- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Confessions of Personal Financial Quirks
Posted on 5/16/13 at 6:53 pm
Posted on 5/16/13 at 6:53 pm
Everyone has different views on how they manage their own finances. I've got plenty of quirks that I have learned not to ever mention in conversation due to their polarizing nature and/or people thinking that I am a complete idiot.
Despite being savvy in discounted cash flow analysis, many of the items below seemingly defy this. Each of these is the result of much contemplation and I admit may not be the best answer, but at this point I seem to be stubborn and set in my ways.
- House is paid off but wife's new car is not (depreciating assets should hit the monthly budget like the expense they are, and not be a waste of investment funds)
- Do not save at all for kids' college (prefer to put ourselves in a financial position to help as needed, without having money stuck in an account that must be used for that purpose)
- Investment portfolio contains zero stocks (~50% of investments are oil/gas interests, and don't want to be part of both bubbles at the same time)
- No IRA accounts (401k has a good bit saved already and still contribute enough to get the match, but want a large portion of retirement savings outside of these tax-advantaged accounts where the rules may change)
- All monthly bills are set up to auto-draft from credit card or bank account if that is not available (don't feel like spending time in life reviewing or paying bills, even electronically, just look into bill if amount seems odd)
- Life insurance is level-term until I am 55 (beyond that kids will be out of college and retirement plan should be set for spouse; would rather have a high face value now than pay for the opportunity to be a nice lotto ticket later)
- Prefer internal rate of return for cash flow analysis and believe that many of the complaints against it are actually strengths (if multiple roots then each has a meaning, especially if combined with the first derivative or scope of analysis)
- No hesitation borrowing money from HELOC or 401k if an opportunity comes along that has a strong rate of return (has worked out well thus far)
- Listen to Dave Ramsey podcasts on a regular basis
Whew! It feels good to get all that off my chest.
So what other quirks are out there that you try not to talk about?
Despite being savvy in discounted cash flow analysis, many of the items below seemingly defy this. Each of these is the result of much contemplation and I admit may not be the best answer, but at this point I seem to be stubborn and set in my ways.
- House is paid off but wife's new car is not (depreciating assets should hit the monthly budget like the expense they are, and not be a waste of investment funds)
- Do not save at all for kids' college (prefer to put ourselves in a financial position to help as needed, without having money stuck in an account that must be used for that purpose)
- Investment portfolio contains zero stocks (~50% of investments are oil/gas interests, and don't want to be part of both bubbles at the same time)
- No IRA accounts (401k has a good bit saved already and still contribute enough to get the match, but want a large portion of retirement savings outside of these tax-advantaged accounts where the rules may change)
- All monthly bills are set up to auto-draft from credit card or bank account if that is not available (don't feel like spending time in life reviewing or paying bills, even electronically, just look into bill if amount seems odd)
- Life insurance is level-term until I am 55 (beyond that kids will be out of college and retirement plan should be set for spouse; would rather have a high face value now than pay for the opportunity to be a nice lotto ticket later)
- Prefer internal rate of return for cash flow analysis and believe that many of the complaints against it are actually strengths (if multiple roots then each has a meaning, especially if combined with the first derivative or scope of analysis)
- No hesitation borrowing money from HELOC or 401k if an opportunity comes along that has a strong rate of return (has worked out well thus far)
- Listen to Dave Ramsey podcasts on a regular basis
Whew! It feels good to get all that off my chest.
So what other quirks are out there that you try not to talk about?
This post was edited on 5/16/13 at 7:21 pm
4
Posted on 5/16/13 at 7:00 pm to Bayou Tiger
This is more of a question.. Is following Dave Ramsey advice sound?
I've been reading his total money makeover book and half way in I've realized there is some decent advice but he is very repetitive, to the point that its really annoying.
So pretty much I wasted $10 on his book because this link is repeated so many times.
LINK
I've been reading his total money makeover book and half way in I've realized there is some decent advice but he is very repetitive, to the point that its really annoying.
So pretty much I wasted $10 on his book because this link is repeated so many times.
LINK
This post was edited on 5/16/13 at 8:30 pm
Posted on 5/16/13 at 7:04 pm to oR33Do
quote:My opinion is that his advice is sound but conservative, which is probably the best answer for 90% of people out there.
Is following Dave Ramsey advice sound?
Mostly I listen for topics that I don't know much about - small business, consumer complaints, estate planning, taxes, etc. He has a good way of explaining things in simple terms.
Posted on 5/16/13 at 7:26 pm to Bayou Tiger
Another question I have is what is this mysterious mutual fund that he hasn't mentioned yet by name but makes 12% in returns every year?
Has me thinking its all pie in the sky..
Has me thinking its all pie in the sky..
Posted on 5/16/13 at 7:55 pm to Bayou Tiger
quote:
- No IRA accounts (401k has a good bit saved already and still contribute enough to get the match, but want a large portion of retirement savings outside of these tax-advantaged accounts where the rules may change)
The logic here seems highly flawed. You dont want the money in tax advantaged accounts because the rules might change? So you pas up tax savings now for what MAY happen?
Alternatively, if the money isnt in a tax advantaged account, its necessarily in a non-tax advantaged account getting taxed NOW or you spend it.
So what do you believe you are accomplishing or hedging against because i have a hard time seeing it.
Posted on 5/16/13 at 8:38 pm to Teddy Ruxpin
Those are fair questions, and I know it is not the best mathematical answer.
However, my savings comes off the top, then I pay bills and spend the rest. So if I save $1000 after-tax or before-tax, the rest gets spent either way. Plus, having a good mix of of retirement savings will provide flexibility on which accounts to withdraw from in a given year to optimize taxes (especially if other benefits down the road, social security, medicare, etc are tapered down based on income or on withdrawal amounts from qualified retirement accounts - tin-foil hat stuff today but who knows).
This is not an academic solution, just what works for me.
However, my savings comes off the top, then I pay bills and spend the rest. So if I save $1000 after-tax or before-tax, the rest gets spent either way. Plus, having a good mix of of retirement savings will provide flexibility on which accounts to withdraw from in a given year to optimize taxes (especially if other benefits down the road, social security, medicare, etc are tapered down based on income or on withdrawal amounts from qualified retirement accounts - tin-foil hat stuff today but who knows).
This is not an academic solution, just what works for me.
Posted on 5/16/13 at 8:50 pm to Bayou Tiger
quote:
House is paid off but wife's new car is not
I don't think it is a good idea to pay off any loan with a fixed interest rate of the rate of inflation. You are literally getting the money at no cost. Most 30 year notes these days fall into that category (don't forget to take the mortgage deduction into account, your repayment of a 3.5% mortgage note is less than a 3% rate of return post-tax).
quote:
No IRA accounts
Ever consider a Roth? You've already paid the tax on your contributions there.
quote:
All monthly bills are set up to auto-draft from credit card or bank account
I do the same but you still have to track it in case something goes wrong (it's happened to me once).
quote:
No hesitation borrowing money from HELOC
Agreed at current rates.
quote:
or 401k
Strongly disagree. You are borrowing untaxed dollars and repaying with money you pay tax on.
Posted on 5/16/13 at 8:54 pm to oR33Do
quote:
Is following Dave Ramsey advice sound?
As I have argued elsewhere, basically yes. It isn't overly complicated and some of his stuff isn't really "best" but some people need that kind of black or white approach.
For example, he basically tells people not to borrow at all if you can avoid it. This is good advice for people who don't handle money well, sort of like telling an alcoholic to quit cold turkey. But if you use money well borrowing can be a very good thing. It's how most people get rich, after all.
Posted on 5/16/13 at 8:54 pm to foshizzle
quote:Which loans can you pay back with pre-tax dollars? At least with a 401k loan you pay the interest to yourself. If you work through the math, the loan and the 401k investment vehicle (interest paid on the loan) are independent.
Strongly disagree. You are borrowing untaxed dollars and repaying with money you pay tax on.
Posted on 5/16/13 at 8:58 pm to oR33Do
quote:
So pretty much I wasted $10 on his book because this link is repeated so many times.
Your link is a perfect example of how his advice is good for people who don't handle money well. In reality the best thing really is to pay off the highest rate debt first.
Also, contrary to his advice, if credit card debt is the problem an emergency fund is not necessary. Pay off all credit card as quickly as possible immediately. If an emergency happens you can charge it back, but there's no need to pay extra interest until then so pay it off now.
Posted on 5/16/13 at 10:50 pm to oR33Do
2 of Dave's funds: AIVSX and AGTHX.
No interest to me because of the front load.
No interest to me because of the front load.
Posted on 5/17/13 at 4:18 am to foshizzle
quote:
Also, contrary to his advice, if credit card debt is the problem an emergency fund is not necessary. Pay off all credit card as quickly as possible immediately. If an emergency happens you can charge it back, but there's no need to pay extra interest until then so pay it off now.
Yeah see my situation is a hell of a lot different than what the book is catered to.
I have never owned a credit card, and I pay for 90% of my purchases with cash. The other 10% is with checks and that's normally bills.
My debt is finishing off the last of student loans, so the snow ball effect is kind of worthless to me.
See if I had layered debts of $200,$600, $1000 etc then I can understand the pump up, but my debts are $1800, $8000, and $12000. I'm already on track to finish them in 20 more months and I had already been using his method to an extent.
Book has given me ideas for "tossing the dynamite" though.
Posted on 5/17/13 at 1:15 pm to oR33Do
quote:
Another question I have is what is this mysterious mutual fund that he hasn't mentioned yet by name but makes 12% in returns every year?
He doesn't say it makes 12% every year what he says is it has averaged 12% over the course of 30 years. Some years it might make 3% some it might maker 18%.
Posted on 5/17/13 at 2:25 pm to matthew25
The straight retail versions have a front load, I use AF Growth Fund of America in a Roth and it is no-load.
Posted on 5/17/13 at 5:01 pm to Bayou Tiger
quote:
Personal Financial Quirks
I go to the ATM every morning after Starbucks. I take out $100.
I say "Thank you, Mr. ATM." He says "You're very welcome, Zach. And your balance is $23,120 today. Don't you think you should be doing something with that?"
I say, "Nope. But thanks for the advice, Mr. ATM. Have a nice day."
I place the money in my wallet with the faces going in the same direction. Bills under 20 bucks are to the right in descending order.
Is that quirky enough?
Posted on 5/17/13 at 7:44 pm to Zach
What do you do with the leftover every day? That wallet gets pretty thick come Thursday I would imagine. Or do you spend it all?
Posted on 5/17/13 at 9:26 pm to Zach
quote:
I go to the ATM every morning after Starbucks. I take out $100.
Sounds like a very inconvenient way to pay for your wife's ebooks...
Posted on 5/19/13 at 4:09 am to foshizzle
quote:
But if you use money well borrowing can be a very good thing. It's how most people get rich, after all.
You peaked my curiosity here.......please explain.
Posted on 5/19/13 at 4:20 am to Daygo85
quote:
You peaked my curiosity here.......please explain.
Typically how rich people get richer. Using other people's money.
Hedge Fund managers for instance simply take other people's money, invest it and make a shite ton
Posted on 5/19/13 at 9:34 am to Sigma
quote:
What do you do with the leftover every day? That wallet gets pretty thick come Thursday I would imagine. Or do you spend it all?
I spend it all. Varies from day to day. For example, yesterday I put 20 bucks on my Gold Card. Put 30 gas in the wife's car. Spent 50 on groceries.
Page 1 of 2
Popular
Back to top
Follow TigerDroppings for LSU Football News