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Afraid of investing
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CrushFearSynth
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PostPosted: Wed Mar 28, 2007 1:39 pm    Post subject: Reply with quote

There are far better ways to invest your money than in a 401k. I opted out of my company's 401k and invested in a specific type of mutual fund that is similar to a CD, but you don't have to pay a tax penalty when you dip into it, and it's insured up to $100k just like a CD. The interest is almost double a CD, so it's a very good deal.
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ashlad
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PostPosted: Wed Mar 28, 2007 1:54 pm    Post subject: Reply with quote

Really? What're the terms? Can you dip into it any time you want, or only after you've had it a certain amount of time? Is the interest rate locked in?
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Exzavier
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PostPosted: Wed Mar 28, 2007 3:03 pm    Post subject: Reply with quote

I just moved my savings over to ING to get 4.5%
I have like 2500 in a roth IRA and 2000 in my 401K so far.
However my 401K year to date is Negative 1.4% last time I checked.

What interest rate is it crush?
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CrushFearSynth
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PostPosted: Thu Mar 29, 2007 5:58 am    Post subject: Reply with quote

Quote:
What're the terms? Can you dip into it any time you want, or only after you've had it a certain amount of time? Is the interest rate locked in?

I'll post the info later when I get home, but you can dip into it any time without penalty, including close out. It's a bit riskier than a CD, but since it's insured I'm not really worried. 401k's are a good only for a backdrop, money that you just forget about and see how much you've accumulated after 20 or 30 years. I'd rather keep that money on my paycheck and invest it in something with a better payout. If the mods would like me to start a new thread, I'd be happy to. It just seems a waste to start a thread when you know there will only be three or four posts.

Quote:
Negative 1.4%

That sucks. You're insured though, so it isn't like your losing money. But you sure aren't making any. It'll get better though, paper is one of the most stable stocks, which is why it's used for 401k's and the like. I really need to start up a savings account myself. Can't rely on the market for everything.

Back on topic, I'm afraid of Ash's girl as well, and I've never met her. She's dating him, there has to be something deep and dark within her soul.
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Quagmire
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PostPosted: Thu Mar 29, 2007 6:11 am    Post subject: Reply with quote

Quote:
Drop the 401(k) deposits for six months or so if necessary.


Quote:
However my 401K year to date is Negative 1.4% last time I checked.


Dropping your deposits for a 401K should be a last resort. Mainly because you are giving up free money. Since your employer matches a certain portion. Also while your interest rate for the year so far may be -1.4% I'm betting there is more money in your 401K then you deposited. My company matches the first 5% put in so that is basically doubling your money a 100% interest rate before you add in the actual interest rate.

Most 401Ks will allow you to decide where your funds go. 30-30-40 is normally a good split and you can adjust as you get close to retirement. Basically place 40% in the higher return stocks, 30% in moderate and 30% in something conservative. You can adjust this to fit your needs. Whether you want to be riskier or more conservative. I'm actually more conservative and have most of mine in moderate and conservative options. But that's just me, other people will be different. My return is still pretty good. Think it was around 7 or 8 % last time I checked. You can pull double digits with the higher risk stuff but you can also lose big to so you have to be prepared to adjust how your money is split a lot more and keep an eye on the market and your company's stocks..
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Exzavier
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PostPosted: Thu Mar 29, 2007 6:20 am    Post subject: Reply with quote

I have 50% of mine going into a fund called the euro growth fund that has small cap european stocks. I picked it because over the past 4 years it had a final APR of over 10% each year.
However this year because of the small crash it is down.

My company gives 3% and it is lump at the end of the year not each paycheck.
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Quagmire
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PostPosted: Thu Mar 29, 2007 10:54 am    Post subject: Reply with quote

Quote:
My company gives 3% and it is lump at the end of the year not each paycheck


You still want to put in at least up to what the company matches. It is free money. Any extra money beyond that, I would take whatever will give you the best return.

Look at it this way. Say you make 50k per year. Is 1500 bucks in free money. So at the end of the year. You lost 1.4% on 1500 which leaves you with 1479. So 1479 +1500 = 2979 so you had a 98.6 % rate for the year.

My company pays 1.5 for the first 1% and then matches 1 to 1 up to 5%

So I put in 2500 on 50k and the company gives me 2750. Say I make 4% on this the next year I end up with interest of 210 for a total of 5460.

You put 2500 into any money market account and expect a profit of almost 3 grand in a year time and most banks will tell you to quit smoking crack. Just remember 401Ks may be limited as to what your options are but free money is still free money and it will beat any return out there unless you speculate on commodities or stocks. This is guaranteed, the others are not. So 401K needs to be your last resort on cutting spending.

We've also all said it, anyone can sit at home feeling sorry for themselves. It is a never ending cycle. What is the worst that can happen if the girl says no. You are still sitting at home, which is where you were to begin with. She says yes to a date and you are the new pimp daddy and Lotan will be taking notes from you. (ok you may have a ways to go on that one) Very Happy
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CrushFearSynth
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PostPosted: Thu Mar 29, 2007 1:02 pm    Post subject: Reply with quote

Quote:
free money is still free money and it will beat any return out there

Payout with 401k's is considerably less than most other insured or low risk investment options. Even though your company will match whatever you put into it, that "free money" will still net you less in the long run than opening a CD or something similar.

I don't think I could handle twins. I'm a one woman kind of guy in the first place, two of the same woman....that seems like a lot of hard work. If you care about pleasing them, that is. Ok, so scratch that. Twins would be awesome.
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ashlad
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PostPosted: Thu Mar 29, 2007 1:49 pm    Post subject: Reply with quote

I always thought of CDs as low-risk, low-payout investments. Good for a slush fund. I'm pretty sure my 401(k) options let me invest in some high payout stuff, but there's no matching, so I don't see the point. I understand traditional and Roth IRAs, but I really don't understand 401(k)s as a tax-shelter. I always thought the whole point was the funds matching. We get a pension instead.
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Quagmire
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PostPosted: Fri Mar 30, 2007 1:55 am    Post subject: Reply with quote

Quote:
Payout with 401k's is considerably less than most other insured or low risk investment options. Even though your company will match whatever you put into it, that "free money" will still net you less in the long run than opening a CD or something similar.


Payout is less which is why I think you should only put in to match your company's free money. You would need to invest in some high risk options to match what you get back, look at it this way. Your CD has to be at least double to get back more interest. Here is an example Say I get 5% and you get 10%

I invest 5k and my company matches 5k. so 10k at 5% is 500 bucks in interest.

You invest 5k at 10% to get 500 bucks in interest. But I've still got the extra 5k in my account with the 401K. (Now once you've hit your company's max percentage for a 401K you need to put the rest somewhere else.)

In 10 years at this you have almost 88k in the bank at 5 grand per year and 10% interest. I would have 132k investing 5000 per year with my company matching what I invested at 5%. I made 32k in interest over that time you would have made 38k. At 15 years you have 175k (100k in interest) and I have 227k (77k in interest) in my accounts. Eventually you will start to close the gap. But these figures are if you can find a rate that is at least double the 401k most are a few points higher and to get double digit returns you are not in a conservative fund or CD
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Trassin
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PostPosted: Fri Mar 30, 2007 2:03 am    Post subject: Reply with quote

My company doesn't do a traditional 401K.

The company matches 3% before taxes regardless of what I invest, which goes into a very conservative account.

Then I can invest up to 15% before taxes, but with my invested money I have a very wide range of options, all of which I can set up however I want.

The entire thing is handled by JP Morgan's retirement division so that no one in the company has to worry about the retirement fund being mismanaged (at least not by anyone within the company).
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CrushFearSynth
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PostPosted: Fri Mar 30, 2007 12:36 pm    Post subject: Reply with quote

Quote:
Payout is less which is why I think you should only put in to match your company's free money

Exactly. Maybe I'm a little hard on 401k's, despite payout I guess you are still getting double your money's worth. The trick is definitely to invest the absolute maximum amount that they will match.

I was way backwards on some stuff, though. For one thing, I didn't finish all the paperwork I was supposed to, so I haven't actually invested in anything yet. Oh well, I have plenty of time. Another thing is I got my wires crossed about what stocks are invested by what plans. 401k's are usually mutual funds, whereas Money Market Funds(which is what I was talking about all along) use commercial paper. I was getting advice from my best friend and future roommate, the one whose working to become a CFO, and he made everything a lot more clear to me. MMF's normally have an IR of about 5%, depending on the one you go with. What you want to do is find one with the cheapest fees(usually annual) with the biggest return. You also want one that's FDIC insured(always up to $100k). Make sure you find one with no load. A load is a percentage of money they take as commission. Front load is where they are taking money out for every dollar you invest into the fund, back load is where they take their commission every time you dip into the fund. So no load is the way to go. Now, any gains you make on your MMF has to be reported on your taxes, no getting around that(to insure that MMF's are not tax shelters), but I believe that means you can also report any losses. That can help to at least take some of the sting out said losses. The major advantage is that they are usually pretty stable, and you can dip into it any time you want with no tax penalty. Uncle Sam still gets his pound of flesh, but at least you don't have to worry about that at the moment you need the money. In the end, it's still a higher payout than any bank or 401k, and it's low risk.

I say we go on a Twin Hunt for Easter. There, I've saved the topic.
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khimaira
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PostPosted: Fri Mar 30, 2007 1:18 pm    Post subject: Reply with quote

If you are just looking to make 5% a year, then it seems putting your money into savings account would be the best bet. The only risk is if the bank goes out of business. "But what savings account offers 5%?" you ask in that whiny voice that irritates me. Well, J.D. over at Get Rich Slowly did the research and came up with a list of online money managers who do just that.

As far as MMF's, Lotan's got the right idea with FMF's.
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khimaira
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PostPosted: Fri Apr 06, 2007 4:12 pm    Post subject: Reply with quote

Does anybody play with penny stocks? I'm thinking about starting.
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CrushFearSynth
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PostPosted: Fri Apr 06, 2007 4:24 pm    Post subject: Reply with quote

Savings definitely do not pay out at 5%. Online money managers are scams as far as I'm concerned, and they aren't the same thing anyway.

I'm sure 'Hatte plays with penny stocks.
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PostPosted: Fri Apr 06, 2007 4:59 pm    Post subject: Reply with quote

Actually, my investments are all in low- and medium-risk mutuals. Growth Fund of America and Investment Company of America, to be exact. I chose them on the recommendation of my broker. I've done fairly well with them, considering that I threw ten grand at them in early 2002, hit an all-time low of about six grand in late 2003, and a high of around fifteen grand middle of this last year, which has largely funded my hedonistic lifestyle between graduation and the new job I start in a few weeks. Way I see it, my investments about tripled in value from Jan 2004 to Jun 2006. That ain't half bad. I can borrow against it, too. My only regret is not buying an assload more around Christmas 2003. I had the cash -- I just didn't think of it. Oh well -- easy come, easy go.
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PostPosted: Fri Apr 06, 2007 5:22 pm    Post subject: Reply with quote

Most of my shit is in medium or so risk stocks. I have everything from Disney to Exxon to Intel and Microshit. The market is a fucking ocean and it's hard to play it, thats why I have "People". Sure it costs money to pay people who know what they're doing, however it usually pays itself off. I only wish I knew how to really do it on my own....however I know for a fact that if I did, I'd be very very very....very poor.
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PostPosted: Sat Apr 07, 2007 12:50 am    Post subject: Reply with quote

Thanks for the thread, Glistam. We always wanted our very own.
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Exzavier
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PostPosted: Sat Apr 07, 2007 1:29 am    Post subject: Reply with quote

CrushFearSynth wrote:
Savings definitely do not pay out at 5%. Online money managers are scams as far as I'm concerned, and they aren't the same thing anyway.

I'm sure 'Hatte plays with penny stocks.


What do you mean by 'Online money managers are scams'
What are examples of Online money managers.

IMG, HSBC direct, Capitol One online bank are all savings accounts and are all close to if not 5%.

Also I thought penny stocks had higher fees to buy. The online trading fees for stocks under $1 are higher than stocks over $1 on the sites I have read.

Crush what is the name of the fund or company with the fund you have?
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PostPosted: Sat Apr 07, 2007 2:36 am    Post subject: Reply with quote

As of this morning my investments for my 401K break down like this:

Dodge & Cox Stock - 25.0%
BGI S&P 500 Eq Idx-Q - 10.0%
AF Grth Fd of Am-A - 35.0%
Dreyfus MidCap Index - 30.0%
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