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No Wave posted:When did you guys feel "satisfied" that your plan was right? It seems like there's always more to read, but I feel pretty solid on this now. When I realized the basic plan of low-complexity allocation-based indexing, combined with maxing out your tax-protected vehicles, was what all the actually-rich people I talked to did (at least those who didn't simply inherit some sort of windfall too big to practically spend), and all the other stuff was almost uniformly done/promoted by people who either aspired or acted rich, but weren't. It's not particularly obvious when you start, since many, many of the actually-rich people often act very low key, whereas the aspiring are very talkative, but when you really dig deep, that's the reality. Unormal fucked around with this message at 20:47 on Jul 11, 2013 |
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Jul 11, 2013 20:43
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No Wave posted:You contribute as the employer - basically, you have to set up your own company (with only one employee) that receives the payments that the other companies make. Then you contribute as yourself, the employee, and as yourself, the employer - so effectively the employer contribution is a business expense and the employee contribution is a personal one. solo401(k) is just OP as gently caress, needs a nerf next patch. Effective total contribution limits are something like 50k/year if you make enough. You'll find the more you make, the more incredibly unfairly tilted everything is in your favor. The first time I made more than the withholding limit and stopped paying those taxes before the end of the year was very 
Unormal fucked around with this message at 22:58 on Jul 11, 2013 |
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Jul 11, 2013 22:53
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For what it's worth my employer's payroll systems have always cut off deductions into Fidelity as soon as I hit the cap for that year; so you might not have to worry about it. Best just ask HR/payroll provider. The only trick was when multiple payroll systems/401k/paycheck sources were in play, since they don't track totals together or anything.
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Jul 16, 2013 15:57
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Orange_Lazarus posted:If anyone has any advice here are the options my wife has for her 401k: Honestly, with those three funds, you're pretty darn close to maximally diversified. Personally, I'd just keep it simple using those three funds.
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Jul 25, 2013 18:37
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Folly posted:I'm 35. More importantly, I have about 3 or 4 times this amount in tax deferred accounts. So I could conceivably put all of this Schwab money in one or two asset classes and use my tax deferred accounts to complete a diversified portfolio http://www.bogleheads.org/wiki/Principles_of_tax-efficient_fund_placement That's a pretty good overview of how to split out your investments. The principals are pretty simple, you put tax-inefficient stuff (usually bonds and bond-like instruments who's returns are mostly taxable dividends) in your IRA/401k/other protected accounts, and put tax more efficient vehicles (stocks and stock-like instruments who's returns are mostly price appreciation) in your taxable accounts. Personally my taxable accounts are mostly low-cost stock indices and municipal bonds, with taxable bonds and REITs in my tax-protected accounts.
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Sep 26, 2013 22:25
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Mouse Cadet posted:So are you guys riding this out, switching to bonds? Riding what out? 
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Feb 4, 2014 02:54
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Having rode the market from 1560 to 666 all-in, these scale pullbacks feel pretty inconsequential. During 2007-2008 the volatility was insane, it felt like it was going up and down 2-3% per day, almost every day. Nowadays I just don't even pay attention.
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Feb 4, 2014 15:20
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Henrik Zetterberg posted:Thank you, this is awesome! Vanguard doesn't know, you have to manage it, usually you track it at tax time (since by then you'll know your AGI). If you over-contribute in a year you'll owe penalties on anything earned, etc. Ultimately it's your responsibility, not Vanguard's, and if you contribute over your allowance, that's on you.
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Feb 27, 2014 01:05
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Now here's something we can all agree on.
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Feb 27, 2014 03:30
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moflika posted:I might be making a move that would have a higher chance of succeeding if I give myself a nicer cushion. Aside from that, I'd have nothing against leaving it alone for x years as I've already been doing As long as your comfortable with your stock/bond split, doing nothing and ignoring your money is basically the optimal investment strategy. If you need less risk, by all means sell some into cash or lower risk funds, but realize you're going to take the capital gains tax (presuming you have some gains) when you sell. I'd only sell what I needed to get to my target cash amount. If the answer to "what's your target amount of cash" is "???", I'd think about that carefully before doing anything at all.
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Mar 19, 2014 23:44
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DNK posted:The hypothetical I'm wrestling with is that I'm positive that I'll be able to invest into a weaker market in the future. I'm sure there will be a valley lower than today's mountain. Why are you positive? Even if you dip into tea leaves (technical analysis) it seems like we're sitting squarely on a trend-line that goes back to the 70s (or earlier) with P/E that might be in the highish end of normal, but still within practical norms. You can't predict the market. In 2000 maybe, but right now the market is pretty normative.
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Aug 4, 2014 18:06
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trigonsareNOThomo posted:I recently came into some money I was NOT expecting to come into. Having just recently paid off my student loans and car, this is a huge blessing. Put it all into a safe and stable vehicle like a savings or money market account (A money market account at Vanguard is a solid option, but by no means the only one. It's under the FDIC insurance limit, so a regular ol' bank savings account would work perfectly fine.). Then buy the books in the OP, and start reading. There's no rush, the market will still be there when you're ready to commit to an investment strategy. If you're investing it sooner than 3-6 months from now, you're probably rushing it.
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Aug 29, 2014 23:07
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Cicero posted:Kind of surprised the The Bogleheads' Guide to Investing isn't in the OP, given how much we love Vanguard. Seems like a good overview book (I actually just got it as the second edition came out recently). I find Four Pillars to just be sort of a better exposition of the same underlying philosophy.
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Aug 29, 2014 23:15
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FateFree posted:Dumb question here. I mentioned earlier I have 100k in my 401k, but I am now capped at 6% due to being a high income employee. I plan to contribute to a Vanguard 2055 plan for the remainder of what I used to max out my 401k with (so another 8% of my salary). However, am I missing out on compound interest since I am essentially starting from scratch with this new account? Does the value of a long term retirement savings account come from continually putting monthly contributions, or compound interest on top of those contributions? Yes, it's the same. 100,000 earning 5% earns 5% no matter if it is in one account of $100,000 or 1,000 accounts of $100 each. The only thing different is your fund choice, fees, and if you're investing pre or post tax, but you'll lose nothing in compound interest if you're saving the same dollar amount; and almost all of those things (even compound interest) are dwarfed by your savings rate early on (below 500kish, where earnings start to tilt towards investment returns for a typical saver.)
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Aug 30, 2014 06:19
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Donald Kimball posted:Fiancee started a new job recently and has a new 401k through her company. Her previous employer 401k was through Fidelity, and her new employer uses Fidelity too. She has the option to rollover her contributions to a Fidelity IRA. Should we do this? Yes, it's almost always a good idea to roll it over into a Fidelity or Vanguard (or other low-cost provider) IRA, unless you have some absurdly rare and valuable options in your new 401k (which you almost certainly don't). IRAs have more or less the same upsides and no exposure to withdrawl blackouts or your employer's malfeasance.
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Aug 31, 2014 04:34
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moana posted:I'll likely be doing this for the first time at the end of this year; is there a cap to how much you can rollover into an IRA from a 401k or no? Nope. The only trick is matching up roth/traditional contribution rollovers into the matching form of IRA, but just call the institution. If you're with Vanguard, at least, they'll assign you a person to manage the whole transaction. It's pretty trivial.
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Aug 31, 2014 16:06
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baquerd posted:Can someone explain to me why WFIOX (Well's Fargo S&P 500 Index) poo poo the bed to the tune of 4% losses that weren't reflected in the S&P around December 11th, 2013? And also why I can't seem to find any news regarding this, and why Bloomberg and Yahoo Finance see this while Morningstar does not? Looks like an ex-dividend date to me.
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Sep 3, 2014 05:34
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DNK posted:How does that work with regards to contribution limits? Can you roll $50k of 401k into an IRA in a single year? Yes, as much as you want, it's a non-taxable event.
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Sep 10, 2014 16:59
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Guinness posted:If your 401k is good, I would hesitate to roll over to a traditional IRA because you'll lose the benefit of being able to do a tax-free backdoor Roth IRA contribution (assuming you don't have any other traditional IRA assets). But if that's not a concern, roll away. I'd always roll it over into an IRA if backdoor issues aren't a problem. 401k blackouts/malfeasance are very real, and can happen to you. Don't be more dependent on your employer's goodwill and good behavior than you have to be, you already are for your job.
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Sep 10, 2014 17:30
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ZentraediElite posted:Does anybody do sector specific ETFs? They sound fun, right? Just buy a single broad global market index and you own all the sectors.
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Sep 11, 2014 19:48
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Worst case 401k scenario is that your company embezzles the whole thing and you lose it completely. Second-best-worst-case is it enters a 401k blackout period and you lose the ability to access it for years. There are plenty of cases where drawing on your 401k is the best of your terrible options. Unormal fucked around with this message at 01:26 on Sep 24, 2014 |
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Sep 24, 2014 01:23
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semicolonsrock posted:What is a reasonable place to invest money which I expect to take out in 2 years other than a savings account? I'm concerned that most investing options are too volatile and might leave me down significantly in 2 years or not leave me with enough liquidity to actually take the money out. Savings, money market account, or Bank CD.
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Oct 5, 2014 03:44
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There's no free lunch, all you're doing branching out into personal loans is adding risk. Personally, I wouldn't 'diversify' into junk bonds with money I needed in two years.
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Oct 5, 2014 17:16
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antiga posted:This is an odd thing to say because diversification is one of the only places I'm aware of that you could make a decent argument for a free lunch. If he's already decided to buy high risk bonds, it's dead wrong to say that diversifying his purchase is 'adding risk'. Tilting towards riskier assets within a broad asset class isn't diversification.
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Oct 5, 2014 17:46
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antiga posted:Diversification is irrelevant if you're talking about investing in fundamentally different assets. Personal lending is risky but diversifying it into small loans to many individuals instead of one bond is a textbook example of decreasing your risk. Again, personal loans are not what I would recommend but your post made no sense. Bank CDs are extremely diverse loans across a large number of individuals plus depost insurance. Personal lending is just a higher risk (junk) form of savings or bank CDs; and in general they are all in the bond-like (lender/debtor) asset class. Simply tilting towards higher risk bond-like assets is not diversification, it's simply increased risk. To be more precise, to be "diversification", the returns of an asset class compared to one that diversifies it in a portfolio should be uncorrelated. The returns on all bond-like instruments (savings accounts to personal loans) are highly correlated, and therefore you do not diversify a portfolio by mixing between them, you merely set a risk profile. If you want higher risk, go for it, it's a perfectly legitimate investing tactic to seek higher rewards at higher risk. It is not, however, diversification. Unormal fucked around with this message at 18:00 on Oct 5, 2014 |
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Oct 5, 2014 17:57
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baquerd posted:The thing is, while the default rate is high, it is offset with the higher interest rates, and social lending allows you to invest in hundreds of loans ("diversifying") so that a dozen defaults don't hurt very much. This form of diversification lowers risk and volatility because individual loans are not correlated with other individual loans. A home owner in Illinois wanting money for home improvement does not correlate well with a debt consolidation loan in Florida, for example. http://en.wikipedia.org/wiki/High-yield_debt
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Oct 5, 2014 18:05
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baquerd posted:Individual loans do not behave like corporate bonds. Individuals behave differently than corporations. For example, while the subprime mortgage crisis in your wikipedia article there was in full swing, social lending was taking off and delivering excellent returns. Actually, corporate junk bonds during that exact time period (2008-2010) were posting stellar yields, because the lending risk was higher across the board. So yes, in fact they do behave like they are highly correlated with corporate bonds. 
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Oct 5, 2014 18:19
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baquerd posted:You might have to walk me though how these charts are correlated. Guess they're not! 8%-27% interest rates still makes them extremely risky, but if interest rates are that stable over long periods, then they look like they'd provide some diversification against a more volatile portfolio. Comparative yield over time, scaled roughly correctly:  Lending tree default rates:  Compare to corporate high-yield bonds, which SPIKE to 10%:  Scale comparison:  So while they likely would bring some diversification (since it appears that personal loan default rates are fairly consistent over economic decisions for a given situation and credit score), they remain extremely risky investment vehicles. Only the class A personal loans have a risk profile like corporate high-yields, and you can see that the Class A personal loans are actually fairly correlated with high-yield bonds in terms of curve (though lower volatility with the presented data). The lower classes of personal loans are just extremely high risk bonds, with high yield along with extremely high default rates. Unormal fucked around with this message at 19:21 on Oct 5, 2014 |
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Oct 5, 2014 18:32
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nwin posted:Thanks in advance for any light you all can shed on this. Just want to make sure I'm setting myself up decent. And also, if what that guy is offering is actually good advice, I'd appreciate to hear that too. This guy is a shill, run. Just read the books in the OP, they're still all totally relevant. I like Four Pillars! There's no rush, investing is long, slow and boring. You're better off just spending the time getting educated at your leisure.
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Oct 11, 2014 23:58
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Nov 13, 2014 20:00
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The funniest thing about this chart is that I can hand it to a homeless & unemployed guy and say "Hey, you're retired!"
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Feb 13, 2015 18:22
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SiGmA_X posted:This is how I feel. Eventually I plan to hold a single digit precent of net worth in well researched single stocks, doing a research/analyze, buy and hold strategy. I just don't have time for it now, so I go to mutual funds. You (the general you) should probably never have time for this unless you're an actual stock-picking professional or *really* love stock picking as a very time-intensive hobby. In reality, you should just be investing any extra time in those amounts that you have in your actual profession/interests and investing those proceeds in the broad market.
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Jan 11, 2016 21:11
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