The Investment Thread (help with savings, stocks, retirement funds, etc.)

[justinandimcool]

Originally Posted by UCFish

Tidu was right I borrowed to help get the 20% down.

One kid and he is 2 right now. Plan is to check the different 529 plans...last year there was a vanguard one that had a 3k minimum. Can do that now. Hoping that once he stops going to daycare in a few years will just put that money away into the 529 monthly.

Are there any fees when you borrow from 401k?

[42graystreet]

Originally Posted by justinandimcool

Are there any fees when you borrow from 401k?

My company's 401(k) plan charges an origination fee of $35 and an annual maintenance fee of $20. Otherwise, the loan is "free" in that the interest you pay on the loan goes back into your own account. You of course lose out on that money growing in your investments while you borrow it so that (and the small fees) should be part of your consideration when you decide if a 401(k) loan is the best thing to do. You also need to understand that if you leave the company or get fired, the balance of the loan is due within 90 days.

[Benny003]

Originally Posted by Tiduwho

I think he borrowed against his 401k to come up with down payment dollars on his house purchase.

Im torn on the whole 529 plan. Not sure on the pros and cons. Got a 1 month old, but currently still trying to get my and my wife's financial house in order.

The first rule is don't do a 529 until you have yourself taken care of first. Take care of your retirement needs first and only if you have left over money after that should do a 529. Your retirement well-being is a higher priority than funding college for your child because your child could potentially have a lot of options to pay for college. Your options to pay for retirement are much more limited.

That being said, if you have your retirement needs being met, then a 529 is a great idea in my opinion. That's why I opened one. I don't plan to pay for all of my kids' college costs, but I will at least put a dent in it. I opened it up with $2000 and plan to put in $100 a month. Projections seem to indicate that the account should have around $40k in it by the time our child turns 18. If our kid wants to go somewhere more expensive than that, then he can work on getting scholarships or finding a job to help pay for it. The other nice thing is that the 529 allows me to encourage friends and family to put money in it rather than buying presents and toys all the time for our child.

Originally Posted by UCFish

Tidu was right I borrowed to help get the 20% down.

One kid and he is 2 right now. Plan is to check the different 529 plans...last year there was a vanguard one that had a 3k minimum. Can do that now. Hoping that once he stops going to daycare in a few years will just put that money away into the 529 monthly.

The 529 plans are usually purchased through the different state-run plans I thought. I guess I didn't even look at financial institution plans. Anyway, after researching the different state plans I went with New York's. It had really good fees, it's run well, no minimum investment amounts, and it was really flexible and easy. Check your home state plan first because they might offer a tax incentive. Minnesota, my home state, has a tax incentive for their plan, but I think it phased out pretty fast and their 529 plan isn't as well rated as New York's.

[UCFish]

I am in Florida so no tax incentive when I was looking last year since there are no state taxes.

Last year someone had a link to the beat 529 plans that is why I liked the Vanguard one.

Same 401k rules as Chad if I remember correct. The one scary thing was always the immediate payback if I left the company/fired but felt strong enough that was not going to happen. When I it off though I won’t have to worry about that part.

[drakan]

Originally Posted by 42graystreet

Absolutely, RIP. Founder of Vanguard. Inventor of the index mutual fund. This guy brought investment to the masses. He made a name for himself by starting and succeeding at the Wellington Fund. How many of us are or have been invested in that fund? [raises hand]

If you invest and haven't read a Bogle book you are doing it wrong.

[justinandimcool]

Great info thanks everyone!

[justinandimcool]

Made a few more sacrifices and looks like I’ll be able to max Roth for 2018 and 2019 and contribute 17000 to the 401k instead of 12000


I will be starving and will have very little fun but it’s all good

[UCFish]

Don't forget to enjoy life a little.....

[42graystreet]

Originally Posted by justinandimcool

Made a few more sacrifices and looks like I’ll be able to max Roth for 2018 and 2019 and contribute 17000 to the 401k instead of 12000


I will be starving and will have very little fun but it’s all good

I mean, this is epic levels of financial responsibility but I have to concur with my fellow poster. You also need to live your best life *now* It's okay to appropriately budget for QOL expenses.

[42graystreet]

It's funny this topic came up because I'm preparing right now for a meeting with a real financial advisor for the first time in my life. I created a damned PowerPoint for him and on one slide I listed my 3 big financial goals I want him to help me achieve:

1. Maximize short-term cash savings for potential real estate purchase (0-2 years)
2. Balance short term savings goal with long term retirement planning
3. Budget appropriately for travel expenses.

I love traveling for many reasons. Visiting family/friends, DMB shows, Chelsea games in London, Vegas for shits and grins, and I'm not going to give them up. They bring joy to my life. I just need to be better at planning and budgeting for them so I don't put them all on credit cards and carry balances for some number of months.

[justinandimcool]

Nice!!!!

For me, traveling and concerts don’t really do anything for me anymore, so that was easy to cut out
Will be replacing the movies with red box
Will be eating out as little as possible, I’m vegan so meal planning has been preferred food anyway


I kept the gym, cable/internet (youtube tv) and audiobook/Spotify

In addition to emergency fund I put aside around 50 a month for minor emergencies/gifts


Leaves about $150 a month for social life/toys which I think I can manage, if I can’t I can lower 401k a little without feeling guilty. Still new to it so adjusting will be key

[justinandimcool]

Originally Posted by 42graystreet

It's funny this topic came up because I'm preparing right now for a meeting with a real financial advisor for the first time in my life. I created a damned PowerPoint for him and on one slide I listed my 3 big financial goals I want him to help me achieve:

1. Maximize short-term cash savings for potential real estate purchase (0-2 years)
2. Balance short term savings goal with long term retirement planning
3. Budget appropriately for travel expenses.

I love traveling for many reasons. Visiting family/friends, DMB shows, Chelsea games in London, Vegas for shits and grins, and I'm not going to give them up. They bring joy to my life. I just need to be better at planning and budgeting for them so I don't put them all on credit cards and carry balances for some number of months.

What would your monthly budget allocation be for travel?

[unccrombie]

Originally Posted by justinandimcool

What would your monthly budget allocation be for travel?

4-8k yearly.

[42graystreet]

Originally Posted by justinandimcool

What would your monthly budget allocation be for travel?

Originally Posted by unccrombie

4-8k yearly.

Typically, I'd say $10K annually for travel. I am willing to cut back on that in 2019/2020 as I save up for a real estate purchase.

[unccrombie]

Originally Posted by 42graystreet

Typically, I'd say $10K annually for travel. I am willing to cut back on that in 2019/2020 as I save up for a real estate purchase.

Agreed, but I like to keep it around 6-7 per international trip. Hell, we just did Seychelles for < 6

[TheLastStop123]

All my accounts have mostly recovered since December so that was good to see.

[coolhotwaves]

Originally Posted by TheLastStop123

All my accounts have mostly recovered since December so that was good to see.

Same here, was worried the trend was going to go for longer than it did

[Tiduwho]

Originally Posted by TheLastStop123

All my accounts have mostly recovered since December so that was good to see.

Originally Posted by coolhotwaves

Same here, was worried the trend was going to go for longer than it did

All part of the ride. No need to put any emotional investment assuming you arent retiring in the next few years.

I keep a spreadsheet to track my net worth periodically. It is interesting to look back at different times and life events and trace the rollercoaster. Times when CC balances were up, car loans taken out and paid, a bonus paid out, and of course the stock market ups and downs.

[cry_minarets458]

Originally Posted by Tiduwho

All part of the ride. No need to put any emotional investment assuming you arent retiring in the next few years.

I keep a spreadsheet to track my net worth periodically. It is interesting to look back at different times and life events and trace the rollercoaster. Times when CC balances were up, car loans taken out and paid, a bonus paid out, and of course the stock market ups and downs.

it's hard for me track net worth because i rent an apartment, have a car but haven't driven it in 2 years (paid for years ago), and just own a bunch of random shit like guitars. pretty much my net worth is just my accounts bc no debt.

[cry_minarets458]

Originally Posted by TheLastStop123

All my accounts have mostly recovered since December so that was good to see.

i've only recovered half of my prior gains. oh well

[UCFish]

I am still off about $5k from what I remember my highest point for my 401k.

[scrock25]

Originally Posted by UCFish

I am still off about $5k from what I remember my highest point for my 401k.

Since 9/28 when I topped out I'm still down $14k.

[TheLastStop123]

Originally Posted by scrock25

Since 9/28 when I topped out I'm still down $14k.

alright money bags!

[42graystreet]

Originally Posted by unccrombie

Agreed, but I like to keep it around 6-7 per international trip. Hell, we just did Seychelles for < 6

For sure. I was just speaking for myself. I'd like to financially plan for at least 2 overseas trips and 4-6 domestic trips for around $12K. I've learned how to do London on the cheap.

Originally Posted by scrock25

Since 9/28 when I topped out I'm still down $14k.

I'm up $8K in the month of January alone which is incredible. That won't sustain.

Still down $7K from the late September peak.

[snake911]

I think I already know my answer to this, but I wanted to toss this out on here for some other perspectives. I'm a little over 15 years into contributing to my 401k plan. I did some initial research, and continue to follow up on investing from a very basic "I want to work towards not working in the future' standpoint, and I have a fairly modest selection of very low fee Vanguard Index funds (mostly) that I put my contributions into. When I started I was very worried that if I was somehow getting this all wrong I might be tanking my retirement, so I took 50% of my contributions and put it into a target date fund (Schwab) for when I turn 65 (roughly 2045), and then I put the other 50% into the selection of index funds that I had picked (things like VINIX and VTSNX). I have made little tweaks to the half I pick over the years and as I sit here today, my picks (aka the index funds that basic common person retirement investing strategies picked) have a cumulative return that is roughly 2% better than the target date fund. I'm guessing the bulk of that is due to the sub 0.04% fees vs the target date fees of 0.35%. I'm thinking of phasing out my contributions to the target date fund as I'd rather put the 2% in my account vs the target date fund managers account. Am I thinking about this correctly? 2% isn't a large percentage, but I'm sitting at roughly half a mil in the account and 2% compounding over the next 25 years is a good sized chunk of money I would prefer to keep. Thoughts?

[Benny003]

Originally Posted by snake911

I think I already know my answer to this, but I wanted to toss this out on here for some other perspectives. I'm a little over 15 years into contributing to my 401k plan. I did some initial research, and continue to follow up on investing from a very basic "I want to work towards not working in the future' standpoint, and I have a fairly modest selection of very low fee Vanguard Index funds (mostly) that I put my contributions into. When I started I was very worried that if I was somehow getting this all wrong I might be tanking my retirement, so I took 50% of my contributions and put it into a target date fund (Schwab) for when I turn 65 (roughly 2045), and then I put the other 50% into the selection of index funds that I had picked (things like VINIX and VTSNX). I have made little tweaks to the half I pick over the years and as I sit here today, my picks (aka the index funds that basic common person retirement investing strategies picked) have a cumulative return that is roughly 2% better than the target date fund. I'm guessing the bulk of that is due to the sub 0.04% fees vs the target date fees of 0.35%. I'm thinking of phasing out my contributions to the target date fund as I'd rather put the 2% in my account vs the target date fund managers account. Am I thinking about this correctly? 2% isn't a large percentage, but I'm sitting at roughly half a mil in the account and 2% compounding over the next 25 years is a good sized chunk of money I would prefer to keep. Thoughts?

Nobody can predict future performance, so it's tough to say if that 2% trend will continue or not. It will probably take a real recession to figure out which option can handle the ups and downs better. Both are pretty good options and it sounds like you're thinking about this correctly in general (using index funds, comparing to target date funds) rather than trying to "beat the market" by hand picking your bets. Personally, I only use index funds because of the low fees and I like the feeling of at least some control over the process (I can pick the mix of index funds). However, who knows, maybe I'm way too conservative on my bonds index fund compared to the equivalent target date fund and the target date fund would be beating me badly right now. I don't know.

Pick whichever one makes you more comfortable. Neither one is that bad of an option. Congratulations on having about half a million in your 401k. Sounds like you're pretty close to my age (I've been working for 13 years) and you have me beat by a decent amount even though I've been investing in my 401k for 13 years and maxing it out the last 2 or 3 years.

[unccrombie]

My Voya 401k target fund is outperforming the TSP equivalent by like 8%, so there's another data point.

[snake911]

Originally Posted by Benny003

Nobody can predict future performance, so it's tough to say if that 2% trend will continue or not. It will probably take a real recession to figure out which option can handle the ups and downs better. Both are pretty good options and it sounds like you're thinking about this correctly in general (using index funds, comparing to target date funds) rather than trying to "beat the market" by hand picking your bets. Personally, I only use index funds because of the low fees and I like the feeling of at least some control over the process (I can pick the mix of index funds). However, who knows, maybe I'm way too conservative on my bonds index fund compared to the equivalent target date fund and the target date fund would be beating me badly right now. I don't know.

Pick whichever one makes you more comfortable. Neither one is that bad of an option. Congratulations on having about half a million in your 401k. Sounds like you're pretty close to my age (I've been working for 13 years) and you have me beat by a decent amount even though I've been investing in my 401k for 13 years and maxing it out the last 2 or 3 years.

Yeah, my "handpicks" are basically just selecting a mix of US, Foreign, and Bond index funds. My risk tolerance is fairly high, so I keep the bond % very low. After the collapse of the markets in late 08 I upped my contributions from 12 to 15%, seemed like a good time to "buy low". That decision turns out to have been a good one. Int he end, I don't think my picks are actually performing any differently than the target date fund, I think it's just the lower fees that create the difference. And I'd rather pay me. Turned 40 last year so there are still a lot of years left to work, but the finish line is starting to look a bit closer.

[TheLastStop123]

Having $500k after 13 years is incredible. I’m over here happy with like $50k lol and I turn 30 this year.

[Route_2]

My numbers (age and dollars invested) aren't far off yours snake. You're doing good. Stay the course.