Author Topic: New To Investing Thread  (Read 327370 times)

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Offline slobber

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Re: New To Investing Thread
« Reply #500 on: April 25, 2013, 09:42:39 AM »
Okay, so FSAs seem kinda dumb. I put the minimum that I could in just to cover dentist and checkup type stuff.
I used to work with some fsa plans.  I've seen employees game the plan though.  like one time a guy calculated the price of lasic surgery, "withheld" that amount through the fsa, had it done the first month of the new plan year and then quit his job the next month, effectively having his company pay for most of his lasic. :lol:
Awesome. I unintentionally did this. When I left my other job, the money in the FSA was mine (I had already spent it), even though I hadn't contributed it all. The company puts all of the money in the FSA at the beginning of the year, then they take it out of your paycheck over the course of the year. Is it still done that way?

Offline Rage Against the McKee

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Re: New To Investing Thread
« Reply #501 on: April 25, 2013, 09:45:28 AM »
Okay, so FSAs seem kinda dumb. I put the minimum that I could in just to cover dentist and checkup type stuff.
I used to work with some fsa plans.  I've seen employees game the plan though.  like one time a guy calculated the price of lasic surgery, "withheld" that amount through the fsa, had it done the first month of the new plan year and then quit his job the next month, effectively having his company pay for most of his lasic. :lol:
Awesome. I unintentionally did this. When I left my other job, the money in the FSA was mine (I had already spent it), even though I hadn't contributed it all. The company puts all of the money in the FSA at the beginning of the year, then they take it out of your paycheck over the course of the year. Is it still done that way?

That's how mine works.

Offline michigancat

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Re: New To Investing Thread
« Reply #502 on: April 25, 2013, 09:45:40 AM »
where do unused fsa contributions go?

Offline slobber

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Re: New To Investing Thread
« Reply #503 on: April 25, 2013, 09:53:11 AM »
where do unused fsa contributions go?
Back to the employer is what I always understood.

Offline LilSmokyMcIntyre

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Re: New To Investing Thread
« Reply #504 on: April 25, 2013, 09:58:50 AM »
My HDHP is free for me and my entire family. My company also puts in $1k at the beginning of each year for the HSA and I can contribute up to a bit over $5k which I do. My wife also gets coverage under her job through BCBS which I think you aren't supposed to do but they've never busted us on it.

Be careful with that. If you get audited they will bust you. Plus if the IRS auditor is a cat fan then he knows you know it's wrong and would get double busted.

Also, I do not believe health expenses that are paid for by an hsa are eligible for the 7.5% tax floor. You get the tax benefit upfront so you don't get it on the back end. Could be wrong but I don't think I am.

If you're young, relatively healthy then an hsa is great. Tax benefits and the fact that it will be used before you die plus you get investment options on it.

Offline steve dave

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Re: New To Investing Thread
« Reply #505 on: April 25, 2013, 10:01:13 AM »
Also, I do not believe health expenses that are paid for by an hsa are eligible for the 7.5% tax floor. You get the tax benefit upfront so you don't get it on the back end. Could be wrong but I don't think I am.

I know, our discussion was about putting the money in the HSA long term and paying health costs OOP which would bring in the 7.5% tax floor (which I have never gotten close to meeting) so I wouldn't be able to deduct them.

Offline Mrs. Gooch

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Re: New To Investing Thread
« Reply #506 on: April 25, 2013, 10:03:29 AM »
I only have an FSA, no HSA :(.
Use it. Just don't put too much money in it. Up until a couple of years ago you could by over the counter medicine with your FSA. Back when my company only offered an FSA, Mrs. dobber and I went out one year in December and bought $150 worth of crap (vitamins, aspirin, tylenol, cold medicine) just so we didn't lose the money.

I put $200 in it last year but only used about $100 which was basically a couple dentists/eye doctor copays and some contacts.

I havent been to an actual doctor since I stopped playing high school sports :-/

Yeah, you shouldn't be using the FSA at all, then.

You can buy sunglasses with your FSA as long as they are "prescription ready" even if you don't actually get prescription lenses.

Offline The Tonya Harding of Twitter Users Creep

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Re: New To Investing Thread
« Reply #507 on: April 25, 2013, 10:03:53 AM »
i can only change my health plan once a year so can we freeze this thread cuz ill forget next year when i wanna change it
I think what my friend Mitch is trying to say is that true love is blind.

Offline slobber

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Re: New To Investing Thread
« Reply #508 on: April 25, 2013, 10:04:49 AM »
Also, I do not believe health expenses that are paid for by an hsa are eligible for the 7.5% tax floor. You get the tax benefit upfront so you don't get it on the back end. Could be wrong but I don't think I am.

I know, our discussion was about putting the money in the HSA long term and paying health costs OOP which would bring in the 7.5% tax floor (which I have never gotten close to meeting) so I wouldn't be able to deduct them.
Even excluding the 7.5% tax floor, I still believe paying out of pocket now and allowing the HSA to grow tax free is a good plan when you have small annual out of pocket expenses.

Offline LilSmokyMcIntyre

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Re: New To Investing Thread
« Reply #509 on: April 25, 2013, 10:10:06 AM »
Also, I do not believe health expenses that are paid for by an hsa are eligible for the 7.5% tax floor. You get the tax benefit upfront so you don't get it on the back end. Could be wrong but I don't think I am.

I know, our discussion was about putting the money in the HSA long term and paying health costs OOP which would bring in the 7.5% tax floor (which I have never gotten close to meeting) so I wouldn't be able to deduct them.
Even excluding the 7.5% tax floor, I still believe paying out of pocket now and allowing the HSA to grow tax free is a good plan when you have small annual out of pocket expenses.

Completely agree. Another bonus...if you do not max out your hsa and come tax time you realize that you could use a tax deduction (bec you know, you're a cat fan and its tough to track the gobs of $ you make), then you can put more into your hsa and count it as prior year contribution until April 15. Thus lowering the tax you owe Uncle Sam on your return.

Offline kostakio

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Re: New To Investing Thread
« Reply #510 on: April 25, 2013, 10:16:06 AM »
where do unused fsa contributions go?
Back to the employer is what I always understood.

my company donates the money to charity.  Not sure if they are allowed to keep it or not. 

Offline Fedor

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Re: New To Investing Thread
« Reply #511 on: April 25, 2013, 11:29:58 AM »
My HDHP is free for me and my entire family. My company also puts in $1k at the beginning of each year for the HSA and I can contribute up to a bit over $5k which I do. My wife also gets coverage under her job through BCBS which I think you aren't supposed to do but they've never busted us on it.

Be careful with that. If you get audited they will bust you. Plus if the IRS auditor is a cat fan then he knows you know it's wrong and would get double busted.

Also, I do not believe health expenses that are paid for by an hsa are eligible for the 7.5% tax floor. You get the tax benefit upfront so you don't get it on the back end. Could be wrong but I don't think I am.

If you're young, relatively healthy then an hsa is great. Tax benefits and the fact that it will be used before you die plus you get investment options on it.
Please elaborate, this fund would be several hundred thousand dollars at retirement if you max out the contributions every year.  You can't pay premiums w/ it and most will likely have insurance even after retirement.  I am having a hard time seeing how someone could spend all this money given the restrictions.
I was wrong and I apologize. - michigancat 8/22/14

Offline steve dave

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Re: New To Investing Thread
« Reply #512 on: April 25, 2013, 11:43:45 AM »
My HDHP is free for me and my entire family. My company also puts in $1k at the beginning of each year for the HSA and I can contribute up to a bit over $5k which I do. My wife also gets coverage under her job through BCBS which I think you aren't supposed to do but they've never busted us on it.

Be careful with that. If you get audited they will bust you. Plus if the IRS auditor is a cat fan then he knows you know it's wrong and would get double busted.

Also, I do not believe health expenses that are paid for by an hsa are eligible for the 7.5% tax floor. You get the tax benefit upfront so you don't get it on the back end. Could be wrong but I don't think I am.

If you're young, relatively healthy then an hsa is great. Tax benefits and the fact that it will be used before you die plus you get investment options on it.
Please elaborate, this fund would be several hundred thousand dollars at retirement if you max out the contributions every year.  You can't pay premiums w/ it and most will likely have insurance even after retirement.  I am having a hard time seeing how someone could spend all this money given the restrictions.

You can draw on it like any other investment after the age of 65. You don't have to use it for medical expenses. It essentially becomes an IRA.

Offline LilSmokyMcIntyre

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Re: New To Investing Thread
« Reply #513 on: April 25, 2013, 11:44:13 AM »
My HDHP is free for me and my entire family. My company also puts in $1k at the beginning of each year for the HSA and I can contribute up to a bit over $5k which I do. My wife also gets coverage under her job through BCBS which I think you aren't supposed to do but they've never busted us on it.

Be careful with that. If you get audited they will bust you. Plus if the IRS auditor is a cat fan then he knows you know it's wrong and would get double busted.

Also, I do not believe health expenses that are paid for by an hsa are eligible for the 7.5% tax floor. You get the tax benefit upfront so you don't get it on the back end. Could be wrong but I don't think I am.

If you're young, relatively healthy then an hsa is great. Tax benefits and the fact that it will be used before you die plus you get investment options on it.
Please elaborate, this fund would be several hundred thousand dollars at retirement if you max out the contributions every year.  You can't pay premiums w/ it and most will likely have insurance even after retirement.  I am having a hard time seeing how someone could spend all this money given the restrictions.

Unless you're a super human you (or your family) will have health issues that will require out of pocket expenses. But if you are super human and you die with a healthy hsa then your spouse/beneficiary can use it. I'm not sure of the hsa rules regarding beneficiaries so it may even be able to be used for non health expenses/general purchases at that point. Wouldn't shock me.

FYI, health expenses are only going to increase. Furthermore there's no guarantees that hsa will be around forever. Just like there's no guarantees that Roth IRAs will be around forever.

Offline slobber

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Re: New To Investing Thread
« Reply #514 on: April 25, 2013, 11:49:22 AM »
My HDHP is free for me and my entire family. My company also puts in $1k at the beginning of each year for the HSA and I can contribute up to a bit over $5k which I do. My wife also gets coverage under her job through BCBS which I think you aren't supposed to do but they've never busted us on it.

Be careful with that. If you get audited they will bust you. Plus if the IRS auditor is a cat fan then he knows you know it's wrong and would get double busted.

Also, I do not believe health expenses that are paid for by an hsa are eligible for the 7.5% tax floor. You get the tax benefit upfront so you don't get it on the back end. Could be wrong but I don't think I am.

If you're young, relatively healthy then an hsa is great. Tax benefits and the fact that it will be used before you die plus you get investment options on it.
Please elaborate, this fund would be several hundred thousand dollars at retirement if you max out the contributions every year.  You can't pay premiums w/ it and most will likely have insurance even after retirement.  I am having a hard time seeing how someone could spend all this money given the restrictions.


You don't know how much nursing home care costs, do you. Either way, it doesn't matter:

Fromhttp://www.hsaconnect.com/irs-and-treasury-hsa-publications/hsa-basics/what-happens-to-my-hsa-when-I-die.php
Quote
If your spouse becomes the owner of the account, your spouse can use it as if it were their own HSA. If you are not married, the account will no longer be treated as an HSA upon your death. The account will pass to your beneficiary or become part of your estate (and be subject to any applicable taxes).
There isn't much bad that can be found in investing in an HSA.

Offline ben ji

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Re: New To Investing Thread
« Reply #515 on: April 26, 2013, 09:44:50 AM »
So I was thinking about the increasing popularity of Index funds the other day and have some questions....

Index funds are basically a collection of stocks meant to mimic the movement of the a certain index(SP500, Dow, etc) correct?

Lets say right now only 10%(Completely made up percent) of individual investors actually buy Index funds now but the gospel is spreading and soon 50% of individual investors are buying index funds instead of mutual funds.

Wouldnt this lead to the stocks in the index funds being overvalued(and then crashing) compared to other stocks not included in the Index's?

Do Index funds adjust for this?


Offline steve dave

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Re: New To Investing Thread
« Reply #516 on: April 26, 2013, 09:48:23 AM »
So I was thinking about the increasing popularity of Index funds the other day and have some questions....

Index funds are basically a collection of stocks meant to mimic the movement of the a certain index(SP500, Dow, etc) correct?

Lets say right now only 10%(Completely made up percent) of individual investors actually buy Index funds now but the gospel is spreading and soon 50% of individual investors are buying index funds instead of mutual funds.

Wouldnt this lead to the stocks in the index funds being overvalued(and then crashing) compared to other stocks not included in the Index's?

Do Index funds adjust for this?

my initial response is "wut?" but the short answer is "no"

Offline ben ji

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Re: New To Investing Thread
« Reply #517 on: April 26, 2013, 09:50:27 AM »
So I was thinking about the increasing popularity of Index funds the other day and have some questions....

Index funds are basically a collection of stocks meant to mimic the movement of the a certain index(SP500, Dow, etc) correct?

Lets say right now only 10%(Completely made up percent) of individual investors actually buy Index funds now but the gospel is spreading and soon 50% of individual investors are buying index funds instead of mutual funds.

Wouldnt this lead to the stocks in the index funds being overvalued(and then crashing) compared to other stocks not included in the Index's?

Do Index funds adjust for this?

my initial response is "wut?" but the short answer is "no"

No they dont adjust for this or No this though process makes no sense?

Offline steve dave

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Re: New To Investing Thread
« Reply #518 on: April 26, 2013, 09:57:12 AM »
So I was thinking about the increasing popularity of Index funds the other day and have some questions....

Index funds are basically a collection of stocks meant to mimic the movement of the a certain index(SP500, Dow, etc) correct?

Lets say right now only 10%(Completely made up percent) of individual investors actually buy Index funds now but the gospel is spreading and soon 50% of individual investors are buying index funds instead of mutual funds.

Wouldnt this lead to the stocks in the index funds being overvalued(and then crashing) compared to other stocks not included in the Index's?

Do Index funds adjust for this?

my initial response is "wut?" but the short answer is "no"

No they dont adjust for this or No this though process makes no sense?

in your scenario people are moving from mutual funds to index funds. the same securities in those mutual funds are held in the index funds. they just aren't actively managed and charged.

index funds hold groups of stocks across all ranges, industries, markets, etc. and not just stocks. bonds, real estate investments, etc. the investors moving into them are moving away from either individually owning these assets or owning them in another fund of some sort.

I guess I still don't 100% understand what you are asking but I'm pretty confident the answer is "no".

Offline Emo EMAW

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Re: New To Investing Thread
« Reply #519 on: April 26, 2013, 10:02:17 AM »
Ben ji, when one company is dropped from the DJIA it's common to see a drop in share price and also trade volume.  Opposite is true when a company is added to the DJIA. 

Offline steve dave

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Re: New To Investing Thread
« Reply #520 on: April 26, 2013, 10:03:30 AM »
and most of the individual stocks or other assets that make up those funds are held institutionally and if the price gets driven up artificially by some random market rush by the personal retirement investor (which isn't really feasible) the market will correct for it pretty fast.

Offline ben ji

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Re: New To Investing Thread
« Reply #521 on: April 26, 2013, 10:45:23 AM »
Thanks friends!

Offline ben ji

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Re: New To Investing Thread
« Reply #522 on: May 03, 2013, 10:11:42 AM »
enough with the market timing fight.  anyone invest in individual stocks?  to me, that's the fun part.

I have a few. Mostly just for my own enjoyment, not really a way to strike it rich or anything unless I get lucky.

This.

Currently own some YRC stock, Bought in over the summer for around $6.45 per share and it is currently at 6.75. Was up over 8.00 a share a couple weeks ago but has had some crazy fluctuations both good and bad.

Back in 2010 I read an atricle about Macau overtaking Vegas and the worldwide gambling capital. Looked up the companies that had casino's based in Macaua and its basically just Wynn and Las Vegas Sands. Was going to buy some LVS stock for $28 but I was a new grad and didnt have any money. LVS us currently over $50.  :(

 :D

Offline sys

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