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Old 06-23-2016, 12:17 PM   #181
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Let's talk tax withholdings...

So getting a tax return at the end of the tax season is giving the government an interest free loan....
The safest way to set your withholding is to get as close to a $0 tax return or taxes owed at the end of the year.
The best way would be to withhold no taxes and save them in an savings account that will generate interest and have it set aside for tax season??

If that is the case, how many people use that approach? If you do, how do you properly set your allowances and withholding so that no taxes are removed from your pay check?

And where do you typically save the taxes that you set aside (I was thinking of putting it in a Betterment account ETF (0.25% management fee with about 80% bonds, 20% stocks).
It'd be way easier to just adjust your withholding to end up at close to $0+/- owed. Doing what you say, if you could, just adds another element of risk to what you will be required to pay on Apr 15. The IRS doesn't give a **** that the market just lost xx% of your "tax" fund. And you want to pay someone 1/4% to hold onto your money? Send it to me...

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If you are able to do that (an employee likely can't), then you'll need to make quarterly payments to the IRS. The gubmnt' wants their money NOOOOWWWW!!!
Correct, quarterly payments or pay the penalty + interest.
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Old 06-23-2016, 01:47 PM   #182
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It'd be way easier to just adjust your withholding to end up at close to $0+/- owed. Doing what you say, if you could, just adds another element of risk to what you will be required to pay on Apr 15. The IRS doesn't give a **** that the market just lost xx% of your "tax" fund. And you want to pay someone 1/4% to hold onto your money? Send it to me...



Correct, quarterly payments or pay the penalty + interest.
If I put it in mostly in bonds I should be making 4%+ in returns in even a terrible economic year. With $1000 a bi-weekly paycheck invested there instead of given to the government that's should be $1000+ plus in interest (after 0.25% fees) that I'd make by having it in bonds rather than straight to the government.

But if that's not even an option, which it sounds like it isn't, than ignore all of this and I'll keep with my current net $0 owed at the end of the tax year.
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Old 06-23-2016, 02:35 PM   #183
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If I put it in mostly in bonds I should be making 4%+ in returns in even a terrible economic year.
Not to get into a big debate about it but why do you think bond prices only go up or that you will make 4% returns?

AAII: The American Association of Individual Investors
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Old 06-23-2016, 03:39 PM   #184
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LOL - buying bonds as a way of generating income is a terrible way of doing things - seems to me it would make more financial sense to just give the IRS all of their moneys at the beginning of the Fiscal Year and avoid the depreciation. In other news, I'm up 15% on the quarter for stocks, which ain't too shabby.
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Old 02-21-2017, 07:31 PM   #185
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**Necropost alert**

Currently reviewing/reallocating and closing poor performing funds. I was just gifted a chunk of change from the parental units in their efforts to do some estate planning.

I had six different mutual funds for over fifteen years. Three are getting the boot due to performance. I'll keep three and am thinking about dumping the chunk into the best performer. It has weathered multiple bubbles bursting and the recession.

Your thoughts on buying now vs waiting to see what the market brings? Do you think the market is safe and will see continued growth or is this level temporary and we will see a correction soon?
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Old 02-21-2017, 08:02 PM   #186
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I think the big picture is that we're going to see the market decrease in the next 2-3 years, but it's going to be a slow sucking drain vice a major correction.

Pick a fund and stick your money in there. If you want to be a bit more active, find someone on collective2 and follow them.

If you're not approaching retirement, you've got room to be a little more risky than the age-old suckage of "invest all of your moneys in shitty returning mutual funds". Some of your money can be there, but by god don't put all of it there - unless you're okay with 4-8% annual returns.
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Old 02-21-2017, 08:02 PM   #187
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Research shows fairly consistently that time in the market is better than timing the market. Lump sum almost always beats dollar cost averaging or trying to time market entrance. If it will give you more peace of mind though, dollar cost averaging is only a little worse than lump sum investing. This means you divide up the sum into equal portions (ex. 12 parts. One for each month). Then you invest the equal portions each month. That way if the market dips you didn't put it all in at the high and you buy some while it's lower.
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Old 02-21-2017, 09:09 PM   #188
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Mid forties so retirement isnt right around the corner. House has been paid off for several years and 401k is doing well. No kids and we live below our means. I want to invest in something that will GMTFO of my current job sooner than later.
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Old 02-21-2017, 10:36 PM   #189
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Small cap index fund from Vanguard or some other very low expense ratio outfit is a great place to park money long term. It is automatically diversified because you are in 2500 different stocks in every conceivable type of business. And small businesses grow more quickly than the largest ones.
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Old 02-21-2017, 10:50 PM   #190
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Small cap index fund from Vanguard or some other very low expense ratio outfit is a great place to park money long term. It is automatically diversified because you are in 2500 different stocks in every conceivable type of business. And small businesses grow more quickly than the largest ones.
A Vanguard fund is one of the three I am keeping. It isnt the small index fund.

I started all six of my of accounts in '00 right before the tech bubble burst. I am trying not to duplicate that, but it is hard not getting excited with the past few months stock market performance.

Seems there is the "a major correction is coming" camp and then I read analyst's opinions are favorable about the coming years.
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Old 02-21-2017, 11:25 PM   #191
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Has anyone ever really looked at historical performance based on the Buffett retirement portfolio? 90% Vanguard S&P500 index fund + 10% short term Government bonds? I mean hard to argue a guy with $75B is wrong especially if you have years ahead of you. I looked at one of my accounts that is the usual "diversified, blah blah" based on Schwab and I'm hard pressed to argue against just taking Buffetts free advice.

https://www.fool.com/investing/gener...ment-plan.aspx
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Old 02-22-2017, 10:28 AM   #192
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Work has a wiz-bang MerrilLynch guy who charges a "low" 1.25% to handle the 401k. A betterment account with similar risk level/term investment goal outperforms it, especially when you factor in the difference in fees. Betterment also has tax loss harvesting which I know nothing about.
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Old 02-22-2017, 11:32 AM   #193
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Megamillions is a little over 400 million. I am picking up a ticket today. It is my birthday so I figure I should be lucky and win. The my financial independence plan will be buying mt.net and raising subscriber rates so all you can pay my bills.
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Old 02-22-2017, 11:53 AM   #194
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Originally Posted by bahurd View Post
Has anyone ever really looked at historical performance based on the Buffett retirement portfolio? 90% Vanguard S&P500 index fund + 10% short term Government bonds? I mean hard to argue a guy with $75B is wrong especially if you have years ahead of you. I looked at one of my accounts that is the usual "diversified, blah blah" based on Schwab and I'm hard pressed to argue against just taking Buffetts free advice.

https://www.fool.com/investing/gener...ment-plan.aspx
I'm diversified in equities across the total market. I have 4 low cost index funds that roughly mirror vanguard's total market equities index fund which has a fair amount of international exposure. It's quite high risk but has been treating me well over the long term so far. I think buffets suggestion is overly conservative but it would be less volatile and should help prevent many people from panic selling in a depression. It also wouldn't protect you if the US economy stagnated for a long period of time as it has no true international exposure.

Unfortunately, I am a "covered person" due to my profession and am severely limited to what and with whom I can invest to avoid perceived independence issues. So I can't just by Vanguard. Luckily the funds available to me are just as low cost. Some are actually cheaper.
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Old 02-22-2017, 12:38 PM   #195
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Originally Posted by Ryan_G View Post
I'm diversified in equities across the total market. I have 4 low cost index funds that roughly mirror vanguard's total market equities index fund which has a fair amount of international exposure. It's quite high risk but has been treating me well over the long term so far. I think buffets suggestion is overly conservative but it would be less volatile and should help prevent many people from panic selling in a depression. It also wouldn't protect you if the US economy stagnated for a long period of time as it has no true international exposure.

Unfortunately, I am a "covered person" due to my profession and am severely limited to what and with whom I can invest to avoid perceived independence issues. So I can't just by Vanguard. Luckily the funds available to me are just as low cost. Some are actually cheaper.
Thanks, I'm at the end of my career so looking more to protect my money from the inevitable downturn and towards a consolidation of many accounts into a couple.

My equity accounts (non-IRA stuff) is pretty well diversified into specific stocks and a few funds. I'm looking to kind of consolidate my IRA stuff and just move it over to one place (I have used Morgan Stanley for specific stock stuff and Schwab for IRA stuff that started with rollover 401K from when I went on my own and an SEP as a self employed). Seems a little chaotic but I have a pretty good handle on things insofar as how much and where it is.
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