So I downloaded Qapital and so far I like what I'm seeing. It's pretty easy to use and straightforward enough.
I've set a round up rule and I think I'm gonna do that 52 week thing, too. On top of that I set a $1,000 investment goal for the start of next year at about $20 a week.
I need to do a better job of saving and not nickel and diming myself.
16.51% through 12/31 but I think TSP calculates the RoR weird.
Considering I lost $100k of value in March when all this craziness started, I'm happy with any positive return; let alone one above 15%
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ChaosHatHop, hop, hop, HA!Trick of the lightRegistered Userregular
edited January 2021
Hello financial literacy thread. So I have come into some money since my mother passed. I felt pretty confident managing my own finances and investments before this, so I feel like logically not a lot has changed except for the total amount that I have, but of course when numbers get big it can get a little scary. The thing I am most concerned about is that much of this money is from her retirement accounts, which are being put into beneficiary IRAs for me. I understand that I have to withdraw these within 10 years, and that any withdrawals I make from these accounts are considered taxable income. I don't wanna fuck it up and owe a ton of money, so the firms allow for income tax withholding on these withdrawals. If I want to know how much withholding to do, it should be as easy as figure out the tax bracket I want to be in then withdrawing $X such that X + my wife and I's total income is <= maximum income of desired tax bracket. If I wanted to get really fancy I could also try to take more out per year given I'll get a standard deduction and a child tax credit but it's probably not necessary.
And then they'll just send me the equivalent of a W-2 and I just put it into my taxes every year and it's just that easy? I plan on taking some out for a down payment on a house, and then just dumping the rest of it into index funds and mostly forgetting about it for 20 years or so and that seems pretty prudent?
I recommend you at least talk to a CPA about your situation. Since you're working with trying to fit into tax brackets, it's worth letting a CPA do the actual math for you and recommend how to set up the payments going forward. If you want to get fancy, you can move that money into something like a Trust where you determine who and how someone can withdraw from the account at a later date. It doesn't have to be just for your kids (if you have any), you can set up a trust for yourself or your wife.
The CPAs may have some other options for you as well (for example, did your mother die of a disease that you'd like to donate to its research?).
CPAs can recommend financial instruments for investing the money, but you may be better off getting info from a financial adviser of some level
+11
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ChanusHarbinger of the Spicy Rooster ApocalypseThe Flames of a Thousand Collapsed StarsRegistered Userregular
just to say income tax brackets only apply to the income in that bracket
e.g. if the bracket starts at 101 and you make 101, you only pay that bracket's rate on the 1 and the corresponding rate for each bracket on the way down
(totally made up numbers for simplicity's sake of course)
there are still reasons it would make sense you want to disperse at 100 instead of 101 to save that small percentage increase over time, but it's an extremely common misconception so i wanted to point it out
Allegedly a voice of reason.
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ChaosHatHop, hop, hop, HA!Trick of the lightRegistered Userregular
I recommend you at least talk to a CPA about your situation. Since you're working with trying to fit into tax brackets, it's worth letting a CPA do the actual math for you and recommend how to set up the payments going forward. If you want to get fancy, you can move that money into something like a Trust where you determine who and how someone can withdraw from the account at a later date. It doesn't have to be just for your kids (if you have any), you can set up a trust for yourself or your wife.
The CPAs may have some other options for you as well (for example, did your mother die of a disease that you'd like to donate to its research?).
CPAs can recommend financial instruments for investing the money, but you may be better off getting info from a financial adviser of some level
This is good advice, my sister and I were talking about what it would cost to set up some kind of modest scholarship at the college she worked at/graduated from. I have been planning on drafting up some post death documents like a trust and everything, but wasn't sure if a CPA or lawyer was the correct person to do that with.
My goal has been to try and avoid paying anyone I didn't need to, since I feel like a lot of the finance industry is based on appearing super complicated so that way you'll need the aid of people, but I don't want to be crazy about it, I just want to dial in the right amount of help for me and not get overcharged, like paying for some kind of assets under management fee/commission based stuff.
just to say income tax brackets only apply to the income in that bracket
e.g. if the bracket starts at 101 and you make 101, you only pay that bracket's rate on the 1 and the corresponding rate for each bracket on the way down
(totally made up numbers for simplicity's sake of course)
there are still reasons it would make sense you want to disperse at 100 instead of 101 to save that small percentage increase over time, but it's an extremely common misconception so i wanted to point it out
Yes, I was aware of that, I am assuming the money I withdraw will keep me in my tax bracket, or if it goes higher I'll just withhold the X amount over at the new, next highest bracket rate.
You'll need a lawyer to setup a trust. It'll probably be more complicated now that she's passed and you are acting on behalf of her estate rather than her doing it herself, but not drastically so.
Trust, lawyer is a must. Don't go for a "we do legal" quicky either. Real attorneys only, not paralegals. I've seen a lot of poorly drafted trust mill trusts, and they stink at explaining consequences.
If you get a trust, it's basically just for you and your significant other to plan how assets move if either of you pass suddenly. You need assets over 10mil before any of the really complicated trust stuff comes in.
For withholding, if you are not in need of the money you can just withhold 35% and usually that will cover you (state needs withholding also if there is income tax). Remember if you over withhold that just means a refund. If you want to avoid over withholding the best bet is visit a CPA and ask if they can help run a projection. Downside is this is busy season so you might have a hard time scheduling anything.
The above is not legal or tax advice, please refer to a professional, these are general principles that may not apply to your situation.
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ChaosHatHop, hop, hop, HA!Trick of the lightRegistered Userregular
Trust, lawyer is a must. Don't go for a "we do legal" quicky either. Real attorneys only, not paralegals. I've seen a lot of poorly drafted trust mill trusts, and they stink at explaining consequences.
If you get a trust, it's basically just for you and your significant other to plan how assets move if either of you pass suddenly. You need assets over 10mil before any of the really complicated trust stuff comes in.
For withholding, if you are not in need of the money you can just withhold 35% and usually that will cover you (state needs withholding also if there is income tax). Remember if you over withhold that just means a refund. If you want to avoid over withholding the best bet is visit a CPA and ask if they can help run a projection. Downside is this is busy season so you might have a hard time scheduling anything.
The above is not legal or tax advice, please refer to a professional, these are general principles that may not apply to your situation.
Thanks for this. I feel pretty confident but with this amount of money it's probably just worth having someone dot the i's and cross the t's. Something with a flat fee like a CPA is fine, I just wasn't sure if this needed like a financial adviser or something.
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firewaterwordSatchitanandaPais Vasco to San FranciscoRegistered Userregular
i do wish i took, maybe 5% of my portfolio and did some risky things in 2020 because that was the year to do some crazy things, but i just stuck to my lazy conservative boring investment strategies
that fomo
i do wish i took, maybe 5% of my portfolio and did some risky things in 2020 because that was the year to do some crazy things, but i just stuck to my lazy conservative boring investment strategies
that fomo
are you, dear fww
The fomo is how they get you. Generally it's hard to overperform the market year to year, but very easy to underperform, and not underperforming is usually better.
Last year I did both. I distributed it as all matched contributions went into the normal 401k, and everything above that I dumped into the Roth.
Same here.
I don't know if it's optimal but it's what I did so ??????????
Most financial advice is to follow that pattern. Do the maximum matching on your 401k, max out your Roth, and then if you still somehow have money afterwards you can start upping your 401k contribution.
Your Roth assets are fairly accessible (you can withdraw the principle at any time at no penalty if you need it) so it can be more useful to have a ton of money in that instead of your 401k.
And yes I know it’s hard to out perform the market
I’ve been conservatively investing for 10 years mostly in index funds with a few individual stock picks
But boy this bull market is silly
I don’t regret putting a tiny bit of money into some meme stocks for fun, money I’d be okay if it went to 0
Wish I’d done a bit more of it tbh, just for fun and entertainment, I stayed super conservative and yeah the fomo is real and not a good thing to chase
But I have enough money saved that I can have fun money, set aside for entertainment purposes
Considering how much I spend on clothes I don’t need...
But if you just followed the memery of the last year you’d have made a lot
Shazkar Shadowstorm on
poo
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ChaosHatHop, hop, hop, HA!Trick of the lightRegistered Userregular
I mean the fomo-est I got was I should have dumped more money into airline stock because my thought at the time was "they'll never let these go bankrupt" and that idea is/was still absolutely correct.
As someone who has complained about the absurd cost of living in a major city, the flip side of that has been seeing articles indicating that possibly 50,000+ people have left Toronto in the last year. Granted, it's not a huge number out of a city of millions, but that (and other factors, like room mates or family members sharing an apartment or house) have apparently seen the vacancy rate here go from around 1% to around 5.7% in a year.
This has begun to have an effect, seeing rents decrease to a degree, units going onto the market, and perhaps even some downward pressure on those prices (though still doubling over the course of a decade, no way that was unsustainable...)
It's a hair sobering to find ones self in possibly the best financial shape they've been in, ever, to run the numbers past my bank and a trusted second opinion, and find out that my range is still maybe 450 square feet in an 'okay' section of town (but not exactly super conveniently located either). Sort of a mixed feeling of 'wow, to think someone might entrust me with like a third of a million dollars' while also realizing just how little that (plus a 10-20% downpayment) would actually get.
Kind of a perverse incentive to realize that markets falling mean people are potentially enduring hardships, but I don't think it's unreasonable to be hoping for a non-shoebox condo to eventually be within reach.
Just thought I'd share the vague particulars. Maybe between covid related financial hardships and a broadened Work From Home view on things, more opportunities will open up. I don't wish ill on anyone needlessly, but if there are pressures increasing stock (more buildings coming online in the months to come) and lesser demand, maybe I'll land on something in the next year or two that I could feasibly have paid off by the time I'm retired. Or at least a starter home to begin building some equity in towards something a decade out, depending on where life takes me.
Not really apropos of anything in particular, but as someone who participated in the topic and actually made some inquiries to see where things actually were, I thought I'd mention it.
First they came for the Muslims, and we said NOT TODAY, MOTHERFUCKER!
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MonwynApathy's a tragedy, and boredom is a crime.A little bit of everything, all of the time.Registered Userregular
I mean the fomo-est I got was I should have dumped more money into airline stock because my thought at the time was "they'll never let these go bankrupt" and that idea is/was still absolutely correct.
I mean the fomo-est I got was I should have dumped more money into airline stock because my thought at the time was "they'll never let these go bankrupt" and that idea is/was still absolutely correct.
Like this was literally my exact thought process basically. I also put money into the cruise lines which is way riskier because we as a society don't need them to function. But they obviously were popular, could be again, and it's a capital intensive business so the easiest option for people would always be to buy them out than to start from scratch and let them fail. So they'll probably be back in some form.
But yeah go go plane stock.
To people who may not understand the risk behind just dumping all of my money into airline stock even though it's rebounding is as close to a sure thing as sure things get, the RATE of how quickly it returns is anything but guaranteed. I assume airlines are going to do crazy go nuts business as people dump their stimulus money into long delayed vacations to Disney World and shit, but like, who knows when that happens? There's no guarantee on vaccination rates, covid mutations, blah blah. And even if the airline stock does do well, there's no guarantee it outperforms the rest of the market. The vast majority of my holdings is in index funds, and I have like 10% as play money to make some fun bets with.
I just don't want anyone to see that stocks are still not at their 52 week high and dump their life savings into it on account of it.
This by far the most batshit wild ass market I have ever seen in the dozen or so years I've cared about this stuff. Unbelievable.
Things sound very dot-com-bubble right now, but I've thought that in the past and the market kept rising so I'm the wrong person to guess timing on this one.
+4
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thatassemblyguyJanitor of Technical Debt.Registered Userregular
I have a good amount of cash built up in my HSA account earning me basically nothing and I figured I'd start investing the excess of it.
I had them for a while. Nothing really stand out to me other than the tie-in with TD Ameritrade so you can have a fully self directed investment experience.
I didn’t need to withdraw anything for health care when I did have them, so unclear on how they handle that side of the house.
+1
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HedgethornAssociate Professor of Historical Hobby HorsesIn the Lions' DenRegistered Userregular
Definitely fighting the FOMO right now, because it's definitely feeling like it's in the portion of "the public is aware of it, get out get out get out".
So, real question: Should I go over to that subreddit and try to understand how this shit works just in case this happens again with another pick of theirs?
Because I'm honestly really jealous of the people who profited off of this and want in.
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OrcaAlso known as EspressosaurusWrexRegistered Userregular
So, real question: Should I go over to that subreddit and try to understand how this shit works just in case this happens again with another pick of theirs?
Because I'm honestly really jealous of the people who profited off of this and want in.
So you're clearly in the greed phase, but when we're talking this shit it's gambling. Do you want to get in on gambling? If so, only do it with money you literally don't care if you burn it.
So, real question: Should I go over to that subreddit and try to understand how this shit works just in case this happens again with another pick of theirs?
Because I'm honestly really jealous of the people who profited off of this and want in.
Probably not, unless you want to pick it up as a hobby. This shit never works like this. I enjoy the whole thing because it's a different way to understand how the cogs of the world turn, I know I'm not going to get rich off it.
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The Monster Baru Cormorant - Seth Dickinson
Steam: Korvalain
~ Buckaroo Banzai
I've set a round up rule and I think I'm gonna do that 52 week thing, too. On top of that I set a $1,000 investment goal for the start of next year at about $20 a week.
I need to do a better job of saving and not nickel and diming myself.
Considering I lost $100k of value in March when all this craziness started, I'm happy with any positive return; let alone one above 15%
And then they'll just send me the equivalent of a W-2 and I just put it into my taxes every year and it's just that easy? I plan on taking some out for a down payment on a house, and then just dumping the rest of it into index funds and mostly forgetting about it for 20 years or so and that seems pretty prudent?
The CPAs may have some other options for you as well (for example, did your mother die of a disease that you'd like to donate to its research?).
CPAs can recommend financial instruments for investing the money, but you may be better off getting info from a financial adviser of some level
e.g. if the bracket starts at 101 and you make 101, you only pay that bracket's rate on the 1 and the corresponding rate for each bracket on the way down
like
101 - 5%
80-100 - 4.5%
50-79 - 4%
16-49 - 3%
0-15 - 0%
(totally made up numbers for simplicity's sake of course)
there are still reasons it would make sense you want to disperse at 100 instead of 101 to save that small percentage increase over time, but it's an extremely common misconception so i wanted to point it out
This is good advice, my sister and I were talking about what it would cost to set up some kind of modest scholarship at the college she worked at/graduated from. I have been planning on drafting up some post death documents like a trust and everything, but wasn't sure if a CPA or lawyer was the correct person to do that with.
My goal has been to try and avoid paying anyone I didn't need to, since I feel like a lot of the finance industry is based on appearing super complicated so that way you'll need the aid of people, but I don't want to be crazy about it, I just want to dial in the right amount of help for me and not get overcharged, like paying for some kind of assets under management fee/commission based stuff.
Yes, I was aware of that, I am assuming the money I withdraw will keep me in my tax bracket, or if it goes higher I'll just withhold the X amount over at the new, next highest bracket rate.
Trust, lawyer is a must. Don't go for a "we do legal" quicky either. Real attorneys only, not paralegals. I've seen a lot of poorly drafted trust mill trusts, and they stink at explaining consequences.
If you get a trust, it's basically just for you and your significant other to plan how assets move if either of you pass suddenly. You need assets over 10mil before any of the really complicated trust stuff comes in.
For withholding, if you are not in need of the money you can just withhold 35% and usually that will cover you (state needs withholding also if there is income tax). Remember if you over withhold that just means a refund. If you want to avoid over withholding the best bet is visit a CPA and ask if they can help run a projection. Downside is this is busy season so you might have a hard time scheduling anything.
The above is not legal or tax advice, please refer to a professional, these are general principles that may not apply to your situation.
Thanks for this. I feel pretty confident but with this amount of money it's probably just worth having someone dot the i's and cross the t's. Something with a flat fee like a CPA is fine, I just wasn't sure if this needed like a financial adviser or something.
i was just staring at that
it is ridiculous
i do wish i took, maybe 5% of my portfolio and did some risky things in 2020 because that was the year to do some crazy things, but i just stuck to my lazy conservative boring investment strategies
that fomo
are you, dear fww
now i need to figure out mega backdoor roths
do any of you do that? do any of you put money into roth 401k instead of a pretax 401k?
Same here.
The fomo is how they get you. Generally it's hard to overperform the market year to year, but very easy to underperform, and not underperforming is usually better.
Except for Telsa, but that seems to be an exception to frankly everything.
I don't know if it's optimal but it's what I did so ??????????
Most financial advice is to follow that pattern. Do the maximum matching on your 401k, max out your Roth, and then if you still somehow have money afterwards you can start upping your 401k contribution.
Your Roth assets are fairly accessible (you can withdraw the principle at any time at no penalty if you need it) so it can be more useful to have a ton of money in that instead of your 401k.
And yes I know it’s hard to out perform the market
I’ve been conservatively investing for 10 years mostly in index funds with a few individual stock picks
But boy this bull market is silly
I don’t regret putting a tiny bit of money into some meme stocks for fun, money I’d be okay if it went to 0
Wish I’d done a bit more of it tbh, just for fun and entertainment, I stayed super conservative and yeah the fomo is real and not a good thing to chase
But I have enough money saved that I can have fun money, set aside for entertainment purposes
Considering how much I spend on clothes I don’t need...
Most of my investing is automated at this point
There’s no fundamentals behind it
Memery
What a silly market
But if you just followed the memery of the last year you’d have made a lot
But you know, risk tolerances.
This has begun to have an effect, seeing rents decrease to a degree, units going onto the market, and perhaps even some downward pressure on those prices (though still doubling over the course of a decade, no way that was unsustainable...)
It's a hair sobering to find ones self in possibly the best financial shape they've been in, ever, to run the numbers past my bank and a trusted second opinion, and find out that my range is still maybe 450 square feet in an 'okay' section of town (but not exactly super conveniently located either). Sort of a mixed feeling of 'wow, to think someone might entrust me with like a third of a million dollars' while also realizing just how little that (plus a 10-20% downpayment) would actually get.
Kind of a perverse incentive to realize that markets falling mean people are potentially enduring hardships, but I don't think it's unreasonable to be hoping for a non-shoebox condo to eventually be within reach.
Just thought I'd share the vague particulars. Maybe between covid related financial hardships and a broadened Work From Home view on things, more opportunities will open up. I don't wish ill on anyone needlessly, but if there are pressures increasing stock (more buildings coming online in the months to come) and lesser demand, maybe I'll land on something in the next year or two that I could feasibly have paid off by the time I'm retired. Or at least a starter home to begin building some equity in towards something a decade out, depending on where life takes me.
Not really apropos of anything in particular, but as someone who participated in the topic and actually made some inquiries to see where things actually were, I thought I'd mention it.
Like this was literally my exact thought process basically. I also put money into the cruise lines which is way riskier because we as a society don't need them to function. But they obviously were popular, could be again, and it's a capital intensive business so the easiest option for people would always be to buy them out than to start from scratch and let them fail. So they'll probably be back in some form.
But yeah go go plane stock.
To people who may not understand the risk behind just dumping all of my money into airline stock even though it's rebounding is as close to a sure thing as sure things get, the RATE of how quickly it returns is anything but guaranteed. I assume airlines are going to do crazy go nuts business as people dump their stimulus money into long delayed vacations to Disney World and shit, but like, who knows when that happens? There's no guarantee on vaccination rates, covid mutations, blah blah. And even if the airline stock does do well, there's no guarantee it outperforms the rest of the market. The vast majority of my holdings is in index funds, and I have like 10% as play money to make some fun bets with.
I just don't want anyone to see that stocks are still not at their 52 week high and dump their life savings into it on account of it.
I do a megabackdoor roth because it’s available at work, but I do not split my standard 19.5k 401k contributions between Roth and traditional.
I think that’s what I will try doing
I have a good amount of cash built up in my HSA account earning me basically nothing and I figured I'd start investing the excess of it.
Things sound very dot-com-bubble right now, but I've thought that in the past and the market kept rising so I'm the wrong person to guess timing on this one.
I had them for a while. Nothing really stand out to me other than the tie-in with TD Ameritrade so you can have a fully self directed investment experience.
I didn’t need to withdraw anything for health care when I did have them, so unclear on how they handle that side of the house.
Gamestop, Tesla, and AMC stock are the new tulip bulbs.
NOK, BB, BBBY, NAKD...
Feels like David versus Goliath except there are 3 million or more Davids...
Because I'm honestly really jealous of the people who profited off of this and want in.
So you're clearly in the greed phase, but when we're talking this shit it's gambling. Do you want to get in on gambling? If so, only do it with money you literally don't care if you burn it.
Probably not, unless you want to pick it up as a hobby. This shit never works like this. I enjoy the whole thing because it's a different way to understand how the cogs of the world turn, I know I'm not going to get rich off it.