Let's talk about money - The Finance Thread

[akumatrunigga]

OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO
My favorite topic!!!

Anyway here is one suggestion is that whatever you make take about 1 hour worth of work for each day and add it into your savings weekly. For example, if you make about $34,000 a year that is the equivalent about $16.35/hr. So you should be saving about $81.73/wk. With interest bearing accounts such as INGDirect (i have) and others, that money will increase in a heartbeat.

right now i got all my monies in savings
im thinking about buying a condo soon so thats why. if i dont, i will make my portfolio something like this:

Im trying to do the same thing myself as fast as I could. It may come to the point of saying no in taking ladies out cuz it can hurt a brotha especially since the Real Estate money isnt coming in right away. I just started literally last month and it is going to be a while before the money come through. So, I just may wind up working for an organization that has all the great perks while doing real estate part-time. (my broker is a cool dude and understands) Im having a crap load of interviews and it just a matter of choosing.

In regards to the debt thing, I agree a whole lot. If you have credit card debt, just place an emphasis and pay them off as quickly as possible. If it comes to the point of saving everything after you take of important expenses DO IT! I would rather have all of my debt taken care of in less than a year than do that bullshit debt consoldation thing that alot of companies provide. In actuality if you settle your debts on your own your credit score will increase faster. I still remember my score was at about 550 and after taken care of my debts in less than a year that shit jump to 630. Now 630 is alright status and companies will risk you cuz they know that you are taking care of you shit.

If you are single put all that pimp money in paying off your debt. You’ll thank yourself in the long run.

[Digitalbooty]

Diversify yo bonds, nigga!

[terracotta]

you know i’m not even in the US and i’m using ING Direct. i guess that’s good news…

nobody beats the market in the long run.

except other markets…

[fishjie]

you know i’m not even in the US and i’m using ING Direct. i guess that’s good news…

except other markets…

?

are you talking about foreign markets? if so thats why you should invest in a global index fund. because nobody beats the market in the long term. not even warren buffet. so the best strategy is to index the whole thing.

[Night]

I personally only shelf like, $1,000 in the checking account to take care of monthly bills, ATM withdrawls (rare), etc. Each pay period, I balance the checking to $1,000 and putting the excess into other accounts.

I keep about say, $10,000+ in a high-yield account at the bank, and I keep like a few hundred bucks tucked away in a cupboard somewhere just in case. That’s the “emergency” stuff.

I contribute a good deal into the 401k, even more than double the company matching since I want to be at or near the $15,000 limit allowed per year, and then diversify the funds in there, a large cap, small cap, international, etc. That money won’t be seen in a long time until way into retirement, but that doesn’t matter since I never spend money anyway. The company matching is free money, and I’m more than happy if the returns on those investments are beating current CD and MMA rates.

I also contribute the maximum allowed to the company’s ESP plan since it’s guaranteed by the company that each stock purchase will be AT LEAST a 15% discount, so that’s essentially a gain right there.

The rest of my money is committed to investments. Each pay period, the excess money from the checking account is put into the account where it can be accumulated as cash and used for investing, where more of the activity takes place.

Like the quoted earlier in the thread, I diversify my mutual funds, not putting everyone into just one. I’m a little heavier towards International funds (I can even give specifics if anyone is interested) these days, and I do a little research in looking at the expense ratios, their morningstar ratings, what other people say, and of course, their historical performance. As long as my funds are returning more than CD and MMA rates, I’m more than happy.

I also keep a decent amount of cash around to see if I have an opportunity to get into a stock that I feel is at a good price, get a gain I’m comfortable with and get out. Sure there’s the tax, but a gain’s a gain, and it at least increases my cash position to put into another investment. I did this a few times with Intel this year, where it was hovering at $19~20… got in, when it gained a point or two, get out. Stocks are a lot more riskier though, so a bit more homework is needed.

At a young age, you can afford to take risks, and if you’ve got money to throw around that you plan on using to get some returns, just having all the money lumped into a high interest CD, MMA or savings account isn’t exactly maximzing things for you in an upward market, so it’s good to do a little homework and see what you can put your money into and watch it grow.

[System_1]

I have my job allocate 20% of my gross pay to my retirement account (which is nothing but an S&P500 Index Fund). At the moment I don’t have time to try to ‘beat’ the market so I use an index fund (which basically means if the S&P 500 goes up 12% this year so will my retirement account.

Unfortunately, though I’m always broke or well not able to buy cool things (like a XBOX 360 or HDTV).

Also if your job offers retirement matching funds GO FOR IT!!! Can’t stress this enough, my job matches upto 5% of my gross pay so basically my savings rate is about 25%.

And if you find yourself in a tough pinch you can always borrow against it (and the interest you pay you’re paying yourself).

I would recommend saving into these retirement accounts because not only do most jobs match your contributions (in some scheme) but you also reduce your taxable income by how much you contribute.

-Dali

[MrBlank]

I got 5 credit cards i want to consolidate.

What is the best possible place to make this happen? i want a low interest rates and online payments.

[defcon]

i invested all the leftover money i had from my civilian financial endeavors into an aggressive growth mutual fund just about 3 years ago. i rarely ever check it because i don’t want to turn into one of those compulsive day trader types. but i checked it today and that shit has netted a 41% growth. my face is still like this :wow: right now. being that i’m invested into an aggressive growth mutual fund (this is my primary savings right now), when should i cash out? i’m tempted to right now, because i remember a few times i’ve checked and all the market shit was in red and negative numbers and the outstanding 40% over these 3 years is not a sustainable rate of return i can expect in the future… thoughts + advice?

[terracotta]

i heard this advice once.
collect assets. an asset is anything that generates income. a liability is anything that takes it away.

simple concept, but i think not enough people have this mindset. say i had $2000. i could use it as down payment on a new car, or do some professional course that will help me land a much better job. most people would see both as “assets” equally.

fish: i guess you’re right… but then again, isn’t the market a zero sum game? one market’s loss is another’s gain. and it’s probably easier to speculate on an economy than on a stock. (well… maybe. if that were true everyone would be throwing money at the chinese economy)

===

any business people here?

[Night]

i invested all the leftover money i had from my civilian financial endeavors into an aggressive growth mutual fund just about 3 years ago. i rarely ever check it because i don’t want to turn into one of those compulsive day trader types. but i checked it today and that shit has netted a 41% growth. my face is still like this :wow: right now. being that i’m invested into an aggressive growth mutual fund (this is my primary savings right now), when should i cash out? i’m tempted to right now, because i remember a few times i’ve checked and all the market shit was in red and negative numbers and the outstanding 40% over these 3 years is not a sustainable rate of return i can expect in the future… thoughts + advice?

41% in 3 years is about 13.7% return each year, so that’s not too bad. Very recently if you’ve paid attention to last month, the market was pretty much on an upswing, so you’ll probably notice that the fund has grown a lot even in the past month, so maybe the peak hasn’t even been reached yet. Even today (June 5) the market is in the red, and don’t let seeing the market in the red on certain days make you want to pull out. You’re already beating current CD and MMA rates so that’s great. Only pull out if you need the cash or if you notice that the growth is starting to flatten.

i heard this advice once.
collect assets. an asset is anything that generates income. a liability is anything that takes it away.

Basically if they tell you “collect assets” where they generate income, that pretty much means owning property where if you own property, you can rent it out or sell it, generating additional income for yourself.

[specs]

This thread is good eatin’. Kudos to all who gave the advice!

[System_1]

Well…

These are all great things if you seriously want to get married, have kids, and have something to leave behind.

If you’re just thinking about the day-to-day, though, it’s as easy as just setting some money aside in a savings account for emergency situations. Anyone living on their own should have a “Fuck-I-Can’t-Believe-My-Car-Broke-Down” fund.

[Disciple_of_Ryu]

Okay, I have a few question. I’ve read all the posts in this thread but I’m pretty retarded so most of this stuff has gone over my head. I’m only making a little over 30,000 a year so I don’t have tons to invest. I’ve gathered from reading this thread that I need to up the amount I’m paying into my 401k, that’s a given. I do have some questions about that though.

1. I have a 401k from the first real job I had but I never bothered to update my address or do anything with the account when I quit my job and moved. This was about 3 years ago, so is the money still there and mine? If so, is it possible to transfer the money directly into my current 401k? How much should I expect to pay in fees?

2. I plan on opening a savings account. Currently I only plan to put about $100 a month into it and never draw from it. Yeah, it’s not much but I have car payments to make and I know that’s a safe guess as too how much I make myself put away. I’m 25 now and looking for a somewhat long time investment. I want to attempt to buy a house in my late 30’s-early 40’s. If I went to the bank this weekend, what type of account(s) would I tell the banker I wanted to have a decent amount of money to use as a down payment?

3. If I invest in an overseas company, i’ll have to go through a broker (?) to find out what company is best to invest in and to get everything set up. Realisticly how much money should I have before I attempt this, and are the fees associated with this method one time, or would I have to keep paying the broker to be updated on how my investment is going?

Thanks for the time and knowledge.

[klearshadow]

Buy the book: “The millionaire next door” great read about how the “real” rich people eat,live,spend etc.

[Night]

1. I have a 401k from the first real job I had but I never bothered to update my address or do anything with the account when I quit my job and moved. This was about 3 years ago, so is the money still there and mine? If so, is it possible to transfer the money directly into my current 401k? How much should I expect to pay in fees?

Your 401k stays with you as well as all the money you contributed into the funds during your time at that company. And yes, you can transfer the money from the funds from your former job into the funds of your current job, but before you think about doing that, have a look at how well your former funds are performing. If they’re already performing pretty good, no need to transfer! Depending on your 401k broker (e.g. Fidelity) there may be fees associated with it if you exceed the number of times you can do it per year, so you need to get that info from your 401k broker.

2. I plan on opening a savings account. Currently I only plan to put about $100 a month into it and never draw from it. Yeah, it’s not much but I have car payments to make and I know that’s a safe guess as too how much I make myself put away. I’m 25 now and looking for a somewhat long time investment. I want to attempt to buy a house in my late 30’s-early 40’s. If I went to the bank this weekend, what type of account(s) would I tell the banker I wanted to have a decent amount of money to use as a down payment?

The highest interest account they’ll likely push on you is a high yield savings or money market account (MMA). If you have a big chunk you want to deposit and never touch it for a while (can’t withdraw or deposit) they’ll push a promitional CD on you probably. If you actually do plan on lots of activity, then a savings account or MMA is what they’ll likely offer you. I honestly don’t know what the local bank would offer when you ask, so they’ll know better than me.

You can open up a Roth IRA, you can put away up to $4,000 per year (as of 2007), and withdraw $10,000 (and only $10,000) towards the purchase of your first home, but this will be tax-free and will not suffer an early withdrawl penalty (I believe if the holding period is over 5 years), so this $10,000 can really help you out. In the IRA, you can have it in a mutual fund that can grow better than current CD and MMA rates, so when you retire, the money withdrawn will also be tax-free.

The accounts at the bank aren’t necessarily the greatest in terms of getting growth and stuff since CD and MMA rates, while safe, aren’t ideal for maximizing your returns in an upswing market. If you open up an investment account, and do a little homework, and put your money into a decent mutual fund, that’s where you money can really grow.

3. If I invest in an overseas company, i’ll have to go through a broker (?) to find out what company is best to invest in and to get everything set up. Realisticly how much money should I have before I attempt this, and are the fees associated with this method one time, or would I have to keep paying the broker to be updated on how my investment is going?

It depends on what exactly we’re talking about investing in an overseas company. If the company has stock in the public market, they easily be purchased via any online brokerage and the main fees are the transaction fees for the trading.

What I would personally recommend is to use the same brokerage and do research to look at international mutual funds. You probably have an international fund in your 401k plan, so if that is growing nicely, you can also invest more of your money from a brokerage account in the same way by putting it into a similar fund (or maybe even the same fund if it’s available through your broker). An international mutual fund is essentially a basket of stocks that are managed by a financial expert, and he does all the research, trading and everything dealing with companies overseas, although not necessarily ALL overseas as there may be a mix of domestic companies in there too. A deeper look into researching the fund will reveal what it’s invested in.

The main fees associated with mutual funds (not just international, but all) are:

• Transaction fees from the broker for the initial investment and cashing out. Some brokers have relations with certain funds and will actually not have one!

• Early termination fees where if you decide cash out too early

• Load fees, either front end or back end, where the FUND charges a certain amount for entering or exiting the fund respectively. Many funds out there are “no load” which make them more desirable over other ones with loads.

• Management fees as shown by the “Net expense ratio”. Each year, the manager of the fund will charge its investors a certain fee, and the approximate estimation of that amount will be shown on the “Net expense ratio” when looking at the fund’s info. If say, the fund has a 1.00% expense ratio, then each year, you’ll probably see approximately a charge of 1% of your total investment. These fees are how the managers make their money for their time, research, maintanence, etc. of the fund. If the fund’s returns are good enough though, then you’ll easily accept that charge every time though. This is among the key things you look for when researching your mutual funds and do your comparisons.

The great thing about international funds is that in the recent market, it looks like many international funds are doing better than domestic funds. It does require a little bit of research and reviewing the market trends in the event this can change, but for the moment, international seems to be doing quite well.

[BBQ]

For me I adjust my income on my current situation. I was in the military for 4 yrs so when I wasn’t in iraq, I’d make sure my bills were paid off and the rest I couldn’t care less if it was saved or used for what ever. When I got deployed I tried to save as much as I could, the motivation was the pay increase and tax free so it helped me with spending on the bare minimum( maybe buying fast food every now and then or a haji dvd). I was able to buy a car in cash and still had some to spend. Mistake was with that, I should of saved the remainder.

Now that I’m out of the military, unemployed, and starting school in august, I have a new plan. I get almost the same amount from unemployment like I did when I was in service so I estimate on how much I’ll be able to collect until I start school. Then I estimate on how much I have to spend for my bills. Then I guess on what I spend on gas/stuff/going out. So roughly I will know how much I have left and that’s when I try to save most of that because it’s all just on guessing.

When I’m in college I’m going to have to work because even though the G.I. bill pays for my school, it only gives me a certain amount. And because I’m going out of state, the first year is going to suck as for tuition and other things. But after that year I’ll become a resident and it won’t end up being as rough. So I’ll continue to save and hopefully by the time I graduate, I’ll have a good chunk of money in my account so it can help me get by on what ever I’ll be doing.

Basicly I’m as of now I’m saving to where it will help me climb the ladder to success.

[fishjie]

i heard this advice once.
collect assets. an asset is anything that generates income. a liability is anything that takes it away.

simple concept, but i think not enough people have this mindset. say i had $2000. i could use it as down payment on a new car, or do some professional course that will help me land a much better job. most people would see both as “assets” equally.

fish: i guess you’re right… but then again, isn’t the market a zero sum game? one market’s loss is another’s gain. and it’s probably easier to speculate on an economy than on a stock. (well… maybe. if that were true everyone would be throwing money at the chinese economy)

===

any business people here?

i think that quote is from rich dad poor dad. he was talking about cashflow. thats important. the guy has good ideas and got me thinking about finances, but a lot of his financial advice is not so good. he gets more hate on his yahoo finance articles than svc chaos does here.

i dunno about zero sum game. isnt the theory that the market is a random walk or efficient? if it was zero sum, an indexing strat would never work, yet the S&P and other indexes have always consistently increased in the long term, even after bubbles.

[Disciple_of_Ryu]

** A ton of good info.**

Thanks for the well thought out response.

[Omski2k4]

I was curious to know how US residents are responding to a rapidly dropping Greenback? As of this morning, the Canadian dollar was 94.3 to the dollar and with the impending hurricane season coupled with the Canadian dollar being very commidity based, there are projections of actual parity. Any thoughts on the subject?

T8 IS COMING!

Well, I dunno, since the CAD is a floating point currency that compares its value against the dollar. This means that the Canada doesn’t have to do anything if the USD is going down, so if this trend continues, then yeah there will be a 1:1 ratio, but that’s not because the CAD is actually worth more, but because the USD is worth less. In the case of China, it does the bread basket system as well where it says, "well we’re worth THIS much in comparison to the USD, CAD, GBP, etc. and the way they do this ( like any other currency that goes float point) is by taking their market capital and looking at purchasing power, and economy and trade and volume of currency out in the world. Increases or decreases in any of these is what moves currency values which is why the Tresury secretary has so much power. He can set interest rates and such and effect the way ppl use the dollar. If interest is high, who’s gonna want to use the dollar ? If you do this, then this helps off set increases in dollar flow in the world which helps prevent inflation from getting too high. Of course this is sortof oversimplifying it, but I think you get the idea. With this new (relatively) era of float point currency as opposed to gold standard, countries bank their currency on tresuries, amt of dollars in circulation, economic well being of said contry, and sentiment. I hope that answers your question.

[f_man]

hey does anyone have any good financial planning lit books they can recommend?

none of this personal finance for dummies crap. looking for stuff with solid theory/investment advice for recent college grads.

hey night, mind me asking where you work? i remember on a thread long ago or maybe it was a PM you mentioned getting connected with a job through a school club. ive found a job, albeit not one i really want that pays pretty well imo for entry level (55k). but its in a crappy ass location. im trying to get a job in the bay area, and the financial district in sf would be nice. any advice on finding jobs in that respect?