Search found 131 matches
- Mon Oct 15, 2018 4:03 pm
- Forum: Personal Investments
- Topic: I401k Contribution Limits
- Replies: 7
- Views: 641
Re: I401k Contribution Limits
Thanks for the reply and this what I'm thinking too. I actually was showing him the link below on the IRS website, because that example with "Ben" is a perfect example for this situation. However my accountant stopped at the part where it said Ben, age 51, earned $50,000 in W-2 wages from his S Corporation in 2018 . He deferred $18,500 in regular elective deferrals plus $6,000 in catch-up contributions to the 401(k) plan. His business contributed 25% of his compensation to the plan, $12,500. Total contributions to the plan for 2018 were $37,000. This is the maximum that can be contributed to the plan for Ben for 2018. My accounted said "You don't have any W2 wages since your the employer, not the employee". I still think...
- Mon Oct 15, 2018 3:43 pm
- Forum: Personal Investments
- Topic: I401k Contribution Limits
- Replies: 7
- Views: 641
I401k Contribution Limits
Hello, I'm a small business owner and have an Individual 401k plan. My understanding on limits is the following 1) Employee Portion up to $18,000 2) Employer Portion up to 20% of income 3) Total amount cannot exceed 54,000. My understanding is that as a self employed person, I can do that full amount of #1, and then ALSO do #2. So to make numbers easy lets say the income is $100,000. Then in this instance, I could contribute $38,000. My accountant is insisting that I must pick one or the other, NOT both. He's kind of saying I can only do the employer portion of 20%, and that I can't do the employee portion--as I'm not an employee. Everything I'm finding online indicates that he is wrong. However I really want to be sure. Any help with this ...
- Wed Jan 24, 2018 12:02 am
- Forum: Investing - Theory, News & General
- Topic: Importance of FDIC Insurance
- Replies: 17
- Views: 3075
Importance of FDIC Insurance
I hear mentioned extremely frequently on this board about keeping FDIC limits in mind. But in practice is this a real concern? Take Chase Bank for example. So if somebody decides to have $1.5 million in an account instead of the protected $250k or whatever it is, don't they only get into trouble if Chase Bank goes under. And if an institution like JP Morgan Chase were to somehow go under, wouldn't we have much bigger problems at that point?
Not saying its a bad idea to be cautious, just wondering if theres any practicality to considering the fdic thing in decision making.
Not saying its a bad idea to be cautious, just wondering if theres any practicality to considering the fdic thing in decision making.
- Fri Jan 05, 2018 10:35 pm
- Forum: Investing - Theory, News & General
- Topic: "Buffett's Million Dollar Hedge Fund Bet"
- Replies: 1
- Views: 793
Re: "Buffett's Million Dollar Hedge Fund Bet"
I wanted to bump this thread in honor of buffet winning the bet.
- Sat Feb 25, 2017 5:57 pm
- Forum: Personal Finance (Not Investing)
- Topic: Deciding how much house to get
- Replies: 25
- Views: 4047
Deciding how much house to get
I am a few years out of college,in relatively good shape financially, and getting ready to buy my first home. I'm trying to determine what price range I should go with. I'm kind of deciding my general range is $250000-$400,000. My primary question is this, lets say I can comfortable afford any home in that range. Is there any major downside to getting a pricier house in that range from an investment standpoint? I know this board likes to say that houses are terrible investments and to view it as an expense (mainly due to transaction costs I believe). And that makes sense, but aren't I incurring those transaction costs regardless of whether is a 300k house or a 400k house? Just trying to get a decent train of thought going regarding this iss...
- Wed Feb 08, 2017 12:53 am
- Forum: Investing - Theory, News & General
- Topic: Any definitive consensus on placement of different factors
- Replies: 4
- Views: 894
Re: Any definitive consensus on placement of different factors
I was surprised there weren't any opinions on this. Just thought I would bump in case anyone wanted to take a stab at it.
- Mon Feb 06, 2017 12:33 am
- Forum: Investing - Theory, News & General
- Topic: Any definitive consensus on placement of different factors
- Replies: 4
- Views: 894
Any definitive consensus on placement of different factors
Lets say one has somewhat of a "tilt" portfolio that involves the following types of funds -total stock market fund -total international fund -A small cap value fund -An emerging market fund Lets say at your disposal is taxable account, 401k, Roth IRA, etc. I've seen this question discussed on here before, but typically all I see is a list of the pro's cons of each (SCV is good in roth because it might go up a lot, but its good in taxable for tax loss harvesting purposes, etc). I know we cant predict the future, but is there any best, or most prudent choice as to where the total market goes, where the SCV goes, etc. Any feedback is appreciated, but in giving feedback I would appreciate for your response to take a firm position on ...
- Sat Feb 04, 2017 5:30 am
- Forum: Investing - Theory, News & General
- Topic: Anyone have a tilt portfolio similar to this
- Replies: 22
- Views: 3498
Re: Anyone have a tilt portfolio similar to this
For the record the portfolio stated in the original post is not "my" portfolio. I was asking for thoughts on "this" portfolio, just referencing the hypothetical portfolio above. Personally I'm currently 100% stock, and just a 2 fund portfolio (total stock 2/3, Total international 1/3).
- Sat Feb 04, 2017 1:48 am
- Forum: Investing - Theory, News & General
- Topic: Anyone have a tilt portfolio similar to this
- Replies: 22
- Views: 3498
Anyone have a tilt portfolio similar to this
Hello,
I was just curious if anyone has a portfolio similar to this for their equity portion.
30% total stock market fund
30% Small Cap Value
20% total international fund
20% emerging market
This fund is 60/40 as far as US/International. Its also 50% total stock market funds versus 50% in SCV and EM type funds. I'm mainly wondering if this portfolio is extreme on the risk side? Anything glaringly odd/missing with it? Also curious if this type of portfolio is somewhat common among Bogleheads who DO tilt.
I was just curious if anyone has a portfolio similar to this for their equity portion.
30% total stock market fund
30% Small Cap Value
20% total international fund
20% emerging market
This fund is 60/40 as far as US/International. Its also 50% total stock market funds versus 50% in SCV and EM type funds. I'm mainly wondering if this portfolio is extreme on the risk side? Anything glaringly odd/missing with it? Also curious if this type of portfolio is somewhat common among Bogleheads who DO tilt.
- Wed Feb 01, 2017 11:45 pm
- Forum: Investing - Theory, News & General
- Topic: Does boglehead style investing benefit from being "Too big to fail"
- Replies: 7
- Views: 1535
Does boglehead style investing benefit from being "Too big to fail"
I was pondering the other day one of many possible benefits to the boglehead style of investing. I'm aware that theres many floors, but for now lets just look at the 3 fund portfolio. For index investors, for them to poorly it basically means EVERYTHING has to go to hell. And if things ever get really bad, governments will get involved and literally force things back into shape (2008). At the same time, nobody could care less if your batch of individual stocks goes to hell, or if your fund manager makes some horrible decisions, etc etc. But if the S and P 500, TSM, etc etc, if THOSE things went to hell, and I mean REALLY went to hell, not just a bear market, then I feel like heads would roll, hearings would be held, forces would intervene. ...
- Mon Jan 30, 2017 7:32 pm
- Forum: Investing - Theory, News & General
- Topic: Theory on whether to go Roth 401k
- Replies: 89
- Views: 10426
Theory on whether to go Roth 401k
Hello, This question is regarding the offering of a Roth 401k in an Solo 401k account for self employed people. Per my understanding, if you're in the 25% tax bracket,one should NOT take advantage of making their Employee portion a ROTH contribution. I'm wondering if below are reasons to go Roth, even if you're in the 25% tax bracket. 1) What if you think you'll still be making a similar (inflation adjusted) amount of money in your older age? In that case, does Roth make sense, or does traditional still make more sense? 2) Is getting different "tax buckets" a good reason to go roth on the employee portion? 3) Lastly, how substantial is the difference between the 2 in savings? Example person A is 25 years old, makes 100k, is in the...
- Mon Jan 30, 2017 7:18 pm
- Forum: Investing - Theory, News & General
- Topic: Roth 401k question
- Replies: 4
- Views: 911
Re: Roth 401k question
For a Roth 401k, wouldnt everything you withdraw (assume your not withdrawing early) be tax free?
- Mon Jan 30, 2017 6:15 pm
- Forum: Investing - Theory, News & General
- Topic: Roth 401k question
- Replies: 4
- Views: 911
Roth 401k question
Hello, Dumb question here, but I'm having trouble getting a firm answer on this I know the people on this board will certainly know it. Individual 401k (not roth option), the money goes in pre-tax, and when you withdraw money from this account, lets say in your 60's...Are you paying tax on just the income portion itself? Or on the gains too? Example, I contributed 18k at age 25 and then never contributed to the 401k again. It returned 7%/year for 35 years, now its $192,178.30. Am I just paying taxes on the 18k (so 6k or whatever), and then the $174,178.30 can be taken out tax free? Or do I pay taxes on the 18k at my income rate, and then also pay taxes on the $174,000 or so in capital gains? Thanks in advance for any helpful replies.
- Thu Jan 26, 2017 12:47 am
- Forum: Personal Investments
- Topic: Maxing out investment vehicles
- Replies: 5
- Views: 1205
Re: Maxing out investment vehicles
Thats great advice, I did not know you could do that with multiple businesses. While I may start additional businesses, thats not a concern right now because I'm not able to "Max" my current I401k (that would require around 185k income to be eligible to do...I'm not at that level yet).ved wrote:If you have multiple businesses, then you can save 54k / business in each 401k.
Remember, as an employee, you can contribute a total of $18k across employers
But, as an employer you can contribute upto ($54k - employee contribution) per company plan.
- Thu Jan 26, 2017 12:41 am
- Forum: Personal Investments
- Topic: Maxing out investment vehicles
- Replies: 5
- Views: 1205
Re: Maxing out investment vehicles
Hello, small world! No debts whatsoever. My goal is really just financial independence. My hope is to earn enough and invest enough over the next 15 years or so, that by age 40 saving for retirement is no longer a major concern, and money can go towards other things.b4nash wrote:Hello fellow Michigander. Any debts to take care of? What are your goals?
- Wed Jan 25, 2017 7:43 pm
- Forum: Personal Investments
- Topic: Maxing out investment vehicles
- Replies: 5
- Views: 1205
Maxing out investment vehicles
Hello,
Self employed, middle 20's in Michigan. Checking if my different investment vehicles is correct. Lets say for the sake of argument I have enough to max out everything, and then contribute to taxable according to my AA. Let me know if I'm missing something
-Roth IRA (or traditional) $5500.
-I401k 53k (2016 max allowed)...in the form of 18k on employee side, 35k on employer side.
-Only remaining option is taxable account?
Let me know if I'm missing anything here. FYI, currently not enrolled in a "high deductible" health coverage which would rule out one of those HSA's...but let me know if I'm missing anything. Thanks in advance for any feedback.
Self employed, middle 20's in Michigan. Checking if my different investment vehicles is correct. Lets say for the sake of argument I have enough to max out everything, and then contribute to taxable according to my AA. Let me know if I'm missing something
-Roth IRA (or traditional) $5500.
-I401k 53k (2016 max allowed)...in the form of 18k on employee side, 35k on employer side.
-Only remaining option is taxable account?
Let me know if I'm missing anything here. FYI, currently not enrolled in a "high deductible" health coverage which would rule out one of those HSA's...but let me know if I'm missing anything. Thanks in advance for any feedback.
- Sun Jan 15, 2017 5:19 pm
- Forum: Personal Finance (Not Investing)
- Topic: Trying to Understand HSA [Health savings account]
- Replies: 5
- Views: 1051
Re: Trying to Understand HSA [Health savings account]
According to my dad, its definitely not a "high deductible plan". He works at a pretty small company. (Like 15-20 employees). The insurance is through Blue Care network. Co-pays are like $20-for most doctor visits, and my dad seems to think that If I required an expensive operation of some kind, the deductible would be $500. Does that provide enough information? It appears to be pretty "good" coverage from what I can tell. What I'm trying to figure out is if there is an advantage in having a high deductible policy instead, which allows me to enjoy the benefits of these Health Savings accounts. Or am I overthinking this and should just enjoy the benefits of the good coverage I have (and pay about $455 a month for). Thanks.
- Sun Jan 15, 2017 4:31 pm
- Forum: Personal Investments
- Topic: I401k Employer Portion limit 20% or 25% of income
- Replies: 23
- Views: 1981
Re: I401k Employer Portion limit 20% or 25% of income
Found something online that says to calculate net self employment income, " subtract your business expenses from your business revenues, then multiply the difference by 92.35%." Therefore if making 80k, my real net self employment income is 73,880. 20% of that is 14,776. $14,776 would be my employer portion maximum if making that amount.
Therefore, to contribute 20k to employer, I would have needed to make around $108,000 (ROUGHLY)...then multiply that $108,000 by 0.9235, getting around $100,000, and at that point the $20,000 employer contribution is roughly correct.
I think using the above calculations, my question has been answered. Looks good? Thanks.
Therefore, to contribute 20k to employer, I would have needed to make around $108,000 (ROUGHLY)...then multiply that $108,000 by 0.9235, getting around $100,000, and at that point the $20,000 employer contribution is roughly correct.
I think using the above calculations, my question has been answered. Looks good? Thanks.
- Sun Jan 15, 2017 4:13 pm
- Forum: Personal Investments
- Topic: Choice of bond fund
- Replies: 5
- Views: 775
Re: Choice of bond fund
I think my income may be closer to 100k in 2017. Even at that income level, is it not high enough to go with muni's in taxable? AKA I should stick with total bond fund in taxable? Thanks.
- Sun Jan 15, 2017 3:45 pm
- Forum: Personal Investments
- Topic: Choice of bond fund
- Replies: 5
- Views: 775
Choice of bond fund
Hello,
Middle 20's and living in michigan. Making about 80k. I have a taxable account, Roth IRA, and I401k. Is I401k an acceptable place for bonds? Also, would the best choice be total bond market, or something like intermediate term tax exempt? My understanding so far is that in tax advantaged, total bond is good choice. If I place any bonds in taxable, then intermediate term tax exempt is a good choice. Open to other funds outside of the ones I mentioned. Just curious if my understanding is good, or if anyone would tweak that understanding. Thanks.
Middle 20's and living in michigan. Making about 80k. I have a taxable account, Roth IRA, and I401k. Is I401k an acceptable place for bonds? Also, would the best choice be total bond market, or something like intermediate term tax exempt? My understanding so far is that in tax advantaged, total bond is good choice. If I place any bonds in taxable, then intermediate term tax exempt is a good choice. Open to other funds outside of the ones I mentioned. Just curious if my understanding is good, or if anyone would tweak that understanding. Thanks.
- Sun Jan 15, 2017 3:33 pm
- Forum: Personal Investments
- Topic: I401k Employer Portion limit 20% or 25% of income
- Replies: 23
- Views: 1981
Re: I401k Employer Portion limit 20% or 25% of income
What tax software are you using to prepare you 2016 tax return? I believe Turbotax will calculate your max employer contributions to solo 401k if you're a sole proprietor. I don't think TaxAct does this calculation. Not sure about other packages. The tax software will also help you with what kind of IRA contributions you can make Traditional IRA vs Roth IRA. For Traditional IRA, it will tell you if your TIRA contributions are deductible or non-deductible. Note that TIRA deduction is subject to MAGI limits when one is covered by employer plan like Solo 401k. Our family uses an accountant who prepares our tax returns, which is partially why I sound so uninformed on a lot of these matters. I basically give him very detailed reports regarding ...
- Sun Jan 15, 2017 3:19 pm
- Forum: Personal Investments
- Topic: I401k Employer Portion limit 20% or 25% of income
- Replies: 23
- Views: 1981
Re: I401k Employer Portion limit 20% or 25% of income
The adjustment for self employment income is what was throwing me off. So just to confirm, if making 80k, then I could have done 18k to employee, and 16k to employer. If making 100k, then I could do 18k to employee, and 20k to employer. Does that sound correct in your opinion? Thanks.
- Sun Jan 15, 2017 3:14 pm
- Forum: Personal Investments
- Topic: I401k Employer Portion limit 20% or 25% of income
- Replies: 23
- Views: 1981
Re: I401k Employer Portion limit 20% or 25% of income
I am beginning to question whether Vanguard really gave you incorrect information. In my first post I gave you a detailed explanation of when and how the 20% or 25% numbers apply. It does not appear you have read and understood that basic issue. You have yet to conclusively answer the first reply that was from niceguy. Are you a sole proprietor or an S-Corp W-2 employee? Everything depends on this. In your last post you keep referring the the vague concept of pay even when the information you quoted clarified they were talking about W-2 wages. I repeat again, what matters is what is your compensation and how is that determined. Klangfool has also replied with excellent posts trying to help you understand the issues. Yet it does not appear ...
- Sun Jan 15, 2017 3:08 pm
- Forum: Personal Investments
- Topic: I401k Employer Portion limit 20% or 25% of income
- Replies: 23
- Views: 1981
Re: I401k Employer Portion limit 20% or 25% of income
I am a one-man LLC, with no common law employees. I apologize for my lack of fluency in the terminology. I am a sole proprietor. Does that sufficiently answer what type of business I am?
- Sun Jan 15, 2017 1:26 am
- Forum: Personal Investments
- Topic: I401k Employer Portion limit 20% or 25% of income
- Replies: 23
- Views: 1981
Re: I401k Employer Portion limit 20% or 25% of income
Here is an article I found that seems like it would support what I was originally told by the Vanguard reps. Quote from article below, link to article here "Like the regular 401k contribution limits for 2015, you can elect to defer up to $18,000 of your pre-tax income in elective contributions." "as the employer you can also make a nonelective profit sharing contribution up to 25% of your pay (which would be based on your W-2). Total contributions (not including any catch up contributions for being 50 or older) cannot exceed $53,000" The above seems pretty straight-forward...yet were sure it isn't correct? It expliclity states that for employer, the contribution is 25% of my pay. My pay was 80k...making 25%=20k. Does som...
- Sun Jan 15, 2017 1:08 am
- Forum: Personal Investments
- Topic: I401k Employer Portion limit 20% or 25% of income
- Replies: 23
- Views: 1981
Re: I401k Employer Portion limit 20% or 25% of income
I did contribute the 20k already to the employer portion. The employee portion is also getting maxed out with the 18k, no brainer there. But once thats maxed out, to contribute more I have to use the employer portion. So back to this employer portion.. .it sounds like by putting 20k in that would have required 100k in income then, not 80? See I must have messed that up because I used the 25% rule, not 20%. What should my next step be? SpartanBull, http://www.bankrate.com/calculators/retirement/self-employed-401-k-calculator.aspx No, you need 110K of income in order to contribute 18K to Employee and 20K to Employer. Adjusted earned income* $81,782 Employer contribution $20,445 25% of Adjusted earned income Maximum contribution amount $38,44...
- Sun Jan 15, 2017 1:01 am
- Forum: Personal Investments
- Topic: I401k Employer Portion limit 20% or 25% of income
- Replies: 23
- Views: 1981
Re: I401k Employer Portion limit 20% or 25% of income
Unlike an excess employee deferral, a 401k excess employer contribution can not normally be removed. If any of these excess contributions we made in 2017, they could be reallocated to 2017 contributions. If not, there is a rather complicated process to resolve this. It will require extra forms, the payment of excise tax(s), and multi-year return effect. There is one possible alternative, but I am not sure if it is even possible given the fact pattern. The IRS does provide an exception and allows the removal for a "mistake of fact". This is only supportable on a case by case basis resulting from a 'good faith" effort. This is a very high bar and the fact that you didn't know what your allowed contribution was at the time you ...
- Sat Jan 14, 2017 5:41 pm
- Forum: Personal Investments
- Topic: I401k Employer Portion limit 20% or 25% of income
- Replies: 23
- Views: 1981
Re: I401k Employer Portion limit 20% or 25% of income
I did contribute the 20k already to the employer portion. The employee portion is also getting maxed out with the 18k, no brainer there. But once thats maxed out, to contribute more I have to use the employer portion.
So back to this employer portion...it sounds like by putting 20k in that would have required 100k in income then, not 80? See I must have messed that up because I used the 25% rule, not 20%. What should my next step be?
So back to this employer portion...it sounds like by putting 20k in that would have required 100k in income then, not 80? See I must have messed that up because I used the 25% rule, not 20%. What should my next step be?
- Sat Jan 14, 2017 4:53 pm
- Forum: Personal Finance (Not Investing)
- Topic: Trying to Understand HSA [Health savings account]
- Replies: 5
- Views: 1051
Trying to Understand HSA [Health savings account]
So a little bit about me. Making decent money. Still on my dad's insurance--I pay him back for my share (His work covers him, and then has to pay to insure his family members). I don't think this plan is a "high deductible plan" as I think HSA requires?
Would it be smart to switch to my own plan, a high deductible plan, which allow me to utilize the benefits of a HSA account? Let me know if I'm someone who this would make sense for, or if I'm missing something. Thanks.
Would it be smart to switch to my own plan, a high deductible plan, which allow me to utilize the benefits of a HSA account? Let me know if I'm someone who this would make sense for, or if I'm missing something. Thanks.
- Sat Jan 14, 2017 2:02 am
- Forum: Personal Investments
- Topic: I401k Employer Portion limit 20% or 25% of income
- Replies: 23
- Views: 1981
I401k Employer Portion limit 20% or 25% of income
Hello, I distinctly recall being told by a vanguard customer service rep/small business specialist that on the employer portion, its 25% of income. Therefore, if you make 80k, 20k can be contributed. I've seen in various places both number floating around...20% and 25%. Would anyone be able able to confirm which it is? My understanding was 20%. My income will certainly be at least 80k from 2016 (it may be slightly more--but not a ton more...once all the numbers are crunched), so i did contribute 20k on this portion knowing that I'll at least be making the 80k. However, if its the the 20% number...then the 20k implies that I will have made 100k in 2016...which Im fairly certain will not end up being correct. If anyone knows a clear answer on...
- Sat Jan 14, 2017 1:44 am
- Forum: Investing - Theory, News & General
- Topic: Is Vanguard not the best choice for I401k or Sep IRA
- Replies: 13
- Views: 1898
Is Vanguard not the best choice for I401k or Sep IRA
As an avid believer in both vanguard and this forum, I always just presumed that when I started an I401K I would do so with Vanguard, and when I did that last year I did just that. However I've found it interesting that it seems among bogleheads, Vanguard might not be the most popular provider when it comes to I401k's and/or SEP IRA's. I was just curious what people felt the best choice was to house an I401k and/or SEP IRA. Fidelity, Schwab, Vanguard...maybe theres some other one I'm not thinking of. Just curious to see which one people think has the best offerings currently considering cost, other conveniences, etc. Of course you can build a bogleheads portfolio at any of these, but costs do matter. Thanks in advance for any feedback.
- Fri Jan 13, 2017 7:17 pm
- Forum: Personal Investments
- Topic: I401k Whether to go Roth or not
- Replies: 48
- Views: 9875
Re: I401k Whether to go Roth or not
Klangfool,
I am gathering that The only reason a Roth would make sense would be if I am making an Outrageously higher salary at time of withdrawal vs now. If I'm doing better better, but not absurdly better, then the Traditional makes sense. It seems like traditional might be a safer bet...and I'm thinking I'm going to go that route.
Also, in I401k form, can it be converted to Roth at a later time? Thanks.
I am gathering that The only reason a Roth would make sense would be if I am making an Outrageously higher salary at time of withdrawal vs now. If I'm doing better better, but not absurdly better, then the Traditional makes sense. It seems like traditional might be a safer bet...and I'm thinking I'm going to go that route.
Also, in I401k form, can it be converted to Roth at a later time? Thanks.
- Fri Jan 13, 2017 5:30 pm
- Forum: Personal Investments
- Topic: I401k Whether to go Roth or not
- Replies: 48
- Views: 9875
Re: I401k Whether to go Roth or not
With 2017 being upon us, It is time to again decide whether to go Roth (or not) on the employee portion of the I401k. From the responses in this thread, it seems that If I make more now then I will at time of withdrawal, go traditional. If I'll be making more in those later years, then go Roth. So heres why I'm thinking the decision might not be so simple. I'm a small business owner operating a service based business that is still growing, both geographically and in terms of different ways that we earn revenue. I'm in my middle 20's. That being said, I very much feel that in my 30's the business will have grown in various ways and my income will be higher. Same in my 40's. Same in 50's. My thought is that as I progress in age, by business a...
- Fri Jan 13, 2017 12:08 am
- Forum: Investing - Theory, News & General
- Topic: Uneasy lump summing right now--increased international allocation
- Replies: 4
- Views: 857
Uneasy lump summing right now--increased international allocation
Ok, so this thread is going Theory instead of personal investment forum because I'm not looking for advice, but I'm curious if anyone else has felt similar or acted similarly. My asset allocation is 2/3 Total stock Market (us), and 1/3 Total International. In light of where the market is at, valuations , etc, I felt a little uneasy adding in a current lump of funds that was available to me to invest. I know I shouldn't feel that way, but I did. The choices in front of me were lump sum, DCA, or wait. Well, I picked a fourth choice, which was to lump the money into International. Normally my investments go in in a way that gets me as close to the target as possible (they were currently pretty close to "on target". However by lumping...
- Wed Jan 11, 2017 1:54 am
- Forum: Personal Investments
- Topic: Re-characerization questions
- Replies: 2
- Views: 407
Re-characerization questions
I have a couple of questions about re-characterization. Last year (2016) I contributed to a personal roth IRA. Additionally, in my I401k I also contributed 18k to the Employee portion, in Roth form (this was an option in the Roth Ira). This year, I contributed the max to a Roth Ira (personal), and haven't done the I401k stuff yet. Questions 1) Is last years personal Roth IRA still allowed to be re-characterized to traditional? My thought is that I'm allowed to do this before tac time rolls around...let me know if thats correct? 2) Is my I401k employer portion from last year, where I went the Roth Route on it....still able to be re-characterized to the traditional, income deduction style of doing it? 3) Is my Personal IRA contribution made i...
- Mon Jan 09, 2017 9:25 pm
- Forum: Investing - Theory, News & General
- Topic: How Bad was 2008, really?
- Replies: 407
- Views: 63788
How Bad was 2008, really?
Full disclosure, I was too young to be invested during the financial crisis. That being said, I'm having trouble understanding how bad it was. I hear about these bear markets (tech bubble, financial crisis, etc). All I see is a sharp decline, and then everything is gained back a couple years later. I could see how frightening drops like this could be if I were close to a retirement age, but being young, why should I care if I go down 50% on paper? I know thats I'm speaking as someone who hasn't taken a walk in someones else shoes who's invested through a crash....but for me the real fear would be the fear of stocks going down for like...decades. What is so scary about a 2 year blip? If you're truly invested long term...it seems like you're ...
- Sun Jan 08, 2017 9:53 pm
- Forum: Investing - Theory, News & General
- Topic: Over what time period should stocks NOT lose money
- Replies: 50
- Views: 7323
Re: Over what time period should stocks NOT lose money
Klangfool,KlangFool wrote:OP,
A) At any point of time, your equity portion could lose 50% of its value.
With (A) in mind, please tell me what do you mean by stock will not lose money?
i) Not lose money in REAL term?
ii) Not lose money in a nominal term?
KlangFool
Real return. The question was over what period is it reasonable to assume that you will have a real return that is not below 0%.
- Sun Jan 08, 2017 8:25 pm
- Forum: Investing - Theory, News & General
- Topic: Over what time period should stocks NOT lose money
- Replies: 50
- Views: 7323
Over what time period should stocks NOT lose money
Hello,
While there are no certainties, bogleheads clearly believe that over time, staying invested is a prudent investment. Time is your friend. If forced to answer "over what time period will stocks NOT lose money....in real terms, what would you say?". If forced to give an answer on this I would say 10 years. I'm curious what others think.
While there are no certainties, bogleheads clearly believe that over time, staying invested is a prudent investment. Time is your friend. If forced to answer "over what time period will stocks NOT lose money....in real terms, what would you say?". If forced to give an answer on this I would say 10 years. I'm curious what others think.
- Sun Jan 08, 2017 8:05 pm
- Forum: Investing - Theory, News & General
- Topic: all the debate over tilting away from market-cap weighting
- Replies: 27
- Views: 3748
Re: all the debate over tilting away from market-cap weighting
I have a problem with the common response to this question which is typically along the lines of "nobody knows what will perform better until after the fact". However that sometimes strikes me as a bit of a cop-out because of course nobody knows...but probability does matter. Some extremely respected investors on this forum, including people like Rick Ferri for example...seem to believe that a probability exist that SCV will outperform, and tilt for that reason. I guess the question isn't whether something WILL outperform, but more-so whether something SHOULD outperform. So are people who don't believe in tilting saying thats its a virtual 50/50 proportion, it might/it might not? I have like a 35 year horizon, maybe a 40 year hori...
- Sat Jan 07, 2017 7:07 pm
- Forum: Investing - Theory, News & General
- Topic: No Vanguard Customer Support on weekends
- Replies: 76
- Views: 13892
Re: No Vanguard Customer Support on weekends
I'll be honest, while I appreciate the fact that Vanguard actively tries to keep their costs low, sometimes I get the feeling they go overboard with it. They just often seem woefully understaffed from a customer service point of view. I get that they do things thing to help keep costs down which ultimately gets passed along to us, the investors...whoever I feel like there is a "bare minimum" level of customer service, website stuff, etc...and vanguard definitely flirts with that level.
- Thu Jan 05, 2017 6:32 pm
- Forum: Investing - Theory, News & General
- Topic: Historical International returns
- Replies: 1
- Views: 621
Historical International returns
I can easily find historical returns of the S and P 500, which is more or less a pretty good bench mark for the US stock market. What would be the equivalent thing to look at for International? I can only find so much data on VTSAX...just wondering what I should look at to compare performance of international vs domestic.
- Thu Jan 05, 2017 1:11 am
- Forum: Investing - Theory, News & General
- Topic: Performance of International
- Replies: 11
- Views: 2381
Re: Performance of International
Columbia, why do you mentioned that now would be a good time? Is that because international has performed worse recently?
- Mon Jan 02, 2017 5:04 pm
- Forum: Personal Investments
- Topic: Thoughts on this potential portfolio?
- Replies: 5
- Views: 799
Re: Thoughts on this potential portfolio?
It seemed that because my horizon is long, you advised that I stick with what I have. For the record, I would not exactly consider this a change, as I'm only 25 and haven't been investing very long. So really, I want to find an allocation...and then I'll definitely stick what allocation and "do nothing" indefinitely". Is your belief that tilting is overrated, and thus I should stick with the 70/30, not tilt portfolio? I was slightly attracted to the idea of SCV, not SOLELY due to the idea of potentially higher long term returns, but really because I like the idea of having something that may perform a bit differently then VTSAX, and VTIAX, and therefore provide a form of diversification in that regard.
- Mon Jan 02, 2017 4:53 pm
- Forum: Personal Investments
- Topic: Thoughts on this potential portfolio?
- Replies: 5
- Views: 799
Thoughts on this potential portfolio?
My equity portfolio currently consists of Total Stock market and Total International, both in admiral shares, with a 2/3 tilt towards US. Pretty boring, and probably somewhere in the middle as far as most people on this forum, at least from what I've found. In my quest to land on a portfolio I'm comfortable sticking with long term, I do feel that I want to have a SCV tilt aspect to the portfolio. I'm curious how people feel about this Portfolio as far as the equity portion goes 1/3 Total Stock Market, VTSAX 1/3 Total international, VTIAX 1/3 SCV IJS (IJS was the fund I had found based on doing research on this forum). Is this a pretty good portfolio? I fully understand the risks/reward elements of the SCV, and that the premium is not guaran...
- Mon Jan 02, 2017 4:33 pm
- Forum: Personal Investments
- Topic: Advice for 60 year old parents
- Replies: 10
- Views: 2846
Re: Advice for 60 year old parents
To provide some information about my dad, he has a job that consists of a base salary plus commission. Of the 200k, lets ballpark that somewhere between 25%-33% is in actual salary, with the majority of the income coming from the commission aspect. I forgot exactly how it works, but apparently the money he makes outside of the salary sort of goes into his own LLC like a small business, etc, while the salary money is just taxed regularly like a regular job. So I guess you could look it like...He has a job making around 65k, and he also is a business owner who makes about 135k through his business.
- Mon Jan 02, 2017 3:57 pm
- Forum: Investing - Theory, News & General
- Topic: Whats your number to walk away?
- Replies: 360
- Views: 63857
Whats your number to walk away?
Hello, I'm curious as to what amount of money in your portfolio you would require right now to walk away from working/income, etc forever. Some background information such as age, type of area your in, etc, just so the response makes sense, would be helpful. I'm also curious how much of an increase this is from what you currently have. For example "If I had 8 million, I would completely walk away from work. I would need 7 million more since I have one million" Just for fun and just interested to see what numbers people come up with. For the sake of this question, I request that people choose the "minimum" number they would do this with. For example, I know a lot of people would do it with $50 million. But would you also ...
- Sun Jan 01, 2017 11:13 am
- Forum: Investing - Theory, News & General
- Topic: What inflation rate do you use for your planning?
- Replies: 105
- Views: 12715
Re: What inflation rate do you use for your planning?
While I do a lot planning in real terms as well, the reason I'm curious about this question is its definitely interesting to have an idea of what my "number" is. While its nice to know that "My number is whatever-million in todays dollars 30 years from now", its also interesting to have an idea for that that actual, literal number would be. While using Real-terms is a pretty good indicator, its still in some way, a bit abstract. Its interesting to look at what the actual dollar amount is that you need to retire. While I know its harder to reach that dollar amount early due to the inflation and everything, its interesting to know. For example lets say I want $3,000,000 in todays dollars to retire in 2052. If i use 3%, the...
- Sun Jan 01, 2017 10:42 am
- Forum: Investing - Theory, News & General
- Topic: What inflation rate do you use for your planning?
- Replies: 105
- Views: 12715
What inflation rate do you use for your planning?
What inflation rate do you use when your making projections and setting goals? I've seen some varying things on this board. One thing I want to clarify about this question is what I mean by inflation (even though this might be obvious), but I'm referring to the change in value of one dollar. For some reason some people view inflation as like, related to their personal situation/scenario, and I don't think thats the case. If it is, then thats not the type of answer I'm looking for. I understand that your personal expenses might go up less/more than the rate of inflation...I also understand that a Dollar in NYC is worth less than one dollar in Birmingham, Alabama(when your buying things)...but that doesnt change the amount of inflation that o...
- Sat Dec 31, 2016 4:16 pm
- Forum: Investing - Theory, News & General
- Topic: Performance of International
- Replies: 11
- Views: 2381
Performance of International
I've never really understood something about international. There is definitely a group that makes that argument that you "don't need international"...seemingly implying that the it performs similar enough that theres not a big diversification benefit. At the same time, I've seen people post charts that show alarmingly similar returns (I'm also certain I saw one of these from nispirius once. I don't recall what position he was supporting on the matter, but all I know is he was illustrating on a graph how close together the lines were and how similar the performance of US and International were). That being said, I constantly here about Internationals substantial underperformance lately, International being on sale, etc etc. So ess...
- Wed Dec 28, 2016 11:02 pm
- Forum: Investing - Theory, News & General
- Topic: Expected returns 2017-2047
- Replies: 30
- Views: 4206
Re: Expected returns 2017-2047
These responses are just silly. Even if one of those numbers turns out to correct, They wont have been OK, good, or spectacular by any stretch of the imagination. I second that I would look for other means of capital appreciation if 2% real were "spectacular". Not saying these numbers aren't perfectly possible...but just confused by the words you associated with the numbers.Goal33 wrote:Bad: -1% real
Ok: 0% real
Good: 1% real
Spectacular: 2% real
I am just trying to keep up with inflation in the most tax efficient manner possible.