I took a risk on this. I always knew the Yahoo stock was undervalued since I started working here, which allowed me to triple my profit. I will be using this money to purchase a single family home and make my double into a full investment property. I don’t recommend my decision unless the individual can clearly prove the stock was undervalued.
I have my wife contribute to a 403b and is in TRS (Teacher Tier 4) which she only needs to contribute for 10 years (I think)
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401K is not taxed until you take out. When an individual retires, in most cases, they won’t be making the same w2 gross which will most likely place them in a lower tax bracket. Plus I prefer to keep my money not taxed until I start withdrawing it over paying tax as I go (IRA).
I get your concept on the 401k…it’s actually quite logical. And I fully understand your approach on that stock purchase, I just imagine the majority to be incapable of knowing what “undervalued” means in reality.
Your right, what I considered the undervalue was the stake in Alibaba, SoftBank, Partnerships, Core Business, Balance Sheet, Close to no debt, cash on hand, minimal gains every year, media view, company direction.
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I am not to keen on doing a HSA. Its kind of like receiving a gift card for a place you never shop at and at the end of the year you are buying stuff so you don’t lose the money. It all depends on your personal or family needs/requirements. I don’t consider it a top form of investment.
HSAs never expire and you can play a number of tax games with them.
you’re thinking of FSA
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this is incorrect. you are comparing a 401k vs. a ROTH IRA. A traditional IRA is pretax.
I like ROTH IRAs because you can withdrawl from them anytime tax free (except for any gains) so I can use it as a secondary emergency fund. I have plenty pre-tax in my 401k. The contribution limits are also the same in an IRA regardless of pre-tax or post-tax so you can put more in if you go post tax.
Vanguard all day. check out the Admiral shares where offered (only some funds), you have buy in at a decent level, but the fees are insanely low. check out VFIAX, it only costs 0.05% and that’s not a typo.
and yeah, all IRAs are 5.5k/year.
Your right, FSA expires but HSA can only be used for qualified medical expenses. I don’t see the gains of opening this up. Your limit to your options but if you hold out, you can do this (which I am sure you are doing) - Withdrawals for non-medical expenses are treated very similarly to those in an individual retirement account (IRA) in that they may provide tax advantages if taken after retirement age, and they incur penalties if taken earlier. These accounts are a component of consumer-driven health care.
Withdrawing money from 401k, IRA, or roth (regardless of penalty or not) is not a smart option because they should never be used as an emergency fund in x scenario.
if you can’t put $1000 in to start then you should be using a high interest savings account to build an emergency fund until you can comfortably. The $1 month + other fees of Acorn are also going to kill any gains and probably cost you money when you have less than $1k in there.
I have $1,000+ right now in a Capital One Savings account (formerly ING). It’s our emergency fund so to speak right now. I just wanted to start off with $500 to kick things off.
This would be more of my wife’s retirement. I have a 401k where I put in 5% and my company matches + 2% (7% total). So my retirement is “covered”.
think in months… how many can you go if you lost your main source of income today. If it’s not 3 you’re in critical danger, and investing should not come into play yet.
Currently 5% is the max that they match at. So if I put in 5% they match+2 equaling 7%. If I put in 20%, they still put in 7%.
I was going to use the Roth Account like a savings account as well as a retirement account. Is that not a smart option? The understanding is the Roth account would be a set it and forget it account, treated like a 401k but with the ability to take out the money (aside from the earned money) if there was an absolute emergency like job loss or medical emergency.
Like I said, I’m not a financial person and I won’t claim to be. As of right now my credit rating is over 800 as is my wifes. We’re working on paying off credit cards, mine is because of dental work I had to have done. Xmas bonus and Tax return will be used to pay any an all debt.
I would (I do) put a few thousand into the high interest and then play using the ROTH with conservative funds beyond that. One thing to remember is that you can only put 5500 into it once. You can’t put in 5k, take out 3k and put it back in during the same year because you’ll be over 5500.
And I fully understand your approach on that stock purchase, I just imagine the majority to be incapable of knowing what “undervalued” means in reality.