Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[Rain Man]

Originally Posted by O.city

Psychologically, I just hate having that over my head. I work my ass off and it’s just a mental drain to think I’m set up to pay that shit until I’m 46.

I just wanna get out from under it. I’ll deal with retirement later. It may not be the best way to go about it but it just wears on me

That was my philosophy on various debts. I just wanted them off the books as fast as possible. At my phase in life, I'm no longer paying any debt and instead I'm on the receiving end. There's a huge mental benefit to that.

[O.city]

Originally Posted by Rain Man

That was my philosophy on various debts. I just wanted them off the books as fast as possible. At my phase in life, I'm no longer paying any debt and instead I'm on the receiving end. There's a huge mental benefit to that.

Right there with ya.

I know I may miss out on some retirement or some investing, but for my mental stability, I just have to get this done ASAP. It wears on me daily.

[Buehler445]

Originally Posted by O.city

Right there with ya.

I know I may miss out on some retirement or some investing, but for my mental stability, I just have to get this done ASAP. It wears on me daily.

If that’s where you are do it now.

My personal philosophy is they’re not collateralized so I work harder on the collateralized loans first.

But mine is $240 a month and as cheap interest as my mortgage.

[Cornstock]

Originally Posted by O.city

Well guys, could use a little help or advice here.

The wife and I are doing well, bought some land getting ready to build a home. I max out an ira for both of us each year. But I’m not sure if I should be doing more or putting as much as I can towards my student loans. I started with 300k at about 7 % 4 years ago and I’ve taken down 50k or so of it total but the interest is killer. I’m getting ready to join the national guard as a dentist and get some help there with the loans so I think that plus what I pay, I can get the student loans done in about 3.5 years.

So, question is would you max out and get out from under those first or try and put more into a brokerage account?

To echo a lot of what's been said, it's all about weighing the opportunity cost of investing vs the fixed cost of 7% interest. You can improve that through deductions, so say paying that down is effectively a 10% return for doing so.

In the coming 12-18 months I foresee market returns exceeding 10%, so it would be economically smarter to be investing over that period, and revisit your strategy afterwards.

Obviously, the emotional aspect of paying off debt is difficult to quantify. But from a numbers perspective it makes more sense to invest right now.

But ultimately, it's whatever helps you sleep at night.

[O.city]

Thanks for the advise guys

My issue is just the length of the payout. I feel like I can still be putting into retirement but I’m just feeling like maxing the debt repayment works better mentally for me.

Getting those done in that short of time will free up so much capitol I feel the gains I can make then will make up for it

[Cornstock]

Originally Posted by O.city

Thanks for the advise guys

My issue is just the length of the payout. I feel like I can still be putting into retirement but I’m just feeling like maxing the debt repayment works better mentally for me.

Getting those done in that short of time will free up so much capitol I feel the gains I can make then will make up for it

With your cash flow, you're in an enviable position. I see a lot of doctors and others with high cash flow and high debt not strategizing at all, thinking their cash flow will take care off all their problems.

You're asking the right questions.

[O.city]

Originally Posted by Cornstock

With your cash flow, you're in an enviable position. I see a lot of doctors and others with high cash flow and high debt not strategizing at all, thinking their cash flow will take care off all their problems.

You're asking the right questions.

Yeah, I’m trying.

My thought process is also that as my practice continues to grow I can hopefully make up for lost investing and retirement.

But we shall see

Mainly I’m just trying to stick to the plan we set a few years ago when I graduated. Now with this national guard thing opening up its opened a new door to shortening the replay considerably. Of course getting deployed and having to leave my practice would be devastating but it’s a risk I’m looking to take

[Cornstock]

Originally Posted by O.city

Yeah, I’m trying.

My thought process is also that as my practice continues to grow I can hopefully make up for lost investing and retirement.

But we shall see

Mainly I’m just trying to stick to the plan we set a few years ago when I graduated. Now with this national guard thing opening up its opened a new door to shortening the replay considerably. Of course getting deployed and having to leave my practice would be devastating but it’s a risk I’m looking to take

As long as you're not completely foregoing investing at this point you will be in a good position. Compound interest is incredibly powerful, and it is almost impossible to match it's power in only a few years preceeding retirement.

Especially when there are so many variables in those last few years of employment-we can't know what the market situation is at that point, and the prudent approach is to shift to a more conservative portfolio to mitigate the possibility of loss of principle.

I am amazed almost daily by incredibly highly educated individuals who have too much hubris to consider all the factors involved.

[RunKC]

Originally Posted by DaFace

Most of personal finance is about constantly taking steps in the right direction. Consult the chart linked in the OP, and do your best, but don't stress TOO much if some of those steps seem a long way off.

Yeah I’m going in the right direction, I just need to finish off my last bit of student loan debt this summer before I can add more. I really think I should avoid fiddling around with an open investing account and put all of my resources towards my compound interest accounts like the Roth IRA.

[DaFace]

Originally Posted by RunKC

Yeah I’m going in the right direction, I just need to finish off my last bit of student loan debt this summer before I can add more. I really think I should avoid fiddling around with an open investing account and put all of my resources towards my compound interest accounts like the Roth IRA.

Yeah, that's typically recommended. Get some boring, safe retirement accounts going before you start playing with anything that's intended to bring in income.

[DaFace]

Originally Posted by Cornstock

In the coming 12-18 months I foresee market returns exceeding 10%, so it would be economically smarter to be investing over that period, and revisit your strategy afterwards.

Sure, but be careful with that kind of thinking. You may THINK they'll exceed 10%, but it's never out of the question you could lose money instead. It's worth tempering your expectations either direction rather than just assuming that it'll go the way you believe it will.

[Cornstock]

Originally Posted by DaFace

Sure, but be careful with that kind of thinking. You may THINK they'll exceed 10%, but it's never out of the question you could lose money instead. It's worth tempering your expectations either direction rather than just assuming that it'll go the way you believe it will.

Right, it is conjecture to forecast the market. I'll differ to people who know far more than I on the subject.

Read this today: https://www.cnbc.com/amp/2018/01/28/...-jpmorgan.html

I like to think JPMorgan knows what they're talking about. But at the same time, don't bet the farm on a forecast.

[Hog's Gone Fishin]

I don't even understand why you would have to go to college to be a dentist. I mean all you do is tell people to open their mouths and then you just clean their teeth and if you find holes in their teeth you drill them out and pack shit in the hole. Not rocket science.

[wheeler08]

I just opened this thread for the first time today, and read a few pages.
So here's my story and question

I worked in a factory for 18 years, since the day I turned 18. I put 7% of every paycheck into a 401k, company matched 3-5 % for 3/4ths of that time (It was mind blowing how many co workers didn't put anything in, I tried to convince them to at least do 3% to get the company to match) anyway, I decided in May last year to quit. I moved my family across the state to work for my father in law, with the plan to take his place when he retires.
So I roll over my 401k to an IRA, both at Fidelity. I immediately notice that I have a ton more options in what to invest in with an IRA. Not only are there way more mutual funds to choose from, but from what I think I understand, I can invest in individual stocks if I want to.

So from June to December this past year I only invested $200. Because we were paying all the bills of a house we were trying to sell, plus building a new house where we moved to. With my IRA I gained almost $20k in that 6 months with only investing $200. For the year I gained almost $30k.

I was talking to my Dad the other day, and we both talked about how great our 401k/IRA's had done this year, and he said, yeah but when is the bottom gonna fall out? And I joked that I had thought of moving all my investments to bonds before it happened. And he said he was thinking seriously about doing that, because he's almost 60, I'm only 36. He's already almost lost everything once before from the housing market and he had to see friends work years past retirement because of it.

So thats the question, are you guys worried at all about the bottom falling out, or are you still watching the DOW climb to new heights ever day?

[Buehler445]

Originally Posted by wheeler08

I just opened this thread for the first time today, and read a few pages.
So here's my story and question

I worked in a factory for 18 years, since the day I turned 18. I put 7% of every paycheck into a 401k, company matched 3-5 % for 3/4ths of that time (It was mind blowing how many co workers didn't put anything in, I tried to convince them to at least do 3% to get the company to match) anyway, I decided in May last year to quit. I moved my family across the state to work for my father in law, with the plan to take his place when he retires.
So I roll over my 401k to an IRA, both at Fidelity. I immediately notice that I have a ton more options in what to invest in with an IRA. Not only are there way more mutual funds to choose from, but from what I think I understand, I can invest in individual stocks if I want to.

So from June to December this past year I only invested $200. Because we were paying all the bills of a house we were trying to sell, plus building a new house where we moved to. With my IRA I gained almost $20k in that 6 months with only investing $200. For the year I gained almost $30k.

I was talking to my Dad the other day, and we both talked about how great our 401k/IRA's had done this year, and he said, yeah but when is the bottom gonna fall out? And I joked that I had thought of moving all my investments to bonds before it happened. And he said he was thinking seriously about doing that, because he's almost 60, I'm only 36. He's already almost lost everything once before from the housing market and he had to see friends work years past retirement because of it.

So thats the question, are you guys worried at all about the bottom falling out, or are you still watching the DOW climb to new heights ever day?

At 36 I wouldn’t think twice about it. At 60 yeah. He should move at least some out now.