Personal Finance Advice and Education! (3 Viewers)

[Random]

Just to voice the other side of the coin. I have a neighbor friend that got intrigued by what we are doing with RE and went out and bought a $10K house. I had driven by it numerous times and just from the outside its an obvious teardown. It would take more time and money to rehab the place than it will ever be worth. He is a Dr and said he was going to work on it in his spare time (and he has 4 kids). He bought it 6 months ago and to this day has done nothing to it because it needs a new roof and he can't get an estimate because the structure is unstable. I know the $10K isn't that big of a deal to him and he should be able to sell it for a minimal loss if he bails sooner rather than later. But now he's talking about tearing it down and building a duplex.

 

[Random]

So what about someone not as financially set up as JB, but is pretty set on staying in the area?

My job has a pension and I have an Roth IRA. In the bank I have enough to for a down payment (15-20%) on a condo. Larger size and mortgage+hoa would be about what I spend for rent right now.

Not married, don't have any kids. So this would be my permanent bachelor pad and I wouldn't mind keeping it long term to rent out once I out grow it.

Make sense to buy or keep renting?

Buy a duplex.

 

[chet]

Here's one. $20K list (been listed for 6+months, we could probably get it for $15K). Probably needs $5-$10K tops in work to get it rented, we would rent it for $700-$725. I might go look at it today.

http://www.realtor.com/realestateandhomes-detail/133-Piper-St_Sidney_OH_45365_M44117-59278?row=3

This seems like a great deal. ~$8500 in annual income. $30K outlay. How hard is it to rent out? What would taxes and other expenses be?

 

[Random]

Here's one. $20K list (been listed for 6+months, we could probably get it for $15K). Probably needs $5-$10K tops in work to get it rented, we would rent it for $700-$725. I might go look at it today.

http://www.realtor.com/realestateandhomes-detail/133-Piper-St_Sidney_OH_45365_M44117-59278?row=3

This seems like a great deal. ~$8500 in annual income. $30K outlay. How hard is it to rent out? What would taxes and other expenses be?

Meh. It didn't even make it past our drive by. Its a dump. While we could no doubt make it a winner, it would just take too much time and money to turn that one around.

 

[wilked]

So what about someone not as financially set up as JB, but is pretty set on staying in the area?

My job has a pension and I have an Roth IRA. In the bank I have enough to for a down payment (15-20%) on a condo. Larger size and mortgage+hoa would be about what I spend for rent right now.

Not married, don't have any kids. So this would be my permanent bachelor pad and I wouldn't mind keeping it long term to rent out once I out grow it.

Make sense to buy or keep renting?

Are you planning to be a permanent bachelor? Just realize that if not, your future husband/wife may (will) not want to stay there

When you say mortgage+hoa would be the same, what about taxes and insurance? Budget 1% of the purchase price for annual maintenance

As Bucky said, don't spend your last dollar on down-payment...you will still need money for closing, moving, new furniture, broken furnace, etc

 

[wilked]

Here's one. $20K list (been listed for 6+months, we could probably get it for $15K). Probably needs $5-$10K tops in work to get it rented, we would rent it for $700-$725. I might go look at it today.

http://www.realtor.com/realestateandhomes-detail/133-Piper-St_Sidney_OH_45365_M44117-59278?row=3

This seems like a great deal. ~$8500 in annual income. $30K outlay. How hard is it to rent out? What would taxes and other expenses be?

Meh. It didn't even make it past our drive by. Its a dump. While we could no doubt make it a winner, it would just take too much time and money to turn that one around.

Zillow has failed us. I had high hopes for that place too...

 

[Random]

Here's one. $20K list (been listed for 6+months, we could probably get it for $15K). Probably needs $5-$10K tops in work to get it rented, we would rent it for $700-$725. I might go look at it today.

http://www.realtor.com/realestateandhomes-detail/133-Piper-St_Sidney_OH_45365_M44117-59278?row=3

This seems like a great deal. ~$8500 in annual income. $30K outlay. How hard is it to rent out? What would taxes and other expenses be?

Meh. It didn't even make it past our drive by. Its a dump. While we could no doubt make it a winner, it would just take too much time and money to turn that one around.

Zillow has failed us. I had high hopes for that place too...

No doubt there will be others. This thread has got me thinking about picking up a few more. This one would have been a winner, but its under contract.

http://www.realtor.com/realestateandhomes-detail/732-N-Ohio-Ave_Sidney_OH_45365_M47119-38280?row=13

 

[Gawain]

Here's one. $20K list (been listed for 6+months, we could probably get it for $15K). Probably needs $5-$10K tops in work to get it rented, we would rent it for $700-$725. I might go look at it today.

http://www.realtor.com/realestateandhomes-detail/133-Piper-St_Sidney_OH_45365_M44117-59278?row=3

This seems like a great deal. ~$8500 in annual income. $30K outlay. How hard is it to rent out? What would taxes and other expenses be?

Meh. It didn't even make it past our drive by. Its a dump. While we could no doubt make it a winner, it would just take too much time and money to turn that one around.

Zillow has failed us. I had high hopes for that place too...

No doubt there will be others. This thread has got me thinking about picking up a few more. This one would have been a winner, but its under contract.

http://www.realtor.com/realestateandhomes-detail/732-N-Ohio-Ave_Sidney_OH_45365_M47119-38280?row=13

That house in my neighborhood would go for easily 10X what's being asked. Telecommuting can't get here soon enough.

 

[No. 16]

So what about someone not as financially set up as JB, but is pretty set on staying in the area?

My job has a pension and I have an Roth IRA. In the bank I have enough to for a down payment (15-20%) on a condo. Larger size and mortgage+hoa would be about what I spend for rent right now.

Not married, don't have any kids. So this would be my permanent bachelor pad and I wouldn't mind keeping it long term to rent out once I out grow it.

Make sense to buy or keep renting?

Once you make the downpayment on a condo/house do you still have enough saved to make payments for a year?

Nope.

So I guess that's my next step, before I look to buy.

Assuming I did....would my situation make sense to buy? Tied to the area and willing to hold the property long term to eventually rent out.

 

[Doctor Detroit]

Fred

How did the meeting with the advisor go? House chat has crushed this thread.

 

[thecatch]

So what about someone not as financially set up as JB, but is pretty set on staying in the area?

My job has a pension and I have an Roth IRA. In the bank I have enough to for a down payment (15-20%) on a condo. Larger size and mortgage+hoa would be about what I spend for rent right now.

Not married, don't have any kids. So this would be my permanent bachelor pad and I wouldn't mind keeping it long term to rent out once I out grow it.

Make sense to buy or keep renting?

Once you make the downpayment on a condo/house do you still have enough saved to make payments for a year?

Nope. So I guess that's my next step, before I look to buy.

Assuming I did....would my situation make sense to buy? Tied to the area and willing to hold the property long term to eventually rent out.

20% plus enough cash leftover to make payments for a year can't be the general rule of thumb in expensive regions, can it? Nobody could ever afford a house under those guidelines.

 

[No. 16]

So what about someone not as financially set up as JB, but is pretty set on staying in the area?

My job has a pension and I have an Roth IRA. In the bank I have enough to for a down payment (15-20%) on a condo. Larger size and mortgage+hoa would be about what I spend for rent right now.

Not married, don't have any kids. So this would be my permanent bachelor pad and I wouldn't mind keeping it long term to rent out once I out grow it.

Make sense to buy or keep renting?

Once you make the downpayment on a condo/house do you still have enough saved to make payments for a year?

Nope.So I guess that's my next step, before I look to buy.

Assuming I did....would my situation make sense to buy? Tied to the area and willing to hold the property long term to eventually rent out.

20% plus enough cash leftover to make payments for a year can't be the general rule of thumb in expensive regions, can it? Nobody could ever afford a house under those guidelines.

Living in the Bay Area makes this all seem impossible.

 

[xulf]

So what about someone not as financially set up as JB, but is pretty set on staying in the area?

My job has a pension and I have an Roth IRA. In the bank I have enough to for a down payment (15-20%) on a condo. Larger size and mortgage+hoa would be about what I spend for rent right now.

Not married, don't have any kids. So this would be my permanent bachelor pad and I wouldn't mind keeping it long term to rent out once I out grow it.

Make sense to buy or keep renting?

Once you make the downpayment on a condo/house do you still have enough saved to make payments for a year?

Nope.So I guess that's my next step, before I look to buy.

Assuming I did....would my situation make sense to buy? Tied to the area and willing to hold the property long term to eventually rent out.

20% plus enough cash leftover to make payments for a year can't be the general rule of thumb in expensive regions, can it? Nobody could ever afford a house under those guidelines.

Living in the Bay Area makes this all seem impossible.

Which makes living in expensive cities seem silly to us Midwesterners...

 

[No. 16]

For those investing with Vanguard, mainly through index funds, what does your portfolio look like?

With retirement so far away (30 years old) is it crazy to invest 100% into a Total Stock Market Index fund?

 

[wilked]

I am a couple years older than you, but here is what I do

http://i58.tinypic.com/2uh9zk7.jpg

Would you be able to swallow a 40% drop in your portfolio?

 

[ghostguy123]

Ok, quickie on situation and then question about taking a loan from my 403-b (loan, not withdrawal).

I have one rental, and am buying a house for the family, 20% down, 15 year. Payment (including everything) will be about the same as I pay in rent right now.

Now I am not say I am planning to do this or even actively LOOKING, but if another sweet deal comes up like the current rental condo I have (total $44,000 investment to purchase and fix up, rents for 750), how strongly would you advise AGAINST me taking out a 40-50k loan from the 403-b for the same type of property?

Only reason I would look towards the 403-b for this is because I might not have enough for down payments on another rental, and even if I did it would completely deplete my savings.

I know the general rule is "don't touch your retirement fund for any reason".....................but something like that would seem like an ok reason.

 

[RUSF18]

For those investing with Vanguard, mainly through index funds, what does your portfolio look like?

With retirement so far away (30 years old) is it crazy to invest 100% into a Total Stock Market Index fund?

Not even a little crazy. There's a popular idea from Buffet that the best/simplest advice is invest 90% in some kind of similar index fund and 10% in short term instruments.

 

[General Malaise]

GM, you are almost blind in your support of home purchasing. Advising someone to buy with 3.5%? Why not 0%, bring it back to 2006?

Big picture stuff that many gloss over:

1. You will lose 6-10% between buying/selling. If you are counting on your home to appreciate, it needs to beat this. That is why people say you need to stay in your home 5-10 years to make the numbers work.

2. People overemphasize "building equity" and don't speak to the reality that for the first 10 years you are basically renting from the bank (paying mostly interest). Again, this applies more to short term owners <10 years.

3. People assume house prices will go up, when historically they have only kept pace with inflation (Google if needed). Home appreciation is a recent phenomenon and is not assured to continue.

4. Most get as much home they can afford, and only rent what they need. This part is big and often overlooked.

GM, you ask if I was burned, nope. Bought my first home 6 months ago and love it. I am a realist though...

I didn't advise him to do that; simply stated it was an option. FHA loans are very common and not at all the same as 0% down.

Not sure I follow point 1....Bender can get the seller to pay closing costs. How has he "lost" 10%?

Also not sure I agree that home appreciation is a "recent phenomenon". Can you expand on that?

I think you significantly overlook the tax deduction available to homeowners too. Hopefully you'll recognize your oversight next tax season. It makes a difference.

 

[xulf]

For those investing with Vanguard, mainly through index funds, what does your portfolio look like?

With retirement so far away (30 years old) is it crazy to invest 100% into a Total Stock Market Index fund?

I'm 34 and 100% in the market. 80%/20% in the 500 fund and small cap growth.

 

[wilked]

GM, you are almost blind in your support of home purchasing. Advising someone to buy with 3.5%? Why not 0%, bring it back to 2006?

Big picture stuff that many gloss over:

1. You will lose 6-10% between buying/selling. If you are counting on your home to appreciate, it needs to beat this. That is why people say you need to stay in your home 5-10 years to make the numbers work.

2. People overemphasize "building equity" and don't speak to the reality that for the first 10 years you are basically renting from the bank (paying mostly interest). Again, this applies more to short term owners <10 years.

3. People assume house prices will go up, when historically they have only kept pace with inflation (Google if needed). Home appreciation is a recent phenomenon and is not assured to continue.

4. Most get as much home they can afford, and only rent what they need. This part is big and often overlooked.

GM, you ask if I was burned, nope. Bought my first home 6 months ago and love it. I am a realist though...

I didn't advise him to do that; simply stated it was an option. FHA loans are very common and not at all the same as 0% down.

Not sure I follow point 1....Bender can get the seller to pay closing costs. How has he "lost" 10%?

Also not sure I agree that home appreciation is a "recent phenomenon". Can you expand on that?

I think you significantly overlook the tax deduction available to homeowners too. Hopefully you'll recognize your oversight next tax season. It makes a difference.

GM...good questions

1. If the seller pays closing costs you still pay them (seller just adds it to the sale price. If a home lists for $200K and you offer $180K plus seller cover the $5K in closing, they might counter with either $190K no closing costs or $195K seller pays closing costs). There is no 'free lunch' here. In a slow market, if the seller overprices his home and lists it high you might get him/her to pay the closing costs, but that is not typical. More to the point, every home sale has 5-6% going to realtors. Let's say 6% that is lost right off the top, every transaction. Then you have moving costs, new furniture costs, new paint costs to make it like you like it, new floor mat here, new bath mat there, replace the blinds... Add it all up and you approach 10%. It happens every time you move, and it is expensive, and is another reason why buying / selling a house for < 5 years is a bad idea (unless you are the realtor on the deal!)

2. See this graph for real house prices over the years (ie inflation adjusted) http://keenomics.s3.amazonaws.com/debtdeflation_media/2009/04/IMG0031_46434765.PNG . I am going to take a wild guess and say that most of your home ownership has happened where the line goes way up. That worked out great for you and others and I think that is awesome, but there is no reason to think that the last 20 years outweighs the previous 100 (also makes you glad not to be living in Australia!)

3. Tell me what I don't get for tax deduction. I can deduct interest paid and real estate taxes from my taxable income, yes? Let's say my tax rate is 30%. That means for every dollar I pay the bank in interest (not equity), I get 30 cents back, yes? It is a little like 'saving' money by buying a bunch of clothes that are on sale 30%. Yes, I saved $100 but I also spent $300. Don't get me wrong, the tax deduction helps but let's not make it out to be something it isn't.

 

[Doctor Detroit]

House buying chat is...

...SO ####### BORING!

 

[FUBAR]

Reviewing the accounts, I decided to sell off my Google shares in our near-term account to buy bonds. This is our account intended to provide our down payment on a home in 5 years (give or take). So I figure it makes sense to have bonds here but perhaps not in our long term (TSP) account.

But now the question becomes what Bond ETF to buy? VCIT looks promising as does AGG, while BND has been mentioned often. Does it make sense to diversify among your Bond ETFs? Let's say someone has $20k to invest in bonds which they intend to use in 5 years. Would it make sense to split between US and world bonds? Say $10k in BND and $10k in BNDX? Maybe $7k in each and $6k in VCIT? Our tax rate is fairly low but this is a taxable account, so Muni's might be useful too. We don't pay state taxes.

I forgot how complicated Bonds can be since the only bonds I've owned lately have been the G fund in TSP.

 

[DocHolliday]

For those investing with Vanguard, mainly through index funds, what does your portfolio look like?

With retirement so far away (30 years old) is it crazy to invest 100% into a Total Stock Market Index fund?

I'm 34 and 100% in the market. 80%/20% in the 500 fund and small cap growth.

It depends on how you feel about risk. If you could watch the market crash and lose 30 or 40% of your investment and not sell, you are fine. The only mistake would be to sell your stock fund when it crashed.

That being said, I have always held at least 10% of my retirement investment in bonds. Now that I am in my 40s, I am at 30% bonds. I plan on staying at 70/30 until I am 55 and then shift 1% towards bonds for the next 10 years. That does not mean that is the right way of doing things. You make the plan that fits you and do not panic.

 

[eoMMan]

House buying chat is...

...SO ####### BORING!

I know, right?

Let's discuss ultra leveraged ETFs!!!!

 

[eoMMan]

Here's one. $20K list (been listed for 6+months, we could probably get it for $15K). Probably needs $5-$10K tops in work to get it rented, we would rent it for $700-$725. I might go look at it today.

http://www.realtor.com/realestateandhomes-detail/133-Piper-St_Sidney_OH_45365_M44117-59278?row=3

I wonder how many people were murdered in that house.

 

[Grahamburn]

For those investing with Vanguard, mainly through index funds, what does your portfolio look like?

With retirement so far away (30 years old) is it crazy to invest 100% into a Total Stock Market Index fund?

VBINX

VHDYX

VGSTX

VTIVX

 

[wilked]

Reviewing the accounts, I decided to sell off my Google shares in our near-term account to buy bonds. This is our account intended to provide our down payment on a home in 5 years (give or take). So I figure it makes sense to have bonds here but perhaps not in our long term (TSP) account.

But now the question becomes what Bond ETF to buy? VCIT looks promising as does AGG, while BND has been mentioned often. Does it make sense to diversify among your Bond ETFs? Let's say someone has $20k to invest in bonds which they intend to use in 5 years. Would it make sense to split between US and world bonds? Say $10k in BND and $10k in BNDX? Maybe $7k in each and $6k in VCIT? Our tax rate is fairly low but this is a taxable account, so Muni's might be useful too. We don't pay state taxes.

I forgot how complicated Bonds can be since the only bonds I've owned lately have been the G fund in TSP.

If I had $20K I needed for a house purchase in 5 years...I would put it in a CD. There are some 2-2.5% CDs available out there

Here is Vanguard's Total Bond Index over the last 5 years, as a comparison

http://finance.yahoo.com/echarts?s=VBMFX+Basic+Chart&t=5y

What do you expect to earn from your bond fund?

 

[RUSF18]

Reviewing the accounts, I decided to sell off my Google shares in our near-term account to buy bonds. This is our account intended to provide our down payment on a home in 5 years (give or take). So I figure it makes sense to have bonds here but perhaps not in our long term (TSP) account.

But now the question becomes what Bond ETF to buy? VCIT looks promising as does AGG, while BND has been mentioned often. Does it make sense to diversify among your Bond ETFs? Let's say someone has $20k to invest in bonds which they intend to use in 5 years. Would it make sense to split between US and world bonds? Say $10k in BND and $10k in BNDX? Maybe $7k in each and $6k in VCIT? Our tax rate is fairly low but this is a taxable account, so Muni's might be useful too. We don't pay state taxes.

I forgot how complicated Bonds can be since the only bonds I've owned lately have been the G fund in TSP.

If I had $20K I needed for a house purchase in 5 years...I would put it in a CD. There are some 2-2.5% CDs available out there

I sort of agree. My wife and I aren't planning on buying anything for another 2 years or so, but even still...down payment money is sitting in savings, and everything else above that is being invested in index funds. There's just no way in hell I'm willing to risk any of that if the economy blew up. And even if it did, then that down payment will really be able to get me a good deal!

 

[FUBAR]

Reviewing the accounts, I decided to sell off my Google shares in our near-term account to buy bonds. This is our account intended to provide our down payment on a home in 5 years (give or take). So I figure it makes sense to have bonds here but perhaps not in our long term (TSP) account.

But now the question becomes what Bond ETF to buy? VCIT looks promising as does AGG, while BND has been mentioned often. Does it make sense to diversify among your Bond ETFs? Let's say someone has $20k to invest in bonds which they intend to use in 5 years. Would it make sense to split between US and world bonds? Say $10k in BND and $10k in BNDX? Maybe $7k in each and $6k in VCIT? Our tax rate is fairly low but this is a taxable account, so Muni's might be useful too. We don't pay state taxes.

I forgot how complicated Bonds can be since the only bonds I've owned lately have been the G fund in TSP.

If I had $20K I needed for a house purchase in 5 years...I would put it in a CD. There are some 2-2.5% CDs available out there

Here is Vanguard's Total Bond Index over the last 5 years, as a comparison

http://finance.yahoo.com/echarts?s=VBMFX+Basic+Chart&t=5y

What do you expect to earn from your bond fund?

pretty much the same, 2-2.5%

never even considered a CD. Best I can get from my bank is 1.06% for 5 years.

 

[John Bender]

Tomorrow is another vesting date for my stock options which have done incredibly well. I'm going to have some cash to move around/invest.

Thank you to those who provided contact information for Advisors, I'm currently vetting out the list here.

Read through this thread and want to re-certify some of the overall themes I'm finding:

(Keep in mind, I have the knowledge level of Dentist's chiropractor friend)

1 - Find a fee based advisor. They are less inclined to have a motive of enrolling you in things you don't need or want.

Dr. Drs link: http://www.napfa.org/

2 - I see a lot of recco's for Vanguard. Their headquarters is the next town over from me. Do I call a fee based advisor who offers Vanguard or do I just call Vanguard directly. What's the difference?

3 - Fully fund your Roth (I don't have a Roth). Start one?

4 - Index Funds seem the prevailing opinion for best investment opportunity (depending on situation obviously). Does that still hold?

The taxes are becoming an issue for me as well - I've hired a real accountant instead of dealing with H&R Block or Turbo Tax at this point. Problem is, even real accountants can't seem to make heads or tails of what my stocks mean - at least they aren't as clear as I'd thought they'd be. They're asking "what does NQ mean on this batch of grants?" I'm like "I thought you could tell me that." Seems they just want you to give them the numbers you want to touch or move and they can look up how much you'll owe accordingly. I really need more of a deep dive in explaining why one batch are Non qualified, one batch are ISOs, one batch is something else. None of which I have a clue about.

 

[Mystery Achiever]

For those investing with Vanguard, mainly through index funds, what does your portfolio look like?

With retirement so far away (30 years old) is it crazy to invest 100% into a Total Stock Market Index fund?

VBINX

VHDYX

VGSTX

VTIVX

Star and target funds are meant to be all inclusive, ie only fund you own. In fact, by adding additional funds, you change your asset allocation, defeating their purpose.Total Stock Market should be okay at age 30 and would be more diversifed than VBINX or VHDYX.

 

[Random]

You can open an account online at vanguard.com If you're just looking for mutual funds/efts there's really no need for an adviser.

And if you make more than 129K single filing status you cant have a Roth.

 

[John Bender]

You can open an account online at vanguard.com If you're just looking for mutual funds/efts there's really no need for an adviser.

Problem is....I don't know where my money is best because I don't even know what a mutual fund or EFTS is.

I need the financial adviser at least for these types of things. Or a book to read first. I'm uncomfortable handling my own money.

 

[NutterButter]

You can open an account online at vanguard.com If you're just looking for mutual funds/efts there's really no need for an adviser.

And if you make more than 129K single filing status you cant have a Roth.

Backdoor roth although that will be going away if obama has his way.

 

[John Bender]

You can open an account online at vanguard.com If you're just looking for mutual funds/efts there's really no need for an adviser.

And if you make more than 129K single filing status you cant have a Roth.

ok - thanks.

I just need someone who not only can re-invest some of this money for me, but prepare me for the checks I'll be writing to the IRS. There's 2 years salary in this account and it grows again tomorrow. I can't just go to Vanguard.com and open an account not knowing what I'm doing.

In conjunction with my accountant's help. Will most advisors have some knowledge of tax implications as well?

ETA: there's 3 types of grants in this account:

RSU (restricted)

ISO Options

NQ Options

Seems like they all mean something different for tax purposes.

 

[Tiger Fan]

You can open an account online at vanguard.com If you're just looking for mutual funds/efts there's really no need for an adviser.

And if you make more than 129K single filing status you cant have a Roth.

ok - thanks.

I just need someone who not only can re-invest some of this money for me, but prepare me for the checks I'll be writing to the IRS. There's 2 years salary in this account and it grows again tomorrow. I can't just go to Vanguard.com and open an account not knowing what I'm doing.

In conjunction with my accountant's help. Will most advisors have some knowledge of tax implications as well?

ETA: there's 3 types of grants in this account:

RSU (restricted)

ISO Options

NQ Options

Seems like they all mean something different for tax purposes.

Knowledge, yes...but they'll be the first to tell you to check with your accountant.

If you have a trusted accountant, you might want to ask him if he can refer you to any fee based advisors

 

[John Bender]

You can open an account online at vanguard.com If you're just looking for mutual funds/efts there's really no need for an adviser.

And if you make more than 129K single filing status you cant have a Roth.

ok - thanks.

I just need someone who not only can re-invest some of this money for me, but prepare me for the checks I'll be writing to the IRS. There's 2 years salary in this account and it grows again tomorrow. I can't just go to Vanguard.com and open an account not knowing what I'm doing.

In conjunction with my accountant's help. Will most advisors have some knowledge of tax implications as well?

ETA: there's 3 types of grants in this account:

RSU (restricted)

ISO Options

NQ Options

Seems like they all mean something different for tax purposes.

Knowledge, yes...but they'll be the first to tell you to check with your accountant.

If you have a trusted accountant, you might want to ask him if he can refer you to any fee based advisors

First year using a real accountant. Got a recommendation for a Financial Advisor with Citigroup Smith Barney through her.

 

[RUSF18]

My recommendation would be to see if any of your co-workers, who would have similar options-related activity as you, can recommend someone. And if they're out of the area, have them recommend someone near you. This doesn't seem like something that should be left with just any accountant you'd find in your town.

 

[Tiger Fan]

My recommendation would be to see if any of your co-workers, who would have similar options-related activity as you, can recommend someone. And if they're out of the area, have them recommend someone near you. This doesn't seem like something that should be left with just any accountant you'd find in your town.

this is good advice as well. My guy knows the ins and out of our benefits plan

 

[mquinnjr]

Here's some info on the tax end of the different equity compensation types that you listed above, for a basic understanding of how you'll be taxed on each. Great primers so you can see what you're getting into at a high level before you speak with an accountant:

RSU's: http://www.investopedia.com/articles/tax/09/restricted-stock-tax.asp?performancelayout=true

ISO's: https://turbotax.intuit.com/tax-tools/tax-tips/Investments-and-Taxes/Incentive-Stock-Options/INF12049.html

NQ's: https://turbotax.intuit.com/tax-tools/tax-tips/Investments-and-Taxes/Non-Qualified-Stock-Options/INF12046.html

As for investing the proceeds after their tax effected, really depends on your timeline/purpose for the funds (retirement, non-retirement (e.g., saving for a home, other large purchase, etc.), college savings, you name it). That will drive the vehicle and the funds you're investing in. Lots of guys on the board with good, sound knowledge of how to get started before you decide to sit down with someone. You could also read Boglehead's Guide to Investing or books like it that teach the basics of low cost, long term investing to get a flavor for how to invest so you're educated before you go see an adviser and ask the right questions when they propose options for you.

 

[John Bender]

Here's some info on the tax end of the different equity compensation types that you listed above, for a basic understanding of how you'll be taxed on each. Great primers so you can see what you're getting into at a high level before you speak with an accountant:

RSU's: http://www.investopedia.com/articles/tax/09/restricted-stock-tax.asp?performancelayout=true

ISO's: https://turbotax.intuit.com/tax-tools/tax-tips/Investments-and-Taxes/Incentive-Stock-Options/INF12049.html

NQ's: https://turbotax.intuit.com/tax-tools/tax-tips/Investments-and-Taxes/Non-Qualified-Stock-Options/INF12046.html

As for investing the proceeds after their tax effected, really depends on your timeline/purpose for the funds (retirement, non-retirement (e.g., saving for a home, other large purchase, etc.), college savings, you name it). That will drive the vehicle and the funds you're investing in. Lots of guys on the board with good, sound knowledge of how to get started before you decide to sit down with someone. You could also read Boglehead's Guide to Investing or books like it that teach the basics of low cost, long term investing to get a flavor for how to invest so you're educated before you go see an adviser and ask the right questions when they propose options for you.

The RSU taxes is about as confusing as it gets for me. Haven't not reported and I'm 40% vested, elected to withhold from that grants 25%, and did not pay taxes at time of grant (which appears to be a mistake).

I'm buying the dinner Tuesday - I'm gonna have to bring my laptop , you're gonna need to school me.

 

[belljr]

You can open an account online at vanguard.com If you're just looking for mutual funds/efts there's really no need for an adviser.

And if you make more than 129K single filing status you cant have a Roth.

ok - thanks.

I just need someone who not only can re-invest some of this money for me, but prepare me for the checks I'll be writing to the IRS. There's 2 years salary in this account and it grows again tomorrow. I can't just go to Vanguard.com and open an account not knowing what I'm doing.

In conjunction with my accountant's help. Will most advisors have some knowledge of tax implications as well?

ETA: there's 3 types of grants in this account:

RSU (restricted)

ISO Options

NQ Options

Seems like they all mean something different for tax purposes.

Yes. The good ones should. If not they will know who to ask.

 

[Vincesanity]

I'm turning to the FBGs to help educate me regarding personal finance and planning. Thanks to my parents hard work and selflessness I was lucky enough to graduate from college without any loans. They live a comfy life, but as immigrants to the US I feel that they did not learn how to make their money work for them when they were younger. So hopefully you guys can help me out with some advice, recommend some books, and/or blogs for me. I tried wading through the web, but as many of you may know there are thousands of personal finance books. It's a bit overwhelming as a complete n00b to 401ks, Roth IRAs, mutual funds, stocks, portfolios, etc. There's just so much out there it. Hopefully, you guys can point me in the right direction. Here's a little bit more info about me to help out: - 26 years old, single, and lives in CA. - Current job/1st job out of college is per diem in my career field - so no benefits. Looking to land a full-time gig as I gain more experience. - No debt at all. College was paid for with my parent's help and working as a waiter, still driving around my first car from HS (100k + miles) which is paid off, and no credit card debit (well 2k on a card with 0% APR for 9 months - planning to pay it off by then). I find these are the 3 main debts that most college graduates have. So basically the things I "have" to pay for are only insurance (car and medical) and rent. So I should have a decent amount to save. I plan on getting married, having kids, owning a home, and blah blah blah. You know the drill. I will put effort educating myself, but again I just don't know where to start. I've read that saving 20% of your paycheck is a good start and I plan on doing that, but there has to be better ways to make your money work for you rather than sitting in a savings account. Also, this is going to be my first year making big bucks, so what steps should I take to make sure I can keep as much of my money as possible for myself rather than Uncle Sam? Thanks for the help.

1. Find a great advisor.

2. Take forum information with a grain of salt.

3. Take Siffoins information with a smaller grain of salt.

 

[No. 16]

I'll throw my support out there for Boglehead's Guide to Investing. I believe it was recommended in here by others when I first started this thread and it definitely helped make sense of everything.

 

[ghostguy123]

Jesus I need to reed an investment book for dummies. I know 100% I should spend time on this, but for some dumb ### lazy reason I don't

 

[John Bender]

Spoke to a financial planner today (CFP, fee based).

Fees seemed a bit high...

$1000 dollars for an initial meeting that I'd have to wait 2 weeks on while he researches my w2s, bank statements, tax returns, investments, savings, monthly expenses, etc.

From there it's $5000 per year. Which I realize includes Tax Prep, and on going planning, but I'm not sure I make enough money to justify that cost. Then again, I have enough money currently in stock options that a fee/% based guy may make a killing if those are reinvested and do well.

From guys who know these things (Dr D) does 5k per year seem a bit steep? His office is in one of the most affluent areas in the state, and that may be a big reason (he's used to dealing with bigger bucks?)

Wanted to get a sanity check on those types of fees.

 

[Sand]

Jesus I need to reed an investment book for dummies. I know 100% I should spend time on this, but for some dumb ### lazy reason I don't

Look one post up.

 

[Tiger Fan]

Spoke to a financial planner today (CFP, fee based).

Fees seemed a bit high...

$1000 dollars for an initial meeting that I'd have to wait 2 weeks on while he researches my w2s, bank statements, tax returns, investments, savings, monthly expenses, etc.

From there it's $5000 per year. Which I realize includes Tax Prep, and on going planning, but I'm not sure I make enough money to justify that cost. Then again, I have enough money currently in stock options that a fee/% based guy may make a killing if those are reinvested and do well.

From guys who know these things (Dr D) does 5k per year seem a bit steep? His office is in one of the most affluent areas in the state, and that may be a big reason (he's used to dealing with bigger bucks?)

Wanted to get a sanity check on those types of fees.

That seems extremely high IMO. Mine is about $1000/year. I initially went filled out a packet with all of that info and they input it all in to generate a report and that drove our conversation from there. I use Ameriprise FWIW.

 

[John Bender]

Spoke to a financial planner today (CFP, fee based).

Fees seemed a bit high...

$1000 dollars for an initial meeting that I'd have to wait 2 weeks on while he researches my w2s, bank statements, tax returns, investments, savings, monthly expenses, etc.

From there it's $5000 per year. Which I realize includes Tax Prep, and on going planning, but I'm not sure I make enough money to justify that cost. Then again, I have enough money currently in stock options that a fee/% based guy may make a killing if those are reinvested and do well.

From guys who know these things (Dr D) does 5k per year seem a bit steep? His office is in one of the most affluent areas in the state, and that may be a big reason (he's used to dealing with bigger bucks?)

Wanted to get a sanity check on those types of fees.

That seems extremely high IMO. Mine is about $1000/year. I initially went filled out a packet with all of that info and they input it all in to generate a report and that drove our conversation from there. I use Ameriprise FWIW.

Thanks - ok - it did seem high.

This guy, like I said, likely handles multi millionaires given his location. This is likely the reason why the cost is so high.

mquinnjr and I both live in this area, he can attest to the money out here on the Main Line. (I'm just a renter of condo and way out of place amongst all these Drs. )

 

[Grahamburn]

For those investing with Vanguard, mainly through index funds, what does your portfolio look like?

With retirement so far away (30 years old) is it crazy to invest 100% into a Total Stock Market Index fund?

VBINX

VHDYX

VGSTX

VTIVX

Star and target funds are meant to be all inclusive, ie only fund you own. In fact, by adding additional funds, you change your asset allocation, defeating their purpose.Total Stock Market should be okay at age 30 and would be more diversifed than VBINX or VHDYX.

Started with the STAR and Target 2045 within my Roth. I should have made that more clear.