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

[Benny003]

Originally Posted by smokew11

Jealous of all you guys...

graduated into the recession with a lot of student loan debt, took 2 years for me to find a job and 3 years for my wife (permanent job in our field, education)
student loan debt blew up in that time
wife got laid off and couldnt find permanent work for 2 years, so we had to stop our contributions and savings, havent started them back up
we did just buy a new house and we have our 2nd baby coming
we each have about $11k in Roth IRAs, $2700 in a 529, and are both nearing $50k in our retirement funds through PSERS

both in our mid 30s, still have $40k in SL debt between us. Pretty maxed out with bills and everything else. Wife is taking some more classes and will hopefully get her masters in about a year and a half, which will give her a $10k raise, but that will mostly just be breathing room.

might try to do like $50/month/each back in our IRAs but thats nothing. Just want to be able to do something

Originally Posted by M. Steng

Pfffft dude if you think you're in a rough spot, listen to our situation.

Both 28, married and bought our first house at 26.

I graduated law school with $150k+ in student loans- in retrospect a totally ridiculous thing to do, if I had to do it all over again I would have just taken the cheapest option possible. Though, I will say, I've found that having a law degree from Villanova as opposed to Quinnipiac or UConn like everyone else in CT has helped me stand out from the crowd and definitely got me my first job.

My wife has a Master's in Social Work, her grad school racked up about $25k in student loan debt. She is a saint but just like teachers, social workers are unfortunately severely under-compensated. She's been at her job for five years and is the highest paid person in her group and she is still barely cracking $50k/yr. She has a second job doing individual therapy/counseling which has helped us out tremendously.

Right now, even with our combined annual salary pushing $165k, we are barely keeping our heads above water- literally and figuratively. Our house had a really bad flooding problem that we didn't know about until all our stuff got ruined a week after we moved in. Four inches of water in my basement. So between getting that taken care of ($20k+ over the past 1.5 years replacing the basement, waterproofing/drainage, etc.), our student loan payments ($1750/month between the two of us) and our mortgage, we have almost nothing put away toward retirement. We've got kid #1 on the way in June/July so I can't imagine we're going to be doing much saving in the immediate future. Like I said above I've got $2500 in my 401k (can't contribute at my new job until I hit one year in June), and I think my wife has about $15-20k in her Roth through work. When I see Fidelity saying I should have $90k saved up by the time I hit 30 in 2020, I just laugh

So, that was basically a long-winded way of saying, things on your end aren't as bad as they seem. Once we get my student loans paid off in 7-8 years things will obviously start improving, and we both know it's a long game with my career which will hopefully really start to become more fruitful as I enter my fourth year of practice. But in the short-term, it absolutely sucks not being able to save for much of anything.

Stories like this make me pretty angry at the system. These are the types of stories that define a generation and I think we'll all be seeing the effects for decades to come.

I got lucky. I graduated college in 2005 with an engineering degree, no debt because I went to the local state university and lived at home the entire time. Got a job a few months later. Quit that job about a year later with my boss at the time to help start a company related to renewable energy right around the time wind energy was ramping up (also got a master's degree while working full time at that company, job paid for all of it). The recession never touched us and I've been doing that ever since. So while I'm considered a millennial, I have a little bit of trouble relating to a lot of other millennials with the way that they are defined by having high debt and slow job advancement. Just got super lucky and made a few good fortuitous decisions.

[Benny003]

Originally Posted by unccrombie

I'll add my data point, 32 with $125k. Just started maxing last year.

That is great. You're way ahead of a lot of people.

[M. Steng]

Originally Posted by Benny003

Stories like this make me pretty angry at the system. These are the types of stories that define a generation and I think we'll all be seeing the effects for decades to come.

I got lucky. I graduated college in 2005 with an engineering degree, no debt because I went to the local state university and lived at home the entire time. Got a job a few months later. Quit that job about a year later with my boss at the time to help start a company related to renewable energy right around the time wind energy was ramping up (also got a master's degree while working full time at that company, job paid for all of it). The recession never touched us and I've been doing that ever since. So while I'm considered a millennial, I have a little bit of trouble relating to a lot of other millennials with the way that they are defined by having high debt and slow job advancement. Just got super lucky and made a few good fortuitous decisions.

I just think about having $1750 extra in my account every month, and it makes me sick

I always saw school as a means to an end, it’s just frustrating trying to be patient getting to the point where it stops becoming a liability and my “investment” in myself starts paying off.

[Benny003]

Originally Posted by M. Steng

I just think about having $1750 extra in my account every month, and it makes me sick

I always saw school as a means to an end, it’s just frustrating trying to be patient getting to the point where it stops becoming a liability and my “investment” in myself starts paying off.

The good thing is that it almost certainly will. I bet you'll feel a lot more comfortable in 10 years. What I mean is that the time will pass, you'll get to a point where you're comfortable with where things are at, and you'll look back knowing that it was all worth it. The struggles of the early years will probably fade.

[M. Steng]

On another related note, the fact that student loans accrue interest while you’re in school is absolute horseshit. It took me over a year to pay my balance down just to the original loan amount. Totally unfair.

[Benny003]

Originally Posted by M. Steng

On another related note, the fact that student loans accrue interest while you’re in school is absolute horseshit. It took me over a year to pay my balance down just to the original loan amount. Totally unfair.

That really is unbelievable. It's also unbelievable that the Education Secretary currently is a lobbyist for the student loan lender industry. It's unbelievable how we make it so difficult for people to advance themselves.

[MOWJO8185]

Yeah that's all pretty bogus. Neither my wife or I made great money coming out of college, but we were extremely blessed that my wife's parents had paid for her college in entirety, which meant that she was already sitting on a little nest egg from jobs she had had in college/high school (she's pretty frugal). That, combined with the fact that we both lived with our parents for about a year and a half after graduation, with me putting basically my entire paycheck towards student loans and her saving up for a down payment on a house, meant we had a nice little savings to get a head start on things while we both got our career legs under us.

The above isn't a possibility for a ton of people and it's scary for me to think about where we would be if we didn't have that starting out.

[42graystreet]

Does anybody in here have strong opinions on life insurance? Particularly the whole kind that (eventually) gives you a cash value and modest return on investment.

[snake911]

Originally Posted by 42graystreet

Does anybody in here have strong opinions on life insurance? Particularly the whole kind that (eventually) gives you a cash value and modest return on investment.

Obviously everyone is in their own specific circumstances, but for my spouse and I a whole life policy makes zero sense. They aren't great investment tools, high fees, poor returns, and you can buy way more coverage with a term policy. For us, life insurance is a guard against a loss of income if one of us dies so we need something now during our working years. Retirement money is being handled through other avenues that should perform much better than a whole life policy. The financial adviser we use, who sells whole life products, was really clear that if we were maxing our 401ks and Roth IRAs and keeping an emergency cash fund of 6 months and living an enjoyable life and then had excess money lying around she would be happy to sell us a whole life policy as the returns for her on a whole life policy are great, but for now she recommends against it as all of those "ands" aren't currently true.

[Benny003]

I was just starting to plan to look into life insurance now that we have a baby. My plan was to look at just term life insurance, probably something like 15 years perhaps. I agree with snake's comments.

[M. Steng]

I just took out a $500k policy on myself. For some reason I have an irrational fear (maybe not so irrational?) of something happening to me and my wife is left holding the bag on our mortgage and possibly even my student loans (not sure about this). Regardless, that figure would just about cover the rest of my loans and the mortgage. With kid #1 on the way I don't want to take any risks. My $90k policy through work wouldn't last her more than a few years, I'd imagine.

[TheLastStop123]

Originally Posted by M. Steng

I just took out a $500k policy on myself. For some reason I have an irrational fear (maybe not so irrational?) of something happening to me and my wife is left holding the bag on our mortgage and possibly even my student loans (not sure about this). Regardless, that figure would just about cover the rest of my loans and the mortgage. With kid #1 on the way I don't want to take any risks. My $90k policy through work wouldn't last her more than a few years, I'd imagine.

listen man - send us a sign that you're okay and not being held captive somewhere.

[M. Steng]

Originally Posted by TheLastStop123

listen man - send us a sign that you're okay and not being held captive somewhere.

I meant that only in the sense of, despite my own personal fears about sudden death and what it would do to my family, perhaps it is more of a universal concern than I imagine.

[Benny003]

Originally Posted by M. Steng

I just took out a $500k policy on myself. For some reason I have an irrational fear (maybe not so irrational?) of something happening to me and my wife is left holding the bag on our mortgage and possibly even my student loans (not sure about this). Regardless, that figure would just about cover the rest of my loans and the mortgage. With kid #1 on the way I don't want to take any risks. My $90k policy through work wouldn't last her more than a few years, I'd imagine.

That covers the mortgage and student loans, but what about the loss of income and paying for college for your baby? I was thinking a lot of the people who are the types that buy life insurance probably needed at least $1M+ for 10 to 15 years of coverage (I think I ballparked mine at around $1.5M). Maybe you're covered, but you mentioned not wanting to take any risks, so you might want to check how much you need again. I think there are calculators out there or guidelines to follow to determine how much you need.

Also, consider taking out a policy on your wife too since she brings in money.

[M. Steng]

Originally Posted by Benny003

That covers the mortgage and student loans, but what about the loss of income and paying for college for your baby? I was thinking a lot of the people who are the types that buy life insurance probably needed at least $1M+ for 10 to 15 years of coverage (I think I ballparked mine at around $1.5M). Maybe you're covered, but you mentioned not wanting to take any risks, so you might want to check how much you need again. I think there are calculators out there or guidelines to follow to determine how much you need.

Also, consider taking out a policy on your wife too since she brings in money.

At a certain point it becomes a reward analysis. I could have taken out a $1M policy for the next ten years, but it would more than double the premium I was quoted. I can swing a $250/yr premium for $500k in coverage for the next ten years, a little harder to justify an increased premium. Obviously what I have isn't ideal given the concerns you mentioned, but it's certainly better than nothing.

[Benny003]

Originally Posted by M. Steng

At a certain point it becomes a reward analysis. I could have taken out a $1M policy for the next ten years, but it would more than double the premium I was quoted. I can swing a $250/yr premium for $500k in coverage for the next ten years, a little harder to justify an increased premium. Obviously what I have isn't ideal given the concerns you mentioned, but it's certainly better than nothing.

Was the process cumbersome? How did you decide which provider to use?

[M. Steng]

Originally Posted by Benny003

Was the process cumbersome? How did you decide which provider to use?

I had to have a health evaluation since it'd been more than a year since my last physical when I applied. Other than that it was pretty easy. I just went with the company my employer recommended, did a little research and their premiums are pretty competitive and I'm too busy to shop around for the absolute lowest premium available.

[MOWJO8185]

Originally Posted by Benny003

Was the process cumbersome? How did you decide which provider to use?

I used quotacy.com and found the whole process pretty simple honestly. It compares your rates right there. They facilitate things for you with the provider you choose. The medical exam was given at our house. The most cumbersome thing was probably the interview over phone that took about 20-30 minutes for me.

[42graystreet]

Originally Posted by MOWJO8185

I used quotacy.com and found the whole process pretty simple honestly. It compares your rates right there. They facilitate things for you with the provider you choose. The medical exam was given at our house. The most cumbersome thing was probably the interview over phone that took about 20-30 minutes for me.

Cool website. Very easy to play around with a lot of different term policies and see the rates. Unfortunately, it didn't include Northwestern Mutual which is who I'm looking at.

[smokew11]

Originally Posted by Benny003

I was just starting to plan to look into life insurance now that we have a baby. My plan was to look at just term life insurance, probably something like 15 years perhaps. I agree with snake's comments.

my wife and I both have $250k term life ROI policies through Voya, its about $125/qtr each

[Tiduwho]

For most people under 45, just get a term policy. Whole Life is a racket, and you dont need the "options" it can provide. Works great for people closer to retirement in certain situations. (Please try to avoid getting eaten alive by a Northwestern Mutual agent, some are fine, many have learned to become vultures)

My wife and I each have $500k term policies until 65. I think mine is $500/year and hers is $450/yr. Something like that. $500k was the max that can still avoid the medical rigamarole, just had to do an HIV swab i think, not even a physical. I have another probably $250k-300k from work.

[Tiduwho]

Im very surprised people in their late 20s - early 30s are looking at 10 or 15 year term policies.

Life insurance does not get cheaper with age. Youll never be able to lock into a 30+ year policy affordably at any other time. Just lock it in now.

10 year term? Why? The amount you save now by staying short term is not worth the very high $$ amount you will pay if you want to reup in 10 years. Just do a 30.

[sbuzzz]

I have a $500k policy for 30 years that I only pay $18 a month for. But I got it when I was in really good health, had the physical and everything at age 25.

I do feel much better about my retirement situation after reading a lot in here. Was pretty pissed after my divorce and losing that other persons amount too. Of course I am much closer to retirement age than most in here too.

[justinandimcool]

vary good reading in this page, life insurance will definitely be something i tackle within the next 10 years. nobody really cares if i fall off the face of the earth right now lol


definitely never going to be anxious about my savings/retirement rate again, some of you guys have some tough situations. much good vibes antsbros

[M. Steng]

Originally Posted by Tiduwho

Im very surprised people in their late 20s - early 30s are looking at 10 or 15 year term policies.

Life insurance does not get cheaper with age. Youll never be able to lock into a 30+ year policy affordably at any other time. Just lock it in now.

10 year term? Why? The amount you save now by staying short term is not worth the very high $$ amount you will pay if you want to reup in 10 years. Just do a 30.

I honestly don't even have an answer, I'm more concerned about the more immediate future. Other than some back surgeries I've been fortunate enough to have incredible health thus far in my 29 years on Earth, I suppose my concern was dying suddenly and not having anything for my wife before we turn 40. By the time my policy expires I will have at least paid off my student loans, probably gotten out of our starter house, been able to save toward retirement, etc. So she would be in a much better situation financially at that point then she would have if I croak within the next ten years.

[Lee3691]

I bought a 30 year tern at age 32 and it was incredibly cheap.

Wife and I just bought 30 year terms at 43 and it was incredibly expensive.

[MOWJO8185]

I did $1.5M for 25 years. Figured 25 years would get us through college and at least most of our mortgage. Once it’s over, our cost will go up but our payout needs will also be way down, big expenses paid off and retirement funds that much more plentiful, so if we even get another it will be much smaller.

[Benny003]

Originally Posted by Tiduwho

Im very surprised people in their late 20s - early 30s are looking at 10 or 15 year term policies.

Life insurance does not get cheaper with age. Youll never be able to lock into a 30+ year policy affordably at any other time. Just lock it in now.

10 year term? Why? The amount you save now by staying short term is not worth the very high $$ amount you will pay if you want to reup in 10 years. Just do a 30.

Originally Posted by MOWJO8185

I did $1.5M for 25 years. Figured 25 years would get us through college and at least most of our mortgage. Once it’s over, our cost will go up but our payout needs will also be way down, big expenses paid off and retirement funds that much more plentiful, so if we even get another it will be much smaller.

Yes, that. Basically, if I can get covered through our kid's college age (approx. 20 years, maybe even just 15 years), then a huge chunk of the big stuff is taken care of and our needs for life insurance will be drastically reduced. Most of the house will be paid off. We will have saved a lot more for retirement by then. Kids will be out of the house. No need to carry $1.5M or whatever well past the point when the kids are out of the house.

[Benny003]

Originally Posted by MOWJO8185

I used quotacy.com and found the whole process pretty simple honestly. It compares your rates right there. They facilitate things for you with the provider you choose. The medical exam was given at our house. The most cumbersome thing was probably the interview over phone that took about 20-30 minutes for me.

Thanks for sharing, that will help a lot.

[UCFish]

Originally Posted by Benny003

Embrace this chart and you'll be fine:

https://imgur.com/lSoUQr2

I love that chart....all about the retire early option for me.