NT: Official Personal Finances Thread

[antidope]

Best interest rate I've seen is at Santander bank. 1.20% interest rate if you keep the balance above 10k, 0.30% if it drops below that.

Great Lakes Credit Union offers 3.0% on up to $10k

https://www.glcu.org/accounts/personal/checking/ultimate-checking/


Have to do some things (like use your debit card 10x per month, but you can buy 1 pack of gum in 10 different purchases) but its better than most

Sheesh that's wild. What is the yield above 10k though?

I don't ever use my debit card, it's been years. I use my credit card and pay it off in full every month but this is something I'd consider for a piece.

 

[turbospartan]

Sheesh that's wild. What is the yield above 10k though?

I don't ever use my debit card, it's been years. I use my credit card and pay it off in full every month but this is something I'd consider for a piece.

Don't think its anywhere near as good once you go above $10k.  

But it'd be a nice spot to park an emergency fund or what not, if you could manage the "rules" 

 

[water runs dry]

Would you say that using a Roth IRA as your emergency fund is a good idea or no?

 

[capital sb]

 
Would you say that using a Roth IRA as your emergency fund is a good idea or no?

Bad idea imo . IRA's are supposed to used to allow money to grow long term, Roth's long term tax free.

The money isn't going to grow if your just going to pull it out.

I think keeping your emergency fund in an online savings account is best . 1.0% - 1.05% APY from Ally or Barclays .

Extremely liquid and accessible  .

 

[antidope]

Would you say that using a Roth IRA as your emergency fund is a good idea or no?

No. Every time you take money out you'll pay ordinary income taxes on it and the early withdrawal penalties.

 

[capital sb]

Good point as well Anti , I forgot about the tax implications .

 

[crcballer55]

 
Would you say that using a Roth IRA as your emergency fund is a good idea or no?

Terrible idea. You'll get his with a 10% penalty, PLUS your tax rate. So when you're most desperate and need the money the most, you'll be hit with a 35-40% penalty. Basically your money will disappear into thin air. ALWAYS have a separate bank account as your Emergency Fund and keep it liquid. You don't want to try to make extra money on it by investing in stocks, CD's, or Real Estate. All are too risky to depend on for something you don't know when you'll need. Consider it insurance and take the financial hit of it not being plugged in to a high gain investment.

Not to mention when you take it out you're unplugging your retirement account from any possible gains you may incur and will have less money in there to grow over the next 30-40 years.

 

[crcballer55]

Joining the party late here.

Just had a son and want to start his college fund now. What I wanted to know is the 529 plan worth it or would I be better off investing in mutual funds?

Any and all advice is appreciated.

A 529 is just the IRS tax code for a type of educational savings account. You can invest in stocks, mutual funds, ETF's, etc. Think of it as an IRA, but for educational purposes. If you don't use the account for one kid, it can always roll over to the second, or third. Or I believe you may even be able to gift it to someone else.

IMO, it's better to start saving now. If you realize in the future that he'll get scholarships then you can always stop saving and take the potential tax hit on what your child didn't use. With the way college costs are going, I would err on the side of caution and save as much as possible as soon as possible than face the prospect that I'm going to have to pay $100k/yr for college or saddle my kids with that kind of debt (which we will never do).

 

[JL415]

^ correct me if I'm wrong but since it's a roth won't he only be penalized the 10% and no tax rate?

 

[antidope]

^ correct me if I'm wrong but since it's a roth won't he only be penalized the 10% and no tax rate?

Only on the contributions. 

Lets say you had $15,000 in Roth. 10k of contributions, 2k of conversions and 3k of earnings.

• The first 10,000 would not be subject to the taxes or penalties because its the corpus.
• If the 2k of conversions was there for more than five years you would be fine, if not its subject to taxes
• The 3k is always subject to the taxes

The rules say that when you take money out it always comes from the corpus first. Regardless a Roth as an Emergency Fund just seems like a bad idea, because if he ever needs the whole thing then what?

Another thing to mention is that the contribution cap is $5,500 per annum. What if he wants to put more than that? He can't.

 

[capital sb]

Barclays just upped their online saving interest rate to 1.15% APY nice surprise . Guess they finally want to beat Ally.

 

[ballinsam23]

Checking in for the first time and got a couple of questions....

1. Is there any point of having a savings account?

2. Whats the best way to find out how much you owe in student/private loans?

3. Best to pay off your student loans ASAP or throw money at a real estate investment (apt/house) and have someone rent it out and use that money to pay off your loans.

 

[based mod]

Checking in for the first time and got a couple of questions....

1. Is there any point of having a savings account?

2. Whats the best way to find out how much you owe in student/private loans?

3. Best to pay off your student loans ASAP or throw money at a real estate investment (apt/house) and have someone rent it out and use that money to pay off your loans.

1. If you want your money liquid and ultra safe

2. Check the institution you loaned from? I don't understand how you can't find out yourself.

3. Depends on your interest rate. Do the math yourself.

 

[antidope]

 
Barclays just upped their online saving interest rate to 1.15% APY nice surprise . Guess they finally want to beat Ally.

Goldman Sachs offers 1.20%

https://www.gsbank.com/en.html

This war over APY rates is nonsense to me. That extra five BPS is making no difference unless we're talking large sums of money. If you asked me now I'd say go put your money with Goldman, but if they were to get beaten out by someone else in the next few months I wouldnt totally flip out over it.

Checking in for the first time and got a couple of questions....

1. Is there any point of having a savings account?

2. Whats the best way to find out how much you owe in student/private loans?

3. Best to pay off your student loans ASAP or throw money at a real estate investment (apt/house) and have someone rent it out and use that money to pay off your loans.

1. To keep the money "safe" and earn income on it. "They" tell you that you should have 6-8 months of living expenses in savings/emergency fund. I personally disagree with that, but I'm not here to project my style of living upon anyone. 
2. This is an odd one, but a surefire way to do this would be to run your full credit report. It would show you all of the debt you have outstanding.
3. I am a firm believer in just paying off the loans before you do anything else. More than likely you have a blended interest rate of like 5-6% across all of your loans. To find something that will consistently yield more than what those loans are costing you isnt easy and getting a real estate investment will only add to your debt picture. 

 

[handullz]

Goldman upping that yield is lovely...

My liquidity just keeps getting mo'e icy.

 

[sickr8r]

I am a teacher so my job has calstrs for retirement probably same as 401k they match and put  little extra then what I contribute.

My question was since I already have my retirement through work would there be any point for me getting a roth IRA? 

I have no plans for a big purchase besides a house but thats still 2-3 years down the road and I put money every month into my savings for that should i just keep it like that?

Im only 25 if that means anything. 

Any help appreciated. 

 

[capital sb]

@Antidope yeah I'm not jumping around chasing higher APY's lol . Been with barclays for years and it's gonna stay that way.

How much do you believe to keep in an emergency fund?

 

[antidope]

@Antidope
yeah I'm not jumping around chasing higher APY's lol . Been with barclays for years and it's gonna stay that way.

How much do you believe to keep in an emergency fund?

Used to be one month but now I've set it to a specific number anything else I invest.

 

[crcballer55]

 
I am a teacher so my job has calstrs for retirement probably same as 401k they match and put  little extra then what I contribute.

My question was since I already have my retirement through work would there be any point for me getting a roth IRA? 

I have no plans for a big purchase besides a house but thats still 2-3 years down the road and I put money every month into my savings for that should i just keep it like that?

Im only 25 if that means anything. 

Any help appreciated. 

My wife is a teacher too. We opened a Roth 403(b) for her. Her initial district retirement rep offered us an annuity. We were ~27 at the time. DO NOT EVER let someone talk you into that piece of crap in your district. It will literally cost you over $100k in gains before retirement. But I digress...

CalSTRS is only 68% funded currently. That's WITH a modest outlook and a historically long bear market. If nothing else, throw in a few hundred each month to a ROTH account. That way your retirement is in your fate and won't have the possibility of sticking you with taking less during retirement should the system crash like it is in Illinois or Stockton or San Bernardino. That would be the WORST place to be. Approaching retirement, and you're too old to take a job after they cut your benefits.

http://www.montereycountyweekly.com...cle_35fd4cde-3340-11e6-afb6-0b86c093e239.html

Checking in for the first time and got a couple of questions....

1. Is there any point of having a savings account?

2. Whats the best way to find out how much you owe in student/private loans?

3. Best to pay off your student loans ASAP or throw money at a real estate investment (apt/house) and have someone rent it out and use that money to pay off your loans.

1. Yes. Cash is ALWAYS king. You won't make much on it, but having a stash set aside will give you a whole lot of peace of mind that words can't describe.

2. Ask? I'm sure your school can tell you who is sending them the check. Or if you're out of school you're getting a statement, right?

3. Pay them ASAP. What happens if the market crashes and your Real Estate asset goes underwater, your tenant moves out, and you've lost your job? You still have that debt and it's not going anywhere until you've either paid it off or you're in the ground. If you stop paying it they'll garnish your wages. Bottom line, I would always recommend getting the chain off your neck before trying to invest. Your outcome is certain and the sense of peace knowing you're not obligated to pay anyone is so freeing. I'll always remember the exact date I finished paying Fannie Mae. It was like a final punch to her face before she got out of my life.

 

[sickr8r]

 
My wife is a teacher too. We opened a Roth 403(b) for her. Her initial district retirement rep offered us an annuity. We were ~27 at the time. DO NOT EVER let someone talk you into that piece of crap in your district. It will literally cost you over $100k in gains before retirement. But I digress...

CalSTRS is only 68% funded currently. That's WITH a modest outlook and a historically long bear market. If nothing else, throw in a few hundred each month to a ROTH account. That way your retirement is in your fate and won't have the possibility of sticking you with taking less during retirement should the system crash like it is in Illinois or Stockton or San Bernardino. That would be the WORST place to be. Approaching retirement, and you're too old to take a job after they cut your benefits.

http://www.montereycountyweekly.com...cle_35fd4cde-3340-11e6-afb6-0b86c093e239.html

Thanks repped appreciate this!!!

Will start that roth IRA early next month.

This thread has so much great info thanks fellas!!!!

 

[water runs dry]

Would you say investing 100% of your 401k into a Target date retirement fund a good idea?

 

[antidope]

I have all my 401k in a target fund with no qualms whatsoever. Currently it's outperforming the S&P by like 0.50% and that's totally fine by me. I don't really care about chasing a ton of returns in my 401K and IRA, I'm all about indexing those and just staying the course. As long as it's not down a ton I'm good.

My PA is where I can mess with that kind of stuff and really chase high return numbers.

That's just me though. I have a friend who actively manages his 401k and rebalances every time he's allowed and he was up 22% last year while I was up 9.10%

 

[girlslovewaffles]

Any advice on how to get around the income limit for Roth IRAs?

 

[antidope]

Any advice on how to get around the income limit for Roth IRAs?

Backdoor Roth. Google it. It's a nonsense rule that's easy to get around.

 

[206to813]

At what point does it make sense to hire a financial advisor?