Re: [MBZ] question for young investor

[Mitch Haley via Mercedes]

On 2021-01-03 00:11, Rick Knoble via Mercedes wrote:

I would suspect most folks will piss it away. I also suspect the
government will find a way to tax that distribution at the absolute
highest rate too.


I can tell you I won't be signing any returns classifying it as a 
rollover distribution unless I have evidence of rollover on the day I 
file the return. You're going to roll it over by October? OK, I'll file 
an extension. You're going to roll it over next year? OK, I'll amend and 
refund after you roll it over.


But like Rick said, nobody is going to roll it over, unless they fall 
into an inheritance or other windfall and want to stuff the windfall in 
an IRA.


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Re: [MBZ] question for young investor

[Rick Knoble via Mercedes]

I would suspect most folks will piss it away. I also suspect the government 
will find a way to tax that distribution at the absolute highest rate too.


Rick

From: mercedes@okiebenz.com
Sent: January 2, 2021 7:34 PM
To: mercedes@okiebenz.com
Reply-to: mercedes@okiebenz.com
Cc: mi...@mitchellhaley.com
Subject: Re: [MBZ] question for young investor

On 2021-01-02 20:28, Rick Knoble via Mercedes wrote:

> A sad reality for many, is they were able to tap their retirement
> accounts penalty free because of the CARES act. Not particularly wise.

But you now have years to roll it over / recontribute it, instead of 60
days.

Won't that be fun, is it a taxable distribution, or is it nontaxable
rollover distribution in 2020 because you rolled it over in 2022?

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Re: [MBZ] question for young investor

[Mitch Haley via Mercedes]

On 2021-01-02 20:28, Rick Knoble via Mercedes wrote:


A sad reality for many, is they were able to tap their retirement
accounts penalty free because of the CARES act. Not particularly wise.


But you now have years to roll it over / recontribute it, instead of 60 
days.


Won't that be fun, is it a taxable distribution, or is it nontaxable 
rollover distribution in 2020 because you rolled it over in 2022?


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Re: [MBZ] question for young investor

[Rick Knoble via Mercedes]

Under 50, which Curt is. Over 50 there are catch up contributions one can make. 
I was replying to Curt's comment, although I didn't quote him. You can start 
drawing from funds penalty free at 59 1/2,

You can conceivably draw funds from a retirement account at 55, however it's a 
bit complicated.

https://www.forbes.com/sites/kristinmckenna/2020/07/21/is-55-too-early-to-retire-what-you-need-to-retire-early/

A sad reality for many, is they were able to tap their retirement accounts 
penalty free because of the CARES act. Not particularly wise.

https://www.fool.com/retirement/2020/03/31/you-can-now-raid-your-retirement-plan-early-withou.aspx

Rick

From: mercedes@okiebenz.com
Sent: January 2, 2021 6:33 PM
To: mercedes@okiebenz.com
Reply-to: mercedes@okiebenz.com
Cc: d...@penoff.com
Subject: Re: [MBZ] question for young investor

More of a semantic question, but I understand. And those are limits of you’re 
under a certain age, like 59-1/2, too, I believe.

-D

> On Jan 2, 2021, at 7:27 PM, Rick Knoble via Mercedes 
> mailto:mercedes@okiebenz.com>> wrote:
>
> 19,500 into a 401k.
> 6,000 into an IRA.
>
> https://www.kiplinger.com/retirement/retirement-plans/601632/bad-news-on-ira-and-401k-contribution-limits-for-2021?amp
>
> Rick

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Re: [MBZ] question for young investor

[Mitch Haley via Mercedes]

On 2021-01-02 19:32, Dan Penoff via Mercedes wrote:

More of a semantic question, but I understand. And those are limits of
you’re under a certain age, like 59-1/2, too, I believe.


There's a boost if you're over 50, so I can put 7000 in an IRA. (too 
lazy to look up the current qualified plan catch-up amount, but it might 
be 6500)
And you were prohibited from contributing to an IRA if over RMD age, but 
that's waived by one of the COVID bills.


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Re: [MBZ] question for young investor

[Dan Penoff via Mercedes]

More of a semantic question, but I understand. And those are limits of you’re 
under a certain age, like 59-1/2, too, I believe.

-D

> On Jan 2, 2021, at 7:27 PM, Rick Knoble via Mercedes  
> wrote:
> 
> 19,500 into a 401k.
> 6,000 into an IRA.
> 
> https://www.kiplinger.com/retirement/retirement-plans/601632/bad-news-on-ira-and-401k-contribution-limits-for-2021?amp
> 
> Rick
> 
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Re: [MBZ] question for young investor

[Rick Knoble via Mercedes]

19,500 into a 401k.
6,000 into an IRA.

https://www.kiplinger.com/retirement/retirement-plans/601632/bad-news-on-ira-and-401k-contribution-limits-for-2021?amp

Rick

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Re: [MBZ] question for young investor

[Dan Penoff via Mercedes]

Absolutely. You can have as many IRAs as you want. You can have as many 401ks 
as you want, too, but each one would be from a different employer. My point 
being in that if you don’t roll over  a 401k from a pervious employer it just 
sits in their 401k program, earning the same that it had been with the 
elections you chose. What’s nice about this is that many employers pay the fees 
on 401ks, so leaving the money with a former employer means you could get the 
benefit of their 401k and they are paying the fees.

In these cases you often get regular “beg” letters that tell you how they’ll 
gladly assist you with doing a rollover into an IRA or a new employer’s program.

-D

> On Jan 2, 2021, at 6:04 PM, Curt Raymond via Mercedes  
> wrote:
> 
> Can you do an IRA if you already have a 401K?
> I haven't checked but I must be nearing the max for 401K contributions, I've 
> been pushing it up a percent every year for the last 3 or 4 years...
> -Curt
> 
>On Saturday, January 2, 2021, 5:55:49 PM EST, Mitch Haley via Mercedes 
>  wrote:  
> 
> That's where a Roth IRA does double duty.
> It's a lifetime investment that you can draw the deposits out of in case 
> of emergency.
> 
> On 2021-01-01 15:27, Dan Penoff via Mercedes wrote:
>> This is when I get on my soapbox about having an emergency fund. I
>> totally understand your rationale, but that notwithstanding, everyone
>> should have funds for at least six if not 12 months of living
>> expenses. I don’t think I could sleep at night if I didn’t. That
>> should be everyone’s first goal. Once you’ve got that, start
>> investing…
> 
> 
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Re: [MBZ] question for young investor

[Curt Raymond via Mercedes]

 Can you do an IRA if you already have a 401K?
I haven't checked but I must be nearing the max for 401K contributions, I've 
been pushing it up a percent every year for the last 3 or 4 years...
-Curt

On Saturday, January 2, 2021, 5:55:49 PM EST, Mitch Haley via Mercedes 
 wrote:  
 
 That's where a Roth IRA does double duty.
It's a lifetime investment that you can draw the deposits out of in case 
of emergency.

On 2021-01-01 15:27, Dan Penoff via Mercedes wrote:
> This is when I get on my soapbox about having an emergency fund. I
> totally understand your rationale, but that notwithstanding, everyone
> should have funds for at least six if not 12 months of living
> expenses. I don’t think I could sleep at night if I didn’t. That
> should be everyone’s first goal. Once you’ve got that, start
> investing…


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Re: [MBZ] question for young investor

[Curt Raymond via Mercedes]

 You make a great point on fees. I was talking to buddy Ben about investing the 
other day. They have a financial advisor and have been making something like 7% 
over the last 2 years.Angie and I are (each, we have his and hers money) at 
closer to 11% in that time frame. I suspect he is getting 11% and giving the 
advisor 4%. I told him to get an online account of some sort, Angie uses 
Vanguard, I have E-Trade but I suspect it doesn't really matter as long as its 
one of the big companies. Buy an ET Index Fund and enjoy not sharing your 
returns with anybody else...
-Curt

On Saturday, January 2, 2021, 4:00:24 PM EST, Scott Ritchey 
 wrote:  
 
 I'll offer my two cents.  I am retired.  
My adequate net worth came from three sources: real estate (my personal
homes), IRA/401K investment, and military pension/social security.  I
mention the last two only because I can live on them without needing to
liquidate investments.  
I literally had near-zero investments until I retired from the military in
1994 and got a private sector job.  After that I maxed out IRA (preferably
Roth) and 401K.  I seldom lost money in real estate but being in the
military (i.e., having no choice when I sold) my average gain was modest
until my last house which I owned for 15 years and sold at a time of my
choosing when I fully retired.  
I got clobbered in several market dives but only compared to those that
cashed-out at the peak; the markets always came back.  I always used mutual
funds (vs individual stocks) from reputable companies like Vanguard or
Fidelity.  After selecting an asset mix, look for the low fees; fees will
eat up your gains.  
Especially in retirement, cash outgo is at least as important as cash
income.  A low-fixed-cost retirement home/location may be the most important
factor (e.g. low taxes, insurance, and house payment,-preferably zero) in
the long term.  It should go without saying but you should be debt-free well
before retirement.

  
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Re: [MBZ] question for young investor

[Mitch Haley via Mercedes]

That's where a Roth IRA does double duty.
It's a lifetime investment that you can draw the deposits out of in case 
of emergency.


On 2021-01-01 15:27, Dan Penoff via Mercedes wrote:

This is when I get on my soapbox about having an emergency fund. I
totally understand your rationale, but that notwithstanding, everyone
should have funds for at least six if not 12 months of living
expenses. I don’t think I could sleep at night if I didn’t. That
should be everyone’s first goal. Once you’ve got that, start
investing…



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Re: [MBZ] question for young investor

[Scott Ritchey via Mercedes]

I'll offer my two cents.  I am retired.  
My adequate net worth came from three sources: real estate (my personal
homes), IRA/401K investment, and military pension/social security.  I
mention the last two only because I can live on them without needing to
liquidate investments.  
I literally had near-zero investments until I retired from the military in
1994 and got a private sector job.  After that I maxed out IRA (preferably
Roth) and 401K.  I seldom lost money in real estate but being in the
military (i.e., having no choice when I sold) my average gain was modest
until my last house which I owned for 15 years and sold at a time of my
choosing when I fully retired.  
I got clobbered in several market dives but only compared to those that
cashed-out at the peak; the markets always came back.  I always used mutual
funds (vs individual stocks) from reputable companies like Vanguard or
Fidelity.  After selecting an asset mix, look for the low fees; fees will
eat up your gains.  
Especially in retirement, cash outgo is at least as important as cash
income.  A low-fixed-cost retirement home/location may be the most important
factor (e.g. low taxes, insurance, and house payment,-preferably zero) in
the long term.  It should go without saying but you should be debt-free well
before retirement.


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Re: [MBZ] question for young investor

[Curt Raymond via Mercedes]

Yup. Not something to do with the rent money for sure.
Curt

Sent from Yahoo Mail on Android 
 
  On Sat, Jan 2, 2021 at 2:42 PM, Mitch Haley via 
Mercedes wrote:   On 2021-01-01 16:32, Curt Raymond via 
Mercedes wrote:
> I don't think you understand how index funds work.
> Since the index fund is invested in a larger number of stocks its less
> exposed when the market does down.


Even so, 60% drops are not unheard of.
Take the fall of 2007 to the winter of 2009 for example.
  
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Re: [MBZ] question for young investor

[Curt Raymond via Mercedes]

Have you seen his documentary? It's well done and he's pretty cool.

Curt

Sent from Yahoo Mail on Android 
 
  On Fri, Jan 1, 2021 at 7:35 PM, Meade Dillon via 
Mercedes wrote:   That's a great article.  Warren Buffet 
definitely knows investing.
-
Max
Charleston SC


On Fri, Jan 1, 2021 at 5:28 PM Curt Raymond via Mercedes <
mercedes@okiebenz.com> wrote:

>  Warren Buffet says individual stock picking is for dummies. Then he put
> his money where his mouth is a proved it:
> https://www.investopedia.com/articles/investing/030916/buffetts-bet-hedge-funds-year-eight-brka-brkb.asp
> -Curt
>
>    On Friday, January 1, 2021, 2:49:58 PM EST, Andrew Strasfogel via
> Mercedes  wrote:
>
>  Fisher Investments ONLY purchases individual stocks for their clients - no
> mutual funds or ETFs.  Sounds risky, but when you think about it - they
> employ a large cadre of smart stock pickers to weed out poor performers and
> focus on the best of the best in a typical client portfolio.  Sort of like
> a turbocharged mutual fund minus the losers, and without the fees (other
> than their own one percent management fee).  They claim this has led to
> lasting success, such as predicting 9 out of 10 bear markets.
>
> On Fri, Jan 1, 2021 at 2:33 PM Allan Streib via Mercedes <
> mercedes@okiebenz.com> wrote:
>
> > Jim Cathey via Mercedes  writes:
> >
> > > My friends all sneered at my decision to use the windfall to pay off
> > > my mortgage, pointing out that my mortgage rate was lower than the
> > > general rate of return on tech-sector investments.
> >
> > Yeah I feel the same way.  Sure, rationally if you have a mortgage at 5%
> > and the market is returning three times that, why pay it off? For me
> > it's because in a downturn, the mortgage payments don't stop. In the
> > course of a 30 year mortgage, there will be some multi-year recessions
> > and maybe you'll even have periods of unemployment or reduced
> > income. It's just inevitable. In those situations, the less debt you
> > have, the more flexibility you have.
> >
> > Allan
> >
> > ___
> > http://www.okiebenz.com
> >
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> >
> > To Unsubscribe or change delivery options go to:
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> >
> >
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Re: [MBZ] question for young investor

[Dan Penoff via Mercedes]

Sure he does. Look at a Dairy Queen as an example.

-D

> On Jan 1, 2021, at 10:18 PM, Clay Monroe via Mercedes  
> wrote:
> 
> Oddly he does not seem to hold onto things for all that long.  SWMBA’s firm 
> has sold him a number of client businesses.  Bershire Hathaway holds on just 
> long enough to squeeze the jelly from their eyes, slather it on toast, and 
> then divests at a profit.  Not small toys, but big boy products, from trains, 
> to power companies, a few other large scale endeavors.   Must be nice to have 
> that sort of scratch.
> 
> I like the buy and hold theory.  I may one day have enough to retire to a 
> cardboard box in an alley.
> 
> Clay
> 
> 
> inter urinas et faeces nascimur
> 
>> On Jan 1, 2021, at 3:34 PM, Meade Dillon via Mercedes 
>>  wrote:
>> 
>> That's a great article.  Warren Buffet definitely knows investing.
>> -
>> Max
> 
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Re: [MBZ] question for young investor

[Andrew Strasfogel via Mercedes]

 *I may one day have enough to retire to a cardboard box in an alley.*

Double wall or single?  It makes a big difference.

On Fri, Jan 1, 2021 at 10:18 PM Clay Monroe via Mercedes <
mercedes@okiebenz.com> wrote:

> Oddly he does not seem to hold onto things for all that long.  SWMBA’s
> firm has sold him a number of client businesses.  Bershire Hathaway holds
> on just long enough to squeeze the jelly from their eyes, slather it on
> toast, and then divests at a profit.  Not small toys, but big boy products,
> from trains, to power companies, a few other large scale endeavors.   Must
> be nice to have that sort of scratch.
>
> I like the buy and hold theory.  I may one day have enough to retire to a
> cardboard box in an alley.
>
> Clay
>
>
> inter urinas et faeces nascimur
>
> > On Jan 1, 2021, at 3:34 PM, Meade Dillon via Mercedes <
> mercedes@okiebenz.com> wrote:
> >
> > That's a great article.  Warren Buffet definitely knows investing.
> > -
> > Max
>
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Re: [MBZ] question for young investor

[Clay Monroe via Mercedes]

Oddly he does not seem to hold onto things for all that long.  SWMBA’s firm has 
sold him a number of client businesses.  Bershire Hathaway holds on just long 
enough to squeeze the jelly from their eyes, slather it on toast, and then 
divests at a profit.  Not small toys, but big boy products, from trains, to 
power companies, a few other large scale endeavors.   Must be nice to have that 
sort of scratch.

I like the buy and hold theory.  I may one day have enough to retire to a 
cardboard box in an alley.

Clay


inter urinas et faeces nascimur

> On Jan 1, 2021, at 3:34 PM, Meade Dillon via Mercedes  
> wrote:
> 
> That's a great article.  Warren Buffet definitely knows investing.
> -
> Max

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Re: [MBZ] question for young investor

[Meade Dillon via Mercedes]

That's a great article.  Warren Buffet definitely knows investing.
-
Max
Charleston SC


On Fri, Jan 1, 2021 at 5:28 PM Curt Raymond via Mercedes <
mercedes@okiebenz.com> wrote:

>  Warren Buffet says individual stock picking is for dummies. Then he put
> his money where his mouth is a proved it:
> https://www.investopedia.com/articles/investing/030916/buffetts-bet-hedge-funds-year-eight-brka-brkb.asp
> -Curt
>
> On Friday, January 1, 2021, 2:49:58 PM EST, Andrew Strasfogel via
> Mercedes  wrote:
>
>  Fisher Investments ONLY purchases individual stocks for their clients - no
> mutual funds or ETFs.  Sounds risky, but when you think about it - they
> employ a large cadre of smart stock pickers to weed out poor performers and
> focus on the best of the best in a typical client portfolio.  Sort of like
> a turbocharged mutual fund minus the losers, and without the fees (other
> than their own one percent management fee).  They claim this has led to
> lasting success, such as predicting 9 out of 10 bear markets.
>
> On Fri, Jan 1, 2021 at 2:33 PM Allan Streib via Mercedes <
> mercedes@okiebenz.com> wrote:
>
> > Jim Cathey via Mercedes  writes:
> >
> > > My friends all sneered at my decision to use the windfall to pay off
> > > my mortgage, pointing out that my mortgage rate was lower than the
> > > general rate of return on tech-sector investments.
> >
> > Yeah I feel the same way.  Sure, rationally if you have a mortgage at 5%
> > and the market is returning three times that, why pay it off? For me
> > it's because in a downturn, the mortgage payments don't stop. In the
> > course of a 30 year mortgage, there will be some multi-year recessions
> > and maybe you'll even have periods of unemployment or reduced
> > income. It's just inevitable. In those situations, the less debt you
> > have, the more flexibility you have.
> >
> > Allan
> >
> > ___
> > http://www.okiebenz.com
> >
> > To search list archives http://www.okiebenz.com/archive/
> >
> > To Unsubscribe or change delivery options go to:
> > http://mail.okiebenz.com/mailman/listinfo/mercedes_okiebenz.com
> >
> >
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Re: [MBZ] question for young investor

[Meade Dillon via Mercedes]

Well I do, and I've pretty easily managed an average 10-12% annual return
over the long term.

Making money investing in index funds is easy, as your own advisor.  The
most basic rule: buy low, and sell high.  Plan for both bear markets and
bull markets, and use each to your advantage.

Make a simple plan, and stick to it.  I've got 4 index funds with Vanguard
which comprise 70% of my Roth IRA (total stock market, small cap, REIT, and
international), and then 30% in either cash or their Ginnie Mae bond fund.
I set targets as a percentage of the portfolio for each fund, I think they
are something like 25% total stock market, 20% small cap, 15%
international, and 10% REIT.  I picked these funds as they all are
relatively decent as long term investments and also because they tend to
move up or down in price independently or with different speed.  The total
market fund and the small cap both tend to move in the same direction at
the same time, but the small cap moves faster.  REIT gives me exposure to
commercial real-estate.  The International index will sometimes follow the
US markets but sometimes will not.  Vanguard recently added a technology
index fund, VITAX, and I've been considering that as an addition which will
track the NASDAQ and has lots of volatility but very good long term returns.

Dollar-cost average with monthly automatic purchases.  If you want to get a
little sophisticated and love to play with spreadsheets, you can value-cost
average instead of dollar cost average.  Value-cost average means that
every month, you look at all the index funds in your portfolio, and you
make your purchases to try to keep the portfolio balanced (i.e. you buy
what is low, compared to the other funds).  I don't have enough time for
this, but if I were starting over 30 years ago, I'd probably do this.

Once a year, I re-balance, which forces me to sell what is high and buy
what is low.  This is key.  Re-balancing forces you to automatically sell
what is high (relative to the rest of your portfolio) and buy what is low.
By low, sell high, THAT is a good part of how you make your money.
Rebalance once a year, or you can go two years if you're lazy.  Simple,
slow and steady, no excitement, no need to pay someone else.

When the stock market tanks, THAT is when the FUN begins, because STOCKS
are ON SALE!  I've got 30% of my portfolio in cash or GNMA (my dry powder),
so I just need to buy when they ring the bell when the market hits the
bottom.  You didn't hear the bell ring?  Neither did I, ever.  The best I
can do is bracket it.  When the market is down 10% or more, I plow in some
cash.  If it goes down to 25% or so, I buy some more, and if it keeps
falling, I keep buying, until I'm all in or it starts rocketing back up.
Ride the market back up, which takes 6 months to a year or maybe longer,
and then I take my cash back out at a nice fat profit.  The stock market is
cyclical, and stock prices tend to fluctuate.  Keep this in mind, have a
plan for when the bear market comes because it WILL come around every 5-10
years or so, and use that bear market to buy stocks on sale and come out
stronger on the other side.  Stay invested for the long term (at least ten
years) so you get full advantage of the bull markets.
-
Max
Charleston SC


On Fri, Jan 1, 2021 at 4:08 PM Andrew Strasfogel via Mercedes <
mercedes@okiebenz.com> wrote:

> *If you're investing in market index funds, you don't need an advisor.*
>
> Yes, but who has the discipline?  And if the market tanks then what?
>
> On Fri, Jan 1, 2021 at 3:44 PM Jim Cathey via Mercedes <
> mercedes@okiebenz.com> wrote:
>
> > Even 6-12mo slush fund wouldn't have worked for me.  Without a mortgage
> > (or rent), though, even
> > a fairly modest fund can stretch out well.  IIRC, the two biggest
> expenses
> > are mortgage, followed
> > by health insurance premiums.  Those keep draining funds at a fixed (and
> > high) rate no matter what.
> > Everything else you can push back on.  Stop going out, learn to cook
> more,
> > take better care of your
> > wardrobe, read instead of going to shows, wear more sweaters and turn
> down
> > the heat, etc.  You can,
> > of course, let the health insurance go too, but that's a big gamble.
> > Fairly dangerous.
> >
> > -- Jim
> >
> >
> > ___
> > http://www.okiebenz.com
> >
> > To search list archives http://www.okiebenz.com/archive/
> >
> > To Unsubscribe or change delivery options go to:
> > http://mail.okiebenz.com/mailman/listinfo/mercedes_okiebenz.com
> >
> >
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>
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>
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Re: [MBZ] question for young investor

[Curt Raymond via Mercedes]

 I don't think you understand how index funds work.
Since the index fund is invested in a larger number of stocks its less exposed 
when the market does down. It will also have significantly lower expenses 
because there's no "stock picking" the plan just buys the stocks in the index.

-Curt

On Friday, January 1, 2021, 4:08:07 PM EST, Andrew Strasfogel via Mercedes 
 wrote:  
 
 *If you're investing in market index funds, you don't need an advisor.*

Yes, but who has the discipline?  And if the market tanks then what?

On Fri, Jan 1, 2021 at 3:44 PM Jim Cathey via Mercedes <
mercedes@okiebenz.com> wrote:

> Even 6-12mo slush fund wouldn't have worked for me.  Without a mortgage
> (or rent), though, even
> a fairly modest fund can stretch out well.  IIRC, the two biggest expenses
> are mortgage, followed
> by health insurance premiums.  Those keep draining funds at a fixed (and
> high) rate no matter what.
> Everything else you can push back on.  Stop going out, learn to cook more,
> take better care of your
> wardrobe, read instead of going to shows, wear more sweaters and turn down
> the heat, etc.  You can,
> of course, let the health insurance go too, but that's a big gamble.
> Fairly dangerous.
>
> -- Jim
>
>
> ___
> http://www.okiebenz.com
>
> To search list archives http://www.okiebenz.com/archive/
>
> To Unsubscribe or change delivery options go to:
> http://mail.okiebenz.com/mailman/listinfo/mercedes_okiebenz.com
>
>
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Re: [MBZ] question for young investor

[Curt Raymond via Mercedes]

 Good point and a good lesson.
-Curt

On Friday, January 1, 2021, 5:11:53 PM EST, Allan Streib via Mercedes 
 wrote:  
 
 One of the lessons I want to try to impart. Young people are very prone
to complaining about "capitalism" but they may view it differently if
they actually participate in it. Investing, even at a modest scale,
gives that experienece.

Allan

Curt Raymond via Mercedes  writes:

>  I spent several years building a good cash reserve. Once that was 
>established I took the money I had been putting in the bank and invested in an 
>S index fund. Its done really well, especially the last 4 years.
> Just the other day I had a sell go through for the bulk of the stock I had 
> with my employer. I've been sitting on a bunch of stock for 5-10 years. The 
> price had been kind of idling along doing doodly. This year with the cost 
> cutting we've had to go through the company made a little money so the stock 
> has about tripled. I set my price a dollar higher than the highest we'd seen 
> this year, I was surprised that we nudged that price.
> The bulk of the money is going into the index fund although some is probably 
> going to buy a backhoe for the vast estate...
> -Curt

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Re: [MBZ] question for young investor

[Curt Raymond via Mercedes]

 Warren Buffet says individual stock picking is for dummies. Then he put his 
money where his mouth is a proved it: 
https://www.investopedia.com/articles/investing/030916/buffetts-bet-hedge-funds-year-eight-brka-brkb.asp
-Curt

On Friday, January 1, 2021, 2:49:58 PM EST, Andrew Strasfogel via Mercedes 
 wrote:  
 
 Fisher Investments ONLY purchases individual stocks for their clients - no
mutual funds or ETFs.  Sounds risky, but when you think about it - they
employ a large cadre of smart stock pickers to weed out poor performers and
focus on the best of the best in a typical client portfolio.  Sort of like
a turbocharged mutual fund minus the losers, and without the fees (other
than their own one percent management fee).  They claim this has led to
lasting success, such as predicting 9 out of 10 bear markets.

On Fri, Jan 1, 2021 at 2:33 PM Allan Streib via Mercedes <
mercedes@okiebenz.com> wrote:

> Jim Cathey via Mercedes  writes:
>
> > My friends all sneered at my decision to use the windfall to pay off
> > my mortgage, pointing out that my mortgage rate was lower than the
> > general rate of return on tech-sector investments.
>
> Yeah I feel the same way.  Sure, rationally if you have a mortgage at 5%
> and the market is returning three times that, why pay it off? For me
> it's because in a downturn, the mortgage payments don't stop. In the
> course of a 30 year mortgage, there will be some multi-year recessions
> and maybe you'll even have periods of unemployment or reduced
> income. It's just inevitable. In those situations, the less debt you
> have, the more flexibility you have.
>
> Allan
>
> ___
> http://www.okiebenz.com
>
> To search list archives http://www.okiebenz.com/archive/
>
> To Unsubscribe or change delivery options go to:
> http://mail.okiebenz.com/mailman/listinfo/mercedes_okiebenz.com
>
>
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Re: [MBZ] question for young investor

[Allan Streib via Mercedes]

One of the lessons I want to try to impart. Young people are very prone
to complaining about "capitalism" but they may view it differently if
they actually participate in it. Investing, even at a modest scale,
gives that experienece.

Allan

Curt Raymond via Mercedes  writes:

>  I spent several years building a good cash reserve. Once that was 
> established I took the money I had been putting in the bank and invested in 
> an S index fund. Its done really well, especially the last 4 years.
> Just the other day I had a sell go through for the bulk of the stock I had 
> with my employer. I've been sitting on a bunch of stock for 5-10 years. The 
> price had been kind of idling along doing doodly. This year with the cost 
> cutting we've had to go through the company made a little money so the stock 
> has about tripled. I set my price a dollar higher than the highest we'd seen 
> this year, I was surprised that we nudged that price.
> The bulk of the money is going into the index fund although some is probably 
> going to buy a backhoe for the vast estate...
> -Curt

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Re: [MBZ] question for young investor

[Curt Raymond via Mercedes]

 I spent several years building a good cash reserve. Once that was established 
I took the money I had been putting in the bank and invested in an S index 
fund. Its done really well, especially the last 4 years.
Just the other day I had a sell go through for the bulk of the stock I had with 
my employer. I've been sitting on a bunch of stock for 5-10 years. The price 
had been kind of idling along doing doodly. This year with the cost cutting 
we've had to go through the company made a little money so the stock has about 
tripled. I set my price a dollar higher than the highest we'd seen this year, I 
was surprised that we nudged that price.
The bulk of the money is going into the index fund although some is probably 
going to buy a backhoe for the vast estate...
-Curt

On Friday, January 1, 2021, 8:58:36 AM EST, Dan Penoff via Mercedes 
 wrote:  
 
 Pretty much what I’ve done/said.

If you’re going into the markets, you have to play for the long game, it’s the 
only way to make a good return. If you’ve got a solid favorite, invest in them 
and stay with them as long as possible, and as Jim said, don’t churn and don’t 
look at it constantly.

I started buying Apple in the early 90s. I rolled a 401k from a former employer 
over into AAPL in the late 90s. Even when I was a stay at home Dad working part 
time in the early 00s I tossed every spare dime I had into it. It’s now funding 
my retirement quite well.

Not every story works out that way, but even with an average return that an 
index fund gives you over time, you’re still well ahead of the game.

-D

> On Dec 31, 2020, at 10:40 PM, Jim Cathey via Mercedes  
> wrote:
> 
> My best investment has been buy-and-hold.  I bought some shares of
> an employer at $3.50, with no expectation that it would ever exceed $20.
> I just sold some of it at $175 nearly 20 years later, because I was NOT
> micro-managing it.  That what-the-hell stock purchase became the single
> biggest component of our retirement portfolio.  Pure luck, really.  I've
> sold half of it so far, to reduce our risk.
> 
> 10 years is a bit short for a stock-market timescale, say if you were
> planning to buy a house, but neither IRA should be what you're putting
> into for house-buying as your next big money need.  An IRA definitely
> makes sense if there's an employer match, because that is just plain
> free money.  For _retirement_ timescales.
> 
> Were it me just starting out, and not working for a company with a 401K
> and matching funds, I'd dump any excess into managed funds with a long-term
> aggressive focus.  And don't churn!  Pick well and hang on to it, generally.
> If it helps keep you sane, don't look at it too often.
> 
> -- Jim
> 
> 
> ___
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> 
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> 
> To Unsubscribe or change delivery options go to:
> http://mail.okiebenz.com/mailman/listinfo/mercedes_okiebenz.com
> 


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Re: [MBZ] question for young investor

[Jim Cathey via Mercedes]

If your choices were good ones, keep them.  If they were not, well I guess
you learned something.  You _still_ keep them unless they were truly heinous,
and it's better to lock in the losses and start over than to wait for recovery.

-- Jim


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Re: [MBZ] question for young investor

[Jim Cathey via Mercedes]

> Yes, but who has the discipline?

The guy who will make it to retirement in good shape, naturally.

-- Jim


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Re: [MBZ] question for young investor

[OK Don via Mercedes]

Same discipline as with any other option - put money in and don't look at
it. If you have to do something, put more money in when the market tanks -
you're buying low.

On Fri, Jan 1, 2021 at 3:08 PM Andrew Strasfogel via Mercedes <
mercedes@okiebenz.com> wrote:

> *If you're investing in market index funds, you don't need an advisor.*
>
> Yes, but who has the discipline?  And if the market tanks then what?
>
> On Fri, Jan 1, 2021 at 3:44 PM Jim Cathey via Mercedes <
> mercedes@okiebenz.com> wrote:
>
> > Even 6-12mo slush fund wouldn't have worked for me.  Without a mortgage
> > (or rent), though, even
> > a fairly modest fund can stretch out well.  IIRC, the two biggest
> expenses
> > are mortgage, followed
> > by health insurance premiums.  Those keep draining funds at a fixed (and
> > high) rate no matter what.
> > Everything else you can push back on.  Stop going out, learn to cook
> more,
> > take better care of your
> > wardrobe, read instead of going to shows, wear more sweaters and turn
> down
> > the heat, etc.  You can,
> > of course, let the health insurance go too, but that's a big gamble.
> > Fairly dangerous.
> >
> > -- Jim
> >
> >
> > ___
> > http://www.okiebenz.com
> >
> > To search list archives http://www.okiebenz.com/archive/
> >
> > To Unsubscribe or change delivery options go to:
> > http://mail.okiebenz.com/mailman/listinfo/mercedes_okiebenz.com
> >
> >
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>
> To Unsubscribe or change delivery options go to:
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>
>

-- 
OK Don

"Whenever you find yourself on the side of the majority, it is time to
pause and reflect." Mark Twain

“Basic research is what I’m doing when I don’t know what I am doing.”  Wernher
Von Braun
2013 F150, 18 mpg
2017 Subaru Legacy, 30 mpg
1957 C182A, 12 mpg - but at 150 mph!
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Re: [MBZ] question for young investor

[Andrew Strasfogel via Mercedes]

*If you're investing in market index funds, you don't need an advisor.*

Yes, but who has the discipline?  And if the market tanks then what?

On Fri, Jan 1, 2021 at 3:44 PM Jim Cathey via Mercedes <
mercedes@okiebenz.com> wrote:

> Even 6-12mo slush fund wouldn't have worked for me.  Without a mortgage
> (or rent), though, even
> a fairly modest fund can stretch out well.  IIRC, the two biggest expenses
> are mortgage, followed
> by health insurance premiums.  Those keep draining funds at a fixed (and
> high) rate no matter what.
> Everything else you can push back on.  Stop going out, learn to cook more,
> take better care of your
> wardrobe, read instead of going to shows, wear more sweaters and turn down
> the heat, etc.  You can,
> of course, let the health insurance go too, but that's a big gamble.
> Fairly dangerous.
>
> -- Jim
>
>
> ___
> http://www.okiebenz.com
>
> To search list archives http://www.okiebenz.com/archive/
>
> To Unsubscribe or change delivery options go to:
> http://mail.okiebenz.com/mailman/listinfo/mercedes_okiebenz.com
>
>
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Re: [MBZ] question for young investor

[Jim Cathey via Mercedes]

Even 6-12mo slush fund wouldn't have worked for me.  Without a mortgage (or 
rent), though, even
a fairly modest fund can stretch out well.  IIRC, the two biggest expenses are 
mortgage, followed
by health insurance premiums.  Those keep draining funds at a fixed (and high) 
rate no matter what.
Everything else you can push back on.  Stop going out, learn to cook more, take 
better care of your
wardrobe, read instead of going to shows, wear more sweaters and turn down the 
heat, etc.  You can,
of course, let the health insurance go too, but that's a big gamble.  Fairly 
dangerous.

-- Jim


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Re: [MBZ] question for young investor

[Allan Streib via Mercedes]

If you're investing in market index funds, you don't need an advisor.

Allan

Andrew Strasfogel via Mercedes  writes:

> Correct. But it's better than paying a financial adviso who charges a fee
> for purchasing mutual funds, which themselves have built in fees and
> expenses.
>

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Re: [MBZ] question for young investor

[Dan Penoff via Mercedes]

This is when I get on my soapbox about having an emergency fund. I totally 
understand your rationale, but that notwithstanding, everyone should have funds 
for at least six if not 12 months of living expenses. I don’t think I could 
sleep at night if I didn’t. That should be everyone’s first goal. Once you’ve 
got that, start investing…

-D

> On Jan 1, 2021, at 2:50 PM, Jim Cathey via Mercedes  
> wrote:
> 
> My motivation for killing the mortgage was peace of mind.  And yes, I did end
> up unemployed for 18mo at some point after that.  Had the mortgage still been
> active I would have had a forced sale of the home and a move to another city
> that had companies hiring in my field, or else ended up greeting at Walmart.
> 
> Instead I was able to wait out the slump and resume my career, while still 
> keeping
> our home, which many (especially in my field) would consider to be vacation 
> property.
> (Semi-rural acreage with a view.)
> 
> -- Jim
> 
> 
> ___
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> 
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> 
> To Unsubscribe or change delivery options go to:
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> 


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Re: [MBZ] question for young investor

[Andrew Strasfogel via Mercedes]

Correct. But it's better than paying a financial adviso who charges a fee
for purchasing mutual funds, which themselves have built in fees and
expenses.

On Fri, Jan 1, 2021 at 2:56 PM Jim Cathey  wrote:

> > Fisher Investments ONLY purchases individual stocks for their clients -
> no
>
> How is this fundamentally different than a mutual fund?  The fund managers
> are supposed to
> be weeding out (or avoiding) the losers, etc.  Po-tay-toe, po-tah-toe if
> you ask me.  Just one
> less layer of staff is all, and maybe that (alone) is the fundamental
> advantage.
>
> -- Jim
>
>
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Re: [MBZ] question for young investor

[Jim Cathey via Mercedes]

> Fisher Investments ONLY purchases individual stocks for their clients - no

How is this fundamentally different than a mutual fund?  The fund managers are 
supposed to
be weeding out (or avoiding) the losers, etc.  Po-tay-toe, po-tah-toe if you 
ask me.  Just one
less layer of staff is all, and maybe that (alone) is the fundamental advantage.

-- Jim


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Re: [MBZ] question for young investor

[Jim Cathey via Mercedes]

My motivation for killing the mortgage was peace of mind.  And yes, I did end
up unemployed for 18mo at some point after that.  Had the mortgage still been
active I would have had a forced sale of the home and a move to another city
that had companies hiring in my field, or else ended up greeting at Walmart.

Instead I was able to wait out the slump and resume my career, while still 
keeping
our home, which many (especially in my field) would consider to be vacation 
property.
(Semi-rural acreage with a view.)

-- Jim


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Re: [MBZ] question for young investor

[Andrew Strasfogel via Mercedes]

Fisher Investments ONLY purchases individual stocks for their clients - no
mutual funds or ETFs.  Sounds risky, but when you think about it - they
employ a large cadre of smart stock pickers to weed out poor performers and
focus on the best of the best in a typical client portfolio.  Sort of like
a turbocharged mutual fund minus the losers, and without the fees (other
than their own one percent management fee).  They claim this has led to
lasting success, such as predicting 9 out of 10 bear markets.

On Fri, Jan 1, 2021 at 2:33 PM Allan Streib via Mercedes <
mercedes@okiebenz.com> wrote:

> Jim Cathey via Mercedes  writes:
>
> > My friends all sneered at my decision to use the windfall to pay off
> > my mortgage, pointing out that my mortgage rate was lower than the
> > general rate of return on tech-sector investments.
>
> Yeah I feel the same way.  Sure, rationally if you have a mortgage at 5%
> and the market is returning three times that, why pay it off? For me
> it's because in a downturn, the mortgage payments don't stop. In the
> course of a 30 year mortgage, there will be some multi-year recessions
> and maybe you'll even have periods of unemployment or reduced
> income. It's just inevitable. In those situations, the less debt you
> have, the more flexibility you have.
>
> Allan
>
> ___
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>
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>
> To Unsubscribe or change delivery options go to:
> http://mail.okiebenz.com/mailman/listinfo/mercedes_okiebenz.com
>
>
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Re: [MBZ] question for young investor

[Dan Penoff via Mercedes]

No question about that. I do my due diligence and watch the research (and do my 
own) and should things appear to be going south in a major fashion, I’ll cut 
and run. I’ve more than made my money off of it.

One nice thing we have at work is a deferred compensation plan, which is 
unrelated to the state pension plan we’re automatically enrolled in as a county 
employee. The county contributes something like 1.5% of your salary no matter 
how much or how little you put in the plan. It amazes me how many people don’t 
use it - after all you could put $5 in it a year and you still get your 1.5% - 
free money!

That and it has a “house account” that pays a minimum of 4%. Any funds that you 
don’t allocate to an investment (standard mutuals and index funds are 
available) sits in the house account and earns 4%. Youngest son had just 
started  in the plan early last year before all of the COVID stuff hit and 
hadn’t decided on the elections he was going to take, so he had monies in the 
plan that weren’t yet invested. While all of the funds were tanking, he was 
earning 4%. Once things began to start back up again, he invested his funds.

I like your thinking re: mortgages. We have done everything we can to 
accelerate or pay principal on our mortgages just to get them paid off that 
much more quickly. My favorite is bi-weekly payments, but unfortunately not all 
lenders will do this. It’s easy to budget and ends up netting you a couple 
extra principal payments.

-D

> On Jan 1, 2021, at 2:19 PM, Allan Streib via Mercedes  
> wrote:
> 
> Dan Penoff via Mercedes  writes:
> 
>> I started buying Apple in the early 90s. I rolled a 401k from a former
>> employer over into AAPL in the late 90s. Even when I was a stay at
>> home Dad working part time in the early 00s I tossed every spare dime
>> I had into it. It’s now funding my retirement quite well.
> 
> I had good results from AAPL also, bought some around 2000/2001 after
> the dot-com crash when it was at about $12. Sold it about 10 years later
> on the thinking that "pigs get fat, hogs get slaughtered" and I had
> definitely done well with it.
> 
> In general owning single stocks is much more risky. They can pay off
> handsomly and you can also lose your shirt. Diversified funds are much
> safer for the non-professional investor (and even pros rarely if ever
> beat the market in the long term).
> 
> I still own AAPL, but as a component of other funds in my retirement
> portfolio, not directly.
> 
> Allan
> 
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Re: [MBZ] question for young investor

[Allan Streib via Mercedes]

Jim Cathey via Mercedes  writes:

> My friends all sneered at my decision to use the windfall to pay off
> my mortgage, pointing out that my mortgage rate was lower than the
> general rate of return on tech-sector investments.

Yeah I feel the same way.  Sure, rationally if you have a mortgage at 5%
and the market is returning three times that, why pay it off? For me
it's because in a downturn, the mortgage payments don't stop. In the
course of a 30 year mortgage, there will be some multi-year recessions
and maybe you'll even have periods of unemployment or reduced
income. It's just inevitable. In those situations, the less debt you
have, the more flexibility you have.

Allan

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Re: [MBZ] question for young investor

[Allan Streib via Mercedes]

Mitch Haley via Mercedes  writes:

> 2. (actually #1) don't buy employer stock, because losing your job and
> your nest egg on the same day is not pleasant.

I've also heard the same advice. Boils down again to diversifying your
risks. Single stocks are risky investments. I don't know if ESOPs are
still really a thing but at my first salaried job they had one and
participation was pushed quite hard.

Allan

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Re: [MBZ] question for young investor

[Allan Streib via Mercedes]

Dan Penoff via Mercedes  writes:

> I started buying Apple in the early 90s. I rolled a 401k from a former
> employer over into AAPL in the late 90s. Even when I was a stay at
> home Dad working part time in the early 00s I tossed every spare dime
> I had into it. It’s now funding my retirement quite well.

I had good results from AAPL also, bought some around 2000/2001 after
the dot-com crash when it was at about $12. Sold it about 10 years later
on the thinking that "pigs get fat, hogs get slaughtered" and I had
definitely done well with it.

In general owning single stocks is much more risky. They can pay off
handsomly and you can also lose your shirt. Diversified funds are much
safer for the non-professional investor (and even pros rarely if ever
beat the market in the long term).

I still own AAPL, but as a component of other funds in my retirement
portfolio, not directly.

Allan

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Re: [MBZ] question for young investor

[Dan Penoff via Mercedes]

Agreed. Again, those of us who have profited from single stock purchases are 
the outliers.

We had a similar situation when Mrs. Dan was anemployee for Harley-Davidson 
during their “boom” years. She got stock options which we exercised and stock 
grants as bonuses. As an officer of the company her ability to trade in these 
was severely limited, as the SEC watches such transactions with a very close 
eye, meaning any time we wanted to buy or sell we had to get the approval of 
HR’s corporate counsel. As a result, very few transactions took place with 
these during her tenure.

We held these after we left WI and they continued to grow, but we knew by the 
early 00s that the customer base for H-D was aging out and that the likelihood 
that their growth would continue was slim. We also saw internal issues that 
convinced us to sell out. That money bought a mortgage balance down 
significantly.

We recently cashed out of her pension plan at H-D as well, since their long 
term outlook does not look favorable. Certainly there are laws to prevent 
employees’ and retiree’s pensions from evaporating, but they’re not 
bulletproof, so she took a buyout. That bought an annuity that will cover our 
annual out of pocket medical costs in retirement. I’m not a fan of annuities, 
but our investment counselor gave us some options as to what we could do with 
the money, and that seemed like the best option.

Paying off debt should be the major goal. Having the extra cash to invest or 
just have on hand for whatever might be needed makes life a lot more 
comfortable. And maybe it’s just me, but having cash on hand seems like it 
stimulates to urge to save even more…

-D

> On Jan 1, 2021, at 11:45 AM, Jim Cathey via Mercedes  
> wrote:
> 
> Single-stock purchasing is not something the casual investor should
> probably do.  I have not done it, with one exception.
> 
> 
> Again... luck?  Or a payoff for my general rules of 1) Don't get greedy, and 
> 2) get
> and stay out of debt.
> 
> -- Jim
> 
> 
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> 
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Re: [MBZ] question for young investor

[Jim Cathey via Mercedes]

Single-stock purchasing is not something the casual investor should
probably do.  I have not done it, with one exception.

I worked for a tech company, pre-bubble-burst, and pretty much every dime
I put into the (matched) 401K disappeared without a trace.  Their fund choices
were dreadful, to say the least.  My next company I was lax about engaging
the 401K, because of this experience.  Instead, for 4 semi-annual purchases,
I used their employee stock purchase plan, funding it at about the 401K level.
After 4 purchases I decided that this was enough exposure, having both my 
current
income and my retirement dependent upon the same resource (Enron, anyone?)
seemed like a bad idea, and exited the program, moving over to the 401K.  (If I
had stayed in it I would be retired now.  But... luck.)

I had stock options in that first company, and when the company got bought it 
had
paid off handsomely.  My friends all sneered at my decision to use the windfall
to pay off my mortgage, pointing out that my mortgage rate was lower than the
general rate of return on tech-sector investments.  Most of them re-invested the
money and kept their mortgages.  Then the .com bubble burst.  Last I checked
I still owned my house, and their money was still gone.

Again... luck?  Or a payoff for my general rules of 1) Don't get greedy, and 2) 
get
and stay out of debt.

-- Jim


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Re: [MBZ] question for young investor

[Mitch Haley via Mercedes]

On 2021-01-01 10:37, Andrew Strasfogel via Mercedes wrote:
But if you had used the same approach with GE or GM there wouldn't be 
such

a happy ending.


I had a management professor who told us two things about investing:
1. Don't buy airlines.
2. (actually #1) don't buy employer stock, because losing your job and 
your nest egg on the same day is not pleasant.


Two examples from my work:

Did an estate return for a guy who retired from Dow Chemical.
Died with $800k of employer stock. I'm sure he paid less than that for 
it.


Did tax returns for some GM employees who were heavily invested in 
employer stock. They didn't lose their jobs, but a couple of them took 
long term capital losses that could have bought new Mercedes if they 
hadn't invested in stock that became literally worthless.


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Re: [MBZ] question for young investor

[Dan Penoff via Mercedes]

Quite true. Which is why if you’re starting out it’s best to get into an index 
fund where things can be rebalanced on a regular basis so a flop like GE or GM 
won’t ruin things.

-D

> On Jan 1, 2021, at 10:37 AM, Andrew Strasfogel  wrote:
> 
> But if you had used the same approach with GE or GM there wouldn't be such a 
> happy ending.
> 
> On Fri, Jan 1, 2021 at 8:58 AM Dan Penoff via Mercedes  > wrote:
> Pretty much what I’ve done/said.
> 
> If you’re going into the markets, you have to play for the long game, it’s 
> the only way to make a good return. If you’ve got a solid favorite, invest in 
> them and stay with them as long as possible, and as Jim said, don’t churn and 
> don’t look at it constantly.
> 
> I started buying Apple in the early 90s. I rolled a 401k from a former 
> employer over into AAPL in the late 90s. Even when I was a stay at home Dad 
> working part time in the early 00s I tossed every spare dime I had into it. 
> It’s now funding my retirement quite well.
> 
> Not every story works out that way, but even with an average return that an 
> index fund gives you over time, you’re still well ahead of the game.
> 
> -D
> 
> > On Dec 31, 2020, at 10:40 PM, Jim Cathey via Mercedes 
> > mailto:mercedes@okiebenz.com>> wrote:
> > 
> > My best investment has been buy-and-hold.  I bought some shares of
> > an employer at $3.50, with no expectation that it would ever exceed $20.
> > I just sold some of it at $175 nearly 20 years later, because I was NOT
> > micro-managing it.  That what-the-hell stock purchase became the single
> > biggest component of our retirement portfolio.  Pure luck, really.  I've
> > sold half of it so far, to reduce our risk.
> > 
> > 10 years is a bit short for a stock-market timescale, say if you were
> > planning to buy a house, but neither IRA should be what you're putting
> > into for house-buying as your next big money need.  An IRA definitely
> > makes sense if there's an employer match, because that is just plain
> > free money.  For _retirement_ timescales.
> > 
> > Were it me just starting out, and not working for a company with a 401K
> > and matching funds, I'd dump any excess into managed funds with a long-term
> > aggressive focus.  And don't churn!  Pick well and hang on to it, generally.
> > If it helps keep you sane, don't look at it too often.
> > 
> > -- Jim
> > 
> > 
> > ___
> > http://www.okiebenz.com 
> > 
> > To search list archives http://www.okiebenz.com/archive/ 
> > 
> > 
> > To Unsubscribe or change delivery options go to:
> > http://mail.okiebenz.com/mailman/listinfo/mercedes_okiebenz.com 
> > 
> > 
> 
> 
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Re: [MBZ] question for young investor

[Andrew Strasfogel via Mercedes]

But if you had used the same approach with GE or GM there wouldn't be such
a happy ending.

On Fri, Jan 1, 2021 at 8:58 AM Dan Penoff via Mercedes <
mercedes@okiebenz.com> wrote:

> Pretty much what I’ve done/said.
>
> If you’re going into the markets, you have to play for the long game, it’s
> the only way to make a good return. If you’ve got a solid favorite, invest
> in them and stay with them as long as possible, and as Jim said, don’t
> churn and don’t look at it constantly.
>
> I started buying Apple in the early 90s. I rolled a 401k from a former
> employer over into AAPL in the late 90s. Even when I was a stay at home Dad
> working part time in the early 00s I tossed every spare dime I had into it.
> It’s now funding my retirement quite well.
>
> Not every story works out that way, but even with an average return that
> an index fund gives you over time, you’re still well ahead of the game.
>
> -D
>
> > On Dec 31, 2020, at 10:40 PM, Jim Cathey via Mercedes <
> mercedes@okiebenz.com> wrote:
> >
> > My best investment has been buy-and-hold.  I bought some shares of
> > an employer at $3.50, with no expectation that it would ever exceed $20.
> > I just sold some of it at $175 nearly 20 years later, because I was NOT
> > micro-managing it.  That what-the-hell stock purchase became the single
> > biggest component of our retirement portfolio.  Pure luck, really.  I've
> > sold half of it so far, to reduce our risk.
> >
> > 10 years is a bit short for a stock-market timescale, say if you were
> > planning to buy a house, but neither IRA should be what you're putting
> > into for house-buying as your next big money need.  An IRA definitely
> > makes sense if there's an employer match, because that is just plain
> > free money.  For _retirement_ timescales.
> >
> > Were it me just starting out, and not working for a company with a 401K
> > and matching funds, I'd dump any excess into managed funds with a
> long-term
> > aggressive focus.  And don't churn!  Pick well and hang on to it,
> generally.
> > If it helps keep you sane, don't look at it too often.
> >
> > -- Jim
> >
> >
> > ___
> > http://www.okiebenz.com
> >
> > To search list archives http://www.okiebenz.com/archive/
> >
> > To Unsubscribe or change delivery options go to:
> > http://mail.okiebenz.com/mailman/listinfo/mercedes_okiebenz.com
> >
>
>
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Re: [MBZ] question for young investor

[Dan Penoff via Mercedes]

Pretty much what I’ve done/said.

If you’re going into the markets, you have to play for the long game, it’s the 
only way to make a good return. If you’ve got a solid favorite, invest in them 
and stay with them as long as possible, and as Jim said, don’t churn and don’t 
look at it constantly.

I started buying Apple in the early 90s. I rolled a 401k from a former employer 
over into AAPL in the late 90s. Even when I was a stay at home Dad working part 
time in the early 00s I tossed every spare dime I had into it. It’s now funding 
my retirement quite well.

Not every story works out that way, but even with an average return that an 
index fund gives you over time, you’re still well ahead of the game.

-D

> On Dec 31, 2020, at 10:40 PM, Jim Cathey via Mercedes  
> wrote:
> 
> My best investment has been buy-and-hold.  I bought some shares of
> an employer at $3.50, with no expectation that it would ever exceed $20.
> I just sold some of it at $175 nearly 20 years later, because I was NOT
> micro-managing it.  That what-the-hell stock purchase became the single
> biggest component of our retirement portfolio.  Pure luck, really.  I've
> sold half of it so far, to reduce our risk.
> 
> 10 years is a bit short for a stock-market timescale, say if you were
> planning to buy a house, but neither IRA should be what you're putting
> into for house-buying as your next big money need.  An IRA definitely
> makes sense if there's an employer match, because that is just plain
> free money.  For _retirement_ timescales.
> 
> Were it me just starting out, and not working for a company with a 401K
> and matching funds, I'd dump any excess into managed funds with a long-term
> aggressive focus.  And don't churn!  Pick well and hang on to it, generally.
> If it helps keep you sane, don't look at it too often.
> 
> -- Jim
> 
> 
> ___
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> 
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> 
> To Unsubscribe or change delivery options go to:
> http://mail.okiebenz.com/mailman/listinfo/mercedes_okiebenz.com
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Re: [MBZ] question for young investor

[Andrew Strasfogel via Mercedes]

I bought some shares of Warner Bros. before Superman hit the theaters in
'77.  When the movie became a smash I sold the stock and used the profit
for the down payment on our first home

On Thu, Dec 31, 2020 at 10:41 PM Jim Cathey via Mercedes <
mercedes@okiebenz.com> wrote:

> My best investment has been buy-and-hold.  I bought some shares of
> an employer at $3.50, with no expectation that it would ever exceed $20.
> I just sold some of it at $175 nearly 20 years later, because I was NOT
> micro-managing it.  That what-the-hell stock purchase became the single
> biggest component of our retirement portfolio.  Pure luck, really.  I've
> sold half of it so far, to reduce our risk.
>
> 10 years is a bit short for a stock-market timescale, say if you were
> planning to buy a house, but neither IRA should be what you're putting
> into for house-buying as your next big money need.  An IRA definitely
> makes sense if there's an employer match, because that is just plain
> free money.  For _retirement_ timescales.
>
> Were it me just starting out, and not working for a company with a 401K
> and matching funds, I'd dump any excess into managed funds with a long-term
> aggressive focus.  And don't churn!  Pick well and hang on to it,
> generally.
> If it helps keep you sane, don't look at it too often.
>
> -- Jim
>
>
> ___
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>
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>
> To Unsubscribe or change delivery options go to:
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Re: [MBZ] question for young investor

[Jim Cathey via Mercedes]

My best investment has been buy-and-hold.  I bought some shares of
an employer at $3.50, with no expectation that it would ever exceed $20.
I just sold some of it at $175 nearly 20 years later, because I was NOT
micro-managing it.  That what-the-hell stock purchase became the single
biggest component of our retirement portfolio.  Pure luck, really.  I've
sold half of it so far, to reduce our risk.

10 years is a bit short for a stock-market timescale, say if you were
planning to buy a house, but neither IRA should be what you're putting
into for house-buying as your next big money need.  An IRA definitely
makes sense if there's an employer match, because that is just plain
free money.  For _retirement_ timescales.

Were it me just starting out, and not working for a company with a 401K
and matching funds, I'd dump any excess into managed funds with a long-term
aggressive focus.  And don't churn!  Pick well and hang on to it, generally.
If it helps keep you sane, don't look at it too often.

-- Jim


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Re: [MBZ] question for young investor

[Kaleb Striplin via Mercedes]

I stayed at a Hampton Inn last night.  For the first time since the 
pandemic started they had their normal breakfast out for self service.  
Seems most hotels are not doing breakfast at all or doing some sort of 
cheap grab bag with nothing in it that I would eat.  A few have had a 
somewhat normal breakfast but they have to dish it out for you.


On 12/31/2020 4:22 PM, Dan Penoff via Mercedes wrote:

That makes sense, and is why I would defer to you in such matters, too, since I 
didn’t stay at a Holiday Inn Express last night, either.

-D


On Dec 31, 2020, at 5:12 PM, Mitch Haley via Mercedes  
wrote:

On 2020-12-31 16:23, Dan Penoff via Mercedes wrote:


If you tie the funds up in a Roth he’ll be limited or unable to access
them in 5-10 years if the intent is to build up some savings for a
future purchase, such as a house. At least I think you’re limited to a
$10k withdrawal for a first home without taking a 10% hit.

Roth contributions always come out free of tax and penalties, but if you do it 
you'll mess up your Saver's Credit (Form 8880) for three years.
The only time you have tax and/or penalty on Roth withdrawals is when you've 
already drawn out everything you put in and start dipping into profits.

https://www.nerdwallet.com/article/investing/roth-ira-early-withdrawals

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Re: [MBZ] question for young investor

[Andrew Strasfogel via Mercedes]

You must have earned income to open (or contribute to) a Roth IRA.  I
converted my standard IRA to  Roth in 1999 and have contributed yearly
since.  Now I have a nice nest egg/slush fund.

On Thu, Dec 31, 2020 at 5:23 PM Dan Penoff via Mercedes <
mercedes@okiebenz.com> wrote:

> That makes sense, and is why I would defer to you in such matters, too,
> since I didn’t stay at a Holiday Inn Express last night, either.
>
> -D
>
> > On Dec 31, 2020, at 5:12 PM, Mitch Haley via Mercedes <
> mercedes@okiebenz.com> wrote:
> >
> > On 2020-12-31 16:23, Dan Penoff via Mercedes wrote:
> >
> >> If you tie the funds up in a Roth he’ll be limited or unable to access
> >> them in 5-10 years if the intent is to build up some savings for a
> >> future purchase, such as a house. At least I think you’re limited to a
> >> $10k withdrawal for a first home without taking a 10% hit.
> >
> > Roth contributions always come out free of tax and penalties, but if you
> do it you'll mess up your Saver's Credit (Form 8880) for three years.
> > The only time you have tax and/or penalty on Roth withdrawals is when
> you've already drawn out everything you put in and start dipping into
> profits.
> >
> > https://www.nerdwallet.com/article/investing/roth-ira-early-withdrawals
> >
> > ___
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Re: [MBZ] question for young investor

[Dan Penoff via Mercedes]

That makes sense, and is why I would defer to you in such matters, too, since I 
didn’t stay at a Holiday Inn Express last night, either.

-D

> On Dec 31, 2020, at 5:12 PM, Mitch Haley via Mercedes  
> wrote:
> 
> On 2020-12-31 16:23, Dan Penoff via Mercedes wrote:
> 
>> If you tie the funds up in a Roth he’ll be limited or unable to access
>> them in 5-10 years if the intent is to build up some savings for a
>> future purchase, such as a house. At least I think you’re limited to a
>> $10k withdrawal for a first home without taking a 10% hit.
> 
> Roth contributions always come out free of tax and penalties, but if you do 
> it you'll mess up your Saver's Credit (Form 8880) for three years.
> The only time you have tax and/or penalty on Roth withdrawals is when you've 
> already drawn out everything you put in and start dipping into profits.
> 
> https://www.nerdwallet.com/article/investing/roth-ira-early-withdrawals
> 
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Re: [MBZ] question for young investor

[Mitch Haley via Mercedes]

On 2020-12-31 16:23, Dan Penoff via Mercedes wrote:


If you tie the funds up in a Roth he’ll be limited or unable to access
them in 5-10 years if the intent is to build up some savings for a
future purchase, such as a house. At least I think you’re limited to a
$10k withdrawal for a first home without taking a 10% hit.


Roth contributions always come out free of tax and penalties, but if you 
do it you'll mess up your Saver's Credit (Form 8880) for three years.
The only time you have tax and/or penalty on Roth withdrawals is when 
you've already drawn out everything you put in and start dipping into 
profits.


https://www.nerdwallet.com/article/investing/roth-ira-early-withdrawals

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Re: [MBZ] question for young investor

[Mitch Haley via Mercedes]

In order to contribute to just about any retirement account, you're 
going to need earned income to qualify.
Your IRA contributions can't exceed the earned income you're supposed to 
be putting away for the future when you quit earning income


Effectively, Earned Income is what you pay FICA or Self Employment taxes 
on.


For gifts you're stuck with stuff like 529 accounts and ABLE accounts.

On 2020-12-31 16:30, Allan Streib via Mercedes wrote:


Are you saying there's a legal requirement to have earned income in
order to contribute to a Roth IRA? Can contributions exceed earned
income (e.g. from gifts)?


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Re: [MBZ] question for young investor

[Max Dillon via Mercedes]

No, it means the total US stock market.  There is plenty of exposure to foreign 
markets via the big international companies (Apple for instance) so there is 
some exposure to emerging markets like China and India.

The two major features of a total market index fund are diversification and low 
expenses.  The investor gets security from diversification and keeps more of 
their money with low low expenses. 

Why invest in the stock market?  Over the long term, no other investment comes 
close to providing a good return for minimal risk. Read John Bogle's Common 
Sense on Mutual Funds to understand the basics and avoid mistakes.

Max Dillon
Charleston SC


Dec 31, 2020 4:18:08 PM Mitch Haley via Mercedes :

> Does "Total Market" include "Emerging Markets" (AKA China)?
> 
> On 2020-12-31 15:44, Max Dillon via Mercedes wrote:
> 
> 
>> Use Vanguard, they are the least expensive for index funds.  Get the
>> total stock market index fund and start putting a couple hundred
>> dollars a month in to it.
> 
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Re: [MBZ] question for young investor

[Allan Streib via Mercedes]

Mitch Haley via Mercedes  writes:

> Does "Total Market" include "Emerging Markets" (AKA China)?

No. The Vanguard total stock market index fund is 99% US equities.

https://www.morningstar.com/funds/xnas/vtsmx/portfolio

Allan

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Re: [MBZ] question for young investor

[Allan Streib via Mercedes]

Mitch Haley via Mercedes  writes:

> Back in the early 1990s, I had an accounting prof who told his 
> dependents that if they'd get jobs, he'd put their wages (up to $2000) 
> in a Roth for them. They still got to spend their money, the Roth 
> contributions were a gift from dad, but he couldn't make them if they 
> didn't have earned income.

Are you saying there's a legal requirement to have earned income in
order to contribute to a Roth IRA? Can contributions exceed earned
income (e.g. from gifts)?

Allan




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Re: [MBZ] question for young investor

[Dan Penoff via Mercedes]

As I would understand it, if he doesn’t have the ability to contribute through 
a pre-tax means, if it were me I would just do a brokerage account. He’s not 
going to get taxed on any proceeds from his investments unless he sells them 
off and makes a profit.

If you tie the funds up in a Roth he’ll be limited or unable to access them in 
5-10 years if the intent is to build up some savings for a future purchase, 
such as a house. At least I think you’re limited to a $10k withdrawal for a 
first home without taking a 10% hit.

Open a brokerage account with someone like Ameritrade (my personal choice) and 
have him set up a scheduled ACH transfer to fund it, if possible. That way the 
money never touches his hands and goes right into the account.

Invest in an index fund that’s targeted out for the time period he’s looking 
for, like 10 years. If there’s no target, just a plain index fund. If he’s long 
in the market he’ll be fine. Don’t try to play the market, just pick something 
with a solid track record, fund it, and stick to it.

Another observation:

If you do this, tell him to ignore the fund’s activity on a daily or even 
weekly basis. When I look at my brokerage account on a daily basis, I see some 
pretty wild swings at times. I don’t worry about it, as I’m still up very well 
because I’m long in the market. Someone who is new to the markets can get 
pretty worked up when they see their investment(s) take a big dive when the 
market gets lousy. It’s difficult to convince them that 2, 3 even 5 years out 
they’ll be fine.

-D



> On Dec 31, 2020, at 3:33 PM, Allan Streib via Mercedes 
>  wrote:
> 
> For those of you who might have some investment backgroud, does it make
> more sense for an 18 year old to open an investment account as an IRA or
> as a normal brokerage account?
> 
> My thought is that he's not going to have significant taxable income for
> at least another four or five years, and will eventually have more
> immediate needs for the funds such as qualifying to buy a house.
> 
> I think an IRA starts to make more sense when you can contribute from
> salary witholding and possibly getting employer matching.
> 
> Not trying to get him into active trading at all. Just establishing the
> habit of dollar-cost-averaging into an index fund or ETF for the long
> term.
> 
> Allan
> 
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Re: [MBZ] question for young investor

[Mitch Haley via Mercedes]

Does "Total Market" include "Emerging Markets" (AKA China)?

On 2020-12-31 15:44, Max Dillon via Mercedes wrote:



Use Vanguard, they are the least expensive for index funds.  Get the
total stock market index fund and start putting a couple hundred
dollars a month in to it.


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Re: [MBZ] question for young investor

[Mitch Haley via Mercedes]

On 2020-12-31 15:44, Rick Knoble via Mercedes wrote:

Roth IRA. That said, I strongly suspect the extreme tax advantages of
one will be disappearing soon.


Back in the early 1990s, I had an accounting prof who told his 
dependents that if they'd get jobs, he'd put their wages (up to $2000) 
in a Roth for them. They still got to spend their money, the Roth 
contributions were a gift from dad, but he couldn't make them if they 
didn't have earned income.


Just imagine what that Roth money has done in the last 30 years, totally 
tax-free.


Start early, start Roth.

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Re: [MBZ] question for young investor

[Rick Knoble via Mercedes]

Roth IRA. That said, I strongly suspect the extreme tax advantages of one will 
be disappearing soon.

Trading stocks can make ones taxes a bit difficult to do, especially with 
capital gains taxes and dividend taxes that are constantly in flux, and certain 
to increase in the coming months.

Perhaps Mitch will expound more on the subject.
Rick
From: mercedes@okiebenz.com
Sent: December 31, 2020 2:34 PM
To: mercedes@okiebenz.com
Reply-to: mercedes@okiebenz.com
Cc: astr...@indiana.edu
Subject: [MBZ] question for young investor

For those of you who might have some investment backgroud, does it make
more sense for an 18 year old to open an investment account as an IRA or
as a normal brokerage account?

My thought is that he's not going to have significant taxable income for
at least another four or five years, and will eventually have more
immediate needs for the funds such as qualifying to buy a house.

I think an IRA starts to make more sense when you can contribute from
salary witholding and possibly getting employer matching.

Not trying to get him into active trading at all. Just establishing the
habit of dollar-cost-averaging into an index fund or ETF for the long
term.

Allan

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Re: [MBZ] question for young investor

[Max Dillon via Mercedes]

I'd say "yes" on the IRA, and make it a Roth IRA so the withdrawals are tax 
free (in retirement).  Also, because he's paying income tax on the 
contributions, the rules for a Roth give you the option of withdrawing the 
contributions with no penalty or additional taxes if needed.  Best of both 
worlds. 

Use Vanguard, they are the least expensive for index funds.  Get the total 
stock market index fund and start putting a couple hundred dollars a month in 
to it.

Max Dillon
Charleston SC


Dec 31, 2020 3:34:31 PM Allan Streib via Mercedes :

> For those of you who might have some investment backgroud, does it make
> more sense for an 18 year old to open an investment account as an IRA or
> as a normal brokerage account?
> 
> My thought is that he's not going to have significant taxable income for
> at least another four or five years, and will eventually have more
> immediate needs for the funds such as qualifying to buy a house.
> 
> I think an IRA starts to make more sense when you can contribute from
> salary witholding and possibly getting employer matching.
> 
> Not trying to get him into active trading at all. Just establishing the
> habit of dollar-cost-averaging into an index fund or ETF for the long
> term.
> 
> Allan
> 
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> 
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> 
> To Unsubscribe or change delivery options go to:
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[MBZ] question for young investor

[Allan Streib via Mercedes]

For those of you who might have some investment backgroud, does it make
more sense for an 18 year old to open an investment account as an IRA or
as a normal brokerage account?

My thought is that he's not going to have significant taxable income for
at least another four or five years, and will eventually have more
immediate needs for the funds such as qualifying to buy a house.

I think an IRA starts to make more sense when you can contribute from
salary witholding and possibly getting employer matching.

Not trying to get him into active trading at all. Just establishing the
habit of dollar-cost-averaging into an index fund or ETF for the long
term.

Allan

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