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Old 08-27-2016, 06:44 PM   #16
sd3035
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Default Re: Anyone here invest in stocks / bonds?

Real estate is a lot more fun
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Old 08-27-2016, 06:52 PM   #17
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Default Re: Anyone here invest in stocks / bonds?

Quote:
Originally Posted by sd3035
Real estate is a lot more fun
Requires significantly more funds though
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Old 08-27-2016, 06:55 PM   #18
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Default Re: Anyone here invest in stocks / bonds?

Quote:
Originally Posted by KyrieTheFuture
Requires significantly more funds though


You can start selling and even renting places, then move on to investing
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Old 08-27-2016, 06:57 PM   #19
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Default Re: Anyone here invest in stocks / bonds?

Quote:
Originally Posted by sd3035
You can start selling and even renting places, then move on to investing
True, but most people these days can barely afford rent, let alone own a place to rent to someone else.
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Old 08-27-2016, 06:59 PM   #20
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Default Re: Anyone here invest in stocks / bonds?

Quote:
Originally Posted by KyrieTheFuture
When buying something like an admiral share, would you buy a single share or wait until you had like 100k to buy several?

Edit: Everything I'm reading has made it clear I don't understand anything about these shares

The price per share isn't important. It's about how much actual money you have in that company.

Let's say you buy $10000 worth of Tesla stock. If Tesla does exceptionally well, your money will up a lot. If they pull an Enron, your $10000 will turn into $1. There is high risk/reward by putting $10000 into one company. Which is why, for the average investor, it is much much much more important to focus on FEES and put money into index funds.

The admiral shares oarabbus mentioned are index funds.

Other major Index fund examples include DOW, NASDAQ, S&P 500.

When you purchase an index fund, you are buying a small portion of multiple companies. For example, if you buy $10000 worth of S&P 500, then you'll own a small portion of 500 different companies such as Amazon, Blizzard, All State insurance, eBay, HP, Home Depot, Nike, Wal-Mart, Whole Foods, ... the benefit of this is that if 1 of those companies goes under, then it doesn't matter much to you because you only owned a small portion of it. Overall, the companies will profit and so will you over time with less risk than buying individual stocks.

https://personal.vanguard.com/us/fun...NT&FundId=0509

Check out that index fund. Scroll to the bottom and you'll see that 23.80% of the money you put into that fund will buy technology stocks (and based on the list on the right you'll know that a larger portion of those tech stocks will be Apple stocks)
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Old 08-27-2016, 07:08 PM   #21
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Default Re: Anyone here invest in stocks / bonds?

Quote:
Originally Posted by Cleverness
The price per share isn't important. It's about how much actual money you have in that company.

Let's say you buy $10000 worth of Tesla stock. If Tesla does exceptionally well, your money will up a lot. If they pull an Enron, your $10000 will turn into $1. There is high risk/reward by putting $10000 into one company. Which is why, for the average investor, it is much much much more important to focus on FEES and put money into index funds.

The admiral shares oarabbus mentioned are index funds.

Other major Index fund examples include DOW, NASDAQ, S&P 500.

When you purchase an index fund, you are buying a small portion of multiple companies. For example, if you buy $10000 worth of S&P 500, then you'll own a small portion of 500 different companies such as Amazon, Blizzard, All State insurance, eBay, HP, Home Depot, Nike, Wal-Mart, Whole Foods, ... the benefit of this is that if 1 of those companies goes under, then it doesn't matter much to you because you only owned a small portion of it. Overall, the companies will profit and so will you over time with less risk than buying individual stocks.

https://personal.vanguard.com/us/fun...NT&FundId=0509

Check out that index fund. Scroll to the bottom and you'll see that 23.80% of the money you put into that fund will buy technology stocks (and based on the list on the right you'll know that a larger portion of those tech stocks will be Apple stocks)
Word I was trying to make Admiral shares be like a class of share within the fund. Like how Class A and B shares are priced differently for individual corporations. Thought it was 10k a share not a minimum for eligibility. Appreciate you dog.
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Old 08-27-2016, 07:09 PM   #22
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Default Re: Anyone here invest in stocks / bonds?

Quote:
Originally Posted by KyrieTheFuture
True, but most people these days can barely afford rent, let alone own a place to rent to someone else.


No, I mean start as an independent agent and work your way up to owning
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Old 08-27-2016, 07:15 PM   #23
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Default Re: Anyone here invest in stocks / bonds?

Quote:
Originally Posted by sd3035
Real estate is a lot more fun

Assuming you are referring to flipping houses, the problem with Real Estate is the ~10% transfer fees when selling. Unless you can find a steal, know how to remodel it efficiently, and then sell it for 110%+ of what you put into it (plus the time it took you to do all that), then it's probably not a good deal.

Buying a house generally requires a huge down payment. That down payment could have been invested into a typical Vanguard index fund and made you more money in the long run.

It takes time and stress to manage a rental property (find renters, maintenance, paperwork, laws). You can probably rent it out for a bit more than the actual mortgage, but overall all you can do is hope to break even when taking everything into account. And there are a lot of laws when trying to kick someone out for not paying rent.. Why deal with all that when you can put money into an index fund and just relax
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Old 08-27-2016, 07:18 PM   #24
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Default Re: Anyone here invest in stocks / bonds?

Quote:
Originally Posted by Cleverness
Assuming you are referring to flipping houses, the problem with Real Estate is the ~10% transfer fees when selling. Unless you can find a steal, know how to remodel it efficiently, and then sell it for 110%+ of what you put into it (plus the time it took you to do all that), then it's probably not a good deal.

Buying a house generally requires a huge down payment. That down payment could have been invested into a typical Vanguard index fund and made you more money in the long run.

It takes time and stress to manage a rental property (find renters, maintenance, paperwork, laws). You can probably rent it out for a bit more than the actual mortgage, but overall all you can do is hope to break even when taking everything into account. And there are a lot of laws when trying to kick someone out for not paying rent.. Why deal with all that when you can put money into an index fund and just relax

Sounds a lot more complicated in the USA, it's much easier in many other countries
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Old 08-27-2016, 07:42 PM   #25
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Default Re: Anyone here invest in stocks / bonds?

More basic investing knowledge:

When you invest money, you are typically investing it within an account

Roth IRA, traditional IRA, 401k, 529, Brokerage, are all just accounts. Kinda like your Checking Account or Savings account at your bank. They all have their own restrictions and benefits.

Checking Account - the money inside can be taken out anytime you wish, as much as you wish, without restriction. It's highly "liquid." The downside is your bank probably doesn't pay you interest on it and you probably need a minimum to avoid a fee. Though, some banks have checking accounts that pay interest, such as CapitalOne360

Savings Account - some restrictions on how much you can take out during a specific period, but the upside is that it pays you a tiny bit of interest.

Roth IRA account - you can put $5500/yr into this account (6.5k if you're 50+ years old). But putting money into it and doing nothing else well not make you any money. You'll need to put money into that account and then purchase funds/stocks with that money so that the money grows.
Pros: any gains that you take out will be TAX FREE.
Cons: you can only take out gains when you turn 59.5yrs (it's a retirement account), otherwise you'll pay a penalty. NOTE: You can always take out contributions ($ you put in) without a penalty. For example, if you put in $5k per year for 3 years, and now your account has $19,000 in it, you can take out up to $15k from the account penalty/tax free.

401k account - another retirement account, but this one is set up by your employer who partnered up with an investment firm, such as Fidelity or Vanguard. Most employers will help contribute money into the account as long as you are contributing ("matching"). Your contribution limit is $18,000/yr (the contributions from your employer don't count toward it)
Pros: the matching is like "extra money" that your employer will put in to help you, which is nice. also, all money that you put in is TAX DEDUCTIBLE. For example, if you made $100,000 in 2015 and put in $18,000 into your 401k, then you will only be taxed as if you made $88,000 in 2015. This also means your money has "tax-free growth"
Cons: you can only take out the money after you turn 59.5 (or pay huge penalty) and you'll have to pay taxes on it when you take it out. Also, you'll be limited on which funds you can buy (generally you want to pick lowest cost index/lifecycle funds)

Accounts like a "Brokerage Account" allows you to buy individual stocks, but you will have to pay capital gains taxes when you withdrawal/sell your stocks


Edit: forgot to mention that you can only contribute to your Roth IRA up to the amount of taxable income for that year

Last edited by Cleverness : 08-27-2016 at 08:01 PM.
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Old 08-27-2016, 07:49 PM   #26
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Default Re: Anyone here invest in stocks / bonds?

Quote:
Originally Posted by Cleverness
More basic investing knowledge:

When you invest money, you are typically investing it within an account

Roth IRA, traditional IRA, 401k, 529, Brokerage, are all just accounts. Kinda like your Checking Account or Savings account at your bank. They all have their own restrictions and benefits.

Checking Account - the money inside can be taken out anytime you wish, as much as you wish, without restriction. It's highly "liquid." The downside is your bank probably doesn't pay you interest on it and you probably need a minimum to avoid a fee. Though, some banks have checking accounts that pay interest, such as CapitalOne360

Savings Account - some restrictions on how much you can take out during a specific period, but the upside is that it pays you a tiny bit of interest.

Roth IRA account - you can put $5500/yr into this account (6.5k if you're 50+ years old). But putting money into it and doing nothing else well not make you any money. You'll need to put money into that account and then purchase funds/stocks with that money so that the money grows.
Pros: any gains that you take out will be TAX FREE.
Cons: you can only take out gains when you turn 59.5yrs (it's a retirement account), otherwise you'll pay a penalty. NOTE: You can always take out contributions ($ you put in) without a penalty. For example, if you put in $5k per year for 3 years, and now your account has $19,000 in it, you can take out up to $15k from the account penalty/tax free.

401k account - another retirement account, but this one is set up by your employer who partnered up with an investment firm, such as Fidelity or Vanguard. Most employers will help contribute money into the account as long as you are contributing ("matching"). Your contribution limit is $18,000/yr (the contributions from your employer don't count toward it)
Pros: the matching is like "extra money" that your employer will put in to help you, which is nice. also, all money that you put in is TAX DEDUCTIBLE. For example, if you made $100,000 in 2015 and put in $18,000 into your 401k, then you will only be taxed as if you made $88,000 in 2015. This also means your money has "tax-free growth"
Cons: you can only take out the money after you turn 59.5 (or pay huge penalty) and you'll have to pay taxes on it when you take it out. Also, you'll be limited on which funds you can buy (generally you want to pick lowest cost index/lifecycle funds)

Accounts like a "Brokerage Account" allows you to buy individual stocks, but you will have to pay capital gains taxes when you withdrawal/sell your stocks

If I gave you 10k I have

What would you do with it exactly
How long will it take you to get a return
How much of a return
How much in brokerage fee will go out the window
How much do you even save come tax time
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Old 08-27-2016, 07:52 PM   #27
KyrieTheFuture
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Default Re: Anyone here invest in stocks / bonds?

Quote:
Originally Posted by Cleverness
More basic investing knowledge:

When you invest money, you are typically investing it within an account

Roth IRA, traditional IRA, 401k, 529, Brokerage, are all just accounts. Kinda like your Checking Account or Savings account at your bank. They all have their own restrictions and benefits.

Checking Account - the money inside can be taken out anytime you wish, as much as you wish, without restriction. It's highly "liquid." The downside is your bank probably doesn't pay you interest on it and you probably need a minimum to avoid a fee. Though, some banks have checking accounts that pay interest, such as CapitalOne360

Savings Account - some restrictions on how much you can take out during a specific period, but the upside is that it pays you a tiny bit of interest.

Roth IRA account - you can put $5500/yr into this account (6.5k if you're 50+ years old). But putting money into it and doing nothing else well not make you any money. You'll need to put money into that account and then purchase funds/stocks with that money so that the money grows.
Pros: any gains that you take out will be TAX FREE.
Cons: you can only take out gains when you turn 59.5yrs (it's a retirement account), otherwise you'll pay a penalty. NOTE: You can always take out contributions ($ you put in) without a penalty. For example, if you put in $5k per year for 3 years, and now your account has $19,000 in it, you can take out up to $15k from the account penalty/tax free.

401k account - another retirement account, but this one is set up by your employer who partnered up with an investment firm, such as Fidelity or Vanguard. Most employers will help contribute money into the account as long as you are contributing ("matching"). Your contribution limit is $18,000/yr (the contributions from your employer don't count toward it)
Pros: the matching is like "extra money" that your employer will put in to help you, which is nice. also, all money that you put in is TAX DEDUCTIBLE. For example, if you made $100,000 in 2015 and put in $18,000 into your 401k, then you will only be taxed as if you made $88,000 in 2015. This also means your money has "tax-free growth"
Cons: you can only take out the money after you turn 59.5 (or pay huge penalty) and you'll have to pay taxes on it when you take it out. Also, you'll be limited on which funds you can buy (generally you want to pick lowest cost index/lifecycle funds)

Accounts like a "Brokerage Account" allows you to buy individual stocks, but you will have to pay capital gains taxes when you withdrawal/sell your stocks
Cleverness with the knowledge drop. Pretend I repped you.
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Old 08-27-2016, 07:59 PM   #28
Cleverness
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Default Re: Anyone here invest in stocks / bonds?

Quote:
Originally Posted by Draz
If I gave you 10k I have

What would you do with it exactly
How long will it take you to get a return
How much of a return
How much in brokerage fee will go out the window
How much do you even save come tax time

Have you made $5.5k in taxable income this year and will you again next year?
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Old 08-27-2016, 08:54 PM   #29
Cleverness
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Default Re: Anyone here invest in stocks / bonds?

Quote:
Originally Posted by Draz
If I gave you 10k I have

1. What would you do with it exactly
2. How long will it take you to get a return
3. How much of a return
4. How much in brokerage fee will go out the window
5. How much do you even save come tax time

Assuming you
-have enough to not need that $10k anytime soon
-make $5.5k/yr+
-are interested in long-term investing...


1. I would open a Roth IRA account with Vanguard and put $5.5k into it in $1k increments over the next month or two (whenever the market dips). Then put $5.5k in 1k increments throughout Jan/Feb next year.

Damn shame the market jumped a few days after the Brexit scare, otherwise I would have put in the whole 5.5k at once. But that doesn't matter all that much because we are long-term investors.

100% of the money will buy VTTSX https://personal.vanguard.com/us/fun...NT&FundId=1691

This fund is incredibly diversified and will also automatically rebalance for you over time so sit back, relax, and let the money grow without having to worry


2-3. You'll get about 8% annually over the long run, but it will be a bit volatile because most of that fund is composed of stocks. In 40 years, that $10k will be about $200,000. At 8% annually, it will actually be about $243,000, but when you get closer to retirement you will want to allocate more of your assets into bonds because those are less volatile than stocks.

A good compound interest calculator to play with: https://www.dinkytown.net/java/FutureValue.html


4. 0.16% per year will go to fees which comes out to about $9 for the first year. That's it. No purchase fee, no redemption fee, no 12b-1 fee, no frontloaded or backloaded fees, no annual fee!
Fees are a huge part of investing that often get overlooked. Many investors are losing out with fees. Here's a chart showing you how much you'll pay in fees with a 0.16% Vanguard fund vs a typical 1% fee you'll find elsewhere:



Now imagine maxing out your 401k every year as well



People are losing out on $1,000,000+ simply because of an expense ratio they overlooked.. it's absolutely crazy!


5. You'll save nothing on taxes now because we are investing for long-term growth. If you're interested in saving on taxes, then we'll look more into your 401k options, including vesting. But think of it this way: by investing in your Roth IRA, you are saving tons of money in taxes later on. If you can afford to invest, then why save $1 now when you can save $20 later?
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Old 08-27-2016, 09:39 PM   #30
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Default Re: Anyone here invest in stocks / bonds?

Quote:
Originally Posted by Cleverness
Assuming you
-have enough to not need that $10k anytime soon
-make $5.5k/yr+
-are interested in long-term investing...


1. I would open a Roth IRA account with Vanguard and put $5.5k into it in $1k increments over the next month or two (whenever the market dips). Then put $5.5k in 1k increments throughout Jan/Feb next year.

Damn shame the market jumped a few days after the Brexit scare, otherwise I would have put in the whole 5.5k at once. But that doesn't matter all that much because we are long-term investors.

100% of the money will buy VTTSX https://personal.vanguard.com/us/fun...NT&FundId=1691

This fund is incredibly diversified and will also automatically rebalance for you over time so sit back, relax, and let the money grow without having to worry


2-3. You'll get about 8% annually over the long run, but it will be a bit volatile because most of that fund is composed of stocks. In 40 years, that $10k will be about $200,000. At 8% annually, it will actually be about $243,000, but when you get closer to retirement you will want to allocate more of your assets into bonds because those are less volatile than stocks.

A good compound interest calculator to play with: https://www.dinkytown.net/java/FutureValue.html


4. 0.16% per year will go to fees which comes out to about $9 for the first year. That's it. No purchase fee, no redemption fee, no 12b-1 fee, no frontloaded or backloaded fees, no annual fee!
Fees are a huge part of investing that often get overlooked. Many investors are losing out with fees. Here's a chart showing you how much you'll pay in fees with a 0.16% Vanguard fund vs a typical 1% fee you'll find elsewhere:



Now imagine maxing out your 401k every year as well



People are losing out on $1,000,000+ simply because of an expense ratio they overlooked.. it's absolutely crazy!


5. You'll save nothing on taxes now because we are investing for long-term growth. If you're interested in saving on taxes, then we'll look more into your 401k options, including vesting. But think of it this way: by investing in your Roth IRA, you are saving tons of money in taxes later on. If you can afford to invest, then why save $1 now when you can save $20 later?

I'll read more in dept on what you wrote later, but this seems well thought out. It's more of a financial planning made for future return.

What software did you use or website to generate that kind of response?
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