 14:17
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I asked this a while ago and received an answer in the negative, but I wanted to revisit the question: Should I take out a HELOC to have a fence built? If that's an acceptable reason, which bank should I go with? What other nuances and things should I know about with HELOCs? I could probably afford to just pay in cash for a fence today but I don't want to play that close to the vest. I could pay it off really aggressively, and everything I've read says using a HELOC to improve your home is a good reason to use it. I was given the home, so all I'm paying are taxes. It's worth probably at least $200k, but I wouldn't ever take anything near that amount out. My car is about 15 years old now too though and while treating me pretty well for it's age, I think I may need to look into a newer car soon after the fence. I know it's probably not this simple, but HELOCs seem to have better rates than auto loans... We want a fence because we're thinking of getting another dog and don't want to have to use a runner for two dogs. Also privacy.
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Jul 6, 2017 12:48
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yamdankee posted:I could probably afford to just pay in cash for a fence today but I don't want to play that close to the vest. I could pay it off really aggressively, and everything I've read says using a HELOC to improve your home is a good reason to use it. I was given the home, so all I'm paying are taxes. It's worth probably at least $200k, but I wouldn't ever take anything near that amount out. My car is about 15 years old now too though and while treating me pretty well for it's age, I think I may need to look into a newer car soon after the fence. I know it's probably not this simple, but HELOCs seem to have better rates than auto loans... See here's the problem. You started with just your fence and by the end you were spending more of it. Spending debt is still spending money, you're just not "owning" the debt all at once since you don't feel the dollars going out (like you would by "play that close to the vest"). If you have the cash, pay for it. I don't know much of anything on HELOCs, but just debt as a whole is always worth avoiding.
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Jul 6, 2017 13:23
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Helocs are a good tool but most people use them like credit cards and never pay them off. If you are fully confident you can open the loan and only purchase the fence, then pay it off completely, it may not be a bad idea.
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Jul 6, 2017 13:28
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yamdankee posted:I asked this a while ago and received an answer in the negative, but I wanted to revisit the question: Should I take out a HELOC to have a fence built? If that's an acceptable reason, which bank should I go with? What other nuances and things should I know about with HELOCs? How much will the fence cost, and how long would it take you to save up enough money to pay that much in cash?
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Jul 6, 2017 13:28
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In the next couple of months, our office is closing the physical location and everyone is going remote. I'm looking into what I can claim for taxes and whatnot for it. It seems that there is a "Home Office" deduction that can be taken of $1,500. If that's correct, I assume it would be prorated for the year? So starting in September would give me $500 deduction? Also, I'm seeing that your home office needs to be it's own dedicated space. I have a big gently caress off desk with my gaming computer on one side and plan on using the other half for work. Is this considered it's own space for this purpose?
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Jul 6, 2017 17:18
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omnibobb posted:In the next couple of months, our office is closing the physical location and everyone is going remote. This is more of a tax question. I used to contribute a lot to it but I haven't done taxes professionally for a few years so I mostly stay out now, but see what they say. When I was doing them I remember the rule was the area had to be used extensively and exclusively, so I don't think so. But see what they say. https://forums.somethingawful.com/showthread.php?threadid=3394641
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Jul 6, 2017 18:07
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yamdankee posted:I asked this a while ago and received an answer in the negative, but I wanted to revisit the question: Should I take out a HELOC to have a fence built? If that's an acceptable reason, which bank should I go with? What other nuances and things should I know about with HELOCs? BFC nerds didn't bless your "Take on debt to buy a fence and pool" plan the first time you asked it so why not give it another whorl to see if the mood around here changed? So tell me why you can't afford the things you want with your 60K salary when you don't have a house payment? As you might be aware there are folks in this thread (probably most of us) who make less than you do and who pay thousands of dollars a month on rent and mortgages because we were not gifted houses and yet still manage to save money and buy cars with cash. We are pulling and clawing to get to the same privileged place you happen to have landed. So go do what you want. You can spend money without goons permission. You are very bankable. You will have no trouble qualifying for a HELOC on the best terms. They are not that complicated. Just think if it as a credit card with check writing privileges and they take your home if you don't pay it. Honestly its very unlikely to happen based on your numbers. Go get some car loans too. After you get your HELOC your debt to income ratio will still be pretty low and you won't have any problems qualifying for a pretty sweet car and the payments should still be easy to manage. Make sure you have plenty of room on your HELOC so you can deal with emergencies as they come, emergencies like new kitchens, which heck, why not? It will just increase the value of your house. You can do all this and more and you will probably get away with it if you define getting away with it as having nice stuff now and being able to make your ongoing payments. The alternative is you can pay yourself a house payment and just deposit $2000 into a savings account and in 6 months buy you a fence, a year later buy a car, a year later get a pool. I also hope you are being outrageously generous too, since it would imply that you are thinking of those less fortunate as well as thinking about how much stuff you can acquire.
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Jul 6, 2017 18:55
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Zeta Taskforce posted:this, uh, got weirdly personal I think "no new household debt" is always a noble goal, and I have only broken it once since starting to post in BFC, and it was for a car on very favorable terms after mine became impossible to operate. Our new floors we paid in cash. Our kitchen remodel is an ongoing savings project. I don't believe it's appropriate to mortgage our future for nicer stuff today.
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Jul 6, 2017 20:34
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Zeta Taskforce posted:I also hope you are being outrageously generous too, since it would imply that you are thinking of those less fortunate as well as thinking about how much stuff you can acquire. Lol okay. How about just "You can afford to take out the loan, but it might be better to save up the money first."
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Jul 6, 2017 20:42
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Thank you all so much for the advice! I'm sorry for whatever I stirred up here but I will certainly not take on more debt just to have the things I want sooner. Sound council. Thank you all for simplifying it and making it very clear.
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Jul 6, 2017 20:58
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potatoducks posted:Lol okay. How about just "You can afford to take out the loan, but it might be better to save up the money first." I've always been on the record as saying all of us who can afford to give to charities should make that a regular and ongoing part of our lives. It is my belief that someone who doesn't have a housing payment and a decent income has a moral obligation to think of others in a financial sense. There is more to money than buying stuff. You should't give everything away, nor should you wait until you have 6 months of expenses saved and 10 times your income in retirement before you give your first dollar. We should be citizens of the world and the minority of us who life in high income developed societies have an obligation to think of the most desperate among us. Every time I say this I somehow upset delicate snowflakes who think I'm preaching. I've also always said that you can spend your money anyway you see fit, so just put me on your ignore list if I make you feel bad.
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Jul 6, 2017 21:16
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