Official PERSONAL FINANCE thread
Goto page 1, 2  Next

 
Post new topic    LakersGround.net Forum Index -> Off Topic Reply to topic
View previous topic :: View next topic  
Author Message
ringfinger
Franchise Player
Franchise Player


Joined: 08 Oct 2013
Posts: 21257

PostPosted: Wed Sep 28, 2016 8:35 pm    Post subject: Official PERSONAL FINANCE thread

Don't see much posted here in OT about personal finance and I thought it might be interesting to share investment ideas and strategy for retirement, general saving, etc. Or, perhaps you want to discuss debt reduction ideas, improving credit score, etc. I prefer that this thread not be about your favorite individual stock picks, but rather, overall personal financial planning/investing or just helping others with their questions.

I'm by no means a financial expert, just somewhat of a very amateurish hobbyist in that regard who started out his 20s being very financially irresponsible, before increasing my earning potential and seeing the light so to speak.

Love to discuss your ideas and opinions around 401K, Roth IRA, Traditional IRA, 529, HSA, FSA, Emergency Funds, Credit Cards, Mortgage, Debt Reduction, Savings Tools/Apps, Investing, Peer to Peer Lending, Reducing Spend, General Saving Questions, etc, etc.
Back to top
View user's profile Send private message Reply with quote
the association
Star Player
Star Player


Joined: 03 Feb 2015
Posts: 1982

PostPosted: Wed Sep 28, 2016 9:35 pm    Post subject: Re: Official PERSONAL FINANCE thread

ringfinger wrote:
Don't see much posted here in OT about personal finance and I thought it might be interesting to share investment ideas and strategy for retirement, general saving, etc. Or, perhaps you want to discuss debt reduction ideas, improving credit score, etc. I prefer that this thread not be about your favorite individual stock picks, but rather, overall personal financial planning/investing or just helping others with their questions.

I'm by no means a financial expert, just somewhat of a very amateurish hobbyist in that regard who started out his 20s being very financially irresponsible, before increasing my earning potential and seeing the light so to speak.

Love to discuss your ideas and opinions around 401K, Roth IRA, Traditional IRA, 529, HSA, FSA, Emergency Funds, Credit Cards, Mortgage, Debt Reduction, Savings Tools/Apps, Investing, Peer to Peer Lending, Reducing Spend, General Saving Questions, etc, etc.


Good thread idea, RF ... this is adjacent to my bailiwick (actually, more of a narrow area within), but I look forward to seeing how much action the thread finds over time. Certain areas of finance have always been intimidating to substantial segments of the population. If this thread helps at least a few individuals to navigate these waters with greater confidence and an edge they wouldn't otherwise enjoy, then that's a success in my book.
Back to top
View user's profile Send private message Reply with quote
lakerjoshua
Franchise Player
Franchise Player


Joined: 28 Nov 2007
Posts: 11043
Location: Bay Area

PostPosted: Wed Sep 28, 2016 10:16 pm    Post subject:

I've put all my money in a chicken farm in Atlanta, a waffle joint in Compton and a shrip distributor in New Orleans..

Assets in futures, commodities and real estate. I'm good.

And if times get rough I can consolidate my assets into one kick ass chicken, waffle and shrip joint in any of the 3 locations and make a killing.


Last edited by lakerjoshua on Wed Sep 28, 2016 10:22 pm; edited 2 times in total
Back to top
View user's profile Send private message Reply with quote
ringfinger
Franchise Player
Franchise Player


Joined: 08 Oct 2013
Posts: 21257

PostPosted: Wed Sep 28, 2016 10:21 pm    Post subject:

Yup, that's what I'm hoping others can get out of it. I still find myself quite intimidated by many aspects of it.

I started debt reduction well over a decade ago, because I always carried high balances on my cards. They just felt so ... insurmountable. Plus, if I left available credit I felt like I was leaving money on the table. And $100 to spend on something I wanted just felt better than applying it to a balance of $8,000 just to knock it down to $7,900. But eventually, you max out your cards and you're left with no ability to spend and little cash. I knew I needed to figure something out just didn't know how.

I stumbled on to something online about Dave Ramsey's snowball method for reducing debt. So I tried it. It really worked for me. I also watched a lot of episodes of Suze Orman. I saw other people, many older than I, in similar and often worse situations. But then seeing them able to climb out of it was ... inspiring. And that's when I became my quest to become more financially responsible.

Anyway, fast forward to today, I now have a totally different perspective on wealth and money. I was always on a quest to make more money but kept finding myself in the same situation. What I didn't realize, is that the key to building wealth isn't just about making more money. Because often, when you do, you just spend more. You get a nicer car, nicer apt or house, nicer things. The real key is reducing your spending as challenging as that is in So Cal where the pressure to "keep up with the Jones'" is very real.

But it is definitely intimidating. I had so many questions about emergency fund saving, should I max my 401K or not, should I borrow against my 401K when I need to buy something large, should I do a Roth IRA, what do I invest in once I do open those accounts, etc. So here is a very basic outline of what I did to get out of debt and into the black.

- I saved my first $1,000 for an emergency fund
- I set my 401K contribution to the employer match level
- I used Dave Ramsey's snowball method to reduce and eventually eliminate my debt
- I bought a home
- I saved 8 months of current living expenses in a savings account
- I opened a Roth IRA and contribute the max
- I maxed the 401K
- I opened a taxable investment account and put any extra money in there as part of my overall portfolio

This all took me over the course of 10-15 years of course, but the main thing that helped me get back to positive territory was with the help of random people online, blogs, message boards, etc. I hope we can help some others too.
Back to top
View user's profile Send private message Reply with quote
lakerjoshua
Franchise Player
Franchise Player


Joined: 28 Nov 2007
Posts: 11043
Location: Bay Area

PostPosted: Wed Sep 28, 2016 10:27 pm    Post subject:

ringfinger wrote:
Yup, that's what I'm hoping others can get out of it. I still find myself quite intimidated by many aspects of it.

I started debt reduction well over a decade ago, because I always carried high balances on my cards. They just felt so ... insurmountable. Plus, if I left available credit I felt like I was leaving money on the table. And $100 to spend on something I wanted just felt better than applying it to a balance of $8,000 just to knock it down to $7,900. But eventually, you max out your cards and you're left with no ability to spend and little cash. I knew I needed to figure something out just didn't know how.

I stumbled on to something online about Dave Ramsey's snowball method for reducing debt. So I tried it. It really worked for me. I also watched a lot of episodes of Suze Orman. I saw other people, many older than I, in similar and often worse situations. But then seeing them able to climb out of it was ... inspiring. And that's when I became my quest to become more financially responsible.

Anyway, fast forward to today, I now have a totally different perspective on wealth and money. I was always on a quest to make more money but kept finding myself in the same situation. What I didn't realize, is that the key to building wealth isn't just about making more money. Because often, when you do, you just spend more. You get a nicer car, nicer apt or house, nicer things. The real key is reducing your spending as challenging as that is in So Cal where the pressure to "keep up with the Jones'" is very real.

But it is definitely intimidating. I had so many questions about emergency fund saving, should I max my 401K or not, should I borrow against my 401K when I need to buy something large, should I do a Roth IRA, what do I invest in once I do open those accounts, etc. So here is a very basic outline of what I did to get out of debt and into the black.

- I saved my first $1,000 for an emergency fund
- I set my 401K contribution to the employer match level
- I used Dave Ramsey's snowball method to reduce and eventually eliminate my debt
- I bought a home
- I saved 8 months of current living expenses in a savings account
- I opened a Roth IRA and contribute the max
- I maxed the 401K
- I opened a taxable investment account and put any extra money in there as part of my overall portfolio

This all took me over the course of 10-15 years of course, but the main thing that helped me get back to positive territory was with the help of random people online, blogs, message boards, etc. I hope we can help some others too.


You sound very proud of yourself. I'm happy you shared all of your finances online and only waited two whole posts before your disclosure.

Such a DB (no not Dancing Barry)
Back to top
View user's profile Send private message Reply with quote
ringfinger
Franchise Player
Franchise Player


Joined: 08 Oct 2013
Posts: 21257

PostPosted: Wed Sep 28, 2016 11:10 pm    Post subject:

lakerjoshua wrote:
ringfinger wrote:
Yup, that's what I'm hoping others can get out of it. I still find myself quite intimidated by many aspects of it.

I started debt reduction well over a decade ago, because I always carried high balances on my cards. They just felt so ... insurmountable. Plus, if I left available credit I felt like I was leaving money on the table. And $100 to spend on something I wanted just felt better than applying it to a balance of $8,000 just to knock it down to $7,900. But eventually, you max out your cards and you're left with no ability to spend and little cash. I knew I needed to figure something out just didn't know how.

I stumbled on to something online about Dave Ramsey's snowball method for reducing debt. So I tried it. It really worked for me. I also watched a lot of episodes of Suze Orman. I saw other people, many older than I, in similar and often worse situations. But then seeing them able to climb out of it was ... inspiring. And that's when I became my quest to become more financially responsible.

Anyway, fast forward to today, I now have a totally different perspective on wealth and money. I was always on a quest to make more money but kept finding myself in the same situation. What I didn't realize, is that the key to building wealth isn't just about making more money. Because often, when you do, you just spend more. You get a nicer car, nicer apt or house, nicer things. The real key is reducing your spending as challenging as that is in So Cal where the pressure to "keep up with the Jones'" is very real.

But it is definitely intimidating. I had so many questions about emergency fund saving, should I max my 401K or not, should I borrow against my 401K when I need to buy something large, should I do a Roth IRA, what do I invest in once I do open those accounts, etc. So here is a very basic outline of what I did to get out of debt and into the black.

- I saved my first $1,000 for an emergency fund
- I set my 401K contribution to the employer match level
- I used Dave Ramsey's snowball method to reduce and eventually eliminate my debt
- I bought a home
- I saved 8 months of current living expenses in a savings account
- I opened a Roth IRA and contribute the max
- I maxed the 401K
- I opened a taxable investment account and put any extra money in there as part of my overall portfolio

This all took me over the course of 10-15 years of course, but the main thing that helped me get back to positive territory was with the help of random people online, blogs, message boards, etc. I hope we can help some others too.


You sound very proud of yourself. I'm happy you shared all of your finances online and only waited two whole posts before your disclosure.

Such a DB (no not Dancing Barry)


Wow. I didn't post my finances, I just posted my timeline for how I prioritized my savings. I thought maybe that would help encourage others to share theirs for comparisons sake. I know my path isn't ideal. In fact I already know any real experts out there will probably say my route is far, far from ideal. I have a long, long way to go and I'm still eager for more advice and ideas on what else I can do better.

What's your problem?
Back to top
View user's profile Send private message Reply with quote
buduan
Starting Rotation
Starting Rotation


Joined: 24 Feb 2002
Posts: 699

PostPosted: Wed Sep 28, 2016 11:41 pm    Post subject:

He's a sad little troll projecting on to you.

What is the snowball method for debt reduction?
Back to top
View user's profile Send private message Reply with quote
the association
Star Player
Star Player


Joined: 03 Feb 2015
Posts: 1982

PostPosted: Wed Sep 28, 2016 11:57 pm    Post subject:

buduan wrote:
He's a sad little troll projecting on to you.

What is the snowball method for debt reduction?


It's a plan for organizing your debts to prioritize payments against smaller balances first (in contrast to remitting minimum payments only, remitting proportional payments [beyond the minimums] based on balance or interest rate, etc.). The idea is that by devoting as much of your disposable income as possible to the task of paying-down those smaller debts first, the resultant psychological effect of seeing tangible progress will motivate you to remain focused and on track.

I don't follow Ramsey, but that's my understanding anyway ...
Back to top
View user's profile Send private message Reply with quote
ringfinger
Franchise Player
Franchise Player


Joined: 08 Oct 2013
Posts: 21257

PostPosted: Thu Sep 29, 2016 7:11 am    Post subject:

buduan wrote:
He's a sad little troll projecting on to you.

What is the snowball method for debt reduction?


the association is spot on. Mathematically speaking, the best way to reduce your debt load is to make the largest payments on your debt that has the highest interest rate. But, that can be a hard pill for a lot of people to swallow because sometimes that is the largest amount of debt and making payments against it feels ... inconsequential. I know that was the case for me.

So the method is to pay the minimums on your largest debts and apply the most you can against the smallest debt first. Once you pay that off, you roll that payment you were making plus the minimum payment you were paying on your second largest debt and pay minimums on the remaining accounts. And so on.

The idea is basically that psychologically, you are more likely to remain motivated when you see greater progress. Making a $200 payment on a $500 balance is more satisfying than making a $200 payment on a $5,000 balance since the latter just feels like a small dent.

For me, and I'm sure others, that war on reducing debt was a psychological one, and less a mathematical one.

I have a friend who asked me about debt consolidation but I know little about it. It seems shady mainly because of the advertising practices, but, anyone have any positive experiences with it?
Back to top
View user's profile Send private message Reply with quote
CandyCanes
Retired Number
Retired Number


Joined: 24 Dec 2007
Posts: 28345
Location: Santa Clarita, CA (Hell) ->>>>>Washington, DC

PostPosted: Thu Sep 29, 2016 7:15 am    Post subject:

My personal plan is to inherit 200 million dollars from my father and then claim that I worked my way up from the bottom. #Selfmademan
_________________
Damian Lillard shatters Dwight Coward's championship dreams:

https://www.youtube.com/watch?v=SZrbEjppnd4
Back to top
View user's profile Send private message Visit poster's website Reply with quote
Thugnomoe
Franchise Player
Franchise Player


Joined: 19 Jul 2005
Posts: 14335
Location: unfortunately not Los Angeles anymore

PostPosted: Thu Sep 29, 2016 8:04 am    Post subject:

Dave Ramsey is amazing. I agree with most of what he says...

and my wife and I are debt free because of it.

those little wins are key...
Back to top
View user's profile Send private message AIM Address Reply with quote
marga86
Star Player
Star Player


Joined: 30 Jun 2008
Posts: 3442

PostPosted: Thu Sep 29, 2016 8:59 am    Post subject:

the association wrote:
buduan wrote:
He's a sad little troll projecting on to you.

What is the snowball method for debt reduction?


It's a plan for organizing your debts to prioritize payments against smaller balances first (in contrast to remitting minimum payments only, remitting proportional payments [beyond the minimums] based on balance or interest rate, etc.). The idea is that by devoting as much of your disposable income as possible to the task of paying-down those smaller debts first, the resultant psychological effect of seeing tangible progress will motivate you to remain focused and on track.

I don't follow Ramsey, but that's my understanding anyway ...


My understanding as well.
Back to top
View user's profile Send private message Reply with quote
ringfinger
Franchise Player
Franchise Player


Joined: 08 Oct 2013
Posts: 21257

PostPosted: Thu Sep 29, 2016 9:00 am    Post subject:

Thugnomoe wrote:
Dave Ramsey is amazing. I agree with most of what he says...

and my wife and I are debt free because of it.

those little wins are key...


Awesome man! That's great to hear. I'm not a fan of when he gets in to the religious stuff, but otherwise, esp for those in debt and needing a plan to get out, I found it helpful as well. Congrats to you and your wife!
Back to top
View user's profile Send private message Reply with quote
spideysense
Star Player
Star Player


Joined: 21 Oct 2007
Posts: 2208

PostPosted: Thu Sep 29, 2016 9:13 am    Post subject:

ringfinger wrote:
lakerjoshua wrote:
ringfinger wrote:
Yup, that's what I'm hoping others can get out of it. I still find myself quite intimidated by many aspects of it.

I started debt reduction well over a decade ago, because I always carried high balances on my cards. They just felt so ... insurmountable. Plus, if I left available credit I felt like I was leaving money on the table. And $100 to spend on something I wanted just felt better than applying it to a balance of $8,000 just to knock it down to $7,900. But eventually, you max out your cards and you're left with no ability to spend and little cash. I knew I needed to figure something out just didn't know how.

I stumbled on to something online about Dave Ramsey's snowball method for reducing debt. So I tried it. It really worked for me. I also watched a lot of episodes of Suze Orman. I saw other people, many older than I, in similar and often worse situations. But then seeing them able to climb out of it was ... inspiring. And that's when I became my quest to become more financially responsible.

Anyway, fast forward to today, I now have a totally different perspective on wealth and money. I was always on a quest to make more money but kept finding myself in the same situation. What I didn't realize, is that the key to building wealth isn't just about making more money. Because often, when you do, you just spend more. You get a nicer car, nicer apt or house, nicer things. The real key is reducing your spending as challenging as that is in So Cal where the pressure to "keep up with the Jones'" is very real.

But it is definitely intimidating. I had so many questions about emergency fund saving, should I max my 401K or not, should I borrow against my 401K when I need to buy something large, should I do a Roth IRA, what do I invest in once I do open those accounts, etc. So here is a very basic outline of what I did to get out of debt and into the black.

- I saved my first $1,000 for an emergency fund
- I set my 401K contribution to the employer match level
- I used Dave Ramsey's snowball method to reduce and eventually eliminate my debt
- I bought a home
- I saved 8 months of current living expenses in a savings account
- I opened a Roth IRA and contribute the max
- I maxed the 401K
- I opened a taxable investment account and put any extra money in there as part of my overall portfolio

This all took me over the course of 10-15 years of course, but the main thing that helped me get back to positive territory was with the help of random people online, blogs, message boards, etc. I hope we can help some others too.


You sound very proud of yourself. I'm happy you shared all of your finances online and only waited two whole posts before your disclosure.

Such a DB (no not Dancing Barry)


Wow. I didn't post my finances, I just posted my timeline for how I prioritized my savings. I thought maybe that would help encourage others to share theirs for comparisons sake. I know my path isn't ideal. In fact I already know any real experts out there will probably say my route is far, far from ideal. I have a long, long way to go and I'm still eager for more advice and ideas on what else I can do better.

What's your problem?


Don't mind him, I consider myself a beginner in personal finance so I would like to learn more.

Noob question, but why would you have both a roth ira and a 401k?
_________________
"Rome wasn't built in a day"
Back to top
View user's profile Send private message Reply with quote
rwongega
Franchise Player
Franchise Player


Joined: 20 Jul 2005
Posts: 20510
Location: UCLA -> NY

PostPosted: Thu Sep 29, 2016 9:58 am    Post subject:

It's called everyone send me their money and I'll invest it for you.
_________________
http://media.giphy.com/media/zNyBPu5hEFpu/giphy.gif
http://bartsblackboard.com/files/2009/11/The-Simpsons-05x18-Burns-Heir.jpg

RIP Jonathan Tang
RIP Alex Gruenberg

Free KBCB
Back to top
View user's profile Send private message Reply with quote
mhan00
Retired Number
Retired Number


Joined: 13 Apr 2001
Posts: 28290

PostPosted: Thu Sep 29, 2016 10:05 am    Post subject:

Probably the best piece of advice that is applicable to most people: Never carry balances on your credit cards and always pay them off every month if at all possible. Credit cards are great because they're convenient and many offer some excellent rewards to use them, but the interest rate is a killer. If you don't have the discipline to do that, then you're better off cutting up every card you have, while maybe leaving one that isn't easily accessible for emergencies.

The short term loan industry (payday loans, auto title loans, pawn shops, etc) is one giant hustle scamming the poor and desperate and should be the very, very, very last resort you fall back to in only the most extreme emergency.

If you have enough money to actually start investing towards retirement (this should be after you have paid off your most expensive debts) then the easiest way to do so would be finding a couple low fee index funds and just investing in those every time you get paid without worrying about the market at all.


Last edited by mhan00 on Thu Sep 29, 2016 10:14 am; edited 1 time in total
Back to top
View user's profile Send private message ICQ Number Reply with quote
LakersRGolden
Star Player
Star Player


Joined: 13 Jan 2002
Posts: 6455
Location: Lake Forest

PostPosted: Thu Sep 29, 2016 10:08 am    Post subject:

spideysense wrote:
ringfinger wrote:
lakerjoshua wrote:
ringfinger wrote:
Yup, that's what I'm hoping others can get out of it. I still find myself quite intimidated by many aspects of it.

I started debt reduction well over a decade ago, because I always carried high balances on my cards. They just felt so ... insurmountable. Plus, if I left available credit I felt like I was leaving money on the table. And $100 to spend on something I wanted just felt better than applying it to a balance of $8,000 just to knock it down to $7,900. But eventually, you max out your cards and you're left with no ability to spend and little cash. I knew I needed to figure something out just didn't know how.

I stumbled on to something online about Dave Ramsey's snowball method for reducing debt. So I tried it. It really worked for me. I also watched a lot of episodes of Suze Orman. I saw other people, many older than I, in similar and often worse situations. But then seeing them able to climb out of it was ... inspiring. And that's when I became my quest to become more financially responsible.

Anyway, fast forward to today, I now have a totally different perspective on wealth and money. I was always on a quest to make more money but kept finding myself in the same situation. What I didn't realize, is that the key to building wealth isn't just about making more money. Because often, when you do, you just spend more. You get a nicer car, nicer apt or house, nicer things. The real key is reducing your spending as challenging as that is in So Cal where the pressure to "keep up with the Jones'" is very real.

But it is definitely intimidating. I had so many questions about emergency fund saving, should I max my 401K or not, should I borrow against my 401K when I need to buy something large, should I do a Roth IRA, what do I invest in once I do open those accounts, etc. So here is a very basic outline of what I did to get out of debt and into the black.

- I saved my first $1,000 for an emergency fund
- I set my 401K contribution to the employer match level
- I used Dave Ramsey's snowball method to reduce and eventually eliminate my debt
- I bought a home
- I saved 8 months of current living expenses in a savings account
- I opened a Roth IRA and contribute the max
- I maxed the 401K
- I opened a taxable investment account and put any extra money in there as part of my overall portfolio

This all took me over the course of 10-15 years of course, but the main thing that helped me get back to positive territory was with the help of random people online, blogs, message boards, etc. I hope we can help some others too.


You sound very proud of yourself. I'm happy you shared all of your finances online and only waited two whole posts before your disclosure.

Such a DB (no not Dancing Barry)


Wow. I didn't post my finances, I just posted my timeline for how I prioritized my savings. I thought maybe that would help encourage others to share theirs for comparisons sake. I know my path isn't ideal. In fact I already know any real experts out there will probably say my route is far, far from ideal. I have a long, long way to go and I'm still eager for more advice and ideas on what else I can do better.

What's your problem?


Don't mind him, I consider myself a beginner in personal finance so I would like to learn more.

Noob question, but why would you have both a roth ira and a 401k?


401K - you put money in before it is taxed (unless you put in a lot). Your employer may match some of the $$ (free!). You pay tax on the money when you draw it out at retirement (your tax bracket should be lower)

Roth IRA - you put money in that has already been taxed. You don't pay tax to use it or any gains in retirement. (Gets around capital gains tax of 15%+ on most investments). Very good for young people where the $$ can "earn" for decades.
Back to top
View user's profile Send private message Reply with quote
venturalakersfan
Retired Number
Retired Number


Joined: 14 Apr 2001
Posts: 126954
Location: The Gold Coast

PostPosted: Thu Sep 29, 2016 11:09 am    Post subject:

Thugnomoe wrote:
Dave Ramsey is amazing. I agree with most of what he says...

and my wife and I are debt free because of it.

those little wins are key...


Same here, but not only did we get out of debt, we are smart enough not to jump back in. We have enough savings to last a couple of months, but for the past 19 years I have been contributing at least 10% to my 401k. We have a step up you can select where I can increase my contributions by 1% on a pre-determined date every year. I am up to about 17% now. It really helps the tax situation.
_________________
Iíve got my toes in the water, ass in the sand.......
Back to top
View user's profile Send private message Reply with quote
Aussiesuede
Star Player
Star Player


Joined: 27 Jul 2005
Posts: 9795

PostPosted: Thu Sep 29, 2016 11:32 am    Post subject:

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
_________________
I'm On point, On task, On message, and Off drugs. A Streetwise Smart Bomb, Out of rehab and In denial. Over the Top, On the edge, Under the Radar, and In Control. Behind the 8 ball, Ahead of the Curve and I've got a Love Child who sends me Hate mail.
Back to top
View user's profile Send private message Reply with quote
marga86
Star Player
Star Player


Joined: 30 Jun 2008
Posts: 3442

PostPosted: Thu Sep 29, 2016 3:32 pm    Post subject:

What do people here general invest in?

I'm in ETF's at the moment, technical analysis aside (unless people can't put it in laymen terms for others), i'd be interested in seeing what stocks people are/have been in and what their experience was.
Back to top
View user's profile Send private message Reply with quote
ringfinger
Franchise Player
Franchise Player


Joined: 08 Oct 2013
Posts: 21257

PostPosted: Thu Sep 29, 2016 5:20 pm    Post subject:

LakersRGolden wrote:
spideysense wrote:
Noob question, but why would you have both a roth ira and a 401k?


401K - you put money in before it is taxed (unless you put in a lot). Your employer may match some of the $$ (free!). You pay tax on the money when you draw it out at retirement (your tax bracket should be lower)

Roth IRA - you put money in that has already been taxed. You don't pay tax to use it or any gains in retirement. (Gets around capital gains tax of 15%+ on most investments). Very good for young people where the $$ can "earn" for decades.


Yeah. There is a cap on the Roth IRA as well. If you make over $117,500 you cannot contribute to a Roth IRA. (Actually you CAN, through a backdoor method with some restrictions).

Anyway, the benefit of having both is that the two account types offer different tax advantages. As LakerRGolden said, 401K is taxed when you withdraw the money (so it is a tax deferred account) whereas the Roth IRA whatever you put in there grows tax free and when you withdraw after 59.5 yrs, you don't have to pay any taxes even on your gains.

At a basic level, stocks offer more earning potential than say, bonds. Since you don't have to pay taxes on gains in a Roth, you should just put all of your Roth investments in stocks. Most of your bonds investments can reside in your 401K since you have to pay taxes on all of your withdrawals from there later in life.
Back to top
View user's profile Send private message Reply with quote
ringfinger
Franchise Player
Franchise Player


Joined: 08 Oct 2013
Posts: 21257

PostPosted: Thu Sep 29, 2016 5:28 pm    Post subject:

marga86 wrote:
What do people here general invest in?

I'm in ETF's at the moment, technical analysis aside (unless people can't put it in laymen terms for others), i'd be interested in seeing what stocks people are/have been in and what their experience was.


I'm only in ETFs as well. I just use a "lazy portfolio" for my retirement portfolio from both Fidelity and Vanguard. It consists of an allocation of index funds such as U.S. Total Stock Market (VTSAX), Int'l Stock Market (VTIAX), Bonds Index Fund (FIBAX), and REITs Index Funds (FSRVX).

I don't have the stomach to actively trade individual stocks.
Back to top
View user's profile Send private message Reply with quote
Ted
Star Player
Star Player


Joined: 24 Jun 2005
Posts: 3257

PostPosted: Thu Sep 29, 2016 5:47 pm    Post subject:

Great thread, I've recently been reading up a lot on this topic and would love to hear opinions/advice from people with more experience.
Back to top
View user's profile Send private message Reply with quote
Ted
Star Player
Star Player


Joined: 24 Jun 2005
Posts: 3257

PostPosted: Thu Sep 29, 2016 5:48 pm    Post subject:

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?
Back to top
View user's profile Send private message Reply with quote
ringfinger
Franchise Player
Franchise Player


Joined: 08 Oct 2013
Posts: 21257

PostPosted: Thu Sep 29, 2016 6:16 pm    Post subject:

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.
Back to top
View user's profile Send private message Reply with quote
Display posts from previous:   
Post new topic    LakersGround.net Forum Index -> Off Topic All times are GMT - 8 Hours
Goto page 1, 2  Next
Page 1 of 2
Jump to:  

 
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum






Graphics by uberzev
© 1995-2010 LakersGround.net. All Rights Reserved. Privacy Policy. Terms of Use.
LakersGround is an unofficial news source serving the fan community since 1995.
We are in no way associated with the Los Angeles Lakers or the National Basketball Association.


Powered by phpBB