Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[lewdog]

Originally Posted by Demonpenz

no problem i am in the game to make mistakes. American funds is what it is called.

What funds did they recommend from them? Looking at some of their initial funds, they have load fees. That's usually not a good sign considering so many offer no load funds. You're just wasting money on that, unless the gains are substantial. With actively managed funds with load fees, generally that's not the case.

[Demonpenz]

Originally Posted by lewdog

What funds did they recommend from them? Looking at some of their initial funds, they have load fees. That's usually not a good sign considering so many offer no load funds. You're just wasting money on that, unless the gains are substantial. With actively managed funds with load fees, generally that's not the case.

I don't have my info handy but I will get it when I can.

[Demonpenz]

Well there you go A load fund is a mutual fund that comes with a sales charge or commission. The fund investor pays the load, which goes to compensate a sales intermediary, such as a broker, financial planner or investment advisor, for his time and expertise in selecting an appropriate fund for the investor. Learned something new everyday

[Demonpenz]

Also to me money is never wasted. Other people have to eat as well.

[Demonpenz]

CAP INC BUL A (CAIBX)

[lewdog]

Originally Posted by Demonpenz

Well there you go A load fund is a mutual fund that comes with a sales charge or commission. The fund investor pays the load, which goes to compensate a sales intermediary, such as a broker, financial planner or investment advisor, for his time and expertise in selecting an appropriate fund for the investor. Learned something new everyday

Originally Posted by Demonpenz

CAP INC BUL A (CAIBX)

I myself don't like load funds. Others may disagree. I just think there are so many options out there that they aren't needed in most portfolios. A similar scenario to this is something like Costco. You pay a yearly membership to shop there. Some people think that is total shit, and I kind of agree. However, I do have a membership there. I will, however, never pay to shop anywhere else. Costco is my "load fund" and the only reason I pay to shop at Costco is because the yearly savings I get exceed the amount of the membership price. If I could get their prices/goods, somewhere else for free, I would do it. If Safeway down the street asked me to pay up front to shop there for groceries, I'd tell them to get bent.


That fund has a high 5.75 load fee, an "ok" expense ratio of .61% and 10 year gain of 4.15%. That pretty terrible gains given the fact you're paying up front just to put money there.

You could simply park money in a target date fund with Vanguard (this fund changes your allocation as you age), pay 0 for a load fee, with an expense ratio of .16% and a 10 year gain of 5.71%. All of this is better than the fund you mentioned and simply requires hands off investing until you retire.


We have so much research at our fingers today that even an average investor, like myself, doesn't require the need of an adviser at this point in life. If later, when my assets have grown and I'm more worried about retirement (less than 5 years out), I may pay for guidance. At a younger age, paying for "guidance" is simply stunting your portfolio growth by tens of thousands of dollar....and this is not an exaggeration as far as dollar amount goes.

[Demonpenz]

sounds good thanks for explaining

[Demonpenz]

The good thing is i got 8 years of saving in vanguard on my first job some money in wells fargo for my second job and some money with merril lynch from my current. I also have a small pention from my first job. So I don't think I am too ****ed.

[lewdog]

Originally Posted by Demonpenz

The good thing is i got 8 years of saving in vanguard on my first job some money in wells fargo for my second job and some money with merril lynch from my current. I also have a small pention from my first job. So I don't think I am too ****ed.

Nothing ****ed at all! You're saving, and that's the important part.

There's no reason you can't consolidate all your 401k's from previous employers to an IRA of your choosing. Easier to manage your money for many if they're together and once rolled over you can dictate how the money is invested, instead of what your employer offered (which usually has limited options). I'd be doing that if you haven't already.

[Demonpenz]

sounds good

[lewdog]

Originally Posted by Demonpenz

sounds good

Hopefully others chime in. I don't want to look like a know-it-all and I myself am still a young investor (31). I do like talking about finances though and reading about it. I have done a lot of financial planning reading in the past few years. Learning about wealth building, retirement planning and investing. There's lots of decent forums where you can find information and for the most part, I think does a pretty good job of educating without someone trying to sell you something like seeing an adviser, plus the fees on top of that.

My parents were good role models in this. Able to retire fully at 57 years old in 2010 having never made a combined household income over $100k. They simply made consistent investments from their mid 20's on. Never sacrificing a years worth of savings for a "major" life event. I hear people use this reasoning all the time. Not saving for retirement to buy a new house, a new car. Taking years off investing when you're young loses you so much money in compounding interest by the time you hit retirement.

I don't solicit any financial advice to people in real life, like friends, unless they directly ask me a question about it. We have some friends who are terrible with money. Close to $100k of debt (that's also their yearly income), outside of a mortgage they barely afford. I just smile and nod when they talk about all their new purchases.

A recent example was our other close friends who asked my opinion on not contributing to retirement for 2 years to save up for redoing their kitchen and floors. Mind you their house is nice, but they didn't like the tile color or the kitchen setup. They are very open with us about finances and told me he contributes 10% of his salary to his 401k. He makes $120k, so he was contributing $12k per year. His wife doesn't work. They contribute to no other investment accounts outside of his 401k. I showed them that if they did not contribute that $24k to retirement over 2 years, that even with a modest 5% gain over 30 years, they'd have $100k less in retirement in 30 years just for missing those 2 years! They were shocked and decided cutting expenses was a better way to save. If more people understood compounding interest, with decades to continue investing, more young people wouldn't skimp on their contributions.

[scho63]

Originally Posted by lewdog

Nothing ****ed at all! You're saving, and that's the important part.

There's no reason you can't consolidate all your 401k's from previous employers to an IRA of your choosing. Easier to manage your money for many if they're together and once rolled over you can dictate how the money is invested, instead of what your employer offered (which usually has limited options). I'd be doing that if you haven't already.

I concur

One account and probably the best performing/lowest fee would be the best.

[Demonpenz]

Originally Posted by lewdog

Hopefully others chime in. I don't want to look like a know-it-all and I myself am still a young investor (31). I do like talking about finances though and reading about it. I have done a lot of financial planning reading in the past few years. Learning about wealth building, retirement planning and investing. There's lots of decent forums where you can find information and for the most part, I think does a pretty good job of educating without someone trying to sell you something like seeing an adviser, plus the fees on top of that.

My parents were good role models in this. Able to retire fully at 57 years old in 2010 having never made a combined household income over $100k. They simply made consistent investments from their mid 20's on. Never sacrificing a years worth of savings for a "major" life event. I hear people use this reasoning all the time. Not saving for retirement to buy a new house, a new car. Taking years off investing when you're young loses you so much money in compounding interest by the time you hit retirement.

I don't solicit any financial advice to people in real life, like friends, unless they directly ask me a question about it. We have some friends who are terrible with money. Close to $100k of debt (that's also their yearly income), outside of a mortgage they barely afford. I just smile and nod when they talk about all their new purchases.

A recent example was our other close friends who asked my opinion on not contributing to retirement for 2 years to save up for redoing their kitchen and floors. Mind you their house is nice, but they didn't like the tile color or the kitchen setup. They are very open with us about finances and told me he contributes 10% of his salary to his 401k. He makes $120k, so he was contributing $12k per year. His wife doesn't work. They contribute to no other investment accounts outside of his 401k. I showed them that if they did not contribute that $24k to retirement over 2 years, that even with a modest 5% gain over 30 years, they'd have $100k less in retirement in 30 years just for missing those 2 years! They were shocked and decided cutting expenses was a better way to save. If more people understood compounding interest, with decades to continue investing, more young people wouldn't skimp on their contributions.

Its all good I just need to get a fire lit under my ass to get those accounts together.

[Buehler445]

Lew is right.

But my perspective is something is better than nothing. It's really easy to get bogged down in details and research. Sometimes paying someone to set it all up is cheap money if you wouldn't otherwise do it.

My grandpa was a farmer. Grew up in the depression. So he did everything himself. Built his house. All his sheds. Airplanes. Rebuilt his tractors. If he couldn't do it himself it largely didn't happen.

But he had 2 mutual funds. One he put $3,000 sometime in the 60s and $3,000 sometime in the 70s. Both had well over 150,000 in them when he died in 08 (right about the time the market puked all over everything). He didn't pay any attention to loads, fees, commission, whatever. He just made a little extra money and had his ground paid off and just stuck it somewhere. I'm sure it wasn't the most efficient and one vastly out yielded the other but the return over time on either one was huge.

Just do something.

[Cornstock]

Originally Posted by lewdog

Nothing ****ed at all! You're saving, and that's the important part.

There's no reason you can't consolidate all your 401k's from previous employers to an IRA of your choosing. Easier to manage your money for many if they're together and once rolled over you can dictate how the money is invested, instead of what your employer offered (which usually has limited options). I'd be doing that if you haven't already.

Agreed, I strongly advise against keeping inactive 401ks from former employers and old IRAs separate. When you consolidate into one IRA you can manage things more easily, and don't need to worry about being charged different fees at 3 different places. You have a full buffet of options when you are in control.

You have the choice to roll these into your current 401k, but this is not advisable because you are limited to whatever funds that company offers, and they usually have higher expense ratios than if you have it elsewhere. A best case scenario would be that they do have a terrific choice of funds that match your objectives, but they are still more expensive annually.

Additionally, when you retire and a required to take Required minimum distributions, having to withdraw from 3 separate places complicates the calculation. If you only have 1 merged account, they will tell you exactly what you need to withdraw, so you don't run the risk of having an insufficient RMD penalty.