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spflakers
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PostPosted: Thu Jun 21, 2018 8:16 am    Post subject:

Question for some LGers.

My company got sold. New place doesn't offer 401k match, but we can roll over and keep contributing.

Since they don't match, is there any benefit to rolling over from the old place to the new one? Or would it make more sense to roll over to the traditional IRA I also have? Also, if I do the IRA, is there any type of limit to how much 401k I can roll over? IRA is with Vanguard, which is supposed to be pretty good place.

We're supposed to have the forms in tomorrow (sale happened last week) so I might just keep it in old one right now, since I assume you can roll over anytime. And I know I could just keep it in old one as well and just have it sit there, but seems like moving to IRA would make more sense than that.

(note: I'm a part-timer at this place so the contribution each year wasn't huge amount; I put more into my other IRA each year, but before I did have the match with the 401k). i guess one question I'd have: Is there any benefit to keeping it 401k - either keeping in my old place or moving to new company -- on the off chance I might someday work for a place that matches?

thanks for any insight.
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audioaxes
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PostPosted: Thu Jun 21, 2018 10:09 am    Post subject:

Im a big fatwallet(RIP), biggerpockets, bogleheads lurker.
I focus on credit card rewards (havent been able to manufactured spend in a minute), rental properties, and index funds.

my goals for credit card rewards are to always optimize the rewards I can earn on every day spending and find another killer manufactured spend avenue (free money!)
my goals for rental properties are to ramp up enough rental property income to cover my barebones monthly expenses and my dream goal is possibly one day owning a 12+ unit complex that I can then hookup family members at a cheap rent rate who may need a place to stay and in return they help with the upkeep of the place
my goals for index funds is to ramp up enough balance where I only need to the spend the interest returns in retirement and never touch the principle
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audioaxes
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PostPosted: Thu Jun 21, 2018 10:28 am    Post subject:

ringfinger wrote:
Ted wrote:
Aussiesuede wrote:
Step #1: Don't get married until financially solvent.

Step #2: Don't have Kids until beyond financially solvent.

Those are the 2 biggest contributors to early financial success.

Avoiding the mistake of steps 1 & 2 provide the easiest path for remaining debt free.

Step #3. Purchase a home as early as possible (As close to your 18th birthday as is feasible)

Step #4: Pay off that home as quickly as possible

Step #5: Use increases in income to purchase rental property(s)

Step #6: Do not finance vehicles


Really, why? I've always thought that financing is better than leasing for vehicles. Is it because of the potential tax write offs for when you lease?


I think he is suggesting to pay cash. Probably the best move financially speaking but not practical for most. Plus, for yoinger folks, I think it can be a good way to build credit history.

I would definitely oppose long term financing for cars, like the 72/84 mo options. If thats what you're doing, you can't afford the car.

I'd say look for low APR (0.0%, 0.9%, etc) and finance is ok over 3 years, 5 tops. I mean, in most areas you gotta have a car to get to work, etc.

Most people can't write off their leases, unless they have their own business.

if you are a financially disciplined you are missing out on opportunities by not financing your car. A car loan is pretty much the cheapest money you can borrow and can put that upfront money in an investment that can easily out earn the loan interest fees.
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LAkers 4 Life
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PostPosted: Fri Jun 22, 2018 4:24 pm    Post subject:

spflakers wrote:
Question for some LGers.

My company got sold. New place doesn't offer 401k match, but we can roll over and keep contributing.

Since they don't match, is there any benefit to rolling over from the old place to the new one? Or would it make more sense to roll over to the traditional IRA I also have? Also, if I do the IRA, is there any type of limit to how much 401k I can roll over? IRA is with Vanguard, which is supposed to be pretty good place.

We're supposed to have the forms in tomorrow (sale happened last week) so I might just keep it in old one right now, since I assume you can roll over anytime. And I know I could just keep it in old one as well and just have it sit there, but seems like moving to IRA would make more sense than that.

(note: I'm a part-timer at this place so the contribution each year wasn't huge amount; I put more into my other IRA each year, but before I did have the match with the 401k). i guess one question I'd have: Is there any benefit to keeping it 401k - either keeping in my old place or moving to new company -- on the off chance I might someday work for a place that matches?

thanks for any insight.


That depends on some other factors.

First, do you like the funds offered by your 401k provider?
* If no, then do you like the funds in your current company's 401k provider?
* If still no, then roll it over to your IRA and pick funds that you like. A bad 401k provider is just a killer on your account.

Second, are you earning too much to qualify for a Roth IRA directly?
* If so, then you probably will do a backdoor Roth IRA. In this case then I would not recommend rolling over the 401k to a rollover IRA since that would affect you tax-wise since you will not be taxed on only the proportion of the non-deductible contribution relative to the total pre-taxed IRAs. For example, if the non-deductible contribution is only 25% of all the total pre-taxed IRA(traditional, SIMPLE, SEP), then the remaining 75% of the Roth conversion will be taxed.
* If no, then it really depends on your preference, i.e. whether you like the funds offered by your IRA compared to the old 401k or the new 401k.

In addition, you might want to consider some other factors like the costs and benefits between borrowing against your 401k versus your IRA, not that I recommend borrowing against your retirement.
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ringfinger
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PostPosted: Fri Jun 22, 2018 7:00 pm    Post subject:

spflakers wrote:
Question for some LGers.

My company got sold. New place doesn't offer 401k match, but we can roll over and keep contributing.

Since they don't match, is there any benefit to rolling over from the old place to the new one?

Or would it make more sense to roll over to the traditional IRA I also have?


The matching (or non-matching) is irrelevant since it only applies to new contributions and not existing funds. Even if they did match, it would have no bearing whether you rolled your existing funds over or not.

Rolling into your new 401K, or into your tIRA, has different benefits depending on what you prefer. I'll get into that later.

spflakers wrote:
Also, if I do the IRA, is there any type of limit to how much 401k I can roll over? IRA is with Vanguard, which is supposed to be pretty good place.


There is no limit on rolling 401K to IRA. Vanguard is excellent IMO.

spflakers wrote:
i guess one question I'd have: Is there any benefit to keeping it 401k - either keeping in my old place or moving to new company -- on the off chance I might someday work for a place that matches?

thanks for any insight.


There is no real benefit to keeping your 401K in the older place other than it can be a pain to rollover funds into a new one. There is a drawback in that sometimes they will convert an old 401K into a rollover IRA. I have 401K money in a job I left 6 years ago, but they have allowed me to keep it in a 401K account so I just leave it there. If they ever close the 401K and convert to rollover, I'm going to roll it into other retirement accounts though.

As for what you should do with the money -- sounds like you have two options outside of just leaving it in the old 401K. You can either roll the old account into your new 401K, or, as you said, roll your old account into your tIRA.

There are benefits to each, so here goes:

- 401K is protected against backruptcy and personal lawsuits. A traditional IRA is only protected against bankruptcy.

- 401K is limited to the investment choices your new account allows for that account. In a tIRA, you can generally invest in a much wider array of options.

- 401K you have the option to borrow against the funds. Not recommended, but, if you get desperate, it's an option not available in a tIRA.

- If you roll into your tIRA, you're done until retirement. If you roll your old 401K into your new 401K and then you part ways with your employer, you might need to make this decision again later.

What would I do? Well, I would keep it in the old 401K as long as the investment choices are ok. But keep an eye on it and if it gets converted to rollover, then roll it into your new 401K, again, provided the investment choices in the new 401K are acceptable to you.

I keep no money in my tIRA actually, for me, because I make backdoor Roth IRA contributions each year (highly recommended and NOT a loophole as it sounds). In short, it's a method that allows people who exceed the Roth IRA income requirements to contribute to Roth IRA, but only if you don't have a balance in any IRA accounts. If you do, you would be taxed on the conversion.
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ringfinger
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PostPosted: Fri Jun 22, 2018 7:10 pm    Post subject:

audioaxes wrote:
ringfinger wrote:
I think he is suggesting to pay cash. Probably the best move financially speaking but not practical for most. Plus, for yoinger folks, I think it can be a good way to build credit history.

I would definitely oppose long term financing for cars, like the 72/84 mo options. If thats what you're doing, you can't afford the car.

I'd say look for low APR (0.0%, 0.9%, etc) and finance is ok over 3 years, 5 tops. I mean, in most areas you gotta have a car to get to work, etc.

Most people can't write off their leases, unless they have their own business.

if you are a financially disciplined you are missing out on opportunities by not financing your car. A car loan is pretty much the cheapest money you can borrow and can put that upfront money in an investment that can easily out earn the loan interest fees.


Agreed, but the amount of opportunity is small. And there is still market risk of course. And then there's cash flow.

But you're right -- the math would say the optimal choice would be to get a very low interest loan, make the payments, and invest the cash instead of buying outright.

There's probably not a single best option for all scenarios, it really depends on the person and their situation.
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Conker
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PostPosted: Fri Jun 22, 2018 7:15 pm    Post subject:

Get a Honda/Toyota. Saves you a lot of headaches. Avoid luxury cars.
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slavavov
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PostPosted: Sat Jun 23, 2018 12:47 am    Post subject:

Conker wrote:
Get a Honda/Toyota. Saves you a lot of headaches. Avoid luxury cars.

This. I live in L.A., and so many people feel like they have the have a luxury car and Armani suits to feel good about themselves. I feel like many people who drive a luxury car are barely making the minimum payments on them. Those people may look loaded, but if they lose their job they're no better off than someone in the hood making $20,000 a year because they own nothing and live paycheck to paycheck.

Ask yourself what you really need to feel emotionally healthy. Do you really need that BMW or Mercedes to impress people you'll never even look in the eye? That money would be better spent on great experiences with the people you really care about.

Unless you make six figures a year, avoiding luxury items really helps you become and stay financially stable.
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Omar Little
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PostPosted: Sat Jun 23, 2018 12:55 am    Post subject:

Yup. Buy used and drive it into the ground. Subaru’s are good too.
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Huey Lewis & The News
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PostPosted: Sat Jun 23, 2018 2:18 am    Post subject:

take home two hefty handfuls of napkins every day from any food service place. the end result is a kitchen drawer overstuffed with napkins that are brown, white, coarse or smooth, large or small, and you never having to buy napkins

when buying items on craigslist, misspell the names of the items you're looking for in the search query. sellers who can't spell aren't smart enough to resist your lowball

workplace potlucks: bring in a dish that looks like garbage to guarantee that it will go untouched, when, really, it'll be one of your favorite dishes, that way you can take all of it home to enjoy as your next couple of meals after you've ravaged the porto's cheese rolls and edible arrangements on which everyone else foolishly spent money and travel time

bring a syringe or an old cell phone with you when you travel. After you check in to your hotel room, "find" the "used" syringe or the "could be a hooker's" phone just under the bed or in the bible drawer. bam, free upgrade

want to travel with an awesome, lightweight computer? Buy a top-tier surface pro from any reputable retailer and return it after your trip before the return policy expires.

call your hotel in advance of your stay to tell the front desk that you have diabetes and need to refrigerate your insulin; they'll put a fridge in your room free of charge. bonus: actually have diabeetus so that this isn't a ruse. jackpot bonus: spend the next 2 years eating whatever you want and forgoing the overrated rigors of exercise; ascend to diabetic status. say that you require a heated neck pad due to recent car wreck to get a microwave in your room, as well.
leave an insulin syringe in a corner somewhere to keep the syringe upgrade in play for the next guy
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Surfitall
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PostPosted: Sat Jun 23, 2018 1:59 pm    Post subject:

Huey Lewis & The News wrote:


want to travel with an awesome, lightweight computer? Buy a top-tier surface pro from any reputable retailer and return it after your trip before the return policy expires.


This is unethical and bad for civilized society. If everyone did this, no retailer would accept returns. We are all then screwed when we have to return something for legitimate reasons.

After spending some time in Egypt, I made some friends who decided to visit me and spent a couple months in SoCal. They rented an apartment short term and couldn’t believe our return policies and felt like the companies were all suckers by letting them buy TV’s, furniture, Etc with a 60 day return policy. Their plan all along was to return everything they bought for a full refund. Sure they, and you are just abiding by their policies, but seriously, this isn’t good for the rest of us. Please don’t do this.
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ringfinger
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PostPosted: Sat Jun 23, 2018 2:08 pm    Post subject:

Surfitall wrote:
Huey Lewis & The News wrote:


want to travel with an awesome, lightweight computer? Buy a top-tier surface pro from any reputable retailer and return it after your trip before the return policy expires.


This is unethical and bad for civilized society. If everyone did this, no retailer would accept returns. We are all then screwed when we have to return something for legitimate reasons.

After spending some time in Egypt, I made some friends who decided to visit me and spent a couple months in SoCal. They rented an apartment short term and couldn’t believe our return policies and felt like the companies were all suckers by letting them buy TV’s, furniture, Etc with a 60 day return policy. Their plan all along was to return everything they bought for a full refund. Sure they, and you are just abiding by their policies, but seriously, this isn’t good for the rest of us. Please don’t do this.


Plus, on computers, I think there is a restocking fee. Not 100% sure but that would make for an expensive lease on a computer.

Also, companies are now flagging frequent returners. If you return too often, you will no longer be eligible for returns. So do so at your own risk!
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Huey Lewis & The News
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PostPosted: Wed Jun 27, 2018 5:50 am    Post subject:

Surfitall wrote:
Huey Lewis & The News wrote:


want to travel with an awesome, lightweight computer? Buy a top-tier surface pro from any reputable retailer and return it after your trip before the return policy expires.


This is unethical and bad for civilized society. If everyone did this, no retailer would accept returns. We are all then screwed when we have to return something for legitimate reasons.

After spending some time in Egypt, I made some friends who decided to visit me and spent a couple months in SoCal. They rented an apartment short term and couldn’t believe our return policies and felt like the companies were all suckers by letting them buy TV’s, furniture, Etc with a 60 day return policy. Their plan all along was to return everything they bought for a full refund. Sure they, and you are just abiding by their policies, but seriously, this isn’t good for the rest of us. Please don’t do this.


rush into elevators with earbuds in your ears whether or not you're actually listening to music, and even if the earbuds are plugged into anything--they could be plugged into your belly button for all you care. look at the floor, never look up from the floor. rapidly smash the door close button like it's the NES power pad and enjoy the muffled resentment of slow-moving peckerwoods who would cost you precious minutes by dampening the efficiency of your vertical commute. also you're now free to jam to your mega cool tunes with a whole elevator to yourself until the doors open

if you're seated on a flight next to a great big fat person, express concern to one of the attendants that this person's girth is affecting your ability to buckle your seatbelt properly. if the flight is not completely full, one of you will be moved and possibly upgraded. either way, you won't have to fly the fat skies

if your kids are destroying your finances, drive down to mexico but park on the US side, don't bring any identification. tell the kids you're going to mexican disneyland. cross the border and then go to the other side of the processing center and then make a panicked sprint through the document check while making incoherent, vaguely spanish-sounding noises. the usa will solve this problem for you, fam
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BadGuy
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PostPosted: Wed Jun 27, 2018 3:04 pm    Post subject:

slavavov wrote:
Conker wrote:
Get a Honda/Toyota. Saves you a lot of headaches. Avoid luxury cars.

This. I live in L.A., and so many people feel like they have the have a luxury car and Armani suits to feel good about themselves. I feel like many people who drive a luxury car are barely making the minimum payments on them. Those people may look loaded, but if they lose their job they're no better off than someone in the hood making $20,000 a year because they own nothing and live paycheck to paycheck.

Ask yourself what you really need to feel emotionally healthy. Do you really need that BMW or Mercedes to impress people you'll never even look in the eye? That money would be better spent on great experiences with the people you really care about.

Unless you make six figures a year, avoiding luxury items really helps you become and stay financially stable.


I feel like many people who cannot afford to drive a luxury car make assumptions about those that do. You live in LA, so a lot of people probably make 6 figures near you. If you moved to a different city, you'd probably see less luxury cars. Some people enjoy driving, and, since much of one's time in LA is usually spent in traffic, I don't see any great virtue in sitting in a beat up Civic that cannot merge safely due to an underpowered engine with a barely working AC, while you sweat it out on your numb ass to pinch a few pennies. Some people have 401ks, emergency funds, personal stock portfolios, a house, and a luxury car, so I would not be so quick to judge others for having one.

With that said, I can afford to get a luxury car today, but I drive a beat-up '04 Civic, which my friends make fun of me for driving. When I get a new job that makes it so I can easily afford the luxury car I want, I'll get one because I love driving!

Also, for those of you abusing returns, Amazon hands out lifetime bans to people that abuse their system. These lifetime bans are rarely (if ever) appealed successfully.
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