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School me on investing...

Discussion in 'General' started by noles19, Nov 8, 2017.

  1. Lawn Dart

    Lawn Dart Difficult. With a big D.

    I think we're getting hung up on words, and all saying the same thing. The contribution isn't taxed - it has already been taxed as income as part of your paycheck or whatever. You're contributing after tax dollars to a Roth plan (401k or IRA) and that money grows tax free. Additionally, you can do funky stuff (if you choose), like withdraw the principal at a later date, and not pay any tax on it. Your gains and interest cannot be withdrawn until 59 1/2 (I think) or may be withdrawn for a qualifying event (like buying a first home, for example). The shitty part is you can only contribute $5500 a year, unless you do some tax gymnastics to convert a regular IRA to a Roth (and it often doesn't work out in your favor unless someone knows what they're doing).
    XFBO likes this.
  2. some guy #2

    some guy #2 Well-Known Member

    The IRA to Roth conversion can be complicated but that's only if you have an existing IRA (not a 401k). I converted my IRA to my Roth this year and it was only a hassle because fidelity wouldn't let me do it electronically so I had to call them.
  3. 05Yamabomber

    05Yamabomber Dammit Haga

    Any time Qualcomm stock hits $50 per share you buy. Dont ever invest in penny stocks, too risky (ive missed way more than I have hit, its not worth it these days). Join "Seeking Alpha" website for investor news and daily breakfast email. Good stuff in there. Learn the lingo and try to understand the market a bit before you spend any money. Open an Etrade account and transfer that $1000 so when you are ready you dont have to wait for the settle time and miss any new opportunity. They come quick. You should also invest in industries you are familiar with to know if they are going to tank or take off.
    Gorilla George likes this.
  4. auminer

    auminer Renaissance Redneck

    School you on investing....

    Wow. You don't ask for much. :D

    You mentioned no 401k, so that's out, but anyone else reading this that works for a company that offers and matches a 401k plan, you're a F#@*&@% idtio if you don't participate at least to the point your company no longer matches. It's free money. Take it.

    You want to take $1000 and invest in stocks. First step, stop right there and wait until you have more like $10K. Commissions will eat at best 7 bucks for every trade. Before you even start you'd need 1.4% gain just to break even. SEC fees too, but those are tiny. Plus, bid/ask spreads are going to take some of your gains, though they're much better now than they were back in the fractions days when I started. I kinda miss those days. :(

    Side note, if you have any interest-paying debt, take care of that before you invest in maybes. No investment will guarantee you a return. Paying debt will.

    Now... I haven't told you what you want to hear, so you're probably not reading this anymore... but if you are, that's good. Because there's this thing called confirmation bias. That's where people only want to see/hear things that confirm what they already want to believe. If you invest and research your investments with that mindset, you'll lose your money... so if you're still reading, then there's still hope. ;)

    Next up, find some online fantasy trading league/website/whatever. Really. Take it seriously. I would say treat it like real money, but you really can't. Nothing virtual gets your blood pumping like pulling the trigger on buying or selling a big chunk of stock with real $ involved. Use different strategies on different accounts. Find a good paper trading website. I used marketocracy dot com They're still around. That education was literally worth in the high 6-figures.

    But to back up a little...I bought my first stock in March of 2000. Perfect Fv(Kin timing. I lost almost 20000 bucks by August. I was pissed. I was wrecked. My wife was pretty torqued too. I started paper trading on marketocracy to see where I'd gone wrong... which was pretty much EVERYWHERE, and figured out what exactly I do well at investing in (blue collar, small-mid cap, low PEG stocks that my research shows have potential for a positive earnings surprise)

    Invest in what you know
    Realize and act when you are wrong
    Learn what style/sector/etc suits your investing acumen

    After that, it's putting in the time to do the research.
    Fencer and noles19 like this.
  5. cyclenut

    cyclenut Well-Known Member

    If you are self-employed and have a company (LLC, etc) you can setup an “Owner K” with many investment firms. My Owner K is better than any 401K I ever had with my prior employers. Also, $$ matching is a business expense. PM me any questions.
    JBall, beac83 and Lawn Dart like this.
  6. GrayGhost

    GrayGhost Well-Known Member

    This is the advice you want to follow. Get into a vanguard fund , leave it there, lazy easy investing.
    sdiver, sanee and noles19 like this.
  7. Lazy Destroyer

    Lazy Destroyer Well-Known Member

    Hah! Small world! I swear she meets more people at the races than I do LOL.
    If you ever see her again, stocks are her passion and she's being doing this a very long time. She loves talking about investing.
    I can forward her email addy if you ever want to get more info on how to get started.
  8. Lawn Dart

    Lawn Dart Difficult. With a big D.

    Damn, now I kinda wanna meet your mom. :D
  9. inpayne

    inpayne Well-Known Member

    Throw it in VTI and let it ride. Seriously doubt you will beat that unless you are willing to take substantial risk. Keep adding through dollar cost averaging.
    shakazulu12 likes this.
  10. sdiver

    sdiver Well-Known Member

    Most active professional traders do not beat the SP500. Its a fact. Dont try as a rank amateur. As stated above, figure out the most tax advantaged way you can buy VOO (or VTI) select dividend reinvestment, and keep adding to it. Truly is end of thread.
    Last edited: Nov 11, 2017
    SuddenBraking likes this.
  11. tony 340

    tony 340 Well-Known Member

    Spot on advice.

    Been maxxing out Vanguard roth contributions since I was 18.

    I'm coming up on 1/4 million this year. I'm 36.

    It's at the point now I can't even come close to matching what I make but I still max my contribution.

    At 50 I'm done working this much. End of story.

    I'll still work, just not this much.

    I have a buddy that trades my non-retirement money if anybody is interested.
    You need 50K to start but this guy pays my mortgage every month and I ain't bullshitting.

    Also, if you are self-employeed pay yourself through a payroll service like Paychex then have them set up the 401K. I do that also for retirement money. Helps with the tax man.

    Really helps when your business gets bigger and you need something to retain employees.
  12. Kris87

    Kris87 Friendly Smartass

    The biggest dowfall to the Roth is the limited amount. I'm sorry, but can't retire only saving $5500 year in that tool alone. Not like the 401k will let you get rich either at $18k year, but its at least kicking the shit out of the IRA's there. You're going to need more than one avenue to live comfortably IMO, unless you're good working until SSI kicks in, you think its still going to be there, and $2k/mo is all you will need in addition to your savings. I'd recommend finding you a nice robo advisor, I like Betterment but don't use them, and also start you an after tax IRA. Save early...most don't, but that's the best thing you can ever do.
    GixxerBlade likes this.
  13. beac83

    beac83 Well-Known Member

    The big deal with the Solo 401K (or any 401K) is that the company can contribute over $50K to the plan each year, in addition to your 18.5K [new 2018 limit if the tax law doesn't pass] or 24.5K(if 50+)

    So a small proprietor can contribute 18.5K from their payroll/earnings, PLUS the company can contribute $53K in addition.
    This lowers A) taxable income for the company AND B) taxable income for the individual.

    (limitations and exclusions apply - talk to your tax advisor)
  14. rk97

    rk97 Well-Known Member

    Investing and actively trading don't have much in common. What you're describing is socially acceptable gambling. Don't tell my wife.
    GixxerBlade likes this.
  15. rcarson15

    rcarson15 Well-Known Member

    Can you get into a Vanguard fund without an employer?
  16. Kris87

    Kris87 Friendly Smartass

    I was keeping my scenario simple thinking he wouldn't have that kind of income, but if he really wanted to do it correctly, and was a big baller and all, he'd just set up a cash balance plan. No better tax shielding, investing way to do it for sole proprietors than that. But that's assuming he's got a lot of stash to put away.
  17. Kris87

    Kris87 Friendly Smartass

    Absolutely. Can do it directly with them. Much cheaper, lowest fees you can get into.
  18. rcarson15

    rcarson15 Well-Known Member

    Ok so I was talking to my financial advisor guy (we have to to set one up with my employer's Simple IRA), and I opened a Roth IRA with him.. I specifically asked about Vanguard and I don't recall exactly what he said about Vanguard, but the gist was that I wouldn't be able to specifically invest in any of their funds unless my employer's 401k used them. He said he deals with Franklin Templeton and Pimco Funds. Am I getting the run around in regards to the Vanguard funds?
  19. It should go without saying, but for those with employer based 401k accounts, AT LEAST put in what is required to take full advantage of the employer match.

    My company matches it dollar for dollar up to 11% (or 6% for lower positions). It baffles me how some people will only put in 2-3% or some shit. That’s just stupid. They are throwing away free money.
    auminer likes this.
  20. Kris87

    Kris87 Friendly Smartass

    If you're solely investing in your 401k, then that could easily be the case. My work 401k doesn't give me any access to Vanguard funds, but I invest a lot outside of just that account, so you would likely have to do it post-tax.

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