Author Topic: New To Investing Thread  (Read 327402 times)

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Offline steve dave

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Re: New To Investing Thread
« Reply #100 on: April 16, 2013, 02:29:18 PM »
if you put money in a cd I'll punch you in the face

SD tell me if this is an accurate description of a typical CD:

I could put $2000 into a 2-year 1.8% CD right now and walk away after 2 years of not touching that money with a cool $2036  :gocho:

You would earn more than $36. It would be closer to $100.

about $70. let's not send mocat out to put down a payment on a lambo just yet.

Offline mocat

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Re: New To Investing Thread
« Reply #101 on: April 16, 2013, 02:30:59 PM »
if you put money in a cd I'll punch you in the face

SD tell me if this is an accurate description of a typical CD:

I could put $2000 into a 2-year 1.8% CD right now and walk away after 2 years of not touching that money with a cool $2036  :gocho:

You would earn more than $36. It would be closer to $100.

about $70. let's not send mocat out to put down a payment on a lambo just yet.

CDs seem like a legal and socially accepted form of Nigerian Prince'ing people  :confused:

Offline Rage Against the McKee

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Re: New To Investing Thread
« Reply #102 on: April 16, 2013, 02:32:30 PM »
if you put money in a cd I'll punch you in the face

SD tell me if this is an accurate description of a typical CD:

I could put $2000 into a 2-year 1.8% CD right now and walk away after 2 years of not touching that money with a cool $2036  :gocho:

You would earn more than $36. It would be closer to $100.

about $70. let's not send mocat out to put down a payment on a lambo just yet.

CDs seem like a legal and socially accepted form of Nigerian Prince'ing people  :confused:

If you are already like 70 years old, and have enough money to reasonably live on until you die, they aren't a horrible idea because there is no risk of taking a loss like there is with a good investment.

Offline lopakman

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Re: New To Investing Thread
« Reply #103 on: April 16, 2013, 02:34:00 PM »
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.


Withdrawal from 401k for first home purchase is considered to be a "hardship" condition.  You're still taxed, penalized, and can't contribute for 6 months.  Forget it.

you can take a loan from your 401k without any of that. but, with mortage rates at essentially zero I don't know why you would.

No you can't.  If you take money from your 401k you are penalized.  You can roll your 401k over to an IRA to avoid the penalties but you'd be paying a higher interest rate.  Mortgage rates are not near zero, they're slightly below 4% for those with excellent credit who would never need to do this in the first place.  If you need to borrow against your 401k for a house then do it but it's going to cost you more in the long run.

you are wrong, dumbass.

http://www.forbes.com/2008/09/02/401k-loan-borrowing-pf-education-in_rw_0902investopedia_inl.html

Guess there's two sides to every story huh?

http://www.investopedia.com/articles/retirement/06/eightreasons401k.asp
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Offline kostakio

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Re: New To Investing Thread
« Reply #104 on: April 16, 2013, 02:34:08 PM »
Also dont pay extra on your mortgage unless your are paying PMI...If your mortgage rate is 4% and the market returns an average of 7% you are losing money.There is some psychological advantage but no financial advantage.

I generally agree with this, but there is some financial advantage in paying extra on your mortgage if you don't plan on living at your current house for an extended period of time. When rates go back up, you will have to get a new mortgage at the higher rate when you move and having a larger amount of the value of your current home paid off will reduce the amount you have to borrow at the higher rate. There are better investments out there, but paying extra on the mortgage is better than letting your money sit in a savings or checking account.

Paying a mortgage off early is maybe slightly better then letting it sit in a savings or checking account. However, I don't follow your logic on the having to borrow less if you move part.  Sure you'll have more equity in your current house but even after you sell it you will not have more liquid worth to put towards the purchase of a new house unless of course you took that extra money and lost it.

I don't recomend paying off your house early under almost any circumstance.  For one you want to stay liquid as much as possible and homes are not liquid.  Two you want to diversify and invest in things other then real estate.  You already own the home and will bear 100% of the value fluctuations.  No reason top tie up any more capital in it then required to avoid PMI.  Even with money sitting in savings you have to take into account interest will likely go up at some point and could easily eclipse the 3% and change mortage rate you can get right now.  I'm not advocating letting the money sit in savings but if the choice were to sit in savings or pay the mortage early I'd probably choose savings right now.   

Offline EllRobersonisInnocent

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Re: New To Investing Thread
« Reply #105 on: April 16, 2013, 02:37:16 PM »
I'd take the advice of Jim Cramer over Steve Dave on these sort of things guys

Offline lopakman

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Re: New To Investing Thread
« Reply #106 on: April 16, 2013, 02:38:32 PM »
Also dont pay extra on your mortgage unless your are paying PMI...If your mortgage rate is 4% and the market returns an average of 7% you are losing money.There is some psychological advantage but no financial advantage.

I generally agree with this, but there is some financial advantage in paying extra on your mortgage if you don't plan on living at your current house for an extended period of time. When rates go back up, you will have to get a new mortgage at the higher rate when you move and having a larger amount of the value of your current home paid off will reduce the amount you have to borrow at the higher rate. There are better investments out there, but paying extra on the mortgage is better than letting your money sit in a savings or checking account.

Paying a mortgage off early is maybe slightly better then letting it sit in a savings or checking account. However, I don't follow your logic on the having to borrow less if you move part.  Sure you'll have more equity in your current house but even after you sell it you will not have more liquid worth to put towards the purchase of a new house unless of course you took that extra money and lost it.

I don't recomend paying off your house early under almost any circumstance.  For one you want to stay liquid as much as possible and homes are not liquid.  Two you want to diversify and invest in things other then real estate.  You already own the home and will bear 100% of the value fluctuations.  No reason top tie up any more capital in it then required to avoid PMI.  Even with money sitting in savings you have to take into account interest will likely go up at some point and could easily eclipse the 3% and change mortage rate you can get right now.  I'm not advocating letting the money sit in savings but if the choice were to sit in savings or pay the mortage early I'd probably choose savings right now.

If you want to pay extra on mortgage make on extra payment a year and that will knock off 5-7 years of your loan depending on interest rate.  If you have enough money in savings to pay off your mortgate then probably Steve Dave and I could both agree you have too much cash on hand. 

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Offline steve dave

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Re: New To Investing Thread
« Reply #107 on: April 16, 2013, 02:38:39 PM »
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.


Withdrawal from 401k for first home purchase is considered to be a "hardship" condition.  You're still taxed, penalized, and can't contribute for 6 months.  Forget it.

you can take a loan from your 401k without any of that. but, with mortage rates at essentially zero I don't know why you would.

No you can't.  If you take money from your 401k you are penalized.  You can roll your 401k over to an IRA to avoid the penalties but you'd be paying a higher interest rate.  Mortgage rates are not near zero, they're slightly below 4% for those with excellent credit who would never need to do this in the first place.  If you need to borrow against your 401k for a house then do it but it's going to cost you more in the long run.

you are wrong, dumbass.

http://www.forbes.com/2008/09/02/401k-loan-borrowing-pf-education-in_rw_0902investopedia_inl.html

Guess there's two sides to every story huh?

http://www.investopedia.com/articles/retirement/06/eightreasons401k.asp

lol, an article about why it's stupid to do it is not a refutation of the ability to do it  :lol:

Offline ben ji

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Re: New To Investing Thread
« Reply #108 on: April 16, 2013, 02:42:33 PM »
Hey lopakman, take a lap and let the big boys hand out the good advice.

I dont want KSC or any other youngsters coming in here and accidentally taking your advice

Offline The Tonya Harding of Twitter Users Creep

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Re: New To Investing Thread
« Reply #109 on: April 16, 2013, 02:44:24 PM »
Hey lopakman, take a lap and let the big boys hand out the good advice.

I dont want KSC or any other youngsters coming in here and accidentally taking your advice

Someone just take all my moneys and make like 2-3% every year except for the moneys I need to buy stuff and live on. Is that too much to ask for? Also when I retire at age 65 or whatever make sure I'm not a poor.
I think what my friend Mitch is trying to say is that true love is blind.

Offline ben ji

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Re: New To Investing Thread
« Reply #110 on: April 16, 2013, 02:45:43 PM »
Hey lopakman, take a lap and let the big boys hand out the good advice.

I dont want KSC or any other youngsters coming in here and accidentally taking your advice

Someone just take all my moneys and make like 2-3% every year except for the moneys I need to buy stuff and live on. Is that too much to ask for? Also when I retire at age 65 or whatever make sure I'm not a poor.

Just buy an index fund and you will make 7% every year.

Offline steve dave

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Re: New To Investing Thread
« Reply #111 on: April 16, 2013, 02:50:01 PM »
Hey lopakman, take a lap and let the big boys hand out the good advice.

I dont want KSC or any other youngsters coming in here and accidentally taking your advice

Someone just take all my moneys and make like 2-3% every year except for the moneys I need to buy stuff and live on. Is that too much to ask for? Also when I retire at age 65 or whatever make sure I'm not a poor.

Just buy an index fund and you will make 7% every year over the long run.

Offline lopakman

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Re: New To Investing Thread
« Reply #112 on: April 16, 2013, 02:52:01 PM »
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.


Withdrawal from 401k for first home purchase is considered to be a "hardship" condition.  You're still taxed, penalized, and can't contribute for 6 months.  Forget it.

you can take a loan from your 401k without any of that. but, with mortage rates at essentially zero I don't know why you would.

No you can't.  If you take money from your 401k you are penalized.  You can roll your 401k over to an IRA to avoid the penalties but you'd be paying a higher interest rate.  Mortgage rates are not near zero, they're slightly below 4% for those with excellent credit who would never need to do this in the first place.  If you need to borrow against your 401k for a house then do it but it's going to cost you more in the long run.

you are wrong, dumbass.

http://www.forbes.com/2008/09/02/401k-loan-borrowing-pf-education-in_rw_0902investopedia_inl.html

Guess there's two sides to every story huh?

http://www.investopedia.com/articles/retirement/06/eightreasons401k.asp

lol, an article about why it's stupid to do it is not a refutation of the ability to do it  :lol:

I didn't say you couldn't do it, I said you shouldn't do it.  We obviously have different investing strategies.  I'm 37 and have two kids, I choose not to be as aggressive as I was when I graduated fifteen years ago.  What I'm doing is working out well for me and my family.  Our house will be paid off by the time my 5 year old goes to college and our 529 IRA will cover all college expenses for both of our kids.  By the time my two year old graduates from college we'll be retired.  That's my definition of success. 

I hope you get everything you want out of your investment strategy and I consider this matter closed.

 :cheers:
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Offline The Tonya Harding of Twitter Users Creep

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Re: New To Investing Thread
« Reply #113 on: April 16, 2013, 02:53:53 PM »
Hey lopakman, take a lap and let the big boys hand out the good advice.

I dont want KSC or any other youngsters coming in here and accidentally taking your advice

Someone just take all my moneys and make like 2-3% every year except for the moneys I need to buy stuff and live on. Is that too much to ask for? Also when I retire at age 65 or whatever make sure I'm not a poor.

Just buy an index fund and you will make 7% every year.

Link? I know absolutely nothing about index funds.

Also I want KSU Cats season tickets for football. Pretty simple budget here, folks. Who wants to be my personal finance manager?
I think what my friend Mitch is trying to say is that true love is blind.

Offline mocat

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Re: New To Investing Thread
« Reply #114 on: April 16, 2013, 02:55:25 PM »
It's almost like KSC and I are the same person here dames and gents

Offline The Tonya Harding of Twitter Users Creep

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Re: New To Investing Thread
« Reply #115 on: April 16, 2013, 02:58:49 PM »
It's almost like KSC and I are the same person here dames and gents

wanna just combine our money so we would only need 1 personal finance manager?
I think what my friend Mitch is trying to say is that true love is blind.

Offline lopakman

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Re: New To Investing Thread
« Reply #116 on: April 16, 2013, 02:58:57 PM »
Hey lopakman, take a lap and let the big boys hand out the good advice.

I dont want KSC or any other youngsters coming in here and accidentally taking your advice

Someone just take all my moneys and make like 2-3% every year except for the moneys I need to buy stuff and live on. Is that too much to ask for? Also when I retire at age 65 or whatever make sure I'm not a poor.

Just buy an index fund and you will make 7% every year.

You mean you could achieve an average return of 7% every year BASED on Histoical Annual Returns data.  Cause if you're saying you'll make 7% every year that would just be ridiculous.   May want to rephrase before sharing your "big boy" advice.
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Offline slobber

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Re: New To Investing Thread
« Reply #117 on: April 16, 2013, 03:03:21 PM »
OH crap! Butthurt is starting to come out. Don't get offended when someone says your ideas are stupid (maybe your ideas are stupid?).

Offline steve dave

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Re: New To Investing Thread
« Reply #118 on: April 16, 2013, 03:10:22 PM »
I didn't say you couldn't do it, I said you shouldn't do it.......I consider this matter closed.

of course you want it closed, because you said this:

Withdrawal from 401k for first home purchase is considered to be a "hardship" condition.  You're still taxed, penalized, and can't contribute for 6 months.  Forget it.

you can take a loan from your 401k without any of that. but, with mortage rates at essentially zero I don't know why you would.

No you can't.  If you take money from your 401k you are penalized.  You can roll your 401k over to an IRA to avoid the penalties but you'd be paying a higher interest rate. 

it has nothing to do with investing strategy. it has to do with me saying you can take a loan without being taxed, paying a penalty, etc. and you saying you couldn't.

Offline ben ji

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Re: New To Investing Thread
« Reply #119 on: April 16, 2013, 03:11:38 PM »
Hey lopakman, take a lap and let the big boys hand out the good advice.

I dont want KSC or any other youngsters coming in here and accidentally taking your advice

Someone just take all my moneys and make like 2-3% every year except for the moneys I need to buy stuff and live on. Is that too much to ask for? Also when I retire at age 65 or whatever make sure I'm not a poor.

Just buy an index fund and you will make 7% every year.

Link? I know absolutely nothing about index funds.

Also I want KSU Cats season tickets for football. Pretty simple budget here, folks. Who wants to be my personal finance manager?

I dont know enough about index funds to recommend an particular one, ask pete or something. All my funds are currently in more aggressive investments since I am just a youngster.

I have been reading about Index funds and will probably add them to the portfolio at some point. Index funds are basically just mutual funds that are built to track the stock market tit for tat. The dow goes up 10% in a year then your portfolio goes up 10% for the year. Their expense ratio's are also very low which is a good thing.

They are great for people who want to put minimal effort into investing and still build a nice retirement fund.

Offline The Tonya Harding of Twitter Users Creep

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Re: New To Investing Thread
« Reply #120 on: April 16, 2013, 03:13:52 PM »
Congrats, ben ji, you're hired! Just bring your cute ass puppy to our meetings and we'll get along just great. Also don't spend all my money on fishing stuff cuz I'm gonna need it at some point.
I think what my friend Mitch is trying to say is that true love is blind.

Offline steve dave

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Re: New To Investing Thread
« Reply #121 on: April 16, 2013, 03:15:49 PM »
Hey lopakman, take a lap and let the big boys hand out the good advice.

I dont want KSC or any other youngsters coming in here and accidentally taking your advice

Someone just take all my moneys and make like 2-3% every year except for the moneys I need to buy stuff and live on. Is that too much to ask for? Also when I retire at age 65 or whatever make sure I'm not a poor.

Just buy an index fund and you will make 7% every year.

Link? I know absolutely nothing about index funds.

Also I want KSU Cats season tickets for football. Pretty simple budget here, folks. Who wants to be my personal finance manager?

open your IRA, throw it all into whichever one of these you fit into:

https://personal.vanguard.com/us/funds/vanguard/TargetRetirementList

Offline SabiNation

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Re: New To Investing Thread
« Reply #122 on: April 16, 2013, 03:16:46 PM »
I want a finance manager too!
"If i worked for the NY times, and my boss told me 'hey. if you keep ranking ksu so high, we may fire you' i would tell my boss to 'bring it on.'"  -FFF

Offline The Tonya Harding of Twitter Users Creep

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Re: New To Investing Thread
« Reply #123 on: April 16, 2013, 03:18:36 PM »

open your IRA, throw it all into whichever one of these you fit into:

https://personal.vanguard.com/us/funds/vanguard/TargetRetirementList

thanks super awesome life planner steve dave!
I think what my friend Mitch is trying to say is that true love is blind.

Offline ben ji

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Re: New To Investing Thread
« Reply #124 on: April 16, 2013, 03:26:48 PM »

open your IRA, throw it all into whichever one of these you fit into:

https://personal.vanguard.com/us/funds/vanguard/TargetRetirementList

thanks super awesome life planner steve dave!

Yeah, the one thing about Index funds is that most(at least mine) 401k's dont offer them so you will have to get an IRA first.