I'm not eligible for an IRA as my salary is above the limit. 401k...Mine is $18k (my contribution) + 9k (company match) =27k; Mrs Shock: 18k (her contribution) + 8k (company match) = 26k. Total of 53k to our 401k's annually. I try and chip in an extra dollar amount that brings the total annual retirement contribution to 200k. So this year I need to put in 147k on top of the 53k to the 401ks to = 200k. The money on top of the 401ks is my investment ideas whatever they may be. I'm very aggressive with that money. I don't diversify and in many cases it is all in 1 or 2 stocks. That will change as I age, but now at a relatively young age I'm as risky as I can be. We have a couple of other small investments that we utilize annually. For example my wife's work has an option to buy company stock at a 10% discount. We can buy $10k max/year. The stock has averaged 7% return annually for the last 5 years so adding in the 10% discount that's 17% annual gain. Very healthy. My goal to invest 200k annually through a variety of investment vehicles revolves around what I want to have at retirement, $24 million. $100,000 in the bank now, invest 200k/yr x 30 yrs at 8% annual growth = $24 million at retirement. Everyone should START by determining what you want to end up with. Then work your way back to determine what you need to save every year to make that happen.
Thanks everyone. It probably sounds like a dumb question but like 95% of the investment articles out there are geared towards retirement, so I've never found a ton of info for how to handle stock investments outside of that This is essentially what I'm doing, though with less money. I've got a roundabout goal to have $1 mil in stocks/savings/cash OUTSIDE of retirement accounts before I'm 50. At that point I could either start using it and retire early, or keep adding to it and retire very well. Right now I just have an online savings account and standard savings account for 3month emergency fund, then all post-tax stocks are in a TradeKing account (had the lowest fees at the time). For your situation, do you put the extra $150k just straight into a brokerage or stock account? Are there secrets or tricks for tax purposes or is it just as simple as it seems; pick an account and start buying?
I use scottrade. I enjoy their charting tools. I don't really have too many tricks but I am VERY cognizant of short term vs. long term capital gains. I have no problem buying and selling in less than 12 months but I am going to make sure I make some nice coin off the sale before I do so, otherwise I will wait at least the 12 months. The differences in taxes is sizable. Also, reinvest any dividends you accrue.
How does Robinhood make its money? I noticed when I bought TSLA that I bought when Google Finance said the current price was $217 but Robinhood got it at $219. Sorry if that's relatively routine and I'm being dumb, it was my first time every buying individual stock anywhere.
Yeah, thats what I figured. So it seems that if you're making a large purchase, you're probably better off paying the $9.95 fee or whatever. Luckily my foray into trading was relatively small while I learn the ropes, so I still came out ahead. But something to keep in mind.
The price listed on google finance isn't the bid ask spread. It's generally the last traded price and lags behind where the market is at the moment you're buying. Robinhoods costs are limited compared to the other brokers. Right how they have investments and accrue interest based on cash users leave in their accounts. Eventually they'll make money by offering margin accounts. They save a bunch of money by not advertising and having brick and mortar sites with tons of customer service reps.
I worry about robinhood structure because they are hardly the first firm to try to run with this business model. Zecco (bought later by Tradeking) was nearly identical and they couldn't make it sustainable. I'm personally interested in Motif as an alternative investment platform. You basically design your own mutual funds or pick from their preset motifs based around trends or themes. Anybody try it?
Hopefully they can make it work. But this is the type of thing we should demand from the government. No reason the government shouldn't fund something like robinhood to give people access to the financial markets.
What happens if you open an online brokerage account, buy stock through them and then that site goes belly up? Say you own 1000 shares of Apple purchased through Robinhood, but Robinhood completely shuts down. Do you still own those shares? What sort of proof or documentation would you need to prove you owned it? Can you transfer the shares to another brokerage?
why no deferred comp? I'm assumingn your extra 147K is purely post tax and you invest it through a tradeking/scottrade?
I believe these brokerages are backed by government programs FINRA and SIPC so you are protected for up to 500k in securities/cash or something. I think you would be given the option to liquidate or transfer your positions but I'm not an expert (at all).
https://www.finra.org/investors/alerts/if-brokerage-firm-closes-its-doors Basically as long as your shares were actually purchased, you will have them regardless. Otherwise, you have protection up to $500k.
A 401k is a form of deferred compensation. As is the 10% discount stock purchase plan I mentioned. I don't have a pension if that is what you are referring to. And yes the ~147k goes into scottrade and individual stocks. My latest was SHPGY. I posted the buy and sell real time in this thread.
obviously you have a good strategy, but this piece of advice is only realistic for people who make a shitload of money for everyone else, IMO the idea is to determine what you can afford to live off of, and then save the rest
The 529 for Shock Jr. varies. I have an Amex/fidelity card that I get 2% return on all purchases. So that builds up quickly with work and personal purchases. I also make occasional lump sum additions once or twice a year. Soon I will be contributing to https://www.texastuitionpromisefund.com to lock in today's tuition rates. Most states have some version of this and I would highly recommend it.
Well obviously someone that makes 50k/yr isn't going to need $24 million at retirement to feel comfortable. I'd still recommend figuring out what that number is and do what you need to make it happen.
You're first mistake was believing anything topssuite says in regards to how much money he has/makes.
Is robinhood any better than TDAmeritrade? That's what I was using and I like the tools you could use.
It was the right amount that would allow me to live the life I want comfortably AND still grow the fund despite my annual living expense withdraws in retirement. If I live into my 90's which I plan to, the account should have swelled close to $100 million. That would be a nice gift to pass on. Someone wiser than me said they want to give their kids enough money so that they can do anything but no so much that they can do nothing.
I'm sure you are asking to do the math and see how old I am...and I'm ok with that. Probably retire at 65. I thought about retiring earlier but I might go crazy just sitting around all day.
That's my point, I wouldn't be able to sit still. I plan on doing a lot of sailing and traveling when I retire. It costs money.
Someone explain Roth IRA's to me. I've been doing 4% on top of my 401k to a Merrill Lynch Roth through BoA. I know jack shit about them though. Do they invest that money in certain funds or am I supposed to or something?
A roth is just a different type of account. You put in post-tax dollars and your gains/withdrawals are tax free after retirement age. You choose the investments.
My friend just told me all of his oncologist buddies are buying BMY. I'm going to spend some time this afternoon looking into it.
I think i'm going to be a little aggressive with this money since my 401k is more moderate. Tying to get a hold of the guy that used to do options trading for me to get some advice from him too.
MHR is about to announce a JV It's at an all time low right now. I wish I had more money to throw on it, but being in that industry my income is pretty iffy lately.
Just opened my Roth a little while back And since most of my other investments are domestic etfs/mutaul funds I was looking to diversify a little bit. Ended up going with Natix Oakmark International Fund to sit on. We'll see what happens
to be clear about the terms being used You have 4 (at least) distinct options: a. IRA b. Roth IRA c. 401k d. Roth 401k 401k is employer-sponsored, IRA is not. For me, I split my retirement 50/50 between two accounts, a Roth 401k and a regular 401k. When you just say "A roth account" most people assume you are talking about the Roth IRA, because the Roth 401k is less common.
Yea I think i have it figured out. I think part of my confusion was the last time I opened a Roth IRA there was some from ML managing it I guess. This time it's just me so I wasn't sure what was going on with it.