- 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
3
Posted on 12/13/21 at 8:38 am to PhiTiger1764
I just explained why. You are taking on excessive risk in an auto-bid momentum strategy that is almost guaranteed to bankrupt your account over decades without participating in the upside. You might as well auto-bid crypto it’s the same trade but you get compensated for the risk.
Posted on 12/13/21 at 8:59 am to dgnx6
quote:
I was just thinking, some of these dudes save more in a year than I make. Good God.
Pay yourself first. Learn some basics of investing. Read on here and see who knows what their talking about. There's plenty of free info online on how to distribute your funds and plenty of knowledgeable people to help guide you.
Unless you have family wealth, no one starts at the top. Time value of money can't be understated. Consistency and not jumping in and out of market. Don't waste money of frivolous shite, invest it instead. Little bits can add up to big money over the years.
On my investments, I'm about 75% mutual funds and etf's. Used to be 90/10 but as my income grew, I had more free money for speculative investments (individual stocks, real estate, crypto etc). On those, don't commit more than you can lose. Even if the asset can't go to zero, having the mentality that if you lose it all it doesn't hurt you overall and you don't give a shite gives you to balls to hang in through downturns and buy more when the prices get even better.
And like I said earlier, don't compare yourself to others. Unless your Elon Musk, there's always people out there richer than you. And richer doesn't mean more successful or happier. I'm not a Nike fan because of their politics but I've always liked their "find your greatness" ads. It's the same in finances and everyday life. Set realistic retirement goals. Stay on the path. But enjoy life. Remember than we make money to live. We don't live to make money.
Posted on 12/13/21 at 9:10 am to PhiTiger1764
quote:
Congrats? How does this make a target date fund a “bad” strategy for long term wealth creation?
Target date funds can be fine for people that just want to set it and forget it. Of course some are better than others. Look at fees and other expenses. If someone is going that route, I recommend they pick one that the target date is like 10 yrs past when they really expect to retire. It'll keep you in a higher percentage of equities. The market has changed. These are based on old ways of re-balancing your funds more into bonds as you get older as a hedge against down markets. With bond yields as shitty as they've been for so long, you are assuring yourself of underperforming if you go the traditional route. In the old days, when stocks went up and bonds went down, it made sense. Now it don't make a shite. You'll see stocks bomb, bonds drop, precious metals drop and crypto drop. There are no "safe" investments anymore except buying good companies and holding.
In fact, if your are investing for the long haul, the most conservative "safest" investments such as bonds, and CD's etc will assure you of losing. If you're investing for the long haul, a higher risk portfolio is your only and most reliable way of making money.
Sorry for rambling. Very little sleep last night and coffee hasn't kicked in yet.
Posted on 12/13/21 at 9:46 am to TDsngumbo
46 years old. I put away $5k for 8 months and $7k four moths out of the year. I then save any one time hits I get. I currently put $3k/month into a SEP and the rest goes into a brokerage account.
Posted on 12/13/21 at 11:05 am to dgnx6
quote:
I was just thinking, some of these dudes save more in a year than I make. Good God.
My wife and i are more than comfortable.
My recommendation is that once you hit "comfortable" (whatever that is to you), freeze your spending and every raise or bonus from that point on invests in your future.
Our family "take home" pay is equivalent to the same pay we got 15 years ago. The biggest difference is maxing out the 401k, hsa, some life insurance, IRAs, etc..
We make some sacrifices (drive cars into the ground, cheap vacations, dont eat out often).
But we also enjoy our toys (3 motorcycles, kids in every sport/activity that they desire).
Dont compare yourself to others. Compare yourself to your stage 5 and 10 years ago. Once you hit a few benchmarks, you can start to see how your money works for you ($25k saved, $50k saved, $100k saved, etc..)
Posted on 12/13/21 at 11:38 am to meansonny
(no message)
This post was edited on 1/1/22 at 12:18 pm
Posted on 12/13/21 at 12:31 pm to DUKE87
quote:Sounds like FA convinced you a whole life policy is good "investment." Plug that $350 into some retirement calculators and see how much more you could have.
$350 to life insurance and $200 to Roth IRA.
Financial advisor said...
Posted on 12/13/21 at 1:38 pm to tigersfan1989
quote:
I would add that the target date funds are more stable in the sense in a market downturn it should limit your losses more so than a s&p index portfolio. Sometimes it’s more valuable for people to stabilize and preserve their portfolio on down years rather than reaching for the highest return year after year. I personally don’t have any target date funds being in my early 30s but I will move into them as I get older and closer to retirement age. Having bonds will help buffer those 2009 years. If you lose 10% one year then it takes 11% return the next year to make it up. Bonds help with this volatility.
Target funds are not good.
If you have a 10+ year retirement window, why are you preserving a portfolio?
The stock market has never shown a downturn that will impact an account more than 3 years. In 2008, i was down for just over 2 years. In march 2020, i was down 2 months (and that is mostly indicative of th3 average downturn in my lifetime).
Why limit returns to bond yields when an index (2000, 500, Dow etc..) are extremely diversified and averaging 8-16%.
I hate to call target funds a mistake. But they are a mistake (one that i made along with many others when first starting out).
Posted on 12/13/21 at 2:11 pm to meansonny
(no message)
This post was edited on 1/1/22 at 12:17 pm
Posted on 12/13/21 at 3:02 pm to tigersfan1989
quote:
Sequence risk of returns would be one reason of a bond allocation with target date funds when retired
I completely disagree. Unless you are talking about timing the market. Are you saying that you recommend a 401k investor should time the market and use bond allocations for that purpose?
quote:
I’m all for no bonds if you’re 10+ years from retirement but from if you’re within a few years of retirement and you get. 20-30% market drop your first few years then you face real sequence risk because at this point you are also withdrawing money based on a withdrawal rate.
We are on the same page, here.
quote:
If you had 5 year expenses in bond allocation during a market drop you could pull from your bond funds and not touch your stock allocation during a hard drop.
Again, we are on the same page.
What percentage of 401k owners are expecting a withdrawal from their 401k within 5 years?
That is not the conversation that i am having.
quote:
Again the goal isn’t always make as much as you can and put it all on the line. A well diversified portfolio may not always be the best performing portfolio. Like they always say past performance does not indicate future returns.
You only lose returns when you sell. Why on earth would an investor not want to maximize returns in a diversified manner? I get it. The russell 2000 is averaging 16%. The dow jones is averaging 14%. They are independent of one another. Completely different levels of risk within each one.
401ks are typically funded dollar cost averaging. That is one diversification/protection in this discussion. Another method of diversification is to index both (or multiple indexes).
quote:
Investors have been spoiled since 2009 this bull run has almost made people blind to risk.
Considering that the 2008 recovery was one of the slowest in history, we can disagree on the semantics. It was a long bull run, though. The longest in history. So the world today is not immune to "firsts". No doubt.
Posted on 12/13/21 at 3:13 pm to meansonny
quote:So a 90/10 portfolio is not good?
Target funds are not good.
Posted on 12/13/21 at 3:21 pm to jimbeam
quote:
So a 90/10 portfolio is not good?
Good is a relative statement.
If i have dollar cost averaged bonds this year, what return am i getting?
If i am not touching my portfolio for 10+ years, what value am i receiving for bonds in the market?
Posted on 12/13/21 at 3:24 pm to jimbeam
I'm 38 and my wife is 33 and this year we're making a combined household income of $157,705. I'm a teacher so I have defined pension that I have to put 7.5% in per month and it will cover a big chunk of my retirement. In PA we have a multiplier of 2.5% per year, so if you work 30 years you will retire at 75% of your highest salary, make it to 40 years and its a 100%. On top of my pension I also contribute to a 403b and Roth and she has a 401K and Roth.
This year we'll save $30,000 in our tax sheltered accounts which is about 19% of our yearly income. So about $2500 per month in If you add in my pension contributions, it is about 21%. It would've been higher this year but my wife's hospital made some changes that took effect on 1/1/21 and she was only contributing the minimum for the match from January-March until things got sorted out. We also put money aside each month for our son's 529 account and just had a daughter last month so we'll be adding money to hers as well. As long as we get 15% in the different tax sheltered accounts I'm happy.
This year we'll save $30,000 in our tax sheltered accounts which is about 19% of our yearly income. So about $2500 per month in If you add in my pension contributions, it is about 21%. It would've been higher this year but my wife's hospital made some changes that took effect on 1/1/21 and she was only contributing the minimum for the match from January-March until things got sorted out. We also put money aside each month for our son's 529 account and just had a daughter last month so we'll be adding money to hers as well. As long as we get 15% in the different tax sheltered accounts I'm happy.
Posted on 12/13/21 at 3:27 pm to TDsngumbo
26,
I put about 600 a month in 401k with employee match equaling about 2000 every year.
Was putting an additional 600 per month in some stocks but recently bought land and need to start saving to build a house.
hoping the money I added previously can pay off down the road. I have a long way to go but if God will allow it looking to have all my stuff paid off in 20ish years then will start hunting a retirement date then
I put about 600 a month in 401k with employee match equaling about 2000 every year.
Was putting an additional 600 per month in some stocks but recently bought land and need to start saving to build a house.
hoping the money I added previously can pay off down the road. I have a long way to go but if God will allow it looking to have all my stuff paid off in 20ish years then will start hunting a retirement date then
Posted on 12/13/21 at 3:39 pm to TDsngumbo
(no message)
This post was edited on 12/18/21 at 9:49 pm
Posted on 12/13/21 at 3:47 pm to jimbeam
48, I max out my Roth 401K ($19500) and receive a 3% match ($4500/yr) all in VIGAX ~ 30%/yr. I also fund my ROTH IRA on the first of every year ($6000). This totals approx. $30K. My wife is very similar for a total of 60K.
Additionally, most of the stocks I own, I own in 100 share blocks and are all in my Roth IRA account (TD Amer). I sell covered call contracts for a 15-20% strike price, 6 weeks out. I have been buying FB, which I personally hate, with house money. (20K/yr)
80K/yr total all which grows tax free.
I also receive about 55K / yr in retirement from the military.
Additionally, most of the stocks I own, I own in 100 share blocks and are all in my Roth IRA account (TD Amer). I sell covered call contracts for a 15-20% strike price, 6 weeks out. I have been buying FB, which I personally hate, with house money. (20K/yr)
80K/yr total all which grows tax free.
I also receive about 55K / yr in retirement from the military.
Posted on 12/13/21 at 5:14 pm to oneg8rh8r
Passive bond funds are next level stupid if you are trying to get bond exposure. They are allocating capital to off-the-run bonds way above Par value that will depreciate in price back to 100. So you get an aggregated coupon with a tiny YTM and no price appreciation upside through convexity. It's absurd on it's face.
Posted on 12/13/21 at 7:39 pm to LSUtigerME
quote:
How much will you need in retirement? Everyone’s needs will be different based on lifestyle choices.
This is something that makes it hard to plan for me and hard to filter out advice for situations that are very different than mine.
I don’t have kids so I don’t have to support anything when I’m older or have to leave as an inheritance. My life has turned out way different than I originally thought.
Posted on 12/13/21 at 9:41 pm to DiamondDog
quote:
I contribute the absolute max, which is $19,500 pretax regardless what people tell you in here. There are catch up provisions with age.
Do you even Mega Backdoor Roth? There are absolutely employer plans that allow total retirement contributions to exceed $19,500.
Page 6 of 7
Popular
Back to top
Follow TigerDroppings for LSU Football News