"SHOW ME THE MONEY" VIEWS on HOW to make MONEY GR

[retailguy]

You mentioned Apple stock earlier. I have never, in 15 years of tax work, have ever recommended that my clients buy "single stocks", other than situations where 401k's match in company stock.

How bout an ESPP plan where the employer sells to you at a discount?

That'd work, too. How long do you have to keep it?

My point is, and was, if it makes sense. Most of the time it is just blind homerism and underperforms a solid mutual fund.

You could flip it the day they bought the shares and just pocket the 15% discount.

That would be tempting. Usually isn't worth the risk to hold single stocks. 15% is a pretty good return! Take it and run.

[Partial]

So I put 20% in the 401k plus the 5k in the roth. What if an emergency comes up and I need money? How does one build up a decent emergency reserve, invest, and save for a down payment on a house?!?

[retailguy]

So I put 20% in the 401k plus the 5k in the roth. What if an emergency comes up and I need money? How does one build up a decent emergency reserve, invest, and save for a down payment on a house?!?

Discipline.

It isn't easy Partial, no matter how much you make. I guess I thought you had an emergency fund. You need that before you start. 3 to 6 months of expenses. Since you have no bills it shouldn't take long to do that.

Then max the 401K, you have until April to fund the Roth if you need extra time. Building a fund for a house will probably have to wait until after that. and really, you've got time for that. dont forget charity either.

Thank God PR is still free. If it wasn't, you probably couldn't afford it. :P

[falco]

If you run an amortization schedule for the full 30 years, you typically pay double in interest and principal than what you paid for a house.

I know it was an old discussion, but I thought pretty much everyone in this thread agreed that 30 years is a horrid term, and that 15 is what people need to be shooting for.

Interesting. One could argue that, depending on the interest rate your paying, you'd be much better off paying the extra principal into an index fund... over the course of 30 years, you'd come out much ahead.

[HowardRoark]

If you run an amortization schedule for the full 30 years, you typically pay double in interest and principal than what you paid for a house.

I know it was an old discussion, but I thought pretty much everyone in this thread agreed that 30 years is a horrid term, and that 15 is what people need to be shooting for.

Interesting. One could argue that, depending on the interest rate your paying, you'd be much better off paying the extra principal into an index fund... over the course of 30 years, you'd come out much ahead.

Why an index fund? Why not one that adds alpha?

[retailguy]

If you run an amortization schedule for the full 30 years, you typically pay double in interest and principal than what you paid for a house.

I know it was an old discussion, but I thought pretty much everyone in this thread agreed that 30 years is a horrid term, and that 15 is what people need to be shooting for.

Interesting. One could argue that, depending on the interest rate your paying, you'd be much better off paying the extra principal into an index fund... over the course of 30 years, you'd come out much ahead.

Many have tried things like this, few succeed. When you understand why, you'll have your answer.

[falco]

If you run an amortization schedule for the full 30 years, you typically pay double in interest and principal than what you paid for a house.

I know it was an old discussion, but I thought pretty much everyone in this thread agreed that 30 years is a horrid term, and that 15 is what people need to be shooting for.

Interesting. One could argue that, depending on the interest rate your paying, you'd be much better off paying the extra principal into an index fund... over the course of 30 years, you'd come out much ahead.

Why an index fund? Why not one that adds alpha?

Ahh, Alpha is a myth. Very few can outperform an index fund year after year, except when accounting for the higher expense ratios.

EDIT: should read, "especially when accounting"

[falco]

Many have tried things like this, few succeed. When you understand why, you'll have your answer.

But, oh wise one, I did not ask a question...

[Scott Campbell]

If you run an amortization schedule for the full 30 years, you typically pay double in interest and principal than what you paid for a house.

I know it was an old discussion, but I thought pretty much everyone in this thread agreed that 30 years is a horrid term, and that 15 is what people need to be shooting for.

Interesting. One could argue that, depending on the interest rate your paying, you'd be much better off paying the extra principal into an index fund... over the course of 30 years, you'd come out much ahead.

How'd your index fund do in Q4 of 2008?

[Bretsky]

Valuations on condo's are going through the floor around here and and as a result sometimes a borrower will have to put 20% down on a condo based on the condo associations specifications. They are not holding value. Doing a loan for a first time homebuyer and the appraisal on that condo came up 6G short and it looks very nice. They just are not selling and many of these condo projects are unfinished and going back to banks so the rules and guidelines are getting worse.

Go single family when you are ready or rent cheap and pack the loot away.

[falco]

If you run an amortization schedule for the full 30 years, you typically pay double in interest and principal than what you paid for a house.

I know it was an old discussion, but I thought pretty much everyone in this thread agreed that 30 years is a horrid term, and that 15 is what people need to be shooting for.

Interesting. One could argue that, depending on the interest rate your paying, you'd be much better off paying the extra principal into an index fund... over the course of 30 years, you'd come out much ahead.

How'd your index fund do in Q4 of 2008?

About the same as my house...

In all seriousness, its a long term strategy. The benefit of dollar cost averaging is that you are continuing to poor money in while it is low. In fact, the extra principal you would have put on your house during Q4 of 2008 has now already returned you 30% or more, instead of the 5-6% you are earning in interest.

For the record, I don't partake in this approach - although I do believe it has merit.

[HowardRoark]

If you run an amortization schedule for the full 30 years, you typically pay double in interest and principal than what you paid for a house.

I know it was an old discussion, but I thought pretty much everyone in this thread agreed that 30 years is a horrid term, and that 15 is what people need to be shooting for.

Interesting. One could argue that, depending on the interest rate your paying, you'd be much better off paying the extra principal into an index fund... over the course of 30 years, you'd come out much ahead.

Why an index fund? Why not one that adds alpha?

Ahh, Alpha is a myth. Very few can outperform an index fund year after year, except when accounting for the higher expense ratios.

EDIT: should read, "especially when accounting"

"Very few" is stretching it......there are many that have over long periods of time added alpha and lower beta. Your premise is a myth that index funds have spoon fed the investing public.

How did those index funds do over the past 12 years? Low fees, but, as of this spring, 0% return over 12 years.

[Partial]

Valuations on condo's are going through the floor around here and and as a result sometimes a borrower will have to put 20% down on a condo based on the condo associations specifications. They are not holding value. Doing a loan for a first time homebuyer and the appraisal on that condo came up 6G short and it looks very nice. They just are not selling and many of these condo projects are unfinished and going back to banks so the rules and guidelines are getting worse.

Go single family when you are ready or rent cheap and pack the loot away.

How much is renting cheap? I'm finding it tough to find single person units for less than 500, and that just seems like too much to pay in rent My last apartment was about 380ish and super nice but I don't want to live with roomates again I don't think.

[Little Whiskey]

So I put 20% in the 401k plus the 5k in the roth. What if an emergency comes up and I need money? How does one build up a decent emergency reserve, invest, and save for a down payment on a house?!?

Discipline.

It isn't easy Partial, no matter how much you make. I guess I thought you had an emergency fund. You need that before you start. 3 to 6 months of expenses. Since you have no bills it shouldn't take long to do that.

Then max the 401K, you have until April to fund the Roth if you need extra time. Building a fund for a house will probably have to wait until after that. and really, you've got time for that. dont forget charity either.

Thank God PR is still free. If it wasn't, you probably couldn't afford it. :P

sorry if this was mentioned earlier. but this sounds alot like Dave Ramsey's plan. (not that he was the first to think of it, he's just the most popular now) baby steps. $1000 in the bank, 3-6months emergency fund. pay everything off but the house, 15% towards retirement, and so on.

[MadtownPacker]

Youre a fucking sorry bitch. If you get paid bank like you said you should be living in a pimp place. Instead you actin like a little bitch. Live the high life just so you can taste it once before you die.

[Bretsky]

Valuations on condo's are going through the floor around here and and as a result sometimes a borrower will have to put 20% down on a condo based on the condo associations specifications. They are not holding value. Doing a loan for a first time homebuyer and the appraisal on that condo came up 6G short and it looks very nice. They just are not selling and many of these condo projects are unfinished and going back to banks so the rules and guidelines are getting worse.

Go single family when you are ready or rent cheap and pack the loot away.

How much is renting cheap? I'm finding it tough to find single person units for less than 500, and that just seems like too much to pay in rent My last apartment was about 380ish and super nice but I don't want to live with roomates again I don't think.

I think what is cheap is relative; I'd say cheap would be around 15% of your monthly wage. Then I'd hope you can pack away the extra for a down payment. Given a figure, I'd probably say a decent place for 500 or less is a good deal

[Partial]

It takes far too long to become a mogul.

I've got about 15 grand sitting in the bank and could either A) pay down all debt or B) keep saving and buy a duplex to rent w/ 20% down before the home buyer tax dealy runs out.

Growing up sucks. All I do is worry about how I'm going to get ahead. I don't know how some of you guys have the patience and nerves of steal to take on the risk of buying homes, etc.

I need to get married. I will have much more money coming in then and will be able to do much more to put my money to work. If the lady is going to rent a place, I know she isn't going to rent a dump, so she will be paying 650-800 a month minimum I would think. I cannot fathom us each having an apartment for a 1200 a month rent + each person having internet, etc. Just seems ridiculous.

One parent is strongly advocating paying back my debt, but they also recommend continuing to live in the basement to save a down payment. Living in the basement has to stop asap as far as I'm concerned.

Other parent is advocating saving money over the new few months and buying a duplex before the tax credit expires.

What do the rats advocate? I take home about 1500 in cash every other week and then have typical expenses like car insurance, etc.

[GrnBay007]

I need to get married. I will have much more money coming in then and will be able to do much more to put my money to work.


What do the rats advocate?

Marriage is difficult enough when you get married for the right reason.

You might find yourself living in your parents basement again when your 30 something if you get married for the wrong reason....have a few kids....marriage ends up a bust, blah, blah blah.

[Partial]

I need to get married. I will have much more money coming in then and will be able to do much more to put my money to work.


What do the rats advocate?

Marriage is difficult enough when you get married for the right reason.

You might find yourself living in your parents basement again when your 30 something if you get married for the wrong reason....have a few kids....marriage ends up a bust, blah, blah blah.

Bah we're going to eventually it is just a matter of when. We've been dating like 7 years.

[Scott Campbell]

It takes far too long to become a mogul.

I've got about 15 grand sitting in the bank and could either A) pay down all debt or B) keep saving and buy a duplex to rent w/ 20% down before the home buyer tax dealy runs out.

Growing up sucks. All I do is worry about how I'm going to get ahead. I don't know how some of you guys have the patience and nerves of steal to take on the risk of buying homes, etc.

I need to get married. I will have much more money coming in then and will be able to do much more to put my money to work. If the lady is going to rent a place, I know she isn't going to rent a dump, so she will be paying 650-800 a month minimum I would think. I cannot fathom us each having an apartment for a 1200 a month rent + each person having internet, etc. Just seems ridiculous.

One parent is strongly advocating paying back my debt, but they also recommend continuing to live in the basement to save a down payment. Living in the basement has to stop asap as far as I'm concerned.

Other parent is advocating saving money over the new few months and buying a duplex before the tax credit expires.

What do the rats advocate? I take home about 1500 in cash every other week and then have typical expenses like car insurance, etc.

I advocate that you quit worrying so much. The boys here have been telling you for years that it's the power of savings, time and compound interest that will get you where you want to be financially. You're gainfully employed with very little debt during one of the worst recessions in the history of this country. Keep your situation in perspective.

And then do the math.

Making great financial decisions can often be no more complex than avoiding the really stupid move. And it looks like you're there already. You're not going to buy a car you can't afford. You're not going to live beyond your means. You're going to systematically save. You'll be fine.