Investing, Stock Market and Retirement Planning Thread
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Investing, Stock Market and Retirement Planning Thread
coming into today I have about $23k in student loans left (all federal, split between sub and unsubsidized loans with amounts less than 4k). I decided to lump sum pay off the three that were >6% interest (was about 5.5k).
now I'll have 6 left with an average interest of 3.85 and a balance of about 17k. should I refinance the rest through a private lender?
now I'll have 6 left with an average interest of 3.85 and a balance of about 17k. should I refinance the rest through a private lender?
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Investing, Stock Market and Retirement Planning Thread
Not unless you get a ridiculously low interest rate at the same term length. 3.85% is very low, and I’d be inclined to just pay those down and get them over with.coming into today I have about $23k in student loans left (all federal, split between sub and unsubsidized loans with amounts less than 4k). I decided to lump sum pay off the three that were >6% interest (was about 5.5k).
now I'll have 6 left with an average interest of 3.85 and a balance of about 17k. should I refinance the rest through a private lender?
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Investing, Stock Market and Retirement Planning Thread
thisNot unless you get a ridiculously low interest rate at the same term length. 3.85% is very low, and I’d be inclined to just pay those down and get them over with.coming into today I have about $23k in student loans left (all federal, split between sub and unsubsidized loans with amounts less than 4k). I decided to lump sum pay off the three that were >6% interest (was about 5.5k).
now I'll have 6 left with an average interest of 3.85 and a balance of about 17k. should I refinance the rest through a private lender?
when we were paying off our loans, we paid the minimum and then any extra went to the smallest balance loan. we found this to be an effective method and helped us pay off 100K pretty quickly
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Investing, Stock Market and Retirement Planning Thread
UpdateTook a profit on my CMG Short at $309.00 for a profit of $24.15 @ share $169.05 leaving it in cash for now.Much discussion since the first of the year wondering if the era of passive investing has run it's course. Has this become a stock pickers market?
Based on the most recent closing prices on March 29th, since March 30th the markets were closed.
$10,0000 to invest, where would you put it?
Benchmark:
SPY 38@263.15 = $9,997.00 ( leaving almost enough for a commission)
My choices:
Long SOXL 50@152.82 = $7,641.00
Short CMG 7@323.15 = $2,262.05
Cash $96.95 (Let's call it $85 after commission)
Major paper losses on my SOXL Long position. Around an $850 paper loss for the day. Holding on to it hoping for a rally.
The benchmark SPY is off around $260, 38@$6.75 as well.
Benchmark:
SPY 38@277.29 = $10,537.02 (A profit of $540.02)
My choices:
Long SOXL 50@180.36 (A profit of $27.54 @ share for a gross profit of $1,377)
Add the $172.10 in cash from the original cash position plus the profits from going short CMG and the FEF portfolio is worth $11,452.15 or $915.13 more than the benchmark S&P 500 index portfolio.
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Investing, Stock Market and Retirement Planning Thread
Update: Due to the volatility in the market recently I made additional trades this AM.UpdateTook a profit on my CMG Short at $309.00 for a profit of $24.15 @ share $169.05 leaving it in cash for now.Much discussion since the first of the year wondering if the era of passive investing has run it's course. Has this become a stock pickers market?
Based on the most recent closing prices on March 29th, since March 30th the markets were closed.
$10,0000 to invest, where would you put it?
Benchmark:
SPY 38@263.15 = $9,997.00 ( leaving almost enough for a commission)
My choices:
Long SOXL 50@152.82 = $7,641.00
Short CMG 7@323.15 = $2,262.05
Cash $96.95 (Let's call it $85 after commission)
Major paper losses on my SOXL Long position. Around an $850 paper loss for the day. Holding on to it hoping for a rally.
The benchmark SPY is off around $260, 38@$6.75 as well.
Benchmark:
SPY 38@277.29 = $10,537.02 (A profit of $540.02)
My choices:
Long SOXL 50@180.36 (A profit of $27.54 @ share for a gross profit of $1,377)
Add the $172.10 in cash from the original cash position plus the profits from going short CMG and the FEF portfolio is worth $11,452.15 or $915.13 more than the benchmark S&P 500 index portfolio.
First, the benchmark SPY (S&P 500 Index) is closed at $271 @ share yesterday making the value of the original benchmark $10K worth $10,298
I took the $11,452.15 balance of the FEF account and went all in for FAS a 3x Leveraged Financial Index fund. 181 shares at $63 ea.
Enormous bet on the Financial sector, but hey, I'm up over $1,100 over the benchmark S&P 500 Index fund so far in only three months. House money.
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Investing, Stock Market and Retirement Planning Thread
Traded out of FAS an hour ago @ $65.07 - 181 Shares at a $2.07 profit for a $374.67 profit.Update: Due to the volatility in the market recently I made additional trades this AM.UpdateTook a profit on my CMG Short at $309.00 for a profit of $24.15 @ share $169.05 leaving it in cash for now.Much discussion since the first of the year wondering if the era of passive investing has run it's course. Has this become a stock pickers market?
Based on the most recent closing prices on March 29th, since March 30th the markets were closed.
$10,0000 to invest, where would you put it?
Benchmark:
SPY 38@263.15 = $9,997.00 ( leaving almost enough for a commission)
My choices:
Long SOXL 50@152.82 = $7,641.00
Short CMG 7@323.15 = $2,262.05
Cash $96.95 (Let's call it $85 after commission)
Major paper losses on my SOXL Long position. Around an $850 paper loss for the day. Holding on to it hoping for a rally.
The benchmark SPY is off around $260, 38@$6.75 as well.
Benchmark:
SPY 38@277.29 = $10,537.02 (A profit of $540.02)
My choices:
Long SOXL 50@180.36 (A profit of $27.54 @ share for a gross profit of $1,377)
Add the $172.10 in cash from the original cash position plus the profits from going short CMG and the FEF portfolio is worth $11,452.15 or $915.13 more than the benchmark S&P 500 index portfolio.
First, the benchmark SPY (S&P 500 Index) is closed at $271 @ share yesterday making the value of the original benchmark $10K worth $10,298
I took the $11,452.15 balance of the FEF account and went all in for FAS a 3x Leveraged Financial Index fund. 181 shares at $63 ea.
Enormous bet on the Financial sector, but hey, I'm up over $1,100 over the benchmark S&P 500 Index fund so far in only three months. House money.
Value of the portfolio is now $11,827.82.
The bench mark SPY is currently trading at $275.65. Bring the value of those 38 shares to $10.474.70
The benchmark portfolio is up approximately $475
The FEF portfolio is up $1,827.82
The FEF portfolio is all cash at this time.
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Investing, Stock Market and Retirement Planning Thread
Back in FAS, I was able to pick up 176 shares @ $66.96. Leaving approximately $42 in cash.
Investing, Stock Market and Retirement Planning Thread
Mrs Mac had her baby shower today. Little Mac is due Sept 3.
Baby received some cash. I guess I'll do the right thing and put it away for him/her.
Whats the best option for that? Savings? Buy bonds?
Baby received some cash. I guess I'll do the right thing and put it away for him/her.
Whats the best option for that? Savings? Buy bonds?
Investing, Stock Market and Retirement Planning Thread
Mrs Mac had her baby shower today. Little Mac is due Sept 3.
Baby received some cash. I guess I'll do the right thing and put it away for him/her.
Whats the best option for that? Savings? Buy bonds?
Baby received some cash. I guess I'll do the right thing and put it away for him/her.
Whats the best option for that? Savings? Buy bonds?
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Investing, Stock Market and Retirement Planning Thread
We have a 529 plan for our daughter that we've been able to build up nicely over the first 4+ years of her life. Might not be a bad place to start.Mrs Mac had her baby shower today. Little Mac is due Sept 3.
Baby received some cash. I guess I'll do the right thing and put it away for him/her.
Whats the best option for that? Savings? Buy bonds?
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Investing, Stock Market and Retirement Planning Thread
Depends on the purpose of the cash, IMO. If it's for school, a 529 is probably your best bet, and I'd highly recommend Utah's 529 plan. You don't have to go with your own state's plan (PA's sucks), and Utah's has been one of the top 3 since inception. You can customize the entire portfolio, right down to the equities/bonds, changing the asset allocation each year you'd like, etc. It's the most flexible plan available, and the funds within are rock solid. It's what I went with when my daughter was born, so I'm speaking from experience here.
If these funds aren't for school, and you wanted to play it safe, iBonds are one way to go. I don't believe in going safe that early personally, and would much sooner choose either an add-on CD (if you can find one) or a traditional CD at higher rates, and just keep rolling everything up into new CDs when they expire.
If these funds aren't for school, and you wanted to play it safe, iBonds are one way to go. I don't believe in going safe that early personally, and would much sooner choose either an add-on CD (if you can find one) or a traditional CD at higher rates, and just keep rolling everything up into new CDs when they expire.
Investing, Stock Market and Retirement Planning Thread
Do I get any tax breaks if I throw it into 529? I was under the impression that was meant more for pretax dollars.
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Investing, Stock Market and Retirement Planning Thread
You get a state tax break. So you save .0307 of each dollar you put into a 529. the earnings on a 529 plan are also tax free as long as you use the funds for education.
Investing, Stock Market and Retirement Planning Thread
One of my emails to my most recent Executive MBA class. Some interesting 529 issues are discussed there:Do I get any tax breaks if I throw it into 529? I was under the impression that was meant more for pretax dollars.
Dear friends:
Just so that you keep your finance knowledge fresh, I will be sending you some random finance-related emails at random intervals. If you don't want to read them - hit the DELETE button. The topic of the email below will NOT be on any of the remaining exams.
EVERYTHING BELOW IS A JUST MY MEANINGLESS OPINION - DO NOT COME COMPLAINING TO ME IF I END UP BEING WRONG
We have already covered many of the issues related to successful retirement investing (low-cost funds, starting with all-stock portfolio), but it never hurts to re-watch these hints, especially if they are in the form of the most awesome video ever made on the topic of retirement investment:
https://www.youtube.com/watch?v=gvZSpET11ZY
Now onto a little more substantive part: I know many of you have children, and you might have thought (or you already started) about investing in their 529 college account. I just want to remind you that you will be sometimes facing a very interesting trade-off.
Basically, you are allowed to open 529 accounts in any state, regardless of your residency. AND, IMPORTANTLY, YOU CAN *SPEND* THE 529 ACCOUNTS ON EDUCATION IN ANY US STATE, AS WELL AS IN SOME FOREIGN COUNTRIES! (That is, you can open the 529 account for your child in AR, and fund his/her studies at Harvard )States therefore do compete in terms of investment choices they offer - and that includes FEES. In addition, some states do offer various incentives (such as tax deductibility for contributions) for their residents. Arkansas is one of such states - you can shield as much as $5,000 worth of 529 contributions ($10,000 if you file "married jointly" return) toward your state taxes. With 7% (I believe) AR tax rate, you can thus get $350 (filing single) or $700 (married jointly) cash back if you invest $5,000 or $10,000.
But here comes the catch - even though AR 529 plan uses Vanguard funds (very low-cost), the plan managers charge very high fund fees - 0.53% pretty much across the board (until last year, it was actually 0.75%!!).
Alternatively, you may want to think about forgoing the tax deduction, but opening the account in another, low-cost state. For example, California offers stock index funds for 529 plan as low as 0.08%.
Luckily, the State of Arkansas ALSO allows some tax deductibility of those contributions (though not as high as contributions you put in Arkansas 529 plan). *IF* I am correct, you can shield as much as $3,000 worth of OUT-OF_STATE 529 contributions ($6,000 if you file "married jointly" return) toward your state taxes. With 7% (I believe) AR tax rate, you can thus get $210 (filing single) or $420 (married jointly) cash back if you invest at least $3,000 (single) or $6,000 (married jointly).
What does it mean for you?
- most likely, AR option will be more advantageous if you have only a few years to invest (say, you have a teenager). That way, your portfolio will not have a large value, and the 0.53% fund fee will not eat that much compared to the annual $350-$700 tax shield.
- but, if you are thinking about opening your account for an infant/toddler (that is, you have 18+ year investment horizon), then the low-cost option suddenly becomes more interesting. Basically, you may want to compare the Future Value of annual $5,000 PLUS $210 ( (putting $5,000 allows you to put additional $210 cash-back for contribution to out-of-state plan), i.e. $5,210 investment contributions earning your expected rate of return R over, say, 18 years in a low-cost state (so your portfolio is eaten by a low fund fee) against the Future Value of annual $5,350 investment contributions in AR (putting $5,000 allows you to put additional $350 cash-back for contribution to Arkansas plan) earning your expected rate of return R over, say, 18 years in AR (where your portfolio is eaten by 0.53% per year).
When I ran the exercise last year (when AR fund fees were 0.75%), it was rather clear that low-cost was the way over long investment horizons (remember you will not be emptying the value of your investment as soon as your kid turns 18 - you can be financing his/her education much later). With 0.53%, Arkansas did become again more competitive. Ultimately, everything depends on the rate you expect to earn and the investment horizon - the longer you expect to invest, and the LOWER return you expect to earn, the worse for the AR option.
For example, assuming R=10% and T=28 years (to finance the sweet MBA degree), your comparison is:
Arkansas:
$5,350*(1+R-fees)^T = $5,350*(1+0.10-0.0053)^28 = $67,393
California:
$5,210*(1+R-fees)^T = $5,210*(1+0.10-0.0008)^28 = $73,618
So, California option beats Arkansas option!
(You can play with T to see that CA is better than AR even for lower investment horizons)
On the other hand, for small T values (say, T=5):
Arkansas:
$5,350*(1+R-fees)^T = $5,350*(1+0.10-0.0053)^5 = $8,411
California:
$5,210*(1+R-fees)^T = $5,210*(1+0.10-0.0008)^5 = $8,360
And Arkansas wins.
Incidentally, though, California seems to be a better investment option than Arkansas for ANY investment horizon equal to or larger than 7 YEARS:
Arkansas:
$5,350*(1+R-fees)^T = $5,350*(1+0.10-0.0053)^7 = $10,079
California:
$5,210*(1+R-fees)^T = $5,210*(1+0.10-0.0008)^7 = $10,101
Naturally, you should do your own research and pick the state that offers the low fees for BOTH stock and bond index funds, because I think it will be prudent to consider moving funds from stocks to bonds as you are getting toward the end of your investment horizon (the day your child enters college).
If you read it until here - you must be REALLY interested, so a few concluding remarks:
1) One extra disadvantage of AR 529 plan is that they charge an account management fee to non-residents (I believe currently $20). It's not something huge, but if you are thinking about moving out of AR, and don't want to give money away, you may consider a state that does not charge such a fee (again, like CA)
2) On the other hand, the State of Arkansas now considers allowing parents to spend 529 account money not only on college, but also on K-12 PRIVATE education without getting taxed on the state level. (http://www.arkansasonline.com/news/2018 ... n-2018031/ ). I believe this advantage will accrue only to AR 529 plan.
3) THERE IS NO GUARANTEE that any of my above numbers are correct. And even if they are, that they will not change. For example, AR can continue lowering their asset management fee from the outrageous 0.75% two years ago to something smaller than the current 0.53%, California may start charging higher fees than their sweet 0.08%, federal and state laws can (and probably will) change depending who will be in power over the next 20 years, etc.
4) And, the last one: If you haven't opened your 529 plans yet, you may consider waiting until the 1-2 weeks before May 29. To commemorate the "5/29 day", many states will likely be giving monetary incentives (something like $50-$100 in free money) for opening NEW accounts.
Good luck!
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Investing, Stock Market and Retirement Planning Thread
@Tomas, so basically my post was the TL;DR version of yours.
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Investing, Stock Market and Retirement Planning Thread
Also, this site is a good resource for all things 529-related: https://www.savingforcollege.com/
Investing, Stock Market and Retirement Planning Thread
Lol... Yeah...@Tomas, so basically my post was the TL;DR version of yours.
Investing, Stock Market and Retirement Planning Thread
What happens if little mac decides to be a union plumber or operating engineer?You get a state tax break. So you save .0307 of each dollar you put into a 529. the earnings on a 529 plan are also tax free as long as you use the funds for education.
Investing, Stock Market and Retirement Planning Thread
He'll be much happier in his 20s.
Investing, Stock Market and Retirement Planning Thread
That's what your risk is in this plan. There are a few ways out:What happens if little mac decides to be a union plumber or operating engineer?You get a state tax break. So you save .0307 of each dollar you put into a 529. the earnings on a 529 plan are also tax free as long as you use the funds for education.
- you can freely redistribute the funds from one child to his/her sibling (and maybe even to other family members, though I am not sure about that)
- some states (like mine) allow the 529 funds to be spent on k-12 private education. If you think about going the private way, and if your state gives some kind of tax shield for 529 contributions, you'd be a fool not to start the 529 plan
- and, naturally, you still can withdraw the money even without spending it on education. You'd pay some penalty on earnings (but I believe not in the principal). The extra tax complication is that the State will demand you to return all the tax shields that you were allowed to take every year you contributed.
And, by the way, if your kid is lucky/smart/talented to get a scholarship, you can freely withdraw the full value of the scholarship penalty free.
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Investing, Stock Market and Retirement Planning Thread
I did not know the scholarship thing
Investing, Stock Market and Retirement Planning Thread
http://www.msn.com/en-us/money/markets/ ... li=BBnb7Kz
A couple people I work with are going through this.
Two young guys quit their jobs to become full time traders, moved to NYC and are now working at some restaurant to make money. Lost everything.
A couple people I work with are going through this.
Two young guys quit their jobs to become full time traders, moved to NYC and are now working at some restaurant to make money. Lost everything.
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Investing, Stock Market and Retirement Planning Thread
Ignoring the warnings from the country's biggest financial gurus will do that to you.
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Investing, Stock Market and Retirement Planning Thread
From the PA 529 websiteWhat happens if little mac decides to be a union plumber or operating engineer?
What happens if my child does not pursue education?
You have several options if your child does not attend pursue education. One option is to change the beneficiary to a member of the family of the original beneficiary. Another option is to transfer the funds from the 529 account into the account of another, related beneficiary. A third option is to make a non-qualified withdrawal. Non-qualified withdrawals have certain tax implications and for a PA 529 GSP account, the valuation of the account will vary based on the type of withdrawal that you are requesting. For more information related to non-qualified withdrawals, please refer to the appropriate disclosure statement.
Member of the Family
As defined under Section 529 of the Internal Revenue Code, a member of the family of a beneficiary is a person related to the beneficiary as follows:
son or daughter, or a descendent of either
stepson or stepdaughter, or a descendent of either
brother, sister, stepbrother, or stepsister
father or mother, or an ancestor of either
stepfather or stepmother
son or daughter of a brother or sister
brother or sister of the father or mother
son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law
spouse of the beneficiary or of any of the foregoing individuals
first cousin
For this purpose, a child includes a legally adopted child or a foster child, and a brother or sister includes a brother or sister by half-blood.
Investing, Stock Market and Retirement Planning Thread
Just to add - once again I don't think it's wise to invest in PENNSYLVANIA 529 plan. Their investment fees are higher than some alternatives (e.g. California) AND you can get exactly the same State tax decuction (up to $30K /year ) for 529 contributions made in PA *and* other states.From the PA 529 websiteWhat happens if little mac decides to be a union plumber or operating engineer?
What happens if my child does not pursue education?
You have several options if your child does not attend pursue education. One option is to change the beneficiary to a member of the family of the original beneficiary. Another option is to transfer the funds from the 529 account into the account of another, related beneficiary. A third option is to make a non-qualified withdrawal. Non-qualified withdrawals have certain tax implications and for a PA 529 GSP account, the valuation of the account will vary based on the type of withdrawal that you are requesting. For more information related to non-qualified withdrawals, please refer to the appropriate disclosure statement.
Member of the Family
As defined under Section 529 of the Internal Revenue Code, a member of the family of a beneficiary is a person related to the beneficiary as follows:
son or daughter, or a descendent of either
stepson or stepdaughter, or a descendent of either
brother, sister, stepbrother, or stepsister
father or mother, or an ancestor of either
stepfather or stepmother
son or daughter of a brother or sister
brother or sister of the father or mother
son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law
spouse of the beneficiary or of any of the foregoing individuals
first cousin
For this purpose, a child includes a legally adopted child or a foster child, and a brother or sister includes a brother or sister by half-blood.
https://www.savingforcollege.com/529_pl ... plan_id=76
The $30K state tax deductibility is really sweet (my Arkansas offers only $10K for in-state and $6K for out-of-state contributions), so residents of PA should really consider investing. At the same time, I am really puzzled why plans like PA529 exist, if they offer higher costs and the same benefits (Minnesota, BTW, is even worse than PA).
(Now, naturally, the "Mamber of the Family" definitions should be the same for ALL states.)