I'm looking to potentially make some larger purchases/financial moves in the near future. I'm reading everything I can but all I can find is trying to sell you something. I don't have any peers to talk to openly about something like this. I have a retirement financial manager and they have me almost up to pre-COVID level but. Where is a good place to learn about financial stuff without the fluff? In my head things make sense but I need somewhere to bounce my thinking off of. Thanks!
bogleheads.org is the droid you're looking for
Not sure what you're planning but some of the investing guys on Youtube have good information.
Griffin Milks and Minority Mindset are a couple that I watch.
Keep in mind, if they're suggesting you buy into something, they stand to make some cash off of it. Use it more as a "how to" than a "what to buy".
If you're in Canada, Mike Campbell's Moneytalks (podcast) has a lot of good information. I've found he's right a LOT. There's a lot of politics but there's a lot of good financial information as well.
PMRacing said:I have a retirement financial manager and they have me almost up to pre-COVID level but.
Man. I hope I'm just misunderstanding this line. If you're not well above pre-covid, something has gone really wrong. The S&P500 is up 51% since Feb 2020.
Agreed on the bogleheads suggestion. I've never found much personality in the place, and the mods seem pretty strict, but there's a ton of cold, honest financial knowledge there.
A good accountant is another resource that can provide feedback on how to "structure" larger moves to be as tax "smart" as possible.
I had same struggle. Wanted to run what I thought were good ideas past someone smarter than me, financially, but didn't want to feel like they were selling me something. Ultimately between our accountant, and two friends actively employed in finance, have been going it on my own.
Probably berkeleying it up.
If you have less money in your retirement accounts than you did in 2019, you need to fire that financial manager.
A good financial analyst, or a fiduciary, should basically be an accountant advising on tax strategies with little to no investment advice.
I like bogleheads and Mr. Money Mustache forums.
For most people, there is no need for any kind of financial advisor, unless you're trying to execute some of the more complex strategies that you've planned for like a backdoor Roth.
Here is my personal savings order:
*You can go either way with the Roth vs. Traditional, but I believe that taxes will only go up in the future, even the 22% and 24% tax brackets are probably lower than what I think we’ll see in the future (I could be completely wrong). For most people, I think the Roth is the better option, or traditional until your taxable income drops a tax bracket… but as always, do the math for yourself.
For 95% of people, the 401k, IRA, and HSA should be invested in an SP500 or total stock market index fund. It is the simple button, and more often than not, the best bet. VTSAX is where I have everything.
I need to look into the new 529 rules. I think that it would get inserted between #8 and #9 on my list as you can now roll it into an IRA.
In reply to mtn :
I would argue that paying off extremely low interest rate loans (number 12 on your list) should probably come before the hookers and blow, but after the fishing boats, etc.
Other than that, it looks good.
I think mtn has done an excellent job of providing a sequence of priorities.
My only regret is that I didn't contribute more to my Roth IRA when I was younger and fell under the MAGI income cap for making contributions.
The raw math for net (post tax) investment gains is identical between pre tax and post tax accounts...the difference is that you can thoughtfully bleed down the Roth portion of your portfolio over time to stay just under various tax brackets; Winning!
In terms of legacy planning however, you'll want to exhaust your Roth before you die as the tax base on your portfolio will be reset when your heirs inherit it unless you're giving someone a little over thirteen million dollars.
We've been using a local branch of an Edward Jones franchise. He's been fantastic to date. He makes great suggestions my wife doesn't want to take so I think he's doing ok.
Also, unless you're paying them a lot of money. Those financial advisors don't have access to any information that you can't find yourself.
If it seems to good to be true, it is. My aunt got scammed out of a bunch of cash in some offshore investment scheme that promised six figure returns on a $25k investment in 5 years.
mtn said:If you have less money in your retirement accounts than you did in 2019, you need to fire that financial manager.
inspired by this statement, i checked my retirement balances and changes:
12/31/2019: EOY $balance
3/31/2020: lost 21% in this quarter
12/31/2020: recovered plus some. EOY +17% vs EOY 2019
12/31/2021: EOY +17% vs EOY 2020 (so +37% vs EOY 2019)
12/31/2022: EOY -11% vs EOY 2021 (so +22% vs EOY 2019)
12/31/2023: EOY +9% vs EOY 2022 (so +33% vs EOY 2019)
Today: + 3.9% year to date, so +38% vs EOY 2019, and just a hair over EOY 2021
I get the impression that basic financial advice is not what PMRacing is looking for or in need of. A little more background information would probably help improve the feedback applicability.
There's some really good (surprisingly/mixed in with the expected) Reddit communities around financial topics, ranging from r/investing to r/personalfinance and r/financialindependence
In reply to Driven5 :
I'm wondering if I have enough in reserve to tap into some home equity? Straight home equity loan vs HELOC? Cash flow seems to be there for payments and I can sell a majority of the purchase without issue should things go south. No bad debt. Or is there another way to achieve some goals.
Invest vs. live life now vs. Future college/education expenses vs. potential life later kind of questions. We aren't moving until our mortgage is paid off (or any job pays it off) and our daughter is out of school. I need to run my rationale and numbers by an expert. The spreadsheet calcs (yes I'm an engineer...) make sense to me and I know what I want to do but am I missing something?
I'm not a fan of the HELOC system. It seems a lot of interest trickery compounding to make your life hell.
We used a HELOC to buy our farm.
My mortgage was half paid off. Bank lent us enough to buy this place outright and pay for the move.
Sold my house, paid off the mortgage, paid off the HELOC and put the rest in the bank.
Debt free now.
People who say renting is better than owning don't understand how equity works.
PMRacing said:In reply to Driven5 :
I'm wondering if I have enough in reserve to tap into some home equity? Straight home equity loan vs HELOC? Cash flow seems to be there for payments and I can sell a majority of the purchase without issue should things go south. No bad debt. Or is there another way to achieve some goals.
Invest vs. live life now vs. Future college/education expenses vs. potential life later kind of questions. We aren't moving until our mortgage is paid off (or any job pays it off) and our daughter is out of school. I need to run my rationale and numbers by an expert. The spreadsheet calcs (yes I'm an engineer...) make sense to me and I know what I want to do but am I missing something?
You can ask here, bogleheads, MMM, etc. Any are a good place to bounce ideas off. It sounds like you've got stuff figured out enough that the responses are going to be along the lines of "does it provide that much value to you, when do you want to retire, etc" I.E. there is no "right" answer, just "right for you".
Cash-out refinance could be another option, depending on your personal situation, but mostly if you don't already have a significantly lower mortgage rate.
HELOC is generally better for variable, intermittent, and/or short duration needs. Home equity loan is generally better for fixed, continuous, and/or long duration needs. The caveat is that this also depends on what your crystal ball predicts will happen with interest rates over the duration of your usage.
QuasiMofo (John Brown) said:I'm not a fan of the HELOC system. It seems a lot of interest trickery compounding to make your life hell.
We have used it, pretty well, too. But, and it's a big BUT, it was after we paid the home off. And it was for some home improvement that we knew we could pay off easily.
In reply to PMRacing :
IMHO, there is the hard numbers that you can calculate, and then there are how that feels to you. That's a very personal balance.
For instance, for many home loans, you can nominally do better if you keep money invested than pay it off early. But it makes one feel sooooo good to not have a mortgage.
If you can, put some models together- doesn't need to be perfect, just good. And they can be simple to set up in a spreadsheet. That should help a lot.
In reply to alfadriver :
For me, any disconnect between the numbers and the feelings indicates that something is wrong with the calculations.
We always hear that the cost avoidance coming from not paying interest on a home loan is less than the opportunity cost associated with not having the money working for you in investments.
But, if I have a mortgage, I'll need to be more conservative with my investments in order to hold my risk level constant which, of course, means lower returns over the long haul.
The extreme example being people that have a mortgage and hold bonds in their portfolios at the same time.
Being debt free allows you to enjoy the luxury of being more aggressive with your investments.
I'll be sixty at the end of June and I plan on retiring pretty soon and yet I hold zero bonds.
I paid off my mortgage in May of 2022, I own my four year old car outright, and my credit card balance as of this moment is -$32.10 (yes, there's a minus sign in front of the number because I've got more in reward points than I owe).
Don't ignore your heart, it's trying to tell you that something is wrong with the math.
My one buddy in finance works for the "high net worth" arm of a big bank. We often joke after he gives me some easy to say, but hard to actually follow advice, that the recipe to financial success is easy when you're playing with "house money" like a lot of his [born into it] clients are. Gets a little more complicated for "the rest of us".
I'm not uncomfortable with pulling some equity in the right situation, but I get the heebee-jeebies thinking about it right now.
Interest is likely going to be 7-10%, home values are trending the wrong way (meaning you could be underwater in short order), and most of the engineers that I know don't have a rosy outlook for company performance/job security over the next 18 months. Maybe it's just my corner of the world, but lots of manufacturing/industrial businesses are predicting down years, cutting budgets/headcount, etc.
Every situation is different, and every person has different risk tolerance, but taking those kinds of risks and encountering a little bad luck is how people lose their homes. I'll gamble with some investment money, but I won't gamble with the roof over my family's head.
RX Reven' said:But, if I have a mortgage, I'll need to be more conservative with my investments in order to hold my risk level constant which, of course, means lower returns over the long haul.
The truth to this statement relies on the assumption that an individual has already reached their risk tolerance threshold.
.
STM317 said:
I'll gamble with some investment money, but I won't gamble with the roof over my family's head.
I've known some people with significant equity who actually kept a zero balance HELOC to help cover extended periods of unemployment. Having a large fund to tap into, without overly depleting their equity, actually provided them much peace of mind... But they wouldn't be able to tap into that equity to keep paying the mortgage and prevent being forced to sell, if they waited to apply for it until after getting laid off.
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