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Old 03-19-2008, 01:17 PM   #41
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What tax advantage? With a roth you put in post tax income, you paid the tax on it already. With a traditional IRA you can write the taxes off.

Unless you are referring to the non taxed earnings when you withdraw retirement?
Hell yes I'm referring to the non taxed earnings. My example was clear. You put in 5000 dollars (which costs you 7700 say because it's taxed) and you earn 600% over the life of the investment in your roth grossing you 30k. that's ALL YOUR MONEY. you already paid 2700 dollars in taxes on 30,000 dollars of income at retirement. that's like 9% compared to being in the 25% tax bracket otherwise. but if you want to give up 14% for personal reasons, go ahead.

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Btw, when you put your money into a Roth, you allocate the funds to a Mutual Fund, or Hedge Fund and those have Fees. Thats what I am referring to when I said paying someone to play with your money. What would seem is a small percentage they charge, is actually a lot of money in the end.
Not all funds have fees. I have my IRA money in an S&P index for example. It's a no fee "fund" that's not managed. It tracks an index = not managed. So I pay whatever my etrade comission is to put it in and to take it out. Since my whole ira's in there, it's 9.99 each time. And what's more, on the S&P you earn dividends! some companies give you money for holding their stock. shock and awe.

managed mutual funds can lick my *****. 99 times out of 100 they underperform the market over the long term. and cost more. and dont pay dividends. You should really look into "no load" funds.
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But it does matter. If the market is constantly going down, why would I want to put my money into it only to wait for it to recover? Id rather invest when the market is doing well, and is stable at least in the short term even though this is a long term investment.
The reality is you should put money into the market no matter what the market is doing. and do it regularly (monthly or each paycheck or whatever) because it will average out over time. one year you buy cheap stock, the next you buy expensive stock. the average is middle-price stock.
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I am not saying it isnt a great idea, its a fantastic idea. In fact I have a roth opened with Etrade along with my brokerage account. I was getting ready to put 4 grand into it until I started to think about the near term future.

I need my money to stay available to me over the next 5 years. If I put it in a roth I cant withdraw it for 5 years to buy a house, which carries no early withdrawal penalty.
The IRA lets you take 10k out penalty free for a home purchase. Even beyond that it's 10% on top of your bracket--not the end of the world if you're desperate but not as cheap as other means.
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I have my 401k tied to the market, if I could id take that money but free money is free money when the company matches.

Simple difference is this. Either A. You retain liquidity and pay tax on earnings or B. put the money away and have it available to you tax free in 50 years.

I want my money available to me all the time. I dont know whats going to happen in 50 years, locking my money up, in my mind is not the smartest thing to do today.

But please don't think that I am advocating against a Roth IRA, I think its a great thing to do if you have the disposable income to put into it. In fact if you have the money and you can do with it, then do it.

Just understand its not the same for everyone.
I dont need the money now so I keep it in the IRA. But keep in mind that pulling money out of the market when you're scared it's going to crash is what makes it crash. 1929.... 1987.... when next?

I'm long in this market. The best part is that our annual profit sharing (which is dumped straight into our 401k) was posted just as the market was tanking. Basically a lot of cheap stock that I can wait for to come back up.
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Old 03-19-2008, 01:19 PM   #42
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rmcelwee there are so many things wrong with what you said its sickening. I can tell you that the CEO of Bear Sterns didnt just walk about from 28 million dollars in stock cause of the media.
Not wishing to start and argument but what do you find wrong in in what I said that makes you so ill?

As far as James Cayne, the man has been working there since 1969 and has been the CEO for the past 16 years. He now serves as a "non-executive chairman". So, after 40 years at the same company he is now getting paid just to hang around. Seems like a pretty sweet deal to me! Would you not take it when you are 70 (or however old he is)?

Anyway, the sub prime mess we now have is the same as the mess created in '99 by people being over leveraged in stocks. People will always been greedy and that greed will eventually bite them in the ***. The extreme over valuation in the housing market was caused by greed. The value on houses is still great (I know mine is worth more now than it was 5 years ago) but it just couldn't live up to the media driven frenzy we had for the past few years.

All I know is that with my meager single income household we have been able to pay for a house, have a huge nest egg in investments and owe no one anything. We have 3 paid for cars and $0 in debt. I actually took a loan out of my 401K (@ 9.5% tax deferred interest paid back to myself) before the market dropped to pay the last $50K of it off. I should have it paid back in the next year and then will be able to max out both my 401K and Roth accounts. My wife wants a Lava Orange '05 MSM so that may set us back a year on paying the "house" off but things still look pretty damn good from where I am sitting.
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Old 03-19-2008, 02:47 PM   #43
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I am not sure what your point is. I am not going to argue the reason we are in turmoil . But we are in turmoil. I am glad you are not affected (not really sure of the financial snap shot)
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Old 03-19-2008, 04:06 PM   #44
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y8s, I completely agree with everything you say. There is no debating anything you said because I agree.

Especially the no load funds, I really want to invest and outperform the market though, who doesnt. Right now its impossible because the market is in the *******, but at one time it was very doable.

Based on your reasoning, I see that saving for the long term is important for you. Wife, family, kids etc. I am 23, still trying to figure out what I wanna do. I have some time to figure it out for sure.
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Old 03-19-2008, 04:59 PM   #45
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thats a common mistake. THe more money you put in now saves you years in the future.
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Old 03-19-2008, 05:03 PM   #46
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in just 2008 I have made over 12K in Gold investments. Thanks spiraling economy!
Who do you broker through? Comments on them?
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Old 03-19-2008, 05:56 PM   #47
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I'm my broker. I invest through USAA, and balance my principal with their precious medals fund. (Also have a bag o coins in a safety deposit box.) Monthly investing without penalties. Works out pretty good in the end. Only real stocks I play around with are penny stocks. Thats like playing the lotto though.
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Old 03-19-2008, 06:16 PM   #48
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buy bullion

/end


*i was going to add firearms and food, but meh*
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Old 03-19-2008, 06:22 PM   #49
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thats a common mistake. THe more money you put in now saves you years in the future.
I agree. If your money doubles 7 years from now then it is really nice to have $100,000 in there now instead of $1,000. It is the upfront money that is the most important. That was the biggest mistake I made years ago (no one ever talked about the market back then).
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Old 03-19-2008, 09:11 PM   #50
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thats a common mistake. THe more money you put in now saves you years in the future.
***** please. 1 - 2 years wont do anything for me.
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Old 03-19-2008, 09:42 PM   #51
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***** please. 1 - 2 years wont do anything for me.
No? starting your 401k when you're 21 vs. 23 could be worth hundreds of thousands depending on how much you put in.

but again, if you want to give that up...
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Old 03-19-2008, 09:54 PM   #52
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No? starting your 401k when you're 21 vs. 23 could be worth hundreds of thousands depending on how much you put in.

but again, if you want to give that up...
My 401k is already getting its maximum contribution that is matched.

I was talking Roth IRA.
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Old 03-19-2008, 10:58 PM   #53
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damn it are jewish people so ****** annoying*


*Ben is excluded from the above comment
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Old 03-19-2008, 11:12 PM   #54
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My 401k is already getting its maximum contribution that is matched.

I was talking Roth IRA.
the devil has many names.
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Old 03-20-2008, 01:06 PM   #55
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only reason i have a credit card is to have a credit history since i never bought a car on credit and untill recently i never had a mortgage...
That and CCs are also useful for buyer protection e.g., buying a clip from someone overseas and they send you a brick and a [email protected] email and then you call up CC company and protest charge and get your money back. Done tat several times. protest, not the brick.
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