Too Hot Investment Thread

Obviously depends on the specifics of the mortgage, but if it is a low rate obtained before recent rate hikes, I absolutely would not pay it down. I have a mortgage of 2.35%, and I have most of that amount in ibonds currently earning 7%+.

 

I am ahead of schedule on my retirement and personal savings. When I bought the house I only put 5 percent down, so still owe a lot even with paying it down for almost a decade. And Right now my home equity is a small Percentage of my net worth, trying to get it evened out a bit for diversification reasons. I don’t want such a high percentage of my net worth in the market, now that I don’t need to take nearly as many risks. And if I don’t pay extra that gap widens every month, it doesn’t narrow. Even with the extra money it’s probably still widening, at least until this last downturn. It’s also a default bond hedge against my stocks when I pay it down. And yeah, long story but there are some interest rate issues around my mortgage too.
But I get the argument the other way.

 

Hi...thanks for replying. First I don't think that I think that I have better info. You studied finance - I was in Surgical Nursing before dropping out to put my ex through. I had zero experience & never did a 401k because we always maxed his out. He never saw a need, plus for a good part I worked from home as an independent contractor.

So when the divorce came my entire life especially financially got flipped upside down.

My job matches but their match isn't great. I finally reached a point where I could put in the max of what they match.

I do have a Roth IRA that I've started putting money into & while my tax refund was supposed to go there, I had to make the choice to travel to FL for the first time in over 3 years to see my sick parents.

The play around money is basically my "education". I don't like the idea of the 401k being left to others & me just putting money in blindly...every cent counts. With my newfound education I was able to shift things around a little and while not impressive, it's at least making money.

Oh! I will say that I'd like an HSA but my company/health plan doesn't offer it. So I'm not sure how to set one up otherwise. If you or someone can shed light on that it would be great

 

Umm...I guess this addresses me and I didn't think I was stepping on toes or insulting anyone, etc. I honestly didn't see another way to learn, and if I hadn't done it this way I would've never started. I know I'll never reach everyone else's levels here. I'm in NY, alone, & in a bad job with close to no chance at a better one. My spare change won't amount to much but it's better than nothing.

Again I apologize. I would never presume to know more than the experts

 

Got a 6 figure cash windfall from a deal I helped put together and not sure where to put it right now. Mortgage and car loans both at 3%, 60k and 17k respectfully. Have 401k at work that I increased % on to max that out. Thoughts?

 

No, not specifically at you. This thread has been raging for months with all kind of nonsense.

If you really want to learn about the right way to invest , try this site:

Bogleheads Investing Advice and Info

Bogleheads

Bogleheads.org - Index page

Suggested Reading | Bogleheads Investing Advice and Info


You could even anonymously start a forum thread to get some advice if you choose.

 

It really depends on the specifics of your situation, but I’d probably fully fund a 401k, or open a Roth IRA, or fund HSA, or buy ibonds before I thought about paying a 3% mortgage.

 

I know it's counterintuitive, but even with a mortgage rate at 2.5, I am paying it off early.

 

If you are an independent contractor you can set up a solo 401k at most of the major brokerages such as vanguard Fidelity or schwab. It is pretty easy to do - I have one at Vanguard.

Definitely contribute up to the match. But even after there is a match, if you can reasonably afford it. Obviously being on your own there are limits to what you can do.

That’s great that you have set one up, and put in whatever you reasonably can.

I am going to disagree here. In investing, passive is the way to go. You aren’t likely to beat the market on your own. You have people who manage billions for a living on Wall Street, and most of them can’t beat the market. It’s been demonstrated over and over. Sure it is possible you could get lucky and beat the market but it is likely not sustainable.

The financial industry makes money on transactions. You buying a selling. Whether you actually make money or keep up with the market is secondary to them.

Not everyone has access to an HSA and you have to be in a qualifying high deductible health insurance plan to open one.

 

You aren’t alone, and nothing wrong in doing so, but I’d at least buy ibonds before paying off a mortgage. I definitely would not pay down a 2.5% when inflation is running at 7%.

 

Thanks. One of my few perks is an excellent health plan, which with my strokes, tumors, etc, has been a Godsend. I was an IC when I was married, and so the thought was I didn't need something. He said his was more than enough, & he was the one making 6 figures. I was naive & stupid frankly to trust him & believe marriage would work.

The play money part - I've tried reading to learn and I stink at it. Doing my little fractions like I have is basically my "hands on" learning. In those fractions I do have ETFs/Mutual Fund, and other than a couple of instances, my goal is long term & I just buy in each time. The major bulk of my savings is the 401k that's professionally managed.

Other than saving up (with a lousy savings rate) and then just handing over a bulk of money, doing things in fractions is all I can afford right now. If I was a bigger fish I'd give it all to a professional to handle for me for way better results.

 

I will say that I've started to change the vicious cycle I was raised in, and my daughter is getting a STEM degree, is already setting up student loan repayments to establish her credit, and is saving any extra she gets from financial aid. We've already had the "as soon as you get a job put in money to their 401k" discussion, too.

 

You can only do what you can. But don’t fall into the trap that you think you have to be buying and trading to get ahead. That just isn’t the case. You are better off buying an index fund/index etf and just letting it sit there.

As to a professional, while certain advisors may be helpful, they can come at a high cost, as I indicated in the above Edwards Jones post. You could put all the money in index and target date funds and be better off over the long term.

 

Do you have Venmo? Asking for a friend

 

The honest truth is that you can make so much money in the market with very little knowledge needed, provided it's the right knowledge. And that knowledge has nothing to do with futures contracts, options, shortselling, margin investing, etc. It's about understanding that the market always goes up over a long time frame, and so the best thing you can do is broadly invest in that whole market while minimizing your costs to do so.

I strongly recommend you read the following blog:

Stock Series - JLCollinsnh

If that's not your speed, then I recommend checking out the following podcast that will give the punchlines of his blog in about a 90-minute interview.

019 | JL Collins from jlcollinsnh | The Stock Series | Part 1

 

I have a "balanced mutual fund" that I probably should have gotten rid of years ago, but it is a bit nostalgic to me (I know crazy) so I have kept it. My first IRA investment out of college and it is still a good example for the young ones in the family. I invested $2K and 40 years later it is around $75K, taking a hit lately but still a winner.

 

well at least you realize nostalgia is a bad investment strategy. At least you didnt keep contributing to it for 40 years.

 

Amazon is splitting 20 to 1.

 

Cannabis stocks are getting ready to take off....