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[iamblades]

My parents are convinced that the government will tax Roth IRA earnings in 20-30 years "when the government realizes how much money they're missing out on." As I am investing through my Roth I am obviously not in agreement with this paranoia, to say the least.

Of course given time value of money, the government is not 'losing out on money'.

I don't think they could get away with double taxing Roths though, worst case would be that they change it to a traditional tax treatment as some point in the future and gains up to that point are still tax free.

I don't see it ever being changed, as they are not really losing out on anything. They get their share one way or another.

I personally like the roth treatment because I'm investing with the anticipation that my income during retirement will be higher than my current income. It won't be higher than my peak working income, but it should be higher than the first 15-20 years of my career because during that period i am still building my investments up. Plus as mentioned it is a hedge against tax rate uncertainty.

time value of money is strong though, so it's not really an easy answer, even if you have a higher tax bracket at retirement than you do when working.

 

[Giard]

Is your question whether an RRSP or a TFSA is the best invest vehicle in your particular situation, or are you asking which specific RRSP/ TFSA you should invest in? (if the later there may be a bit of a misunderstanding how they work)

The first option, sorry for not being clear. I would try to invest about 300 dollars a month.

 

[Sickafant]

The first option, sorry for not being clear. I would try to invest about 300 dollars a month.

In general, for someone just starting to work, investing in a TFSA is the preferred vehicle because you are in a lower tax bracket when beginning your career.

RRSPs being tax-deferred are more effective later in your career when your income is at its peak, since your investment doesn't get taxed until you withdraw funds (when you retire).

TFSA also provides more flexibility for withdrawing funds, so you can use it to help pay for a car or house if necessary.

There is a maximum contribution limit to TFSAs as well, so it's not like you will only use either TFSA or RRSP. But it's safe to start investing in a TFSA to start off, and there's nothing wrong with putting money into an RRSP as well.

Again, these are just for a general case and you should compare what works better depending on your personal mid/long financial plan.

 

[anonymous_abc]

Quick general question:

I am invested in 4 different ETFs I buy new stock in these automatically every month

• Europe
• Germany
• USA
• Asia

Now if I want to invest more, is there any reason not to just add new ETFs to that instead of increasing what I already invest in those?
For example I'm thinking of adding another ETF for the Eurozone.
The way I see it I am spreading the risk.
What are the pro/cons that I might not be considering?

 

[anonymous_abc]

The risk is you mess with your risk adjusted returns by possibly accumulating more exposure in an area you may already be concentrated in or that is inefficient due to other variables (geo political, social, the "google effect" etc). While you may get the benefit of increasing your direct correlation to the markets, you risk higher volatility when doing so. There are a few factors to consider when "spreading the risk" and it just doesn't boil down a simple category. Several check boxes have to be hit to know if you're truly spreading the risk.

If you're not going to measure correlation on a regular basis not just to the market but also to measure the correlation between your holdings, I would say steer away from your idea and just keep it simple.

Ok, the Eurozone might have been a bad example. But I might also consider a completely new market to add to the mix, maybe Latin America. Thereby not increasing the correlation in one specific market.

However I was considering the Euro zone because right now I am split 25% each amongst those four so 50/50 Europe/non Europe and I am considering increasing the European part. By buying e.g. Eurozone I could go towards 20% each or 60/40 Europe/non Europe.

By buying a Latin American ETF i would go towards 40/60.
Or do I have something fundamentally wrong about the whole matter in my head?

 

[Piecake]

Ok, the Eurozone might have been a bad example. But I might also consider a completely new market to add to the mix, maybe Latin America. Thereby not increasing the correlation in one specific market.

However I was considering the Euro zone because right now I am split 25% each amongst those four so 50/50 Europe/non Europe and I am considering increasing the European part. By buying e.g. Eurozone I could go towards 20% each or 60/40 Europe/non Europe.

By buying a Latin American ETF i would go towards 40/60.
Or do I have something fundamentally wrong about the whole matter in my head?

I think his point was that adding more funds, even if you invest in other regions does not necessarily mean that you are increasing diversity if you are not getting non-correlative assets in those funds like REITS and the like. Adding funds of the same region is especially true. So if new European fund just basically invests in the same stuff as your old European fund you are simply overexposing yourself to European stock

I personally like getting exposure to those non-correlative assets by simply investing in total market funds. Correlations can shift over time and circumstances. There is really no guaranty that you or anyone can figure it out in time before the correlation shifts again. I also think gettinig exposure to different regions is a good thing. Just try to invest in all of it at the regional market percetage and that region's international market percentage.

As for your thinking, I would worry about over/under-exposure to markets. A 20% exposure to the USA market means that you are significantly under-exposed to that market, while a 20% exposure to the Latin American and a 20% exposure to the German market means that you are overexposed.

 

[Giard]

In general, for someone just starting to work, investing in a TFSA is the preferred vehicle because you are in a lower tax bracket when beginning your career.

RRSPs being tax-deferred are more effective later in your career when your income is at its peak, since your investment doesn't get taxed until you withdraw funds (when you retire).

TFSA also provides more flexibility for withdrawing funds, so you can use it to help pay for a car or house if necessary.

There is a maximum contribution limit to TFSAs as well, so it's not like you will only use either TFSA or RRSP. But it's safe to start investing in a TFSA to start off, and there's nothing wrong with putting money into an RRSP as well.

Again, these are just for a general case and you should compare what works better depending on your personal mid/long financial plan.

Thanks. The problem I'm having is guessing whether I'll pay more taxes during retirement or less.

RRSP also has an option to help pay for a house, does it not? I believe you can withdraw up to 25k without being taxed, but you have to repay it in 15 years.
Is that an advantageous offer compared simply to withdrawing what you need with a TFSA? Reimbursing your own money seems kinda weird.

 

[anonymous_abc]

I think his point was that adding more funds, even if you invest in other regions does not necessarily mean that you are increasing diversity if you are not getting non-correlative assets in those funds like REITS and the like. Adding funds of the same region is especially true. So if new European fund just basically invests in the same stuff as your old European fund you are simply overexposing yourself to European stock

I understand that, and expecting the two ETFs to have a big overlap but some distinct parts too.

I personally like getting exposure to those non-correlative assets by simply investing in total market funds. Correlations can shift over time and circumstances. There is really no guaranty that you or anyone can figure it out in time before the correlation shifts again. I also think gettinig exposure to different regions is a good thing. Just try to invest in all of it at the regional market percetage and that region's international market percentage.

I don't really understand what your last part is supposed to mean‽

As for your thinking, I would worry about over/under-exposure to markets. A 20% exposure to the USA market means that you are significantly under-exposed to that market, while a 20% exposure to the Latin American and a 20% exposure to the German market means that you are overexposed.

Are you saying that just because of the different absolute sizes of the economies?
If so that is precisely why I want to increase my Euro-wide holdings.

 

[Piecake]

I understand that, and expecting the two ETFs to have a big overlap but some distinct parts too.

You don't have access to a Total European fund that invests in all European stocks at the market value?

I don't really understand what your last part is supposed to mean‽

woops, guess I misunderstood. I am talking about market share. Investing in a total US fund gets you the correct market share of US assets. If you invest in multiple funds in the US or Europe you are not getting the correct market share. You are over-exposing yourself to some assets.

I think you should also look at the % of that economy's world market share. The US is about 45-50% I believe. So, I think it would be a good idea to have around that % of holdings of US assets. I simply like following the market as close as I can get. While dealing with non-correlative and correlative assets might net you a higher return, thats just a lot of work to deal with because those are constantly shifting and changing. If you follow the whole market the non-correlative asset that does the best will naturally become a higher percentage of your holdings if you are simply following the market.

Are you saying that just because of the different absolute sizes of the economies?
If so that is precisely why I want to increase my Euro-wide holdings.

But Europe does not command that high of a market share.

https://personal.vanguard.com/us/funds/snapshot?FundId=0628&FundIntExt=INT#tab=2

Look at the pie chart under the portfolio and management tab. I am sure its not exact, but it should give you a good idea of what regions command what % of the world market.

 

[anonymous_abc]

You don't have access to a Total European fund that invests in all European stocks at the market value?

I thought that this is what Groovy was referring to. Basically certain asset classes are correlated or non correlated. Stocks go up, bonds go down = non-correlated.

But Europe does not command that high of a market share.

https://personal.vanguard.com/us/funds/snapshot?FundId=0628&FundIntExt=INT#tab=2

Look at the pie chart under the portfolio and management tab. I am sure its not exact, but it should give you a good idea of what regions command what % of the world market.

Ok now I think I'm getting what you are trying to get at overall.
Thanks for the discussion!

I will probably increase my NA assets somehow.

Just for reference these are the ETFs I am currently in.

• Wertpapiername ISIN WKN
• CS.-STX.EU.600 NR U.ETF I LU0378434582 ETF060
• DB X-TR.MSCI USA INDEX 1C LU0274210672 DBX1MU
• IS.DJ AS.PAC.S.D.30 U.ETF DE000A0H0744 A0H074
• ISHARES DAX UCITS ETF DE0005933931 593393

 

[Smushroomed]

What is a reasonable amount per month to place into a roth ira?

Should I put 100/month and go up, or higher and go down if I need to?

 

[SyNapSe]

What is a reasonable amount per month to place into a roth ira?

Should I put 100/month and go up, or higher and go down if I need to?

That's really up to you. Whatever you feel comfortable putting in. The more earlier, the better

I've never done this myself but my understanding is you can always remove the money you originally put into a roth IRA if you run into trouble. You can't remove any gains but the money you funded the account with can be removed without penalty I believe.

 

[Salamando]

Why would one invest in an index fund over a life-cycle retirement fund? From my understanding, the life-cycle fund is comprised of multiple investment types...starting off stock/index fund heavy, moving into safer bonds as the fund reaches its end date. So when/why should a person put money in an index fund over the retirement fund?

 

[iamblades]

Why would one invest in an index fund over a life-cycle retirement fund? From my understanding, the life-cycle fund is comprised of multiple investment types...starting off stock/index fund heavy, moving into safer bonds as the fund reaches its end date. So when/why should a person put money in an index fund over the retirement fund?

Because index funds are cheaper.

When you buy a target-date/life cycle fund, you are paying a substantial amount for portfolio rebalancing that you can do on your own if you do the research.

It the usual convenience vs. value trade off.

It also is strategically limiting and target date funds tend to be too conservative for some investors.

 

[clav]

Why would one invest in an index fund over a life-cycle retirement fund? From my understanding, the life-cycle fund is comprised of multiple investment types...starting off stock/index fund heavy, moving into safer bonds as the fund reaches its end date. So when/why should a person put money in an index fund over the retirement fund?

Depends on your lifestyle. Some people like to have control over investments. Some people just want to keep their investing simple.

 

[Benzychenz]

It's nice to live in the first world and have a superannuation account.

 

[Piecake]

Why would one invest in an index fund over a life-cycle retirement fund? From my understanding, the life-cycle fund is comprised of multiple investment types...starting off stock/index fund heavy, moving into safer bonds as the fund reaches its end date. So when/why should a person put money in an index fund over the retirement fund?

Investing in separate index funds also gives you the option of selling asset classes and not the whole fund. Need to sell some stock for income during a huge market crash? Well, I think you would be better off having the option to sell your bond fund than your target date fund

 

[barnone]

My company sets me up with a retirement account at Schwab, and I think I should rebalance the default investment setup. Here are the stocks it seems I am able to invest in:

Large Company
EB DL Non-SL Broad Market Stock Index
JPMCB Large Cap Growth Fund-CF
Schwab Instl Lrg Cap Value Tr Fd-Instl

Small/Mid Co.
Delaware Small Cap Value Instl
Mellon Cap EB DL Small Cap Stock Indx Fd
Prudential Jennison Small Company Z

Intl/Global
Artisan International Growth Trust

Employer/Individual Stock
** company name ** Stock Fund


By default, I am putting 100% of my savings into the Schwab Managed Retirement Trust Fund 2050. I think this disperses my money automatically amongst the above funds. I am not really sure if I should rebalance my investments, or leave everything in this Retirement Trust Fund (sounds legitimate!).

What advice do ya'll have for me?

 

[Cyan]

By default, I am putting 100% of my savings into the Schwab Managed Retirement Trust Fund 2050. I think this disperses my money automatically amongst the above funds.

http://www.schwabplan.com/funddetail/sm150.pdf See page 3 for that fund's allocation as of 3/31.

 

[barnone]

http://www.schwabplan.com/funddetail/sm150.pdf See page 3 for that fund's allocation as of 3/31.

Thanks for the link! I see it's pretty spread out. I am looking for a pretty generic strategy as detailed in the OP, and I wouldn't mind putting those bond investments towards the domestic or international index funds. I should stop using the Schwab trust fund then.

Now I am not sure how to pick from the choices in my above post, and would love to hear what someone thinks.

 

[Piecake]

Thanks for the link! I see it's pretty spread out. I am looking for a pretty generic strategy as detailed in the OP, and I wouldn't mind putting those bond investments towards the domestic or international index funds. I should stop using the Schwab trust fund then.

Now I am not sure how to pick from the choices in my above post, and would love to hear what someone thinks.

I would go with this one for sure

EB DL Non-SL Broad Market Stock Index

and then possibly this one

Mellon Cap EB DL Small Cap Stock Indx Fd

The expense ratio isnt bad for the above one, but it isnt great either.

I would avoid your 2050 target date fund. The fees are pretty terrible. Since you really don't have access to a good international fund or a good bond fund (if you want one), I would suggest opening up an IRA after you meet your company match and then getting your international and/or bond fund that way.

 

[hesido]

Once a year, buy 100$ worth of emerging digital currencies that hasn't blown up; including stupid shit like doge coins, along with your typical retirement plan.

 

[RumblingRosco]

-

 

[hesido]

How many are out there? Bitcoin, litecoin, dogecoin are all I know of. Seems like a great gamble if you're into that kind of thing.

I'm assuming new ones will come out. Doing this once a year makes this a low risk venture that's more like a long term lottery! (I was a click away from buying 10usd worth of bitcoins when it all began, which could have helped me buy a car without a loan!)

 

[barnone]

I would go with this one for sure

EB DL Non-SL Broad Market Stock Index

and then possibly this one

Mellon Cap EB DL Small Cap Stock Indx Fd

The expense ratio isnt bad for the above one, but it isnt great either.

I would avoid your 2050 target date fund. The fees are pretty terrible. Since you really don't have access to a good international fund or a good bond fund (if you want one), I would suggest opening up an IRA after you meet your company match and then getting your international and/or bond fund that way.

Thank you for the recommendations Piecake. I am wondering how to better understand expense ratios / fees. Should I read investopedia tutorials, or are there shorter explanations?

And I do plan on starting an IRA within the year after i've settled into my full time position.

 

[Piecake]

Thank you for the recommendations Piecake. I am wondering how to better understand expense ratios / fees. Should I read investopedia tutorials, or are there shorter explanations?

And I do plan on starting an IRA within the year after i've settled into my full time position.

Easiest way is just to calculate how much a high expense ratio will cost you over the long run and see for yourself

http://www.begintoinvest.com/expense-ratio-calculator/

 

[demon]

Bumpin' this since it seems like the perfect place to ask...

I still really have no idea how to invest. So I've been contributing kind of a piddly amount at 2% to my 401k (they match 1/1 up to 2%) and now I'm supposed to choose how I want to invest.

These are my options:

[Name of employer] CONSERVATIVE MODEL *
[Name of employer] MODERATELY CONSERV *
[Name of employer] MODERATE MODEL *
[Name of employer] MODERATELY AGGRESS *
[Name of employer] AGGRESSIVE MODEL *
MORLEY STABLE VALUE
PIMCO TOTAL RETURN
PIMCO REAL RETURN
FRANKLIN US GOVT SECS ADV
AMERICAN BALANCED FUND
MFS VALUE
SCHWAB S&P 500 INDEX FUND
HARBOR CAPITAL APPRECIATION
JP MORGAN MID CAP VALUE
MORGAN STANLEY MID CAP GROWTH
ROYCE PENNSYLVANIA MUTUAL
VANGUARD SMALL-CAP GROWTH INDX
AMERICAN FUND EUROPACIFIC R6
HARBOR INTERNATIONAL


So far I've been investing 100% in the conservative model. The breakdown of that portfolio is this:

20% Stable Value
41% Intermediate Term Bond
22% Inflation-Linked Bond
2% Large Value
4% Market Index
2% Large Growth
2% Mid Value
1% Mid Growth
1% Small Blend
2% International Equity
3% International Equity


Any advice on what to invest in? Or is it impossible to say without more information?

 

[Zantetsuken]

Along with this thread, If someone could make a get out of debt/fix credit tips thread I would be complete.

 

[Randolph Freelander]

Bumpin' this since it seems like the perfect place to ask...

I still really have no idea how to invest. So I've been contributing kind of a piddly amount at 2% to my 401k (they match 1/1 up to 2%) and now I'm supposed to choose how I want to invest.

These are my options:

<snip>

So far I've been investing 100% in the conservative model. The breakdown of that portfolio is this:

<snip>

Any advice on what to invest in? Or is it impossible to say without more information?

Well, more information is helpful. How close are you to retirement? If you're 20-30+ years out, you are entirely too conservative (in my opinion). You also need to get a handle on the fees. Most of those fund options look like managed funds, for example, which typically carry higher fees and will eat further into your returns than lower cost options.

If it's me (and I'm not you), I'd be significantly into the S&P 500 Index Fund, but then I'd also try to find some index funds that get me into mid and small caps, as well as an international component. I'm not telling you how to split out your investments, that's for you and your comfort level, but my present split based on my employer's fund offerings are

S&P 500 Index - 48%
S&P Mid Cap Index - 16%
Russell Small Cap Index - 16%
Nasdaq 100 Index - 10%
International Index - 10%

I'd say this leans aggressive (no bonds, pretty significant weighting into small and mid caps), but I'm also 30 years out from retirement. Mid and small caps have out performed large caps (basically the S&P 500) over the long term, but they're also more volatile, which means higher highs and lower lows. The Russell 2000 (the small cap benchmark) has trailed the S&P these past couple of months, as an example, as small caps fell out of favor, although just in the past few days they've swung back a bit. Also note that these are all index funds, so expenses and fees are low.

But as I said, you need to decide what level of risk you want to take, but again, if you're far out from retirement, I don't think you need to be in the conservative group. Most of your weighting is into things that simply will not allow your money to grow.

 

[RustyNails]

Anyone know if opening a 529 plan or an Education Savings Account is a good idea? Which one is better?

 

[Piecake]

...

http://www.vox.com/2014/5/21/5735292/is-the-401k-a-trap-for-the-unsophisticated

Further, going by these results, it seems that people who are less knowledgeable/confident about financial/investing matters do worse than other people simply because they invest a lot more in bonds.

Anyone know if opening a 529 plan or an Education Savings Account is a good idea? Which one is better?

https://www.360financialliteracy.or...lans-vs.-Coverdell-Education-Savings-Accounts

This might help you out. Basically, ESA seems to have more restrictions, but with the option of using it for private school. 529 plans also vary by state, so I know you can find some really good ones, especially if you live in one of those states

 

[RustyNails]

https://www.360financialliteracy.or...lans-vs.-Coverdell-Education-Savings-Accounts

This might help you out. Basically, ESA seems to have more restrictions, but with the option of using it for private school. 529 plans also vary by state, so I know you can find some really good ones, especially if you live in one of those states

Would you recommend opening a 529 over another less aggressive index fund and forget it for the next 20 years?

 

[Zombine]

So is it bad that I plan on working until I'm dead? I have no real retirement plan and I enjoy the satisfaction I get from having a reason to get up day to day. I am signed up for NYS Retirement but I'm not actively planning to ever actually stop doing shit. I also like to spend the money I save so everything I put away has some sort of short term purpose.

 

[clav]

Would you recommend opening a 529 over another less aggressive index fund and forget it for the next 20 years?

Can you even open a 529 where you live? Not all states are eligible.

 

[Piecake]

Would you recommend opening a 529 over another less aggressive index fund and forget it for the next 20 years?

I might be a bit confused, but a 529 is just a vehicle that you put investments in. So you can stick an aggressive or not so aggressive index fund in there. I honestly don't know much about 529s and the like since I don't have kids, so hopefully someone more knowledgeable can help you out.

So is it bad that I plan on working until I'm dead? I have no real retirement plan and I enjoy the satisfaction I get from having a reason to get up day to day. I am signed up for NYS Retirement but I'm not actively planning to ever actually stop doing shit. I also like to spend the money I save so everything I put away has some sort of short term purpose.

I certainly think so. You might not have that option. Also, that opinion could change once you're old and creaky and working a long day is just too hard.

 

[RustyNails]

Can you even open a 529 where you live? Not all states are eligible.

Yeah I think Illinois has 3 539 plans I believe

 

[Cyan]

So is it bad that I plan on working until I'm dead? I have no real retirement plan and I enjoy the satisfaction I get from having a reason to get up day to day. I am signed up for NYS Retirement but I'm not actively planning to ever actually stop doing shit. I also like to spend the money I save so everything I put away has some sort of short term purpose.

Is it bad? Maybe, maybe not. It's certainly shortsighted. Now-You may be a lot more different from FortyYearsFromNow-You than you think.

 

[iamblades]

So is it bad that I plan on working until I'm dead? I have no real retirement plan and I enjoy the satisfaction I get from having a reason to get up day to day. I am signed up for NYS Retirement but I'm not actively planning to ever actually stop doing shit. I also like to spend the money I save so everything I put away has some sort of short term purpose.

Never retiring is fine, I don't really ever plan to completely retire either, would be boring as shit.

Never planning for your financial future? Completely irresponsible and shortsighted.

Investing is basically money amplification. If you invest two years worth of income early in your career, you will basically double your lifetime earnings if you just earn the market rate of return. If you invest throughout your career you will earn an order of magnitude more money than if you just work and spend your paycheck.

What you do with the money is irrelevant, but the money will give you options you may not even be thinking of yet. You can work less hours and have a better lifestyle with your free cash, you can not work at all, you can start your own business doing something that may not be financially lucrative but makes you happy, you can take a year off and go travel the world if you want, you can save it all and pass it along to your children, you can volunteer for a charity you admire, etc.

Investment income gives you the freedom to do basically whatever you want to do with your life. Get a new boss that sucks? Say 'fuck that guy, I'm out', with absolutely no worries. Your company goes out of business? You ain't even mad.

Even if you never retire, the peace of mind that having a pile of fuck you money buys is worth the time and money spent planning out your financial future.

 

[hitsugi]

So is it bad that I plan on working until I'm dead? I have no real retirement plan and I enjoy the satisfaction I get from having a reason to get up day to day. I am signed up for NYS Retirement but I'm not actively planning to ever actually stop doing shit. I also like to spend the money I save so everything I put away has some sort of short term purpose.

If your reason to get out of bed is to go to work - congratulations. That's either a really amazing or a kind of bad thing depending on how you look at it.

 

[Dr. Feel Good]

What's the average a 25 year old should have in their 401k account after 3 years in the work force? I'm at about $12,500 and I feel like that's not very much. I decided against contributing my first year, and have done 6% to 8% the past two years (company matches up to 6%).

 

[Piecake]

What's the average a 25 year old should have in their 401k account after 3 years in the work force? I'm at about $12,500 and I feel like that's not very much. I decided against contributing my first year, and have done 6% to 8% the past two years (company matches up to 6%).

Compound interest is what will skyrocket your investments into the big bucks. You've simply havent invested long enough for that to really pay off. That also means that the more you invest when you are young, the less you will have to invest when you are older. That means that you will save/make a lot of money if you jack up your contributions when you are young.

As for the amount, that's really hard to say. If you invest up to the 401k match and contribute to your Roth IRA yearly for the rest of your life you will probably do fine (especially if you arent invested in terrible funds).

 

[iamblades]

What's the average a 25 year old should have in their 401k account after 3 years in the work force? I'm at about $12,500 and I feel like that's not very much. I decided against contributing my first year, and have done 6% to 8% the past two years (company matches up to 6%).

That's not a terrible start compared to the average, but it could be better.

My personal guideline is the IRA contribution limit(currently 5500 per year) or 10% of annual income. At that level of contributions you should have a relatively nice amount at retirement. More is always better, especially early on in your career, so if you can afford it I would suggest dumping an extra few percent into an investment account outside of your retirement account, so even if you don't hold it long term it gives you a little bit of a boost in income.

This is what I did and now(at 30) I'm to the point where I can cover my IRA contributions just with my non-retirement investment income so it is really not painful at all for me to save for retirement. Getting to that point only takes about 5 years of double contributions if you have luck with the timing of market cycles, and once you reach that point it rapidly accelerates.

Compounding yields are crazy once you get that ball rolling, and the more you can add in early, the faster it starts.

Also instead of contributing 8% to your 401k, it is generally a good idea to just contribute to the matching limit(6%) and put the extra 2%(or however much) into a separate IRA or investment account. Generally 401k give you more limited investment options and higher fees than you can find on the open market.

 

[Piecake]

One of the best strategies to fund your retirement: eloping.

A back-of-the-envelope calculation shows the potential cost of doing that. Start with $10,000 put on a credit card charging 15 percent interest. That debt would take more than 12 years to pay off, even if the couple decided to make payments of 4 percent, or $400, rather than the actual, lower minimum payment due. Interest costs would add nearly $4,500 to the total wedding cost.

Say a 30-year-old couple decide to skip a big-ticket wedding that they would have helped finance. They could allocate the amount they'd have paid to the credit card company, $400, to fund two Roth IRAs ($200 monthly deposits for each). The accounts would grow to more than $39,000 apiece after 12 years, assuming a 5 percent annualized rate of return. If the couple never made another contribution after year 12 and kept the money invested for another 25 years to age 67, they’d have more than $130,000 each in tax-free Roth accounts.

There’s not a lot of romance in opportunity cost calculations. But setting yourself up to save more than a quarter million in tax-free dollars down the line is a pretty appealing prospect. And being parsimonious on the wedding may help couples avoid one of marriage's biggest stress points -- fighting over money.

I basically posted this so that I can easily find this article to convince my possible future wife that it makes a whole lot of sense to get hitched at the courthouse.

 

[iamblades]

One of the best strategies to fund your retirement: eloping.



I basically posted this so that I can easily find this article to convince my possible future wife that it makes a whole lot of sense to get hitched at the courthouse.

Certainly, starting out your marriage with tens of thousands in high interest debt is basically the worst idea in the world. It's basically an express ticket to resentment, bitterness and arguing over financial matters.

It is about time we as a society split the legally binding contract away from the ceremony and celebration. You can go back and do the latter part when you can afford it, which you quickly will be able to if you follow that article's advice, so you wouldn't even be delaying it that long.

the same goes for engagement/wedding rings. Going into debt to pay for a worthless rock is a terrible financial plan. Much wiser to use that debt to acquire some piece of property that actually appreciates in value. It also serves the original purpose of wedding jewels much better than jewelry that is basically impossible to sell on the secondary market. A $10,000 ring might be able to be pawned off for $5,000 ten years down the road, but $10,000 worth of appreciating assets is likely to be worth $20,000 or more at that point.

 

[Randolph Freelander]

Certainly, starting out your marriage with tens of thousands in high interest debt is basically the worst idea in the world. It's basically an express ticket to resentment, bitterness and arguing over financial matters.

It is about time we as a society split the legally binding contract away from the ceremony and celebration. You can go back and do the latter part when you can afford it, which you quickly will be able to if you follow that article's advice, so you wouldn't even be delaying it that long.

the same goes for engagement/wedding rings. Going into debt to pay for a worthless rock is a terrible financial plan. Much wiser to use that debt to acquire some piece of property that actually appreciates in value. It also serves the original purpose of wedding jewels much better than jewelry that is basically impossible to sell on the secondary market. A $10,000 ring might be able to be pawned off for $5,000 ten years down the road, but $10,000 worth of appreciating assets is likely to be worth $20,000 or more at that point.

Popping the question over a printed statement of an index fund should really become a thing.

 

[demosthenes]

Along with this thread, If someone could make a get out of debt/fix credit tips thread I would be complete.

Live extremely frugal. Pay down the highest % (int rate) debt first. Only contribute to your 401k what you're matched. If you have an extremely low % rate on a student loan or something, pay minimum b/c it's essentially free money in a good economy if you can get your money to grow higher than that %.

 

[Piecake]

Popping the question over a printed statement of an index fund should really become a thing.

I know that would get me all hot and bothered

 

[demosthenes]

I know that would get me all hot and bothered

What if it's a printed with frosting on a piecake?

 

[demosthenes]

What exactly does this mean?

Vanguard ETFs are not redeemable with an Applicant Fund other than in Creation Unit aggregations. Instead, investors must buy or sell Vanguard ETF Shares in the secondary market with the assistance of a stockbroker. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.

 

[Piecake]

What if it's a printed with frosting on a piecake?

I'd orgasm all over it

What exactly does this mean?

My first guess was that that means that you can only sell etfs in whole shares, but that didn't make much sense to me since I am pretty sure I sold partial shares of etfs before. Of course, that was when I completely liquidated the fund, so maybe that makes a difference?

I am totally guessing btw since I don't understand lawyerspeak.