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L0cke17 posted:Is there a good way to figure out which debts are worth paying down faster vs investing the money? If you want to talk pure numbers, a good rule of thumb is that any debt with less than 5% interest, you're probably better off investing rather than paying down the debt. That being said, it all depends on your risk tolerance and how much you value having more cash flow vs. having higher returns.
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Feb 3, 2021 02:20
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If your mortgage rate is above 5% you should seriously consider refinancing.
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Feb 3, 2021 02:48
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KYOON GRIFFEY JR posted:If your mortgage rate is above 5% you should seriously consider refinancing. Ya, refi down under 3% and don't pay a penny early
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Feb 3, 2021 06:37
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Our mortgage rate is 3.125% I believe. I absolutely hate the feeling of owing money though, so that's why I'm trying to find some spreadsheet I can plug into to try and prove to myself that while owing money sucks that if I just allow myself to owe money and invest well ill have more money later and by how much so I can basically bribe myself with future money to get over this bad feeling now.
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Feb 3, 2021 08:18
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drive me nuts to school posted:If you want to talk pure numbers, a good rule of thumb is that any debt with less than 5% interest, you're probably better off investing rather than paying down the debt.
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Feb 3, 2021 09:25
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Dik Hz posted:I disagree on the 5% number. A guaranteed return of 5% is way better than other 'safe' investments right now. this is basically entirely up to individual risk tolerance though
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Feb 3, 2021 13:37
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KYOON GRIFFEY JR posted:this is basically entirely up to individual risk tolerance though But to flip it around, I don't think too many people would advocate borrowing money at 5% to invest in mutual funds.
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Feb 3, 2021 14:20
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L0cke17 posted:Our mortgage rate is 3.125% I believe. Paying off student loans is a good question right now. -student loans are usually something you want to pay off sooner, interest rate is usually 7%, and if poo poo hits the fan they can’t be discharged in bankruptcy -if you qualify for the 10 year student loan forgiveness, you may want to consider that -depending on the amount of loans, I think it’s likely a bit of them get forgiven in the next 4 years. I don’t think it’ll be $50k like they said in the campaign (lol), but I think $10-20k could happen. So, with student interest rates suspended , you could either really knock them out over the next 9 months, or just let it sit and put said money aside (hell, you could then make a big payment in September if you then decide to pay towards them). That said: private student loans won’t qualify for any of that, so def pay those off first if you have it. My opinion on student loans is they’re gonna have to do something. And honestly, the fact that it was one of the first things they suspended when Covid / quarantine hit, and they very easily kept just kicking the can down the road. It wasn’t even a divisive issue. To me, it just shows the obvious : they really could just waive it tomorrow and it wouldn’t affect the government at all. So student loan debt is the only debt that I feel no obligation to pay, and we are basically just going to pay 0 or the minimum until we get it waived or forgiven. Student loans really piss me off, so sorry for the rant.
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Feb 3, 2021 15:14
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Dik Hz posted:Totally agree. Concur. I am pretty debt and risk averse outside of super long retirement money, so I tend over-compensate for that in advice giving. (We just paid off a 1.9% car note early)
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Feb 3, 2021 16:21
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Duckman2008 posted:-student loans are usually something you want to pay off sooner, interest rate is usually 7%, and if poo poo hits the fan they can’t be discharged in bankruptcy Also: - student loan interest is tax deductible (unless you make a lot) so the effective rates are often lower - student loans qualify for deferrals if you lose your job or go back to school (maybe not private loans though) I often think student loans are the last thing you should pay for this reason, and you should not sacrifice your savings to do so.
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Feb 3, 2021 16:49
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Small White Dragon posted:Also: Do you mean emergency savings or retirement savings ? I agree with both, with emergency savings being the no brainer, and retirement savings being a bit of “it depends.”
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Feb 3, 2021 17:00
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Duckman2008 posted:
We paid off everything over 4% and there's about 20% of my loans left that are federal and between 2 and 3.5% and I have private loans that make up the other 80% of the debt that's at 3.75% but I'm paying them off anyways because after a refinance with a short term the monthly bill for them is higher than my mortgage. We're about 10 months away from clearing all the private loans at our current rate.
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Feb 3, 2021 19:00
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I have a retirement account with my old employer through Fidelity that I forgot to rollover when I got a new job a year ago. I have a retirement account with my new employer. It seems like I want to do a direct rollover, but the breakdown of the account shows pre-tax and roth amounts. The paperwork for the direct rollover indicates those amounts aren't eligible to be rolled into the plan. I'm not sure where to begin. Are there specific questions I can ask my current employer to understand if any of the old plan is eligible for rollover? What do I do with the ineligible amounts?
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Feb 3, 2021 19:06
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L0cke17 posted:We paid off everything over 4% and there's about 20% of my loans left that are federal and between 2 and 3.5% and I have private loans that make up the other 80% of the debt that's at 3.75% but I'm paying them off anyways because after a refinance with a short term the monthly bill for them is higher than my mortgage. We're about 10 months away from clearing all the private loans at our current rate. Mortgage interest is only deductible if you itemize, and after the first few years of your mortgage the amount of interest you pay drops fairly quickly. I don't know if I would prioritize retirement over the student loans/mortgage, but I would prioritize the mortgage over the student loans.
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Feb 3, 2021 19:17
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Given the state of HYSAs these days does it matter who I go with? AMEX is offering .5% which is better than my cu's .08 i guess
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Feb 3, 2021 20:12
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I dont think it matters. My Ally account is at .5 now. They seem reasonably fast moving up and down with rates at least in my experience.
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Feb 3, 2021 21:39
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Thanatosian posted:Pay the student loans last, IMO. Student loan interest is an above-the-line deduction, so you can take it even if you're taking the standard deduction and not itemizing. Plus the potential for loan forgiveness in the next few years. Can't take student loan interest deduction if you're married filing separately! And if you're in income based repayment, if you file jointly your payment is based on both incomes! My wife MFS just to lower the student loan payments, at least we're halfway done with PSLF!
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Feb 3, 2021 21:55
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The Postman posted:I have a retirement account with my old employer through Fidelity that I forgot to rollover when I got a new job a year ago. I have a retirement account with my new employer. It seems like I want to do a direct rollover, but the breakdown of the account shows pre-tax and roth amounts. The paperwork for the direct rollover indicates those amounts aren't eligible to be rolled into the plan. I can't answer your direct question, but if they aren't able to help, you can roll those over into an IRA. Vanguard or whoever will know what to do. You will end up with 2 accounts, a rollover IRA for your pre-tax amount and a Roth IRA for your Roth funds. Depending on how good your new company's 401k is, it may even be better to roll them to an IRA (depending on fund choices and fees).
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Feb 3, 2021 22:09
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Ally, Amex, Marcus, etc all pretty much move together. There's that HM Bradley thing that might have some advantages but has somewhat higher complexity, I think.
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Feb 3, 2021 22:20
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The Postman posted:I have a retirement account with my old employer through Fidelity that I forgot to rollover when I got a new job a year ago. I have a retirement account with my new employer. It seems like I want to do a direct rollover, but the breakdown of the account shows pre-tax and roth amounts. The paperwork for the direct rollover indicates those amounts aren't eligible to be rolled into the plan. The reason I recommend to do this is because employer plans can change. If your employer plan goes to poo poo, all the money you rolled over into the plan is essentially held hostage until you leave that job. Also if the fund selection isn't to your liking, you can balance your funds inside the employer plan with your funds outside in your personal accounts to achieve your desired portfolio.
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Feb 4, 2021 02:21
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Dik Hz posted:I would personally roll it into your own personal Vanguard account. It takes about 5 minutes to set up, and (at least when I did this 2 years ago) Vanguard gives a direct number to a real person who picks up on the first ring who will help you set up the roll-overs. Is it the Roth funds that can't be rolled into the new 401k? If so, consider rolling the pre-tax funds into your new 401k and the Roth funds into a Roth IRA. If you are ever interested in doing backdoor IRAs in the future, you want to avoid having non-Roth IRAs if possible. (Also, in the unlikely event you are sued or go bankrupt, 401k's have far better legal protection.)
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Feb 4, 2021 03:23
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Looking for investment/retirement advice. I’m closing in on 40 and I’ve come to the realization that my recent general malaise may have its roots in the fact that I am rather far behind in saving for retirement. This has been affecting my day to day enjoyment of life, and I think it would make me feel better if I had a plan to manage the current state of my finances such that I do not end up living out of a cardboard box 20 years from now. General info: -No debt (paid off my student loan last year). About USD 130-140k in assets invested in stocks and crypto. Mostly stocks. I have approx USD 3k in cash, which I am in the process of building up into a 10k emergency fund. -Income is approximately USD 50k annually, 40k after taxes. Expenses are estimated at around USD 1,500 per month or about USD 18k per year. I work overseas so these are best estimates. -Goals – have an investment plan to be in a good place when retirement rolls around. I'm not really even sure what kind of number is reasonable given my circumstances. I have no 401K since I work overseas. I have an IRA I just started last year when I started to be able to afford contributing. -no wife no kids, so my savings and expenses are just as above. Currently I have a regular IRA opened in 2020 which I have max contributed already for 2021 - should I turn this into a Roth? Not sure what the pros and cons are, but I see a lot of people doing Roth IRAs. The rest of my money is invested in stocks, but I would say they are not well diversified. I have a Wealthfront account that I have been contributing to regularly in small amounts since about 2017 and there's no management fee since I am under the amount which they would charge for that. I have about USD 13k in here and it should be managed for free up until 15k. My thinking is just to let this ride since it's automatically managed and it seems well diversified. Thoughts? Should I just take it out and manage it myself? I've only recently started picking individual stocks but have doubts that my strategy of investing in meme stocks is sound long term. Currently I have the majority of my holdings in a mixture of AAPL, PLTR, NIO as well as small holdings of ARKK and others. The total value here is close to 60k. I'm aware that we are in a bull market and people have started saying it's a bubble, so I would like to have an idea how to have this invested in a "safer" way. I have about 30-40k in crypto, and I give this range because anyone with crypto can tell you that this can fluctuate between 20-30% on a daily basis. I rode out the 2018 crash, so I've been desensitized to this kind of volatility. I'm considering investing more in crypto as there is potentially more upside. I understand this is gambling. I have USD 28k floating around in cash that I would like to invest somewhere. lolollama fucked around with this message at 13:43 on Feb 5, 2021 |
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Feb 5, 2021 10:45
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lolollama posted:Looking for investment/retirement advice. Don’t buy individual stocks, even Apple. It’s way higher risk than mutual funds / ETFs Emphasize this 100% for crypto. You have 40% ish of of your retirement , which you stated is behind and worries you, in a highly volatile field. Think of it this way: there’s absolutely a chance any crypto could go to either literal 0 or close to it, like the 2018 crash. If you buy a target based fund that is a mixture of all US stocks, all international, and some bonds, you are pretty much guaranteed to not lose it. If you have gambling money to invest in crypto after fixing retirement, that’s great go for it. But I highly recommend not gambling almost 50% of your retirement. So the emphasize: safer is whatever mutual funds you have access to that are either a target date, entire stock market, etc. with a low ratio. A lot of people here, myself included, use Vanguard , but others like Fidelity are certainly fine.
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Feb 5, 2021 14:14
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First of all, it's good that you are getting started! Real baby step here - but you can also contribute to your IRA for 2020 up until April 15th 2021. If you haven't done that, it's a very good landing place for $6,000 of your $28,000 free cash. You should focus on moving as much of your money as possible away from taxable accounts like your Wealthfront account in to your tax-sheltered IRA. The advantages of a traditional IRA is that you don't pay taxes on the money you contribute to the IRA at your income level. The money grows tax-free, but you are then taxed when you withdraw the money in retirement. A Roth IRA is taxed now (in that you pay in to it with ordinary income that you've paid income taxes on), but the money you withdraw is not taxed in the future. I'm pro-Roth if you can afford it. For an expat, I think it's usually useful to have a good chunk of emergency fund stashed up. It depends on what country you're in, but you're still a foreigner with limited rights if SHTF, so having enough money to bug out to the homeland and land on your feet is useful. I think $10K is probably a good starting point. I agree that you should not have a bunch of money in crypto that you're planning on for retirement. If you want to let that position ride and see if you get the moon money, I'm not opposed to that decision, but I would not augment your crypto portfolio in any way. Keep in mind that if you sell individual stock positions you've held for less than a year where you earn a profit from sale, they are subject to higher tax rates. Positions held for more than a year are subject to long term capital gains, which for you at your income level should be about 15%.
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Feb 5, 2021 14:33
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I'm looking to get a HELOC to finance a few home projects in a few months. Any recommendations on a provider? I current bank with Amex FSB, Schwab, Chase, and Alliant Credit Union. I think Alliant has the best rates, but I figured I'd throw it out there. I need maybe $10-20k. I refinanced back in October, and my home load is at 71%LTV, so I think I have some room to breathe there as well.
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Feb 5, 2021 14:57
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Does it ever make sense to lock in natural gas prices via a 1-3 year fixed rate with your main energy provider? I can't find historical therm prices for my provider. I missed the sign up window but I was curious in general for going forward. Our gas bills in winter are pretty high because we rent an old leaky home.
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Feb 8, 2021 14:03
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It can make sense. It’s not guaranteed to be a lower price, but it will be predicable. Price stability is what you’re locking in for; do you care about your gas bill being stable?
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Feb 8, 2021 14:34
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laxbro posted:Does it ever make sense to lock in natural gas prices via a 1-3 year fixed rate with your main energy provider? I can't find historical therm prices for my provider. I missed the sign up window but I was curious in general for going forward. Our gas bills in winter are pretty high because we rent an old leaky home. If I can rephrase the question as, "Should I speculate in commodity futures with the money I use to make my house habitable?" I think my answer is clear.
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Feb 8, 2021 15:14
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DNK posted:It can make sense. It’s not guaranteed to be a lower price, but it will be predicable. Price stability is what you’re locking in for; do you care about your gas bill being stable? The price is stable, but the cost is not. The gas bill will not be stable because you're stabilizing cost per therm, but the number of therms you use is dependent on the weather.
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Feb 8, 2021 15:34
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laxbro posted:Does it ever make sense to lock in natural gas prices via a 1-3 year fixed rate with your main energy provider? I can't find historical therm prices for my provider. I missed the sign up window but I was curious in general for going forward. Our gas bills in winter are pretty high because we rent an old leaky home. My dad does this with propane. He gets topped off every 2 months for a fixed price for the year. I don't have the exact numbers but in the summer it would be $100 to fill up in the winter it is around $500 he pays like $350 for the fixed price (the numbers are fake so don't read into those). Since it is a tank it is a bit different than from the utility. A lot of his neighbors will fill up at end of September and try to make it to spring but that bill in February if you don't make it.... Also look into exactly how your utility does this. We don't have a lock in like you are saying (I work for a large utility) but we have fixed monthly pricing. So you always pay X/month and then they adjust it for he next year based on the usage.
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Feb 8, 2021 16:54
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spwrozek posted:My dad does this with propane. He gets topped off every 2 months for a fixed price for the year. I don't have the exact numbers but in the summer it would be $100 to fill up in the winter it is around $500 he pays like $350 for the fixed price (the numbers are fake so don't read into those). Since it is a tank it is a bit different than from the utility. A lot of his neighbors will fill up at end of September and try to make it to spring but that bill in February if you don't make it.... I reread the letter and it isn't clear if this is the utility or not. My utility is named XYZ but the letter came from "XYZ Solutions." What's odd is that they share the same logo but have separate websites. The "XYZ Solutions" does not identify themselves as a reseller or subsidiary of the utility. But in digging through the FAQs they do imply that the utility is separate. Very scammy that they are trying to pass themelves off as the utility. I'm guessing they pay to use a similar name as the utility? The letter also used scammy language where "only the first 2000 respondents may lock in their rate so act now." Thanks for the feedback everyone. I don't have any need or desire to lock in my gas rate - was just curious because I thought it was the utility was sending this out. I know that energy resellers are almost always a bad deal.
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Feb 8, 2021 17:35
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laxbro posted:I reread the letter and it isn't clear if this is the utility or not. My utility is named XYZ but the letter came from "XYZ Solutions." What's odd is that they share the same logo but have separate websites. The "XYZ Solutions" does not identify themselves as a reseller or subsidiary of the utility. But in digging through the FAQs they do imply that the utility is separate. Very scammy that they are trying to pass themelves off as the utility. I'm guessing they pay to use a similar name as the utility? The letter also used scammy language where "only the first 2000 respondents may lock in their rate so act now." Congratulations on not getting scammed. You could call the utility (from your utility bill, not the letter) and ask about the letter you got. There is a chance they don't know the logo is being used. If it's a regulated field you might also file a complaint if it's not officially licensed merch. Apparently some scammer claiming to be my lender has been "referred for citation" here in California, we'll see if their license gets an actual ding.
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Feb 8, 2021 18:03
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Yeah, that sounds like a middleman trying to wedge some profit in there. Scammy as gently caress when you go to lengths to sound 'like' the utility company but have to provide a clear statement that you are in fact not the company you're trying to mimic.spwrozek posted:Also look into exactly how your utility does this. We don't have a lock in like you are saying (I work for a large utility) but we have fixed monthly pricing. So you always pay X/month and then they adjust it for he next year based on the usage. Yep, I have this with my electric company. They adjust my rate every quarter, and they're pretty generous about it - my account carries a "negative" balance for a good chunk of the year, when I'd normally have $200-250 bills that jack up my automated bill payment 'system'.
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Feb 8, 2021 18:04
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laxbro posted:I reread the letter and it isn't clear if this is the utility or not. My utility is named XYZ but the letter came from "XYZ Solutions." What's odd is that they share the same logo but have separate websites. The "XYZ Solutions" does not identify themselves as a reseller or subsidiary of the utility. But in digging through the FAQs they do imply that the utility is separate. Very scammy that they are trying to pass themelves off as the utility. I'm guessing they pay to use a similar name as the utility? The letter also used scammy language where "only the first 2000 respondents may lock in their rate so act now." Glad you reread it. I would contact your actual utility about it. It may be a legal middle man thing but also could just be a scam. Utilities are commonly targeted for scams.
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Feb 8, 2021 18:13
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"Level pay agreements" are very common and what is being described by other posters. (I think that's the common term for it.) They take your forecasted annual usage, add it all up, and divide by 12. Then they adjust it over time based on whatever actuals they have (kwh/therm/hcf costs, your actual usage in the lookback window, that sort of thing.) It's very convenient if it's free and you don't like having bills that bounce around for ease of budgeting against the harsher seasons.
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Feb 8, 2021 18:23
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What's the consensus on paying extra principal on a house payment? I've been paying am extra $300 on my mortgage each month, and now I'm refinancing from a 3.5 to a 2.5 fifteen year. I had planned on continuing to pay extra principal, but a couple friends told me I should consider taking that extra money and putting it into my Roth (I haven't maxed it yet) as it would likely be a higher than 2.5% return. I'm bad with having extra cash on hand so I tend to put it in places I can't spend it easily, so this seems like a decent idea to me. Thoughts? I have some credit card debt but it's all 0% promo so I'm not rushing to pay it off early.
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Feb 9, 2021 00:31
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Medullah posted:What's the consensus on paying extra principal on a house payment? I've been paying am extra $300 on my mortgage each month, and now I'm refinancing from a 3.5 to a 2.5 fifteen year. I had planned on continuing to pay extra principal, but a couple friends told me I should consider taking that extra money and putting it into my Roth (I haven't maxed it yet) as it would likely be a higher than 2.5% return. I'm bad with having extra cash on hand so I tend to put it in places I can't spend it easily, so this seems like a decent idea to me. Thoughts? I have some credit card debt but it's all 0% promo so I'm not rushing to pay it off early. This is a "what is my risk tolerance" question. I think you should absolutely be maxing your tax advantaged retirement accounts (every last one you have access to) before paying down a 3.5% mortgage and definitely a 2.5% one.
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Feb 9, 2021 00:39
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I wouldn't pay one extra penny on a 3.25%+ mortgage, and if my rate were higher than that, I'd refi to 2.5% immediately. So basically, don't pay extra principal under any scenario in our current time of Free Money
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Feb 9, 2021 01:06
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Thanks guys, that's what I was thinking but wanted to get some second eyes. I'm annoyed that I'm paying to refinance but the rates are just too good.
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Feb 9, 2021 01:10
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Medullah posted:Thanks guys, that's what I was thinking but wanted to get some second eyes. I'm annoyed that I'm paying to refinance but the rates are just too good. My refi from 3.875 to 2.69 paid for itself in 8 months. It stings in the moment but it's so worth it. And with rates this low I have no plan to pay a dime early.
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Feb 9, 2021 07:46
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