Author Topic: New To Investing Thread  (Read 62096 times)

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Offline slobber

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Re: New To Investing Thread
« Reply #25 on: April 16, 2013, 11:05:56 AM »
of all the "wealth" i have to my name currently, a little less than 20% of it is actual cash that i could spend right now.

is this bad?
Depends on how much wealth you have. My available cash is only 4%.

Offline Emo EMAW

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Re: New To Investing Thread
« Reply #26 on: April 16, 2013, 11:06:21 AM »
I contribute enough to my 401k to max out the employer match, and then I use the rest of my spare money purchasing stocks.

General trading account?  Wife and I been maxing the Roth IRA contribution the last few years and now we wish we would have been doing just a general trading account for the purpose of pulling out cash to buy a new house.

You do realize you can pull the principal(not any interest earned) from your roth IRA at anytime.....

No penalty?  Was not aware of that.

No penalty, you already paid tax on it. You can pull out as much principal as you want at any time.

While I am  :thumbs: about learning this, it's going to end up costing me more money, so like eff you and your helpfulness!  :shakesfist:

Offline slobber

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Re: New To Investing Thread
« Reply #27 on: April 16, 2013, 11:08:58 AM »
If you have the option at your place of employment, invest in the Roth 401(k), not the traditional 401(k).

Offline ben ji

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Re: New To Investing Thread
« Reply #28 on: April 16, 2013, 11:12:05 AM »
of all the "wealth" i have to my name currently, a little less than 20% of it is actual cash that i could spend right now.

is this bad?

Not really, as a general rule you should have around 3 months expenses in a emergency fund. The rest should be in tax advantaged accounts like a 401k or an IRA.
"I think my grandpa killed some body once, he never liked to talk about Kent State though"

Online 'taterblast

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Re: New To Investing Thread
« Reply #29 on: April 16, 2013, 11:14:02 AM »
of all the "wealth" i have to my name currently, a little less than 20% of it is actual cash that i could spend right now.

is this bad?

Not really, as a general rule you should have around 3 months expenses in a emergency fund. The rest should be in tax advantaged accounts like a 401k or an IRA.

i'm good to go then.

i have a 401k, employer match (employer's stock is BITB), all of that..

should i open a Roth IRA too?

Offline michigancat

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Re: New To Investing Thread
« Reply #30 on: April 16, 2013, 11:15:17 AM »
401k to employer match (in an index or target fund if available) than a Roth ira investing in a vanguard target retirement find.

you get a tax break on the Roth, you just see it when you retire instead of now. combining this with the 401k is hedging your bets on future tax rates. Not real sure what Steve Dave is talking about regarding Roth's.

Offline Kat Kid

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Re: New To Investing Thread
« Reply #31 on: April 16, 2013, 11:15:49 AM »
of all the "wealth" i have to my name currently, a little less than 20% of it is actual cash that i could spend right now.

is this bad?

Not really, as a general rule you should have around 3 months expenses in a emergency fund. The rest should be in tax advantaged accounts like a 401k or an IRA.

i'm good to go then.

i have a 401k, employer match (employer's stock is BITB), all of that..

should i open a Roth IRA too?

Yes.
@bentren

Offline steve dave

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Re: New To Investing Thread
« Reply #32 on: April 16, 2013, 11:16:42 AM »
401k to employer match (in an index or target fund if available) than a Roth ira investing in a vanguard target retirement find.

you get a tax break on the Roth, you just see it when you retire instead of now. combining this with the 401k is hedging your bets on future tax rates. Not real sure what Steve Dave is talking about regarding Roth's.

that is exactly what I was talking about re. Roths

Offline ben ji

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Re: New To Investing Thread
« Reply #33 on: April 16, 2013, 11:18:15 AM »
of all the "wealth" i have to my name currently, a little less than 20% of it is actual cash that i could spend right now.

is this bad?

Not really, as a general rule you should have around 3 months expenses in a emergency fund. The rest should be in tax advantaged accounts like a 401k or an IRA.

i'm good to go then.

i have a 401k, employer match (employer's stock is BITB), all of that..

should i open a Roth IRA too?

Dont invest more than 5/10% of your 401k in your company stock, way to much risk.

If your company has great 401k investment options then sure keep it in the 401k but most companies 401k providers have between 10-15 funds for everyone and their expense ratios tend to be higher than what you can get through an IRA.

The difference in expense ratio's of .9 and 1.3 can add up to alot of money by the time you retire. 

"I think my grandpa killed some body once, he never liked to talk about Kent State though"

Offline ben ji

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Re: New To Investing Thread
« Reply #34 on: April 16, 2013, 11:19:22 AM »
of all the "wealth" i have to my name currently, a little less than 20% of it is actual cash that i could spend right now.

is this bad?

Not really, as a general rule you should have around 3 months expenses in a emergency fund. The rest should be in tax advantaged accounts like a 401k or an IRA.

i'm good to go then.

i have a 401k, employer match (employer's stock is BITB), all of that..

should i open a Roth IRA too?

Dont invest more than 5/10% of your 401k in your company stock, way to much risk.

If your company has great 401k investment options then sure keep it in the 401k but most companies 401k providers have between 10-15 funds for everyone and their expense ratios tend to be higher than what you can get through an IRA.

The difference in expense ratio's of .9 and 1.3 can add up to alot of money by the time you retire.

Not to mention the whole not taxed on retirement advantage as well.
"I think my grandpa killed some body once, he never liked to talk about Kent State though"

Offline The Tonya Harding of Twitter Users Creep

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Re: New To Investing Thread
« Reply #35 on: April 16, 2013, 11:20:40 AM »
Can't you pull from your Roth IRA for your first house or something of that nature?
I think what my friend Mitch is trying to say is that true love is blind.

Offline EllRobersonisInnocent

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Re: New To Investing Thread
« Reply #36 on: April 16, 2013, 11:21:05 AM »
Diversification

Offline slobber

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Re: New To Investing Thread
« Reply #37 on: April 16, 2013, 11:22:50 AM »
I do not care who you work for, do not be over invest in that company's stock. If they have an ESPP (employee stock purchase plan) where you can buy stock at a discount, do it, but then seel the stock when you can if the overall amount in your ESPP is out of balance with the rest of your investments. Additionally, do not own large amounts of company stock in your 401(k).

The reason for the above is diversity. You are already relying on your job and your company 100% for your income, do not rely on your company's performance for your retirement.

Offline 0.42

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Re: New To Investing Thread
« Reply #38 on: April 16, 2013, 11:23:01 AM »
charge what the market will bear

Offline ben ji

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Re: New To Investing Thread
« Reply #39 on: April 16, 2013, 11:23:16 AM »
Can't you pull from your Roth IRA for your first house or something of that nature?

You never want to pull any money out of your retirement fund, bad habit....but yes.

Say your have a Roth IRA and you have 20k in it. 15k of that is principal that you put in....You could pull out all 15k if you wanted and use that to pay for a house or any other emergency that may pop up.
"I think my grandpa killed some body once, he never liked to talk about Kent State though"

Offline CNS

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Re: New To Investing Thread
« Reply #40 on: April 16, 2013, 11:23:29 AM »
I do not care who you work for, do not be over invested in that company's stock. If they have an ESPP (employee stock purchase plan) where you can buy stock at a discount, do it, but then seel the stock when you can if the overall amount in your ESPP is out of balance with the rest of your investments. Additionally, do not own large amounts of company stock in your 401(k).

The reason for the above is diversity. You are already relying on your job and your company 100% for your income, do not rely on your company's performance for your retirement.

See Enron.

Offline EllRobersonisInnocent

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Re: New To Investing Thread
« Reply #41 on: April 16, 2013, 11:23:54 AM »
Buy and sell options

Offline The Tonya Harding of Twitter Users Creep

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Re: New To Investing Thread
« Reply #42 on: April 16, 2013, 11:24:13 AM »
Can't you pull from your Roth IRA for your first house or something of that nature?

You never want to pull any money out of your retirement fund, bad habit....but yes.

Say your have a Roth IRA and you have 20k in it. 15k of that is principal that you put in....You could pull out all 15k if you wanted and use that to pay for a house or any other emergency that may pop up.

Well I thought it was no penalty. I understand that you can always pull it out but you get taxed like crazy. Just thought there was an exception for your first home.
I think what my friend Mitch is trying to say is that true love is blind.

Offline treysolid

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Re: New To Investing Thread
« Reply #43 on: April 16, 2013, 11:24:21 AM »
well, before you start investing for retirement, you should put together your emergency fund. whatever you could live on for 6 months if you were to lose your job should just be sitting in a money-market account, ready to use whenever crap goes sideways.

Offline steve dave

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Re: New To Investing Thread
« Reply #44 on: April 16, 2013, 11:24:57 AM »
Can't you pull from your Roth IRA for your first house or something of that nature?

you can borrow from most retirement accounts for stuff like this.

Offline 0.42

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Re: New To Investing Thread
« Reply #45 on: April 16, 2013, 11:25:45 AM »
use the laffer curve

Offline ben ji

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Re: New To Investing Thread
« Reply #46 on: April 16, 2013, 11:25:55 AM »
Can't you pull from your Roth IRA for your first house or something of that nature?

You never want to pull any money out of your retirement fund, bad habit....but yes.

Say your have a Roth IRA and you have 20k in it. 15k of that is principal that you put in....You could pull out all 15k if you wanted and use that to pay for a house or any other emergency that may pop up.

Well I thought it was no penalty. I understand that you can always pull it out but you get taxed like crazy. Just thought there was an exception for your first home.

You are confusing a 401k and a roth IRA...there is some way to pull money out of a 401k for your first home but I dont know much about that.

With a roth IRA you can pull out your principal at any time with no penalty because you have already paid taxes on this money.
"I think my grandpa killed some body once, he never liked to talk about Kent State though"

Offline slobber

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Re: New To Investing Thread
« Reply #47 on: April 16, 2013, 11:27:32 AM »
well, before you start investing for retirement, you should put together your emergency fund. whatever you could live on for 6 months if you were to lose your job should just be sitting in a money-market account, ready to use whenever crap goes sideways.

This varies per person and situation. At 24, no spouse, no kids, I wouldn't worry so much about 6 months. Start out with a couple of months and then start investing, but continue to add a little more to your emergency fund until you get to three months or more if you want to.

Offline slobber

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Re: New To Investing Thread
« Reply #48 on: April 16, 2013, 11:30:34 AM »
If you have the option at your place of employment, invest in the Roth 401(k), not the traditional 401(k).
Hey elites, the people that are new to investing will not take my advice unless one of you agrees to it. This is a simple and easy step, but I know a lot of people freak out when they see "Roth 410(k)" and just select the traditional. Could one of you elites please agree with this statement so all of the young college grads will not make the mistake of passing on their new employer's Roth 401(k).

Offline ben ji

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Re: New To Investing Thread
« Reply #49 on: April 16, 2013, 11:33:49 AM »
If you have the option at your place of employment, invest in the Roth 401(k), not the traditional 401(k).
Hey elites, the people that are new to investing will not take my advice unless one of you agrees to it. This is a simple and easy step, but I know a lot of people freak out when they see "Roth 410(k)" and just select the traditional. Could one of you elites please agree with this statement so all of the young college grads will not make the mistake of passing on their new employer's Roth 401(k).

most places dont have roth 401k's and I dont know much about them.
"I think my grandpa killed some body once, he never liked to talk about Kent State though"