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Old 11-15-2015, 09:41 AM   #26
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The market will come back. Stocks are low returning right now. Keep your eye on 5-yr and 10-yr returns.

Right on about the T Rowe target funds. They do ok but there are better options for long term investing.
T Rowe 2040 is 140%+ since 2009 and 40%+ on 5-yr.
T Rowe large cap growth is 278%+ and 87%+ using the same timeline as above.

I used to average 12% year to year but last year was not a good year for a lot of people.

It will come back. Don't panic and dump your $ just yet.
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Old 11-15-2015, 10:44 AM   #27
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Lots of advice on investing in paper assets, whether stocks, funds, IRAs, Drips, etc. I would diversify more. There's a real possibility of a SHTF event in the future and all those paper assets will be hit hard. What do you think will happen to all markets and paper based investments when a dirty nuke goes off in Wallstreet? One way of course is to pay off your home. You want to own property in an era of uncertainty. The second is hard currency assets. That's Gold and Silver. I would start buying real Gold/Silver 0000s and also build up a cash reserve that's easily attainable. I'm not advocating going crazy and anticipating a zombie apocalypse, but something more like a depression era event of the 30's, where widespread unemployment and loss of capital leads to surviving on barter, not what you have in your IRA. We almost went there with the housing crash of 2008. We're poised again, with all manufacturing jobs shipped overseas and our economy having moved to a service industry. Take a look at this data https://www.bls.gov/emp/ep_table_201.htm . Our economy is built on a house of cards with 80% of us working in service industries and not creating products or food. Once the printing presses from the Feds stop, our economy will enter a death spiral.
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Old 11-16-2015, 09:04 AM   #28
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You might want to check what current market rates are for mortgages. 4% is a great mortgage rate, but if you get the opportunity to drop it 1% or more it is typically worth doing a refi. All depends.

Good luck and investing in the Roth in an aggressive fund like suggested would be a good idea. Individual stocks can be good as well, but who knows what will happen in the future with said stocks.

What happens to exxon when we are all driving electric cars?? Just saying.

Debt is a personal decision, some accept it some hate it. Whichever way you choose is great for you. Obviously debt free is great, however some people would say that if they could have a $300,000 mortgage at 4% and earn 10% on an investment that would be a better deal. Maybe - there is no guarantees on that investment and puts more stress having a mortgage. What if you lose your job? Sounds like you got a good head on your shoulders. Good luck and congrats on being where you are at, at your age.
I got a bottom dollar interest rate at that time (i.e. I have "perfect" credit that got me the best interest rate possible). Unfortunately, my timing was terrible and I got my rate right when it spiked a little bit in early June. However, it was only a tiny bit better than that earlier this year at around 3.75-4.00, and has been more like 3.875-4.00 since then. I shopped around a bit before I decided on the bank I use anyway (BB&T), and nowhere else was any better. So there's not much to save there other than going to a 15 year, and I'd rather voluntarily pay more towards the principle than be stuck with a higher payment that could put me more in a bind if things were to change for the worse.

Like I mentioned earlier, putting this money towards the house would give me a guaranteed 4% ROI, which is pretty solid for a guarantee, but I feel like more than that, say maybe 7-8%, is very reasonable.

Question for you: why the Roth and not Traditional? I mentioned my reasoning in a post above, but I just don't see any way in which it's beneficial except being able to pull out contributions without a penalty before retirement.

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Most stocks that pay dividends increase their dividend over time. Meanwhile, your mortgage interest or payments do not increase over time. For instance, here's Bristol Myer's dividend increases over just 20 years:

They're paying almost double in dividends what they paid in 2000. If you had purchased $10K worth of BMY in 2000 and it was yielding 2.5%, today it would be yielding 5% and the value of the stock has increased from $13 to $64, or $49,000, in the meantime.
I'm definitely interested in making this part of my portfolio. Probably not a lot, but it sounds like a good way to put some of the "extra" leftover after investing in all the traditional retirement stuff (401k, IRA, etc.). Are your investments directly through the company? Or do you use a transfer agent of some type?
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Old 11-16-2015, 10:46 AM   #29
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I'm definitely interested in making this part of my portfolio. Probably not a lot, but it sounds like a good way to put some of the "extra" leftover after investing in all the traditional retirement stuff (401k, IRA, etc.). Are your investments directly through the company? Or do you use a transfer agent of some type?
Try this link. It should answer a lot of your questions. If it does show up for you, let me know.
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Old 11-16-2015, 11:00 AM   #30
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Hey man, long time, no see. I'm working for a company out in Burlington that sells and services precision measurement systems. I'm part of a small engineering group that designs and builds custom projects for those systems. Pretty much, I get to design, build, and install stuff that everyone else deemed too difficult to do. It's awesome. I love it.

I got an offer from Cat back before I graduated, but decided not to take it on the basis of the potential volatility, especially after what happened back in '08-'09. Looking at what has happened here in the last couple of months with them, I feel like I made the right decision.

They are trying to get alot of the old timers out tat they pay $$$$. Alot of guys had more than 24 years in (4 I know of have 35+, so they are getting shafted). I'm watching closely with what they do with Belcan (who I work for).



All this investing talks make my head spin...

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Old 11-18-2015, 06:00 PM   #31
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why the Roth and not Traditional? I mentioned my reasoning in a post above, but I just don't see any way in which it's beneficial except being able to pull out contributions without a penalty before retirement.
It all depends on your current tax situation. For me I don't need write off right now. But lets assume you are 25 years old and will retire at 65, which give you 40 years of investing.

Using this assumption. You invest $2000. The goal is to do that every year, but lets just look at a single one time investment.

You invest $2000 in a traditional IRA. You get to write off $2000 on your taxes today. Lets say it grows to $100,000 over 40 years (good to have dreams). When you pull out that $100,000 you have to pay taxes each time you make a withdrawl. So you would have to pay taxes on $100,000. Now there is the other side of the 0000. At 65 you are no longer working so don't have income so pulling out the money might not hurt you.

You invest $2000 in a Roth IRA. You don't write of anything on taxes right now. It grows to the same $100,000. You pull the whole thing out and don't pay any taxes on it. Multiply that x 2000 every year and it adds up.

It really depends on your tax situation right now. You need to work with a competent financial planner and figure out what is best for you.

My advice to you is watch who you take advice from. If the financial planner is making lots of money and saving a ton and living the way you want to live you might want to listen to him. If your financial planner is broke barely getting by (which most are) find someone else. How can a broke dude who has never had success tell you how to invest $100,000? You would probably be better off doing it yourself.

You also need to look at doing some estate planning while you are young. When you get older and do this you have to move a ton of stuff around and it is expensive.
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Old 11-18-2015, 06:33 PM   #32
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BBV, can you expound on estate planning at the OP's age?
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Old 11-18-2015, 06:49 PM   #33
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BBV, can you expound on estate planning at the OP's age?
Sure,

There are several reasons for this. Divorce, Taxes, Death, Bankrupcy.

I am personally in the middle of moving all of my crap around.

I did everything right with rental properties in that each property is maintained in it's own LLC, which is great. If one fails it doesn't take out me or any of the rest of the properties.

But. Who owns my personal house. Well right now me and my wife. We are going to transfer it to its own LLC and then we will rent it from that LLC. Why? Well if I ever get sued, I don't own ANYTHING. Wife will sign it away and put it in LLC that I won't even be the owner of, really no one will be. So you could figure out the ramifications there. She wants a divorce she will get half of nothing and will get 50% of my $35,000 per year salary. Not saying that it will ever happen, but 50% end so I will be prepared, but we have been together for 26 years with no end in site.

You have to look at have a will and living trust. You need to figure out the difference in a revocable and irrevocable trust. Your family will get pounded with taxes if you die and leave them assets that aren't protected correctly.

There are also some VERY serious questions that you have to answer when filling out your will. For example if I die racing my car what happens to the kids. Easy wife takes them. But what if we both die? We don't want our parents to take them so where do the kids go. And lets just say I am worth $10 Mil at that point. Who gets the money and when? So we had to look at having one of my friends take them and paying him some money on an annual basis and then stipulating when my girls could get the money. As an example in my case the girls must graduate college. then they get distributions upon college graduations, then monthly, annually and then lumps at 25, 30, and 35. You can also specify things like making loans against it to build a business and what they can and can't do. How does it get distributed to my wife if I were to die. Again stupid woman leave her $10Mil right now and in 2 years her new boyfriend spent it all. Was joking with my lawyer that she has to be followed full time by a detective to make sure she doesn't have a boyfriend or she will forfeit anything (didn't do that). So you want to make it to where my wife could live her entire life accustomed to the lifestyle she has now and live forever on it, not for just the next 2 years.

We have all seen the people who get lump sums and 2 years later it is gone. I am just planning for that. You also have to plan on the massive tax burden both today and upon your death where it is like a 54% tax or some stupid thing like that.

You usually can't do this on your own. And don't quote any of my numbers perfectly as they are all just guesses, but you get the idea.

We are all gonna live forever. But I am now 45 and when you see people dying of heart attacks at 38 and 40, and younger than you are it makes you think.

One of my healthy employees was reffing soccer. After the game he came home and told his wife he was going to lie down because he wasn't feeling good. Then he went to the doctor. He was rushed to ER and had emergency heart surgery and has to wear a pacemaker forever. You never know.
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Old 11-18-2015, 07:40 PM   #34
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You invest $2000 in a traditional IRA. Lets say it grows to $100,000 over 40 years (good to have dreams).
Not unreasonable. That's a 10% CAGR. The S&P 500 has grown at 12.65% since 1970.
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Old 11-18-2015, 08:07 PM   #35
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Sure,

There are several reasons for this. Divorce, Taxes, Death, Bankrupcy.

I am personally in the middle of moving all of my crap around.

I did everything right with rental properties in that each property is maintained in it's own LLC, which is great. If one fails it doesn't take out me or any of the rest of the properties.

But. Who owns my personal house. Well right now me and my wife. We are going to transfer it to its own LLC and then we will rent it from that LLC. Why? Well if I ever get sued, I don't own ANYTHING. Wife will sign it away and put it in LLC that I won't even be the owner of, really no one will be. So you could figure out the ramifications there. She wants a divorce she will get half of nothing and will get 50% of my $35,000 per year salary. Not saying that it will ever happen, but 50% end so I will be prepared, but we have been together for 26 years with no end in site.

You have to look at have a will and living trust. You need to figure out the difference in a revocable and irrevocable trust. Your family will get pounded with taxes if you die and leave them assets that aren't protected correctly.

There are also some VERY serious questions that you have to answer when filling out your will. For example if I die racing my car what happens to the kids. Easy wife takes them. But what if we both die? We don't want our parents to take them so where do the kids go. And lets just say I am worth $10 Mil at that point. Who gets the money and when? So we had to look at having one of my friends take them and paying him some money on an annual basis and then stipulating when my girls could get the money. As an example in my case the girls must graduate college. then they get distributions upon college graduations, then monthly, annually and then lumps at 25, 30, and 35. You can also specify things like making loans against it to build a business and what they can and can't do. How does it get distributed to my wife if I were to die. Again stupid woman leave her $10Mil right now and in 2 years her new boyfriend spent it all. Was joking with my lawyer that she has to be followed full time by a detective to make sure she doesn't have a boyfriend or she will forfeit anything (didn't do that). So you want to make it to where my wife could live her entire life accustomed to the lifestyle she has now and live forever on it, not for just the next 2 years.

We have all seen the people who get lump sums and 2 years later it is gone. I am just planning for that. You also have to plan on the massive tax burden both today and upon your death where it is like a 54% tax or some stupid thing like that.

You usually can't do this on your own. And don't quote any of my numbers perfectly as they are all just guesses, but you get the idea.

We are all gonna live forever. But I am now 45 and when you see people dying of heart attacks at 38 and 40, and younger than you are it makes you think.

One of my healthy employees was reffing soccer. After the game he came home and told his wife he was going to lie down because he wasn't feeling good. Then he went to the doctor. He was rushed to ER and had emergency heart surgery and has to wear a pacemaker forever. You never know.
I get where you are going with the LLC, but it is generally not a good idea for a primary residence. You say no one would own the LLC, but if you set it up, you, your wife, or both would own the LLC. An LLC just like S-corp is pass through, so any income earned by the LLC (the rent you are paying yourself) would be taxed and paid by you. Even if deductible home repair expenses offset the income, you would still be raising your FICA taxes, as all the rent is income. It'd be difficult to transfer/refi a mortgage to the LLC, no? The quit claim deed to the LLC becomes a sell event and the bank would very likely call the balance of the loan.

Also, in an LLC, should you sell your house, you lose the 500K capital gains exemption. You'll have to pay taxes on any gains. You also lose any homestead exemptions depending on the state you live in. You will also pay higher hazard insurance because you are no longer insuring a primary residence but an 'investment' property, since the 'owner' (the LLC) doesn't live in the home.

I would think an umbrella protection policy of several million would better, and they are not that expensive. I have a 5mil policy for my S-Corp with errors and omissions (I'm a programmer) and it's about 2K a year. One for just your personal liability would be much less.

Another alternative is to put the home into your living trust or into an asset trust which would shield it from suit. However, in the case of a trust, you aren't in control, your trustee is. Living trusts have some great advantages, but also have some downfalls. I'm dealing with two now, one with my deceased father, and one with my living mother. In both cases, their bank was their trustee and they don't make the best choices, and certainly not always in the best interest of my parents, so be VERY careful of who you appoint as Trustee.
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Old 11-19-2015, 07:34 AM   #36
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I get where you are going with the LLC, but it is generally not a good idea for a primary residence. You say no one would own the LLC, but if you set it up, you, your wife, or both would own the LLC. An LLC just like S-corp is pass through, so any income earned by the LLC (the rent you are paying yourself) would be taxed and paid by you. Even if deductible home repair expenses offset the income, you would still be raising your FICA taxes, as all the rent is income. It'd be difficult to transfer/refi a mortgage to the LLC, no? The quit claim deed to the LLC becomes a sell event and the bank would very likely call the balance of the loan.

Also, in an LLC, should you sell your house, you lose the 500K capital gains exemption. You'll have to pay taxes on any gains. You also lose any homestead exemptions depending on the state you live in. You will also pay higher hazard insurance because you are no longer insuring a primary residence but an 'investment' property, since the 'owner' (the LLC) doesn't live in the home.

I would think an umbrella protection policy of several million would better, and they are not that expensive. I have a 5mil policy for my S-Corp with errors and omissions (I'm a programmer) and it's about 2K a year. One for just your personal liability would be much less.

Another alternative is to put the home into your living trust or into an asset trust which would shield it from suit. However, in the case of a trust, you aren't in control, your trustee is. Living trusts have some great advantages, but also have some downfalls. I'm dealing with two now, one with my deceased father, and one with my living mother. In both cases, their bank was their trustee and they don't make the best choices, and certainly not always in the best interest of my parents, so be VERY careful of who you appoint as Trustee.
Mine is extremely layered. I have my living trust which is an revocable living trust thus the IRS and creditors can go after it. Then I have a irrevocable trust that owns an S-Corp, which then owns the LLCs. You are right on the taxes, but I don't need any tax write off, because I only make $35,000 per year.

This shit kind of confuses the hell out of me. And I might have the revocable and irrevocable flip flopped.
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Old 11-19-2015, 10:58 AM   #37
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You invest $2000 in a Roth IRA. You don't write of anything on taxes right now. It grows to the same $100,000.
The whole point of a Roth IRA is you are taxed now VS later. So, your $2000 has been reduced to $1500 or whatever once taxes are taken out.

And that $1500 won't grow to nearly the amount the $2000 would. Losing 25% from your initial investment makes a HUGE difference, in your hypothetical scenario, it would grow to only ~$75,000.

This is the reason I have never gotten one.

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Old 11-19-2015, 01:20 PM   #38
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The whole point of a Roth IRA is you are taxed now VS later. So, your $2000 has been reduced to $1500 or whatever once taxes are taken out.

And that $1500 won't grow to nearly the amount the $2000 would. Losing 25% from your initial investment makes a HUGE difference, in your hypothetical scenario, it would grow to only ~$75,000.

This is the reason I have never gotten one.
That is a huge disadvantage of a Roth IRA.

Most of the supposed advantages of a Roth IRA don't offset that huge disadvantage for me. If you read through the list of Roth IRA benefits, they seem like rich folks' problems. The irony is that Roth IRAs are limited to people whose AGI is less than $107,000, people who aren't likely to have to worry about avoiding the Medicare surtax, contributing past the age of 70, no minimum distributions, etc.

The one advantage is the ability to take out some money before 59, such as for the purchase of a first home. (But seriously, how much will your money have grown if you take it out early to buy a house?)
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Old 11-19-2015, 02:26 PM   #39
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The whole point of a Roth IRA is you are taxed now VS later. So, your $2000 has been reduced to $1500 or whatever once taxes are taken out.

And that $1500 won't grow to nearly the amount the $2000 would. Losing 25% from your initial investment makes a HUGE difference, in your hypothetical scenario, it would grow to only ~$75,000.

This is the reason I have never gotten one.

Al
That is where I disagree with you. You are correct about the tax. However that isn't saying only put $1500 in. What it is saying is still put $2000 in. Give up some sort of disposable income for stuff you don't need. We are talking $500 for the entire year. That is $40 a month. One movie, several packs of cigarettes, few joints, whatever your thing is.
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Old 11-19-2015, 04:47 PM   #40
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That is where I disagree with you. You are correct about the tax. However that isn't saying only put $1500 in. What it is saying is still put $2000 in. Give up some sort of disposable income for stuff you don't need. We are talking $500 for the entire year. That is $40 a month. One movie, several packs of cigarettes, few joints, whatever your thing is.
What he's saying is that if you're in the 28% tax bracket you would need $2560 to make that $2000 Roth contribution after you pay your taxes. Either way, you're starting in the hole with a Roth IRA.
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Old 11-19-2015, 05:14 PM   #41
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The whole point of a Roth IRA is you are taxed now VS later. So, your $2000 has been reduced to $1500 or whatever once taxes are taken out.

And that $1500 won't grow to nearly the amount the $2000 would. Losing 25% from your initial investment makes a HUGE difference, in your hypothetical scenario, it would grow to only ~$75,000.

This is the reason I have never gotten one.

Al
Arguments can be made for both the roth & traditional IRA when using different rates of return, tax brackets (both now & future) etc... The thing is that we (meaning usa) are currently in the lowest marginal tax rates in our nations history. We as a nation have a ton of debt and this debt has to be paid for somehow and at some-point. So if I was a betting man I would think the odds are far greater of a tax hike than any more tax decreases. So take that for what it is worth. Its also not that linear when you say I have 2k to invest and taxes eat up 500 so you really are investing only 1500. Most people that are looking for a tax break now are not putting 5500 into a traditional IRA they are putting 53k into a SEP IRA for the tax deduction because they are a business owner in the top tax bracket. Regardless of which way you want to go saving in either one is not going to hurt you.

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That is a huge disadvantage of a Roth IRA.

Most of the supposed advantages of a Roth IRA don't offset that huge disadvantage for me. If you read through the list of Roth IRA benefits, they seem like rich folks' problems. The irony is that Roth IRAs are limited to people whose AGI is less than $107,000, people who aren't likely to have to worry about avoiding the Medicare surtax, contributing past the age of 70, no minimum distributions, etc.

The one advantage is the ability to take out some money before 59, such as for the purchase of a first home. (But seriously, how much will your money have grown if you take it out early to buy a house?)
Not trying to beat up your quote but its actually 116k or more if single where the roth IRA begins to phase out for the max contribution of 5500. It's 131k single and 193k married filing jointly to be ineligible for a roth IRA.

It's also the traditional IRA were you can avoid the 10% penalty when taking 10k or less out for a first time home purchase. The roth IRA you can pull the principal out anytime without penalty or taxes b/c you have already paid the tax...its the earnings in the roth you can not access without penalty until you are 59.5

I would also disagree with you that the Roth IRA is for rich people, I personally would love to have one but I can not.

Big Bad Viper I am sure you only take a salary of 35k a year
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Old 11-19-2015, 07:22 PM   #42
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I would also disagree with you that the Roth IRA is for rich people, I personally would love to have one but I can not.
I haven't looked at Roth IRAs for a while, so my income figures are from what I remember then.

The fact remains that for small investors, you start at a disadvantage because you're starting with fewer dollars. That $560 difference in real funds available for investment every year means nearly $183,000 difference in assets 35 years down the road based on a 10% annual return. It's hard to imagine that the Roth's advantages on the back end would be worth $183K.

Of course, that assumption is based on someone with the discipline to actually invest the difference.

Lastly, I didn't say that the Roth IRA was for rich people---obviously the limits on AGI prevent that---but that some of its advantages on the back end are unlikely to be especially useful to the average Roth participant.

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Old 11-20-2015, 08:17 AM   #43
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The key with a lot of this "investing" is investing in different vehicles. One of the reasons I don't pay any taxes is that I have numerous tax write off vehicles. One of the best things you can do is to get into some rental properties.

I LOVE the idea of rentals. With stocks and investments it is just a number on a screen. With rentals you own a tangible piece of property. With a home that you own you can only write of the interest taxes and insurance. With rentals you can write off so much more. You can also claim depreciation. This will help with your tax situation. For example if you upgrade the kitchen on your personal house, you are left with a nicer kitchen , not much else. If you upgrade the kitchen on a rental property you can write the entire thing off. Now if it is truly a rental property, would it be the best use of your money to upgrade the kitchen?

Write offs are only great though in certain situations. Believe it or not you can have too many write offs. I have lived in my current house for 5 years. I rented it for 3 years. Reason for that. Most banks won't lend you any money when your adjusted gross income is -$100,000 a year for the last 5 years. They even asked me "How can you make negative money?" So in 2011 and 2012 or 13 don't remember the years I had to show $300,000 income just to get the house. Then I had to have a bunch of losses carried forward. I actually thought about going back after we closed on the house and doing an amended return, but thought that would raise too many flags. And I have been audited a lot.

This is why when you talk about the $500 write off for the taxes, I don't really deal with that. The key with a lot of these investment strategies like Roth IRA, SEP IRA, Traditional IRA, 401, regular investments, rentals - whatever. You have to make enough income above and beyond your living expenses to be able to get started investing.

We all love cars here, but you might be better off getting an older car and fixing it up vs buying the new Corvette, or Viper, or whatever your flavor is, and putting that money away for retirement.

On the other side of the 0000 - we live our limited life not having fun, saving everything for retirement then we die at 55 of a heart attack. Why didn't we spend more time enjoying life? So there has to be some sort of happy medium.
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Old 11-23-2015, 10:42 AM   #44
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The key with a lot of this "investing" is investing in different vehicles. One of the reasons I don't pay any taxes is that I have numerous tax write off vehicles. One of the best things you can do is to get into some rental properties.

I LOVE the idea of rentals. With stocks and investments it is just a number on a screen. With rentals you own a tangible piece of property. With a home that you own you can only write of the interest taxes and insurance. With rentals you can write off so much more. You can also claim depreciation. This will help with your tax situation. For example if you upgrade the kitchen on your personal house, you are left with a nicer kitchen , not much else. If you upgrade the kitchen on a rental property you can write the entire thing off. Now if it is truly a rental property, would it be the best use of your money to upgrade the kitchen?

Write offs are only great though in certain situations. Believe it or not you can have too many write offs. I have lived in my current house for 5 years. I rented it for 3 years. Reason for that. Most banks won't lend you any money when your adjusted gross income is -$100,000 a year for the last 5 years. They even asked me "How can you make negative money?" So in 2011 and 2012 or 13 don't remember the years I had to show $300,000 income just to get the house. Then I had to have a bunch of losses carried forward. I actually thought about going back after we closed on the house and doing an amended return, but thought that would raise too many flags. And I have been audited a lot.

This is why when you talk about the $500 write off for the taxes, I don't really deal with that. The key with a lot of these investment strategies like Roth IRA, SEP IRA, Traditional IRA, 401, regular investments, rentals - whatever. You have to make enough income above and beyond your living expenses to be able to get started investing.

We all love cars here, but you might be better off getting an older car and fixing it up vs buying the new Corvette, or Viper, or whatever your flavor is, and putting that money away for retirement.

On the other side of the 0000 - we live our limited life not having fun, saving everything for retirement then we die at 55 of a heart attack. Why didn't we spend more time enjoying life? So there has to be some sort of happy medium
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Some great advice here. Looking for a business partner?
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Old 11-24-2015, 08:18 AM   #45
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Great thread! I sat through a financial planner pitch a few years ago trying to convince me of the benefits of a Roth conversion. There's one huge assumption with a Roth that I've got a major problem with - and that's the assumption that our shitty, broke ass government won't come for that money at some point in the future. Yeah, you pay your tax now so you won't have to later, but do you really believe these politicians are going to honor those rules 10, 20, 30 years from now? That's a huge risk... and why I don't have a Roth.
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Old 11-24-2015, 01:55 PM   #46
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Great thread! I sat through a financial planner pitch a few years ago trying to convince me of the benefits of a Roth conversion. There's one huge assumption with a Roth that I've got a major problem with - and that's the assumption that our shitty, broke ass government won't come for that money at some point in the future. Yeah, you pay your tax now so you won't have to later, but do you really believe these politicians are going to honor those rules 10, 20, 30 years from now? That's a huge risk... and why I don't have a Roth.
Same could be said about any "tax vehicle". Given your premise, nothing would stop the government from taxing your 401k the same way. Neither scenario is very likely, however.
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Old 11-24-2015, 02:06 PM   #47
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Same could be said about any "tax vehicle". Given your premise, nothing would stop the government from taxing your 401k the same way. Neither scenario is very likely, however.
Sure; I'd say it's likely all retirement vehicles will get hit at some point in the future as red badges of the shamefully wealthy... the key difference being for the Roth you will have already paid taxes on it once. Suckers.
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Old 12-01-2015, 02:48 PM   #48
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Sure; I'd say it's likely all retirement vehicles will get hit at some point in the future as red badges of the shamefully wealthy... the key difference being for the Roth you will have already paid taxes on it once. Suckers.
Assuming government decides to tax all retirement vehicles, there would be less impact on vehicles that have already paid some tax compared to those that have not paid any tax.
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Old 12-14-2015, 02:32 PM   #49
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Your age and you want access to it , narrows it down.
Other than that, one word , Vanguard !
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Old 12-31-2015, 10:43 AM   #50
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This is an interesting chart:



I don't think too many of us have to worry about the far right of the chart, but as the red circles show, a 35-year-old currently making $100,000 a year should have 1.4x his salary saved, or $140,000. That seems reasonable. A 60-year-old making $75K should have $540K, etc.

Some of you may scoff at the 30 years of "expected retirement," but if you're 30 or 40 now and don't smoke, there's no telling what medical science will do for longevity between your age now and when you're 95. For you 20-somethings, that's 70 years from now. Think about where the state of medicine was 70 years ago in 1945. You are fixin' to be the oldest and almost certainly the healthiest generation in history.



This chart doesn't represent average lifespan (it was only 49 in 1900), but expected lifespan for those who make it to 65.

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