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I'm new to investing but getting more serious about it because both my fiance and I got into significantly higher paying jobs this year. I have a Roth IRA at Fidelity that I'm tossing small amounts at, but I'm mostly looking at money market funds since we're focused on paying off a modest credit card debt and establishing an emergency fund before anything else. My main question so far is what kind of math I need to determine when tax exempt funds become worth considering over just sticking with SPAXX. For intance, I just learned that FDLXX is state tax exempt and only yields about 0.05% less, so it seems like a no brainer to switch over. But apparently there are municipal funds that only yield half as much but are totally tax exempt; is it even worth worrying about that at my current (22%) tax bracket?
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# ¿ Sep 18, 2023 16:47 |
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# ¿ May 4, 2024 01:26 |
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Leperflesh posted:Just to be clear, you're talking about doing short-term, tax-free investments in your cash emergency fund, not in your Roth IRA, right? Because your Roth IRA is tax-advantaged, there is no taxes on the earnings from the stuff you buy in your IRA. Correct. To elaborate a bit, I have 0% APR on the card until next February, and I've done the budgeting to ensure I'll have enough to pay it off outright when that rolls around. I plan to spend the next year building savings and then transition into maxing out my Roth contributions as much as possible. My state tax is a flat 4.4% if that matters.
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# ¿ Sep 18, 2023 17:27 |
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Antillie posted:Since you have state income tax SGOV might be a good place to keep your efund as it is exempt from state taxes since its all US treasuries. Since the yield on SGOV is higher than SPAXX at the moment there isn't much reason to stay in SPAXX right now imo. Once the yield curve returns to normal (who knows when that will be) you can always move back over to SPAXX. I've been reading up on SGOV and it looks great, but I've recently learned that it's subject to wash sales, a concept so utterly baffling to me that I'm not sure it's worth the trouble trying to figure it out as opposed to just figuring out how to buy treasuries directly.
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# ¿ Sep 20, 2023 16:33 |
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Subvisual Haze posted:I recommend water purification chips too. And containers of gasoline to bribe Lord Humungous with. If you can't get hold of a water purification chip now, keeping some rope handy might help you find one later on.
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# ¿ Oct 5, 2023 03:12 |
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The Leck posted:one of the main things that I'm looking forward to with finding a new job is getting my money out of the garbage 401(k) that it's in right now. They don't even HAVE a S&P500 index, let alone a cheap one, and I think the lowest expense ratio for anything is around .80. Target date funds are over 1%. Yeah I'm in a similar boat. I forgot to opt out of 401k contributions for a bit so I have some money tied up in it. There's no employer match, the target date funds have an ER of 1.03%, and while there is an SP500 fund its still at 0.5% ER. I guess I'll just shove everything into that and aggressively max out my Roth IRA and the better funds it has access to.
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# ¿ Oct 24, 2023 18:09 |
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runawayturtles posted:This sounds like my old plan. Try to get your employer to switch, there are plenty of modern plans out there that are better and cheaper for everyone involved. Can you elaborate on this a bit? Is there some way I can find info on the specific 401k plan I'm under and research other offerings so I can make a case for something being better for the employer as well?
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# ¿ Oct 26, 2023 19:51 |
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Antillie posted:The classic way to reduce risk is bonds. BND is the defacto total bond fund. There are equity funds that try to go for some sort of "stable value" approach but I feel that you can get the same effect with less expense with some mix of VTI and BND. What's a good fidelity equivalent? FXNAX? Also thanks for everyone who weighed in on my earlier 401k questions, I think I can present a decent case to my employer. They're already revising benefits so I'm hopeful.
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# ¿ Nov 1, 2023 16:36 |
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KYOON GRIFFEY JR posted:edit: pretty sure by account you meant anecdote, not like, a HSA oops Yeah I had the same read you did at first lol Man I really miss my HSA at my last job. If I had known then what I do now I'd have put a lot more money in before leaving
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# ¿ Nov 7, 2023 21:17 |
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I'm helping my fiance manage her finances. She's eligible for PERA and we're trying to decide of she would be better served by their defined benefit plan or by a Roth 403b. I realize there probably isn't a simple answer to this but Ive never dealt with defined benefit plans, any pitfalls that might not be obvious or advice for what we should be comparing to make that decision?
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# ¿ Nov 8, 2023 20:17 |
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I asked a question about pensions a little further up, so this discussion has been pretty helpful. My main concern was with the long-term viability of a pension fund (especially since my fiance's is a state program), but from what I've been able to tell it's a pretty good deal, and since we'll both be contributing to Roth IRA's anyway that'll mitigate a lot of the risk.
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# ¿ Nov 9, 2023 17:53 |
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KYOON GRIFFEY JR posted:you could be at an income point where you have to backdoor in to a Roth IRA and at that point having an existing traditional IRA is a pain. Can you explain this a bit? I currently have a 401k, tradition, and Roth IRA. I won't be hitting the backdoor Roth threshold anytime soon but I only have a tiny about in my traditional at the moment; I could roll it over if doing so will keep more options open for me in the future.
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# ¿ Nov 10, 2023 00:08 |
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I have a fidelity CMA account that's largely replaced traditional banks for me The yield you quoted is just for the FDIC sweep position, you can and should invest in government money market funds with a CMA. Fidelity will even auto liquidate MMF shares on demand to cover any withdrawals. Worth pointing out that the CMA is almost identical to a regular brokerage account. Which one you pick depends on whether you prefer ATM reimbursement (CMA only) or having SPAXX as a core position (brokerage only). It was an easy decision for me since my preferred MMF isn't an eligible core position so I have to buy it manually either way.
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# ¿ Nov 10, 2023 19:44 |
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drk posted:Yeah, annoyingly there is no official list that I found, but the following rules apply That's what I do. We have a flat state tax here in CO and I'm in a low tax bracket so it works well for me.
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# ¿ Nov 13, 2023 05:47 |
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I'm still fairly new to finance, and probably making far less than anyone in here, so grain of salt and all that. But I was under the impression that houses make terrible assets (zero diversification, need constant maintenance, very prone to physical damage and outright destruction from all sorts of causes). So as someone whose entire monthly take-home pay would barely cover a 30 year mortgage as defined by some of the examples in this thread, it's really hard for me not to take daslog's view and wonder why I should even entertain the idea at all when I could just sock a few hundred a month into my IRA and get much less riskier returns over that same timeframe.
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# ¿ Nov 23, 2023 03:59 |
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Antillie posted:You are correct. A house is a terrible investment in most cases. It costs a bunch of money in upkeep, repairs, taxes, and insurance that you never get back. It is also highly unlikely to keep pace with the S&P500 over the long term. But that said it is still an investment in a practical sense. Or at the very least a savings account that tends to slightly outpace inflation and is somewhat hard to pull money from. A savings account that keeps up with inflation that is hard to pull money out of isn't great as investments go. But its a great thing for most people. It fits what most people need so well that most people desperately need it for their own good. Sure it often results in scary levels of over concentration into a single asset but it still better than trying to live off of just social security. I don't really have anything to add to this, I just wanted to say thanks for breaking it all down and I fully appreciate your point about solutions needing to account for what average people are likely to do. Pollyanna posted:If I had a million dollars I would buy a house solely to spite once and future landlords of all kinds. gently caress a landlord, bitches hate landlords. I feel similarly but then I'd be forced into an HOA and that doesn't sound much better (I don't know how it is outside of CO but around here you really can't avoid them).
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# ¿ Nov 24, 2023 01:42 |
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Uthor posted:401(k) question. You're lucky, my company's 401k target date funds are at 1.03% with no match. Even my IRA doesn't have an ER that low.
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# ¿ Nov 28, 2023 03:38 |
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spwrozek posted:Then you need to move your IRA to vanguard or Fidelity. I worded that poorly, I was shocked to see a 401k with such low fees. 401k's tend to be lovely in general and getting 0.08 on one is amazing. I have a target date fund at Fidelity that's at 0.2%
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# ¿ Nov 28, 2023 05:09 |
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Yeah I posted before about how I use Fidelity for basically everything and I'm very happy with it. Everything comes in and out of my CMA (including my direct deposit and any bills paid by direct debit), and then I distribute my savings/retirement investments into my other brokerage accounts/IRA's, respectively. I do keep a checking account open at one of my local credit unions for the times I need to deposit cash, but those are rare enough that it's almost purely psychological and I'd probably be fine without it.
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# ¿ Dec 16, 2023 21:46 |
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There are Fidelity Freedom Funds and Fidelity Freedom INDEX Funds. They're identical but one has an ER of 0.75% and the other is 0.22% or thereabouts. No, the site is not clear about this. EDIT: I checked and it's actullay 0.12% for the one I'm in (FDEWX) Jabarto fucked around with this message at 18:25 on Dec 22, 2023 |
# ¿ Dec 22, 2023 18:22 |
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Subvisual Haze posted:I can't recommend SGOV enough as a savings account like vehicle. Because it's an ETF you can buy it at any brokerage including RH, 5.24% yield currently, accumulates value slowly and safely, and ideal for potentially transferring assets between brokerages as the shares of it can be transferred in kind and keep accumulating value in the process. SGOV has really brought me around to ETFs as a concept. I mostly use money markets for cash just because of Fidelitys auto liquidate feature, but I keep my more discretionary savings in SGOV and I recently dropped my target date fund on favor of manually balancing my retirement portfolio across the vanguard total market ETFs.
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# ¿ Jan 4, 2024 22:48 |
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As long as we're talking about it, anyone have any thoughts on SCHO vs. SGOV? I get the the former is a 1-3 year bond fund, and the latter is a 0-1 year fund, but how much difference does that make in practice?
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# ¿ Jan 10, 2024 01:43 |
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It also seems to be increasingly common for brokerages to allow the purchase of fractional ETF shares. I know Fidelity can do it, at least.
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# ¿ Jan 24, 2024 01:40 |
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I tried to get into investing 6 or 7 years ago and was paralyzed by not knowing what stocks to pick before giving up on it. If I had just known what money market funds and target date funds were back then, my finances would be going quite a bit better.
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# ¿ Jan 24, 2024 22:02 |
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My 401k options are through American Funds and they all have over 1% ER's, so I'd pay close attention to the fees if nothing else.
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# ¿ Jan 28, 2024 20:27 |
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I was wondering if a 401k loan for a house down-payment was worth planning around, but I really hated the idea of pulling from my 401k for any reason and it seems my instincts were right. Not worth the risk
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# ¿ Feb 6, 2024 23:04 |
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Mu Zeta posted:Some paranoids need that FDIC guarantee Not that it matters for the average user, but even then the FDIC limit is lower than Fidelity's sweep program. I love Vanguard but Fidelity really has become a great one-stop shop for me, especially since I started using the Vanguard ETF's for a 3-fund portfolio.
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# ¿ Feb 11, 2024 01:28 |
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I will say Vanguard's money market funds have unbeatable returns. The Fidelity ones have ER's around 0.4, which is pretty high even if the CMA features more than make up for it.
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# ¿ Feb 11, 2024 03:27 |
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runawayturtles posted:Tax question about SGOV: My 1099 doesn't appear to mention that the dividend income is almost entirely from the U.S. government. Is this a Schwab thing, or is this just generally not done for ETFs? I guess I'm supposed to manually use the percentage posted by iShares (96.45%)? I have the same question. I'm just assuming that gor ETFS you need to get that info from the broker that owns the ETF instead of the one you're trading through?
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# ¿ Feb 14, 2024 22:30 |
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I'm not the most experienced investor but my vote goes to Fidelity. They have a decent website, good customer service, and a lot of great cash management/hsa features if you're into those. Vanguard is very good for the low fees and their "shareholder-owned" organization, but lacks some convenience and their cash management isn't as good. Schwab has nothing. I don't know why you'd pick it over Vanguard or Fidelity.
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# ¿ Feb 17, 2024 02:52 |
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This is just making me glad my father told me to open a Roth IRA and gave me a link to the Bogleheads forum along with a copy of The Four Pillars of Investing when I was in my mid 20s. Shame it took me 6 years to follow up on it.
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# ¿ Mar 11, 2024 20:43 |
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Boris Galerkin posted:Saw that Fidelity was adding SPAXX as a core position for their cash management accounts in June, so no more having to manually buy SPAXX or manually sending money over to an actual brokerage account w/ Fidelity. This is really cool, I prefer FDLXX so I'll have to make manual transfers either way, but it's nice not having to worry about forgetting to do so at least.
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# ¿ Apr 23, 2024 00:55 |
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# ¿ May 4, 2024 01:26 |
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If I ever had to do a backdoor roth and had less than 50 cents in my traditional IRA to begin with, am I correct in assuming it would round down to 0 as far as the IRS is concerned and avoid any pro rata nonsense?
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# ¿ May 2, 2024 17:06 |