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Message
re: Millennials Guide to Investing and Retirement
Posted on 5/6/14 at 8:38 pm to Joshjrn
Posted on 5/6/14 at 8:38 pm to Joshjrn
quote:
I really don't understand your hate for emergency funds. You don't have to be wealthy to have one. You simply have to spend less than you make for a few months. It's not that complicated, unless you've already put yourself behind the eight ball with bad decisions.
Same here, but I think more or less his point is that you should invest ALL of your money, putting a good amount in bonds so as to be "safer" in case you need it for an emergency. At least that's what I took from all of his posts.
The problem I have with his view is that one of his arguments against an emergency fund is that many people aren't rich enough, or disciplined enough, to have one. Which I find odd that he assumes these same people that don't and/or can't save an emergency fund are actively investing in stocks and bonds.
In my experiences, people who can't even save a few months worth of expenses couldn't even tell you what a stock or bond is.
0
Posted on 5/6/14 at 8:41 pm to Joshjrn
If you have credit card debt, why have an emergency fund? Better to pay off the high interest on the credit card debt and use the line of credit as the emergency fund.
Posted on 5/6/14 at 8:57 pm to Anfield Road
I agree with you. What gave you the idea that I didn't? 
This post was edited on 5/6/14 at 8:58 pm
Posted on 5/6/14 at 9:34 pm to Sigma
quote:
4) Bonds are safe and stocks are risky, so their expected returns reflect that.
5) Your investment account should consist of 33% Total US stock fund, 33% Total international stock fund, and 33% Bond fund (preferably gov't). You should rebalance yearly, which should take 15 min.
While I agree partially, it should reflect your risk appetite. Me being young, I can take as much risk as I want and invest heavily in the stock market.
Posted on 5/7/14 at 1:39 am to Emiliooo
I let my emergency fund build up and when it reaches a certain point I use the money for a down payment on a rental house or buy some interest in an oil well. If an emergency comes up after i drain my account I can always get a HELOC or sell off some stock. Also have an emergency line of credit with my credit union and credit cards.
Posted on 5/7/14 at 8:30 am to Swifty
I'm early 30s and 100% stocks with a 6 month or so e fund. If I lose my job in a recession I won't sell stocks to get by.
Always can cut grass, deliver pizza, whatever. My debt is very low though.
Always can cut grass, deliver pizza, whatever. My debt is very low though.
Posted on 5/7/14 at 9:03 am to bayoubengals88
Possibly a dumb question, but here goes...
I read the booklet and was about to download The Millionaire Next Door (the first reading "assignment"), but I noticed this book was written in 1996. A lot has changed in the market/economy since then. Is this book still a good and relevant read?
I read the booklet and was about to download The Millionaire Next Door (the first reading "assignment"), but I noticed this book was written in 1996. A lot has changed in the market/economy since then. Is this book still a good and relevant read?
Posted on 5/7/14 at 9:51 am to That's BS
Yes it still applies and its a quick read.
Posted on 5/7/14 at 10:08 am to jmtigers
quote:
If I lose my job in a recession I won't sell stocks to get by. I can always cut grass, deliver pizza, whatever. My debt is very low though.
This has always been my approach too.
Posted on 5/7/14 at 10:54 am to That's BS
quote:
Possibly a dumb question, but here goes...
I read the booklet and was about to download The Millionaire Next Door (the first reading "assignment"), but I noticed this book was written in 1996. A lot has changed in the market/economy since then. Is this book still a good and relevant read?
Yes. It's more about perspective than a "plan" to me. Just showing you the statistics and lives of millionaires that aren't worried about keeping up with the Joneses.
Posted on 5/7/14 at 4:41 pm to Venelar
Thread hijack:
When deciding between a traditional and ROTH 401k/IRA do you look at your current marginal tax rates vs. your future marginal tax rates or your current marginal tax rates vs. your future effective tax rates? When going for a traditional, all (or most) of the incoming money is saved at the marginal rate whereas you pay at different marginal tax rates on the outgoing money (some at 0%, 10%, 15%, etc.). When this is considered (and after plugging in the numbers in a spreadsheet), I'm not sure that the ROTH is all that advantageous for most people other than the fact that you can easily withdraw contributions.
When deciding between a traditional and ROTH 401k/IRA do you look at your current marginal tax rates vs. your future marginal tax rates or your current marginal tax rates vs. your future effective tax rates? When going for a traditional, all (or most) of the incoming money is saved at the marginal rate whereas you pay at different marginal tax rates on the outgoing money (some at 0%, 10%, 15%, etc.). When this is considered (and after plugging in the numbers in a spreadsheet), I'm not sure that the ROTH is all that advantageous for most people other than the fact that you can easily withdraw contributions.
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