Damn, I didnt know if I was getting ganked or not. Ive never had any of this stuff. I dont know about the max but I think I will following your advice.Originally Posted by shamrockfan
Damn, I didnt know if I was getting ganked or not. Ive never had any of this stuff. I dont know about the max but I think I will following your advice.
You darn bankers are all the same, you expect us to pay back the money you give us!
this is a really good topic!! I am thinking immediately after college I will sacrifice as much money as I can and invest into 401k and IRA. I figure I will probably rent for awhile before I get settled. Would it be a better idea to take out a mortgage and buy a duplex, fix it up, and rent one unit while living in the other, and then rent them both out once I get settled with a family?
TO ME that is absolutely the smartest way to go. That being said, it's easier done while single. I wanted to do this right when we were married but da wife kaboshed it.
The only complication is you need 5% down when buying a duplex so you have to save up a bit. Where with a single family home there are loads of on money down programs.
So you buy the duplex, and when you get married then you buy a home if your chick doesn't want to live in one.
You find another renter, and already have equity in a property plus you then have two renters paying down your mortgage. The key is finding a duplex at the right price that you like. Keep in mind that years down the road you will want both rents be be greater than the mortgage payment. Many I know use a simple formula that I'd agree with. On a duplex for 120G, you want about 1200 of rent coming in. Problem is with how houses have appreciated it's very hard to find a duplex where that forumula works anymore, and if it does the property is often in a tougher part of the neighborhood.
Also, it's far better to spend the time to find a good renter than rush to get a place rented. Many landlords are finding ways to pull credit on applicant rentors and look up their information on a website for criminal history. If you go this route you need to really do your due diligence on any renter you are considering.
BE SURE that IRA you start up is a "Roth" IRA. And many employers require you to work a full year before being able to get into the 401K. You can get the Roth IRA started either way.
For the ROTH IRAs is there a maximum you can put in per year? Also what's the minimum you can put in? Anyone know?
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$4000 per person. $8000 per couple - $5000/person/year if you're over 50. It's phased out from $95,000 for singles, $150,000 - $160,000 for couples. So if you make under $95K, you can make the maximum $4000 contribution.
The only minimum you need to worry about is an amount that would be adversly affected by any management fees that the institution (Fidelity, E*TRADE, etc.) charges for maintaining the account. In other words, if you contribute $25 a year, and they charge you $25 a year to maintain the account, the Roth would make no sense.
My suggestion is to find a way to contribute the max every year.
I've always defied conventional wisdom in this area. I've never felt like I had enough time to adequately research and follow more than 4 stocks at time. So I've never diversified in the traditional sense. I've had a high beta (variability), but my severe downturns have always been more than made up for by the run ups.
The Roth is great place to trade stocks, as you won't be paying short term or long term capital gains on any of the money you make. It's a real shot in the arm to your investment returns.
There's a variation on this that can help you quickly build equity in your home. Build it yourself. Work as the general contractor and take on a couple of the easier trades (tile, paint, landscaping, etc.) to build sweat equity. Many community colleges offer courses for owner/builders. You can sell the house after you live in it for 2 years, and any money that you net from appreciation or sweat equity is tax free up to $500K. Many people who do this well own their home free and clear after the 4th house.
I will admit I'm curious as to some of retailguy's views as well as the other accounting wiz's.
Geez, we need to recruit a couple stock brokers to come in here. Lots of great points in here so far.
And 007, if you haven't yet, start up a d@m Roth IRA.
Cheers,
B
Yes, I need to do that B. But I do have a 401k, deferred comp and also a State retirement plan.
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You are doing fine then; geez all that extra money; the strip clubs in Iowa must be treating you well
Life must be good when the EX is playing the mortgage and excessively high child supports.
I learned in Dennis Rodman's book that NBA players could pay up to $75,000/mth in child support for a single child. I mean, WTF does a child need $75,000 for? Frailty, thy name is woman!
I'm not going to stop the wheel. I'm going to break the wheel.
Life must be good when the EX is playing the mortgage and excessively high child supports.
Stop trying to pick a fight; but a great idea. If you get child support take it and invest it in a Roth IRA so the ex can be sure you retire early.
Cheers,
B
In my opinion, knowing how is only half the equation. You still have to be disciplined and execute on the plan once you know what to do. I know lots of accountants that are horrible money managers.
Here is where many people fail. They live beyond their means. They carry debt on things besides their house. They mortgage their future wealth to buy "stuff" now.
You have to be generating excess cash flow to get that money invested. So you can do one of two things (or a combination I guess). You can either make more money, or you can spend less money. Most people are already maximizing their income, or close to maximizing their income. So for the majority that leaves one option for generating excess cash flow needed for investment - spend less.
While I'm not a financial professional, I do work on my understanding of personal finance with about the same amount of effort as I put into following the Packers.
This thread was directed at Partial's original question, and I find it interesting that nobody has yet brought up the most critical financial success factor (IMO) for someone his age.
Any guesses?
Poor Dennis Rodman.....another of your boyfriends, if I remember correctly.
sorry doper, you are wrong. I pay my mortgage.
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Having a job?
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lolHaving a job?
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Nope.
Not buying a car (especially a new one) if at all possible. Common thing for new grads but very $$$. I went w/o one for almost 2 years and then had to bite the bullet.
I have several clients who have did the credit card at 0% flipping for some time. If you do it right this it should not seriously damage your credit score.Hmm, but the ratio is based on actual money owed not how many different accounts you have. Right?I've heard you can really screw up your credit rating if you do that. They leave the credit card you transferred from open and you end up with a screwed up debt to credit available (is that right?) ratio.
Your credit scores are based on a number of things, a few of which include payments made on time and delinquent payments (by far the most important factor), any current liens or judgements, revolving debt balances, and the number of times your credit is pulled by companies. Having a few unused credit cards should not hurt you much unless you are carrying balances and not making payments on time.
Remember each time you sign up for a no interest rate CC that company has to pull your credit, and if you do that too much, it will damage your credit. If you are doing this with one or two cards (resulting in 1-2 credit checks per year), this won't have a lot of adverse impact from the credit pulls.
But if people are doing this, and then running up these cards and never paying any principal off, this will have a long term bad effect because their debt loads are constantly going the wrong way.
But the #1 factor in building credit is making your payments on time. Every time you make a payment to a CC company, even a minimal payment, if it's on time they report this to the credit bureau and that helps your score. Likewise, if your bill is 2G and you don't have much money and neglect to send in a minimum payment, they will report you being late and that will have a very bad effect on your score.
As a banker, the first details I look at on a credit report (after the scores) are how many late payments people have made in their lifespan. People with perfect credit can usually get approved for much higher payments on a loan than they normally want or can afford.
About every month, my credit card company automatically raises my limit although I'd never use it. Previously, I asked them to lower the max b/c I read that before a loan it looks better to use more credit. What is the appropriate response? Should I continue letting the company float me a higher credit limit or not?
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