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10-11-2019, 10:00 AM | #3241 | |
Kind of a mod
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If you want to try and figure out the best financial decision, you can play around with an online calculator to help you see where the differences are. For me, what it really comes down to is that your mortgage is a fixed amount, while rent will increase over time. So if you plan to stay in your place for 50 years, there's almost no question that buying will be the best option. But you're right that big maintenance items suck, and if you get hit with a bunch of them right after you buy, you might be behind where you'd be if you'd rented in the short term. Side note: I'm kind of ignoring the "equity" argument even though it's a valid one. I personally bought my place in 2009 when the government was giving out free money to buy a house, and I live in Denver where the housing market has been booming ever since. Nearly half of my net worth is due to my house, so I've been really fortunate. The problem is that another housing market collapse could eliminate all of it, and the situation in Denver this past decade is far from typical. Again, if you plan to stay in your place for years, the equity will absolutely be a benefit, but it doesn't work for everyone, and the benefit is pretty small if you're not in it for the long haul. |
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10-11-2019, 10:25 AM | #3242 | |
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FWIW if you have a loan on an amortization table (as opposed to straight line) you will not accumulate much equity early on. If you really are worried about the numbers make sure you read up on how amortization tables work. |
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10-11-2019, 10:34 AM | #3243 | |
NFL's #1 Ermines Fan
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VARSITY
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Active fan of the greatest team in NFL history. Last edited by Rain Man; 10-11-2019 at 08:19 PM.. |
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10-11-2019, 07:55 PM | #3244 | |
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10-12-2019, 07:07 AM | #3245 |
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Amnorix is partially right.
You can reinvest your ETF dividends easily if you go through Fidelity and I assume even Schwab or others. I use Fidelity. I own a number of ETFs. I have dividends and capital gains automatically reinvested in them. So if you want to go the ETF route don't let that dissuade you as Amnorix is wrong about that. |
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10-12-2019, 03:49 PM | #3246 | |
Andy Reid Supporter
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I’d also consider adding Target. They’ve ascended since 1996 and they pay a 2.36% dividend yield.
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Mike Greenberg@Espngreeny I can’t fathom what it must be like to be a fan of the #Chiefs. Adopt a Chief: Jared Wiley Last edited by RunKC; 10-12-2019 at 03:57 PM.. |
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10-12-2019, 05:52 PM | #3247 |
Fish are scared of me
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10-12-2019, 06:54 PM | #3248 |
It was not a fair catch
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Put everything in a trust.
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#investigatecarlcheffers |
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10-17-2019, 01:46 PM | #3249 |
Andy Reid Supporter
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So I use Fidelity and they sold me their target managed fund for my Roth IRA.
My question is, why would I do that and not just get an S&P low cost Index Fund, specifically the Fidelity version FXAIX? Here’s the comparison: Fidelity managed target fund-average life of return to date is 7.70%. It’s got an expense ratio of 0.75% Fidelity S&P FXAIX-average life of return to date is 13.22%. It’s expense ratio is 0.02% It also seems like a large portion of the target fund is made up of the S&P anyway. That seems like one hell of a huge difference. Any downside to this in your minds?
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Mike Greenberg@Espngreeny I can’t fathom what it must be like to be a fan of the #Chiefs. Adopt a Chief: Jared Wiley |
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10-17-2019, 02:00 PM | #3250 | |
Supporter
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The SP500 fund is just that. It's 100% stocks. Most people fall in love with the return of the SP500 and lose site of proper asset allocation. The downside is if you go 100% SP500 you are in nothing but stocks. So if the SPX goes down 20% you go down 20% because you have nothing else to cushion or otherwise stabilize your portfolio. I will give you a hint: 90% of people with proper asset allocation will rarely outperform the SP500 unless you are very young and pretty much in all stocks. |
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10-17-2019, 02:12 PM | #3251 | |
Kind of a mod
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Google around about a "three fund lazy portfolio" to give you the gist. |
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10-17-2019, 02:38 PM | #3252 | |
Andy Reid Supporter
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Quote:
Sure you’ve got some bonds and a few international assets, but A large portion of my target fund is in stocks. December is a great case study. It was the worst performance in a decade. The S&P went from 2,924 to 2,4447 (16.25% drop). Hell my target fund dropped more! It went down 17%! I guess that’s why I’m such a big fan of this possibility. We went though hell after 9/11, 2008 and as recently as last December and it always bounces back stronger every single time. In almost 100 years, the S&P has done nothing but go up. Meanwhile my target fund barely moves.
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Mike Greenberg@Espngreeny I can’t fathom what it must be like to be a fan of the #Chiefs. Adopt a Chief: Jared Wiley |
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10-17-2019, 02:41 PM | #3253 | |
Kind of a mod
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10-17-2019, 02:47 PM | #3254 | |
Andy Reid Supporter
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Quote:
What if you move your highest position to the S&P index fund and have a similar % as your target fund in the same (or similar) bonds and international assets? That’s the general idea. Not sure if it will work, but it’s an interesting thought.
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Mike Greenberg@Espngreeny I can’t fathom what it must be like to be a fan of the #Chiefs. Adopt a Chief: Jared Wiley |
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10-17-2019, 02:51 PM | #3255 | |
Kind of a mod
Join Date: Aug 2005
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Quote:
I've gotten super lazy and just do the Schwab target index fund for most stuff these days, but I used to do something like 70% S&P index, 15% International stock index, and 15% bond index (in my mid-30s). As you get older, it should shift a bit toward more bonds and fewer stocks. |
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