Home Off Topic

Final 401K Results for 2011.

2»

Replies

  • MenziesMenzies Posts: 19,289 AG
    Same here!!!! I haven't invested in the stock market since 2002. I'd can think of 10 better investments

    Really?

    Tax deferred, with company match (i.e. free money)? I'd love to hear about the other 10 investments where other people give you money that's yours to invest and keep and at the same time you don't pay any income tax on that money at time of earning.
    Maybe if we tell people that the brain is an App, they will start using it.
  • Bottom LinesBottom Lines Posts: 1,105 Officer
    -5.17% for the year... :facepalm
  • treemanjohntreemanjohn Posts: 5,031 Admiral
    Menzies wrote: »
    Really?

    Yes really. Look at the numbers in this thread. I invest in myself. I will not go into specifics, but I buy and sell all the extra stuff that no one appreciates the value of. As a matter of fact I've been up since 430 this morning looking around for money. I don't believe that there is a person on Earth that will protect and work my money better than I can.

    Too many people aren't willing to do the work to make money. I can't ever see a reason to leave my families future in the hand's of some "Broke"r sitting behind a computer
    We’re like the piggy bank that everybody is robbing, and that ends
  • bottom feederbottom feeder Posts: 1,335 Officer
    Roth is down .01%. Stocks I trade regularly are up 10.7%

    Leaving Florida... take a developer with you!

  • MenziesMenzies Posts: 19,289 AG
    First I wouldn't base ANY investment plan on one year's or even a few year's returns. Especially 401Ks which are designed for a working life span.

    So say company matches 6%, and marginal tax rate is 25% (in most cases will be much higher) then 401K money has a basis of + 6% before any returns PLUS the value of the tax deferral for up to 30-40 years. The investor has to spend very little to no time getting up at 4:30 to look around for money or work to create value.

    I do not know of any wealth manager, advisor, who would advise against a 401K.

    Now if you work for yourself or your company does not match, then I can see the argument for not having a 401K, otherwise no.

    Would still like to hear about those 10 other areas that would better a 401K over the average work span. Many people have investments over and above a 401K so there can be additional money for other opportunities.
    Maybe if we tell people that the brain is an App, they will start using it.
  • ranger350ranger350 Posts: 112 Officer
    Not to sound stupid,but could I get a couple ideas where you might put 10,000[besides in your account]I pulled it out of my 401k and put it into a mm.[8/11]401 is not matched.Only what I put in.Used to think my house would hold me,but not any more.If you do not want to post,pm me.Retirerment is not in my future.54 now. Thanks
  • Team SabatageTeam Sabatage USA, USA, USAPosts: 13,014 AG
    401K?
    What a scam.
    Government convincing people to give what little they can save to wall streeet to pay their million dollar bonuses with.

    Deferred taxes? Nice. You think taxes will be less than they are now in the future? Have some more kool-aid. Taxes are going up, they have to to pay for the debt being incurred. When you all start pulling your money out you will regret not paying the tax when you earned the money.

    I invest in rentals. They pay for themselves and provide income already. When they are paid off they provide even more income and can still be sold for 5 times what I paid for them or given to my heirs. Can't do that with a 401K.
    I invest in stocks that I control on a daily basis with online trading. I will pay the taxes on the money earned this year, then what is left is mine, never to worry about future tax rates.
    Strap me in, tie me down and roll me a bone, I'm getting on an airplane and I'm flying home...
  • MenziesMenzies Posts: 19,289 AG
    401K?

    Deferred taxes? Nice. You think taxes will be less than they are now in the future? Have some more kool-aid. Taxes are going up, they have to to pay for the debt being incurred. When you all start pulling your money out you will regret not paying the tax when you earned the money.

    I don't think you understand the value of tax deferred. It means that there is 25-35% more invested than you would otherwise have to invest. Regardless of what tax is paid on withdrawals, you have invested the money that would have otherwise gone to the government. In your case you had 25-35% less to invest in real estate because you paid tax on that money at source. Also your income from the rentals is taxed real time, whereas 401K returns are also deferred. So a double tax benefit. The gift that keeps on giving.
    I invest in rentals. They pay for themselves and provide income already. When they are paid off they provide even more income and can still be sold for 5 times what I paid for them or given to my heirs. Can't do that with a 401K.

    Not sure why you are saying you can't give a 401K money to your heirs? Of course you can. Also not convinced that the losses you incurred in property over the past 6-7 years will be recovered in the next 10, never mind a return on the principle. Paying your principle down with profits may not even be the best strategy given current low mortgage rates versus opportunity cost.
    I invest in stocks that I control on a daily basis with online trading. I will pay the taxes on the money earned this year, then what is left is mine, never to worry about future tax rates.

    So you advise day-trading and paying taxes over 401K and deferred taxes?
    Maybe if we tell people that the brain is an App, they will start using it.
  • Team SabatageTeam Sabatage USA, USA, USAPosts: 13,014 AG
    I don't think you understand the danger of tax deferred.
    My taxes are paid, the money I have is mine, to do with as I please without ever having to worry about what the tax rate could be when I decide to use my money. I can withdraw when ever I want with no penalties. I can invest in what I want when I want, regardless of my age, financial or health status.
    Wow, I can invest 35% more at the returns shown above. Invest more and get a - return, yeah, that's what I want to do. You lost over 1/2 of a percent, I gained 20%. Who made the better choices?

    Losses on property? Sorry, I have no losses. Is the value down from 4 years ago, yes, slightly. These are rentals, value is set by amount of income they can produce, rents are up, not down. Then there is a little thing called depreciation, any idea how much that helps offset income?

    Yes I advise day trading, it's a job. You study, research and invest. It's a full time job that offers full time pay.
    Strap me in, tie me down and roll me a bone, I'm getting on an airplane and I'm flying home...
  • treemanjohntreemanjohn Posts: 5,031 Admiral
    I don't think you understand the danger of tax deferred.
    My taxes are paid, the money I have is mine, to do with as I please without ever having to worry about what the tax rate could be when I decide to use my money.

    Now we have a forward thinker on board. Sitting money is dead money in my eyes. If I can turn my money once in a year it will stomp any stock on the planet. The US has been up to it's **** in alligators for a LONG time. People better start thinking outside the box on investments. A BROKErs will do/say whatever they can to keep the commissions coming in.

    As I said before I will not let you or anyone else in on something I've worked very hard at for years. It's not going to happen. Here's my money making scheme. Take some money and buy an underpriced POPULAR widget for lets say $100. Now take that widget and immediately sell it for a 10% profit. Now take your $110 and go buy another widget and dump it for another 10% profit. Pretty soon your money collection will go up and your widget collection will go down.

    Now let say you're a successful widget buyer and you can make 10% on your money PER WEEK, That's an investment and you're always ahead of the cur with cash in your pocket
    We’re like the piggy bank that everybody is robbing, and that ends
  • TriplewrapTriplewrap Posts: 173 Deckhand
    You are on the right track, Menz.. ! I am on the finished-side of a 401K/match program, and I will tell you that it works as you have said. My program is with ICMA. 90% of my account was in their cash/bond fund, up 3.6% for the year. The remainder is in a TIPS account that was up 8.1% for the year. I draw off the interest monthly and maintain the principal balance. I pay tax on what I draw out. Since my income is less after I punched out, I am in a Bama-proof tax bracket as well.

    I took some good advice and got out of equities altogether in June of 2008: Preserve wealth for retirement via fixed-income investments. I watched the crashes and burns of 08 and 09 without anguish, but I did miss the significant recovery last 2 years. I have no regrets though.

    I will watch for a bottom (no time soon..) and move a portion back into equity funds then. For now, I am grateful to have not been aggressive with the bulk of my egg, and will continue with my conservative approach.

    You are on the right track with the program your employers have. If you can cash out sick and vacation time as well, all the better for your 401K.

    For those not in a program, rental properties are a sound investment IF;
    You bought after 2008, & you have superb credit and can qualify for the basement mortgage rates, & you can tolerate the aggravation that tenants can impart upon your mind. One eviction process of a single mom W/kids is enough for a lifetime in my County. However, in the long term you can sell off gradually and spread the Capital Gains taxes out where it doesn't kill your returns. Right now, 20% is a good rate. That may change if the Administration decides that your fair share is 30%. Real Estate will recover more slowly yet in that environment..

    Good luck with all your retirement strategies, guys ! It is more important than you think now.. Don't gamble with your future. Always remember Madoff and Rothstein when you invest. My health coverage costs $1550/Mo for my family. Until the ObamaCare program is settled in Court, private insurers have no idea what coverage will cost. Be careful not to get stuck without coverage if you have some condition or history that will make you ineligible/unaffordable..

    You young guys.. Trickle money in every month.. It pays handsomely down the road, even if it hurts a little now.. Trust the Wisdom of the Ages..
    Woodsie
    FS Forum member since February, 2002
    Throwing Money into the Marine Industry since 1981
  • Team SabatageTeam Sabatage USA, USA, USAPosts: 13,014 AG
    If we bought after 2008?

    I began buying in 1988. Single family 2/1's were going for 28K, needed fixing up. I bought and sweat equitied my way through the inprovements, refinancing along the way as intrest rates dropped and buying more houses with the equity. Along the way I built a 4 plex. I flipped a few.

    I certainly won't be retiring early, 65 is the plan, but I'm slowing down. Semi retired, maybe in a few years.
    By then the rentals and my hobbies should support us in the manner we have become accustomed.
    Who knows when the wife will give up her career. She doesn't seem to be slowing down any, ahh, youth.
    Strap me in, tie me down and roll me a bone, I'm getting on an airplane and I'm flying home...
Sign In or Register to comment.