Talking stocks, trading, and investing in general

[GreenFrog]



You're assuming he only has one account.

True dat.

Depends on the type of account, too. I only have one brokerage account, but have around 7 accounts across everything else, like 401k, IRA, rollover, HSA, checkings, etc.

My brokerage by far and away has the most assets in it though.

 

[otc]

That's my Roth IRA...so kind of a hard limit on how much money could be in it (and FWIW, that's a pretty rough estimate due to rounding...there's about 10k more in there than you would calculate from 0.03%). Considering that I only started working in 2010 (and thus may have not made full contributions until 2011), I'd say 55k is pretty good given that I can't have made much more than 30k in contributions total.

But I'm not really a sleeper baller...and I don't mean that the way piob's lying ass says it.

 

[GreenFrog]



That's because GF is a small-timer.
Yes, that's what makes you 14 times better than GF.

'tis true

I mean, I did eat a footlong at Subway for lunch today after all. But I did splurge and get the bacon chicken ranch one which is $2.10 more expensive than the standard five dorra foot rong.

 

[GreenFrog]

Damn brah, that's really good for a roth IRA. I slacked hard on contributing to my roth ira, in that I put in $2.5K when I was a junior in college and haven't contributed a dime since, lol.

It's now worth $3.2k due to gains. I haven't touched it since and it's all in some stupidly high-fee mutual fund. I didn't know wtf I was doing back then and I'm too lazy to change anything now.

 

[otc]

What...you like paying taxes or something?

 

[GreenFrog]

Honestly.. yes. I know this goes against all conventional wisdom of using tax advantaged accounts.. but I've thought long and hard about this. I'd rather pay the tax hit up front now when I think tax rates are at all time lows so I can have instant access to that capital. I don't like the idea of having my retirement funds locked away for 40+ more years. I want to be able to tap into my capital whenever I need it for any large investments or business related ventures I might want to pursue in the future.

I also don't make enough money to the point where contributing just 5% or something of my salary (where you also get the company match) maxes you out for the 401k contribution limit. If I had a 200k base salary or something like everyone else, then sure.

Now, I just contribute $1,000 a month to my 401k and do nothing else for retirement.

Regardless, I am very, very pleased about my financial status at 26 years of age. I am doing far better than 95% of the population.

 

[Piobaire]



That's my Roth IRA...so kind of a hard limit on how much money could be in it (and FWIW, that's a pretty rough estimate due to rounding...there's about 10k more in there than you would calculate from 0.03%). Considering that I only started working in 2010 (and thus may have not made full contributions until 2011), I'd say 55k is pretty good given that I can't have made much more than 30k in contributions total.

But I'm not really a sleeper baller...and I don't mean that the way piob's lying ass says it.

If that's just your Roth from five years I think you're doing great and are off to a far better start than I was.

We just got good retirement news as Mrs. Piob is changing jobs, after 17 years, and her new job includes a 457(b). Can suddenly sock away another 18k a year!

 

[MSchapiro]

That's my Roth IRA...so kind of a hard limit on how much money could be in it (and FWIW, that's a pretty rough estimate due to rounding...there's about 10k more in there than you would calculate from 0.03%). Considering that I only started working in 2010 (and thus may have not made full contributions until 2011), I'd say 55k is pretty good given that I can't have made much more than 30k in contributions total.

But I'm not really a sleeper baller...and I don't mean that the way piob's lying ass says it.

You picked a great time to start a Roth. I just opened mine this year in this crap market.

Honestly.. yes. I know this goes against all conventional wisdom of using tax advantaged accounts.. but I've thought long and hard about this. I'd rather pay the tax hit up front now when I think tax rates are at all time lows so I can have instant access to that capital. I don't like the idea of having my retirement funds locked away for 40+ more years. I want to be able to tap into my capital whenever I need it for any large investments or business related ventures I might want to pursue in the future.

I also don't make enough money to the point where contributing just 5% or something of my salary (where you also get the company match) maxes you out for the 401k contribution limit. If I had a 200k base salary or something like everyone else, then sure.

Now, I just contribute $1,000 a month to my 401k and do nothing else for retirement.

Regardless, I am very, very pleased about my financial status at 26 years of age. I am doing far better than 95% of the population.

You can withdraw from your Roth penalty free up to your contributed amount I believe.

I feel somewhat the same which is why I only contribute up to my 401k company match.

 

[otc]



Honestly.. yes. I know this goes against all conventional wisdom of using tax advantaged accounts.. but I've thought long and hard about this. I'd rather pay the tax hit up front now when I think tax rates are at all time lows so I can have instant access to that capital. I don't like the idea of having my retirement funds locked away for 40+ more years. I want to be able to tap into my capital whenever I need it for any large investments or business related ventures I might want to pursue in the future.

But...principal on a Roth can be withdrawn at any time without penalty (since you already paid taxes on it).

Unless you are using that capital for something (or think you need immediate access to the principal as well as the gains), there is no reason not to put money in the Roth.

And since roth contributions are limited per year...its not like you can make it up later.

At this point it doesn't matter as I am maxing out everything, but when I first started, the Roth took priority over anything else like long term savings. I figured "I'd much rather max this out now and potentially have to remove some principal in the future for a down payment, than save money in another account only to later realize I don't need it and that I could have been maxing my Roth".

You should be doing 401k up to match, then Roth, then back to the 401k up to max (as far as retirement goes...obviously fill in non-retirement where necessary).

 

[GreenFrog]



But...principal on a Roth can be withdrawn at any time without penalty (since you already paid taxes on it).

Unless you are using that capital for something (or think you need immediate access to the principal as well as the gains), there is no reason not to put money in the Roth.

And since roth contributions are limited per year...its not like you can make it up later.

At this point it doesn't matter as I am maxing out everything, but when I first started, the Roth took priority over anything else like long term savings. I figured "I'd much rather max this out now and potentially have to remove some principal in the future for a down payment, than save money in another account only to later realize I don't need it and that I could have been maxing my Roth".

You should be doing 401k up to match, then Roth, then back to the 401k up to max (as far as retirement goes...obviously fill in non-retirement where necessary).

I was talking more about 401k, but good points on the Roth. It's only like $5.5K a year right? I really should have set up an auto pay into my roth account or something of that nature. Like I said, I just kinda neglected my roth since I started working in 2011.

I don't even have a separate savings account. I have a checkings account with 6 months of living expenses and everything else is in some sort of investment vehicle.

 

[otc]

GF's commentary made me look at my mint account...I have way too much money in my savings account.

Need to deploy some money...must decide if it goes into the wisebanyan account or into active management.

 

[lawyerdad]



I was talking more about 401k, but good points on the Roth. It's only like $5.5K a year right? I really should have set up an auto pay into my roth account or something of that nature. Like I said, I just kinda neglected my roth since I started working in 2011.

I don't even have a separate savings account. I have a checkings account with 6 months of living expenses and everything else is in some sort of investment vehicle.

Just FYI, lots of 401K's allow participants to take interest-free "loans" against a portion of their accumulated account balance.

 

[GreenFrog]



GF's commentary made me look at my mint account...I have way too much money in my savings account.

Need to deploy some money...must decide if it goes into the wisebanyan account or into active management.

I've noticed that you are fairly conservative in your risk appetite. Is there any reason you aren't more aggressive given you're only, what, like 28?

Just FYI, lots of 401K's allow participants to take interest-free "loans" against a portion of their accumulated account balance.

I've heard of taking loans against your balance, but only with the stipulation that you pay yourself some interest, like 4-5%. At least that's what an older coworker told me at my first job when he took money out for a downpayment.

But I'd rather not borrow against a retirement vehicle. Just doesn't sit well with me.

 

[lawyerdad]



But I'd rather not borrow against a retirement vehicle. Just doesn't sit well with me.

We all have our own approaches, but it seems like you're getting overly hung up on labels. I mean, if you're under-funding your retirement accounts because you're concerned about having the flexibility to deploy capital opportunistically, the ability to borrow against the retirement account (assuming it's an account where this is an option) largely undercuts that rationale. You have X dollars in earned income that you can either pay taxes on now and then deploy as you see fit, or that you can direct into a tax-deferred account and (again, assuming your plan allows this) borrow against if you want to invest it in something that can't be held in the retirement account. I'm not suggesting there's a "right" approach, but whatever decisions you're making are better made with an accurate understanding of which trade-offs are real and which are illusory.

 

[GreenFrog]



We all have our own approaches, but it seems like you're getting overly hung up on labels. I mean, if you're under-funding your retirement accounts because you're concerned about having the flexibility to deploy capital opportunistically, the ability to borrow against the retirement account (assuming it's an account where this is an option) largely undercuts that rationale. You have X dollars in earned income that you can either pay taxes on now and then deploy as you see fit, or that you can direct into a tax-deferred account and (again, assuming your plan allows this) borrow against if you want to invest it in something that can't be held in the retirement account. I'm not suggesting there's a "right" approach, but whatever decisions you're making are better made with an accurate understanding of which trade-offs are real and which are illusory.

That's a fair point and thanks for pointing that out. I think the key consideration here is "under-funding." I don't think I'm under-funding my retirement accounts by any stretch. At $12K a year + company match when it kicks in next year of 5%, I feel rather comfortable with my contribution amounts.

I guess one could argue that I could be maximizing all my retirement options, but I'm no $200K base + $400K bonus balla.